Exhibit 10.2

 
 
 
GLOWPOINT, INC.
 
LOAN AND SECURITY AGREEMENT
 
 
 

 
 

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This LOAN AND SECURITY AGREEMENT (this “Agreement”) is entered into as of
October 1, 2012, by and between Comerica Bank (“Bank”) and GLOWPOINT, INC.
(“Borrower”).
 
RECITALS
 
Borrower wishes to obtain credit from time to time from Bank, and Bank desires
to extend credit to Borrower.  This Agreement sets forth the terms on which Bank
will advance credit to Borrower, and Borrower will repay the amounts owing to
Bank.
 
AGREEMENT
 
The parties agree as follows:
 
1. DEFINITIONS AND CONSTRUCTION.
 
1.1 Definitions.  As used in this Agreement, all capitalized terms shall have
the definitions set forth on Exhibit A.  Any term used in the Code and not
defined herein shall have the meaning given to the term in the Code.
 
1.2 Accounting Terms.  Any accounting term not specifically defined on Exhibit A
shall be construed in accordance with GAAP and all calculations shall be made in
accordance with GAAP.  The term “financial statements” shall include the
accompanying notes and schedules.
 
2. LOAN AND TERMS OF PAYMENT.
 
2.1 Credit Extensions.
 
(a) Promise to Pay.  Borrower promises to pay to Bank, in lawful money of the
United States of America, the aggregate unpaid principal amount of all Credit
Extensions made by Bank to Borrower, together with interest on the unpaid
principal amount of such Credit Extensions at rates in accordance with the terms
hereof.
 
(b) Advances Under Revolving Line.
 
(i) Amount.  Subject to and upon the terms and conditions of this Agreement
Borrower may request Advances in an aggregate outstanding amount not to exceed
the lesser of (A) the Revolving Line or (B) the Borrowing Base (provided that as
a condition precedent to the initial Advance, Bank shall have received an audit
of the Collateral, the results of which shall be satisfactory to Bank).  Amounts
borrowed pursuant to this Section 2.1(b) may be repaid and reborrowed at any
time without penalty or premium prior to the Revolving Maturity Date, at which
time all Advances under this Section 2.1(b) shall be immediately due and
payable.
 
(c) Form of Request.  Whenever Borrower desires an Advance, Borrower will notify
Bank by facsimile transmission or telephone no later than 3:00 p.m. Pacific time
(12:00 p.m. Pacific time for wire transfers), on 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 C.  Bank 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 Bank’s discretion such Advances are necessary to meet
Obligations which have become due and remain unpaid.  Bank shall be entitled to
rely on any facsimile or telephonic notice given by a person who Bank reasonably
believes to be a Responsible Officer or a designee thereof, and Borrower shall
indemnify and hold Bank harmless for any damages or loss suffered by Bank as a
result of such reliance.  Bank will credit the amount of Advances made under
this Section 2.1(b) to Borrower’s deposit account.

 
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(d) Growth Capital Advances.
 
(i) Subject to and upon the terms and conditions of this Agreement, Bank agrees
to make Growth Capital Advances to Borrower.  Borrower may request Growth
Capital Advances from the Closing Date through October 1, 2013.  The aggregate
outstanding amount of Growth Capital Advances shall not exceed the Growth
Capital Line.
 
(ii) Interest shall accrue from the date of each Growth Capital Advance at the
rate specified in Section 2.3(a), and shall be payable in accordance with
Section 2.3(c).  Any Growth Capital Advances that are outstanding on October 1,
2013 shall be payable in twenty four (24) equal monthly installments of
principal, plus all accrued interest, beginning on November 1, 2013, and
continuing on the same day of each month thereafter through the Growth Capital
Maturity Date.  Growth Capital Advances, once repaid, may not be
reborrowed.  Except as set forth in the Prime Reference Rate Addendum, Borrower
may prepay any Growth Capital Advances without penalty or premium.
 
(iii) When Borrower desires to obtain a Growth Capital Advance, Borrower shall
notify Bank (which notice shall be irrevocable) by facsimile transmission to be
received no later than 3:00 p.m. Pacific time three (3) Business Days before the
day on which the Growth Capital Advance is to be made.  Such notice shall be
substantially in the form of Exhibit C.  The notice shall be signed by a
Responsible Officer or its designee.  Bank shall be entitled to rely on any
facsimile or telephonic notice given by a person who Bank reasonably believes to
be a Responsible Officer or a designee thereof, and Borrower shall indemnify and
hold Bank harmless for any damages or loss suffered by Bank as a result of such
reliance.
 
2.2 Overadvances.  If the aggregate amount of the outstanding Advances exceeds
the lesser of the Revolving Line or the Borrowing Base at any time, Borrower
shall immediately pay to Bank, in cash, the amount of such excess.
 
2.3 Interest Rates, Payments, and Calculations.
 
(a) Interest Rates.
 
(i) Advances.  Except as set forth in Section 2.3(b), the Advances shall bear
interest, on the outstanding daily balance thereof, as set forth in the Prime
Referenced Rate Addendum.
 
(ii) Growth Capital Advances.  Except as set forth in Section 2.3(b), the Growth
Capital Advances shall bear interest, on the outstanding daily balance thereof,
as set forth in the Prime Referenced Rate Addendum.
 
(b) Late Fee; Default Rate.  If any payment is not made within 10 days after the
date such payment is due, Borrower shall pay Bank a late fee equal to the lesser
of (i) five percent (5%) of the amount of such unpaid amount or (ii) the maximum
amount permitted to be charged under applicable law.  All Obligations shall bear
interest, from and after the occurrence and during the continuance of an Event
of Default, at a rate equal to five (5) percentage points above the interest
rate applicable immediately prior to the occurrence of the Event of Default.
 
(c) Payments.  Except as set forth in the Prime Referenced Rate Addendum,
interest hereunder shall be due and payable on the first calendar day of each
month during the term hereof.  Bank shall, at its option, charge such interest,
all Bank Expenses, and all Periodic Payments against any of Borrower’s deposit
accounts or against the Revolving Line, in which case those amounts charged
against the Revolving Line 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.  Payments hereunder shall be
made via auto debit from Borrower’s account at Bank.

 
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(d) Computation.  With respect to Obligations bearing interest at the Prime
Rate, 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.
 
2.4 Crediting Payments.  Prior to the occurrence of an Event of Default, Bank
shall credit a wire transfer of funds, check or other item of payment to such
deposit account or Obligation as Borrower specifies.  After the occurrence of an
Event of Default, Bank shall have the right, in its sole discretion, to
immediately apply any wire transfer of funds, check, or other item of payment
Bank may receive to conditionally reduce Obligations, but such applications of
funds shall not be considered a payment on 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 Bank
after 12:00 noon Pacific time shall be deemed to have been received by Bank as
of the opening of business on the immediately following Business Day.  Whenever
any payment to Bank 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 Fees.  Borrower shall pay to Bank the following:
 
(a) Facility Fees.  On the Closing Date, a term facility fee equal to $20,000
and a revolving facility fee equal to $30,000, each of which shall be
nonrefundable; and
 
(b) Bank Expenses.  On the Closing Date, all Bank Expenses incurred through the
Closing Date, and, after the Closing Date, all Bank Expenses, as and when they
become due.
 
