FIVE9, INC.

CITY NATIONAL BANK

SILICON VALLEY BANK

LOAN AND SECURITY AGREEMENT

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This LOAN AND SECURITY AGREEMENT is entered into as of August 1, 2016 (this
“Agreement”), by and among CITY NATIONAL BANK (“CNB”), as a Lender (as defined
below) and in its capacity as administrative agent for the Lenders, SILICON
VALLEY BANK (“SVB”, and collectively, with CNB, the “Lenders”, and each, a
“Lender”), as a Lender, and FIVE9, INC. (“Borrower”).
RECITALS
Borrower wishes to obtain credit from time to time from Lenders, and Lenders
desire to extend credit to Borrower. This Agreement sets forth the terms on
which Lenders will advance credit to Borrower, and Borrower will repay the
amounts owing to Lenders.
AGREEMENT
The parties agree as follows:
1.DEFINITIONS AND CONSTRUCTION.
1.1    Definitions. As used in this Agreement, the following terms shall have
the following definitions:
“Accounts” means any “account” as defined in the Code, including, without
limitation all presently existing and hereafter arising accounts, contract
rights, payment intangibles, and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods (including, without
limitation, the licensing of software and other technology) or the rendering of
services by Borrower, whether or not earned by performance, and any and all
credit insurance, guaranties, and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower and Borrower’s Books relating
to any of the foregoing. Unless otherwise stated, the term “Account,” when used
herein, shall mean an Account of the Borrower.
“Adjusted EBITDA” means, with respect to any Person for fiscal period, an amount
equal to the sum of (a) Consolidated Net Income (or Deficit) of such Person for
such fiscal period, plus (b) in each case to the extent deducted in the
calculation of such Person’s Consolidated Net Income (or Deficit) and without
duplication, (i) depreciation and amortization for such period, plus (ii) income
tax expense for such period, plus (iii) Consolidated Total Interest Expense paid
or accrued during such period, plus (iv) non-cash expense associated with stock
based compensation, plus (v) all extraordinary and non-recurring losses and
expenses reasonably acceptable to the Required Lenders, and minus, (c) to the
extent added in computing Consolidated Net Income (or Deficit), and without
duplication, all extraordinary and non-recurring gains (including income tax
benefits) for such period, all as determined in accordance with GAAP.
“Administrative Agent” means CNB, not in its individual capacity, but solely as
administrative agent on behalf of and for the benefit of the Lenders.
“Administrative Agent-Related Person” means the Administrative Agent, together
with its Affiliates, and the officers, directors, employees, agents, advisors,
auditors and attorneys in fact of the Administrative Agent and such Affiliates;
provided, however, that no Affiliate of Borrower shall be an Administrative
Agent-Related Person.
“Advance” or “Advances” means a cash advance or cash advances under the
Revolving Facility, including under the Letter of Credit Sublimit.
“Affiliate” means, with respect to any Person, any Person that owns or controls
directly or indirectly such Person, any Person that controls or is controlled by
or is under common control with such Person, where “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise; and each of such Person’s
senior executive officers, directors, and partners.

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“Borrower’s Books” means all of Borrower’s books and records including: ledgers;
records concerning Borrower’s assets or liabilities, the Collateral, business
operations or financial condition; and all computer programs, or tape files, and
the equipment, containing such information.
“Borrowing Base” means, as of any date of determination, an amount equal to the
Monthly Recurring Revenue for the four months prior to such date multiplied by
the average dollar based retention rate (expressed as a percentage) over the
twelve months prior to such date, in each case as determined by Administrative
Agent with reference to the most recent Borrowing Base Certificate.
“Borrowing Base Certificate” means a certificate substantially in the form of
Exhibit C hereto.
“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks in the State of California are authorized or required to close.
“Change in Control” shall mean (a) a transaction in which any “person” or
“group” (within the meaning of Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), directly or indirectly, of a
sufficient number of shares of all classes of stock then outstanding of Borrower
ordinarily entitled to vote in the election of directors, empowering such
“person” or “group” to elect a majority of the Board of Directors or other
equivalent governing body of Borrower, who did not have such power before such
transaction or (b) during any period of 12 consecutive months, a majority of the
members of the Board of Directors or other equivalent governing body of Borrower
cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body.
“Change in Law” means the occurrence, after the date of this Agreement of any of
the following: (a) the adoption or taking effect of any law, rule, regulation or
treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation, implementation or application thereof by any
governmental authority, (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of law) by any
governmental authority, (d) all rules, guidelines or directives thereunder or
issued in connection with the Dodd-Frank Wall Street Reform and Consumer
Protection (regardless of the date enacted, adopted or issued), and (e) all
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or any United States regulatory authorities pursuant to the
Basil III (regardless of the date enacted, adopted or issued).
“Closing Date” means the date of this Agreement.
“Code” means the California Uniform Commercial Code.
“Collateral” means the property described on Exhibit A attached hereto.
“Commitment Amount” is set forth in Schedule 1.1, as amended from time to time.
“Commitment Percentage” means, as of any date of determination, with respect to
each Lender, a percentage determined by dividing (a) its Commitment Amount by
(b) the aggregate Commitment Amount of all Lenders.
“Consolidated Net Income (or Deficit)” means, for any Person for any period, the
consolidated net income (or deficit) of such Person, determined in accordance
with GAAP.
“Consolidated Total Interest Expense” means with respect to any Person for any
period, the aggregate amount of interest required to be paid or accrued by such
Person during such period on all Indebtedness of such Person

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outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including
payments consisting of interest in respect of any capitalized lease or any
synthetic lease, and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the
borrowing of money, all on a consolidated basis.
“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to (i) any
indebtedness, lease, dividend, letter of credit or other obligation of another;
(ii) any obligations with respect to undrawn letters of credit, corporate credit
cards, or merchant services issued or provided for the account of that Person;
and (iii) all obligations arising under any agreement or arrangement designed to
protect such Person against fluctuation in interest rates, currency exchange
rates or commodity prices; provided, however, that the term “Contingent
Obligation” shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determined amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by Administrative Agent in good faith; provided, however,
that such amount shall not in any event exceed the maximum amount of the
obligations under the guarantee or other support arrangement.
“Copyrights” means any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof.
“Credit Extension” means each Advance, any issuance of a Letter of Credit, or
any other extension of credit by Lenders for the benefit of Borrower hereunder.
“Daily Balance” means the sum of, without duplication, the aggregate outstanding
principal amount of all Advances (other than Advances consisting of Letters of
Credit or obligations in respect thereof) plus the aggregate undrawn amount of
all issued and outstanding Letters of Credit plus the aggregate amount of all
drawn but unreimbursed amounts under any Letter of Credit, in each case at the
end of a given day.
“Default” means any circumstance that, with the passage of time or giving of
notice, would constitute an Event of Default.
“Default Rate” has the meaning set forth in Section 2.3(b).
“Equipment” means all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.
“Equity Interests” means, with respect to any Person, the capital stock,
partnership or limited liability company interest, or other equity securities or
equity ownership interests of such Person.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations thereunder.
“Event of Default” has the meaning assigned in Article 8.
“GAAP” means generally accepted accounting principles as in effect from time to
time.
“Governmental Authority” is any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization.
“Indebtedness” means (a) all indebtedness for borrowed money or the deferred
purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of

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credit, (b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all capital lease obligations and (d) all Contingent
Obligations.
“Insolvency Proceeding” means any proceeding commenced by or against any person
or entity under any provision of the United States Bankruptcy Code, as amended,
or under any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, formal or informal moratoria, compositions, extension
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
“Intellectual Property” means all of a Person’s right, title, and interest in
and to the following: Copyrights, Trademarks and Patents; all trade secrets, all
design rights, claims for damages by way of past, present and future
infringement of any of the rights included above, all licenses or other rights
to use any of the Copyrights, Patents or Trademarks, and all license fees and
royalties arising from such use to the extent permitted by such license or
rights; all amendments, renewals and extensions of any of the Copyrights,
Trademarks or Patents; and all proceeds and products of the foregoing, including
without limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.
“Inventory” means all inventory in which Borrower has or acquires any interest,
including work in process and finished products intended for sale or lease or to
be furnished under a contract of service, of every kind and description now or
at any time hereafter owned by or in the custody or possession, actual or
constructive, of Borrower, including such inventory as is temporarily out of its
custody or possession or in transit and including any returns upon any accounts
or other proceeds, including insurance proceeds, resulting from the sale or
disposition of any of the foregoing and any documents of title representing any
of the above, and Borrower’s Books relating to any of the foregoing.
“Investment” means any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital
contribution to any Person.
“IRC” means the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.
“Issuing Bank” means City National Bank.
“L/C Disbursements” means a payment or disbursement made by Issuing Bank
pursuant to a Letter of Credit.
“Letter of Credit” means a letter of credit issued under this Agreement.
“Lien” means any mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.
“Lender Expenses” means all: reasonable costs or expenses (including reasonable
attorneys’ fees and expenses) incurred in connection with the preparation,
negotiation, administration, and enforcement of the Loan Documents; reasonable
Collateral audit fees; and Administrative Agent and each Lender’s reasonable
attorneys’ fees and expenses incurred in connection with negotiating, amending,
enforcing or defending the Loan Documents (including fees and expenses of
appeal), incurred before, during and after an Insolvency Proceeding, whether or
not suit is brought.
“Letter of Credit Sublimit” means a sublimit for the issuance of Letters of
Credit under the Revolving Line in an amount equal to Five Million Dollars
($5,000,000) at any time.
“Loan Commitment” means, for any Lender, the obligation of such Lender to make
Advances up to its Commitment Amount. “Loan Commitments” means the aggregate
Loan Commitment of all Lenders.
“Loan Documents” means, collectively, this Agreement, any note or notes executed
by Borrower, any agreements with Issuing Bank relating to the issuance of
Letters of Credit hereunder, and any other agreement entered into in connection
with this Agreement, all as amended or extended from time to time.

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“Material Adverse Effect” means a material adverse effect on (i) the business
operations or condition (financial or otherwise) of Borrower and its
Subsidiaries taken as a whole or (ii) the ability of Borrower to repay the
Obligations or otherwise perform its obligations under the Loan Documents or
(iii) the value of or priority of Administrative Agent’s security interests in
the Collateral.
“Monthly Recurring Revenue” means, for any applicable period, the gross revenue
received by Borrower during such period on a recurring basis (and not
extraordinary gains or other payments outside the ordinary course of business),
including subscription and usage revenue, as such revenue terms are defined in
accordance with GAAP.
“Negotiable Collateral” means all letters of credit of which Borrower is a
beneficiary, notes, drafts, instruments, securities, documents of title, and
chattel paper, and Borrower’s Books relating to any of the foregoing.
“Obligations” means all debt, principal, interest, Lender Expenses and other
amounts owed to Administrative Agent, Lenders and Issuing Bank by Borrower
pursuant to this Agreement or any other Loan Document or agreement for the
provision of bank services by any Lender, whether absolute or contingent, due or
to become due, now existing or hereafter arising, including any interest that
accrues after the commencement of an Insolvency Proceeding.
“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.
“Periodic Payments” means all installments or similar recurring payments that
Borrower may now or hereafter become obligated to pay to Lenders pursuant to the
terms and provisions of any Loan Document.
“Permitted Acquisition” means any acquisition by Borrower or any of its
Subsidiaries, whether by purchase, merger or otherwise, of all or substantially
all of the assets of, the Equity Interests of, or a business or product line or
unit or a division of, any Person (each, an “Acquisition”) so long as:
(a)(i)    immediately before and immediately after giving effect to such
Acquisition, no Default or Event of Default shall have occurred and be
continuing, (ii) immediately after giving effect to such Acquisition, the
Borrower shall be in compliance with each of the covenants set forth in Section
6.9 and 6.10 for the most recently ended testing period and for the succeeding
twelve-month period, based upon financial information delivered to the Required
Lenders which give effect, on a pro forma basis, to the Acquisition, and (iii)
and the proposed Acquisition is consensual;
(b)    Borrower has provided the Administrative Agent with (i) written notice of
the proposed Acquisition promptly upon the execution of any letter of intent in
connection therewith or concurrently with Borrower's notification to the board
of directors of such proposed Acquisition and (ii) not later than five (5)
Business Days prior to the anticipated closing date of the proposed Acquisition,
copies of the then current drafts of acquisition agreement and other material
documents relative to the proposed Acquisition;
(c)(i)     the aggregate amount of the cash consideration paid by the Borrower
or any of its Subsidiaries in connection with any particular Acquisition shall
not exceed $10,000,000, and (ii) the aggregate amount of the cash consideration
paid by the Borrower or any of its Subsidiaries in connection with all such
Permitted Acquisitions consummated during the term of this Agreement shall not
exceed $20,000,000;
(d)    the newly-created or acquired Subsidiary (or assets acquired in
connection with such asset sale) shall be (x) in the same or a related line of
business as that conducted by the Borrower on the date hereof, or (y) in a
business that is ancillary to and in furtherance of the line of business as that
conducted by the Borrower on the date hereof; and
(e)    any such newly-created or acquired Subsidiary shall become a Borrower or
secured guarantor and comply with the requirements of Section 6.7.
“Permitted Indebtedness” means:

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(a)    Indebtedness of Borrower in favor of Administrative Agent, Lenders or
Issuing Bank arising under this Agreement or any other Loan Document;
(b)    Indebtedness existing on the Closing Date and disclosed in the Schedule
and any extensions, renewals and replacements of such Indebtedness, provided
that the principal amount thereof (or, as the case may be, the maximum
commitment amount thereof) is not increased nor the terms made substantially
more burdensome to Borrower;
(c)    Indebtedness secured by a Lien described in clause (c) of the defined
term “Permitted Liens,” provided (i) such Indebtedness does not exceed the
lesser of the cost or fair market value of the equipment financed with such
Indebtedness and the cost of installation or improvement thereof and (ii) such
Indebtedness does not exceed $25,000,000 in the aggregate at any given time
(inclusive of all equipment financing arrangements set forth on the Schedule);
(d)    Indebtedness consisting of trade payables incurred in the ordinary course
of business;
(e)    Indebtedness consisting of obligations with respect to corporate credit
cards owing to (i) any Lender or (ii) to any other Person in an aggregate
outstanding amount not to exceed $250,000 at any time;
(f)    Indebtedness consisting of obligations with respect to merchant services
owing to (i) any Lender or (ii) any Person with whom a deposit account is
maintained in accordance with the terms of this Agreement, provided that for
purposes of this clause (ii), (A) with respect to such Indebtedness incurred by
a Subsidiary not organized under the laws of the United States or any state or
territory thereof, such merchant services are in the ordinary course and
consistent with past practice, and (B) with respect to such Indebtedness
incurred by Borrower and any Guarantor, the aggregate amount of processing
reserves related thereto shall not exceed $250,000 at any time;
(g)    Subordinated Debt;
(h)    Indebtedness of Borrower owing to any Subsidiary that is a secured
guarantor or constituting Subordinated Debt;
(i)    Indebtedness of any Subsidiary owing to Borrower solely to the extent
such Indebtedness constitutes a Permitted Investment under clause (d) of such
defined term;
(j)    guarantees by any Subsidiary of Indebtedness of Borrower or any other
Subsidiary, in each case to the extent that the Indebtedness is permitted under
this Agreement;
(k)    Indebtedness owed to any Person providing workers’ compensation, health,
disability or other employee benefits or property, casualty or liability
insurance, pursuant to reimbursement or indemnification obligations to such
Person, in each case incurred in the ordinary course of business; and
(l)    Indebtedness of Borrower or any Subsidiary in respect of performance
bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each
case provided in the ordinary course of business.
“Permitted Investment” means:
(a)    Investments existing on the Closing Date disclosed in the Schedule;
(b)    (i) marketable direct obligations issued or unconditionally guaranteed by
the United States of America or any agency or any State thereof maturing within
one (1) year from the date of acquisition thereof, (ii) commercial paper
maturing no more than one (1) year from the date of creation thereof and
currently having rating of at least A-2 or P-2 from either Standard & Poor’s
Corporation or Moody’s Investors Service, (iii) certificates of deposit maturing
no more than one (1) year from the date of investment therein issued by any
Lender or by any

