EXHIBIT 10.1

Partners for Growth

Loan and Security Agreement

 

Borrower:

     Mattersight Corporation, a Delaware corporation

Address:

     200 S Wacker Drive, Suite 820, Chicago, IL 60606

Borrower:

     Mattersight Europe Holding Corporation, a Delaware corporation

Address:

     200 S Wacker Drive, Suite 820, Chicago, IL 60606

Borrower:

     Mattersight International Holding, Inc., an Illinois corporation

Address:

     200 S Wacker Drive, Suite 820, Chicago, IL 60606

Date:

     August 19, 2013

THIS LOAN AND SECURITY AGREEMENT (“Agreement”) is entered into on the above date
(the “Effective Date”) between PARTNERS FOR GROWTH IV, L.P. (“PFG”), whose
address is 150 Pacific Avenue, San Francisco, CA 94111 and the borrower(s) named
above (jointly and severally, “Borrower”), whose chief executive office is
located at the above address (“Borrower’s Address”). The Schedule to this
Agreement (the “Schedule”) being signed by the parties concurrently, is an
integral part of this Agreement. (Definitions of certain terms used in this
Agreement are set forth in Section 8 below.)

 

1.   LOANS.

1.1 Loans. PFG will make loans to Borrower designated “Facility A” and “Facility
B” (the “Loans”) up to the amounts shown in Section 1 of the Schedule, provided
no Default or Event of Default has occurred and is continuing.

1.2 Interest. All Loans and all other monetary Obligations that are not
Non-Overdue Monetary Obligations shall bear interest at the rates shown in the
Schedule, except where expressly set forth to the contrary in this Agreement.
Interest shall be payable monthly, on the first day of each month for interest
accrued during the prior month. Interest may, in PFG’s discretion, be charged to
Borrower’s loan account, and the same shall thereafter bear interest at the same
rate as the other Loans.

1.3 Fees. Borrower shall pay PFG the fees shown in the Schedule, which are in
addition to all interest and other sums payable to PFG and are not refundable.

1.4 Loan Requests. To obtain a Loan, Borrower shall make a Loan Request that
constitutes a Qualifying Request to PFG by electronic mail compliant with
Section 9.6. Loan Requests are not deemed made until PFG acknowledges receipt of
a Qualifying Request by electronic mail or otherwise in writing. PFG’s
obligation to consider a Loan Request shall be subject to its receipt of such
reports, certificates and other information as may be set forth in the Schedule.
Borrower shall provide PFG at least three (3) Business Days’ advance notice of
Loan Requests under Facility A. PFG will use reasonable commercial efforts to
expedite funding of Qualifying Requests under Facility A if so requested by
Borrower. Loan Requests received after 12:00 Noon Pacific time will not be
deemed to have been received by PFG until the next Business Day. PFG may rely on
any telephone request for a Loan given by a person whom PFG believes in good
faith is an authorized representative of Borrower, and Borrower will indemnify
PFG for any loss PFG suffers as a result of such reliance.

1.5 Late Fee. If any payment of accrued interest for any month is not made
within three Business Days after the later of the date a bill therefor is sent
by PFG or three Business Days after the due date therefor, or if any payment of
principal or any other payment is not made within three Business Days after the
date due, then Borrower shall pay PFG a late payment fee equal to 5% of the
amount of such late payment in the first two instances of late payment and 10%
of the amount of each future late payment occurring thereafter. The provisions
of this paragraph shall not be construed as PFG’s consent to Borrower’s failure
to pay any amounts when due, and PFG’s acceptance of any such late payments
shall not restrict PFG’s exercise of any remedies arising out of any such
failure.

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2.   SECURITY INTEREST.

2.1 Grant of Security Interest. To secure the payment and performance of all of
the Obligations when due, Borrower hereby grants to PFG a continuing security
interest in, and pledges to PFG, all of the following (collectively, the
“Collateral”): all right, title and interest of Borrower in and to all of the
following, whether now owned or hereafter arising or acquired and wherever
located: all Accounts; all Inventory; all Equipment; all Deposit Accounts; all
General Intangibles (including without limitation all Intellectual Property,
provided, however, that the foregoing grant of the security interest in
Intellectual Property shall become effective upon the first borrowing made under
this Agreement, as further set forth in the Intellectual Property Security
Agreement and Collateral Agreements and Notices in the form appended hereto as
Exhibit E); all Investment Property; all Other Property; and any and all claims,
rights and interests in any of the above, and all guaranties and security for
any of the above, and all substitutions and replacements for, additions,
accessions, attachments, accessories, and improvements to, and proceeds
(including proceeds of any insurance policies, proceeds of proceeds and claims
against third parties) of, any and all of the above, and all Borrower’s books
relating to any and all of the above. Borrower hereby authorizes PFG to file
financing statements, without notice to Borrower, with all appropriate
jurisdictions in order to perfect or protect PFG’s interests or rights
hereunder, which financing statements may show the Collateral as “all assets of
Debtor” or words of similar effect, or as being of equal or lesser scope, or
with greater detail, and may include a notice that any disposition of
Collateral, by either Borrower or any other Person, shall be deemed to violate
the rights of PFG under the Code, all in PFG’s discretion. Notwithstanding the
foregoing, Collateral shall not include Excluded Collateral.

 

3.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER.

In order to induce PFG to enter into this Agreement and to make Loans, Borrower
represents and warrants to PFG as follows, and Borrower covenants that the
following representations will continue to be true and correct in all material
respects, and that Borrower will at all times comply with all of the following
covenants, throughout the term of this Agreement and thereafter until all
Obligations have been paid and performed in full:

3.1 Corporate Existence and Authority. Borrower is and will continue to be, duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Borrower is and will continue to be qualified
and has and will have all Governmental Authorizations required to do business in
all jurisdictions in which any failure to do so would result in a Material
Adverse Change. The execution, delivery and performance by Borrower of this
Agreement, and all other documents contemplated hereby (i) have been duly and
validly authorized, (ii) are enforceable against Borrower in accordance with
their terms (except as enforcement may be limited by equitable principles and by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
creditors’ rights generally), (iii) do not violate Borrower’s Constitutional
Documents, or any Legal Requirement or any material agreement or instrument
which is binding upon Borrower or its property, and (iv) do not constitute
grounds for acceleration of any material indebtedness or obligation under any
agreement or instrument which is binding upon Borrower or its property.

3.2 Name; Trade Names and Styles. As of the date hereof, the name of Borrower
set forth in the heading to this Agreement is its correct name, as set forth in
its Constitutional Documents. Listed in the Representations are all prior names
of Borrower and all of Borrower’s present and prior trade names as of the date
hereof. Borrower shall give PFG 30 days’ prior written notice before changing
its name or doing business under any other name. Borrower has complied, and will
in the future comply, in all material respects, with all laws relating to the
conduct of business under a fictitious business name, if applicable to Borrower.

3.3 Place of Business; Location of Collateral. As of the date hereof, the
address set forth in the heading to this Agreement is Borrower’s chief executive
office. In addition, as of the date hereof, Borrower has places of business and
Collateral is located only at the locations set forth in the Representations.
Borrower will give PFG at least 30 days prior written notice before opening any
additional place of business, changing its chief executive office, or moving any
of the Collateral to a location other than Borrower’s Address or one of the
locations set forth in the Representations, except that Borrower may maintain
sales offices in the ordinary course of business at which not more than a total
of $100,000 fair market value of Equipment is located.

3.4 Title to Collateral; Perfection; Permitted Liens.

(a) Borrower is now, and will at all times in the future be, the sole owner of
all the Collateral, except for items of Equipment which are leased to Borrower.
The Collateral now is and will remain free and clear of any and all Liens,
except for Permitted Liens. PFG now has, and will continue to have, a
First-Priority perfected and enforceable (except as may be limited by
bankruptcy, insolvency, moratorium, fraudulent conveyance or other laws
applicable to creditors’ rights generally) security interest in all of the
Collateral and Borrower will at all times defend PFG and the Collateral against
all claims of others.

(b) Borrower has set forth in the Representations all of Borrower’s Deposit
Accounts, and Borrower will give PFG five (5) Business Days advance written
notice before establishing any new Deposit Accounts and will cause the
institution where any such new Deposit Account is maintained to execute and
deliver to PFG (or to the Senior Lender and to PFG) a Control Agreement in form
sufficient to perfect PFG’s security interest in the Deposit Account and
otherwise satisfactory to PFG in its good faith business judgment.

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(c) In the event that Borrower shall at any time after the date hereof have any
commercial tort claims against others, which it is asserting, and in which the
potential recovery exceeds $100,000, Borrower shall promptly notify PFG thereof
in writing and provide PFG with such information regarding the same as PFG shall
request (unless providing such information would waive the Borrower’s
attorney-client privilege). Such notification to PFG shall constitute a grant of
a security interest in the commercial tort claim and all proceeds thereof to
PFG, and Borrower shall execute and deliver all such documents and take all such
actions as PFG shall request in connection therewith.

(d) Set forth in the Representations is every location where Collateral having a
fair market value of $100,000 or more (in the aggregate as to each such
location) is located (whether by being affixed to real property or otherwise).
Whenever any Collateral having a fair market value, as to any one location, of
$100,000 or more is located upon a premises in which any third party has an
interest, Borrower shall, whenever requested by PFG, use commercially reasonable
efforts to cause such third party to execute and deliver to PFG, in form
acceptable to PFG, such waivers and subordinations as PFG shall specify in its
good faith business judgment. Borrower will comply with all material terms of,
any lease of real property where any of the Collateral now or in the future may
be located.

3.5 Maintenance of Collateral. Borrower will maintain the Collateral in good
working condition (ordinary wear and tear excepted), and Borrower will not use
the Collateral for any unlawful purpose. Borrower will immediately advise PFG in
writing of any material loss or damage to the Collateral.

3.6 Books and Records. Borrower has maintained and will maintain at Borrower’s
Address complete and accurate books and records, comprising an accounting system
in accordance with GAAP.

3.7 Financial Condition, Statements and Reports. All financial statements now or
in the future delivered to PFG have been, and will be, prepared in conformity
with GAAP and now and in the future will fairly present in all material respects
the results of operations and financial condition of Borrower, in accordance
with GAAP, at the times and for the periods therein stated. Between the last
date covered by any such statement provided to PFG and the date hereof, there
has been no Material Adverse Change.

3.8 Tax Returns and Payments; Pension Contributions. Borrower has timely filed,
and will timely file, all required Tax Returns, except for returns and reports
for taxes, assessments, deposits and contributions in an aggregate amount not
exceeding Twenty-Five Thousand Dollars ($25,000), and Borrower has timely paid,
and will timely pay, all Taxes now or in the future owed by Borrower. Borrower
may, however, defer payment of any of the foregoing which are contested by
Borrower in good faith, provided that Borrower (i) contests the same by
appropriate proceedings promptly and diligently instituted and conducted,
(ii) notifies PFG in writing of the commencement of, and any material
development in, the proceedings, and (iii) posts bonds or takes any other steps
required to keep the same from becoming a Lien upon any of the Collateral.
Borrower is unaware of any claims or adjustments proposed for any of Borrower’s
prior tax years which could result in additional taxes becoming due and payable
by Borrower. Borrower has paid, and shall continue to pay all amounts necessary
to fund all present and future pension, profit sharing and deferred compensation
plans in accordance with their terms, and Borrower has not and will not withdraw
from participation in, permit partial or complete termination of, or permit the
occurrence of any other event with respect to, any such plan which could
reasonably be expected to result in any liability of Borrower, including any
liability to the Pension Benefit Guaranty Corporation or its successors or any
other Governmental Body, except as could reasonably be expected to result in a
Material Adverse Change.

3.9 Compliance with Law. Borrower has, to its Knowledge, complied, and will
comply, in all material respects, with all provisions of all foreign, federal,
state and local laws and regulations applicable to Borrower, including, but not
limited to, those relating to Borrower’s ownership of real or personal property,
the conduct and licensing of Borrower’s business, and all environmental matters.

3.10 Litigation. There is no claim, suit, litigation, proceeding or
investigation pending or (to Borrower’s Knowledge) threatened in writing against
or affecting Borrower in any court or before any Governmental Body (or any basis
therefor known to Borrower) which could reasonably be expected to result, either
separately or in the aggregate, in any Material Adverse Change. Borrower will
promptly inform PFG in writing of any claim, proceeding, litigation or
investigation in the future threatened in writing or instituted against Borrower
involving any single claim of $50,000 or more, or involving $100,000 or more in
the aggregate.

3.11 Use of Proceeds. All proceeds of all Loans shall be used solely for lawful
business purposes. Borrower is not purchasing or carrying any “margin stock” (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
and no part of the proceeds of any Loan will be used to purchase or carry any
“margin stock” or to extend credit to others for the purpose of purchasing or
carrying any “margin stock.”

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3.12 No Default. At the date hereof, no Default or Event of Default has
occurred, and no Default or Event of Default will have occurred after giving
effect to any Loans being made concurrently herewith.

3.13 Protection and Registration of Intellectual Property Rights. Borrower owns
or otherwise holds the right to use all intellectual property rights, including,
without limitation, all patents, copyrights, trademarks, Domain Rights (as
defined below), trade secrets and computer software, material to the conduct of
its business as currently conducted, except for (a) non-exclusive licenses
granted to its customers in the ordinary course of business, and
(b) over-the-counter software that is commercially available to the public.
Borrower shall: (a) protect, defend and maintain the validity and enforceability
of its intellectual property, other than intellectual property that is not
material to Borrower’s business and that Borrower has determined not to maintain
or to abandon; (b) promptly advise PFG in writing of material infringements of
its intellectual property; and (c) not allow any intellectual property owned by
Borrower and material to Borrower’s business to be abandoned, forfeited or
dedicated to the public without PFG’s written consent. If, before the
Obligations have been paid and/or performed in full, Borrower shall (i) adopt,
use, acquire or apply for registration of any trademark, service mark or trade
name, (ii) apply for registration of any patent or obtain any patent or patent
application; (iii) create or acquire any published or material unpublished works
of authorship material to the business that is or is to be registered with the
U.S. Copyright Office or any non-U.S. equivalent or other Governmental Body; or
(iv) register or acquire any domain name or domain name rights, then the
provisions of Section 2.1 shall automatically apply thereto, and Borrower shall
use all commercially reasonable efforts to give PFG advance written notice
thereof and in any event shall thereafter give PFG prompt written notice thereof
(which for purposes hereof shall be deemed to be not more than fifteen
(15) Business Days). Borrower shall further provide PFG with all information and
details relating to the foregoing and take such further actions as PFG may
reasonably request from time to time to enable PFG to perfect or continue the
perfection of PFG’s interest in such Collateral.

3.14 Domain Rights and Related Matters. Borrower (a) is the sole record, legal
and beneficial owner of all domain names and domain name rights used in
connection with its business and that of its Subsidiaries, free and clear of any
rights or claims of any third party; (b) the information provided in the
Representations with respect to domain names and ownership thereof, domain
registry, domain servers, location and administrative contact information, web
hosting and related services and facilities (collectively, “Domain Rights”) is
true, accurate and complete and Borrower shall promptly notify PFG of any
changes to such information; (c) shall maintain all Domain Rights in full force
and effect so long as any Obligations remain outstanding; (d) shall, upon
request of PFG, notify such third parties (including domain registrars, hosting
companies and internet service providers) of PFG’s security interest in
Borrower’s Domain Rights; and (e) promptly advise PFG in writing of any disputes
or infringements of its Domain Rights.

3.15 Solvency. The fair salable value of Borrower’s assets (including goodwill
minus disposition costs) exceeds the fair value of its liabilities; Borrower is
not left with unreasonably small capital after the transactions contemplated in
this Agreement; and Borrower is able to pay its debts (including trade debts) as
they mature.

3.16 Subsidiaries; Investments. Borrower does not own any stock, partnership
interest or other equity securities except for Permitted Investments.

3.17 Restricted License. Except as set forth in the Representations, Borrower is
not party to any Restricted License.

3.18 The Company, Notes and Conversion Stock

(a) The shares of the Company’s Common Stock issuable upon conversion of the
Notes (the “Conversion Stock”), upon issuance of the Notes, will be duly and
validly reserved for issuance. The Conversion Stock, when issued upon conversion
of Notes, will be validly authorized, issued and fully paid. The issuance and
delivery of the Conversion Stock is not subject to preemptive or any similar
rights of the stockholders of the Company (which have not been duly waived) or
any Liens, except for restrictions on transfer provided for herein or under
applicable federal and state securities laws and restrictions created by PFG.
The Conversion Stock will be issued without any legends other than the
Securities Act legend in the form set forth in the Notes, until such time as it
is removed pursuant to the provisions thereof.

(b) The capitalization table of the Company provided to PFG as part of the
Representations is true, correct, accurate and complete as of the date hereof.

(c) The execution and delivery of this Agreement and the Notes by Borrower and
the consummation by it of the transactions contemplated hereby and thereby
(including without limitation, the issuance of the Notes and the issuance and
reservation for issuance of the Conversion Stock) have been duly authorized by
the Company’s Board and no further consent of authorization or the Company, its
Board or its shareholders is required.

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(d) Except as specified in Exhibit A, no consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Body or other person or entity is required on the
part of the Company in connection with the execution, delivery and performance
of this Agreement the Notes or the issuance, sale and delivery of the Conversion
Stock, except (i) such filings as shall have been made prior to and shall be
effective on and as of the date hereof, (ii) notice filings required pursuant to
applicable state securities laws on or after the date hereof, and (iii) filings
necessary to perfect security interests of PFG.

(e) Commencing on the date upon which the Notes are issued, the Company shall
maintain authorized but unissued shares of Common Stock sufficient to
accommodate the conversion of all Notes outstanding at any time and from time to
time upon Optional Conversion.

(f) Assuming the accuracy of the representations and warranties of PFG contained
in Exhibit D hereof, the offer, sale and issuance of the Notes are, and the
Conversion Stock upon conversion thereof will be, exempt from the registration
requirements of the Securities Act pursuant to 506 of Regulation D under the
Securities Act and from the registration and qualification requirements of
applicable state securities laws. Neither the Company nor any agent on its
behalf has solicited or will solicit any offers to sell or has offered to sell
or will offer to sell all or any part of such securities to any person or
persons so as to bring the sale of the Notes and issuance of Conversion Stock
upon conversion thereof by the Company within the registration provisions of the
Securities Act.

(g) The Company is and will remain subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act and (i) has filed and will file all
required reports under Section 13 or 15(d) of the Exchange Act, as applicable,
during the 12 months preceding the initial issuance of any Notes, other than
Form 8-K reports; and (ii) has submitted and will submit electronically and
posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T, during the 12
months preceding such sale (a “Reporting Issuer”).

(h) At any time and from time to time, PFG may advise the Company that it does
not wish to routinely and periodically receive Reports (or other information, as
advised) under Section 6 of the Schedule other than by a later submitted
“Special Request”, and if PFG so advises the Company, the Company shall not at
any time thereafter (unless PFG so requires by Special Request) provide PFG with
any material nonpublic information and shall publicly disclose the terms of such
agreement on Form 8-K under the Exchange Act (including it as an exhibit thereto
only if the Company deems it required under applicable law) promptly following
the date of such PFG advice; provided, if applicable, that the Company makes no
representation or warranty with respect to any information provided to the
Company in writing pursuant to a Special Request.

(i) The Company has not and shall not pay any commission or other remuneration
either directly or indirectly for soliciting the conversion of any Notes.

(j) The Company has not and shall not engage any placement agent, finder or
broker dealer in connection with the offer and sale of the Notes and the
Conversion Stock.

(k) Neither the Company nor any of its predecessors or affiliates has been
subject to any order, judgment or decree of any court of competent jurisdiction
temporarily, preliminarily or permanently enjoining such person for a failure to
comply with Regulation D under the Securities Act and the Company shall comply
in all respects with Regulation D in connection with any future securities
offerings made in reliance on Regulation D.

(l) Neither the Company nor any person acting on its behalf has used or will use
any form of general solicitation or general advertising in connection with the
offer or sale of the Notes or the Conversion Stock.

3.19 Full Disclosure. No written representation, warranty or other statement of
Borrower in any certificate or written statement given to PFG, as of the date of
such representation, warranty or other statement was made, taken together with
all such written certificates and written statements given to PFG, contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained in the certificates or statements not
misleading (it being recognized by PFG that the projections and forecasts
provided by Borrower in good faith and based upon reasonable assumptions are not
viewed as facts or as a representation or warranty as to future performance and
that actual results during the period or periods covered by such projections and
forecasts may differ from the projected or forecasted results.

 

4.   ACCOUNTS.

4.1 Representations Relating to Accounts. Borrower represents and warrants to
PFG as follows: Each Account reflected from time to time in Reports provided to
PFG under Section 6 of the Schedule or otherwise represented in Borrower’s
Financial Statements shall, as of the date of such Reports and Financial
Statements, represent an undisputed bona fide existing unconditional obligation
of the Account Debtor created by the sale, delivery, and acceptance of goods or
the rendition of services, or the non-exclusive licensing of Intellectual
Property, in the ordinary course of Borrower’s business.

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4.2 Representations Relating to Documents and Legal Compliance. Borrower
represents and warrants to PFG as follows: All statements made and all unpaid
balances appearing in all invoices, instruments and other documents evidencing
the Accounts are and shall be true and correct in all material respects and all
such invoices, instruments and other documents and all of Borrower’s books and
records are and shall be genuine and in all material respects what they purport
to be. All sales and other transactions underlying or giving rise to each
Account shall comply in all material respects with all applicable laws and
governmental rules and regulations. To Borrower’s Knowledge, all signatures and
endorsements on all documents, instruments, and agreements relating to all
Accounts are and shall be genuine, and all such documents, instruments and
agreements are and shall be legally enforceable in accordance with their terms.