2.6 Term.  This Agreement shall become effective on the Closing Date and,
subject to Section 13.8, shall continue in full force and effect for so long as
any Obligations remain outstanding or Bank has any obligation to make Credit
Extensions under this Agreement.  Notwithstanding the foregoing, Bank shall 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.
 
3. CONDITIONS OF LOANS.
 
3.1 Conditions Precedent to Initial Credit Extension.  The obligation of Bank to
make the initial Credit Extension is subject to the condition precedent that
Bank shall have received, in form and substance reasonably satisfactory to Bank,
the following:
 
(a) duly executed signatures to this Agreement;
 
(b) duly executed signatures to an officer’s certificate of Borrower with
respect to incumbency and resolutions authorizing the execution and delivery of
this Agreement;
 
(c) duly executed signatures to the Prime Referenced Rate Addendum;
 
(d) financing statements (Form UCC-1) (Borrower and each Guarantor);
 
(e) duly executed signatures to an intellectual property security agreement (for
Borrower and each Guarantor);
 
(f) duly executed signatures to the Unconditional Secured Guaranty (GP
Communications), together with duly executed signatures to an officer’s
certificate of GP Communications with respect to incumbency and resolutions
authorizing the execution and delivery of the Unconditional Secured Guaranty;

 
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(g) duly executed signatures to the Unconditional Secured Guaranty (Affinity
Video), together with duly executed signatures to an officer’s certificate of
Affinity Video with respect to incumbency and resolutions authorizing the
execution and delivery of the Unconditional Secured Guaranty;
 
(h) duly executed signatures to the Intercreditor Agreement (Escalate Capital);
 
(i) duly executed signatures to the Subordination Agreement (Shareholder
Representative Services LLC, as Sellers’ Representative for the benefit of the
Stockholders (as defined in the Merger Agreement));
 
(j) duly executed signatures to the certificate for the Shares, together with
Assignment(s) Separate from Certificate, duly executed in blank;
 
(k) a fully executed copy of the final Seller Note (as defined in the Seller
Subordination Agreement);
 
(l) a fully executed copy of the final Merger Agreement;
 
(m) duly executed signatures to the agreement to furnish insurance;
 
(n) payment of the fees and Bank Expenses then due specified in Section 2.5;
 
(o) a payoff letter (Silicon Valley Bank);
 
(p) current SOS Reports indicating that except for Permitted Liens, there are no
other security interests or Liens of record in the Collateral;
 
(q) an audit of the Collateral, the results of which shall be satisfactory to
Bank;
 
(r) Borrower’s quarterly balance sheet projections for fiscal year ended
December 31, 2013;
 
(s) current financial statements, including audited statements for Borrower’s
most recently ended fiscal year, together with an unqualified opinion, company
prepared consolidated and consolidating balance sheets and income statements for
the most recently ended month in accordance with Section 6.2, and such other
updated financial information as Bank may reasonably request;
 
(t) duly executed signatures to a current Compliance Certificate in accordance
with Section 6.2;
 
(u) duly executed signatures to a Collateral Information Certificate;
 
(v) duly executed signatures to an Automatic Debit Authorization; and
 
(w) such other documents or certificates, and completion of such other matters,
as Bank may reasonably deem necessary or appropriate.
 
3.2 Post Closing Conditions.  Unless otherwise provided in writing, Bank shall
have received, in form and substance satisfactory to Bank:
 
(a) within five (5) Business Days after the Closing Date, original signatures to
the Loan Documents;
 
(b) within three (3) Business Days after the Closing Date, evidence of
termination of all Liens in favor of Silicon Valley Bank;

 
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             (c) within thirty (30) calendar days after the Closing Date, duly
executed signatures to a landlord waiver in form satisfactory to Bank; and
 
(d) within thirty (30) calendar days after the Closing Date, duly executed
signatures to the Subordinated Deposit Account Control Agreement (Escalate).
 
3.3 Conditions Precedent to all Credit Extensions.  The obligation of Bank to
make each Credit Extension, including the initial Credit Extension, is further
subject to the following conditions:
 
(a) timely receipt by Bank of the Payment/Advance Form as provided in Section
2.1; and
 
(b) the representations and warranties contained in Article 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, and no Event of Default shall have occurred and be
continuing, or would exist after giving effect to such Credit Extension
(provided, however, that those representations and warranties expressly
referring to another date shall be true, correct and complete in all material
respects as of such date).  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 3.3.
 
4. CREATION OF SECURITY INTEREST.
 
4.1 Grant of Security Interest.  Borrower grants and pledges to Bank a
continuing security interest in all of Borrower’s rights, title and interests in
and to the Collateral to secure prompt repayment of any and all Obligations and
to secure prompt performance by Borrower of each of its covenants and duties
under the Loan Documents.  Except as set forth in the Schedule, 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 later-acquired Collateral.  Borrower also hereby agrees not to sell,
transfer, assign, mortgage, pledge, lease, grant a security interest in, or
encumber any of its Intellectual Property, except in connection with Permitted
Liens and Permitted Transfers.  Notwithstanding any termination of this
Agreement, Bank’s Lien on the Collateral shall remain in effect for so long as
any Obligations are outstanding.
 
4.2 Perfection of Security Interest.  Borrower authorizes Bank to file at any
time financing statements, continuation statements, and amendments thereto that
(i) either specifically describe the Collateral or describe the Collateral as
all assets of Borrower of the kind pledged hereunder, and (ii) contain any other
information required by the Code for the sufficiency of filing office acceptance
of any financing statement, continuation statement, or amendment, including
whether Borrower is an organization, the type of organization and any
organizational identification number issued to Borrower, if applicable.  Any
such financing statements may be filed by Bank at any time in any jurisdiction
whether or not Revised Article 9 of the Code is then in effect in that
jurisdiction.  Borrower shall from time to time endorse and deliver to Bank, at
the request of Bank, all Negotiable Collateral and other documents that Bank may
reasonably request, in form satisfactory to Bank, to perfect and continue
perfection of Bank’s security interests in the Collateral and in order to fully
consummate all of the transactions contemplated under the Loan
Documents.  Borrower shall have possession of the Collateral, except where
expressly otherwise provided in this Agreement, for Permitted Transfers or where
Bank chooses to perfect its security interest by possession in addition to the
filing of a financing statement.  Where Collateral is in possession of a third
party bailee, Borrower shall take such steps as Bank reasonably requests for
Bank to (i) obtain an acknowledgment, in form and substance satisfactory to
Bank, of the bailee that the bailee holds such Collateral for the benefit of
Bank, (ii) obtain “control” of any Collateral consisting of investment property,
deposit accounts, letter-of-credit rights or electronic chattel paper (as such
items and the term “control” are defined in Revised Article 9 of the Code) by
causing the securities intermediary or depositary institution or issuing bank to
execute a control agreement in form and substance satisfactory to
Bank.  Borrower will not create any chattel paper without placing a legend on
the chattel paper reasonably acceptable to Bank indicating that Bank has a
security interest in the chattel paper.  Borrower from time to time may deposit
with Bank specific cash collateral to secure specific Obligations; Borrower
authorizes Bank to hold such specific 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 specific
Obligations are outstanding.