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commercial bank organized under the laws of the United States or any state
thereof having combined capital and surplus of not less than $250,000,000 and
(iv)  money market mutual or similar funds that (A) invest exclusively in assets
satisfying the requirements of clauses (i) through (ii) of this definition or
(B) that (x) comply with the criteria set forth in SEC Rule 2a-7 under the
Investment Company Act of 1940, as amended, (y) are rated AAA by S&P and Aaa by
Moody’s and (z) have portfolio assets of at least $500,000,000;
(c)    deposits in deposit and securities accounts listed on the Schedule or
maintained in accordance with Sections 6.9 and 7.7;
(d)    Investments in the form of equity securities issued by any wholly owned
Subsidiaries of Borrower formed after the Closing Date so long as Borrower
complies with the requirements of Section 6.7; other Investments in wholly owned
Subsidiaries existing as of the Closing Date solely to the extent necessary to
maintain such Subsidiary’s operations in support of Borrower’s business in the
ordinary course consistent with past transfer pricing practices; other
Investments in wholly owned Subsidiaries existing after the Closing Date that
are in compliance with Section 6.7 solely to the extent necessary to establish
such Subsidiary’s operations in support of Borrower’s business, and maintain
such Subsidiary’s operations in the ordinary course and consistent with past
transfer pricing practices; and Permitted Transfers;
(e)    loans or advances made by any Subsidiary to (i) Borrower, (ii) any other
Subsidiary that is a secured guarantor or (iii) any other Subsidiary that is not
a secured guarantor in an aggregate outstanding amount not to exceed $500,000 at
any time;
(f)    loans or advances made to employees on an arms-length basis in the
ordinary course of business consistent with past practices for travel and
entertainment expenses, relocation costs and similar purposes up to a maximum of
$250,000 in the aggregate at any one time outstanding;
(g)    notes payable, or stock or other securities issued by account debtors to
Borrower or any Subsidiary pursuant to negotiated agreements with respect to
settlement of such account debtor’s Accounts in the ordinary course of business,
consistent with past practices; and
(h)    other Investments in an aggregate amount not to exceed $3,000,000 in the
aggregate unless consented to by the Required Lenders on a case by case basis.
“Permitted Liens” means the following:
(a)    any Liens existing on the Closing Date and disclosed in the Schedule or
arising under this Agreement or the other Loan Documents;
(b)    Liens for taxes, fees, assessments or other governmental charges or
levies, either not delinquent or being contested in good faith by appropriate
proceedings, provided the same have no priority over any of Administrative
Agent’s security interests;
(c)    Liens (i) upon or in any equipment acquired or held by Borrower or any of
its Subsidiaries (including pursuant to a lease arrangement) to secure the
purchase price and the costs of installation or improvement of such equipment or
indebtedness incurred solely for the purpose of financing the acquisition of
such equipment and the installation or improvement thereof, or (ii) existing on
such equipment at the time of its acquisition, provided that, in each case, the
Lien is confined solely to the property so acquired and improvements thereon,
and the proceeds of such equipment and the amount of Indebtedness secured
thereby does not exceed the amounts permitted by clause (c) of the definition of
“Permitted Indebtedness”;
(d)    Liens of materialmen, mechanics, warehousemen, carriers, artisan's or
other similar Liens arising in the ordinary course of Borrower's business or by
operation of law, which are not past due or which are being contested in good
faith by appropriate proceedings and for which reserves satisfactory to the
Required Lenders

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have been established, and do not in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof in the
operation of the business of Borrower or any Subsidiary;
(e)    pledges and deposits (other than any Lien imposed by ERISA) made in the
ordinary course of business in compliance with workers’ compensation,
unemployment insurance and other social security laws or regulations;
(f)    deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business
(other than obligations in respect of the payment for borrowed money);
(g)    Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default;
(h)    (i) Liens arising from leases, subleases, licenses or sublicenses (other
than Intellectual Property) granted to others in the ordinary course of business
not interfering in any material respect with the business of Borrower or any
Subsidiary, and not interfering with any interest or title of a lessor under any
lease, and (ii) non-exclusive licenses or sublicenses of Intellectual Property
granted to third parties in the ordinary course of business;
(i)    bankers’ Liens, rights of setoff and other similar Liens existing solely
with respect to cash and cash equivalents on deposit in one or more accounts
maintained by Borrower or any Subsidiary, in each case granted in the ordinary
course of business in favor of the bank or banks with which such accounts are
maintained, securing amounts owing to such bank with respect to cash management
and operating account arrangements, provided that such accounts are subject to
an account control agreement in favor of Administrative Agent, in form and
substance satisfactory to Administrative Agent to the extent required under this
Agreement; and
(j)    Liens incurred in connection with the extension, renewal or refinancing
of the indebtedness secured by Liens of the type described in clauses (a) and
(c) above, provided that any extension, renewal or replacement Lien shall be
limited to the property encumbered by the existing Lien and the principal amount
of the indebtedness being extended, renewed or refinanced does not increase.
“Permitted Transfers” means
(a)    Transfers of Inventory in the ordinary course of business;
(b)    Transfers of non-exclusive licenses and similar arrangements for the use
of the property of Borrower or its Subsidiaries in the ordinary course of
business;
(c)    Transfers of used, worn-out, surplus or obsolete Equipment;
(d)    Transfers of property of any Subsidiary to Borrower or any other
Subsidiary that is a secured guarantor;
(e)    Transfers of Intellectual Property of Borrower with an aggregate value
not to exceed $15,000,000 to any Subsidiary that is in compliance with Section
6.7, to the extent such Transfer is necessary to effectuate the purposes of
Borrower’s corporate restructuring, along with up to $3,000,000 in cash used for
start-up capital or operating costs for such Subsidiary in connection with such
restructuring, provided that prior to such Transfer(s), Borrower has provided to
the Required Lenders pro forma financial statements or other information and
details regarding the restructuring and the property being transferred, in form
and substance reasonably acceptable to the Required Lenders and the Required
Lenders have approved the proposed restructuring and Transfer(s) of Intellectual
Property;

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(f)    dispositions of accounts receivable in connection with the compromise,
settlement or collection thereof consistent with past practices; and
(g)    dispositions of assets that are not otherwise permitted under this
Section 7.1 so long as the aggregate fair market value of all such assets
disposed of under this clause (f) do not exceed $250,000 during any calendar
year.
“Person” means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.
“Prime Rate” means the greater of (i) zero percent (0%), and (ii) the U.S. Prime
Rate that appears in The Wall Street Journal from time to time, whether or not
such announced rate is the lowest rate available from a Lender.
“Pro Rata Share” means, as of any date of determination, with respect to each
Lender, a percentage determined by dividing (a) the Revolving Exposure of that
Lender on such date, by (b) the aggregate Revolving Exposure of all Lenders on
such date.
“Required Lenders” means (i) for so long as all of the Persons that are Lenders
on the Closing Date (each an “Original Lender”) have not assigned or transferred
any of their interests in their respective Advances and/or Loan Commitments,
Lenders holding one hundred percent (100%) of the aggregate outstanding
principal balance of the Advances and/or Loan Commitments, or (ii) at any time
from and after any Original Lender has assigned or transferred any interest in
its Advances and/or Loan Commitment, Lenders holding sixty-six percent (66%) of
the aggregate outstanding principal balance of Advances and/or Loan Commitments;
provided that so long as there is more than one (1) Lender, at least two (2)
Lenders shall be necessary to constitute “Required Lenders. For purposes of this
definition only, a Lender shall be deemed to include itself and any Lender that
is an Affiliate of such Lender.
“Responsible Officer” means each of the Chief Executive Officer, the Chief
Financial Officer and the Vice President Finance of Borrower.
“Revolving Exposure” means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Loan Commitments, that
Lender’s Commitment Amount, and (ii) after the termination of the Loan
Commitments, the sum of, without duplication, (a) the aggregate outstanding
principal amount of Advances of that Lender, plus (b) the aggregate amount of
all participations by that Lender in any outstanding Letters of Credit or any
unreimbursed drawing under any Letter of Credit.
“Revolving Facility” means the facility under which Borrower may request Lenders
to issue Advances, as specified in Section 2.1(a) hereof.
“Revolving Line” means a credit extension of up to Fifty Million Dollars
($50,000,000).
“Revolving Maturity Date” means the third anniversary of the Closing Date.
“Schedule” means the schedule of exceptions attached hereto, if any, including
any updates to such Schedule, as such may be delivered by Borrower to
Administrative Agent from time to time, and accepted by the Required Lenders.
“Shares” is defined in Section 4.4.
“Subordinated Debt” means any debt incurred by Borrower that is subordinated to
the debt owing by Borrower to Lenders on terms reasonably acceptable to
Administrative Agent and the Required Lenders (and identified as being such by
Borrower and Required Lenders).
“Subsidiary” means any corporation, company or partnership in which (i) any
general partnership interest or (ii) more than 50% of the stock or other units
of ownership which by the terms thereof has the ordinary voting power

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to elect the Board of Directors, managers or trustees of the entity, at the time
as of which any determination is being made, is owned by a Person, either
directly or through an Affiliate. Unless the context shall require otherwise,
“Subsidiary” shall refer to a Subsidiary of Borrower.
“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.
“Unused Line Fee” is defined in Section 2.6.
1.2    Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP and all calculations made hereunder
shall be made in accordance with GAAP. When used herein, the terms “financial
statements” shall include the notes and schedules thereto. Any financial ratios
required to be maintained by the Borrower pursuant to this Agreement shall be
calculated by dividing the appropriate component by the other component,
carrying the result to one place more than the number of places by which such
ratio is expressed herein and rounding the result up or down to the nearest
number.
2    LOAN AND TERMS OF PAYMENT.
2.1    Credit Extensions. Borrower promises to pay to Administrative Agent, for
the ratable benefit of the Lenders, in lawful money of the United States of
America, the aggregate unpaid principal amount of all Credit Extensions made
hereunder in accordance with the terms hereof. Borrower shall also pay interest
on the unpaid principal amount of such Credit Extensions at rates in accordance
with the terms hereof.
(a)    Revolving Advances.
(i)    Subject to and upon the terms and conditions of this Agreement, Borrower
may request, and Lenders shall, severally and not jointly, according to each
Lender’s Loan Commitment, make Advances in an aggregate outstanding amount not
to exceed the lesser of (i) the Revolving Line or (ii) the Borrowing Base.
Subject to the terms and conditions of this Agreement, amounts borrowed pursuant
to this Section 2.1(a) may be repaid and reborrowed at any time prior to the
Revolving Maturity Date, at which time all Advances under this Section 2.1(a)
shall be immediately due and payable. Borrower may prepay any Advances without
penalty or premium. Borrower may at any time and from time to time, upon at
least ten (10) Business Days prior written notice to Administrative Agent,
permanently reduce, without premium or penalty, (A) the entire Commitment Amount
at any time or (B) portions of the Commitment Amount, from time to time, in an
aggregate principal amount not less than whole multiple of $1,000,000. Any
reduction of the Commitment Amount shall be applied to the Commitment Amount of
each Lender according to its Commitment Percentage.
(ii)    Whenever Borrower desires an Advance, Borrower will notify
Administrative Agent by facsimile or other electronic transmission or telephone
no later than 11:00 a.m. Pacific time, on the Business Day prior to the Business
Day that the Advance is to be made. Each such notification shall be promptly
confirmed by a Payment/Advance Form in substantially the form of Exhibit B
hereto. Upon receipt of such notification, Administrative Agent shall promptly
notify each Lender, and Lender shall fund its pro rata portion of the Advance to
be made in accordance with such Lender’s Commitment Percentage into an account
designated by Administrative Agent no later than 12:00 p.m. (noon) Pacific time
on the Business Day the Advance is to be made. Administrative Agent is
authorized to make Advances under this Agreement, based upon instructions
received from a Responsible Officer or a designee of a Responsible Officer, or
without instructions if in Administrative Agent’s reasonable discretion such
Advances are necessary to meet Obligations which have become due and remain
unpaid. Administrative Agent shall be entitled to rely on any telephonic notice
given by a person whom Administrative Agent reasonably believes to be a
Responsible Officer or a designee thereof, and Borrower shall indemnify and hold
Administrative Agent and each Lender harmless for any damages or loss suffered
by such Person as a result of such reliance except for damages or losses caused
by Administrative Agent’s gross negligence or willful misconduct. Unless
Administrative Agent shall have determined that any of the conditions set forth
in Section 3.1 or 3.2, as applicable, have not been satisfied,