4.3 Documents Relating to Accounts. If reasonably requested by PFG, Borrower
shall furnish PFG with copies (or, at PFG’s request, originals) of all material
contracts, orders, invoices, and other similar documents, and all shipping
instructions, delivery receipts, bills of lading, and other evidence of
delivery, for any goods the sale or disposition of which gave rise to such
Accounts.

4.4 Collection of Accounts. Borrower shall have the right to collect all
Accounts, unless and until an Event of Default has occurred and is continuing.
Subject to the rights of the Senior Lender, PFG may, in its good faith business
judgment, upon the occurrence of an Event of Default, require that all proceeds
of Collateral be deposited by Borrower into a lockbox account, or such other
“blocked account” as PFG may specify, pursuant to a blocked account agreement in
such form as PFG may specify in its good faith business judgment.

4.5. Remittance of Proceeds. Subject to the rights of the Senior Lender and, to
the extent inconsistent herewith, Section 4.4, all proceeds arising from the
Transfer of any Collateral shall be delivered, in kind, by Borrower to PFG in
the original form in which received by Borrower not later than five (5) Business
Days after receipt by Borrower, to be applied to the Obligations in such order
as PFG shall determine; provided that, if no Event of Default has occurred and
is continuing, Borrower shall not be obligated to remit to PFG the proceeds
(i) of Accounts arising in the ordinary course of business, or (ii) of the sale
of worn out, obsolete or unneeded Equipment disposed of by Borrower in good
faith in an arm’s length transactions, or (iii) in connection with Permitted
Liens and Permitted Investments, or (iv) of non-exclusive licenses and
non-exclusive sublicenses for the use of the property of Borrower or its
Subsidiaries in the ordinary course of business, or (v) of Cash Equivalents for
cash or other Cash Equivalents of equal or greater value, or (vi) of other
Transfers in an aggregate amount not to exceed Ten Thousand Dollars ($10,000) in
any fiscal year of Borrower. Borrower agrees that it will not commingle proceeds
of Collateral (other than those described in subclauses (i) through (vi), above)
with any of Borrower’s other funds or property, but will hold such proceeds
separate and apart from such other funds and property and in an express trust
for PFG, except as set forth above, and subject to the rights of the Senior
Lender. PFG may, in its good faith business judgment, require that all proceeds
of Collateral be deposited by Borrower into a lockbox account, or such other
“blocked account” as PFG may specify, pursuant to a blocked account agreement in
such form as PFG may specify in its good faith business judgment. Nothing in
this Section limits the restrictions on disposition of Collateral set forth
elsewhere in this Agreement.

4.6 Disputes. Borrower shall notify PFG promptly of all disputes or claims
relating to Accounts. Borrower shall not forgive (completely or partially),
compromise or settle any Account for less than payment in full, or agree to do
any of the foregoing, except that Borrower may do so, provided that:
(i) Borrower does so in good faith, in a commercially reasonable manner, in the
ordinary course of business, and in arm’s length transactions, which are
reported to PFG on the regular reports provided to PFG; (ii) no Default or Event
of Default has occurred and is continuing; and (iii) after taking into account
all such discounts, settlements and forgiveness, the total outstanding Loans
will not exceed the Facility A Credit Limit.

4.7 Verification. Following the occurrence and during the continuance of a
Default, PFG may, from time to time, verify directly with the respective Account
Debtors the validity, amount and other matters relating to the Accounts, by
means of mail, telephone or otherwise, in the name of Borrower. Following the
occurrence and during the continuance of an Event of Default PFG may, from time
to time, verify directly with the respective Account Debtors the validity,
amount and other matters relating to the Accounts, by means of mail, telephone
or otherwise, in the name of Borrower or PFG or such other name as PFG may
choose.

 

5.   ADDITIONAL DUTIES AND COVENANTS OF BORROWER.

Borrower will at all times comply with all of the following covenants throughout
the term of this Agreement:

5.1 Financial and Other Covenants. Borrower shall at all times comply with the
financial and other covenants set forth in the Schedule.

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5.2 Insurance. Borrower shall, at all times insure all of the tangible personal
property Collateral and carry such other business insurance, with insurers
reasonably acceptable to PFG, in such form and amounts as PFG may reasonably
require and as are customary and in accordance with standard practices for
Borrower’s industry and locations, and Borrower shall provide evidence of such
insurance to PFG. All such insurance policies shall name PFG as an additional
loss payee, and shall contain a lenders loss payee endorsement in form
reasonably acceptable to PFG. Upon receipt of the proceeds of any such
insurance, subject to the rights of the Senior Lender, PFG shall apply such
proceeds in reduction of the Obligations as PFG shall determine in its good
faith business judgment, except that, provided no Default or Event of Default
has occurred and is continuing, PFG shall release to Borrower insurance proceeds
with respect to Equipment and other fixed assets totaling less than $100,000,
which shall be utilized by Borrower for the replacement of the Equipment and
other fixed assets with respect to which the insurance proceeds were paid. PFG
may require reasonable assurance that the insurance proceeds so released will be
so used. If Borrower fails to provide or pay for any insurance, PFG may, but is
not obligated to, obtain the same at Borrower’s expense. Borrower shall promptly
deliver to PFG copies of all material reports made to insurance companies.

5.3 Reports. Borrower, at its expense, shall provide PFG with the written
reports set forth in the Schedule, and such other written reports with respect
to Borrower (including budgets, projections, operating plans and other financial
documentation), as PFG shall from time to time reasonably request.

5.4 Access to Collateral, Books and Records. At reasonable times and, so long as
no Event of Default has occurred, on three (3) Business Day’s notice (or if an
Event of Default has occurred, regardless of notice thereof and cure periods,
upon one (1) Business Day’s notice), PFG, or its agents, shall have the right to
inspect the Collateral, and the right to audit and copy Borrower’s books and
records. The foregoing inspections and audits shall be at Borrower’s expense and
the charge therefor shall be $850 per person per day (or such higher amount as
shall represent PFG’s then current standard charge for the same), plus
reasonable out-of-pocket expenses. So long as no Event of Default has occurred
and no prior inspection or audit has revealed any material impropriety,
inconsistency or defect in Borrower’s practices, Collateral or its books and
records in relation thereto, such inspections and audits shall be conducted no
more often than once every twelve months. Notwithstanding the foregoing, if no
Default or Event of Default has occurred and is continuing, Borrower shall not
be required to disclose to PFG any document or information (i) where disclosure
is prohibited by applicable law or any agreement binding on Borrower, or (ii) is
subject to attorney-client or similar privilege or constitutes attorney work
product. If Borrower is withholding any information under the preceding
sentence, it shall so advise PFG in writing, giving PFG a general description of
the nature of the information withheld.

5.5 Negative Covenants. Except as may be permitted in the Schedule, Borrower
shall not, without PFG’s prior written consent (which shall be a matter of its
good faith business judgment and shall be conditioned on Borrower then being in
compliance with the terms of this Agreement), do any of the following:

(i) permit or suffer any Change in Control;

(ii) acquire any assets, except in the ordinary course of business, or make any
Investments other than Permitted Investments;

(iii) create, incur, allow or suffer any Lien on any of its property (including
Intellectual Property), or assign or convey any right to receive income,
including the sale of any Accounts, or permit any of its Subsidiaries to do so,
except for Permitted Liens, permit any Collateral not to be subject to the
First-Priority Lien granted herein, or enter into any agreement, document,
instrument or other arrangement (except with or in favor of PFG or the Senior
Lender) with any Person which directly or indirectly prohibits or has the effect
of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging,
granting a Lien in or upon, or encumbering any of Borrower’s or any Subsidiary’s
Intellectual Property, except for Permitted Liens or as otherwise permitted in
clause (iv), below;

(iv) Transfer, or permit any Subsidiary to Transfer, any Collateral (including
without limitation the Transfer of Intellectual Property and the Transfer of
Collateral which is then leased back by Borrower), except for (A) the proceeds
of Accounts arising in the ordinary course of business, or (B) the proceeds of
the sale of worn out, obsolete or unneeded Equipment disposed of by Borrower in
good faith in an arm’s length transactions, or (C) in connection with Permitted
Liens and Permitted Investments, or (D) of non-exclusive licenses and
non-exclusive sublicenses for the use of the property of Borrower or its
Subsidiaries in the ordinary course of business, or (E) of Cash equivalents for
cash or other Cash Equivalents of equal or greater value, or (E) other Transfers
in an aggregate amount not to exceed Ten Thousand Dollars ($10,000) in any
fiscal year of Borrower;

(v) store any Inventory or other Collateral with a fair market value in excess
of $100,000 with any warehouseman or other third party, unless there is in place
a bailee agreement in such form as PFG shall specify in its good faith business
judgment;

(vi) sell any Inventory on a sale-or-return, guaranteed sale, consignment, or
other contingent basis, except in the ordinary course of business;

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(vii) directly or indirectly make any Investment other than Permitted
Investments, or permit any of its Subsidiaries to do so;

(viii) create, incur, assume, guarantee or otherwise become liable for any
Indebtedness, or permit any Subsidiary to do so, other than Permitted
Indebtedness;

(ix) directly or indirectly enter into or permit to exist any material
transaction with any Affiliate of Borrower, except for transactions that are in
the ordinary course of Borrower’s business, upon fair and reasonable terms that
are no less favorable to Borrower than would be obtained in an arm’s length
transaction with a non-affiliated Person and loans owing from Subsidiaries that
are not a Borrower to Borrower or another Subsidiary that constitute Permitted
Subsidiary Investments or Other Permitted Investments;

(x) pay any dividends on Borrower’s stock or make any distribution or payment or
redeem, retire or repurchase any capital stock (except for Permitted
Investments); provided that (A) Borrower or any Subsidiary may convert any of
its convertible securities into other securities pursuant to the terms of such
convertible securities or otherwise in exchange thereof, (B) Borrower may pay
dividends solely in its common stock, (C) any Subsidiary may pay to Borrower (or
a Borrower may pay to another Borrower) cash dividends on the stock of such
Subsidiary or such Borrower paid and declared solely for the purpose of funding
payments by such Borrower in respect of Taxes owing by such Borrower in respect
of another Borrower or a Subsidiary, and (D) Mattersight Corporation may, in an
aggregate combined amount for (1) and (2) not to exceed $750,000 in any calendar
year: (1) pay cash dividends, semi-annually in arrears, with respect to the
shares of Series B stock issued by Mattersight Corporation, and (2) from time to
time redeem shares of Series B stock issued by Mattersight Corporation;
provided, however, that Borrower’s balance sheet Cash immediately after each
payment of a Series B dividend must be greater than $5,000,000; and provided
further, for the avoidance of doubt, that the holders of Series B stock issued
by Mattersight Corporation may convert such stock into common stock of
Mattersight Corporation from time to time;

(xi) redeem (other than as expressly permitted under Section 5.5(x)(D)), retire,
purchase or otherwise acquire, directly or indirectly, any of Borrower’s stock,
except as required in the ordinary course of business and consistent with past
practice in connection with redeeming or purchasing stock of departing
employees, up to a maximum aggregate of $25,000 in any fiscal year;

(xii) engage, directly or indirectly, in any business other than the businesses
currently engaged in by Borrower or reasonably related thereto;

(xiii) without at least thirty (30) days prior written notice to PFG: (1) add
any new offices or business locations, including warehouses (unless such new
offices or business locations contain less than $100,000 in Borrower’s assets or
property, (2) change its jurisdiction of organization, (3) change its
organizational structure or type, (4) change its legal name, or (5) change any
organizational number (if any) assigned by its jurisdiction of organization;

(xiv) liquidate or dissolve or elect to liquidate or dissolve;

(xv) merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with any other Person, or acquire, of permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock (or other
equity interest) or property of any other Person; provided that a Subsidiary may
merge or consolidate into another Subsidiary or into Borrower;

(xvi) Borrower’s Board shall resolve to or approve, or Borrower shall otherwise
take any steps to effect, any of the foregoing actions in clauses (i) through
(xv), inclusive.

Transactions permitted by the foregoing provisions of this Section are only
permitted if no Default or Event of Default would occur as a result of such
transaction.

5.6 Litigation Cooperation. Should any third-party suit or proceeding be
instituted by or against PFG with respect to any Collateral or relating to
Borrower, Borrower shall, without expense to PFG, make available Borrower and
its officers, employees and agents and Borrower’s books and records, to the
extent that PFG may deem them reasonably necessary in order to prosecute or
defend any such suit or proceeding.

5.7 Changes. Borrower agrees to promptly notify PFG in writing of (i) any
changes in the information set forth in Part A, Section 1(a), 1(b), 2(a), 2(b),
3(a), 3(c), 4(c) and 17; and (ii) any material changes to the information set
forth in the remainder of the Representations. Changes (other than Trivial) to
the information set forth in Part A, Sections 1, 2, 3 (other than the Sections
specified above and variable dollar values of collateral from time to time),
4(a), 4(c), 4(d), 4(e), 5 and 6, and in Part B, Section 8, and Part C Sections
11(a), (b) and (c) and Sections 12 and 13 of the Representations shall be deemed
material.

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5.8 Further Assurances. Borrower agrees, at its expense, on request by PFG, to
execute all documents and take all actions, as PFG, may, in its good faith
business judgment, deem necessary or useful in order to perfect and maintain
PFG’s perfected First-Priority security interest in the Collateral (subject to
Permitted Liens), and in order to fully consummate the transactions contemplated
by this Agreement.

5.9 Existing Subsidiaries. Notwithstanding and without limiting the affirmative
covenant contained in Section 5.10 and the negative covenants contained in
Sections 5.5(ii), (x) and (xv) hereof, if at any time either Mattersight Canada,
individually, or the Other Subsidiaries, collectively, maintain gross assets in
an aggregate amount greater than Five Hundred Thousand Dollars ($500,000),
Borrower shall (a) cause Mattersight Canada or each of the Other Subsidiaries,
as applicable, to provide to PFG a joinder to the Loan Agreement to cause
Mattersight Canada and/or each of the Other Subsidiaries, as applicable, to
become a co-borrower hereunder, together with such appropriate financing
statements and/or Control Agreements, all in form and substance satisfactory to
PFG (including being sufficient to grant PFG a First-Priority Lien in and to the
assets of Mattersight Canada and/or each of the Other Subsidiaries, as
applicable), (b) provide to PFG appropriate certificates and powers and
financing statements, pledging all of the direct or beneficial ownership
interest in Mattersight Canada and/or each of the Other Subsidiaries, as
applicable, in form and substance satisfactory to Bank, and (c) provide to PFG
all other documentation in form and substance satisfactory to PFG, including one
or more opinions of counsel satisfactory to PFG, which in its opinion is
appropriate with respect to the execution and delivery of the applicable
documentation referred to above. Any document, agreement or instrument executed
or issued pursuant to this Section 5.9 shall be a Loan Document.

5.10 Formation or Acquisition of Subsidiaries. Notwithstanding and without
limiting the affirmative covenant contained in Section 5.9 and the negative
covenants contained in Sections 5.5(ii), (x) and (xv) hereof, at the time that
Borrower forms any direct or Indirect Subsidiary after the Effective Date,
Borrower shall, unless otherwise directed by PFG in writing, (a) cause such new
Subsidiary to provide to PFG a joinder to this Agreement to cause such
Subsidiary to become a co-borrower hereunder, together with such appropriate
financing statements and/or Control Agreements, all in form and substance
satisfactory to PFG (including being sufficient to grant PFG a First-Priority
Lien in and to the assets of such newly formed or acquired Subsidiary),
(b) provide to PFG appropriate certificates and powers and financing statements,
pledging all of the direct or beneficial ownership interest in such new
Subsidiary, in form and substance satisfactory to PFG; provided, that, with
respect to any Foreign Subsidiary formed or acquired after the Effective Date,
in the event that (i) the grant of a continuing pledge and security interest in
and to the assets of any such Foreign Subsidiary, (ii) the guaranty of the
Obligations of Borrower by any such Foreign Subsidiary and/or (iii) the pledge
by Borrower of a perfected security interest in one hundred percent (100%) of
the stock, units or other evidence of ownership of each Foreign Subsidiary,
could reasonably be expected to have a Non-Trivial adverse tax effect on
Borrower as demonstrated by Borrower to PFG, then Borrower shall only be
required to grant and pledge to PFG a perfected security interest in no more
than sixty-five percent (65%) of the stock, units or other evidence of ownership
of such Foreign Subsidiary, and (c) provide to PFG all other documentation in
form and substance satisfactory to PFG, including one or more opinions of
counsel satisfactory to PFG, which in its opinion is appropriate with respect to
the execution and delivery of the applicable documentation referred to above.
Any document, agreement or instrument executed or issued pursuant to this
Section 5.10 shall be a Loan Document.

6. TERM.

6.1 Maturity Date. This Agreement shall continue in effect until the maturity
dates set forth in the Schedule (the respective “Maturity Date” of each Loan),
subject to Sections 6.2, 6.3 and 6.4, below.

6.2 Early Termination. This Agreement may be terminated prior to the Maturity
Date of any Loan as follows: (i) by Borrower, effective three Business Days
after written notice of termination is given to PFG and Borrower’s repayment of
all Obligations as set forth in Section 6.3, provided, however, such termination
shall not affect Borrower’s obligations in respect of Warrants issued to PFG and
its designees; or (ii) by PFG at any time after the occurrence and during the
continuance of an Event of Default, without notice, effective immediately.

6.3 Payment of Obligations. On the Maturity Date of any Loan or on any earlier
effective date of termination, Borrower shall pay and perform in full all
Obligations in respect of such Loan, whether evidenced by installment notes or
otherwise, and whether or not all or any part of such Obligations are otherwise
then due and payable (other than inchoate indemnification obligations).
Notwithstanding any termination of this Agreement, all of PFG’s security
interests in all of the Collateral and all of the terms and provisions of this
Agreement shall continue in full force and effect until all Obligations have
been paid and performed in full (other than inchoate indemnification
obligations); provided that PFG may, in its sole discretion, refuse to make any
further Loans after termination. No termination shall in any way affect or
impair any right or remedy of PFG, nor shall any such termination relieve
Borrower of any Obligation to PFG, until all of the Obligations have been paid
and performed in full. Upon payment and performance in full of all the
Obligations and termination of this Agreement (other than inchoate
indemnification obligations), PFG shall release its security interests hereunder
and promptly terminate its financing statements with respect to the Borrower (or
authorize Borrower or its designee to so terminate) and deliver to Borrower such
other documents as may be required to fully terminate PFG’s security interests.

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6.4 Survival of Certain Obligations. Without limiting the survival of
obligations addressed otherwise in this Agreement and notwithstanding any other
provision of this Agreement, the obligations of Borrower under Section 5.6 and
Section 9 shall survive the termination of this Agreement.

7. EVENTS OF DEFAULT AND REMEDIES.

7.1 Events of Default. The occurrence of any of the following events shall
constitute an “Event of Default” under this Agreement, and Borrower shall give
PFG immediate written notice thereof:

(a) Any warranty, representation, covenant, statement, report or certificate
made or delivered to PFG by Borrower or any of Borrower’s officers, employees or
agents, now or in the future, shall be untrue or misleading in a material
respect when made or deemed to be made; or

(b) Borrower shall fail to pay any Loan or any interest thereon or any other
monetary Obligation within three (3) Business Days after the date due; or

(c) the aggregate principal amount of Loans and other monetary Obligations
outstanding at any time (other than Non-Overdue Monetary Obligations) shall
exceed the aggregate of the Facility A Credit Limit in the case of Facility A
and the principal amount of Facility B Notes at any time outstanding, and
Borrower fails to repay such excess within one (1) Business Day from the date
such excess occurs; or

(d) Borrower (i) shall fail to comply with any of the financial covenants set
forth in the Schedule, or (ii) shall breach any of the provisions of Section 5.5
hereof, or (iii) shall fail to perform any other non-monetary Obligation which
by its nature cannot be cured, or (iv) shall fail to permit PFG to conduct an
inspection or audit as provided in Section 5.4 hereof or (v) shall fail to
provide PFG with a Report under Section 6 of the Schedule within one
(1) Business Day after the date due; or

(e) Borrower shall fail to perform any other non-monetary Obligation, which
failure is not cured within ten (10) calendar days after the date due or, if
such failure is reasonably susceptible of cure but cannot by its nature be cured
within such ten (10) day period or cannot, after diligent attempts by Borrower,
be cured within such ten (10) calendar day period, and such failure is likely to
be cured within a reasonable time, then Borrower shall have an additional period
(which shall not in any case exceed thirty (30) calendar days) to cure such
failure; provided, however, that Borrower’s right to such additional cure
periods shall be conditioned upon (A) Borrower having provided PFG prompt notice
of such failure, together with details as to the steps taken and proposed to be
taken to cure such failure, (B) Borrower’s undertaking to cure such failure
within such additional cure periods, and (C) Borrower providing to PFG its
factual basis for believing such failure will be cured within such additional
periods; or

(f) any levy, assessment, attachment or seizure is made on all or any part of
the Collateral which is not cured within three (3) Business Days after the
occurrence of the same, or any Lien (other than a Permitted Lien) is made on all
or any part of the Collateral which is not cured within ten (10) calendar days
after the occurrence of the same; or

(g) any default or event of default occurs under any obligation (including
Indebtedness) secured by a Permitted Lien that individually or in the aggregate
has a value or associated cost in excess of $50,000, which is not cured within
any applicable cure period or waived in writing by the holder of the Permitted
Lien; or

(h) Borrower breaches any material contract or obligation, which has resulted or
may reasonably be expected to result in a Material Adverse Change; or

(i) Dissolution, termination of existence, insolvency or business failure of
Borrower; or appointment of a receiver, trustee or custodian, for all or any
part of the property of, assignment for the benefit of creditors by, or the
commencement of any proceeding by Borrower under any reorganization, bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, now or in the future in effect, or Borrower shall
generally not pay its debts as they become due, or Borrower shall conceal,
remove or transfer any part of its property, with intent to hinder, delay or
defraud its creditors, or make or suffer any transfer of any of its property
which may be fraudulent under any bankruptcy, fraudulent conveyance or similar
law; or

(j) the commencement of any proceeding against Borrower or any guarantor of any
of the Obligations under any reorganization, bankruptcy, insolvency,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, now or in the future in effect, which is not cured by the
dismissal thereof within 45 days after the date commenced; or

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(k) revocation or termination of, or limitation or denial of liability upon, any
guaranty of the Obligations or any attempt to do any of the foregoing, or
commencement of proceedings by any guarantor of any of the Obligations under any
bankruptcy or insolvency law; or

(l) revocation or termination of, or limitation or denial of liability upon, any
pledge of any certificate of deposit, securities or other property or asset of
any kind pledged by any third party to secure any or all of the Obligations, or
any attempt to do any of the foregoing, or commencement of proceedings by or
against any such third party under any bankruptcy or insolvency law; or

(m) Borrower makes any payment on account of any Indebtedness or obligation
which has been subordinated to the Obligations (other than as permitted in the
applicable subordination agreement), or if any Person who has subordinated such
Indebtedness or obligations terminates or in any way limits his subordination
agreement; or

(n) a default or breach shall occur under any other Loan Document, which default
or breach shall be continuing after the later of any cure period specified in
such other Loan Document or five (5) Business Days; provided, however, so long
as such default or breach does not, as determined in PFG’s good faith business
judgment, involve material risk to PFG’s security interest, perfection or
ability to exercise rights in any Collateral with a value in excess of $100,000,
if such default or breach is reasonably susceptible of cure but cannot by its
nature be cured within the relevant cure period or cannot after diligent
attempts by Borrower be cured within such relevant cure period, and such default
or breach is likely to be cured within a reasonable time, then Borrower shall
have an additional period (which shall not in any case exceed thirty
(30) calendar days) to cure such default or breach; provided, however, that
Borrower’s right to such additional cure period shall be conditioned upon
(A) Borrower having provided PFG prompt notice of such default or breach,
together with details as to the steps taken and proposed to be taken to cure
such default or breach, (B) Borrower’s undertaking to cure such default or
breach within such additional cure periods, and (C) Borrower providing to PFG
its factual basis for believing such default or breach will be cured within such
additional period; or

(o) a Material Adverse Change shall occur.