 
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4.3 Right to Inspect.  Bank (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 twice 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 Collateral in order to
verify Borrower’s financial condition or the amount, condition of, or any other
matter relating to, the Collateral.
 
5. REPRESENTATIONS AND WARRANTIES.
 
Borrower represents and warrants as follows:
 
5.1 Due Organization and Qualification.  Borrower and each Subsidiary is an
entity duly existing under the laws of the jurisdiction in which it is organized
and 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 cause 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 organizational documents, nor will they constitute an event of
default under any material agreement by which Borrower is bound.  Borrower is
not in default under any agreement by which it is bound, except to the extent
such default would not reasonably be expected to cause a Material Adverse
Effect.
 
5.3 Collateral.  Borrower has rights in or the power to transfer the Collateral,
and its title to the Collateral is free and clear of Liens, adverse claims, and
restrictions on transfer or pledge except for Permitted Liens.  All Collateral
is located solely in the Collateral States.  The Eligible Accounts are bona fide
existing obligations.  The property or services giving rise to such Eligible
Accounts has been delivered or rendered to the account debtor or its agent for
immediate shipment to and unconditional acceptance by the account
debtor.  Borrower has not received notice of actual or imminent Insolvency
Proceeding of any account debtor whose accounts are included in any Borrowing
Base Certificate as an Eligible Account. No licenses or agreements giving rise
to such Eligible Accounts is with any Prohibited Territory or with any Person
organized under or doing business in a Prohibited Territory.  All Inventory is
in all material respects of good and merchantable quality, free from all
material defects, except for Inventory for which adequate reserves have been
made.  Except as set forth in the Schedule, none of the Collateral consisting of
investment property is maintained or invested with a Person other than Bank or
Bank’s Affiliates.
 
5.4 Intellectual Property Collateral.  Borrower is the sole owner of the
Intellectual Property Collateral, except for non-exclusive licenses granted by
Borrower to its customers in the ordinary course of business.  To the best of
Borrower’s knowledge, each of the Copyrights, Trademarks and Patents is valid
and enforceable, and no part of the Intellectual Property Collateral has been
judged invalid or unenforceable, in whole or in part, and no claim has been made
to Borrower that any part of the Intellectual Property Collateral violates the
rights of any third party except to the extent such claim could not reasonably
be expected to cause a Material Adverse Effect.  Except as set forth in the
Schedule or provided in writing to Bank from Borrower, Borrower’s rights as a
licensee of intellectual property do not give rise to more than 10% 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.
 
5.5 Name; Location of Chief Executive Office.  Except as disclosed in the
Schedule, Borrower has not done business under any name other than that
specified on the signature page hereof, and its exact legal name is as set forth
in the first paragraph of this Agreement.  The chief executive office of
Borrower is located in the Chief Executive Office State at the address indicated
in Section 10 hereof.
 
5.6 Actions, Suits, Litigation, or Proceedings.  Except as set forth in the
Schedule, there are no actions, suits, litigation or proceedings, at law or in
equity, pending by or against Borrower or any Subsidiary before any court,
administrative agency, or arbitrator in which a likely adverse decision could
reasonably be expected to have a Material Adverse Effect.

 
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5.7 No Material Adverse Change in Financial Statements.  All consolidated and
consolidating financial statements related to Borrower and any Subsidiary that
are delivered by Borrower to Bank fairly present in all material respects
Borrower’s consolidated and consolidating financial condition as of the date
thereof and Borrower’s consolidated and consolidating results of operations for
the period then ended.  There has not been a material adverse change in the
consolidated or in the consolidating financial condition of Borrower since the
date of the most recent of such financial statements submitted to Bank.
 
5.8 Solvency, Payment of Debts.  Borrower is able to pay its debts (including
trade debts) as they mature; the fair saleable value of Borrower’s assets
(including goodwill minus disposition costs) exceeds the fair value of its
liabilities; and Borrower is not left with unreasonably small capital after the
transactions contemplated by this Agreement.
 
5.9 Compliance with Laws and Regulations.  Borrower and each Subsidiary have met
the minimum funding requirements of ERISA with respect to any employee benefit
plans subject to ERISA.  No event has occurred resulting from Borrower’s failure
to comply with ERISA that is reasonably likely to result in Borrower’s incurring
any liability that could reasonably be expected to have a Material Adverse
Effect.  Borrower is not an “investment company” or a company “controlled” by an
“investment company” within the meaning of the Investment Company Act of
1940.  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 has complied in all material
respects with all the provisions of the Federal Fair Labor Standards Act
applicable to it.  Borrower is in compliance with all environmental laws,
regulations and ordinances applicable to it except where the failure to comply
is not reasonably likely to have a Material Adverse Effect.  Borrower has not
violated any statutes, laws, ordinances or rules applicable to it, the violation
of which could reasonably be expected to have a Material Adverse
Effect.  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 except those being contested in good
faith with adequate reserves under GAAP or where the failure to file such
returns or pay such taxes could not reasonably be expected to have a Material
Adverse Effect.
 
5.10 Subsidiaries.  Borrower does not own any stock, partnership interest or
other equity securities of any Person, except for Permitted Investments.
 
5.11 Government Consents.  Borrower and each Subsidiary have obtained all
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,
except where the failure to do so would not reasonably be expected to cause a
Material Adverse Effect.
 
5.12 Inbound Licenses.  Except as disclosed on the Schedule, Borrower is not a
party to, nor is bound by, any material inbound license or other similar
agreement, the failure, breach, or termination of which could reasonably be
expected to cause a Material Adverse Effect, or that prohibits or otherwise
restricts Borrower from granting a security interest in Borrower’s interest in
such license or agreement or any other property other than customary
anti-assignment clauses that are unenforceable under applicable law, including,
without limitation, Sections 9406 and 9408 of the Code.
 
5.13 Full Disclosure.  No representation, warranty or other statement made by
Borrower in any certificate or written statement furnished to Bank taken
together with all such certificates and written statements furnished to Bank
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, it being recognized by Bank that the projections and
forecasts provided by Borrower in good faith and based upon reasonable
assumptions are not to be viewed as facts and that actual results during the
period or periods covered by any such projections and forecasts may differ from
the projected or forecasted results.
 