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Administrative Agent will credit the amount of Advances to a deposit account of
Borrower maintained with Administrative Agent on the Business Day the Advance is
to be made.
(iii)    All Advances shall be made, and all participations purchased, by
Lenders simultaneously and in accordance to their respective Commitment
Percentage, it being understood that no Lender shall be responsible for any
default by any other lender in such other Lender’s obligation to make an Advance
requested hereunder or purchase a participation required hereby, nor shall any
commitment of any Lender be increased or decreased as a result of a default by
any other Lender in such other Lender’s obligation to make an Advance requested
hereunder or purchase a participation required hereby.
(iv)    Unless Administrative Agent shall have been notified by any Lender prior
to the Business Day the Advance is requested to be made, Administrative Agent
may assume that such Lender has made such amount available to Administrative
Agent on the Business Day the Advance is to be made, and Administrative Agent
may, in its sole discretion, but shall not be obligated to, make available to
Borrower a corresponding amount on the Business Day the Advance is requested to
be made. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such day the Advance was made until the date
such amount is paid to Administrative Agent, at a rate reasonably determined by
the Administrative Agent in accordance with banking industry rules on interbank
compensation. If such Lender does not pay such corresponding amount forthwith
upon Administrative Agent’s demand therefor, Administrative Agent shall promptly
notify Borrower and Borrower shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from the date
of such Advance until the date such amount is paid to Administrative Agent, at
the rate applicable to Advances pursuant to Section 2.3. Nothing in this Section
shall be deemed to relieve any Lender from its obligation to fulfill its
commitments hereunder or to prejudice any rights that Borrower may have against
any Lender as a result of any default by such Lender hereunder.
(v)    Borrower will use the proceeds of the Advances for the repayment of
existing indebtedness and working capital needs or general corporate purposes.
(b)    Letters of Credit.
(i)    Subject to the terms and conditions hereof, Issuing Bank will issue
Letters of Credit in form and substance acceptable to Issuing Bank for the
account of Borrower on any Business Day before the Revolving Maturity Date. The
aggregate undrawn amount of all issued and outstanding Letters of Credit plus
the aggregate amount of all drawn but unreimbursed amounts under any Letter of
Credit shall at all times reduce the amount otherwise available for Advances
under the Revolving Line. Unless otherwise agreed by the Lenders, each Letter of
Credit shall (i) be denominated in Dollars and (ii) expire no later than the
earlier of (A) 30 days prior to the Revolving Maturity Date (unless cash
collateral is provided therefor as provided hereunder) and (ii) the first
anniversary of its date of issuance; provided that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(A) above).
(ii)    Borrower may from time to time request that Issuing Bank issue a Letter
of Credit by delivering to Issuing Bank an application and such other documents
as Issuing Bank may request. Issuing Bank shall furnish a copy of such Letter of
Credit to Borrower and Lenders promptly following the issuance thereof.
(iii)    Borrower shall pay Issuing Bank such fees as are incurred or charged by
Issuing Bank in issuing, negotiating, effecting payment under, amending or
otherwise administering any Letter of Credit.
(iv)    Issuing Bank grants to each Lender, and each Lender irrevocably agrees
to accept and purchase from Issuing Bank, on the terms and conditions set forth
below, an undivided interest equal to such Lender’s Commitment Percentage in
Issuing Bank’s obligations and rights under and in respect of each Letter of
Credit and the amount of each draft paid by Issuing Bank thereunder. If a draft
is paid under any Letter of Credit for which Issuing Bank is not reimbursed in
full by Borrower, such Lender shall pay to Issuing Bank upon demand an

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amount equal to such Lender’s Commitment Percentage of the amount of such draft,
or any part thereof, that is not so reimbursed. Each Lender’s obligation to pay
such amount shall be absolute and unconditional.
(v)    If Issuing Bank shall make any L/C Disbursement in respect of a Letter of
Credit, Borrower shall pay or cause to be paid to Issuing Bank an amount equal
to the entire amount of such L/C Disbursement not later than the immediately
following Business Day. Each such payment shall be made to Issuing Bank in
Dollars and in immediately available funds. Unless Borrower immediately notifies
Issuing Bank that Borrower intends to reimburse Issuing Bank for such L/C
Disbursement from other sources or funds, Borrower is deemed to have timely
given a Payment/Advance Form to Administrative Agent requesting that Lenders
make an Advance on the applicable repayment date in the amount of such L/C
Disbursement and Lenders shall make an Advance in such amount, the proceeds of
which shall be applied to reimburse Issuing Bank for such L/C Disbursement. If
Issuing Bank shall not have received payment from Borrower (by an Advance or
otherwise), Issuing Bank will promptly notify the Administrative Agent of the
L/C Disbursement and the Administrative Agent will promptly notify each Lender
of such L/C Disbursement, and each Lender shall pay to Issuing Bank upon demand
an amount equal to such Lender’s Commitment Percentage of such L/C Disbursement;
upon such payment, Borrower shall be required to reimburse the Lenders for such
payments (including interest accrued thereon from the date of such payment until
the date of such reimbursement at the Default Rate) on demand.
(vi)    Borrower’s obligations under this Section are absolute and unconditional
and irrespective of any setoff, counterclaim or defense to payment that Borrower
may have or have had against Issuing Bank, any beneficiary of a Letter of Credit
or any other Person. Issuing Bank shall not be responsible for, and Borrower’s
obligations hereunder shall not be affected by, among other things, the validity
or genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among Borrower and any beneficiary of any Letter of Credit or
any other Person. Issuing Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of Issuing Bank.
(vii)    If any draft shall be presented for payment under any Letter of Credit,
Issuing Bank shall promptly notify Borrower and the Administrative Agent of the
date and amount thereof. The responsibility of Issuing Bank to Borrower in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are substantially in conformity with such Letter of Credit.
(viii)    To the extent that any provision of any application related to any
Letter of Credit is inconsistent with the provisions of this Section 2.1(b), the
provisions of this Section 2.1(b) shall apply.
(ix)    Issuing Bank shall not at any time be obligated to issue any Letter of
Credit if Issuing Bank has received written notice from any Lender, the
Administrative Agent or the Borrower, at least one Business Day prior to the
requested date of issuance, amendment, renewal or reinstatement of such Letter
of Credit, that one or more of the applicable conditions contained in
Section 3.2 shall not then be satisfied.
(x)    Borrower shall provide to Administrative Agent cash collateral equal to
105% of the aggregate undrawn amount of such Letters of Credit, plus all accrued
and unpaid interest, fees, and costs due in connection therewith, to secure all
of the Obligations relating to such Letters of Credit (i) on the Revolving
Maturity Date (or the effective date of any termination of this Agreement) if
there are any outstanding Letters of Credit on such date or (ii) as required
under Section 2.2.
2.2    Overadvances. If, without duplication, the aggregate outstanding
principal amount of all Advances (other than Advances consisting of Letters of
Credit or obligations in respect thereof) plus the aggregate undrawn amount of
all issued and outstanding Letters of Credit plus the aggregate amount of all
drawn but unreimbursed amounts under any Letter of Credit exceeds the lesser of
the Revolving Line or the Borrowing Base at any time,

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Borrower shall immediately pay to Administrative Agent the amount of such excess
in cash (a) with respect to Advances (other than Advances consisting of Letters
of Credit or obligations in respect thereof), for distribution the Lenders in
accordance with each Lender’s Commitment Percentage promptly upon receipt
thereof by Administrative Agent or (b) with respect to Advances consisting of
Letters of Credit, as cash collateral as provided by Section 2.1(b)(x).
2.3    Interest Rates, Payments, and Calculations.
(a)    Interest Rates. Except as set forth in Section 2.3(b), the Advances
(other than Advances consisting of Letters of Credit or obligations in respect
thereof) shall bear interest, on the outstanding principal amount thereof, at a
rate per annum equal to one half of one percent (0.50%) above the Prime Rate,
provided that if Borrower and its consolidated Subsidiaries’ Adjusted EBITDA at
the end of any fiscal quarter is less than $1.00 for such fiscal quarter, then
the Advances (other than Advances consisting of Letters of Credit or obligations
in respect thereof) shall bear interest, on the outstanding principal amount
thereof, at a rate per annum equal to three quarters of one percent (0.75%)
above the Prime Rate until Borrower has provided evidence to Lenders that
Borrower and its consolidated Subsidiaries have Adjusted EBITDA of at least
$1.00 for the preceding two fiscal quarters, at which time the interest rate
shall revert to a rate per annum equal to one half of one percent (0.50%) above
the Prime Rate.
(b)    Default Rate. All Obligations shall bear interest, from and after the
occurrence and during the continuance of an Event of Default, at the option of
the Required Lenders, at a rate equal to two (2) percentage points above the
interest rate applicable immediately prior to the occurrence of such Event of
Default (the “Default Rate”); provided that the Default Rate shall be applicable
automatically upon an Event of Default pursuant to Sections 8.1 or 8.5.
(c)    Payments. Interest hereunder shall be due and payable on the first
Business Day of each month during the term hereof. Administrative Agent shall,
at its option, charge such interest, all Lender Expenses, and all Periodic
Payments against any of Borrower’s deposit accounts or against the Revolving
Line, in which case those amounts shall thereafter accrue interest at the rate
then applicable hereunder. Any interest not paid when due shall be compounded by
becoming a part of the Obligations, and such interest shall thereafter accrue
interest at the rate then applicable hereunder. Administrative Agent shall
promptly distribute payments received by it in its capacity as Administrative
Agent pursuant to this Agreement to Lenders, in accordance with each Lender’s
Pro Rata Share promptly upon receipt.
(d)    Computation. In the event the Prime Rate is changed from time to time
hereafter, the applicable rate of interest hereunder shall be increased or
decreased, effective as of the day the Prime Rate is changed, by an amount equal
to such change in the Prime Rate. All interest chargeable under the Loan
Documents shall be computed on the basis of a three hundred sixty (360) day year
for the actual number of days elapsed. Each determination of an interest rate or
the amount of a fee under the Loan Documents shall be made by Administrative
Agent and shall be conclusive, binding and final for all purposes, absent
demonstrable error.
(e)    Maximum Rate. Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid under the Loan Documents
shall not exceed the maximum rate of non-usurious interest permitted by
applicable law (the “Maximum Rate”). If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Advances or, if it exceeds
such unpaid principal, refunded to the Borrower. In determining whether the
interest contracted for, charged, or received by the Administrative Agent or a
Lender exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and spread in
equal or unequal parts the total amount of interest throughout the contemplated
term of the Obligations hereunder.
2.4    Crediting Payments. So long as no Event of Default has occurred and is
existing, Administrative Agent shall credit a wire transfer of funds, check or
other item of payment to such deposit account or pay such amount to the
Administrative Agent, for the ratable benefit of the Lenders, to be applied to
the Obligations as Borrower specifies. After the occurrence and during the
continuation of an Event of Default, the receipt by a Lender

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or of any wire transfer of funds, check, or other item of payment shall be
immediately paid to Administrative Agent, for the ratable benefit of the
Lenders, to conditionally reduce Obligations in accordance with Section 9.3, but
shall not be considered a payment on such account unless such payment is of
immediately available federal funds or unless and until such check or other item
of payment is honored when presented for payment. Notwithstanding anything to
the contrary contained herein, any wire transfer or payment received by a Lender
after 12:00 noon Pacific Time shall be deemed to have been received by such
Lender as of the opening of business on the immediately following Business Day.
Whenever any payment under the Loan Documents would otherwise be due (except by
reason of acceleration) on a date that is not a Business Day, such payment shall
instead be due on the next Business Day, and additional fees or interest, as the
case may be, shall accrue and be payable for the period of such extension.
2.5    Withholding. Payments made on account of the Obligations by Borrower
under this Agreement will be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority (including any interest, additions to tax or penalties applicable
thereto) other than income, franchise or branch profit taxes imposed on (or
measured by) any Lender’s net income by the United States of America.
Specifically, however, if at any time any Governmental Authority, applicable
law, regulation or international agreement requires Borrower to make any
withholding or deduction from any such payment or other sum payable hereunder,
for any such tax, Borrower hereby covenants and agrees that the amount due from
Borrower with respect to such payment or other sum payable hereunder will be
increased to the extent necessary to ensure that, after the making of such
required withholding or deduction, each Lender receives a net sum equal to the
sum which it would have received had no withholding or deduction been required,
and Borrower shall pay the full amount withheld or deducted to the relevant
Governmental Authority. Borrower will, upon request, furnish any Lender with
proof reasonably satisfactory to such Lender indicating that Borrower has made
such withholding payment; provided, however, that Borrower need not make any
withholding payment if the amount or validity of such withholding payment is
contested in good faith by appropriate and timely proceedings and as to which
payment in full is bonded or reserved against by Borrower. The agreements and
obligations of Borrower contained in this Section shall survive the termination
of this Agreement.
2.6    Fees. Borrower shall pay to Administrative Agent, and Administrative
Agent shall distribute to Lenders in accordance with each Lender’s Commitment
Percentage (except in case of Lender Expenses, in which case each Lender and
Administrative Agent shall receive Lender Expenses owed to such Person) promptly
upon receipt, the following:
(a)    Facility Fees.
(i)    on the Closing Date, a fully earned, non-refundable facility fee equal to
$125,000, and
(ii)    an anniversary fee on each of the first and the second anniversary of
the Closing Date, equal to $31,250, each of which shall be fully earned and
non-refundable as of the Closing Date and which shall be accelerated and be due
and payable in full upon (i) the occurrence of an Event of Default, or (ii) the
termination of this Agreement;
(b)    Unused Fee. Within ten days of the last day of each fiscal quarter, a
fee, payable in arrears, equal to 0.25% per annum on the average daily
difference between (i) the Revolving Line and (ii) the Daily Balance during such
fiscal quarter;
(c)    Lender Expenses. On the Closing Date, all Lender Expenses incurred
through the Closing Date, including reasonable attorneys’ fees and expenses,
and, after the Closing Date, all Lender Expenses incurred after the Closing
Date, including reasonable attorneys’ fees and expenses, within 10 days after
demand therefor by Administrative Agent or such Lender.
2.7    Term. This Agreement shall become effective on the Closing Date and,
subject to Section 12.7, shall continue in full force and effect for so long as
any Obligations remain outstanding or any Lender has any obligation to make
Credit Extensions under this Agreement. Notwithstanding the foregoing, Lenders
shall

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have the right to terminate its obligation to make Credit Extensions under this
Agreement immediately and without notice upon the occurrence and during the
continuance of an Event of Default in accordance with this Agreement.
Notwithstanding termination, Administrative Agent’s Lien on the Collateral shall
remain in effect for so long as any Obligations (other than inchoate indemnity
obligations or Obligations that have been cash collateralized in accordance
herewith) are outstanding.
3.    CONDITIONS OF LOANS.
3.1    Conditions Precedent to Initial Credit Extension. The obligation of
Lenders to make the initial Credit Extension is subject to the condition
precedent that:
(a)    Administrative Agent shall have received, in form and substance
satisfactory to Administrative Agent and the Lenders, the following:
(i)    this Agreement;
(ii)    a secured guaranty by Five9 Acquisition LLC;
(iii)    an intellectual property security agreement;
(iv)    (a) a certificate of the Secretary of Borrower and any guarantors with
respect to incumbency and resolutions authorizing the execution and delivery of
this Agreement, (b) formation documents, as certified by the Secretary of State
(or equivalent agency) of Borrower’s and any guarantors’ jurisdiction of
organization on a date that is no earlier than thirty (30) days prior to the
Closing Date, and bylaws (or equivalent) in current form, and (c) a long-form
good standing certificate of Borrower and any guarantor certified by the
Secretary of State (or equivalent agency) of such entities jurisdiction of
organization or formation each as of a date no earlier than thirty (30) days
prior to the Closing Date;
(v)    UCC National Form Financing Statement;
(vi)    a certificate and/or endorsement of insurance naming Administrative
Agent as lender loss payee and additional insured;
(vii)    a payoff letter from CNB with respect to amounts outstanding under the
Loan and Security Agreement dated March 8, 2013, as amended to date;
(viii)    a payoff letter from Fifth Street Finance Corp.;
(ix)    current financial statements of Borrower;
(x)    a completed Borrowing Base Certificate;
(xi)    an audit of the Collateral, the results of which shall be satisfactory
to Administrative Agent and the Lenders;
(xii)    account control agreements with respect to Borrower’s deposit and
securities accounts;
(b)    Administrative Agent shall have received payment of the fees and Lender
Expenses then due specified in Section 2.6 hereof; and
(c)    Administrative Agent and each Lender shall have received such other
documents, and completion of such other matters, as such party may reasonably
deem necessary or appropriate.