PFG may cease making any Loans hereunder during any of the cure periods provided
above, and thereafter if an Event of Default has occurred and is continuing.

7.2 Remedies. Upon the occurrence and during the continuance of any Event of
Default, and at any time thereafter, PFG, at its option, and without notice or
demand of any kind (all of which are hereby expressly waived by Borrower), may
do any one or more of the following: (a) Cease making Loans or otherwise
extending credit to Borrower under this Agreement or any other Loan Document;
(b) Accelerate and declare all or any part of the Obligations to be immediately
due, payable, and performable, notwithstanding any deferred or installment
payments allowed by any instrument evidencing or relating to any Obligation;
(c) Subject to the rights of the Senior Lender, take possession of any or all of
the Collateral wherever it may be found, and for that purpose Borrower hereby
authorizes PFG without judicial process to enter onto any of Borrower’s premises
without interference to search for, take possession of, keep, store, or remove
any of the Collateral, and remain on the premises or cause a custodian to remain
on the premises in exclusive control thereof, without charge for so long as PFG
deems it necessary, in its good faith business judgment, in order to complete
the enforcement of its rights under this Agreement or any other agreement;
provided, however, that should PFG seek to take possession of any of the
Collateral by court process, Borrower hereby irrevocably waives: (i) any bond
and any surety or security relating thereto required by any statute, court rule
or otherwise as an incident to such possession; (ii) any demand for possession
prior to the commencement of any suit or action to recover possession thereof;
and (iii) any requirement that PFG retain possession of, and not dispose of, any
such Collateral until after trial or final judgment; (d) Require Borrower to
assemble any or all of the Collateral and make it available to PFG at places
designated by PFG which are reasonably convenient to PFG and Borrower, and to
remove the Collateral to such locations as PFG may deem advisable; (e) Complete
the processing, manufacturing or repair of any Collateral prior to a disposition
thereof and, for such purpose and for the purpose of removal, PFG shall have the
right to use Borrower’s premises, vehicles, hoists, lifts, cranes, and other
Equipment and all other property without charge; (f) Sell, lease or otherwise
dispose of any of the Collateral, in its condition at the time PFG obtains
possession of it or after further manufacturing, processing or repair, at one or
more public and/or private sales, in lots or in bulk, for cash, exchange or
other property, or on credit, and to adjourn any such sale from time to time
without notice other than oral announcement at the time scheduled for sale. PFG
shall have the right to conduct such disposition on Borrower’s premises without
charge, for such time or times as PFG deems reasonable, or on PFG’s premises, or
elsewhere and the Collateral need not be located at the place of disposition.
PFG may directly or through any affiliated company purchase or lease any
Collateral at any such public disposition, and if permissible under applicable
law, at any private disposition. Any sale or other disposition of Collateral
shall not relieve Borrower of any liability Borrower may have if any Collateral
is defective as to title or physical condition or otherwise at the time of sale;
(g) Demand payment of, and collect any Accounts and General Intangibles
comprising Collateral and, in connection therewith, Borrower irrevocably
authorizes PFG to endorse or sign Borrower’s name on all collections, receipts,
instruments and other documents, to take possession of and open mail addressed
to Borrower and remove therefrom payments made with respect to any item of the
Collateral or proceeds thereof, and, in PFG’s good faith business judgment, to
grant extensions of time to pay, compromise claims and settle Accounts and the
like for less than face value; (h) Exercise any and all rights under any present
or future Control Agreements relating to Deposit Accounts or Investment
Property; and (i) Demand and receive possession of any of Borrower’s federal and
state income tax returns and the books and records utilized in the preparation
thereof or referring thereto. All reasonable attorneys’ fees, expenses, costs,
liabilities and obligations incurred by PFG with respect to the foregoing shall
be added to and become part of the Obligations, shall be due on demand, and
shall bear interest at a rate equal to the highest interest rate applicable to
any of the Obligations. Without limiting any of PFG’s rights and remedies, from
and after the occurrence and during the continuance of any Event of Default, the
interest rate applicable to the Obligations shall be the Default Rate.
Notwithstanding the foregoing (but without limiting PFG’s right to cease lending
to Borrower if a Default or Event of Default has occurred), PFG shall not
exercise remedies in respect of Collateral if there are no monetary Obligations
outstanding to PFG (other than inchoate indemnification obligations).

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7.3 Standards for Determining Commercial Reasonableness. Borrower and PFG agree
that a sale or other disposition (collectively, “sale”) of any Collateral which
complies with the following standards will conclusively be deemed to be
commercially reasonable: (i) Notice of the sale is given to Borrower at least
ten days prior to the sale, and, in the case of a public sale, notice of the
sale is published at least five days before the sale in a newspaper of general
circulation in the county where the sale is to be conducted; (ii) Notice of the
sale describes the collateral in general, non-specific terms; (iii) The sale is
conducted at a place designated by PFG, with or without the Collateral being
present; (iv) The sale commences at any time between 8:00 a.m. and 6:00 p.m.;
(v) Payment of the purchase price in cash or by cashier’s check or wire transfer
is required; (vi) With respect to any sale of any of the Collateral, PFG may
(but is not obligated to) direct any prospective purchaser to ascertain directly
from Borrower any and all information concerning the same. PFG shall be free to
employ other methods of noticing and selling the Collateral, in its discretion,
if they are commercially reasonable.

7.4 Power of Attorney. Upon the occurrence and during the continuance of any
Event of Default, without limiting PFG’s other rights and remedies, Borrower
grants to PFG an irrevocable power of attorney coupled with an interest,
authorizing and permitting PFG (acting through any of its employees, attorneys
or agents) at any time, at its option, but without obligation, with or without
notice to Borrower, and at Borrower’s expense, to do any or all of the
following, in Borrower’s name or otherwise, but PFG agrees that if it exercises
any right hereunder, it will do so in good faith and in a commercially
reasonable manner: (a) Execute on behalf of Borrower any documents that PFG may,
in its good faith business judgment, deem advisable in order to perfect and
maintain PFG’s security interest in the Collateral, or in order to exercise a
right of Borrower or PFG, or in order to fully consummate all the transactions
contemplated under this Agreement, and all other Loan Documents; (b) Execute on
behalf of Borrower, any invoices relating to any Account, any draft against any
Account Debtor and any notice to any Account Debtor, any proof of claim in
bankruptcy, any Notice of Lien, claim of mechanic’s, materialman’s or other
Lien, or assignment or satisfaction of mechanic’s, materialman’s or other Lien;
(c) Take control in any manner of any cash or non-cash items of payment or
proceeds of Collateral; endorse the name of Borrower upon any instruments, or
documents, evidence of payment or Collateral that may come into PFG’s
possession; (d) Endorse all checks and other forms of remittances received by
PFG; (e) Pay, contest or settle any Lien, charge, encumbrance, security interest
and adverse claim in or to any of the Collateral, or any judgment based thereon,
or otherwise take any action to terminate or discharge the same; (f) Grant
extensions of time to pay, compromise claims and settle Accounts and General
Intangibles for less than face value and execute all releases and other
documents in connection therewith; (g) Pay any sums required on account of
Borrower’s taxes or to secure the release of any Liens therefor, or both;
(h) Settle and adjust, and give releases of, any insurance claim that relates to
any of the Collateral and obtain payment therefor; (i) Instruct any third party
having custody or control of any books or records belonging to, or relating to,
Borrower to give PFG the same rights of access and other rights with respect
thereto as PFG has under this Agreement; (j) Execute on behalf of Borrower and
file in Borrower’s name such documents and instruments as may be necessary or
appropriate to effect the transfer of Domain Rights, domain names, domain
registry administrative contacts and domain and website hosting services into
the name of PFG or its designees, and (k) Take any action or pay any sum
required of Borrower pursuant to this Agreement and any other Loan Documents.
Any and all reasonable sums paid and any and all reasonable costs, expenses,
liabilities, obligations and attorneys’ fees incurred by PFG with respect to the
foregoing shall be added to and become part of the Obligations, shall be payable
on demand, and shall bear interest at a rate equal to the highest interest rate
applicable to any of the Obligations. In no event shall PFG’s rights under the
foregoing power of attorney or any of PFG’s other rights under this Agreement be
deemed to indicate that PFG is in control of the business, management or
properties of Borrower.

7.5 Application of Proceeds. All proceeds realized as the result of any sale of
the Collateral shall be applied by PFG first to the reasonable costs, expenses,
liabilities, obligations and attorneys’ fees incurred by PFG in the exercise of
its rights under this Agreement, second to the interest due upon any of the
Obligations, and third to the principal of the Obligations, in such order as PFG
shall determine in its sole discretion. Any surplus shall be paid to Borrower or
other persons legally entitled thereto; Borrower shall remain liable to PFG for
any deficiency. If, PFG, in its good faith business judgment, directly or
indirectly enters into a deferred payment or other credit transaction with any
purchaser at any sale of Collateral, PFG shall have the option, exercisable at
any time, in its good faith business judgment, of either reducing the
Obligations by the principal amount of purchase price or deferring the reduction
of the Obligations until the actual receipt by PFG of the cash therefor.

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7.6 Remedies Cumulative. In addition to the rights and remedies set forth in
this Agreement, PFG shall have all the other rights and remedies accorded a
secured party under the Code and under all other applicable laws, and under any
other instrument or agreement now or in the future entered into between PFG and
Borrower, and all of such rights and remedies are cumulative and none is
exclusive. Exercise or partial exercise by PFG of one or more of its rights or
remedies shall not be deemed an election, nor bar PFG from subsequent exercise
or partial exercise of any other rights or remedies. The failure or delay of PFG
to exercise any rights or remedies shall not operate as a waiver thereof, but
all rights and remedies shall continue in full force and effect until all of the
Obligations have been fully paid and performed.

 

8.   DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:

“Account Debtor” means the obligor on an Account.

“Accounts” means all present and future “accounts” as defined in the California
Code in effect on the date hereof with such additions to such term as may
hereafter be made, and includes without limitation all accounts receivable and
other sums owing to Borrower.

“Affiliate” means, with respect to any Person, a relative, partner, shareholder,
director, officer, or employee of such Person, or any parent or Subsidiary of
such Person, or any Person directly or indirectly through any other Person
controlling, controlled by or under common control with such Person.

“Board” means, with respect to any Person, such Person’s board of directors or
other corporate governing authority compliant with such Person’s Constitutional
Documents and applicable Legal Requirements.

“Borrowing” or “borrowing” or “draw” or “advance” and similar terms mean
extensions of credit to Borrower under this Agreement.

“Borrowing Resolutions” means with respect to any Person, those resolutions
adopted by such Person’s Board and delivered to PFG approving the Loan Documents
to which such Person is a party and the Warrants and the transactions
contemplated thereby.

“Business Day” means a day on which PFG is open for business.

“Cash” means unrestricted and unencumbered (except for the Liens of PFG and the
Senior Lender) cash or Cash Equivalents in deposit accounts or investment
accounts for which there is in effect a Control Agreement among Borrower, PFG
and the depositary institution in respect of such accounts, unless the
requirement for a Control Agreement has been waived by PFG.

“Cash Equivalents” means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or any agency or any State
thereof having maturities of not more than two (2) years from the date of
acquisition; (b) commercial paper maturing no more than one (1) year after its
creation and having the highest rating from either Standard & Poor’s Ratings
Group of Moody’s Investors Service, Inc.; (c) certificates of deposit with the
Senior Lender (or if there is no Senior Lender, such financial institutions in
respect of which PFG has in effect a Control Agreement) issued maturing no more
than one (1) year after issue; and (d) money market funds at least ninety-five
percent (95%) of the assets of which constitute Cash Equivalents of the kinds
described in clauses (a) through (c) of this definition.

“Change in Control” means any event, transaction, or occurrence as a result of
which (a) any “person” (as such term is defined in Sections 3(a)(9) and 13(d)(3)
of the Securities Exchange Act of 1934, as an amended (the “Exchange Act”)),
other than a trustee or other fiduciary holding securities under an employee
benefit plan of Borrower, is or becomes a beneficial owner (within the meaning
Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of
securities of Borrower, representing forty-nine percent (49%) or more of the
combined voting power of Borrower’s then outstanding securities (other than by
sale of Borrower’s equity securities in a public offering or to venture capital
investors so long as Borrower identifies to PFG the venture capital investors
prior to the closing of the transaction and provides PFG a description of the
material terms of the transaction).

“Code” means the Uniform Commercial Code as adopted and in effect in the State
of California from time to time.

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

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“Compliance Certificate” means Borrower’s certification of its compliance with
the terms and conditions of this Agreement, in the form as initially set forth
as Exhibit B hereto, as such form may be amended from time to time upon advance
notice from PFG to reflect any amendments, modifications and restatements of
this Agreement or the waiver of any terms hereof.

“Constitutional Document” means in relation to any Borrower, such Borrower’s
articles of incorporation, formation or association, certificate of
incorporation or formation, by-laws or other or other document or instrument
required or customary in such Borrower’s jurisdiction of formation, principal
place of business or operation, including such Borrower’s agreements with
shareholders and joint venture partners.

“Contingent Obligation” is, for any Person, any direct or indirect liability,
contingent or not, of that Person for (a) any Indebtedness, lease, dividend,
letter of credit or other obligation of another such as an obligation, in each
case directly or indirectly guaranteed, endorsed, co made, discounted or sold
with recourse by that Person, or for which that Person is directly or indirectly
liable; (b) any obligations for undrawn letters of credit for the account of
that Person; and (c) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but “Contingent
Obligation” does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under any guarantee or other support arrangement.

“continuing” and “during the continuance of” when used with reference to a
Default or Event of Default means that the Default or Event of Default has
occurred and has not been either waived in writing by PFG or cured within any
applicable cure period.

“Control Agreement” means a written agreement among PFG, Borrower and a
depositary bank or other custodian in respect of Borrower’s deposit accounts,
securities accounts, commodity accounts, and investment accounts by which the
depositary bank or other custodian, as appropriate, agrees to comply, following
the occurrence of an Event of Default, with instructions given from time to time
by PFG directing the disposition of the funds, investments and securities in
Borrower’s deposit, investment and securities accounts without further consent
of Borrower, which instructions may include not complying with instructions
(which term may include the honoring of checks written by Borrower against funds
in said accounts) given by Borrower.

“Conversion Notice” has the meaning set forth in Section 1 of the Schedule.

“Conversion Price” has the meaning set forth in Section 1 of the Schedule.

“Copyrights” means any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof, whether published or unpublished and whether or not the
same also constitutes a trade secret.

“Default” means any event which with notice or passage of time or both, would
constitute an Event of Default.

“Default Rate” means the lesser of eighteen percent (18%) per annum and the
maximum rate of interest that may lawfully be charged to a commercial borrower
under applicable usury laws.

“Deferred Revenue” means all amounts received or invoiced in advance of
performance under contracts and not yet recognized as Revenue.

“Deposit Accounts” means all present and future “deposit accounts” as defined in
the California Code in effect on the date hereof with such additions to such
term as may hereafter be made, and includes without limitation all general and
special bank accounts, demand accounts, checking accounts, savings accounts and
certificates of deposit.

“Dollars”, “dollars” or the use of the sign “$” means only lawful money of the
United States and not any other currency, regardless of whether that currency
uses the “$” sign to denote its currency or may be readily converted into lawful
money of the United States, but when used in reference to a non-U.S. Person, may
include the relevant foreign currency equivalent of the specified dollar amount.

“Domestic Subsidiary” means a Subsidiary organized under the laws of the United
States or any state or territory thereof or the District of Columbia.

“EBITDA” means (a) Net Income, plus (b) Interest Expense, plus (c) to the extent
deducted in the calculation of Net Income, depreciation expense, amortization
expense and non-cash compensation expense, plus (d) income tax expense.

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“Effective Date” is defined in the preamble hereof.

“Effective Price” means the price at which Borrower common stock is in an Equity
Financing or the price at which convertible securities issued in an Equity
Financing convert into common stock, provided, however, that if the securities
issued in an Equity Financing consist of any combination of securities (such as,
for example only, a unit consisting of common stock or preferred stock with
accompanying warrants or other derivative securities), the Effective Price shall
be reduced by the value of the accompanying warrants or other derivative
securities. For this purpose, the value of warrants or other derivative
securities shall be valued by the Black-Scholes valuation model. For example, if
a package of securities is sold consisting of one share of common stock and one
warrant for a total consideration of 75 cents, and the Black-Scholes valuation
of the warrant is 10 cents, the Effective Price of the common stock sold would
be deemed to be 65 cents. If the securities issued in an Equity Financing are
equity securities of a class or series other than common stock, the Effective
Price shall be the lower of (i) the price at which incentive common stock
options are then issued to Borrower’s employees, and (ii) the value of common
stock determined in Borrower’s last 409A-compliant valuation.

“Equipment” means all present and future “equipment” as defined in the
California Code in effect on the date hereof with such additions to such term as
may hereafter be made, and includes without limitation all machinery, fixtures,
goods, vehicles (including motor vehicles and trailers), and any interest in any
of the foregoing.

“Equity Financing” means the consummation of an equity (only) financing by
Borrower that occurs within six (6) months after the Effective Date and provides
net proceeds to Borrower of not less than $3,000,000.

“ERISA” is the Employee Retirement Income Security Act of 1974, and its
regulations.

“Event of Default” means any of the events set forth in Section 7.1 of this
Agreement.

“Excluded Collateral” means (a) any lease, license, contract or other agreement
(or any equipment or other assets owned by a Borrower that are subject to or
secured by a purchase money lien or a capital lease) disclosed in the
Representations to PFG to the extent that such lease, license, contract or other
agreement (or the agreement pursuant to which such purchase money lien is
granted (or the document providing for such capital lease)) prohibits or would
result in the termination of such agreement or document because of a grant of a
security interest therein by the Borrower, and (b) more than sixty-five percent
(65%) of the presently existing and hereafter arising, issued and outstanding
shares of capital stock owned by Borrower in any Foreign Subsidiary in existence
as of the Effective Date and disclosed to PFG and which shares entitled the
holder thereof to vote for directors or for any other matter.

“Facility A” means the Facility A Loan described in Section 1 of the Schedule.

“Facility A Credit Limit” has the meaning set forth in Section 1 of the
Schedule.

“Facility B” means the Facility B Loans (in the form of Notes) described in
Section 1 of the Schedule.

“Facility B Availability Period” has the meaning set forth in Section 1 of the
Schedule.

“First-Priority” means, in relation to PFG’s Lien in Collateral, a security
interest that is prior to any other security interest, with the exception of the
Liens of the Senior Lender and other Permitted Liens, which other Permitted
Liens may only have superior priority to PFG’s Lien as expressly permitted
herein or pursuant to a subordination agreement between PFG and the holder of
such other Permitted Lien.

“Financial Statements” means consolidated financial statements of Borrower,
including a balance sheet, income statement and cash flow and, in the case of
monthly-required financial statements, showing data for the month being reported
and a history showing each month from the beginning of the relevant fiscal year.

“Foreign Subsidiary” means any Subsidiary not a Domestic Subsidiary.

“GAAP” means generally accepted accounting principles, consistently applied.