5.14 No Material Adverse Effect.  No Material Adverse Effect or event reasonably
expected to cause a Material Adverse Effect has occurred.

 
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6. AFFIRMATIVE COVENANTS.
 
Borrower covenants that, until payment in full of all outstanding Obligations,
and for so long as Bank may have any commitment to make a Credit Extension
hereunder, Borrower shall do all of the following:
 
6.1 Good Standing and Government Compliance.  Borrower shall maintain its
organizational existence and good standing in the Borrower State, shall maintain
qualification and good standing in each other jurisdiction in which the failure
to so qualify could reasonably be expected to have a Material Adverse Effect,
and shall furnish to Bank the organizational identification number issued to
Borrower by the authorities of the jurisdiction in which Borrower is organized,
if applicable.  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 in all material respects with all
applicable Environmental Laws, and maintain all material permits, licenses and
approvals required thereunder where the failure to do so could reasonably be
expected to have a Material Adverse Effect.  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, and shall maintain, and
shall cause each of its Subsidiaries to maintain, in force all licenses,
approvals and agreements, the loss of which or failure to comply with which
would reasonably be expected to have a Material Adverse Effect.
 
6.2 Financial Statements, Reports, Certificates.  Borrower shall deliver to
Bank:  (i) as soon as available, but in any event within thirty (30) days after
the end of each calendar month and within forty five (45) days after the end of
each calendar quarter, a company prepared consolidated and consolidating balance
sheet and income statement covering Borrower’s operations during such period, in
a form reasonably acceptable to Bank and certified by a Responsible Officer;
(ii) as soon as available, but in any event within one hundred twenty (120) days
after the end of Borrower’s fiscal year (beginning with Borrower’s fiscal year
ending December 31, 2012) , audited consolidated and consolidating financial
statements of Borrower prepared in accordance with GAAP, consistently applied,
together with an opinion which is unqualified (including no going concern
comment or qualification) or otherwise consented to in writing by Bank on such
financial statements of an independent certified public accounting firm
reasonably acceptable to Bank; (iii) if applicable, copies of all material
statements, reports and notices sent or made available generally by Borrower to
its security holders or to any holders of Subordinated Debt and all reports on
Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (iv)
promptly upon receipt of notice thereof, a report of any legal actions pending
or threatened against Borrower or any Subsidiary that could reasonably be
expected to result in damages or costs to Borrower or any Subsidiary of One
Hundred Thousand Dollars ($100,000) or more; (v) promptly upon receipt, each
management letter prepared by Borrower’s independent certified public accounting
firm regarding Borrower’s management control systems; (vi) as soon as available,
but in any event within thirty (30) days after the beginning of Borrower’s
fiscal year, Borrower’s financial and business projections and operating budget
for that year, with evidence of approval thereof by Borrower’s board of
directors; (vii) such budgets, sales projections, operating plans or other
financial information generally prepared by Borrower in the ordinary course of
business as Bank may reasonably request from time to time; and (viii) within
thirty (30) days of the last day of each fiscal quarter, a report signed by
Borrower, in form reasonably acceptable to Bank, listing any applications or
registrations that Borrower has made or filed in respect of any Patents,
Copyrights or Trademarks and the status of any outstanding applications or
registrations, as well as any material change in Borrower’s Intellectual
Property Collateral, including but not limited to any subsequent ownership right
of Borrower in or to any Trademark, Patent or Copyright not specified in
Exhibits A, B, and C of any Intellectual Property Security Agreement delivered
to Bank by Borrower in connection with this Agreement.
 
(a) On a bi-monthly basis, on the 15th and last day of each month, Borrower
shall deliver to Bank a Borrowing Base Certificate signed by a Responsible
Officer in substantially the form of Exhibit D hereto, together with aged
listings by invoice date of accounts receivable and accounts payable (the “A/R
and A/P Listings”), and within three (3) days of the date such A/R and A/P
Listings are due, Borrower shall deliver to Bank a contractual backlog trend
report in form reasonably satisfactory to Bank.
 
(b) Within thirty (30) days after the last day of each month, Borrower shall
deliver to Bank with the monthly financial statements a Compliance Certificate
certified as of the last day of the applicable month and signed by a Responsible
Officer in substantially the form of Exhibit E hereto.

 
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(c) Immediately upon becoming aware of the occurrence or existence of an Event
of Default hereunder, a written statement of a Responsible Officer setting forth
details of the Event of Default, and the action which Borrower has taken or
proposes to take with respect thereto.
 
(d) Bank shall have a right from time to time hereafter to audit Borrower’s
Accounts and appraise Collateral at Borrower’s expense, provided that after the
initial audit, such audits will be conducted no more often than every six (6)
months unless an Event of Default has occurred and is continuing.
 
Borrower may deliver to Bank on an electronic basis any certificates, reports or
information required pursuant to this Section 6.2, and Bank shall be entitled to
rely on the information contained in the electronic files, provided that Bank in
good faith believes that the files were delivered by a Responsible Officer.  If
Borrower delivers this information electronically, it shall also deliver to Bank
by U.S. Mail, reputable overnight courier service, hand delivery, facsimile or
.pdf file within five (5) Business Days of submission of the unsigned electronic
copy the certification of monthly financial statements, the intellectual
property report, the Borrowing Base Certificate and the Compliance Certificate,
each bearing the physical signature of the Responsible Officer.
 
6.3 Inventory; Returns.  Borrower shall keep all Inventory in good and
merchantable condition, free from all material defects except for Inventory for
which adequate reserves have been made.  Returns and allowances, if any, as
between Borrower and its account debtors shall be on the same basis and in
accordance with the usual customary practices of Borrower, as they exist on the
Closing Date.  Borrower shall promptly notify Bank of all returns and recoveries
and of all disputes and claims involving more than One Hundred Thousand
($100,000).
 
6.4 Taxes.  Borrower shall make, and 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, including, but not limited
to, those laws concerning income taxes, F.I.C.A., F.U.T.A. and state disability,
and will execute and deliver to Bank, on demand, proof satisfactory to Bank
indicating that Borrower or a Subsidiary has made such payments or deposits and
any appropriate certificates attesting to the payment or deposit thereof;
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.
 
6.5 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 liability and other insurance 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 reasonably satisfactory to Bank.  All policies of
property insurance shall contain a lender’s loss payable endorsement, in a form
satisfactory to Bank, showing Bank as an additional loss payee, and all
liability insurance policies shall show Bank as an additional insured and
specify that the insurer must give at least twenty (20) days notice to Bank
before canceling its policy for any reason.  Upon Bank’s request, Borrower shall
deliver to Bank certified copies of the policies of insurance and evidence of
all premium payments.  If no Event of Default has occurred and is continuing,
proceeds payable under any casualty policy will, at Borrower’s option, be
payable to Borrower to replace the property subject to the claim, provided that
any such replacement property shall be deemed Collateral in which Bank has been
granted a first priority security interest.  If an Event of Default has occurred
and is continuing, all proceeds payable under any such policy shall, at Bank’s
option, be payable to Bank to be applied on account of the Obligations.
 