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3.2    Conditions Precedent to all Credit Extensions. The obligation of Lenders
to make each Credit Extension, including the initial Credit Extension, is
further subject to the following conditions:
(a)    timely receipt by Administrative Agent of the Payment/Advance Forms as
provided in Section 2.1;
(b)    the representations and warranties contained in Section 5 shall be true
and correct in all material respects on and as of the date of such
Payment/Advance Form and on the effective date of each Credit Extension as
though made at and as of each such date (except (i) to the extent that such
representations and warranties expressly relate to an earlier specified date, in
which case such representations and warranties shall have been true and correct
in all material respects as of the date when made and (ii) such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof). The
making of each Credit Extension shall be deemed to be a representation and
warranty by Borrower on the date of such Credit Extension as to the accuracy of
the facts referred to in this Section 3.2;
(c)    Borrower is in compliance with all covenants and no Default or Event of
Default shall be continuing or would exist after giving effect to such Credit
Extension; and
(d)    no event or circumstance has occurred that could reasonably be expected
to have a Material Adverse Effect.
4.    CREATION OF SECURITY INTEREST.
4.1    Grant of Security Interest. To secure prompt repayment of any and all
Obligations and prompt performance by Borrower of each of its covenants and
duties under the Loan Documents, Borrower grants to Administrative Agent, for
the ratable benefit of each Lender, a continuing security interest in all
presently existing and hereafter acquired or arising Collateral. Except for
Permitted Liens which have priority solely by operation or law or Liens
described in clause (c) of the definition of Permitted Liens, such security
interest constitutes a valid, first priority security interest in the presently
existing Collateral, and will constitute a valid, first priority security
interest in Collateral acquired after the date hereof. If this Agreement is
terminated, Administrative Agent’s Lien in the Collateral shall continue until
the Obligations and any other bank services provided by Lenders (other than
inchoate indemnity obligations or Obligations that have been cash collateralized
in accordance herewith) are repaid in full in cash or cash collateralized in
accordance with the terms hereof. Upon payment in full in cash of the
Obligations (other than inchoate indemnity obligations or Obligations that have
been cash collateralized in accordance herewith) and at such time as Lender’s
obligation to make Credit Extensions has terminated, Administrative Agent shall,
at the sole cost and expense of Borrower, release its Liens in the Collateral
and all rights therein shall revert to Borrower.
4.2    Delivery of Additional Documentation Required. Borrower shall from time
to time execute and deliver to Administrative Agent, at the request of
Administrative Agent, all Negotiable Collateral, all financing statements and
other documents that Administrative Agent may reasonably request, in form
reasonably satisfactory to Administrative Agent, to perfect and continue the
perfection of Administrative Agent’s security interests in the Collateral and in
order to fully consummate all of the transactions contemplated under the Loan
Documents. Borrower from time to time may deposit with Administrative Agent
specific time deposit accounts to secure specific Obligations. Borrower
authorizes Administrative Agent to hold such balances in pledge and to decline
to honor any drafts thereon or any request by Borrower or any other Person to
pay or otherwise transfer any part of such balances for so long as the
Obligations are outstanding.
4.3    Right to Inspect. Administrative Agent and the Lenders (through any of
its officers, employees, or agents) shall have the right, upon reasonable prior
notice, from time to time during Borrower’s usual business hours but no more
than once a year (unless an Event of Default has occurred and is continuing), to
inspect Borrower’s Books and to make copies thereof and to check, test, and
appraise the Accounts and Collateral in order to verify Borrower’s financial
condition or the amount, condition of, or any other matter relating to, the
Collateral.

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4.4    Pledge of Shares. Borrower hereby pledges and grants to Administrative
Agent, for the ratable benefit of each Lender, a security interest in 65% of the
voting Equity Interests of any Subsidiary of Borrower that is a “controlled
foreign corporation” (as defined in the IRC) and all Equity Interests including
shares of stock of any other Subsidiary of Borrower (collectively, the
“Shares”), together with all proceeds and substitutions thereof, all cash, stock
and other moneys and property paid thereon, all rights to subscribe for
securities declared or granted in connection therewith, and all other cash and
noncash proceeds of the foregoing, as security for the performance of the
Obligations. Within thirty (30) days of the Closing Date, the certificate or
certificates, if any, for the Shares will be delivered to Administrative Agent,
accompanied by an instrument of assignment duly executed in blank by Borrower.
To the extent required by the terms and conditions governing the Shares,
Borrower shall cause the books of each entity whose Shares are part of the
Collateral and any transfer agent to reflect the pledge of the Shares. Upon the
occurrence of an Event of Default hereunder, Administrative Agent may effect the
transfer of any securities included in the Collateral (including but not limited
to the Shares) into the name of Administrative Agent and cause new certificates
representing such securities to be issued in the name of Administrative Agent or
its transferee. Borrower will execute and deliver such documents, and take or
cause to be taken such actions, as Administrative Agent may reasonably request
to perfect or continue the perfection of Administrative Agent’s security
interest in the Shares; provided that with respect to any Subsidiary organized
under the laws of any jurisdiction other than the United States or any
subdivision thereof, Borrower is not required to execute or deliver any such
document or take any such actions unless such Subsidiary has a net worth in
excess of $1,000,000 or owns or has rights to any Intellectual Property that is
material to Borrower’s business. Unless notified by Administrative Agent in
writing otherwise, when an Event of Default shall have occurred and be
continuing, Borrower shall be entitled to exercise any voting rights with
respect to the Shares and to give consents, waivers and ratifications in respect
thereof, provided that no vote shall be cast or consent, waiver or ratification
given or action taken which would be inconsistent with any of the terms of this
Agreement or which would constitute or create any violation of any of such
terms. All such rights to vote and give consents, waivers and ratifications
shall terminate upon the written notice by Administrative Agent upon the
occurrence and continuance of an Event of Default.
4.5    Authorization to File Financing Statements. Borrower hereby authorizes
Administrative Agent to file financing statements, without notice to Borrower,
with all appropriate jurisdictions to perfect or protect Administrative Agent’s
interest or rights hereunder. Such financing statements may indicate the
Collateral as “all assets of the Debtor” or words of similar effect, or as being
of an equal or lesser scope, or with greater detail, all in Administrative
Agent’s discretion.
5.    REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants as follows:
5.1    Due Organization and Qualification. Borrower and each Subsidiary is (i)
an organization duly existing under the laws of its jurisdiction of organization
and (ii) qualified and licensed to do business in any state in which the conduct
of its business or its ownership of property requires that it be so qualified,
except where the failure to do so could not reasonably be expected to result in
a Material Adverse Effect.
5.2    Due Authorization; No Conflict. The execution, delivery, and performance
of the Loan Documents are within Borrower’s powers, have been duly authorized,
and are not in conflict with nor constitute a breach of any provision contained
in Borrower’s certificate of incorporation or bylaws or any material law or
regulation of any Governmental Authority applicable to Borrower and its
Subsidiaries or its property, nor will they constitute an event of default under
any material agreement to which Borrower is a party or by which Borrower is
bound. Borrower is not in default under any material agreement to which it is a
party or by which it is bound.
5.3    No Prior Encumbrances. Borrower has good and marketable title to its
property, free and clear of Liens, except for Permitted Liens.
5.4    Bona Fide Accounts. The Accounts are bona fide existing obligations. The
property and services giving rise to such Accounts has been delivered or
rendered to the account debtor or to the account debtor’s agent for immediate
and unconditional acceptance by the account debtor. Except as disclosed in the
Schedule or other written notice provided to Administrative Agent (who shall
provide prompt notice thereof to each Lender), Borrower

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has not received notice of actual or imminent Insolvency Proceeding of any
account debtor owing Accounts in excess of $250,000.
5.5    Merchantable Inventory. All Inventory is in all material respects of good
and marketable quality, free from all material defects (ordinary wear and tear
excepted), except for Inventory for which adequate reserves have been made.
5.6    Intellectual Property. Borrower and its Subsidiaries own, or are licensed
to use, all Intellectual Property necessary to its business. Neither Borrower
nor its Subsidiaries have licensed its Intellectual Property, except for
non-exclusive licenses granted to customers in the ordinary course of business.
Each of the Patents is valid and enforceable, and no part of the Intellectual
Property of Borrower or its Subsidiaries has been judged invalid or
unenforceable, in whole or in part, and no claim has been made that any material
part of the Intellectual Property of Borrower or its Subsidiaries violates the
rights of any third party. Except as set forth in the Schedule, Borrower’s
rights as a licensee of Intellectual Property do not give rise to more than
seven and one half percent (7.5%) of its gross revenue in any given month,
including without limitation revenue derived from the sale, licensing, rendering
or disposition of any product or service. Borrower is not a party to, or bound
by, any agreement that restricts the grant by Borrower of a security interest in
Borrower’s rights under such agreement.
5.7    Name; Location of Chief Executive Office. Except as disclosed in the
Schedule, in the five years prior to the Closing Date, Borrower has not done
business under any name other than that specified on the signature page hereof.
The chief executive office of Borrower is located at the address indicated in
Section 10 hereof or such other address provided to Administrative Agent in
compliance with Section 7.2. All Borrower’s Inventory and Equipment is located
at the location set forth in Section 10 hereof or as set forth in the Schedule
or such other location with respect to which Borrower is in full compliance with
Section 7.10.
5.8    Litigation. Except as set forth in the Schedule, there are no material
actions or proceedings pending by or against Borrower or any Subsidiary before
any court or administrative agency that are reasonably likely to be determined
in an adverse manner and, if so adversely determined, could reasonably be
expected to result in a Material Adverse Effect.
5.9    No Material Adverse Change in Financial Statements. All financial
statements delivered by Borrower under Section 6.3 fairly present in all
material respects Borrower’s financial condition as of the date thereof and
Borrower’s consolidated results of operations for the period then ended. There
has not been a material adverse change in the consolidated financial condition
of Borrower since the date of the most recent of such financial statements
provided to Administrative Agent hereunder or made publicly available by
Borrower.
5.10    Solvency, Payment of Debts. The fair salable value of Borrower’s
consolidated assets exceeds the fair value of Borrower’s liabilities; Borrower
is not left with unreasonably small capital after the transactions in this
Agreement; and Borrower is able to pay its debts (including trade debts) as they
become due.
5.11    Regulatory Compliance. Borrower and each Subsidiary have met the minimum
funding requirements of ERISA with respect to any employee benefit plans subject
to ERISA, and no event has occurred resulting from Borrower’s failure to comply
with ERISA that could result in Borrower’s incurring any material liability.
Borrower is not an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940,
as amended. Borrower is not engaged principally, or as one of the important
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations T and U of the Board of
Governors of the Federal Reserve System). Borrower and each Subsidiary have not
violated any material statutes, laws, ordinances or rules applicable to it.
5.12    Environmental Condition. None of Borrower’s or any Subsidiary’s
properties or assets has ever been used by Borrower or any Subsidiary or, to the
best of Borrower’s knowledge, by previous owners or operators, in the disposal
of, or to produce, store, handle, treat, release, or transport, any hazardous
waste or hazardous substance other than in material accordance with applicable
law; to the best of Borrower’s knowledge, none of Borrower’s properties or
assets has ever been designated or identified in any manner pursuant to any
environmental

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protection statute as a hazardous waste or hazardous substance disposal site, or
a candidate for closure pursuant to any environmental protection statute; no
lien arising under any environmental protection statute has attached to any
revenues or to any real or personal property owned by Borrower or any
Subsidiary; and neither Borrower nor any Subsidiary has received a summons,
citation, notice, or directive from the Environmental Protection Agency or any
other federal, state or other governmental agency concerning any action or
omission by Borrower or any Subsidiary resulting in the releasing, or otherwise
disposing of hazardous waste or hazardous substances into the environment.
5.13    Taxes. Except to the extent provided for in Section 6.6, Borrower and
each Subsidiary have filed or caused to be filed all tax returns required to be
filed, and have paid, or have made adequate provision for the payment of, all
taxes reflected therein.
5.14    Subsidiaries. Borrower does not own any stock, partnership interest or
other equity securities of any Person, except for Permitted Investments, the
Subsidiaries listed on the Schedule or Subsidiaries with respect to which
Borrower is in full compliance with Section 6.7.
5.15    Government Consents. Borrower and each Subsidiary have obtained all
material consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all governmental authorities that are
necessary for the continued operation of Borrower’s business as currently
conducted.
5.16    Deposit and Securities Accounts. Borrower and each Subsidiary maintain
deposit or securities accounts only as set forth in the Schedule or such other
accounts that are subject to an account control agreement in favor of
Administrative Agent to the extent required under this Agreement, in form and
substance satisfactory to the Required Lenders.
5.17    Full Disclosure. No representation, warranty or other statement made by
Borrower in any certificate or written statement furnished to Administrative
Agent or any Lender in connection with the Loan Documents contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained in such certificates or statements not
misleading in light of the circumstances when made.
5.18    Shares. Borrower has full power and authority to create a first lien on
the Shares and no disability or contractual obligation exists that would
prohibit Borrower from pledging the Shares pursuant to this Agreement. There are
no subscriptions, warrants, rights of first refusal or other restrictions on, or
options exercisable with respect to the Shares. The Shares have been and will be
duly authorized and validly issued, and are fully paid and non-assessable. The
Shares are not the subject of any present or threatened suit, action,
arbitration, administrative or other proceeding, and Borrower does not know of
any reasonable grounds for the institution of any such proceedings.
6.    AFFIRMATIVE COVENANTS.
Borrower shall do all of the following:
6.1    Good Standing. Borrower shall maintain its and each of its Subsidiaries’
(i) organizational existence and good standing in its jurisdiction of
incorporation and (ii) maintain qualification in each jurisdiction in which it
is required under applicable law, except where the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. Borrower shall
maintain, and shall cause each of its Subsidiaries to maintain, in force all
licenses, approvals and agreements, the loss of which could reasonably be
expected to have a Material Adverse Effect.
6.2    Government Compliance. Borrower shall file when due with the Securities
Exchange Commission, all reports and statements required under the Securities
Exchange Act of 1934, as amended, and all applicable rules and regulations.
Borrower shall meet, and shall cause each Subsidiary to meet, the minimum
funding requirements of ERISA with respect to any employee benefit plans subject
to ERISA. Borrower shall comply, and shall cause each Subsidiary to comply, with
all statutes, laws, ordinances and government rules and regulations to which it
is subject, noncompliance with which could reasonably be expected to have a
Material Adverse Effect.