“General Intangibles” means all present and future “general intangibles” as
defined in the California Code in effect on the date hereof with such additions
to such term as may hereafter be made, and includes without limitation all
Intellectual Property, payment intangibles, royalties, contract rights,
goodwill, franchise agreements, purchase orders, customer lists, route lists,
telephone numbers, domain names, claims, income tax refunds, security and other
deposits, options to purchase or sell real or personal property, rights in all
litigation presently or hereafter pending (whether in contract, tort or
otherwise), insurance policies (including without limitation key man, property
damage, and business interruption insurance), payments of insurance and rights
to payment of any kind.

“good faith business judgment” means honesty in fact and good faith (as defined
in Section 1201 of the Code) in the exercise of PFG’s business judgment.

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“Governmental Authorization” means any: (a) permit, license, certificate,
franchise, concession, approval, consent, ratification, permission, clearance,
confirmation, endorsement, waiver, certification, designation, rating,
registration, qualification or authorization that is, has been issued, granted,
given or otherwise made available by or under the authority of any Governmental
Body or pursuant to any Legal Requirement; or (b) right under any Contract with
any Governmental Body.

“Governmental Body” means any: (a) nation, principality, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any nature;
(b) local, municipal, foreign or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental division,
subdivision, department, agency, bureau, branch, office, commission, council,
board, instrumentality, officer, official, representative, organization, unit,
body or entity and any court or other tribunal); (d) multi-national organization
or body; or (e) individual, entity or body exercising, or entitled to exercise,
any executive, legislative, judicial, administrative, regulatory, police,
military or taxing authority or power of any nature.

“including” means including (but not limited to).

“Indebtedness” means (a) indebtedness for borrowed money or the deferred
purchase price of property or services, such as reimbursement and other
obligations for surety bonds and letters of credit, (b) obligations evidenced by
bonds, notes, debentures or other similar instruments, (c) Contingent
Obligations, and (d) capital lease obligations.

“Indirect Subsidiary” means a Person that is directly or indirectly majority
owned or controlled through a chain of ownership by a Person that is a
Subsidiary of any Borrower.

“Intellectual Property” means all present and future: (a) Copyrights, Copyright
rights, Copyright applications, Copyright registrations and like protections in
each work of authorship and derivative work thereof, whether published or
unpublished, (b) trade secret rights, including all rights to unpatented
inventions and know-how, and confidential information; (c) mask work or similar
rights available for the protection of semiconductor chips; (d) Patents, Patent
applications and like protections including without limitation improvements,
divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same; (e) Trademarks, servicemarks, trade styles,
and trade names, whether or not any of the foregoing are registered, and all
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of Borrower connected with and symbolized by
any such trademarks; (f) computer software and computer software products;
(g) designs and design rights; (h) technology; (i) all claims for damages by way
of past, present and future infringement of any of the rights included above;
and (j) all licenses or other rights to use any property or rights of a type
described above.

“Interest Expense” means for any fiscal period, interest expense (whether cash
or non-cash) determined in accordance with GAAP for the relevant period ending
on such date, including, in any event, interest expense with respect to any Loan
and other Indebtedness of Borrower and its Subsidiaries, including, without
limitation or duplication, all commissions, discounts, or related amortization
and other fees and charges with respect to letters of credit and bankers’
acceptance financing and the net costs associated with interest rate swap, cap,
and similar arrangements, and the interest portion of any deferred payment
obligation (including leases of all types).

“Inside Debt” has the meaning set forth in Section 8(c) of the Schedule.

“Inventory” means all present and future “inventory” as defined in the
California Code in effect on the date hereof with such additions to such term as
may hereafter be made, and includes without limitation all merchandise, raw
materials, parts, supplies, packing and shipping materials, work in process and
finished products, including without limitation such inventory as is temporarily
out of Borrower’s custody or possession or in transit and including any returned
goods and any documents of title representing any of the above.

“Investment” means any beneficial ownership interest in any Person (including
any stock, partnership interest or other equity or debt securities issued by any
Person), and any loan, advance or capital contribution to any Person.

“Investment Property” means all present and future investment property,
securities, stocks, bonds, debentures, debt securities, partnership interests,
limited liability company interests, options, security entitlements, securities
accounts, commodity contracts, commodity accounts, and all financial assets held
in any securities account or otherwise, and all options and warrants to purchase
any of the foregoing, wherever located, and all other securities of every kind,
whether certificated or uncertificated.

“Knowledge” or “best of knowledge” and words of similar import mean either
(i) the actual knowledge of any of Borrower’s officers, including Managing
Director, Chief Executive Officer, President, Legal Representative (in the case
of Persons in the PRC, Chief Information Officer (if any), Chief Technology
Officer (or equivalent), Chief Financial Officer and Corporate Controller, or
Borrower’s Vice Presidents or General Managers supervising a business unit or
division, or any persons succeeding or performing the responsibilities of such
identified positions, or (ii) such knowledge as the persons in such identified
positions would have assuming (A) Borrower policies in accordance with
generally-accepted norms of corporate governance and (B) the actual exercise of
reasonable diligence and prudence by such persons in accordance with such
policies.

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“Legal Requirement” means any written local, municipal, foreign or other law,
statute, legislation, constitution, principle of common law, resolution,
ordinance, code, edict, decree, proclamation, treaty, convention, rule,
regulation, ruling, directive, pronouncement, requirement, specification,
determination, decision, opinion or interpretation that is, has been issued,
enacted, adopted, passed, approved, promulgated, made, implemented or otherwise
put into effect by or under the authority of any Governmental Body.

“Lien” or “lien” is a security interest, claim, mortgage, deed of trust, levy,
charge, pledge or other encumbrance of any kind, whether voluntarily incurred or
arising by operation of law or otherwise against any property.

“Loan Documents” means, collectively, this Agreement, the Representations, and
all other present and future documents, instruments and agreements between PFG
and Borrower relating to this Agreement, and all amendments and modifications
thereto and replacements therefor.

“Loan Request” means any request that is made on a Business Day and may be made
by a Borrower in connection with this Agreement, including a borrowing request,
consent request, waiver request and the like.

“Material Adverse Change” is (i) a material impairment in the perfection or
priority of PFG’s Lien in the Collateral or in the value of such Collateral;
(ii) a material adverse change in the business, operations or condition
(financial or otherwise) of Borrower; (iii) a material impairment of the
prospect of repayment of any portion of the Obligations; or (iv) PFG determines,
based upon information available to it and in its reasonable judgment, that
there is a reasonable likelihood that Borrower shall fail to comply with one or
more of the financial covenants in Section 5 of the Schedule during the next
succeeding financial reporting period.

“Mattersight Canada” is Mattersight (Canada) Corporation, a company organized
under the laws of Canada.

“Mattersight Corporation” is defined in the preamble hereof.

“Mattersight Europe” is defined in the preamble hereof.

“Mattersight International” is defined in the preamble hereof.

“Net Income” means, as calculated on a consolidated basis for Borrower and its
Subsidiaries for any period as at any date of determination, the net profit (or
loss), after provision for Taxes, of Borrower and its Subsidiaries for such
period taken as a single accounting period.

“Non-Overdue Monetary Obligations” means, at any time, the amount of monetary
Obligations outstanding under this Agreement other than monetary Obligations
owing but not then due, such as accrued and unpaid interest that is not yet due
to be paid under the terms hereof.

“Non-Overdue Senior Monetary Obligations” means, at any time, the amount of
monetary Obligations other than principal Indebtedness owed by Borrower to PFG
and/or the Senior Lender (as the context indicates) but not then due, such as
accrued and unpaid interest that is not yet due.

“Note(s)” has the meaning set forth in Section 1 of the Schedule.

“Obligations” means all present and future Loans, advances, debts, liabilities,
obligations, guaranties, covenants, duties and Indebtedness at any time owing by
Borrower to PFG, including obligations and covenants intended to survive the
termination of this Agreement, whether evidenced by this Agreement or any note
or other instrument or document, or otherwise, including Indebtedness under any
obligation to purchase equity derivatives purchased or otherwise issued to PFG
from time to time, whether arising from an extension of credit, opening of a
letter of credit, banker’s acceptance, loan, guaranty, indemnification or
otherwise, whether direct or indirect (including, without limitation, those
acquired by assignment and any participation by PFG in Borrower’s debts owing to
others), absolute or contingent, due or to become due, including, without
limitation, all interest, charges, expenses, fees, attorney’s fees, expert
witness fees, audit fees, collateral monitoring fees, closing fees, facility
fees, termination fees, minimum interest charges and any other sums chargeable
to Borrower under this Agreement or under any other Loan Documents.

“Ordinary (or “ordinary”) course of business” and derivatives shall apply to an
action taken or an action required to be taken and not taken by or on behalf of
a Borrower. An action will not be deemed to have been taken in the “ordinary
course of business” unless: (a) such action is consistent with its past
practices (if such type of action has been taken in the past and, if not, such
action shall be deemed not in the ordinary course of business) and is similar in
nature and magnitude to actions customarily taken by it; (b) such action is
taken in accordance with sound and prudent business practices in its
jurisdiction of organization; and (c) such action is not required to be
authorized by its shareholders and does not require any other separate or
special authorization of any nature.

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“Other Property” means the following as defined in the California Code in effect
on the date hereof with such additions to such term as may hereafter be made,
and all rights relating thereto: all present and future “commercial tort claims”
(including without limitation any commercial tort claims identified in the
Representations), “documents”, “instruments”, “promissory notes”, “chattel
paper”, “letters of credit”, “letter-of-credit rights”, “fixtures”, “farm
products” and “money”; and all other goods and personal property of every kind,
tangible and intangible, whether or not governed by the California Code.

“Other Subsidiaries” means each of the Subsidiaries of each Borrower in
existence as of the Effective Date, except (a) Mattersight Canada, and (b) any
Subsidiary of any Borrower that is itself a Borrower.

“Patents” means all patents, patent applications and like protections including
without limitation improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same.

“Payment” means all checks, wire transfers and other items of payment received
by PFG for credit to Borrower’s outstanding Obligations.

“Permitted Indebtedness” means

(i) the Loans and other Obligations;

(ii) Indebtedness existing on the date hereof and shown on Exhibit A hereto;

(iii) Subordinated Debt;

(iv) Indebtedness owing to Senior Lender not in excess of the Senior Debt Limit
specified in the Schedule;

(v) unsecured Indebtedness incurred to trade creditors in the ordinary course of
business;

(vi) Indebtedness incurred as a result of endorsing negotiable instruments
received in the ordinary course of business;

(vii) Indebtedness secured by Permitted Liens specified in clauses (i) and
(ii) of the definition thereof;

(viii) reimbursement obligations in respect of letters of credit in an aggregate
face amount outstanding not to exceed $300,000 at any time outstanding, which
has been reported to PFG in writing, and, in the case of reimbursement
obligations to the Senior Lender in respect of letters of credit which do not
exceed the Senior Debt Limit (taking into account all other Indebtedness to
Senior Lender);

(ix) Indebtedness incurred after the Effective Date by a Borrower to its
Subsidiary(ies) in no more in respect of each Borrower than $25,000 in the
aggregate in any fiscal year; and

(x) extensions, refinancings, modifications, amendments and restatements of any
items of Permitted Indebtedness (i) through (ix) above; provided that the
principal amount thereof is not increased or the terms thereof are not modified
to impose more burdensome terms upon Borrower or any Subsidiary, as the case may
be.

“Permitted Investments” are:

(i) Investments (including in Subsidiaries) set forth on Exhibit A and existing
on the date hereof;

(ii) Investments consisting of Cash Equivalents;

(iii) Investments by Borrower in Subsidiaries not to exceed $375,000 in the
aggregate in any fiscal year (“Permitted Subsidiary Investments”);

(iv) Investments consisting of (A) travel advances and employee relocation loans
and other employee loans and advances in the ordinary course of business, and
(B) loans to employees, officers or directors relating to the purchase of equity
securities of Borrower or its Subsidiaries pursuant to employee stock purchase
plans or agreements approved by Borrower’s Board; and

(iv) other Investments in an aggregate amount not to exceed $250,000 in any
fiscal year or $500,000 during the term of this Agreement (“Other Permitted
Investments”).

“Permitted Liens” means the following:

(i) Liens existing on the Effective Date and set forth in the Representations or
arising under this Agreement or the other Loan Documents;

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(ii) purchase money Liens or capital leases (A) on Equipment acquired or held by
Borrower incurred for financing the acquisition or capital lease of such
Equipment securing no more than $6,000,000 in the aggregate amount at any time
outstanding, or (B) existing on Equipment when acquired, if the Lien is confined
to the property and improvements and the proceeds of the Equipment;

(iii) Liens for taxes, fees, assessments or other government charges or levies,
either (i) not due and payable, or (ii) being contested in good faith and for
which Borrower maintains adequate reserves on its books; provided that no notice
of any such Lien has been filed or recorded under the Internal Revenue Code of
1986, as amended, and the Treasury Regulations adopted thereunder;

(iv) additional Liens consented to in writing by PFG, which consent may be
withheld in its good faith business judgment. PFG will have the right to
require, as a condition to its consent under this subparagraph (iv), that the
holder of the additional Lien sign an intercreditor agreement on PFG’s then
standard form, acknowledge that the security interest is subordinate to the
security interest in favor of PFG, and agree not to take any action to enforce
its subordinate security interest so long as any Obligations remain outstanding,
and that Borrower agrees that any uncured default in any obligation secured by
the subordinate security interest shall also constitute an Event of Default
under this Agreement;

(v) Liens being terminated substantially concurrently with this Agreement;

(vi) Liens of materialmen, mechanics, warehousemen, carriers, suppliers or other
Persons that are possessory in nature arising in the ordinary course of business
so long as such Liens attach only to Inventory securing liabilities in the
aggregate amount not to exceed $100,000 and which are not delinquent or remain
payable without penalty or which are being contested in good faith and by
appropriate proceedings which proceedings have the effect of preventing the
forfeiture or sale of the property subject thereto;

(vii) Liens incurred in connection with the extension, renewal or refinancing of
the Indebtedness secured by Liens of the type described above in clauses (i) or
(ii) above, provided that any extension, renewal or replacement Lien is limited
to the property encumbered by the existing Lien and the principal amount of the
Indebtedness being extended, renewed or refinanced does not increase;

(viii) Liens in favor of customs and revenue authorities which secure payment of
customs duties in connection with the importation of goods;

(ix) statutory, common law or contractual Liens of depository institutions or
institutions holding securities account (including rights of set-off) securing
only customary charges and fees in connection with such accounts;

(x) Liens to secure payment of workers’ compensation, employment insurance,
old-age pensions, social security and other like obligations incurred in the
ordinary course of business (other than Liens imposed by ERISA);

(xi) Liens in favor of Senior Lender securing an amount not in excess of the
Senior Debt Limit; and

(xii) Liens incurred in the extension, renewal or refinancing of the
Indebtedness secured by Liens described in (i) through (xi), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the Indebtedness may not increase.

“Permitted Subsidiary Investments” is defined in clause (iii) of the definition
of “Permitted Investments”.

“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, government, or any
agency or political division thereof, or any other entity.

“Plan” means Borrower’s Board-approved financial plan and forecast for each
fiscal year, as contemplated in Section 6 of the Schedule).

“Qualifying Request” means a request made by a Responsible Officer of Borrower
under Section 1.4 for a Loan that is within Borrower’s borrowing availability
under this Agreement and the Schedule, meets the applicable conditions set forth
in Sections 9 (solely with respect to any draw under Facility A on the Effective
Date) and 10 of the Schedule and is accompanied by such certificates, documents
and instruments as may be required under this Agreement or otherwise reasonably
required by PFG to confirm Borrower’s compliance with the Loan Documents at the
time of such request.

“Representations” means the written Representations and Warranties provided by
Borrower to PFG referred to in the Schedule.

“Responsible Officer” means any of the Chief Executive Officer, President, Chief
Financial Officer and Controller of Borrower.

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“Restricted License” means any material license or other agreement with respect
to which Borrower is the licensee that (i) prohibits or otherwise restricts
Borrower from granting a security in Borrower’s interest in such license or
agreement or any other property, or (ii) for which a default under or
termination of could interfere with PFG’s right to sell any Collateral.

“Revenues” means Borrower’s consolidated revenues required to be recognized as
such under GAAP.

“Secretary’s Certificate” is, with respect to any Person, a certificate executed
by such Person’s Secretary on behalf of such Person certifying (i) that such
Person has the authority to execute, deliver, and perform its obligations under
each of the Loan Documents to which it is a party, (ii) that attached as an
exhibit to such certificate is a true, correct and complete copy of the
Borrowing Resolutions then in full force and effect authorizing and ratifying
the execution, delivery and performance by such Person of the Loan Documents to
which it is a party and the Warrants, (iii) the name(s) of the Person(s)
authorized to execute the Loan Documents and (as applicable) Warrants on behalf
of such Person, together with a sample of the true signature(s) of such
Person(s), (iv) that PFG may conclusively rely on such certificate unless and
until such Person shall have delivered to PFG a further certificate canceling or
amending (in each case with prospective effect only) such prior certificate, and
(v) in the case of each Borrower and in respect of each Subsidiary whose equity
is pledged to PFG to secure performance of the Obligations, the capitalization
table of such Person.

“SEC Documents” means any and all periodic and other reports, proxy statements
and other materials filed by Mattersight Corporation with the SEC, any
Governmental Body succeeding to any or all functions of the SEC or with any
national securities exchange, or distributed to its stockholders, as the case
may be. Documents required to be delivered pursuant to the terms hereof (to the
extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date on which Mattersight Corporation posts such
documents, or provides a link thereto, on Mattersight Corporation’s website on
the Internet at Mattersight Corporation’s website address.

“Security Instruments” means financing statements filed under the Code in any
jurisdiction in which such financing statements may be filed, fixed and floating
charges, share charges, mortgage debentures, and any other notices, instruments
and filings that reflect the “all assets” security granted to PFG by Borrower in
this Agreement and the other Loan Documents, including notices in respect of
Intellectual Property.

“Senior Debt Limit” has the meaning set forth in Section 8(a)(2) of the
Schedule.

“Senior Lender” has the meaning set forth in Section 8(a)(1) of the Schedule.

“Senior Loan Document” has the meaning set forth in Section 8(a)(1) of the
Schedule.

“Special Request” in relation to Reports (Section 6 of the Schedule) means,
after PFG has advised Borrower that it does not wish to automatically receive
periodic Borrower reports and financial information other than as and when made
available to the public generally, a PFG written request designated a “Special
Request” to receive information, reports and certificates required to be
delivered on a scheduled periodic basis under the terms of Section 6 of the
Schedule.

“Subsidiary” means, with respect to any Person, any Person of which more than
50% of the voting stock or other equity interests is owned or controlled,
directly or indirectly, by such Person or one or more Affiliates of such Person.

“Subordinated Debt” means Indebtedness incurred by Borrower subordinated to all
of Borrower’s now or hereafter Indebtedness to PFG (pursuant to a subordination,
intercreditor or other similar agreement in form and substance satisfactory to
PFG entered into between PFG and the other creditor and, if so required by PFG,
Borrower, on terms acceptable to PFG; provided, however, for purposes of
calculating Tangible Net Worth (only), Subordinated Debt shall include the
principal amount of Facility A Loans and the principal amount of any Facility B
Notes outstanding, in each case as at any date of measurement.

“Subordination Agreement” means an agreement between PFG and a third party in
form and substance satisfactory to PFG by which the Liens and repayment of such
third party are subordinated to the Liens and prior payment of all Obligations.

“Tangible Net Worth” means, on any date, the consolidated total assets of
Borrower and its Subsidiaries minus (a) any amounts attributable to
(i) goodwill, (ii) intangible items including unamortized debt discount and
expense, Patents, Trademarks, Copyrights, and research and development expenses
except prepaid expenses, (iii) notes, accounts receivable and other obligations
owing to Borrower from its officers and other Affiliates, and (iv) reserves not
already deducted from assets, minus (b) Total Liabilities, plus (c) Subordinated
Debt.

“Tax” means any tax (including any income tax, franchise tax, capital gains tax,
estimated tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, occupation tax, inventory tax, occupancy tax, withholding tax or payroll
tax), levy, assessment, tariff, impost, imposition, toll, duty (including any
customs duty), deficiency or fee, and any related charge or amount (including
any fine, penalty or interest), that is, has been or may in the future be
(a) imposed, assessed or collected by or under the authority of any Governmental
Body, or (b) payable pursuant to any tax-sharing agreement or similar contract.

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“Tax Return” means any return (including any information return), report,
statement, declaration, estimate, schedule, notice, notification, form,
election, certificate or other document or information that is, has been or may
in the future be filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.

“10-day VWAP” has the meaning set forth in Section 1 of the Schedule.

“Total Liabilities” is on any day, obligations that should, under GAAP, be
classified as liabilities on Borrower’s consolidated balance sheet, including
all Indebtedness.

“Trademarks” means any trademark and servicemark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Borrower connected with
and symbolized by such trademarks.

“Transfer” or “transfer” shall include any sale, assignment with or without
consideration, encumbrance, hypothecation, pledge, or other transfer or
disposition of any kind, including, but not limited to, transfers to receivers,
levying creditors, trustees or receivers in bankruptcy proceedings or general
assignees for the benefit of creditors, whether voluntary or by operation of
law, directly or indirectly.

“Trivial” and “Non-Trivial” mean trivial and non-trivial, respectively, from the
perspective of a lender in PFG’s position, as determined by PFG in its good
faith business discretion, and “Non-Trivial” includes a lesser level of
significance that does the term “material.”

“Warrants” has the meaning set forth in Section 9 of the Schedule.