6.6 Accounts.  Beginning within sixty (60) days after the Closing Date and at
all times thereafter, Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, all its primary depository, operating and investment
accounts with Bank in a checking or money market account.

 
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6.7 Financial Covenants.
 
(a) Senior Funded Debt to EBITDA Ratio.  Borrower shall maintain at all times,
measured on a rolling four (4) quarter basis, a ratio of Obligations to
consolidated EBITDA of not more than 2.50 to 1.0.
 
(b) Total Funded Debt to EBITDA Ratio.  Borrower shall maintain at all times a
ratio of Total Funded Debt to EBITDA, measured on a rolling four (4) quarter
basis, of not more than (i) 4.0 to 1.0 beginning on the Closing Date through
June 30, 2013, (ii) 3.5 to 1.0 beginning on July 1, 2013 through December 31,
2013, and (iii) 3.0 to 1.0 beginning on January 1, 2014 and at all times
thereafter.  As used herein “Total Funded Debt” shall mean the sum of (i) the
Obligations and (ii) Subordinated Debt (including without limitation and without
duplication all Indebtedness owing to Escalate and all Indebtedness under the
Seller Note).
 
(c) Fixed Charge Ratio.  Borrower shall maintain at all times, measured on a
rolling four (4) quarter basis, a ratio of (i) net income for such period plus
depreciation and amortization for such period plus interest expense paid during
such period after eliminating therefrom all extraordinary nonrecurring items of
income for such period minus capital expenditures made during such period, minus
distributions made during such period to (ii) the current portion of all
long-term Indebtedness (including without limitation the Seller Note Payments)
plus interest expense paid during such period, of at least (x) beginning on the
Closing Date through August 31, 2013, 1.00 to 1.00, and (y) beginning on
September 1, 2013 and at all times thereafter, 1.20 to 1.00.  As used herein,
"Seller Note Payments" shall mean an amount equal to: (i) $750,000 (the "October
Payment Amount") for the month of October, 2012; (ii) the October Payment Amount
plus an amount equal to $125,000 for each month thereafter through April 30,
2013; (iii) $1,500,000 (the "April Payment Amount") beginning on April 1, 2013
and for each month thereafter until December 31, 2013, and (iv) the April
Payment Amount minus an amount equal to $125,000 for each month thereafter
through January 1, 2015.
 
6.8 Registration of 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.
 
(b) Borrower shall promptly give Bank written notice in accordance with Section
6.2, of any applications or registrations of intellectual property rights filed
with the United States Patent and Trademark Office, including the date of such
filing and the registration or application numbers, if any.
 
(c) Borrower shall (i) give Bank not less than twenty (20) days prior written
notice of the filing of any applications or registrations with the United States
Copyright Office, 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 Bank
may reasonably request for Bank to maintain its perfection in such intellectual
property rights to be registered by Borrower; (iii) upon the request of Bank,
either deliver to Bank or file such documents simultaneously with the filing of
any such applications or registrations with the United States Copyright Office;
(iv) upon filing any such applications or registrations, promptly provide Bank
with a copy of such applications or registrations together with any exhibits,
evidence of the filing of any documents requested by Bank to be filed for Bank
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 Bank shall reasonably request to perfect and maintain the
perfection and priority of Bank's security interest in the Intellectual Property
Collateral.

 
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(e) Borrower shall use commercially reasonably efforts to (i) protect, defend
and maintain the validity and enforceability of the material Trademarks,
Patents, Copyrights, and trade secrets, (ii) detect infringements of the
Trademarks, Patents and Copyrights and promptly advise Bank in writing of
material infringements detected and (iii) not allow any material Trademarks,
Patents or Copyrights to be abandoned, forfeited or dedicated to the public
without the written consent of Bank, which shall not be unreasonably withheld.
 
(f) Bank may audit Borrower's Intellectual Property Collateral to confirm
compliance with this Section 6.8, provided such audit may not occur more often
than twice per year, unless an Event of Default has occurred and is
continuing.  Bank shall have the right, but not the obligation, to take, at
Borrower's sole expense, any actions that Borrower is required under this
Section 6.8 to take but which Borrower fails to take, after fifteen (15) days'
notice to Borrower.  Borrower shall reimburse and indemnify Bank for all
reasonable costs and reasonable expenses incurred in the reasonable exercise of
its rights under this Section 6.8.
 
6.9 Consent of Inbound Licensors.  Prior to entering into or becoming bound by
any inbound license or agreement (other than over-the-counter software that is
commercially available to the public), the failure, breach, or termination of
which could reasonably be expected to cause a Material Adverse Effect, Borrower
shall:  (i) provide written notice to Bank of the material terms of such license
or agreement with a description of its likely impact on Borrower’s business or
financial condition; and (ii) in good faith take such actions as Bank may
reasonably request to obtain the consent of, or waiver by, any person whose
consent or waiver is necessary for (A) Borrower’s interest in such licenses or
contract rights to be deemed Collateral and for Bank to have a security interest
in it that might otherwise be restricted by the terms of the applicable license
or agreement, whether now existing or entered into in the future, and (B) Bank
to have the ability in the event of a liquidation of any Collateral to dispose
of such Collateral in accordance with Bank’s rights and remedies under this
Agreement and the other Loan Documents, provided, however, that the failure to
obtain any such consent or waiver shall not constitute a default under this
Agreement.
 
6.10 Formation or Acquisition of Subsidiaries.  At the time that Borrower or any
Subsidiary or Guarantor forms any direct or indirect Subsidiary or acquires any
direct or indirect Subsidiary after the Closing Date, Borrower (and/or such
Subsidiary and/or Guarantor, as applicable) shall (a) cause such new Subsidiary
to provide to Bank a joinder or amendment to the Loan Agreement to cause such
Subsidiary to become a co-borrower hereunder or a guaranty to cause such
Subsidiary to become a Guarantor, together with such appropriate financing
statements and/or control agreements, all in form and substance reasonably
satisfactory to Bank (including being sufficient to grant Bank a first priority
Lien (subject to Permitted Liens) in and to the assets of such newly formed or
acquired Subsidiary), (b) provide to Bank appropriate certificates and powers
and financing statements, pledging all of the direct or beneficial ownership
interest in such new Subsidiary (to the extent such Subsidiary is a domestic
Subsidiary), in form and substance reasonably satisfactory to Bank, and
(c) provide to Bank all other documentation in form and substance reasonably
satisfactory to Bank which in its reasonable opinion is appropriate with respect
to the execution and delivery of the applicable documentation referred to
above.  Any document, agreement, or instrument executed or issued pursuant to
this Section 6.10 shall be a Loan Document.
 