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6.3    Financial Statements, Reports, Certificates. Borrower shall deliver the
following to Administrative Agent:
(a)    within thirty (30) days after the last day of each month, a report on
Monthly Recurring Revenue, together with a Borrowing Base Certificate signed by
a Responsible Officer in substantially the form of Exhibit C hereto;
(b)    as soon as available, but in any event within thirty (30) days after the
end of each month, a Borrower prepared consolidated balance sheet, income, and
cash flow statement covering Borrower’s consolidated (and consolidating, if
requested by the Administrative Agent) operations during such period, prepared
in accordance with GAAP, consistently applied, in a form reasonably acceptable
to Administrative Agent along with a Compliance Certificate signed by a
Responsible Officer in substantially the form of Exhibit D hereto;
(c)    as soon as available, but in any event within one hundred and twenty
(120) days after the end of Borrower’s fiscal year, audited consolidated
financial statements of Borrower prepared in accordance with GAAP, consistently
applied, together with an unqualified opinion on such financial statements of an
independent certified public accounting firm reasonably acceptable to the
Required Lenders;
(d)    copies of all statements, reports and notices sent or made available
generally by Borrower to its security holders or to any holders of Subordinated
Debt and, if applicable, all reports on Forms 10-K and 10-Q filed with the
Securities and Exchange Commission;
(e)    promptly upon receipt of notice thereof, a report of any legal actions
pending or threatened against Borrower or any Subsidiary that could result in
damages or costs to Borrower or any Subsidiary of $250,000 or more, or any
commercial tort claim acquired by Borrower in an amount in excess of $100,000;
(f)    as soon as available, but in any event no later than 60 days after the
beginning of each of Borrower’s fiscal years, annual operating and financial
projections (including income statements, balance sheets and cash flow
statements presented in a quarterly format) for such fiscal year, as approved by
Borrower’s board of directors, in a form consistent with those previously
delivered to Administrative Agent;
(g)    as required under Section 6.11(b), the notices specified therein;
(h)    promptly notify Administrative Agent in writing of any event which may be
reasonably expected to materially and adversely affect the value, utility of, or
Borrower’s claim of ownership in or right to use any of the Intellectual
Property that is material to Borrower’s business; and
(i)    such other information as Administrative Agent or any Lender may
reasonably request from time to time, including upon request, consolidating
annual financial statements of Borrower and its Subsidiaries prepared by
Borrower in accordance with GAAP, consistently applied and with all notes.
Administrative Agent shall provide reports, financial statements, certificates,
notices, projections and any other information received pursuant to this Section
6.3 to Lenders promptly after receipt thereof by Administrative Agent.
Documents required to be delivered pursuant to Section 6.3 (to the extent any
such documents are included in materials otherwise filed with the Securities
Exchange Commission) may be delivered electronically and if so, shall be deemed
to have been delivered on the date on which the Borrower posts such documents,
or provides a link thereto, either: (i) on the Borrower’s website; or (ii) when
such documents are posted electronically on the Borrower’s behalf on an internet
or intranet website to which each Lender and the Administrative Agent have
access (whether a commercial, third-party website or whether sponsored by the
Administrative Agent), if any; provided that: (A) the Borrower shall deliver
paper copies of such documents to the Administrative Agent or any Lender upon
its request to the Borrower to deliver such paper copies until written request
to cease delivering paper copies is given by the Administrative Agent or such
Lender; and (B) the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent and each Lender of the posting of any
such documents and provide to the Administrative Agent by email electronic

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versions (i.e. soft copies) of such documents. The Administrative Agent shall
have no obligation to request the delivery of or to maintain paper copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request by a Lender for
delivery, and each Lender shall be solely responsible for requesting delivery to
it or maintaining its copies of such documents.
6.4    Audits. Administrative Agent and the Lenders shall have a right from time
to time hereafter to audit Borrower’s Collateral in accordance with Section 4.3.
6.5    Inventory; Returns. Borrower shall keep all Inventory in good and
marketable condition, free from all material defects (ordinary wear and tear
excepted) except for Inventory for which adequate reserves have been made.
Returns and allowances, if any, as between Borrower and its account debtors
shall be in the ordinary course of business and in accordance with the usual
customary practices of Borrower consistent with past practices prior to the date
of this Agreement. Borrower shall promptly notify Administrative Agent of all
returns and recoveries and of all disputes and claims, where the return,
recovery, dispute or claim involves more than Fifty Thousand Dollars ($50,000)
(and Administrative Agent shall promptly notify Lenders upon receipt of such
notification).
6.6    Taxes. Borrower shall make, and shall cause each Subsidiary to make, due
and timely payment or deposit of all material federal, state, and local taxes,
assessments, or contributions required of it by law, and will execute and
deliver to the Lenders, on demand, appropriate certificates attesting to the
payment or deposit thereof; and Borrower will make, and will cause each
Subsidiary to make, timely payment or deposit of all material tax payments and
withholding taxes required of it by applicable laws, including, but not limited
to, those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish the Lenders
with proof satisfactory to the Lenders indicating that Borrower or a Subsidiary
has made such payments or deposits; provided that Borrower or a Subsidiary need
not make any payment if the amount or validity of such payment is contested in
good faith by appropriate proceedings and is reserved against (to the extent
required by GAAP) by Borrower.
6.7    Formation or Acquisition of Subsidiaries. Notwithstanding and without
limiting the negative covenants contained in Sections 7.3 and 7.7 hereof, at the
time that Borrower or any guarantor forms any direct or indirect Subsidiary or
acquires any direct or indirect Subsidiary, Borrower shall (a) cause such new
Subsidiary to become a guarantor with respect to the Obligations, together with
such appropriate financing statements and/or control agreements, all in form and
substance reasonably satisfactory to Administrative Agent (including being
sufficient to grant Administrative Agent, for the ratable benefit of each
Lender, a first priority Lien (subject to Permitted Liens) in and to the assets
of such newly formed or acquired Subsidiary), (b) provide to Administrative
Agent appropriate certificates and powers and financing statements, pledging all
of the direct or beneficial ownership interest in such new Subsidiary, in form
and substance reasonably satisfactory to Administrative Agent, for the ratable
benefit of each Lender (subject to the limitations in Section 4.4), and
(c) provide to Administrative Agent all other documentation in form and
substance reasonably satisfactory to such party that in its opinion is
appropriate with respect to the execution and delivery of the applicable
documentation referred to above. Notwithstanding the foregoing, no newly formed
or acquired Subsidiary that is a “controlled foreign corporation” (as defined in
the IRC ) will be required to become a guarantor with respect to the
Obligations, nor will Borrower be required to pledge more than 65% of the equity
interests of any new formed or acquired Subsidiary that is a controlled foreign
corporation. Administrative Agent shall promptly provide copies of any documents
entered into pursuant to this Section 6.7 to each Lender.
6.8    Insurance.
(a)    Borrower, at its expense, shall keep the Collateral insured against loss
or damage by fire, theft, explosion, sprinklers, and all other hazards and
risks, and in such amounts, as ordinarily insured against by other owners in
similar businesses conducted in the locations where Borrower’s business is
conducted on the date hereof. Borrower shall also maintain insurance relating to
Borrower’s business, ownership and use of the Collateral in amounts and of a
type that are customary to businesses similar to Borrower’s.
(b)    All such policies of insurance shall be in such form, with such
companies, and in such amounts as are reasonably satisfactory to Administrative
Agent. All such policies of property insurance shall contain a lender’s loss
payable endorsement, in a form reasonably satisfactory to Administrative Agent,
showing

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Administrative Agent as an additional loss payee thereof, and all liability
insurance policies shall show the Administrative Agent as an additional insured
and shall specify that the insurer must give at least twenty (20) days notice to
Administrative Agent before canceling its policy for any reason. Upon
Administrative Agent’s request, Borrower shall deliver to Administrative Agent
certified copies of such policies of insurance and evidence of the payments of
all premiums therefor. All proceeds payable under any such policy shall, at the
option of Administrative Agent, be payable to Administrative Agent to be applied
on account of the Obligations, for the ratable benefit of the Lenders.
6.9    Accounts. Borrower shall maintain and shall cause each of its
Subsidiaries to maintain a majority of its cash and cash equivalents located in
the United States in depository, operating, and investment accounts with the
Administrative Agent and the Lenders. In addition, Borrower shall at all times
maintain a balance of unrestricted cash and cash equivalents with Administrative
Agent and the Lenders of at least $25,000,000. Borrower shall cause the
applicable bank or financial institution at or with which any such account
(other than deposit accounts specifically and exclusively used for payroll,
payroll taxes and other employee wage and benefit payments to or for the benefit
of employees, which accounts have been identified in writing to the
Administrative Agent as such, provided that such accounts shall be funded for
the subsequent pay period only) is maintained to execute and deliver an account
control agreement or other appropriate instrument in form and substance
satisfactory to Administrative Agent. Borrower may maintain deposit accounts in
countries outside the United States, provided the aggregate balance maintained
in such accounts does not exceed more than 10% of the aggregate amounts paid to
support Borrower’s operations in the ordinary course of business in those
countries since the commencement of Borrower’s operations in such countries.
6.10    Financial Covenant – Liquidity Ratio. Borrower shall maintain as of the
end of each month a ratio of unrestricted cash and cash equivalents on deposit
with Administrative Agent or any Lender plus Borrower’s net billed accounts
receivable to the aggregate outstanding principal amount of the Advances greater
than or equal to the ratio as set forth in the schedule below.
Fiscal Year ending
Minimum Liquidity Ratio
December 31, 2016
1.15:1.00
December 31, 2017
1.20:1.00
December 31, 2018
1.25:1.00

6.11    Intellectual Property Rights.
(a)    Borrower shall register or cause to be registered (to the extent not
already registered) with the United States Patent and Trademark Office or the
United States Copyright Office, as the case may be, those registrable
intellectual property rights now owned or hereafter developed or acquired by
Borrower, to the extent that Borrower, in its reasonable business judgment,
deems it appropriate to so protect such intellectual property rights as soon as
practicable.
(b)    Borrower shall provide Administrative Agent on a quarterly basis written
notice of any applications or registrations of intellectual property rights
filed with the United States Patent and Trademark Office or the United States
Copyright Office, including the date of such filing and the registration or
application numbers, if any.
(c)    Borrower shall (i) give Administrative Agent not less than 15 days prior
written notice of the filing of any applications or registrations with the
United States Copyright Office with respect to any Intellectual Property that is
material to Borrower’s business, including the title of such intellectual
property rights to be registered, as such title will appear on such applications
or registrations, and the date such applications or registrations will be filed;
(ii) prior to the filing of any such applications or registrations, execute such
documents as Administrative

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Agent may reasonably request for Administrative Agent to maintain its perfection
in such intellectual property rights to be registered by Borrower; (iii) upon
the request of Administrative Agent, either deliver to Administrative Agent or
file such documents simultaneously with the filing of any such applications or
registrations; and (iv) upon filing any such applications or registrations,
promptly provide Administrative Agent with a copy of such applications or
registrations together with any exhibits, evidence of the filing of any
documents requested by Administrative Agent to be filed for Administrative Agent
to maintain the perfection and priority of its security interest in such
intellectual property rights, and the date of such filing.
(d)    Borrower shall execute and deliver such additional instruments and
documents from time to time as Administrative Agent shall reasonably request to
perfect and maintain the perfection and priority of Administrative Agent’s
security interest in the Intellectual Property of Borrower.
(e)    Borrower shall (i) protect, defend and maintain the validity and
enforceability of the trade secrets, Trademarks, Patents and Copyrights that are
material to its business, (ii) use commercially reasonable efforts to detect
infringements of the Trademarks, Patents and Copyrights and promptly advise
Administrative Agent in writing of material infringements detected and (iii) not
allow any Trademarks, Patents or Copyrights that are material to Borrower’s
business to be abandoned, forfeited or dedicated to the public without the
written consent of the Required Lenders, which shall not be unreasonably
withheld.
(f)    Administrative Agent may audit Borrower’s Intellectual Property to
confirm compliance with this Section 6.11, provided such audit may not occur
more often than once per year (unless an Event of Default has occurred and is
continuing). Administrative Agent shall have the right, but not the obligation,
to take, at Borrower’s sole expense, any actions that Borrower is required under
this Section 6.11 to take but which Borrower fails to take, after 15 days’
notice to Borrower. Borrower shall reimburse and indemnify Administrative Agent
for all reasonable costs and reasonable expenses incurred in the reasonable
exercise of its rights under this Section 6.11.
6.12    Further Assurances.
(a)    At any time and from time to time Borrower shall execute and deliver such
further instruments and take such further action as may reasonably be requested
by Administrative Agent or the Required Lenders to affect the purposes of this
Agreement.
(b)    In the event Borrower acquires an ownership interest in real property,
Borrower shall deliver to Administrative Agent a fully executed mortgage or deed
of trust over such real property in form and substance reasonably satisfactory
to Administrative Agent, together with such title insurance policies, surveys,
appraisals, evidence of insurance, legal opinions, environmental assessments and
other documents and certificates as shall be reasonably required by
Administrative Agent.
7.    NEGATIVE COVENANTS.
Borrower shall not do any of the following:
7.1    Dispositions. Convey, sell, lease, transfer or otherwise dispose of
(collectively, a “Transfer”), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, other than: Permitted Transfers.
7.2    Change in Business; Change in Control or Executive Office. (a) Engage in
any business, or permit any of its Subsidiaries to engage in any business, other
than the businesses currently engaged in by Borrower and any business
substantially similar or related thereto (or incidental thereto); experience the
departure of or a change in Borrower’s Chief Executive Officer from the
individual holding such office as of the Closing Date and a replacement is not
appointed by Borrower’s board of directors within 60 days, or materially cease
to conduct business in the manner conducted by Borrower as of the Closing Date;
(b) liquidate or dissolve, (c) suffer or permit a Change in Control; or (d)
without thirty (30) days prior written notification to Administrative Agent,
relocate its chief executive office or state

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of incorporation or change its legal name; or (e) without Administrative Agent’s
prior written consent, change the date on which its fiscal year ends.
Administrative Agent shall promptly notify Lenders of any such relocation or
change.
7.3    Mergers or Acquisitions. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with or into any other business
organization, or acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of another Person, except
that (a) Borrower or any of its Subsidiaries may enter into and consummate a
Permitted Acquisition, (b) a Subsidiary may merge or consolidate with Borrower
or any other Subsidiary that is a secured guarantor and (c) any Subsidiary that
is not a secured guarantor may merge into any other Subsidiary that is not a
secured guarantor.
7.4    Indebtedness. Create, incur, guarantee, assume or be or remain liable
with respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness.
7.5    Encumbrances. Create, incur, assume or suffer to exist any Lien with
respect to any of its property, or assign or otherwise convey any right to
receive income, including the sale of any Accounts, or permit any of its
Subsidiaries so to do, except for Permitted Liens, or enter into any agreement
with any Person other than Administrative Agent or Lenders not to grant a
security interest in, or otherwise encumber, any of its property, other than in
connection with Permitted Liens, or permit any Subsidiary to do so.
7.6    Distributions. Pay any dividends or make any other distribution or
payment on account of or in redemption, retirement or purchase of any capital
stock, or permit any of its Subsidiaries to do so, except that Borrower may
repurchase the stock of former employees pursuant to stock repurchase agreements
as long as an Event of Default does not exist prior to such repurchase or would
not exist after giving effect to such repurchase, and the aggregate amount of
such repurchase does not exceed $250,000 in any fiscal year.
7.7    Investments. Directly or indirectly acquire or own, or make any
Investment in or to any Person, or permit any of its Subsidiaries so to do,
other than Permitted Investments; or maintain or invest any of its property with
a Person other than as permitted under Section 6.9; or suffer or permit any
Subsidiary to be a party to, or be bound by, an agreement that restricts such
Subsidiary from paying dividends or otherwise distributing property to Borrower.
7.8    Transactions with Affiliates. 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 and 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.
7.9    Subordinated Debt. Make any payment in respect of any Subordinated Debt,
or permit any of its Subsidiaries to make any such payment, except in compliance
with the terms of any subordination agreement entered into with Administrative
Agent or Lenders, or amend any provision contained in any documentation relating
to the Subordinated Debt without the Required Lenders’ prior written consent.
7.10    Inventory and Equipment. Store the Inventory or the Equipment with a
value of more than $100,000 with a bailee, warehouseman, or other third party
unless the third party has been notified of Administrative Agent’s security
interest and Administrative Agent (a) has received an acknowledgment from the
third party that it is holding or will hold the Inventory or Equipment for
Administrative Agent’s benefit or (b) is in pledge possession of the warehouse
receipt, where negotiable, covering such Inventory or Equipment. Store or
maintain any Equipment or Inventory with a value of more than $100,000 at a
location other than the locations set forth in Section 10 of this Agreement and
the Schedule or such other locations as Borrower has given Administrative Agent
thirty (30) days prior written notice thereof.
7.11    Compliance. Become an “investment company” or be controlled by an
“investment company,” within the meaning of the Investment Company Act of 1940,
or become principally engaged in, or undertake as one of its important
activities, the business of extending credit for the purpose of purchasing or
carrying margin stock, or use the proceeds of any Credit Extension for such
purpose. Fail to meet the minimum funding requirements