Other Terms. All accounting terms used in this Agreement, unless otherwise
indicated, shall have the meanings given to such terms in accordance with GAAP,
consistently applied. All other terms contained in this Agreement, unless
otherwise indicated, shall have the meanings provided by the Code, to the extent
such terms are defined therein.

9. GENERAL PROVISIONS.

9.1 Confidentiality. PFG agrees to use the same degree of care that it exercises
with respect to its own information, to maintain the confidentiality of any and
all proprietary, trade secret or confidential information provided to or
received by PFG from the Borrower, which indicates that it is confidential,
including business plans and forecasts, non-public financial information,
confidential or secret processes, formulae, devices and contractual information,
customer lists, and employee relation matters, provided that PFG may disclose
such information (i) to its officers, directors, employees, attorneys,
accountants, affiliates, participants, prospective participants, assignees and
prospective assignees, and such other Persons to whom PFG shall at any time be
required to make such disclosure in accordance with applicable law or legal
process, and (ii) in its good faith business judgment in connection with the
enforcement of its rights or remedies after an Event of Default, or in
connection with any dispute with Borrower or any other Person relating to
Borrower. The confidentiality agreement in this Section supersedes any prior
confidentiality agreement of PFG relating to Borrower.

9.2 Interest Computation. In computing interest on the Obligations, all Payments
received after 12:00 Noon, Pacific Time, on any day shall be deemed received on
the next Business Day.

9.3 Payments. All Payments may be applied, and in PFG’s good faith business
judgment reversed and re-applied, to the Obligations, in such order and manner
as PFG shall determine in its good faith business judgment.

9.4 Charges to Accounts. PFG may, in its discretion, require that Borrower pay
monetary Obligations in cash to PFG, or charge them to Borrower’s Loan account,
in which event they will bear interest at the same rate applicable to the Loans.

9.5 Monthly Accountings. PFG shall provide Borrower monthly with an account of
advances, charges, expenses and payments made pursuant to this Agreement. Such
account shall be deemed correct, accurate and binding on Borrower and an account
stated (except for reverses and reapplications of payments made and corrections
of errors discovered by PFG), unless Borrower notifies PFG in writing to the
contrary within 60 days after such account is rendered, describing the nature of
any alleged errors or omissions.

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9.6 Notices; Authorization to Use Borrower Name, Etc. All notices to be given
under this Agreement shall be in writing and shall be given either personally,
or by reputable private delivery service, or by regular first-class mail, or
certified mail return receipt requested, or by fax to the most recent fax number
a party has for the other party (and if by fax, together with confirmation of
transmission and sent concurrently by one of the other methods provided herein),
or by electronic mail to the most recent electronic mail address for Borrower
provided for the chief financial officer or financial controller executing the
Representations (and if by electronic mail, with an electronic delivery and/or
read receipt), addressed to PFG or Borrower at the addresses shown in the
heading to this Agreement, in the Representations or at any other address
designated in writing by one party to the other party. All notices shall be
deemed to have been given upon delivery in the case of notices personally
delivered, or at the expiration of one Business Day following delivery to the
private delivery service, or two Business Days following the deposit thereof in
the United States mail, with postage prepaid, or on the first Business Day of
receipt during the Business Day of recipient in the case of notices sent by fax
or electronic mail, as provided herein. By entering into this Agreement,
Borrower irrevocably authorizes PFG to: (i) use Borrower’s logo on PFG’s website
and in its marketing materials to denote the lending relationship between PFG
and Borrower; (ii) use a “tombstone” to highlight the transaction(s) from time
to time between PFG and Borrower; and (iii) to issue press releases in a form
reasonably acceptable to Borrower and PFG highlighting and summarizing the
credit facilities extended by PFG to Borrower from time to time under this
Agreement, as amended from time to time, all of the above (i) through (iii), for
marketing purposes.

9.7 Severability. Should any provision of this Agreement be held by any court of
competent jurisdiction to be void or unenforceable, such defect shall not affect
the remainder of this Agreement, which shall continue in full force and effect.

9.8 Integration. This Agreement and such other written agreements, documents and
instruments as may be executed in connection herewith are the final, entire and
complete agreement between Borrower and PFG and supersede all prior and
contemporaneous negotiations and oral representations and agreements, all of
which are merged and integrated in this Agreement. There are no oral
understandings, representations or agreements between the parties which are not
set forth in this Agreement or in other written agreements signed by the parties
in connection herewith.

9.9 Waivers; Indemnity. The failure of PFG at any time or times to require
Borrower to strictly comply with any of the provisions of this Agreement or any
other Loan Document shall not waive or diminish any right of PFG later to demand
and receive strict compliance therewith. Any waiver of any default shall not
waive or affect any other default, whether prior or subsequent, and whether or
not similar. None of the provisions of this Agreement or any other Loan Document
shall be deemed to have been waived by any act or knowledge of PFG or its agents
or employees, but only by a specific written waiver signed by an authorized
officer of PFG and delivered to Borrower. Borrower waives the benefit of all
statutes of limitations relating to any of the Obligations or this Agreement or
any other Loan Document, and Borrower waives demand, protest, notice of protest
and notice of default or dishonor, notice of payment and nonpayment, release,
compromise, settlement, extension or renewal of any commercial paper,
instrument, account, General Intangible, document or guaranty at any time held
by PFG on which Borrower is or may in any way be liable, and notice of any
action taken by PFG, unless expressly required by this Agreement. Borrower
hereby agrees to indemnify PFG and its affiliates, subsidiaries, parent,
directors, officers, employees, agents, and attorneys, and to hold them harmless
from and against any and all claims, debts, liabilities, demands, obligations,
actions, causes of action, penalties, costs and expenses (including reasonable
attorneys’ fees), of every kind, which they may sustain or incur based upon or
arising out of any of the Obligations, or any relationship or agreement between
PFG and Borrower, or any other matter, relating to Borrower or the Obligations;
provided that this indemnity shall not extend to damages directly resulting from
the indemnitee’s own gross negligence or willful misconduct. Notwithstanding any
provision in this Agreement to the contrary, the indemnity agreement set forth
in this Section shall survive any termination of this Agreement and shall for
all purposes continue in full force and effect.

9.10 No Liability for Ordinary Negligence. Neither PFG, nor any of its
directors, officers, employees, agents, attorneys or any other Person affiliated
with or representing PFG shall be liable for any claims, demands, losses or
damages, of any kind whatsoever, made, claimed, incurred or suffered by Borrower
or any other party through the ordinary negligence of PFG, or any of its
directors, officers, employees, agents, attorneys or any other Person affiliated
with or representing PFG, but nothing herein shall relieve PFG from liability
for its own gross negligence or willful misconduct.

9.11 Amendment. The terms and provisions of this Agreement may not be waived or
amended, except in a writing executed by Borrower and a duly authorized officer
of PFG.

9.12 Time of Essence. Time is of the essence in the performance by Borrower of
each and every obligation under this Agreement.

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9.13 Attorneys Fees and Costs. Borrower shall reimburse PFG for all reasonable
attorneys’ fees and all filing, recording, search, title insurance, appraisal,
audit, and other reasonable costs incurred by PFG, pursuant to, or in connection
with, or relating to this Agreement (whether or not a lawsuit is filed),
including, but not limited to, any reasonable attorneys’ fees and costs PFG
incurs in order to do the following: prepare and negotiate this Agreement and
all present and future documents relating to this Agreement; obtain legal advice
in connection with this Agreement or Borrower; enforce, or seek to enforce, any
of its rights; prosecute actions against, or defend actions by, Account Debtors;
commence, intervene in, or defend any action or proceeding; initiate any
complaint to be relieved of the automatic stay in bankruptcy; file or prosecute
any probate claim, bankruptcy claim, third-party claim, or other claim; examine,
audit, copy, and inspect any of the Collateral or any of Borrower’s books and
records; protect, obtain possession of, lease, dispose of, or otherwise enforce
PFG’s security interest in, the Collateral; and otherwise represent PFG in any
litigation relating to Borrower. If either PFG or Borrower files any lawsuit
against the other predicated on a breach of this Agreement, the prevailing party
in such action shall be entitled to recover its reasonable costs and attorneys’
fees, including (but not limited to) reasonable attorneys’ fees and costs
incurred in the enforcement of, execution upon or defense of any order, decree,
award or judgment. All attorneys’ fees and costs to which PFG may be entitled
pursuant to this Paragraph shall immediately become part of Borrower’s
Obligations, shall be due on demand, and shall bear interest at a rate equal to
the highest interest rate applicable to any of the Obligations.

9.14 Benefit of Agreement. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective successors, assigns, heirs,
beneficiaries and representatives of Borrower and PFG; provided, however, that
Borrower may not assign or transfer any of its rights under this Agreement
without the prior written consent of PFG, and any prohibited assignment shall be
void. No consent by PFG to any assignment shall release Borrower from its
liability for the Obligations.

9.15 Joint and Several Liability. If Borrower consists of more than one Person,
their liability shall be joint and several, and the compromise of any claim
with, or the release of, any Borrower shall not constitute a compromise with, or
a release of, any other Borrower.

9.16 Limitation of Actions. Any claim or cause of action by one party against
the other, its directors, officers, employees, agents, accountants or attorneys,
based upon, arising from, or relating to this Loan Agreement, or any other Loan
Document, or any other transaction contemplated hereby or thereby or relating
hereto or thereto, or any other matter, cause or thing whatsoever, incurred,
done, omitted or suffered to be done by a party, its directors, officers,
employees, agents, accountants or attorneys, shall be barred unless asserted by
a party by the commencement of an action or proceeding in a court of competent
jurisdiction by (a) the filing of a complaint within one year after the earlier
to occur of (i) the first act, occurrence or omission upon which such claim or
cause of action, or any part thereof, is based, or (ii) the date this Agreement
is terminated, and (b) the service of a summons and complaint on an officer of a
party, or on any other person authorized to accept service on behalf of such
party, within thirty (30) days thereafter. Each party agrees that such one-year
period is a reasonable and sufficient time for it to investigate and act upon
any such claim or cause of action. The one-year period provided herein shall not
be waived, tolled, or extended except by the written consent of the party
against which a claim is proposed to be brought, in its sole discretion.
Notwithstanding the foregoing, the time within which PFG may bring a claim shall
be tolled during the pendency of any bankruptcy or insolvency proceedings in
respect of Borrower. This provision shall survive any termination of this Loan
Agreement or any other Loan Document.

9.17 Loan Monitoring. At reasonable times and upon reasonable advance notice to
Borrower, PFG shall have the right, during any period in which the Loans (or any
portion thereof) have been drawn by Borrower and are outstanding or during which
PFG has any obligation to lend to Borrower, to visit personally with Borrower up
to four times per calendar year at its principal place of business or such other
location as the parties may mutually agree, for the purpose of meeting with
Borrower’s management in order to remain as up-to-date with Borrower’s business
as is practicable and to maintain best practices in terms of lender loan
monitoring and diligence. Reasonable out-of-pocket costs, including travel and
lodging for up to two PFG staff for two of the four visits shall be at
Borrower’s expense and reimbursed in the same manner as other PFG expenses under
this Agreement.

9.18 Correction of Loan Documents. PFG may correct patent errors and fill in any
blanks in the Loan Documents consistent with the agreement of the parties so
long as PFG provides Borrowers with written notice of such correction and allows
Borrower at least ten (10) Business Days to object to such correction. In the
event of such objection, such correction shall not be made except by an
amendment signed by both PFG and Borrower.

9.19 Paragraph Headings; Construction. Paragraph headings are only used in this
Agreement for convenience. Borrower and PFG acknowledge that the headings may
not describe completely the subject matter of the applicable paragraph, and the
headings shall not be used in any manner to construe, limit, define or interpret
any term or provision of this Agreement. This Agreement has been fully reviewed
and negotiated between the parties and no uncertainty or ambiguity in any term
or provision of this Agreement shall be construed strictly against PFG or
Borrower under any rule of construction or otherwise.

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9.20 Governing Law; Jurisdiction; Venue. This Agreement and all acts and
transactions hereunder and all rights and obligations of PFG and Borrower shall
be governed by the laws of the State of California. Each of Borrower and PFG
(i) agrees that all actions and proceedings relating directly or indirectly to
this Agreement shall, at PFG’s option, be litigated in courts located within
California, and that the exclusive venue therefor shall be San Francisco County;
(ii) consents to the jurisdiction and venue of any such court and consents to
service of process in any such action or proceeding by personal delivery or any
other method permitted by law; and (iii) waives any and all rights such party
may have to object to the jurisdiction of any such court, or to transfer or
change the venue of any such action or proceeding.

9.21 Multiple Borrowers; Suretyship Waivers.

(a) Borrower’s Agent. Each Borrower hereby irrevocably appoints each other
Borrower, as the agent, attorney-in-fact and legal representative of all
Borrowers for all purposes, including requesting disbursement of the Loan and
receiving account statements and other notices and communications to Borrowers
(or any of them) from PFG. PFG may rely, and shall be fully protected in
relying, on any request for a Loan, disbursement instruction, report,
information or any other notice or communication made or given by any Borrower,
whether in its own name, as Borrowers’ agent, or on behalf of one or more
Borrowers, and PFG shall not have any obligation to make any inquiry or request
any confirmation from or on behalf of any other Borrower as to the binding
effect on it of any such request, instruction, report, information, other notice
or communication, nor shall the joint and several character of Borrowers’
obligations hereunder be affected thereby.

(b) Waivers. Each Borrower hereby waives: (i) any right to require PFG to
institute suit against, or to exhaust its rights and remedies against, any other
Borrower or any other Person, or to proceed against any property of any kind
which secures all or any part of the Obligations, or to exercise any right of
offset or other right with respect to any reserves, credits or deposit accounts
held by or maintained with PFG or any Indebtedness of PFG to any other Borrower,
or to exercise any other right or power, or pursue any other remedy PFG may
have; (ii) any defense arising by reason of any disability or other defense of
any other Borrower or any guarantor or any endorser, co-maker or other Person,
or by reason of the cessation from any cause whatsoever of any liability of any
other Borrower or any guarantor or any endorser, co-maker or other Person, with
respect to all or any part of the Obligations, or by reason of any act or
omission of PFG or others which directly or indirectly results in the discharge
or release of any other Borrower or any guarantor or any other Person or any
Obligations or any security therefor, whether by operation of law or otherwise;
(iii) any defense arising by reason of any failure of PFG to obtain, perfect,
maintain or keep in force any Lien on, any property of any Borrower or any other
Person; (iv) any defense based upon or arising out of any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding commenced by or against any other Borrower or any
guarantor or any endorser, co-maker or other Person, including without
limitation any discharge of, or bar against collecting, any of the Obligations
(including without limitation any interest thereon), in or as a result of any
such proceeding. Until all of the Obligations have been paid, performed, and
discharged in full, nothing shall discharge or satisfy the liability of Borrower
hereunder except the full performance and payment of all of the Obligations. If
any claim is ever made upon PFG for repayment or recovery of any amount or
amounts received by PFG in payment of or on account of any of the Obligations,
because of any claim that any such payment constituted a preferential transfer
or fraudulent conveyance, or for any other reason whatsoever, and PFG repays all
or part of said amount by reason of any judgment, decree or order of any court
or administrative body having jurisdiction over PFG or any of its property, or
by reason of any settlement or compromise of any such claim effected by PFG with
any such claimant (including without limitation the any other Borrower), then
and in any such event, Borrower agrees that any such judgment, decree, order,
settlement and compromise shall be binding upon Borrower, notwithstanding any
revocation or release of this Agreement or the cancellation of any note or other
instrument evidencing any of the Obligations, or any release of any of the
Obligations, and the Borrower shall be and remain liable to PFG under this
Agreement for the amount so repaid or recovered, to the same extent as if such
amount had never originally been received by PFG, and the provisions of this
sentence shall survive, and continue in effect, notwithstanding any revocation
or release of this Agreement. Each Borrower hereby expressly and unconditionally
waives all rights of subrogation, reimbursement and indemnity of every kind
against any other Borrower, and all rights of recourse to any assets or property
of any other Borrower, and all rights to any collateral or security held for the
payment and performance of any Obligations, including (but not limited to) any
of the foregoing rights which Borrower may have under any present or future
document or agreement with any other Borrower or other Person, and including
(but not limited to) any of the foregoing rights which Borrower may have under
any equitable doctrine of subrogation, implied contract, or unjust enrichment,
or any other equitable or legal doctrine. Each Borrower further hereby waives
any other rights and defenses that are or may become available to the Borrower
by reason of California Civil Code Sections 2787 to 2855 (inclusive), 2899, and
3433, as now in effect or hereafter amended, and under all other similar
statutes and rules now or hereafter in effect.

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(c) Consents. Each Borrower hereby consents and agrees that, without notice to
or by Borrower and without affecting or impairing in any way the obligations or
liability of Borrower hereunder, PFG may, from time to time before or after
revocation of this Agreement, do any one or more of the following in PFG’s sole
and absolute discretion: (i) accept partial payments of, compromise or settle,
renew, extend the time for the payment, discharge, or performance of, refuse to
enforce, and release all or any parties to, any or all of the Obligations;
(ii) grant any other indulgence to any Borrower or any other Person in respect
of any or all of the Obligations or any other matter; (iii) accept, release,
waive, surrender, enforce, exchange, modify, impair, or extend the time for the
performance, discharge, or payment of, any and all property of any kind securing
any or all of the Obligations or any guaranty of any or all of the Obligations,
or on which PFG at any time may have a Lien, or refuse to enforce its rights or
make any compromise or settlement or agreement therefor in respect of any or all
of such property; (iv) substitute or add, or take any action or omit to take any
action which results in the release of, any one or more other Borrowers or any
endorsers or guarantors of all or any part of the Obligations, including,
without limitation one or more parties to this Agreement, regardless of any
destruction or impairment of any right of contribution or other right of
Borrower; (v) apply any sums received from any other Borrower, any guarantor,
endorser, or co-signer, or from the disposition of any Collateral or security,
to any Indebtedness whatsoever owing from such Person or secured by such
Collateral or security, in such manner and order as PFG determines in its sole
discretion, and regardless of whether such Indebtedness is part of the
Obligations, is secured, or is due and payable. Borrower consents and agrees
that PFG shall be under no obligation to marshal any assets in favor of
Borrower, or against or in payment of any or all of the Obligations. Borrower
further consents and agrees that PFG shall have no duties or responsibilities
whatsoever with respect to any property securing any or all of the Obligations.
Without limiting the generality of the foregoing, PFG shall have no obligation
to monitor, verify, audit, examine, or obtain or maintain any insurance with
respect to, any property securing any or all of the Obligations.

(d) Foreclosure of Trust Deeds. Each Borrower waives all rights and defenses
that the Borrower may have because any other Borrower’s Obligations are secured
by real property. This means, among other things: (1) PFG may collect from the
Borrower without first foreclosing on any real or personal property collateral
pledged by the other Borrower; and (2) If PFG forecloses on any real property
collateral pledged by another Borrower: (A) The amount of the Obligations may be
reduced only by the price for which that collateral is sold at the foreclosure
sale, even if the collateral is worth more than the sale price; and (B) PFG may
collect from the Borrower even if PFG, by foreclosing on the real property
collateral, has destroyed any right the Borrower may have to collect from the
other Borrower. This is an unconditional and irrevocable waiver of any rights
and defenses the Borrower may have because any other Borrower’s Obligations are
secured by real property. These rights and defenses include, but are not limited
to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the
California Code of Civil Procedure. Each Borrower waives all rights and defenses
arising out of an election of remedies by PFG, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for a
guaranteed obligation, has destroyed the Borrower’s rights of subrogation and
reimbursement against another Borrower or any other Person by the operation of
Section 580d of the California Code of Civil Procedure or otherwise.

(e) Independent Liability. Each Borrower hereby agrees that one or more
successive or concurrent actions may be brought hereon against Borrower, in the
same action in which any other Borrower may be sued or in separate actions, as
often as deemed advisable by PFG. Each Borrower is fully aware of the financial
condition of each other Borrower and is executing and delivering this Agreement
based solely upon its own independent investigation of all matters pertinent
hereto, and Borrower is not relying in any manner upon any representation or
statement of PFG with respect thereto. Each Borrower represents and warrants
that it is in a position to obtain, and each Borrower hereby assumes full
responsibility for obtaining, any additional information concerning any other
Borrower’s financial condition and any other matter pertinent hereto as Borrower
may desire, and Borrower is not relying upon or expecting PFG to furnish to it
any information now or hereafter in PFG’s possession concerning the same or any
other matter.

(f) Subordination. All Indebtedness of a Borrower now or hereafter arising held
by another Borrower is subordinated to the Obligations and the Borrower holding
the Indebtedness shall take all actions reasonably requested by PFG to effect,
to enforce and to give notice of such subordination.