6.11 Further Assurances.  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 Bank to effect the purposes of this Agreement.
 
7. NEGATIVE COVENANTS.
 
Borrower covenants and agrees that, so long as any credit hereunder shall be
available and until the outstanding Obligations are paid in full or for so long
as Bank may have any commitment to make any Credit Extensions, Borrower will not
do any of the following without Bank’s prior written consent:
 
7.1 Dispositions.  Convey, sell, lease, license, transfer or otherwise dispose
of (collectively, to “Transfer”), or permit any of its Subsidiaries to Transfer,
all or any part of its business or property, or subject to Section 6.6 of the
Agreement, move cash balances on deposit with Bank to accounts opened at another
financial institution, other than Permitted Transfers.

 
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7.2 Change in Name, Location, Executive Office, or Executive Management; Change
in Business; Change in Fiscal Year; Change in Control.  Change its name or the
Borrower State or relocate its chief executive office without thirty (30) days
prior written notification to Bank; replace its chief executive officer or chief
financial officer without written notification to Bank as soon as possible and
in any event promptly thereafter; engage in any business, or permit any of its
Subsidiaries to engage in any business, other than or reasonably related or
incidental to the businesses currently engaged in by Borrower or such
Subsidiaries; change its fiscal year end; have a Change in Control.
 
7.3 Mergers or Acquisitions.  Other than the Merger, merge or consolidate, or
permit any of its Subsidiaries to merge or consolidate, with or into any other
business organization (other than mergers or consolidations of a Subsidiary into
another Subsidiary or into Borrower), or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person, or enter into any agreement to do any of the same.
 
7.4 Indebtedness.  Create, incur, assume, guarantee or be or remain liable with
respect to any Indebtedness, or permit any Subsidiary so to do, other than
Permitted Indebtedness, or prepay any Indebtedness or take any actions which
impose on Borrower an obligation to prepay any Indebtedness, except (i)
Indebtedness to Bank, (ii) as may be expressly permitted pursuant to the terms
of the Intercreditor Agreement or the Seller Subordination Agreement, and (iii)
Borrower may pay the Final Surplus (as defined in the Merger Agreement) provided
Bank receives two (2) Business Days prior written notice thereof and no Event of
Default exists at the time of (and no Event of Default would exist, after giving
effect to) such payment (and Borrower shall certify to Bank as such in the
written notice referenced above).
 
7.5 Encumbrances.  Create, incur, assume or allow 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 (other than solely for the purposes of
collection in the ordinary course of Borrower’s business and consistent with
past practices), or permit any of its Subsidiaries so to do, except for
Permitted Liens, or covenant to any other Person that Borrower in the future
will refrain from creating, incurring, assuming or allowing any Lien with
respect to any of Borrower’s property other than with respect to Liens on
financed Equipment described in clause (c) of the definition of Permitted Liens
and other than covenants to Escalate.
 
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,
except that Borrower may (a) 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, (b) repurchase up to 50% of those shares issued to Avaya pursuant to
an equipment purchase agreement dated as of June 30, 2011 for an aggregate
purchase price not to exceed $800,000 in accordance with the terms of such
equipment purchase agreement as in effect on the Closing Date and (c) pay
dividends to its B-1 and A-2 preferred shareholders beginning on January 1,
2013, payable quarterly in arrears, in an aggregate amount not to exceed
$160,000 during any quarter, in accordance with the terms of the Certificate of
Designations, Preferences and Rights of Series A-2 Convertible Preferred Stock
of Glowpoint, Inc. and the Certificate of Designations, Preferences and Rights
of Series A-2 Convertible Preferred Stock of Glowpoint, Inc. , eacas in effect
on the Closing Date.
 
7.7 Investments.  Directly or indirectly acquire or own, or make any Investment
in or to any Person, or permit any of its Subsidiaries to do so, other than
Permitted Investments, or maintain or invest any of its property consisting of
investment property with a Person other than Bank or Bank’s Affiliates or permit
any Subsidiary to do so unless such Person has entered into a control agreement
with Bank, in form and substance satisfactory to Bank, 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.
Further, Borrower shall not enter into any license or agreement with any
Prohibited Territory or with any Person organized under or doing business in a
Prohibited Territory.
 
7.8 Transactions with Affiliates.  Directly or indirectly enter into or permit
to exist any material transaction with any Affiliate of Borrower except for (a)
transactions that are in the ordinary course of Borrower’s business, upon fair
and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm’s length transaction with a non-affiliated Person, (b)
retention bonuses to be paid to certain officers and employees of Borrower or
its Subsidiaries in connection with the Merger pursuant to the Merger Agreement,
or (c) transactions with wholly-owned Subsidiaries that have guaranteed the
Obligations.

 
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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 such Subordinated Debt and the terms of the subordination
agreement relating to such Subordinated Debt, or amend any provision of any
document evidencing such Subordinated Debt, except in compliance with the terms
of the subordination agreement relating to such Subordinated Debt, or amend any
provision affecting Bank’s rights contained in any documentation relating to the
Subordinated Debt without Bank’s prior written consent.
 
7.10 Inventory and Equipment.  Store the Inventory or the Equipment with a
bailee, warehouseman, or similar third party unless the third party has been
notified of Bank’s security interest and Bank (a) has received an acknowledgment
from the third party that it is holding or will hold the Inventory or Equipment
for Bank’s benefit or (b) is in possession of the warehouse receipt, where
negotiable, covering such Inventory or Equipment.  Except for Inventory sold in
the ordinary course of business and for Permitted Transfers and except for such
other locations as Bank may approve in writing, Borrower shall keep the
Inventory and Equipment only at the location set forth in Section 10 and such
other locations of which Borrower gives Bank prior written notice.
 