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of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in
ERISA, or violate any law or regulation, in each case which could reasonably be
expected to have a Material Adverse Effect, or permit any of its Subsidiaries to
do any of the foregoing.
8.    EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an Event of Default by
Borrower under this Agreement:
8.1    Payment Default. If Borrower fails to pay, when due, any of the
Obligations hereunder;
8.2    Covenant Default.
(a)    If Borrower fails to perform any obligation under Article 6 (other than
Section 6.1 and 6.2) or violates any of the covenants contained in Article 7 of
this Agreement; or
(b)    If Borrower fails or neglects to perform or observe any other material
term, provision, condition, covenant contained in this Agreement (including
Section 6.1 and 6.2) or in any of the other Loan Documents and as to any default
under such other term, provision, condition or covenant that can be cured, has
failed to cure such default within ten days after Borrower receives notice
thereof from Administrative Agent, or any officer of Borrower becomes aware
thereof; provided, however, that if the default cannot by its nature be cured
within the ten day period or cannot after diligent attempts by Borrower be cured
within such ten day period, and such default is likely to be cured within a
reasonable time, then Borrower shall have an additional reasonable period (which
shall not in any case exceed 30 days) to attempt to cure such default, and
within such reasonable time period the failure to have cured such default shall
not be deemed an Event of Default but no Credit Extensions will be made.
8.3    Material Adverse Effect. If there occurs any circumstance or
circumstances that could reasonably be expected to have a Material Adverse
Effect;
8.4    Attachment. If any portion of Borrower’s (or of any entity under the
control of Borrower (including a Subsidiary)) assets is attached, seized,
subjected to a writ or distress warrant, or is levied upon, or comes into the
possession of any trustee, receiver or person acting in a similar capacity and
such attachment, seizure, writ or distress warrant or levy has not been removed,
discharged or rescinded within fifteen (15) days, or if Borrower is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any part of its business affairs, or if a judgment or other claim becomes
a lien or encumbrance upon any portion of Borrower’s assets, or if a notice of
lien, levy, or assessment is filed of record with respect to any of Borrower’s
assets by the United States Government, or any department, agency, or
instrumentality thereof, or by any state, county, municipal, or governmental
agency, and the same is not paid within fifteen (15) days after Borrower
receives notice thereof, provided that none of the foregoing shall constitute an
Event of Default where such action or event is stayed or an adequate bond has
been posted pending a good faith contest by Borrower (provided that no Credit
Extensions will be required to be made during such cure period);
8.5    Insolvency. If Borrower (or any entity under the control of Borrower,
including a Subsidiary) becomes insolvent, or if an Insolvency Proceeding is
commenced by Borrower (or any entity under the control of Borrower, including a
Subsidiary), or if an Insolvency Proceeding is commenced against Borrower and is
not dismissed or stayed within thirty (30) days (provided that no Credit
Extensions will be made prior to the dismissal of such Insolvency Proceeding);
8.6    Other Agreements. If there is a default or other failure to perform in
any agreement to which Borrower is a party or by which it is bound resulting in
a right by a third party or parties, whether or not exercised, to accelerate the
maturity of any Indebtedness in an amount in excess of $1,000,000 or which could
reasonably be expected to have a Material Adverse Effect;
8.7    Judgments. If a judgment or judgments for the payment of money in an
amount, individually or in the aggregate, of at least $1,000,000 shall be
rendered against Borrower and shall remain unsatisfied and unstayed

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for a period of 30 days (provided that no Credit Extensions will be made prior
to the satisfaction or stay of such judgment);
8.8    Misrepresentations. If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate delivered to Administrative Agent or Lenders by any
Responsible Officer pursuant to this Agreement or to induce Lenders to enter
into this Agreement or any other Loan Document; or
8.9    Guaranty. If any guaranty of all or a portion of the Obligations (a
“Guaranty”) ceases for any reason to be in full force and effect, or any
guarantor fails to perform any obligation under any Guaranty or a security
agreement securing any Guaranty (collectively, the “Guaranty Documents”), or any
event of default occurs under any Guaranty Document or any guarantor revokes or
purports to revoke a Guaranty, or any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set forth
in any Guaranty Document or in any certificate delivered to Administrative Agent
or any Lender in connection with any Guaranty Document, or if any of the
circumstances described in Sections 8.3 through 8.8 occur with respect to any
guarantor.
9.    ADMINISTRATIVE AGENT’S RIGHTS AND REMEDIES.
9.1    Rights and Remedies. Upon the occurrence and during the continuance of an
Event of Default, Administrative Agent, at its election, may, or at the written
direction of the Required Lenders, shall, without notice of its election and
without demand, do any one or more of the following, all of which are authorized
by Borrower:
(a)    Declare all Obligations, whether evidenced by this Agreement, by any of
the other Loan Documents, or otherwise, immediately due and payable (provided
that upon the occurrence of an Event of Default described in Section 8.5, all
Obligations shall become immediately due and payable without any action by
Administrative Agent or Lenders);
(b)    Cease advancing money or extending credit to or for the benefit of
Borrower under this Agreement or under any other agreement between Borrower and
any Lender;
(c)    Demand that Borrower (i) deposit cash with Administrative Agent in an
amount equal to 105% of the dollar equivalent of the aggregate undrawn amount of
all Letters of Credit remaining undrawn to secure all of the Obligations
relating to such Letters of Credit, as collateral security for the repayment of
any future drawings under such Letters of Credit, and Borrower shall forthwith
deposit and pay such amounts, and (ii) pay in advance all letter of credit fees
scheduled to be paid or payable over the remaining term of any Letters of Credit
(as determined by Administrative Agent in its good faith business judgment);
(d)    Settle or adjust disputes and claims directly with account debtors for
amounts, upon terms and in whatever order that Administrative Agent and Required
Lenders reasonably considers advisable;
(e)    Make such payments and do such acts as Administrative Agent considers
necessary or reasonable to protect its security interest in the Collateral.
Borrower agrees to assemble the Collateral if Administrative Agent so requires,
and to make the Collateral available to Administrative Agent as Administrative
Agent may designate. Borrower authorizes Administrative Agent to enter the
premises where the Collateral is located, to take and maintain possession of the
Collateral, or any part of it, and to pay, purchase, contest, or compromise any
encumbrance, charge, or lien which in Administrative Agent’s determination
appears to be prior or superior to its security interest and to pay all expenses
incurred in connection therewith. With respect to any of Borrower’s owned
premises, Borrower hereby grants Administrative Agent a license to enter into
possession of such premises and to occupy the same, without charge, in order to
exercise any of Administrative Agent’s rights or remedies provided herein, at
law, in equity, or otherwise;
(f)    In accordance with applicable law, set off and apply to the Obligations
any and all (i) balances and deposits of Borrower held by a Lender, or
(ii) indebtedness at any time owing to or for the credit or the account of
Borrower held by a Lender;

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(g)    Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell (in the manner provided for herein) the
Collateral. Administrative Agent is hereby granted a limited license or other
right, solely pursuant to the provisions of this Section 9.1, to use, without
charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Administrative Agent’s exercise of its rights under this
Section 9.1, Borrower’s rights under all licenses and all franchise agreements
shall inure to Administrative Agent’s benefit;
(h)    Dispose of the Collateral by way of one or more contracts or
transactions, for cash or on terms, in such manner and at such places (including
Borrower’s premises) as Administrative Agent and the Required Lenders determine
is commercially reasonable, and apply any proceeds to the Obligations in
whatever manner or order Administrative Agent and the Required Lenders deem
appropriate;
(i)    place a “hold” on any account maintained with any Lender and/or deliver a
notice of exclusive control, any entitlement order, or other directions or
instructions pursuant to any control agreement or similar agreements providing
control of any Collateral;
(j)    Administrative Agent may credit bid and purchase at any public sale;
(k)    demand and receive possession of Borrower’s Books; and
(l)    exercise all rights and remedies available to the Administrative Agent
under the Loan Documents or at law or equity, including all remedies provided
under the Code.
Any deficiency that exists after disposition of the Collateral as provided above
will be paid immediately by Borrower.
Administrative Agent hereby acknowledges that, to the extent that it holds
physical possession of or “control” (as defined in the Code) over any
Collateral, such possession or control is also for the benefit of each of the
Lenders.
9.2    Power of Attorney. Effective only upon the occurrence and during the
continuance of an Event of Default, Borrower hereby irrevocably appoints
Administrative Agent (and any of Administrative Agent’s designated officers, or
employees) as Borrower’s true and lawful attorney to: (a) send requests for
verification of Accounts or notify account debtors of Administrative Agent’s
security interest in the Accounts; (b) receive and open all mail addressed to
Borrower for the purpose of collecting the Accounts; (c) notify all account
debtors with respect to the Accounts to pay Administrative Agent directly; (d)
endorse Borrower’s name on any checks or other forms of payment or security that
may come into Administrative Agent’s possession, or at Administrative Agent’s
request, cause any Lender to endorse Borrower’s name on any checks or other
forms of payment or security that may come into such Lender’s possession; (e)
sign Borrower’s name on any invoice or bill of lading relating to any Account,
drafts against account debtors, schedules and assignments of Accounts,
verifications of Accounts, and notices to account debtors; (f) make, settle, and
adjust all claims under and decisions with respect to Borrower’s policies of
insurance; (g) demand, collect, receive, sue, and give releases to any account
debtor for the monies due or which may become due upon or with respect to the
Accounts and to compromise, prosecute, or defend any action, claim, case or
proceeding relating to the Accounts; (h) settle and adjust disputes and claims
respecting the accounts directly with account debtors, for amounts and upon
terms which Administrative Agent determines to be reasonable; (i) sell, assign,
transfer, pledge, compromise, discharge or otherwise dispose of any Collateral;
(j) execute on behalf of Borrower any and all instruments, documents, financing
statements and the like to perfect Administrative Agent’s interests in the
Accounts and file, in its sole discretion, one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral; and (k) do
all acts and things necessary or expedient, in furtherance of any such purposes.
The appointment of Administrative Agent as Borrower’s attorney in fact, and each
and every one of Administrative Agent’s rights and powers, being coupled with an
interest, is irrevocable until all of the Obligations have been fully repaid and
performed and Lenders’ obligation to provide Credit Extensions hereunder is
terminated.

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9.3    Application of Payments and Proceeds. Notwithstanding anything to the
contrary contained in this Agreement, upon the occurrence and during the
continuance of an Event of Default:
(a)    Borrower irrevocably waives the right to direct the application of
payments at any time or times thereafter received by Administrative Agent or any
Lender from or on behalf of Borrower of all or any part of the Obligations, and,
as between Borrower on the one hand and Administrative Agent and Lenders on the
other, Administrative Agent and the Lenders shall have the continuing and
exclusive right to apply and to reapply all payments received against the
Obligations in such manner as Administrative Agent and/or the Lenders may deem
advisable (subject to the pro rata application of all such sums in accordance
with this Agreement and to the order of application set forth in clause (b) of
this Section 9.3) notwithstanding any previous application by Administrative
Agent or the Lenders, and
(b)    after the exercise of remedies provided for in Section 9.1, any amounts
received by the Administrative Agent or any Lender on account of the Obligations
shall be applied by the Administrative Agent and Lenders in the following order:
(i)    first, to the Lender Expenses;
(ii)    second, to pay all fees, costs, indemnities, reimbursements and expenses
then due to the Lenders under the Loan Documents, until paid in full in cash
(iii)    third, to accrued and unpaid interest on the Obligations until paid in
full in cash (including any interest which, but for the provisions of the United
States Bankruptcy Code, would have accrued on such amounts);
(iv)    fourth, to the principal amount of the Obligations outstanding until
paid in full in cash; and
(v)    fifth, to any other indebtedness or obligations of Borrower owing to
Administrative Agent or any Lender under the Loan Documents.
Any balance remaining shall be delivered to Borrower or to whoever may be
lawfully entitled to receive such balance or as a court of competent
jurisdiction may direct. In carrying out the foregoing, (x) amounts received
shall be applied in the numerical order provided until exhausted prior to the
application to the next succeeding category, and (y) each of the Persons
entitled to receive a payment in any particular category shall receive an amount
equal to its pro rata share of amounts available to be applied pursuant thereto
for such category. Any reference in this Agreement to an allocation between or
sharing by the Lenders of any right, interest or obligation “ratably,”
“proportionally” or in similar terms shall refer to Pro Rata Share unless
expressly provided otherwise. Administrative Agent, or if applicable, each
Lender, shall promptly remit to the other Lenders such sums as may be necessary
to ensure the ratable repayment of each Lender’s portion of the Advances and the
ratable distribution of interest, fees and reimbursements paid or made by
Borrower. If it is determined that a Lender received more than its Pro Rata
Share of scheduled payments made on any date or dates, then such Lender shall
remit to Administrative Agent or other Lenders such sums as may be necessary to
ensure the ratable payment of such scheduled payments, as instructed by
Administrative Agent. Any payment or distribution of any kind or character,
whether in cash, properties or securities, shall be received by a Lender in
excess of its ratable share, then the portion of such payment or distribution in
excess of such Lender’s Pro Rata Share shall be received by such Lender in trust
for and shall be promptly paid over to the other Lender for application to the
payments of amounts due on the other Lenders’ claims. To the extent any payment
for the account of Borrower is required to be returned as a voidable transfer or
otherwise, the Lenders shall contribute to one another as is necessary to ensure
that such return of payment is on a pro rata basis. If any Lender shall obtain
possession of any Collateral, it shall hold such Collateral for itself and as
agent and bailee for Administrative Agent and Lenders for purposes of perfecting
Administrative Agent’s and Lenders’ security interest therein. Notwithstanding
anything to the contrary contained herein, Borrower shall not be liable for the
failure of any Lender to comply with its obligations hereunder.