--------------------------------------------------------------------------------

9.22 Mutual Waiver of Jury Trial. BORROWER AND PFG EACH HEREBY WAIVE THE RIGHT
TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN
ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE INSTRUMENT OR
AGREEMENT BETWEEN PFG AND BORROWER, OR ANY CONDUCT, ACTS OR OMISSIONS OF PFG OR
BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR
ANY OTHER PERSONS AFFILIATED WITH PFG OR BORROWER, IN ALL OF THE FOREGOING
CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. WITHOUT INTENDING IN
ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A
TRIAL BY JURY, if the above waiver of the right to a trial by jury is not
enforceable, the parties hereto agree that any and all disputes or controversies
of any nature between them arising at any time shall be decided by a reference
to a private judge, mutually selected by the parties (or, if they cannot agree,
by the Presiding Judge of the San Francisco County, California Superior Court)
appointed in accordance with California Code of Civil Procedure Section 638 (or
pursuant to comparable provisions of federal law if the dispute falls within the
exclusive jurisdiction of the federal courts), sitting without a jury, in San
Francisco County, California; and the parties hereby submit to the jurisdiction
of such court. The reference proceedings shall be conducted pursuant to and in
accordance with the provisions of California Code of Civil Procedure §§ 638
through 645.1, inclusive. The private judge shall have the power, among others,
to grant provisional relief, including without limitation, entering temporary
restraining orders, issuing preliminary and permanent injunctions and appointing
receivers. All such proceedings shall be closed to the public and confidential
and all records relating thereto shall be permanently sealed. If during the
course of any dispute, a party desires to seek provisional relief, but a judge
has not been appointed at that point pursuant to the judicial reference
procedures, then such party may apply to the San Francisco County, California
Superior Court for such relief. The proceeding before the private judge shall be
conducted in the same manner as it would be before a court under the rules of
evidence applicable to judicial proceedings. The parties shall be entitled to
discovery which shall be conducted in the same manner as it would be before a
court under the rules of discovery applicable to judicial proceedings. The
private judge shall oversee discovery and may enforce all discovery rules and
order applicable to judicial proceedings in the same manner as a trial court
judge. The parties agree that the selected or appointed private judge shall have
the power to decide all issues in the action or proceeding, whether of fact or
of law, and shall report a statement of decision thereon pursuant to the
California Code of Civil Procedure § 644(a). Nothing in this paragraph shall
limit the right of any party at any time to exercise self-help remedies,
foreclose against collateral, or obtain provisional remedies. The private judge
shall also determine all issues relating to the applicability, interpretation,
and enforceability of this paragraph.

[SIGNATURE PAGE FOLLOWS]

--------------------------------------------------------------------------------

Borrowers:     PFG: MATTERSIGHT CORPORATION     PARTNERS FOR GROWTH IV, L.P. By
  /s/ MARK ISERLOTH     By   /s/ LORRAINE NIELD   President or Vice President  
  Name:   Lorraine Nield By   /s/ CHRISTINE R. CARSEN     Title:  

Manager, Partners for Growth IV, LLC

Its General Partner

  Secretary or Ass’t Secretary       MATTERSIGHT EUROPE HOLDING CORPORATION    
  By   /s/ CHRISTINE R. CARSEN         President or Vice President       By  
/s/ CHRISTINE R. CARSEN         Secretary or Ass’t Secretary       MATTERSIGHT
INTERNATIONAL HOLDING, INC.       By   /s/ CHRISTINE R. CARSEN         President
or Vice President       By   /s/ CHRISTINE R. CARSEN         Secretary or Ass’t
Secretary      

 

Signature Page to Loan and Security Agreement

--------------------------------------------------------------------------------

Partners For Growth

Schedule to

Loan and Security Agreement

 

Borrower: Mattersight Corporation, a Delaware corporation

Address: 200 S Wacker Drive, Suite 820, Chicago, IL 60606

 

Borrower: Mattersight Europe Holding Corporation, a Delaware corporation

Address: 200 S Wacker Drive, Suite 820, Chicago, IL 60606

 

Borrower: Mattersight International Holding, Inc., an Illinois corporation

Address: 200 S Wacker Drive, Suite 820, Chicago, IL 60606

Date: August 19, 2013

This Schedule forms an integral part of the Loan and Security Agreement between
PARTNERS FOR GROWTH IV, L.P. and the above-borrower of even date.

 

1. LOANS

(Section 1.1):

 

   Facility A Loan:    An amount not to exceed a principal amount of Three
Million Dollars ($3,000,000) (the “Facility A Credit Limit”) at any one time
outstanding, which shall be available within three (3) Business Days after
Borrower’s satisfaction of the conditions set forth in Section 9 of this
Schedule. Facility A Loans may be repaid in Borrower’s discretion and, subject
to Borrower’s compliance with the conditions set forth in Section 10 of this
Schedule, re-drawn from time to time.    Facility B Loan:    The Facility B Loan
shall consist of up to two (2) $1,000,000 principal amount convertible term
Loans issued against Borrower’s delivery of promissory notes in the form
appended hereto as Exhibit C (each a “Note” and collectively, the “Notes”), with
availability subject to, (i) in the case of the first Facility B Loan, Borrower
earning not less than $15 million in Revenues for the period July 1, 2013
through December 31, 2013, and (ii) in the case of the Second Facility B Loan,
Borrower earning not less than $15 million in Revenues for the period January 1,
2014 through June 30, 2014. In each case, Borrower shall demonstrate its
qualification to borrow Facility B Loans by delivery of the Reports required in
Section 6 of this Schedule. Borrower shall draw Facility B Loans within thirty
(30) days after demonstrating its qualification to issue a Facility B Note
(under clauses (i) and/or (ii) above) (the “Facility B Availability Period”).

--------------------------------------------------------------------------------

Partners for Growth Schedule to Loan and Security Agreement

 

  Optional Conversion:    At any time prior to the Maturity Date of any Facility
B Note, PFG may at its option convert any Facility B Loan Note (or any part
thereof) into the common stock of Borrower (an “Optional Conversion”) at a
conversion price equal to the greater of: (i) the volume-weighted average price
of Borrower’s common stock over the ten (10) consecutive trading day period
prior to the date on which a Note is issued to PFG (the “10-day VWAP”), plus a
20% premium the 10-day VWAP, and (ii) the Effective Price per share of
securities issued in an Equity Financing (the “Conversion Price”) as set forth
in the applicable Note. PFG may exercise its right to convert a Note by sending
notice thereof via facsimile or electronic mail specifying the Note(s) (or parts
thereof) to be converted into Conversion Stock (a “Conversion Notice”). The date
on which a Conversion Notice is sent to Borrower shall be a Conversion Date.
Pursuant to the terms of the Conversion Notice, Borrower shall issue the
Conversion Stock within three (3) business days of the delivery of the
Conversion Notice.   Prepayment:    The Facility A Loans may be fully repaid at
any time by Borrower without penalty or fee. Any Notes issued under Facility B
may be repaid by Borrower only upon a conditionally-exercisable warrant to
purchase Borrower’s common stock issued in connection with the Facility B Loan
becoming then exercisable, which warrant shall be delivered by Borrower to
Lender on the Effective Date. Facility B principal amounts repaid may not be
reborrowed.

 

2. INTEREST.

Interest Rate (Section 1.2):

 

     A rate equal to 9.75% per annum shall accrue and be paid monthly on
outstanding principal Obligations. Interest shall be calculated on the basis of
a 360-day year and a year of twelve months of 30 days each for the actual number
of days elapsed. Accrued interest for each month shall be payable monthly, on
the first day of each month for interest accrued during the prior month.

Interest Rate Reduction:

 

     If Borrower meets or exceeds (1) Revenues of no less than (a) $8,283,000 in
Q3-2013 and (b) $9,113,000 in Q4-2013, and (2) EBITDA of no less than
(a) ($78,000) in Q3-2013 and (b) ($37,000) in Q4-2013 (with numbers in
parentheses denoting negative numbers), and (3) positive EBITDA in either of
Q1-2014 or Q2-2014, in each case as demonstrated by Borrower’s Reports required
under Section 6 of this Schedule, then the Interest Rate shall thereafter (from
the date of such demonstrated compliance) be reduced to an annual rate of 8.75%.
    

--------------------------------------------------------------------------------

Partners for Growth Schedule to Loan and Security Agreement

 

3. FEES (Section 1.4):

 

    Loan Fees:   

(a) Two Percent (2%) of the Facility A Credit Limit (a $60,000 fee), payable
concurrently herewith; and

 

(b) One Percent (1%) of the Facility A Credit Limit (a $30,000 fee), payable on
the first anniversary of the Effective Date, if this Agreement has not been
terminated as of such date; and

 

(c) One Percent (1%) of the Facility A Credit Limit (a $30,000 fee), payable on
the second anniversary of the Effective Date, if this Agreement has not been
terminated; and

 

(d) One Percent (1%) of the Facility B maximum principal loan amount (a $20,000
fee), payable concurrently herewith; and

 

(e) One Percent (1%) of the principal amount of the first Facility B Loan (a
$10,000 fee), payable on the date Borrower issues the first Facility B Note (if
Borrower has qualified to make such Facility B borrowing and elects to do so);
and

 

(f) One Percent (1%) of the principal amount of the second Facility B Loan (a
$10,000 fee), payable on the date Borrower issues the second Facility B Note (if
Borrower has qualified to make such Facility B borrowing and elects to do so).

 

4. MATURITY DATE

 

    (Section 6.1):    Facility A: August 19, 2016      Facility B: Five
(5) years from the issue date of each Facility B Note, respectively.

 

5. FINANCIAL COVENANTS

 

    (Section 5.1):    Borrower shall comply with each of the following
covenants. Compliance shall be determined as of the end of each month, except as
otherwise specifically provided below:  

  Minimum Tangible

  Net Worth:

   Borrower shall maintain at all times, to be tested as of the last day of each
month and calculated on a consolidated basis for Borrower and its Subsidiaries,
a Tangible Net Worth in an amount equal to or greater than $3,000,000,
increasing by (i) fifty percent (50%) of positive quarterly Net Income plus
(ii) fifty percent (50%) of the proceeds from issuances of equity and the
principal amount of Subordinated Debt, in each case issued after the Effective
Date; provided that the maximum Tangible Net Worth financial covenant
requirement hereunder, after giving effect to such increases, shall not exceed
$10,000,000.

--------------------------------------------------------------------------------

Partners for Growth Schedule to Loan and Security Agreement

 

  Minimum Revenues:    Borrower shall maintain Revenues, to be tested as of the
last day of each calendar quarter and calculated on a consolidated basis for
Borrower and its Subsidiaries, of not less than the following amounts for each
corresponding period:

 

Period

   Minimum Revenues  

Q3-2013

   $ 6,521,000   

Q4-2013

   $ 7,221,000   

Q1-2014

   $ 6,669,000   

Q2-2014

   $ 7,333,000   

Q3-2014

   $ 8,340,000   

Q4-2014

   $ 9,533,000   

 

     For periods after Q4-2014, the minimum threshold shall be 80% of Borrower’s
Plan Revenues for each period.   Minimum EBITDA:    Borrower shall maintain
EBITDA, to be tested as of the last day of each calendar quarter and calculated
on a consolidated basis for Borrower and its Subsidiaries, of not less than the
following amounts for each corresponding period:

 

Period

   Minimum EBITDA  

Q3-2013

   $ (750,000 ) 

Q4-2013

   $ (750,000 ) 

Q1-2014

   $ (1,350,000 ) 

Q2-2014

   $ (600,000 ) 

Q3-2014

   $ 1   

Q4-2014

   $ 1   

 

     For periods after Q4-2014, the minimum threshold shall be at least $1.00 in
EBITDA for each period.

--------------------------------------------------------------------------------

Partners for Growth Schedule to Loan and Security Agreement

 

6. REPORTING.

(Section 5.3):

 

    

Unless Borrower shall have received a written request from PFG not to routinely
deliver reports and other information that may contain material non-public
information (as so identified by PFG), Borrower shall provide PFG with the
following:

 

(a)     Monthly accounts receivable and accounts payable agings, aged by invoice
date, and outstanding or held check registers, if any, within 30 days after the
end of each month.

 

(b)     Monthly Deferred Revenue schedules, within 30 days after the end of each
month.

 

(c)     Monthly unaudited consolidating financial statements, consolidated
accounts receivable and accounts payable agings, within 30 days after the end of
each month.

 

(d)     Monthly Compliance Certificates, within 30 days after the end of each
month, signed by the Chief Financial Officer or another Responsible Officer of
Borrower, certifying that as of the end of such month Borrower was in full
compliance with all of the terms and conditions of this Agreement, and setting
forth calculations showing compliance with the financial covenants set forth in
this Agreement and such other information as PFG shall reasonably request.

 

(e)     Annual operating budgets and forecasts (including income statements,
balance sheets and cash flow statements, by month) for the upcoming fiscal year
of Borrower as soon as available and in no event later than 60 days after the
end of each fiscal year of Borrower.

 

(f)      Annual financial statements, as soon as available, and in any event
within 150 days following the end of Borrower’s fiscal year, certified by, and
with an unqualified opinion of, independent certified public accountants
acceptable to PFG in its reasonable discretion. If Borrower files a form 10-K
with the Securities and Exchange Commission and the same is available within
said period through EDGAR, this requirement will be deemed satisfied.

 

(g)     Upon PFG’s request, copies of all reports and statements provided by
Borrower to the Senior Lender and such other information as PFG may reasonably
request.

 

(h)     Within 5 days of filing, copies of all SEC Documents.

 

7. BORROWER INFORMATION:

 

     Borrower represents and warrants that the information set forth in the
Representations and Warranties of the Borrower submitted to PFG on August 6,
2013 (the “Representations”) is true and correct as of the Effective Date to the
extent required in Section 5.7.

--------------------------------------------------------------------------------

Partners for Growth Schedule to Loan and Security Agreement

 

8. ADDITIONAL PROVISIONS

 

    

(a)     Senior Lender.

 

(1)     Senior Lender. As used herein, “Senior Lender” means Silicon Valley
Bank, and “Senior Loan Documents” means all present and future documents
instruments and agreements entered into between Borrower and Senior Lender or by
third parties relating to Borrower and Senior Lender.

 

(2)     Senior Debt Limit. Subject to the proviso below, Borrower shall not
permit the total Indebtedness at any time of Borrower to the Senior Lender,
exclusive of Non-Overdue Senior Monetary Obligations, to exceed $10,000,000 at
any time outstanding (the “Senior Debt Limit”), including, but not limited to,
monies borrowed by Borrower, interest on loans due from Borrower, fees and
expenses for which Borrower is obligated, sums due from Borrower in connection
with issuance of commercial letters of credit, issuance of forward contracts for
foreign exchange reserve, and any other direct or indirect financial
accommodation Senior Lender may provide to Borrower); provided, however, that
Borrower’s total Indebtedness at any time to the Senior Lender shall not exceed
$7,500,000 without the written consent of PFG.

 

(3)     Senior Loan Documents. Borrower represents and warrants that it has
provided PFG with true and complete copies of all existing Senior Loan
Documents, and Borrower covenants that it will, in the future, provide PFG with
true and complete copies of any future Senior Loan Documents, including without
limitation any amendments to any existing Senior Loan Documents.

 

(b)    Deposit Accounts. Concurrently, Borrower shall cause the banks and other
institutions where its Deposit Accounts are maintained to enter into Control
Agreements with PFG, in form and substance satisfactory to PFG in its good faith
business judgment and sufficient to perfect PFG’ security interest in said
Deposit Accounts, subject to the security interest of the Senior Lender. Said
Control Agreements shall permit PFG, upon the occurrence of an Event of Default,
to exercise exclusive control over said Deposit Accounts (subject to the rights
of the Senior Lender); provided, however, no Control Agreement shall be required
in respect of the non-U.S. accounts disclosed in the Representations so long as
the average daily balance during any month for any such account does not exceed
$200,000.

--------------------------------------------------------------------------------

Partners for Growth Schedule to Loan and Security Agreement

 

    

(c)     Subordination of Inside Debt. All present and future Indebtedness of
Borrower to its officers, directors and shareholders, excluding indebtedness
incurred in connection with the obligation to pay mandatory dividends (or the
deferral of such dividends) with respect to the shares of Series B stock issued
by Mattersight Corporation (“Inside Debt”), to the extent that the same exceeds,
in any single instance, $15,000, or in the aggregate with respect to all
unsubordinated Inside Debt outstanding at any given time, $50,000, shall, at all
times, be subordinated to the Obligations pursuant to a subordination agreement
in form and substance acceptable to PFG. Borrower represents and warrants that
there is no Inside Debt presently outstanding, except as set forth in Exhibit A.
Prior to incurring any Inside Debt in the future, Borrower shall cause the
person to whom such Inside Debt will be owed to execute and deliver to PFG a
subordination agreement on PFG’s standard form.

 

9. CONDITIONS TO INITIAL LOAN

 

    

10.     In addition to any other conditions to the Loan set out in this
Agreement, PFG will not make the initial Facility A Loan until PFG shall have
received, in form and substance satisfactory to PFG, such documents, and
completion of such other matters, as PFG may reasonably deem necessary or
appropriate, including that there shall be no discovery of any facts or
circumstances which would, as determined by PFG in its sole discretion,
negatively affect or be reasonably expected to negatively affect the
collectability of the Obligations, PFG’s security interest in Borrower’s
Collateral, or the value thereof (in other than Trivial respects), including,
without limitation:

 

(a)     duly executed original signatures of Borrower to the Loan Documents to
which Borrower is a party;

 

(b)     Borrower’s respective Constitutional Documents and a good standing
certificate of Borrower certified by the Secretary of State of the State of each
Borrower’s jurisdiction or organization as of a date no earlier than thirty
(30) days prior to the date hereof, together with a foreign qualification
certificate from each State in which each Borrower is qualified to do business
(as of a date no earlier than one hundred eighty (180) days prior to the date
hereof);

--------------------------------------------------------------------------------

Partners for Growth Schedule to Loan and Security Agreement

 

    

(c)     a Secretary’s Certificate for each Borrower, including Borrowing
Resolutions for each Borrower;

 

(d)     Control Agreements as required by Section 8(b) of this Schedule, duly
executed by Borrower and each relevant depositary institution in favor of PFG;

 

(e)     financing statement searches, as PFG shall request, accompanied by
written evidence (including any UCC termination statements) that Liens indicated
in such financing statement searches (other than Permitted Liens) have been or,
in connection with the Loan, will be terminated or released;

 

(f)      the Representations, duly executed by Borrower;

 

(g)     landlord consents executed in favor of PFG by the landlord of Borrower’s
Edina facility with respect to such premises;

 

(h)     certified resolutions of the Board approving all borrowings to be made
under Facility A;

 

(i)      duly executed warrants in favor of PFG and its designees to purchase
shares of Mattersight Corporation’s common stock in agreed form (the
“Warrants”);

 

(j)      the insurance certificates and/or endorsements required pursuant to
Section 5.2;

 

(k)     payment of the Loan Fees specified in clause (a) of Section 3 of this
Schedule and PFG’s reasonable expenses incurred in connection with the Loan as
of the Effective Date;

 

(l)      a duly executed Compliance Certificate dated the date hereof;

 

(m)    the Intellectual Property Security Agreement and related Collateral
Agreements and Notices, together then-current true, complete and accurate
Exhibits detailing the relevant Intellectual Property (including Domain Rights);

 

(n)     true, correct and current copies of the Senior Loan Documents;

 

(o)     Senior Lender and PFG shall have entered into a subordination agreement
in respect of the relative priorities of their Liens and repayment;

 

(p)     a Pledge Agreement by Mattersight Corporation in respect of each of its
Subsidiaries;

--------------------------------------------------------------------------------

Partners for Growth Schedule to Loan and Security Agreement

 

    

(q)     an opinion of Borrower counsel addressing authority and enforceability
(each Borrower); and

 

(r)      execution and delivery of the contingently-exercisable Warrants
described in Section 1 (“Prepayment”) of this Schedule.

 

10. CONDITIONS TO ALL LOANS

 

    

11.     In addition to any other conditions to Loans set out in this Agreement,
PFG will not make any Loan until PFG shall have received, in form and substance
satisfactory to PFG:

 

12.     (a) a Loan Request that constitutes a Qualifying Request;

 

(b) a Compliance Certificate;

 

(c) any update to the Representations then required;

 

(d) in the case of the Facility B Loans, execution and delivery of a Facility B
Note and an opinion of counsel addressing the matters set forth in Section 3.18
in the case of Mattersight Corporation in respect of the Note being issued;

 

(e) certified resolutions of the Board approving (i) each borrowing under
Facility A not within the scope of its approval under Section 9(h), and
(ii) each borrowing to be made under Facility B; and

 

(e) no Default or Event of Default shall have occurred and be continuing.

[Signature Page Follows]

--------------------------------------------------------------------------------

Borrowers:

    PFG:

MATTERSIGHT CORPORATION

    PARTNERS FOR GROWTH IV, L.P. By  

/s/ MARK ISERLOTH

    By  

/s/ LORRAINE NIELD

 

President or Vice President

    Name:   Lorraine Nield       Title:  

Manager, Partners for Growth IV, LLC

    Its General Partner

By  

/s/ CHRISTINE R. CARSEN

       

Secretary or Ass’t Secretary

            MATTERSIGHT EUROPE HOLDING CORPORATION       By  

/s/ CHRISTINE R. CARSEN

        President or Vice President       By  

/s/ CHRISTINE R. CARSEN

        Secretary or Ass’t Secretary       MATTERSIGHT INTERNATIONAL HOLDING,
INC.       By  

/s/ CHRISTINE R. CARSEN

        President or Vice President       By  

/s/ CHRISTINE R. CARSEN

        Secretary or Ass’t Secretary      

- Signature Page of Schedule to Loan and Security Agreement -

--------------------------------------------------------------------------------

Exhibit A to Loan and Security Agreement

Section 3.18(d) – Consents (if any)

Section 8 - “Permitted Indebtedness”—Other Existing Permitted Indebtedness:

 

Indebtedness of Mattersight Corporation to its Subsidiaries

  

Indebtedness to Mattersight (Deutschland) GmbH

   $   4,607,071   

Section 8 - “Permitted Investments”—Other Existing Permitted Investments:

 

Investments by Mattersight Corporation in its Subsidiaries

  

Investment in Mattersight (Deutschland) GmbH

   $ 2,344,782   

Investment in Mattersight (U.K.) Limited

   $ 19,543,400   

Investment in Mattersight (Canada) Corporation

   $ 2,654,850   

Investment in Mattersight Corporation (Australia) Pty. Ltd

   $ 5,741,387   

Investment in Mattersight (Netherlands) B.V.