7.11 No Investment Company; Margin Regulation.  Become 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.
 
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 any of the Obligations when due;
 
8.2 Covenant Default.
 
(a) If Borrower fails to perform any obligation under Article 6 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, in any of the Loan
Documents, or in any other present or future agreement between Borrower and Bank
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 (10) days after
Borrower receives notice thereof or any officer of Borrower becomes aware
thereof; provided, however, that if the default cannot by its nature be cured
within the ten (10) day period or cannot after diligent attempts by Borrower be
cured within such ten (10) 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 thirty (30) days) to attempt to cure
such default, so long as Borrower continues to diligently 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 Change.  If there occurs any circumstance or circumstances
that could reasonably be expected to have a Material Adverse Effect;
 
8.4 Defective Perfection.  If Bank shall receive at any time following the
Closing Date an SOS Report indicating that except for Permitted Liens, Bank’s
security interest in the Collateral is not prior to all other security interests
or Liens of record reflected in the report;

 
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8.5 Attachment.  If any material portion of Borrower’s 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 five (5) days, or if Borrower is
enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business affairs, or if a judgment or
other claim becomes a lien or encumbrance upon any material 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 five (5) 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 made during such cure period);
 
8.6 Insolvency.  If Borrower becomes insolvent, or if an Insolvency Proceeding
is commenced by Borrower, or if an Insolvency Proceeding is commenced against
Borrower and is not dismissed or stayed within forty five (45) days (provided
that no Credit Extensions will be made prior to the dismissal of such Insolvency
Proceeding);
 
8.7 Other Agreements.  If there is a default or other failure to perform in any
agreement to which Borrower or any Guarantor is a party with a third party or
parties resulting in a right by such third party or parties, whether or not
exercised, to accelerate the maturity of any Indebtedness in an amount in excess
of One Hundred Thousand Dollars ($100,000) or that would reasonably be expected
to have a Material Adverse Effect;
 
8.8 Subordinated Debt.  If Borrower makes any payment on account of Subordinated
Debt, except to the extent the payment is allowed under any subordination
agreement entered into with Bank;
 
8.9 Judgments; Settlements.  If a judgment or judgments for the payment of money
in an amount, individually or in the aggregate, of at least One Hundred Thousand
Dollars ($100,000) (not covered by independent third-party insurance as to which
liability has been accepted by such insurance carrier) shall be rendered against
Borrower and shall remain unsatisfied and unstayed for a period of ten (10) days
(provided that no Credit Extensions will be made prior to the satisfaction or
stay of the judgment); or if a settlement or settlements is agreed upon for an
amount individually or in the aggregate of at least One Hundred Thousand Dollars
($100,000) (not covered by independent third-party insurance as to which
liability has been accepted by such insurance carrier);
 
8.10 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 Bank by any Responsible Officer
pursuant to this Agreement or to induce Bank to enter into this Agreement or any
other Loan Document;
 
8.11 Escalate Capital Loan Documents; Seller Note.  If (i) there occurs an Event
of Default in any loan or guaranty document entered into between Borrower and
Escalate including that certain Loan and Security Agreement between Borrower and
Escalate Capital Partners SBIC I, L.P. dated as of the Closing Date, or (ii)
there occurs any default or failure by Borrower to perform or pay any amount
when due under the Seller Note (as defined in the Seller Subordination
Agreement); or
 
8.12 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 (other than for
the merger of a Subsidiary into another Subsidiary that is a Guarantor), 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 Bank in connection
with any Guaranty Document, or if any of the circumstances described in Sections
8.3 through 8.10 occur with respect to any Guarantor.

 
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9. BANK’S RIGHTS AND REMEDIES.
 
9.1 Rights and Remedies.  Upon the occurrence and during the continuance of an
Event of Default, Bank may, at its election, 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 8.6
(insolvency), all Obligations shall become immediately due and payable without
any action by Bank);
 
(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 Bank;
 
(c) Settle or adjust disputes and claims directly with account debtors for
amounts, upon terms and in whatever order that Bank reasonably considers
advisable;
 
(d) Make such payments and do such acts as Bank considers necessary or
reasonable to protect its security interest in the Collateral.  Borrower agrees
to assemble the Collateral if Bank so requires, and to make the Collateral
available to Bank as Bank may designate.  Borrower authorizes Bank 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 Bank’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 Bank a license to enter into possession of such premises
and to occupy the same, without charge, in order to exercise any of Bank’s
rights or remedies provided herein, at law, in equity, or otherwise;
 
(e) Set off and apply to the Obligations any and all (i) balances and deposits
of Borrower held by Bank, and (ii) indebtedness at any time owing to or for the
credit or the account of Borrower held by Bank;
 
(f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale,
advertise for sale, and sell (in the manner provided for herein) the
Collateral.  Bank is hereby granted a 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 Bank’s
exercise of its rights under this Section 9.1, Borrower’s rights under all
licenses and all franchise agreements shall inure to Bank’s benefit;
 
(g) Sell the Collateral at either a public or private sale, or both, 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 Bank determines is
commercially reasonable, and apply any proceeds to the Obligations in whatever
manner or order Bank deems appropriate.  Bank may sell the Collateral without
giving any warranties as to the Collateral.  Bank may specifically disclaim any
warranties of title or the like.  This procedure will not be considered
adversely to affect the commercial reasonableness of any sale of the
Collateral.  If Bank sells any of the Collateral upon credit, Borrower will be
credited only with payments actually made by the purchaser, received by Bank,
and applied to the indebtedness of the purchaser.  If the purchaser fails to pay
for the Collateral, Bank may resell the Collateral and Borrower shall be
credited with the proceeds of the sale;
 
(h) Bank may credit bid and purchase at any public sale;
 
(i) Apply for the appointment of a receiver, trustee, liquidator or conservator
of the Collateral, without notice and without regard to the adequacy of the
security for the Obligations and without regard to the solvency of Borrower, any
guarantor or any other Person liable for any of the Obligations; and

 
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(j) Any deficiency that exists after disposition of the Collateral as provided
above will be paid immediately by Borrower.
 
Bank may comply with any applicable state or federal law requirements in
connection with a disposition of the Collateral and compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral.
 
9.2 Power of Attorney.  Effective only upon the occurrence and during the
continuance of an Event of Default, Borrower hereby irrevocably appoints Bank
(and any of Bank’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 Bank’s security interest in the Accounts; (b) endorse
Borrower’s name on any checks or other forms of payment or security that may
come into Bank’s possession; (c) 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; (d) dispose of any Collateral; (e) make, settle, and adjust all claims
under and decisions with respect to Borrower’s policies of insurance; (f) settle
and adjust disputes and claims respecting the accounts directly with account
debtors, for amounts and upon terms which Bank determines to be reasonable; (g)
enter into a short-form  intellectual property security agreement consistent
with the terms of this Agreement for recording purposes only or modify, in its
sole discretion, any intellectual property security agreement entered into
between Borrower and Bank without first obtaining Borrower’s approval of or
signature to such modification by amending Exhibits A, B, and C, thereof, as
appropriate, to include reference to any right, title or interest in any
Copyrights, Patents or Trademarks acquired by Borrower after the execution
hereof or to delete any reference to any right, title or interest in any
Copyrights, Patents or Trademarks in which Borrower no longer has or claims to
have any right, title or interest; and (h) file, in its sole discretion, one or
more financing or continuation statements and amendments thereto, relative to
any of the Collateral without the signature of Borrower where permitted by law;
provided Bank may exercise such power of attorney to sign the name of Borrower
on any of the documents described in clauses (g) and (h) above, regardless of
whether an Event of Default has occurred.  The appointment of Bank as Borrower’s
attorney in fact, and each and every one of Bank’s rights and powers, being
coupled with an interest, is irrevocable until all of the Obligations have been
fully repaid and performed and Bank’s obligation to provide advances hereunder
is terminated.
 