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9.4    Accounts Collection. In addition to the foregoing, at any time after the
occurrence and during the continuation of an Event of Default, Administrative
Agent may notify any Person owing funds to Borrower of Administrative Agent’s
security interest in such funds and verify the amount of such Account. During
the existence of an Event of Default, upon written instruction by Administrative
Agent Borrower shall collect all amounts owing to Borrower for Administrative
Agent, receive in trust all payments as Administrative Agent’s trustee, and
immediately deliver such payments to Administrative Agent in their original form
as received from the account debtor, with proper endorsements for deposit.
9.5    Lender Expenses. If Borrower fails to pay any amounts or furnish any
required proof of payment due to third persons or entities, as required under
the terms of this Agreement, then Administrative Agent may do any or all of the
following after reasonable notice to Borrower and with the consent of the
Required Lenders: (a) make payment of the same or any part thereof to the extent
such amounts relate to protecting or maintaining the Collateral; (b) set up such
reserves as Administrative Agent deems necessary to protect Administrative Agent
or any Lender from the exposure created by such failure; or (c) obtain and
maintain insurance policies of the type discussed in Section 6.6, and take any
action with respect to such policies as Administrative Agent deems prudent. Any
amounts so paid or deposited by Administrative Agent shall constitute Lender
Expenses, shall be immediately due and payable, and shall bear interest at the
then applicable rate hereinabove provided, and shall be secured by the
Collateral. Any payments made by Administrative Agent shall not constitute an
agreement by Administrative Agent or any Lender to make similar payments in the
future or a waiver by Administrative Agent or any Lender of any Event of Default
under this Agreement.
9.6    Liability for Collateral. So long as Administrative Agent complies with
reasonable banking practices, Administrative Agent shall not in any way or
manner be liable or responsible to the Borrower for: (a) the safekeeping of the
Collateral; (b) any loss or damage thereto occurring or arising in any manner or
fashion from any cause; (c) any diminution in the value thereof; or (d) any act
or default of any carrier, warehouseman, bailee, forwarding agency, or other
person whomsoever. All risk of loss, damage or destruction of the Collateral
shall be borne by Borrower.
9.7    Remedies Cumulative. Administrative Agent’s rights and remedies under
this Agreement, the Loan Documents, and all other agreements shall be
cumulative. Administrative Agent shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by Administrative Agent of one right or remedy shall be deemed an
election, and no waiver by Administrative Agent or of any Event of Default on
Borrower’s part shall be deemed a continuing waiver. No delay by Administrative
Agent shall constitute a waiver, election, or acquiescence by it. No waiver
shall be effective unless made in a written document signed on behalf of
Administrative Agent and Lenders required under Section 12.5 and then shall be
effective only in the instance and for the purpose for which it was given.
9.8    Demand; Protest. Borrower waives demand, protest, notice of protest,
notice of default or dishonor, notice of payment and nonpayment, notice of any
default, nonpayment at maturity, release, compromise, settlement, extension, or
renewal of accounts, documents, instruments, chattel paper, and guarantees at
any time held by Administrative Agent or any Lender on which Borrower may in any
way be liable.
9.9    Shares. Borrower recognizes that Administrative Agent may be unable to
effect a public sale of any or all the Shares, by reason of certain prohibitions
contained in federal securities laws and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. Borrower acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. Administrative Agent shall be under no
obligation to delay a sale of any of the Shares for the period of time necessary
to permit the issuer thereof to register such securities for public sale under
federal securities laws or under applicable state securities laws, even if such
issuer would agree to do so.
9.10    Adjustments-Set-off. Upon the occurrence and during the continuance of
any Event of Default, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower, to the fullest
extent permitted by

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applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, at any time held or
owing, and any other credits, indebtedness, claims or obligations, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender, its Affiliates
or any branch or agency thereof to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now or hereafter
existing under this Agreement or any other Loan Document to such Lender or its
Affiliates, irrespective of whether or not such Lender or Affiliate shall have
made any demand under this Agreement or any other Loan Document and although
such obligations of the Borrower or such other Loan Party may be contingent or
unmatured or are owed to a branch, office or Affiliate of such Lender different
from the branch, office or Affiliate holding such deposit or obligated on such
indebtedness. Each Lender agrees to notify the Borrower and the Administrative
Agent promptly after any such setoff and application made by such Lender or any
of its Affiliates; provided that the failure to give such notice shall not
affect the validity of such setoff and application.
10.    NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by any party
relating to this Agreement or any other agreement entered into in connection
herewith shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by a recognized overnight delivery
service, certified mail, postage prepaid, return receipt requested, electronic
mail, or by telefacsimile to Borrower, Administrative Agent or Lenders, as the
case may be, at its addresses set forth below:
If to Borrower:    FIVE9, INC.
Bishop Ranch 8
4000 Executive Parkway, Suite 400
San Ramon, CA 94583
Attn: David Hill
FAX: (925) 397-3460
email: dhill@five9.com
If to CNB, as Lender or    City National Bank
Administrative Agent:    150 California Street, 13th Floor
San Francisco, CA 94111
Attn: Rod Werner, Managing Director
FAX: (415) 576-2811
email: rod.werner@cnb.com
And
City National Bank
Legal Department
Attn: Managing Counsel, Credit Unit
555 S. Flower Street, 18th Floor
Los Angeles, CA 90071
If to SVB:     Silicon Valley Bank
    555 Mission Street
    San Francisco, California 94105
    Attn: Sean Thompson
    FAX: __________________
    email: sthompson@svb.com
Such notices or demands will be deemed delivered when received or, if sent by
electronic mail or telefacsimile, when receipt is acknowledged by the recipient.
The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other.

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11.    CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE.
This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of California, without regard to principles of
conflicts of law. Each of Borrower, Administrative Agent and each Lender submits
to the jurisdiction of the state and Federal courts located in the County of Los
Angeles, State of California. BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER
EACH HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.
If the jury waiver set forth in this Section is not enforceable, then any
dispute, controversy or claim arising out of or relating to this Agreement, the
Loan Documents or any of the transactions contemplated therein shall be settled
by judicial reference pursuant to Code of Civil Procedure Section 638 et seq.
before a referee sitting without a jury, such referee to be mutually acceptable
to the parties or, if no agreement is reached, by a referee appointed by the
Presiding Judge of the California Superior Court for Los Angeles County. This
Section shall not restrict a party from exercising remedies under the Code or
from exercising pre-judgment remedies under applicable law.
12.    GENERAL PROVISIONS.
12.1    Successors and Assigns. This Agreement shall bind and inure to the
benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Agreement nor any rights hereunder
may be assigned by Borrower without Required Lenders’ prior written consent,
which consent may be granted or withheld in any such Lender’s sole discretion.
Any sale, transfer, or assignment or grant of participation in all or any part
of, or any interest in, a Lender’s obligations, rights and benefits to any
Person that is not a direct competitor of Borrower shall require the prior
written consent of Borrower, which consent shall not be unreasonably withheld,
conditioned or delayed. Notwithstanding the foregoing, following an Event of
Default, or in connection with the sale or disposition of a Lender or all or a
portion of a Lender’s loan portfolio, such Lender shall have the right without
the consent of or notice to Borrower to sell, transfer, negotiate, or grant
participation in all or any part of, or any interest in, such Lender’s
obligations, rights and benefits hereunder to any Person.
12.2    Indemnification. Borrower shall defend, indemnify and hold harmless
Administrative Agent and each Lender and their officers, employees, and agents
against: (a) all obligations, demands, claims, and liabilities claimed or
asserted by any other party in connection with the transactions contemplated by
this Agreement; and (b) all losses or expenses (including Lender Expenses) in
any way suffered, incurred, or paid by Administrative Agent or any Lender as a
result of or in any way arising out of, following, or consequential to
transactions between Administrative Agent or a Lender and Borrower under this
Agreement (including without limitation reasonable attorneys’ fees and
expenses), in each case except for losses caused by the gross negligence or
willful misconduct of Administrative Agent or such Lender, as applicable.
12.3    Time of Essence. Time is of the essence for the performance of all
obligations set forth in this Agreement.
12.4    Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
12.5    Amendments in Writing, Integration. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties hereto with respect to the subject matter of this Agreement and the Loan
Documents, if any, are merged into this Agreement and the Loan Documents.
Neither this Agreement, any other Loan Document, nor any terms hereof or thereof
may be amended, supplemented or modified except in accordance with the
provisions of this Section 12.5. The Required Lenders and the Borrower may, or,
with the written consent of the Required Lenders, the Administrative Agent and
Borrower may, from time to time, (i) enter into written amendments, supplements
or modifications hereto and to the other Loan Documents for the purpose of
adding any provisions to this Agreement or the other Loan Documents or changing
in any manner the rights of the

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Lenders or of the Borrower hereunder or thereunder or (ii) waive, on such terms
and conditions as the Required Lenders or the Administrative Agent, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided that no such waiver and no such amendment, supplement or
modification shall:
(a)    (i) forgive the principal amount or extend the final scheduled date of
maturity of any Loan, (ii) reduce the stated rate of any interest or fee payable
hereunder, (iii) extend the scheduled date of any payment thereof, or increase
the amount or extend the expiration date of any Lender’s Loan Commitment, (iv)
modify the Borrowing Base (any other changes to the extent that such change has
the effect of increasing the Advance rate), in each case, without the written
consent of each Lender directly affected thereby;
(b)    (i) eliminate or reduce the voting rights of any Lender under this
Section 12.5 without the written consent of such Lender; (ii) amend the
definition of Required Lenders, (iii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement and the
other Loan Documents, (iv) release the Borrower from its obligations under the
Loan Documents, release all or substantially all of the Collateral or release
all or substantially all of the guarantors from their obligations under any
guaranty, in each case without the written consent of all Lenders; or
(c)    (i) amend, modify or waive any pro rata requirements or the application
of payments in Section 9.3 without the written consent of each Lender
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrower, the
Lenders, the Administrative Agent, the Issuing Bank and all future holders of
the Loans. In the case of any waiver, the Borrower, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured during the period such waiver is
effective; but no such waiver shall extend to any subsequent or other Default or
Event of Default, or impair any right consequent thereon.
12.6    Counterparts. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Agreement. In
the event that any signature is delivered by facsimile transmission or by e-mail
delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof. Notwithstanding the foregoing, Borrower
shall deliver all original signed documents requested by Administrative Agent no
later than ten (10) Business Days following the initial Advance.
12.7    Survival. All covenants, representations and warranties made in this
Agreement shall continue in full force and effect so long as any Obligations
remain outstanding or any Lender has any obligation to make Credit Extensions to
Borrower. The obligations of Borrower to indemnify Administrative Agent and
Lenders with respect to the expenses, damages, losses, costs and liabilities
described in Section 12.2 shall survive until all applicable statute of
limitations periods with respect to actions that may be brought against
Administrative Agent or any Lender have run.
12.8    Confidentiality; Disclosure. In handling any confidential information of
Borrower or any Subsidiary, Administrative Agent and Lenders and all employees
and agents thereof, including but not limited to accountants, shall exercise the
same degree of care that it exercises with respect to its own proprietary
information of the same types to maintain the confidentiality of any non-public
information thereby received or received pursuant to this Agreement except that
disclosure of such information may be made (i) to the Subsidiaries or Affiliates
of Administrative Agent or any Lender in connection with their present or
prospective business relations with Borrower so long as such Subsidiaries or
Affiliates comply with the provisions of this Section 12.8, (ii) to prospective
transferees or purchasers of any interest in the loans, provided that they are
similarly bound by confidentiality obligations, (iii) as required by law,
regulations, rule or order, subpoena, judicial order or similar order, (iv) as
may be required in connection with the examination, audit or similar
investigation of Administrative Agent or any Lender, (v) as Administrative Agent

32.

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or any Lender may determine in connection with the enforcement of any remedies
hereunder, and (vi) to third-party service providers of a Lender so long as such
service providers are similarly bound by confidentiality obligations.
Confidential information hereunder shall not include information that either:
(a) is in the public domain or in the knowledge or possession of Administrative
Agent or any Lender when disclosed to such party, or becomes part of the public
domain after disclosure to Administrative Agent or Lender through no fault of
such party; or (b) is disclosed to Administrative Agent or a Lender by a third
party, provided such party does not have actual knowledge that such third party
is prohibited from disclosing such information. Borrower authorizes each Lender
to disclose its relationship with Borrower, including use of Borrower’s logo in
such Lender’s promotional materials.
12.9    Patriot Act Notice. Lenders notify Borrower that, pursuant to the
requirements of of “know your customer” and anti-money-laundering rules and
regulations (including the USA Patriot Act, Title III of Pub. L. 107-56 (signed
into law on October 26, 2001) (the “ Patriot Act “), Lenders are required to
obtain, verify and record information that identifies Borrower and its
Subsidiaries and affiliates, which information includes names and addresses and
other information that will allow each Lender to identify the Borrower in
accordance with such rules and regulations. The Borrower will, and will cause
each of its Subsidiaries to, provide such information and take such actions as
are reasonably requested by the Administrative Agent or any Lender to assist the
Administrative Agent or any such Lender in maintaining compliance with such
applicable rules and regulations.
13.    ADMINISTRATIVE AGENT.
13.1    Appointment and Authorization of Administrative Agent. Each Lender
hereby irrevocably appoints, designates and authorizes Administrative Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere herein or in
any other Loan Document, Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Administrative
Agent. Without limiting the generality of the foregoing sentence, the use of the
term “agent” herein and in the other Loan Documents with reference to
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
13.2    Delegation of Duties. Administrative Agent may execute any of its duties
under this Agreement or any other Loan Document by or through its, or its
Affiliates’, agents, employees or attorneys-in-fact and shall be entitled to
obtain and rely upon the advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. Administrative Agent shall not
be responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects in the absence of gross negligence or willful misconduct.
13.3    Liability of Administrative Agent. Except as otherwise provided herein,
no Administrative Agent-Related Person shall (a) be liable for any action taken
or omitted to be taken by any of them under or in connection with this Agreement
or any other Loan Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any Lender
or participant for any recital, statement, representation or warranty made by
Borrower or any officer thereof, contained herein or in any other Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by Administrative Agent under or in connection
with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of Borrower or any other party to any Loan Document
(other than the Administrative Agent) to perform its obligations hereunder or
thereunder. No Administrative Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of Borrower or any Affiliate thereof.

33.