   $ 813,215   

--------------------------------------------------------------------------------

Exhibit B to Loan and Security Agreement – Compliance Certificate

--------------------------------------------------------------------------------

$1,000,000                        , 2014

THIS SENIOR CONVERTIBLE PROMISSORY NOTE (“NOTE”) AND THE SECURITIES ISSUABLE
UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE OR OTHER SECURITIES LAWS AND MAY NOT BE OFFERED,
SOLD, TRANSFERRED, OR ASSIGNED EXCEPT (i) PURSUANT TO REGISTRATIONS THEREOF
UNDER SUCH LAWS, OR (ii) IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS WITHOUT
SUCH REGISTRATIONS.

THIS NOTE IS BEING ISSUED PURSUANT TO A LOAN AND SECURITY AGREEMENT BETWEEN
MAKER AND HOLDER DATED AS OF AUGUST 19, 2013 (THE “LOAN AGREEMENT”).

SENIOR CONVERTIBLE PROMISSORY NOTE

Mattersight Corporation, a Delaware corporation, Mattersight Europe Holding
Corporation, a Delaware corporation and Mattersight International Holding, Inc.,
an Illinois corporation (individually and collectively, jointly and severally,
“Maker”), for value received, promises to pay to Partners for Growth IV, L.P.
(“Holder”), so long as a Conversion Event has not occurred prior to the Maturity
Date (as defined below), the principal sum of One Million Dollars (the
“Principal Amount”) on [DATE 5 YRS FROM ISSUE DATE] or, if earlier, immediately
upon Holder demand after the occurrence of an Event of Default under the Loan
Agreement that is continuing (the “Maturity Date”), as provided herein.
Capitalized terms used but not defined herein are used with the meanings given
to them in the Loan Agreement. This Note is one of up to two (2) Notes in like
principal amount contemplated to be issued under the Loan Agreement, differing
only as to issue date and Conversion Price. The terms of the Loan Agreement
shall govern this Note and are incorporated by reference herein.

1. Payments.

(a) The interest rate payable hereunder shall be 9.75% per annum, fixed, payable
monthly on the basis set forth in Section 2 of the Schedule to the Loan
Agreement; provided, however, if Maker meets or exceeds (1) Revenues of
$32,000,000, and EBITDA of ($325,000) (numbers in parentheses denoting a
negative number) for its 2013 fiscal year, as demonstrated by Maker’s Reports
required under Section 6 of the Schedule to the Loan Agreement, then the
Interest Rate shall thereafter (from the date of such demonstrated compliance)
be reduced to an annual rate of 8.75%. Any accrued and unpaid interest on this
Note will be due and payable on the day that all principal is due and payable,
whether on the Maturity Date, by acceleration, at the time of a Conversion Event
or otherwise.

(b) Payment shall be made in lawful tender of the United States in immediately
available funds, and shall be credited first to accrued interest then due and
payable with the remainder applied to principal. This Note may not be prepaid in
whole or in part at any time prior to the Maturity Date.

2. Ranking. This Note and all principal, interest and other amounts, if any,
payable hereunder shall rank senior in right of payment to all other Maker
Indebtedness, except as otherwise specified in the Loan Agreement.

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3. Conversion.

(a) This Note may be converted into that number of shares of Common Stock
(rounded up to the nearest whole share) determined by dividing the Principal
Amount (excluding interest) of this Note by the greater of: (i) [the
volume-weighted average price of Borrower’s common stock over the ten
(10) consecutive trading day period prior to the date on which a Note is issued
to PFG (the “10-day VWAP”), plus a 20% premium the 10-day VWAP][TO BE INSERTED
ON ISSUE OF NOTE], and (ii) the Effective Price per share of securities issued
in an Equity Financing (as each such term is defined in the Loan Agreement, the
“Conversion Price”), subject to adjustment below, at any time upon the election
of the Holder hereof by delivery of a Conversion Notice (a “Conversion Event”).

(b) As soon as practicable after the occurrence of a Conversion Event, Maker at
its expense will cause to be issued in the name of and delivered to Holder, a
certificate or certificates for the number of shares of Conversion Stock to
which Holder shall be entitled on such conversion. No fractional Conversion
Stock shall be issued on conversion of the Note.

(c) From and after the occurrence of a Conversion Event, Maker shall reserve and
keep available out of its authorized but unissued Common Stock such number of
shares of Common Stock as shall from time to time be sufficient to effect
conversion of this Note and the other Note (if issued). Maker will not, by
amendment of its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities, dividend or other distribution of cash or property, or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed hereunder by Maker, but will at
all times in good faith assist in the carrying out of all the provisions hereof,
and in the taking of all such action as may be necessary or appropriate in order
to protect the conversion rights of Holder as set forth herein against
impairment.

4. Conversion Adjustments.

(a) Adjustments. The Conversion Price shall be subject to adjustment from time
to time in accordance with this Section 4.

(b) Subdivisions, Combinations and Stock Dividends. If Maker shall at any time
subdivide by split-up or otherwise, its outstanding Common Stock into a greater
number of shares, or issue additional Common Stock as a dividend, bonus issue or
otherwise with respect to any Common Stock, the Conversion Price in effect
immediately prior to such subdivision or share dividend or bonus issue shall be
proportionately reduced. Conversely, in case the outstanding Common Stock of
Maker shall be combined into a smaller number of shares, the Conversion Price in
effect immediately prior to such combination shall be proportionately increased.

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(c) Reclassification, Exchange, Substitutions, Etc. Upon any reclassification,
exchange, substitution, or other event that results in a change of the number
and/or class of the securities issuable upon conversion of this Note, Holder
shall be entitled to receive, upon conversion of this Note, the number and kind
of securities and property that Holder would have received in exchange for the
securities that would have been issued on conversion if this Note had been
converted immediately before such reclassification, exchange, substitution, or
other event. Maker or its successor shall promptly issue to Holder a certificate
setting forth the number and kind of such new securities or other property
issuable upon exchange or exercise of this Note as a result of such
reclassification, exchange, substitution or other event that results in a change
of the number and/or class of securities issuable upon exchange or exercise of
this Note. The certificate shall provide for adjustments (as determined in good
faith by Maker’s Board of Directors) which shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Article 4 including,
without limitation, adjustments to the Conversion Price. The provisions of this
Section 4(b) shall similarly apply to successive reclassifications, exchanges,
substitutions, or other similar events.

(d) Notices of Record Date, Etc. In the event that Maker shall:

(1) declare or propose to declare any dividend upon its Common Stock, whether
payable in cash, property, stock or other securities and whether or not a
regular cash dividend, or

(2) offer for sale any additional shares of any class or series of Maker’s stock
or securities exchangeable for or convertible into such stock in any transaction
that would give rise (regardless of waivers thereof) to pre-emptive rights of
any class or series of stockholders, or

(3) effect or approve any reclassification, exchange, substitution or
recapitalization of the capital stock of Maker, including any subdivision or
combination of its outstanding capital stock, or consolidation or merger of
Maker with, or sale of all or substantially all of its assets to, another
corporation, or to liquidate, dissolve or wind up (including an assignment for
the benefit of creditors), or

(4) offer holders of registration rights the opportunity to participate in any
public offering of Maker’s securities,

then, in connection with such event, Maker shall give to Holder:

(i) at least ten (10) days prior written notice of the date on which the books
of Maker shall close or a record shall be taken for such a dividend or offer in
respect of the matters referred to in (1) or (2) above, or for determining
rights to vote in respect of the matters referred to in (3) above; and

(ii) in the case of the matters referred to in (3) above, at least ten (10) days
prior written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause (1) shall also specify, in the case of any
such dividend, the date on which the holders of capital stock shall be entitled
thereto and the terms of such dividend, and such notice in accordance with
clause (2) shall also specify the date on which the holders of capital stock
shall be entitled to exchange their capital stock for securities or other
property deliverable upon such reorganization, reclassification, exchange,
substitution, consolidation, merger or sale, as the case may be, and the terms
of such exchange. Each such written notice shall be given by first class mail,
postage prepaid, addressed to the holder of this Note at the address of Holder;
and

(iii) in the case of the matter referred to in (4) above, the same notice as is
given or required to be given to the holders of such registration rights.

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(e) Adjustment by Board of Directors. If any event occurs as to which, in the
opinion of the Board of Directors of Maker, the provisions of this Section 4 are
not strictly applicable or if strictly applicable would not fairly protect the
rights of the Holder in accordance with the essential intent and principles of
such provisions, then the Board of Directors shall make an adjustment in the
application of such provisions, in accordance with such essential intent and
principles, so as to protect such rights, but in no event shall any adjustment
have the effect of increasing the Conversion Price as otherwise determined
pursuant to any of the provisions of this Section 4, except in the case of a
combination of shares of a type contemplated in Section 4(b) and then in no
event to an amount larger than the Conversion Price as adjusted pursuant to
Section 4(b).

(f) Officers’ Statement as to Adjustments. Whenever the Conversion Price is
required to be adjusted as provided in Section 4, Maker shall forthwith file at
Maker’s principal office with a copy to the Holder notice parties set forth in
Section 7 hereof a statement, executed by a Responsible Officer of Maker,
showing in reasonable detail the facts requiring such adjustment and the
Conversion Price that will be effective after such adjustment; provided,
however, such statement shall not be required to the extent the information
requested in this Section is available through Maker’s current reports filed
with the Securities and Exchange Commission. If at any time the information
described in this Section 4 is readily available through Maker’s reports filed
with the Securities and Exchange Commission, Maker shall not be required to
provide a separate notice of adjustment to the Holder; provided, however, if
such information is not readily available through Maker’s current reports filed
with the Securities Exchange Commission and made public, Maker shall cause a
notice setting forth any such adjustments to be sent by mail, first class,
postage prepaid, to the record Holder of this Note at its notice address(es)
appearing in Section 7.

(g) Issue of Securities other than Common Stock. In the event that at any time,
as a result of any adjustment made pursuant to Section 4, the Holder thereafter
shall become entitled to receive any securities of Maker, other than Common
Stock, thereafter the number of such other shares so receivable upon exchange of
this Note shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Stock contained in Section 4.

5. Events of Default. An Event of Default shall be deemed to have occurred under
this Note if an Event of Default has occurred under the Loan Agreement or any
other Loan Document (each, an “Event of Default”)

6. No Offset Rights. Maker may not offset any amounts due or claimed to be due
from Holder to Maker against amounts due to Holder under this Note.

7. Series of Notes. This Note is one of potentially two Notes of like tenor
issued in an original aggregate principal amount of up to $2,000,000 under
Facility B of the Loan Agreement.

8. Costs and Expenses. Maker promises to pay all reasonable costs and expenses
incurred, including reasonable attorneys’ fees, incurred by Holder in connection
with the enforcement of, or collection of any amounts due under, this Note.
Maker hereby waives notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor and all other notices or demands
relative to this instrument, except for notices to which Maker is expressly
entitled under this Note.

9. Successors and Assigns. This Note shall be binding upon, and shall inure to
the benefit of, Maker and Holder and their respective successors and assigns;
provided, however, that neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by Maker without the prior written consent of Holder.

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10. Modifications and Amendments; Reissuance of Note. This Note may only be
modified, amended, or terminated (other than by payment in full) by an agreement
in writing signed by Maker and Holder. No waiver of any term, covenant or
provision of this Note shall be effective unless given in writing by Holder.
Upon receipt of evidence reasonably satisfactory to Maker of the loss, theft,
destruction, or mutilation of this Note and of an unsecured agreement of
indemnity reasonably satisfactory to Maker, and upon surrender or cancellation
of this Note, if mutilated, Maker will make and deliver a new Note of like tenor
in lieu of such lost, stolen, destroyed, or mutilated Note.

11. Remedies Cumulative. Each and every right, power and remedy herein given to
Holder, or otherwise existing, shall be cumulative and not exclusive and be in
addition to all other rights, powers and remedies now or hereafter granted
(including, without limitation, other rights of set-off under applicable law) or
otherwise existing. Each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time and as
often and in such order as may be deemed expedient by Holder.

12. Notices. All notices or other communications required or permitted hereunder
shall be in writing and shall be deemed effectively given in the manner set
forth in the Loan Agreement, addressed as follows:

if to Holder, at

Partners for Growth IV, L.P.

180 Pacific Avenue

San Francisco, California 94111

Attention: Chief Financial Officer

Fax: (415) 781-0510

with a copy (not constituting notice) to

Greenspan Law Office

Attn: Benjamin Greenspan, Esq.

620 Laguna Road

Mill Valley, CA 94941

Fax: (415) 738-5371

Email: ben@greenspan-law.com

or

if to Maker, at

Mattersight Corporation

200 S Wacker Drive, Suite 820

Chicago, IL 60606

Attn: Kelley D. Conway

Fax: (775) 252-9987

Email: kelly.conway@mattersight.com

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with a copy (not constituting notice) to:

Winston & Strawn LLP

35 W. Wacker Drive

Chicago, IL 60601-9703

T: (312) 558-5600

F: (312) 558-5700

Attn: Steven J. Gavin, Esq.

Email: sgavin@winston.com

or at such other address and facsimile number as Holder shall have furnished to
Maker in accordance with this Section 12.

13. Waiver. Holder shall not by any act (except by a written instrument in
accordance with Section 10 hereof), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
default or Event of Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of
Holder, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by Holder of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which Holder would otherwise have on any future occasion. The
rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights or remedies provided by law.

14. Miscellaneous; Interpretation. Section 3.18, Section 9 and Exhibit D of the
Loan Agreement are expressly incorporated by reference herein. In the event of
any direct conflict between the terms of this Note and the terms of the Loan
Agreement or any other Loan Document referenced herein, except as to (i) the
issue date of this Note, and (ii) the Conversion Price of this Note (due to its
determination as of the issue date of a Note under Section 1 of the Schedule to
the Loan Agreement), the terms of the Loan Agreement and such other Loan
Document shall control.

[Signature Page Follows]

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IN WITNESS WHEREOF, Maker has caused this Note to be signed on the date first
set forth above.

 

MAKER:     MATTERSIGHT CORPORATION    

 

    Name:     Title:     MATTERSIGHT EUROPE HOLDING CORPORATION     By          
President or Vice President     By           Secretary or Ass’t Secretary    
MATTERSIGHT INTERNATIONAL HOLDING, INC.     By           President or Vice
President     By           Secretary or Ass’t Secretary ACKNOWLEDGED AND AGREED
      HOLDER:     PARTNERS FOR GROWTH IV, L.P.     By        
Name:                                                                     
                                

Title: Manager, Partners for Growth IV, LLC

Its General Partner

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EXHIBIT D

Representations and Warranties of PFG

PFG hereby represents and warrants to Borrower as follows:

(a) Investment Representations. PFG understands that neither the Notes nor the
Conversion Stock have been registered under the Securities Act. PFG also
understands that Notes are being offered and sold pursuant to an exemption from
registration contained in Rule 506 of Regulation D under the Securities Act
based in part upon PFG’s representations contained in this Agreement. PFG hereby
represents and warrants as follows:

(i) PFG Bears Economic Risk. PFG has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar
to Borrower so that it is capable of evaluating the merits and risks of its
investment in Borrower and has the capacity to protect its own interests. PFG
understands that it must bear the economic risk of this investment and
represents that it is able to hold the Notes and the Conversion Stock
indefinitely unless and until the Notes (or the Conversion Stock, as may be the
case) are registered pursuant to the Securities Act, or an exemption from
registration thereunder is available.

(ii) Acquisition for Own Account. PFG is acquiring the Notes and the Conversion
Stock for PFG’s own account for investment purposes only, and not with a view
towards their distribution.

(b) PFG Can Protect Its Interest. PFG represents that by reason of its, or of
its management’s, business or financial experience, PFG has the capacity to
protect its own interests in connection with the transactions contemplated in
this Agreement, and the other Loan Documents. PFG also represents such PFG has
not been organized for the purpose of acquiring the Notes or the Conversion
Stock.

(c) Accredited Investor. PFG represents that it is an “accredited investor”
within the meaning of Rule 501 of Regulation D under the Securities Act.

(d) Company Information. PFG has had an opportunity to discuss Borrower’s
business, management and financial affairs with directors, officers and
management of Borrower and has had the opportunity to review Borrower’s
operations and facilities. PFG has also had the opportunity to ask questions of
and receive answers from, Borrower and its management regarding the terms and
conditions of this investment.

(e) Rule 144. PFG acknowledges and agrees that the Notes and the Conversion
Stock must be held indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available. PFG has
been advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things: the availability of certain current public information about
Borrower, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations.

(f) Residence. The office or offices of the PFG in which its investment decision
was made is located in San Francisco, California.

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EXHIBIT E

FORM OF INTELLECTUAL PROPERTY SECURITY AGREEMENT

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INTELLECTUAL PROPERTY SECURITY AGREEMENT

This Intellectual Property Security Agreement is entered into as of
            , 2013, by and between PARTNERS FOR GROWTH IV, L.P. (“PFG”) and each
of Mattersight Corporation, a Delaware corporation, its Subsidiary, Mattersight
Europe Holding Corporation, a Delaware corporation and its Subsidiary
Mattersight International Holding, Inc., an Illinois corporation, each with a
principal place of business as at the date hereof at 200 S Wacker Drive, Suite
820, Chicago, IL 60606 (individually and collectively, jointly and severally,
“Grantor”), with reference to the following facts:

A. PFG and Grantor, as Borrowers, are parties to that certain Loan and Security
Agreement dated as of August 19, 2013 (as amended from time to time, the “Loan
Agreement”). (Capitalized terms used herein have the meaning assigned in the
Loan Agreement.)

B. Pursuant to the Loan Agreement, Grantor has granted to PFG a security
interest in all of the Collateral. The Collateral includes without limitation
all Intellectual Property (including without limitation the Intellectual
Property described herein).

Grantor agrees as follows:

1. To secure performance of all of its “Obligations” as defined in the Loan
Agreement, Grantor grants to PFG a security interest in all of Grantor’s right,
title and interest in Grantor’s “Intellectual Property”, including without
limitation (i) the trademarks and servicemarks listed or required to be listed
from time to time on Schedule A hereto, whether registered or not, and all
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of Borrower connected with and symbolized by
such trademarks, and (ii) the patents and patent applications listed or required
to be listed from time to time on Schedule B hereto and all like protections
including, without limitation, all improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same, (iii) all
copyrights, maskworks, software, computer programs and other works of authorship
listed or required to be listed from time to time on Schedule C hereto, and all
extensions and renewals thereof, (iv) all domain names and domain name rights
used in connection with its business and that of its Subsidiaries, all legal and
equitable rights in domain names and ownership thereof, domain registry, domain
servers, web hosting and related contracts, services and facilities
(collectively, “Domain Rights”) listed or required to be listed from time to
time on Schedule D hereto, and all extensions and renewals thereof, and (iv) all
rights to recover for past or future infringement of any of the foregoing, and
(v) all right, title and interest in and to any and all present and future
license agreements with respect to any of the foregoing, and (vi) all present
and future accounts, accounts receivable and other rights to payment arising
from, in connection with or relating to any of the foregoing.

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2. Grantor represents and warrants that (i) listed on Schedule A hereto are all
trademark registrations and pending registrations owned or controlled by
Grantor, (ii) listed on Schedule B are all patents and patent applications owned
or controlled by Grantor, (iii) listed on Schedule C are all copyrights,
software, computer programs, mask works, and other works of authorship owned or
controlled by Grantor which are registered with the United States Copyright
Office, and (iv) listed on Schedule D are all Domain Rights in which Grantor has
any legal, contractual or equitable right. Grantor shall: (a) protect, defend
and maintain the validity and enforceability of its intellectual property, other
than intellectual property of immaterial business and monetary value that
Grantor’s executive management has made a determination not to maintain;
(b) promptly advise PFG in writing of material infringements of its intellectual
property; and (c) not allow any intellectual property material to Grantor’s
business to be abandoned, forfeited or dedicated to the public without PFG’s
written consent. If, before the Obligations have been paid and/or performed in
full, Grantor shall (i) adopt, use, acquire or apply for registration of any
trademark, service mark or trade name, (ii) apply for registration of any patent
or obtain any patent or patent application; (iii) create or acquire any
published or material unpublished works of authorship material to the business
that is or is to be registered with the U.S. Copyright Office or any non-U.S.
equivalent or other Governmental Body; or (iv) register or acquire any domain
name or domain name rights, then the provisions of Section 1 shall automatically
apply thereto, and Grantor shall provide PFG written notice thereof concurrently
with delivery of Borrower’s monthly compliance certificate. Grantor shall
further provide PFG with all information and details relating to the foregoing
and shall take such further actions as PFG may reasonably request from time to
time to perfect or continue the perfection of PFG’s interest in such
intellectual property.

3. This Agreement is being executed and delivered pursuant to the Loan
Agreement; nothing herein limits any of the terms or provisions of the Loan
Agreement, and PFG’s rights hereunder and under the Loan Agreement are
cumulative. This Agreement, the Loan Agreement and the other Loan Documents set
forth in full all of the representations and agreements of the parties with
respect to the subject matter hereof and supersede all prior discussions, oral
representations, oral agreements and oral understandings between the parties.
This Agreement may not be modified or amended, nor may any rights hereunder be
waived, except in a writing signed by the parties hereto; provided, however, and
notwithstanding the foregoing, PFG may amend the Schedules hereto from time to
time when it becomes aware of new Intellectual Property subject to this
Agreement. In the event of any litigation between the parties based upon,
arising out of, or in any way relating to this Agreement, the prevailing party
shall be entitled to recover all of its costs and expenses (including without
limitation attorneys’ fees) from the non-prevailing party. This Agreement and
all acts, transactions, disputes and controversies arising hereunder or relating
hereto, and all rights and obligations of PFG and Grantor shall be governed by,
and construed in accordance with the internal laws (and not the conflict of laws
rules) of the State of California.

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4. Grantor agrees that simultaneously with the execution of this Agreement, and
thereafter upon any amendment of Schedule A, Schedule B, Schedule C or Schedule
D, the appropriate entities constituting Grantor shall execute notices in the
forms appended hereto (each, a “Notice”), as appropriate, with respect to all of
the pledged Intellectual Property, now owned or hereafter acquired, and shall
deliver each Notice to PFG for the purpose of recordation at the U.S. Patent and
Trademark Office or the U.S. Copyright Office, or otherwise, as appropriate.
Whether or not Grantor executes such a Notice reflecting new Intellectual
Property, Grantor hereby irrevocably appoints PFG as its lawful attorney-in-fact
without any further authorization to file such notices, liens or other
instruments as may be customary from time to time for PFG to perfect security
interests in Grantor’s Intellectual Property. With respect to the power of
attorney granted in the attached Domain Rights Collateral Agreement and Notice,
so long as no default has occurred and is continuing under the Loan Documents,
PFG shall not take any action referenced therein in the name of Grantor.

[Signature Page Follows]

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Address of Grantor:     Mattersight Corporation

200 S Wacker Drive, Suite 820

   

Chicago, IL 60606

    By:         Name:         Title:     Address of Grantor:     Mattersight
Europe Holding Corporation

200 S Wacker Drive, Suite 820

   

Chicago, IL 60606

    By:         Name:         Title:     Address of Grantor:     Mattersight
International Holding, Inc.

200 S Wacker Drive, Suite 820

   

Chicago, IL 60606

    By:         Name:         Title:     Address of PFG:     PARTNERS FOR GROWTH
IV, L.P.

Partners for Growth IV, L.P.

150 Pacific Avenue

San Francisco, California 94111

        By:         Name:        

Title: Manager, Partners for Growth IV, LLC

Its: General Partner

 

Intellectual Property Security Agreement Signature Page

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SCHEDULE A

Mattersight Corporation

Trademark Schedule

 

Serial Number-

Registration Number

  

Date

  

Mark

  

Owner

Canadian Appl. No. 1533752

  

Date Filed

06/29/2011

   MATTERSIGHT    Mattersight Corporation

European Community Reg. No.

010088491

  

Reg. Date

12/02/2011

   MATTERSIGHT    Mattersight Corporation

U.S. Reg. No. 4172456

  

Reg. Date

07/10/2012

   MATTERSIGHT    Mattersight Corporation

U.S. Reg. No. 4250756

  

Reg. Date

11/27/2012

   MATTERSIGHT SEE WHAT MATTERS and Design (B&W)    Mattersight Corporation

U.S. Reg. No. 4250755

  

Reg. Date

11/27/2012

   MATTERSIGHT SEE WHAT MATTERS and Design (Color claimed)    Mattersight
Corporation

European Community Reg. No.

5214077

  

Reg. Date

08/02/2007

   SMARTSPEECH    Mattersight Corporation

New Zealand Reg. No.

310224

   12/07/2000    SOLUTIONS FOR UNBREAKABLE LIFETIME RELATIONSHIPS    Mattersight
Corporation

New Zealand Reg. No.

310225

   12/07/2000    SOLUTIONS FOR UNBREAKABLE LIFETIME RELATIONSHIPS    Mattersight
Corporation

New Zealand Reg. No.

310226

   12/07/2000    SOLUTIONS FOR UNBREAKABLE LIFETIME RELATIONSHIPS    Mattersight
Corporation

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SCHEDULE B

Mattersight Corporation

Patent Schedule

 

Patent/Application Number

  

Title

  

Owner

EP1889257    Method and System for Recording an Electronic Communication and
Extracting Constituent Audio Data Therefrom    Mattersight Corporation US7869586
   Method and System For Aggregating and Analyzing Data Relating to a Plurality
of Interactions between a Customer and a Contact Center and Generating Business
Process Analytics    Mattersight Corporation US8,094,803    Method and System
for Analyzing Separated Voice Data of a Telephonic Communication between A
Customer and a Contact Center By Applying a Psychological Behavioral Model
Thereto    Mattersight Corporation US7995717    Method and System for Analyzing
Separated Voice Data of a Telephonic Communication between A Customer and a
Contact Center By Applying a Psychological Behavioral Model Thereto   
Mattersight Corporation US8023639    Method and System for Determining the
Complexity of a Telephonic Communication Received By a Contact Center Received
   Mattersight Corporation US8,094,790    Method and Software for Training a
Customer Service Representative By Analysis of a Telephonic Interaction Between
a Customer and a Contact Center    Mattersight Corporation US8,078,464    Method
and System for Analyzing Voice Data of a Telephonic Communication to Determine
the Gender of the Communicant tact Center    Mattersight Corporation US8,170,195
   Methods And Systems For Verifying Typed Segments Of A Telephonic
Communication Between A Customer And A Contact Center    Mattersight Corporation

--------------------------------------------------------------------------------

SCHEDULE C

Mattersight Corporation

COPYRIGHTS

 

Copyright Number

  

Date

  

Title / Work

  

Owner

TXu 1-660-176

   12/15/2009    eLoyalty 1A v1.1    Mattersight Corporation

TXu 1-309-998

   05/26/2006    eLoyalty AE v1.1    Mattersight Corporation

TXu 1-311-402

   05/26/2006    eLoyalty AE v1.2    Mattersight Corporation

TXu 1-309-997

   05/26/2006    eLoyalty AE v1.3    Mattersight Corporation

TXu 1-660-144

   12/15/2009    eLoyalty AE v1.4    Mattersight Corporation

TXu1-304-548

   05/26/2006    eLoyalty CRS v1.1    Mattersight Corporation

TXu1-304-554

   05/26/2006    eLoyalty CRS v1.2    Mattersight Corporation

TXu 1-303-400

   05/26/2006    eLoyalty CRS v1.3    Mattersight Corporation

TXu 1-660-177

   12/15/2009    eLoyalty CRS v1.4    Mattersight Corporation

TXu 1-660-165

   12/15/2009    eLoyalty DA v1.1    Mattersight Corporation

TXu1-308-019

   05/26/2006    eLoyalty Portal v1.1    Mattersight Corporation

TXu1-308-018

   05/26/2006    eLoyalty Portal v1.2    Mattersight Corporation

TXu1-308-017

   05/26/2006    eLoyalty Portal v1.3    Mattersight Corporation

TXu 1-660-127

   12/15/2009    eLoyalty Portal v1.4    Mattersight Corporation

TXu 1-660-174

   06/15/2010    eLoyalty SC v1.1    Mattersight Corporation

--------------------------------------------------------------------------------

SCHEDULE D

Mattersight Corporation

DOMAIN RIGHTS

 

URL

  

Expiration Date

  

Provider

  

Account

Mattersight.com

   3/16/2015    Network Solutions    28829425

Mattersight.net

   3/16/2015    Cyber Defense Center    42496293

Mattersight.org

   3/16/2015    Cyber Defense Center    42496293

Mattersights.com

   3/16/2015    Cyber Defense Center    42496293

Mattersite.com

   3/16/2015    Cyber Defense Center    42496293

Mattersite.net

   3/16/2015    Cyber Defense Center    42496293

Matterssight.com

   3/16/2015    Cyber Defense Center    42496293

Mattersite.org

   3/17/2015    Cyber Defense Center    42496293

Matersite.com

   3/21/2015    Cyber Defense Center    42496293

Mattersightsucks.com

   3/21/2015    Cyber Defense Center    42496293

--------------------------------------------------------------------------------

TRADEMARK COLLATERAL AGREEMENT AND NOTICE

This Trademark Collateral Agreement and Notice dated as of             , 2013
(“Trademark Agreement”), is between each of Mattersight Corporation, a Delaware
corporation, its Subsidiary, Mattersight Europe Holding Corporation, a Delaware
corporation and its Subsidiary Mattersight International Holding, Inc., an
Illinois corporation, each with a principal place of business as at the date
hereof at 200 S Wacker Drive, Suite 820, Chicago, IL 60606 (“Assignor”) and
Partners for Growth IV, L.P., 150 Pacific Avenue, San Francisco, CA 94111
(“Assignee”) pursuant to an Intellectual Property Security Agreement of even
date herewith by and among Assignor and Assignee (the “IP Security Agreement”)
and pursuant to a Loan and Security Agreement and certain other loan documents
referenced therein (collectively, the “Loan Documents”).

WHEREAS, Assignor is the owner of certain trademarks, including all federal
applications and/or registrations therefor, together with the goodwill of the
business connected with the use of and symbolized thereby, as listed on Exhibit
1 hereto (the “Marks”); and

WHEREAS, Assignee has agreed to extend certain credit to Assignor on condition
that the Assignor pledge and grant to Assignee as collateral for the Obligations
(as defined in the Loan Documents) a security interest and lien in and to the
Marks and all proceeds thereof and all other related claims and rights as more
fully described in the IP Security Agreement in favor of the Assignee, by and
among Assignor and Assignee;

NOW THEREFORE, for good and valuable consideration, as security for the due and
timely payment and performance of the Obligations, Assignor hereby pledges and
grants to Assignee a security interest and lien in and to the Marks and all
proceeds thereof and gives notice of such security interest and the existence of
such Security Agreement providing therefor.

Executed as of the date first above written.

 

Assignor:     Assignee: Mattersight Corporation     PARTNERS FOR GROWTH IV, L.P.
By         By           Chief Executive Officer     Name:    

 

By

        Title:  

Manager, Partners for Growth IV, LLC

Its General Partner

      Secretary      

--------------------------------------------------------------------------------

EXHIBIT 1

Mattersight Corporation

Trademark Schedule

 

Serial Number-

Registration Number

  

Date

  

Mark

  

Owner

Canadian Appl. No. 1533752

   Date Filed 06/29/2011    MATTERSIGHT    Mattersight Corporation

European Community Reg. No.

010088491

  

Reg. Date

12/02/2011

   MATTERSIGHT    Mattersight Corporation

U.S. Reg. No. 4172456

   Reg. Date 07/10/2012    MATTERSIGHT    Mattersight Corporation

U.S. Reg. No. 4250756

  

Reg. Date

11/27/2012

   MATTERSIGHT SEE WHAT MATTERS and Design (B&W)    Mattersight Corporation

U.S. Reg. No. 4250755

  

Reg. Date

11/27/2012

   MATTERSIGHT SEE WHAT MATTERS and Design (Color claimed)    Mattersight
Corporation

European Community Reg. No.

5214077

  

Reg. Date

08/02/2007

   SMARTSPEECH    Mattersight Corporation

New Zealand Reg. No.

310224

   12/07/2000    SOLUTIONS FOR UNBREAKABLE LIFETIME RELATIONSHIPS    Mattersight
Corporation

New Zealand Reg. No.

310225

   12/07/2000    SOLUTIONS FOR UNBREAKABLE LIFETIME RELATIONSHIPS    Mattersight
Corporation

New Zealand Reg. No.

310226

   12/07/2000    SOLUTIONS FOR UNBREAKABLE LIFETIME RELATIONSHIPS    Mattersight
Corporation

--------------------------------------------------------------------------------

PATENT COLLATERAL AGREEMENT AND NOTICE

This Patent Collateral Agreement and Notice dated as of             , 2013
(“Patent Agreement”), is between each of Mattersight Corporation, a Delaware
corporation, its Subsidiary, Mattersight Europe Holding Corporation, a Delaware
corporation and its Subsidiary Mattersight International Holding, Inc., an
Illinois corporation, each with a principal place of business as at the date
hereof at 200 S Wacker Drive, Suite 820, Chicago, IL 60606 (“Assignor”) and
Partners for Growth IV, L.P., 150 Pacific Avenue, San Francisco, CA 94111
(“Assignee”) pursuant to an Intellectual Property Security Agreement of even
date herewith by and among Assignor and Assignee (the “IP Security Agreement”)
and pursuant to a Loan and Security Agreement and certain other loan documents
referenced therein (collectively, the “Loan Documents”).

WHEREAS, Assignor is the owner of certain United States patents and/or patent
applications as listed on Exhibit 1 hereto (the “Patents”); and

WHEREAS, Assignee has agreed to extend certain credit to Assignor on condition
that the Assignor pledge and grant to Assignee as collateral for the Obligations
(as defined in the Loan Documents) a security interest and lien in and to the
Patents and all proceeds thereof and all other related claims and rights as more
fully described in the IP Security Agreement in favor of the Assignee, by and
among Assignor and Assignee;

NOW THEREFORE, for good and valuable consideration, as security for the due and
timely payment and performance of the Obligations, Assignor hereby pledges and
grants to Assignee a security interest and lien in and to the Patents and all
proceeds thereof and gives notice of such security interest and the existence of
the IP Security Agreement providing therefor.

Executed as of the date first above written.

 

Assignor:     Assignee: Mattersight Corporation     PARTNERS FOR GROWTH IV, L.P.
By         By           Chief Executive Officer     Name:    

 

By

        Title:  

Manager, Partners for Growth IV, LLC

Its General Partner

      Secretary      

--------------------------------------------------------------------------------

EXHIBIT 1

Mattersight Corporation

Patent Schedule

 

Patent/Application Number

  

Title

   Owner   EP1889257    Method and System for Recording an Electronic
Communication and Extracting Constituent Audio Data Therefrom     
Mattersight Corporation    US7869586    Method and System For Aggregating and
Analyzing Data Relating to a Plurality of Interactions between a Customer and a
Contact Center and Generating Business Process Analytics      Mattersight
Corporation    US8,094,803    Method and System for Analyzing Separated Voice
Data of a Telephonic Communication between A Customer and a Contact Center By
Applying a Psychological Behavioral Model Thereto      Mattersight Corporation
   US7995717    Method and System for Analyzing Separated Voice Data of a
Telephonic Communication between A Customer and a Contact Center By Applying a
Psychological Behavioral Model Thereto      Mattersight Corporation    US8023639
   Method and System for Determining the Complexity of a Telephonic
Communication Received By a Contact Center Received      Mattersight Corporation
   US8,094,790    Method and Software for Training a Customer Service
Representative By Analysis of a Telephonic Interaction Between a Customer and a
Contact Center      Mattersight Corporation    US8,078,464    Method and System
for Analyzing Voice Data of a Telephonic Communication to Determine the Gender
of the Communicant tact Center      Mattersight Corporation    US8,170,195   
Methods And Systems For Verifying Typed Segments Of A Telephonic Communication
Between A Customer And A Contact Center      Mattersight Corporation   

--------------------------------------------------------------------------------

COPYRIGHT COLLATERAL AGREEMENT AND NOTICE

This Copyright Collateral Agreement and Notice dated as of             , 2013
(“Copyright Agreement”), is between each of Mattersight Corporation, a Delaware
corporation, its Subsidiary, Mattersight Europe Holding Corporation, a Delaware
corporation and its Subsidiary Mattersight International Holding, Inc., an
Illinois corporation, each with a principal place of business as at the date
hereof at 200 S Wacker Drive, Suite 820, Chicago, IL 60606 (“Assignor”) and
Partners for Growth IV, L.P., 150 Pacific Avenue, San Francisco, CA 94111
(“Assignee”) pursuant to an Intellectual Property Security Agreement of even
date herewith by and among Assignor and Assignee (the “IP Security Agreement”)
and pursuant to a Loan and Security Agreement and certain other loan documents
referenced therein (collectively, the “Loan Documents”).

WHEREAS, Assignor is the owner of certain copyrightable works which are the
subject of United States copyright registrations and/or copyright applications
as listed on Exhibit 1 hereto (the “Copyrights”); and

WHEREAS, Assignee has agreed to extend certain credit to Assignor on condition
that the Assignor pledge and grant to Assignee as collateral for the Obligations
(as defined in the Loan Documents) a security interest and lien in and to the
Copyrights and all proceeds thereof and all other related claims and rights as
more fully described in the IP Security Agreement in favor of the Assignee, by
and among Assignor and Assignee;

NOW THEREFORE, for good and valuable consideration, as security for the due and
timely payment and performance of the Obligations, Assignor hereby pledges and
grants to Assignee a security interest and lien in and to the Copyrights and all
proceeds thereof and gives notice of such security interest and the existence of
the IP Security Agreement providing therefor.

Executed as of the date first above written.

 

Assignor:     Assignee: Mattersight Corporation     PARTNERS FOR GROWTH IV, L.P.
By         By           Chief Executive Officer     Name:    

 

By

        Title:  

Manager, Partners for Growth IV, LLC

Its General Partner

      Secretary      

--------------------------------------------------------------------------------

EXHIBIT 1

Mattersight Corporation

COPYRIGHT SCHEDULE

 

Copyright Number

  

Date

  

Title / Work

  

Owner

TXu 1-660-176

   12/15/2009    eLoyalty 1A v1.1    Mattersight Corporation

TXu 1-309-998

   05/26/2006    eLoyalty AE v1.1    Mattersight Corporation

TXu 1-311-402

   05/26/2006    eLoyalty AE v1.2    Mattersight Corporation

TXu 1-309-997

   05/26/2006    eLoyalty AE v1.3    Mattersight Corporation

TXu 1-660-144

   12/15/2009    eLoyalty AE v1.4    Mattersight Corporation

TXu1-304-548

   05/26/2006    eLoyalty CRS v1.1    Mattersight Corporation

TXu1-304-554

   05/26/2006    eLoyalty CRS v1.2    Mattersight Corporation

TXu 1-303-400

   05/26/2006    eLoyalty CRS v1.3    Mattersight Corporation

TXu 1-660-177

   12/15/2009    eLoyalty CRS v1.4    Mattersight Corporation

TXu 1-660-165

   12/15/2009    eLoyalty DA v1.1    Mattersight Corporation

TXu1-308-019

   05/26/2006    eLoyalty Portal v1.1    Mattersight Corporation

TXu1-308-018

   05/26/2006    eLoyalty Portal v1.2    Mattersight Corporation

TXu1-308-017

   05/26/2006    eLoyalty Portal v1.3    Mattersight Corporation

TXu 1-660-127

   12/15/2009    eLoyalty Portal v1.4    Mattersight Corporation

TXu 1-660-174

   06/15/2010    eLoyalty SC v1.1    Mattersight Corporation

--------------------------------------------------------------------------------

DOMAIN RIGHTS COLLATERAL AGREEMENT AND NOTICE

This Domain Rights Collateral Agreement and Notice dated as of             ,
2013 (“Domain Agreement”), is between each of Mattersight Corporation, a
Delaware corporation, its Subsidiary, Mattersight Europe Holding Corporation, a
Delaware corporation and its Subsidiary Mattersight International Holding, Inc.,
an Illinois corporation, each with a principal place of business as at the date
hereof at 200 S Wacker Drive, Suite 820, Chicago, IL 60606 (“Assignor”) and
Partners for Growth IV, L.P., 150 Pacific Avenue, San Francisco, CA 94111
(“Assignee”) pursuant to an Intellectual Property Security Agreement of even
date herewith by and among Assignor and Assignee (the “IP Security Agreement”)
and pursuant to a Loan and Security Agreement and certain other loan documents
referenced therein (collectively, the “Loan Documents”).

WHEREAS, Assignor is the owner of certain Domain Rights as defined in the Loan
Documents which are, as of the date hereof, as listed on Exhibit 1 hereto (the
“Domain Rights”); and

WHEREAS, Assignee has agreed to extend certain credit to Assignor on condition
that the Assignor pledge and grant to Assignee as collateral for the Obligations
(as defined in the Loan Documents) a security interest and lien in and to the
Domain Rights and all proceeds thereof and all other related claims and rights
as more fully described in the IP Security Agreement in favor of the Assignee,
by and among Assignor and Assignee;

NOW THEREFORE, for good and valuable consideration, as security for the due and
timely payment and performance of the Obligations: (1) Assignor hereby pledges
and grants to Assignee a security interest and lien in and to the Domain Rights
and all proceeds thereof and gives notice of such security interest and the
existence of the IP Security Agreement providing therefor; and (2) Assignor
hereby irrevocably appoints PFG as its lawful attorney-in-fact without any
further authorization to take any action and file any notice on behalf of
Assignor that Assignor itself could file in respect of its Domain Rights,
including without limitation, to transfer Domain Rights, change administrative
contacts in respect of Domain Rights, maintain Domain Rights, and provide
instructions to domain hosting services and any domain name registrars.

Executed as of the date first above written.

 

Assignor:     Assignee: Mattersight Corporation     PARTNERS FOR GROWTH IV, L.P.
By         By       Chief Executive Officer     Name:    

 

By

        Title:  

Manager, Partners for Growth IV, LLC

Its General Partner

  Secretary      

--------------------------------------------------------------------------------

SCHEDULE D

Mattersight Corporation

DOMAIN RIGHTS

 

URL

  

Expiration Date

  

Provider

  

Account

Mattersight.com

   3/16/2015    Network Solutions    28829425

Mattersight.net

   3/16/2015    Cyber Defense Center    42496293

Mattersight.org

   3/16/2015    Cyber Defense Center    42496293

Mattersights.com

   3/16/2015    Cyber Defense Center    42496293

Mattersite.com

   3/16/2015    Cyber Defense Center    42496293

Mattersite.net

   3/16/2015    Cyber Defense Center    42496293

Matterssight.com

   3/16/2015    Cyber Defense Center    42496293

Mattersite.org

   3/17/2015    Cyber Defense Center    42496293

Matersite.com

   3/21/2015    Cyber Defense Center    42496293

Mattersightsucks.com

   3/21/2015    Cyber Defense Center    42496293