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13.4    Reliance by Administrative Agent. Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing,
communication, signature, resolution, representation, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
electronic mail message, statement or other document or conversation reasonably
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to Borrower), independent accountants and other experts
selected by Administrative Agent. As between Administrative Agent and Lenders,
Administrative Agent shall be fully justified in failing or refusing to take any
action under any Loan Document unless it shall first receive such advice or
concurrence of all Lenders as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Lenders against all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of all Lenders
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders.
13.5    Notice of Default. Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any default and/or Event of Default,
unless Administrative Agent shall have received written notice from a Lender or
Borrower, describing such default or Event of Default. Administrative Agent will
notify the Lenders of its receipt of any such notice. Administrative Agent shall
take such action permitted by this Agreement with respect to an Event of Default
as it elects or as may be directed in writing by the Required Lenders in
accordance with Section 9.1(a); provided, however, that while an Event of
Default has occurred and is continuing, Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Event of Default as Administrative Agent shall deem advisable or
in the best interest of the Lenders to protect and safeguard the Collateral,
including, without limitation, satisfaction of other Liens on the Collateral not
permitted under the Loan Documents, payment of taxes on behalf of Borrower,
payments to landlords, warehouseman, bailees and other Persons in possession of
the Collateral, and actions with respect to insurance claims for casualty events
affecting Borrower and/or the Collateral.
13.6    Credit Decision; Disclosure of Information by Administrative Agent. Each
Lender acknowledges that no Administrative Agent-Related Person has made any
representation or warranty to it, and that no act by Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of Borrower or any Affiliate thereof, shall be deemed to
constitute any representation or warranty by any Administrative Agent-Related
Person to any Lender as to any matter, including whether Administrative
Agent-Related Persons have disclosed material information in their possession.
Each Lender represents to Administrative Agent that it has, independently and
without reliance upon any Administrative Agent-Related Person and based on such
documents and information as it has deemed appropriate, made its own appraisal
of, and investigation into, the business, prospects, operations, property,
financial and other condition and creditworthiness of Borrower and its
Subsidiaries, and all applicable bank or other regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon any
Administrative Agent-Related Person and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrower. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by Administrative Agent herein, Administrative Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of Borrower or any of its Affiliates
which may come into the possession of any Administrative Agent-Related Person.
13.7    Indemnification of Administrative Agent. Whether or not the transactions
contemplated hereby are consummated, each Lender shall, severally and pro rata
based on its respective Pro Rata Share, indemnify upon demand each
Administrative Agent-Related Person in its capacity as such (to the extent not
reimbursed by or on behalf of Borrower and without limiting the obligation of
Borrower to do so), and hold harmless each Administrative Agent-Related Person
from and against all Claims (which shall not include legal expenses of
Administrative Agent incurred in connection with the closing of the transactions
contemplated by this Agreement) incurred by it; provided,

34.

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however, that no Lender shall be liable for the payment to any Administrative
Agent-Related Person of any portion of such Indemnified Liabilities to the
extent determined in a judgment by a court of competent jurisdiction to have
resulted from such Administrative Agent-Related Person’s own gross negligence or
willful misconduct; provided, however, that no action taken in accordance with
the directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 13.7. Without
limitation of the foregoing, each Lender shall, severally and pro rata based on
its respective Pro Rata Share, reimburse Administrative Agent upon demand for
its ratable share of any costs or out-of-pocket expenses (including Lender
Expenses incurred after the Closing Date) incurred by Administrative Agent (in
its capacity as Administrative Agent, and not as a Lender) in connection with
the preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Administrative Agent is not reimbursed for such expenses by
or on behalf of Borrower; provided, however, that no Lender shall be liable for
the payment to any Administrative Agent of any portion of such amounts to the
extent determined in a judgment by a court of competent jurisdiction to have
resulted from such Administrative Agent’s own gross negligence or willful
misconduct; provided, however, that no action taken in accordance with the
directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 13.7. The
undertaking in this Section 13.7 shall survive the payment in full of the
Obligations, the termination of this Agreement and the resignation of
Administrative Agent.
13.8    Administrative Agent in its Individual Capacity. With respect to its
Credit Extensions, CNB shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not Administrative Agent, and the terms “Lender” and “Lenders” include
CNB in its individual capacity.
13.9    Successor Administrative Agent. Administrative Agent may resign as
Administrative Agent upon 30 days’ prior notice to Lenders and Borrower. If
Administrative Agent resigns under this Agreement, all Lenders shall appoint
from among the Lenders (or the Affiliates thereof) a successor Administrative
Agent for the Lenders, which successor Administrative Agent shall (unless an
Event of Default has occurred and is continuing) be subject to the approval of
Borrower (which approval shall not be unreasonably withheld, delayed or
conditioned). If no successor Administrative Agent is appointed prior to the
effective date of the resignation of Administrative Agent, Administrative Agent
may appoint, after consulting with the Lenders and Borrower, a successor
Administrative Agent from among the Lenders (or the Affiliates thereof). Upon
the acceptance of its appointment as successor Administrative Agent hereunder,
the Person acting as such successor Administrative Agent shall succeed to all
the rights, powers and duties of the retiring Administrative Agent and the term
“Administrative Agent” means such successor Administrative Agent and the
retiring Administrative Agent’s appointment, powers and duties in such
capacities shall be terminated without any other further act or deed on its
behalf. After any retiring Administrative Agent’s resignation hereunder as
Administrative Agent, the provisions of this Article 13 and Section 12.1 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement. If no successor Administrative
Agent has accepted appointment as Administrative Agent by the date ten (10) days
following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of Administrative Agent
hereunder until such time, if any, as the Lenders appoint a successor agent as
provided for above.
13.10    Administrative Agent May File Proofs of Claim. In case of the pendency
of any Insolvency Proceeding relative to Borrower, Administrative Agent
(irrespective of whether the principal of any Advance shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether Administrative Agent shall have made any demand on Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a)    to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Credit Extensions and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders and
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and

35.

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Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders and Administrative Agent allowed in such judicial
proceeding); and
(b)    to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same.
Any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such Insolvency Proceeding is hereby authorized by each
Lender to make such payments to Administrative Agent and, if Administrative
Agent consents to the making of such payments directly to the Lenders, to pay to
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of Administrative Agent and its agents and counsel,
and any other amounts due Administrative Agent under this Agreement. To the
extent that Administrative Agent fails timely to do so, each Lender may file a
claim relating to such Lender’s claim.
13.11    Collateral and Guaranty Matters. The Lenders irrevocably authorize
Administrative Agent, at its option and in its discretion, to release any
guarantor and any Lien on any Collateral granted to or held by Administrative
Agent under any Loan Document (i) upon the date that all Obligations (other than
inchoate indemnity obligations or Obligations that have been cash collateralized
in accordance herewith) due hereunder have been fully and indefeasibly paid in
full in cash and no Commitment Amounts or other obligations of any Lender to
provide funds to Borrower under this Agreement remain outstanding, (ii) that is
transferred or to be transferred as part of or in connection with any Transfer
permitted hereunder or under any other Loan Document, or (iii) as approved in
accordance with Section 12.5. Upon Administrative Agent’s request at any time,
all Lenders will confirm in writing Administrative Agent’s authority to release
its interest in particular types or items of property, pursuant to this Section
13.11.

[SIGNATURE PAGE FOLLOWS]

36.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
 
FIVE9, INC.
By:/s/ Barry Zwarenstein   
Title: Chief Financial Officer   
 
CITY NATIONAL BANK, as Administrative Agent and a Lender
By:/s/ Alan Jepsen   
Title: Senior Vice President   
SILICON VALLEY BANK, as Lender
By:/s/ Sean Thompson   
Title: Vice President   

37.

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DEBTOR:    FIVE9, INC.
SECURED PARTY:    CITY NATIONAL BANK
EXHIBIT A

COLLATERAL DESCRIPTION ATTACHMENT
TO LOAN AND SECURITY AGREEMENT
All personal property of Borrower (herein referred to as “Borrower” or “Debtor”)
whether presently existing or hereafter created or acquired, and wherever
located, including, but not limited to:
(a)     all accounts (including health-care-insurance receivables), chattel
paper (including tangible and electronic chattel paper), commercial tort claims,
deposit accounts, securities accounts, documents (including negotiable
documents), equipment (including all accessions and additions thereto), general
intangibles (including payment intangibles and software), goods (including
fixtures), instruments (including promissory notes), inventory (including all
goods held for sale or lease or to be furnished under a contract of service, and
including returns and repossessions), investment property (including securities
and securities entitlements), letter of credit rights, money, and all of
Debtor’s books and records with respect to any of the foregoing, and the
computers and equipment containing said books and records;
(b)     any and all cash proceeds and/or noncash proceeds of any of the
foregoing, including, without limitation, insurance proceeds, and all supporting
obligations and the security therefor or for any right to payment. All terms
above have the meanings given to them in the California Uniform Commercial Code,
as amended or supplemented from time to time.
Notwithstanding the foregoing, the Collateral shall not include:
(y) any Equipment or rights of Borrower as a licensee to the extent the granting
of a security interest therein (i) would be contrary to applicable law or
(ii) is prohibited by or would constitute a default under any agreement or
document governing such property (but only to the extent such prohibition is
enforceable under applicable law); provided that upon the termination or lapsing
of any such prohibition, such property shall automatically be part of the
Collateral; and provided further that the provisions of this paragraph shall in
no case exclude from the definition of “Collateral” any Accounts, proceeds of
the disposition of any property, or general intangibles consisting of rights to
payment, all of which shall at all times constitute “Collateral”; and
(z) voting equity interests in a controlled foreign corporation (as defined in
the United States Internal Revenue Code) solely to the extent such equity
interests represents more than 65% of the total combined voting power of all
classes of equity interests of such controlled foreign corporation.

1
 

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EXHIBIT B
LOAN ADVANCE/PAYDOWN REQUEST FORM (CNB)
DEADLINE FOR NEXT DAY PROCESSING IS 11:00 A.M., Pacific Time

TO: ______________________    DATE:         TIME:     
FAX #: ___________________
FROM:                
   Borrower’s Name
FROM:    
   Authorized Signer’s Name
FROM:    
   Authorized Signature (Borrower)
PHONE #:    
FROM ACCOUNT#:   
(please include Note number, if applicable)
TO ACCOUNT #:    
(please include Note number, if applicable)
TELEPHONE REQUEST (For Bank Use Only):
The following person is authorized to request the loan payment
transfer/loan advance on the designated account and is known to me.
   
Authorized Requester & Phone #
   
Received by (Bank) & Phone #
   
Authorized Signature (Bank)

REQUESTED TRANSACTION TYPE   REQUESTED DOLLAR AMOUNT
PRINCIPAL INCREASE* (ADVANCE) $   
PRINCIPAL PAYMENT (ONLY) $   
OTHER INSTRUCTIONS:
   
   
   

For Bank Use Only
Date Rec’d:
Time:
Comp. Status: YES NO
Status Date:
Time:
Approval:

(i) All representations and warranties of Borrower stated in the Loan Agreement
are true, correct and complete in all material respects as of the date of the
telephone request for and advance confirmed by this Borrowing Certificate;
provided, however, that (a) those representations and warranties the date
expressly referring to another date shall be true, correct and complete in all
material respects as of such date and (b) such materiality qualifier shall not
be applicable to any representations and warranties that already are qualified
or modified by materiality in the text thereof and (ii) Borrower is in
compliance with all covenants in the Loan Agreement and no Default or Event of
Default shall be continuing or would exist after giving effect to such credit
extension.

*IS THERE A WIRE REQUEST TIED TO THIS LOAN ADVANCE? (PLEASE CIRCLE
ONE)    YES    NO
If YES, the Outgoing Wire Transfer Instructions must be completed below.

OUTGOING WIRE TRANSFER INSTRUCTIONS
Fed Reference Number
Bank Transfer Number
The items marked with an asterisk (*) are required to be completed.
*Beneficiary Name
 
*Beneficiary Account Number
 
*Beneficiary Address
 
Currency Type
US DOLLARS ONLY
*ABA Routing Number (9 Digits)
 
*Receiving Institution Name
 
*Receiving Institution Address
 
*Wire Amount
$

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EXHIBIT C
BORROWING BASE CERTIFICATE
Borrower: FIVE9, INC. Administrative Agent: City National Bank
Commitment Amount: $50,000,000

MONTHLY RECURRING REVENUE
 
 
1. Monthly Recurring Revenue (four months)
 
$___________
2. Average dollar based retention rate (trailing 12 months)
 
___________%
3. Availability
 
$___________
 
 
 
 
 
 
BALANCES
 
 
4. Maximum Loan Amount
 
$50,000,000
5. Total Funds Available [Lesser of #3 or #4]
 
$___________
6. Present balance owing on Line of Credit (including outstanding Letters of
Credit)
 
$___________
7. Availability (#5 minus #6)
 
$___________
 
 
 

The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Borrowing Base Certificate
complies with the representations and warranties set forth in the Loan and
Security Agreement between the undersigned City National Bank, as Administrative
Agent and a Lender, and Silicon Valley Bank, as a Lender.
FIVE9, INC.
 
 
 
 
 
 
 
 
By:    
 
 
Authorized Signer
 
 
 
 
 

2
  

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EXHIBIT D
COMPLIANCE CERTIFICATE
TO:
CITY NATIONAL BANK

FROM:
FIVE9, INC.

The undersigned authorized officer of FIVE9, INC. (“Borrower”) hereby certifies
that in accordance with the terms and conditions of the Loan and Security
Agreement, dated August 1, 2016, City National Bank, as a lender (as defined
below) and in its capacity as administrative agent for the lenders, Silicon
Valley Bank, as a lender, and Borrower, (i) Borrower is in complete compliance
for the period ending _______________ with all required covenants except as
noted below and (ii) all representations and warranties of Borrower stated in
the Agreement are true and correct in all material respects as of the date
hereof (except to the extent that such representations and warranties expressly
relate to an earlier specified date, in which case such representations and
warranties shall have been true and correct in all material respects as of the
date when made and such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof). Attached herewith are the required documents
supporting the above certification. The Officer further certifies that these are
prepared in accordance with Generally Accepted Accounting Principles (GAAP) and
are consistently applied from one period to the next except as explained in an
accompanying letter or footnotes.

1
 

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Please indicate compliance status by circling Yes/No under “Complies” column.
 
Reporting Covenant
Required
Complies
 
 
 
 
 
 
 
 
 
 
 
Monthly Recurring Revenue Report/BBC
Monthly within 30 days
Yes
No
 
Monthly financial statements + Compliance Cert.
Monthly within 30 days
Yes
No
 
Annual audited financial statements
Annually within 120 days
Yes
No
 
Cash and cash equivalent balance in Administrative Agent and Lender Accounts
$25,000,000
Yes
No
 
Financial projections
Within 60 days of fiscal year beginning
Yes
No
 
Compliance with SEC Reporting
As required by applicable law, rules and regulations
Yes
No
 
 
 
 
 
 
Financial Covenant
Required
Actual
Complies
 
 
 
 
 
 
 
Liquidity Coverage
See Section 6.10
 
Yes
No
 
 
 
 
Comments Regarding Exceptions:  See Attached.
BANK USE ONLY
 
 
 
Received by:    
Sincerely,
AUTHORIZED SIGNER
 
 
 
Date:    
 
 
   
Verified:    
SIGNATURE
AUTHORIZED SIGNER
 
 
 
 
   
Date:    
TITLE
 
 
Compliance Status
Yes
No
   
 
DATE
 

2
 

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SCHEDULE 1.1
LOAN COMMITMENTS

City National Bank
$25,000,000
Silicon Valley Bank
$25,000,000
Total Commitments
$50,000,000

3