9.3 Accounts Collection.  At any time after the occurrence and during the
continuation of an Event of Default, Bank may notify any Person owing funds to
Borrower of Bank’s security interest in such funds and verify the amount of such
Account.  Borrower shall collect all amounts owing to Borrower for Bank, receive
in trust all payments as Bank’s trustee, and immediately deliver such payments
to Bank in their original form as received from the account debtor, with proper
endorsements for deposit.
 
9.4 Bank 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 Bank may do any or all of the following after reasonable
notice to Borrower:  (a) make payment of the same or any part thereof; (b) set
up such reserves under the Revolving Line as Bank deems necessary to protect
Bank from the exposure created by such failure; or (c) obtain and maintain
insurance policies of the type discussed in Section 6.5 of this Agreement, and
take any action with respect to such policies as Bank deems prudent.  Any
amounts so paid or deposited by Bank shall constitute Bank 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 Bank shall not constitute an agreement by Bank to make similar payments in
the future or a waiver by Bank of any Event of Default under this Agreement.
 
9.5 Bank’s Liability for Collateral.  Bank has no obligation to clean up or
otherwise prepare the Collateral for sale.  All risk of loss, damage or
destruction of the Collateral shall be borne by Borrower except for any loss,
damage or destruction caused by Bank’s gross negligence or willful misconduct.
 
9.6 No Obligation to Pursue Others.  Bank has no obligation to attempt to
satisfy the Obligations by collecting them from any other Person liable for them
and Bank may release, modify or waive any collateral provided by any other
Person to secure any of the Obligations, all without affecting Bank’s rights
against Borrower.  Borrower waives any right it may have to require Bank to
pursue any other Person for any of the Obligations.

 
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9.7 Remedies Cumulative.  Bank’s rights and remedies under this Agreement, the
Loan Documents, and all other agreements shall be cumulative.  Bank shall have
all other rights and remedies not inconsistent herewith as provided under the
Code, by law, or in equity.  No exercise by Bank of one right or remedy shall be
deemed an election, and no waiver by Bank of any Event of Default on Borrower’s
part shall be deemed a continuing waiver.  No delay by Bank shall constitute a
waiver, election, or acquiescence by it.  No waiver by Bank shall be effective
unless made in a written document signed on behalf of Bank and then shall be
effective only in the specific instance and for the specific purpose for which
it was given.  Borrower expressly agrees that this Section 9.7 may not be waived
or modified by Bank by course of performance, conduct, estoppel or otherwise.
 
9.8 Demand; Protest.  Except as otherwise provided in this Agreement, Borrower
waives demand, protest, notice of protest, notice of default or dishonor, notice
of payment and nonpayment and any other notices relating to the Obligations.
 
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, or by
telefacsimile to Borrower or to Bank, as the case may be, at its addresses set
forth below:

If to Borrower:                                      GLOWPOINT, INC.
430 Mountain Avenue, Suite 301
Murray Hill, NJ 07974
Attn:  General Counsel
FAX:  (973) 855-3411

If to Bank:                                              Comerica Bank
M/C 7578
39200 W. Six Mile Rd.
Livonia, MI 48152
Attn:  National Documentation Services

with a copy to:                                      Comerica Bank
250 Lytton Ave, 3rd Floor
Palo Alto, CA 94301
Attn:  Robert Hernandez
FAX:  (650) 462-6049
 
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.
 
11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
 
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 and Bank hereby submits to the exclusive
jurisdiction of the State and Federal courts located in the State of
California.  THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES.  TO
THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND
VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO
TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE UNDERSIGNED
PARTIES.

 
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12.           REFERENCE PROVISION.
 
12.1           In the event the Jury Trial Waiver set forth above is not
enforceable, the parties elect to proceed under this Judicial Reference
Provision.
 
12.2           With the exception of the items specified in Section 12.3, below,
any controversy, dispute or claim (each, a “Claim”) between the parties arising
out of or relating to this Agreement or any other document, instrument or
agreement between the undersigned parties (collectively in this Section, the
“Loan Documents”), will be resolved by a reference proceeding in California in
accordance with the provisions of Sections 638 et seq. of the California Code of
Civil Procedure (“CCP”), or their successor sections, which shall constitute the
exclusive remedy for the resolution of any Claim, including whether the Claim is
subject to the reference proceeding. Except as otherwise provided in the Loan
Documents, venue for the reference proceeding will be in the Superior Court in
the County where the real property involved in the action, if any, is located or
in a County where venue is otherwise appropriate under applicable law (the
“Court”).
 
12.3           The matters that shall not be subject to a reference are the
following: (i) foreclosure of any security interests in real or personal
property, (ii) exercise of selfhelp remedies (including, without limitation,
set-off), (iii) appointment of a receiver and (iv) temporary, provisional or
ancillary remedies (including, without limitation, writs of attachment, writs of
possession, temporary restraining orders or preliminary injunctions). This
Agreement does not limit the right of any party to exercise or oppose any of the
rights and remedies described in clauses (i) and (ii) or to seek or oppose from
a court of competent jurisdiction any of the items described in clauses (iii)
and (iv). The exercise of, or opposition to, any of those items does not waive
the right of any party to a reference pursuant to this Agreement.
 
12.4           The referee shall be a retired Judge or Justice selected by
mutual written agreement of the parties. If the parties do not agree within ten
(10) days of a written request to do so by any party, then, upon request of any
party, the referee shall be selected by the Presiding Judge of the Court (or his
or her representative). A request for appointment of a referee may be heard on
an ex parte or expedited basis, and the parties agree that irreparable harm
would result if ex parte relief is not granted.
 
12.5           The parties agree that time is of the essence in conducting the
reference proceedings. Accordingly, the referee shall be requested, subject to
change in the time periods specified herein for good cause shown, to (i) set the
matter for a status and trial-setting conference within fifteen (15) days after
the date of selection of the referee, (ii) if practicable, try all issues of law
or fact within one hundred twenty (120) days after the date of the conference
and (iii) report a statement of decision within twenty (20) days after the
matter has been submitted for decision.
 
12.6           The referee will have power to expand or limit the amount and
duration of discovery.  The referee may set or extend discovery deadlines or
cutoffs for good cause, including a party’s failure to provide requested
discovery for any reason whatsoever. Unless otherwise ordered based upon good
cause shown, no party shall be entitled to “priority” in conducting discovery,
depositions may be taken by either party upon seven (7) days written notice, and
all other discovery shall be responded to within fifteen (15) days after
service. All disputes relating to discovery which cannot be resolved by the
parties shall be submitted to the referee whose decision shall be final and
binding.
 
12.7           Except as expressly set forth in this Agreement, the referee
shall determine the manner in which the reference proceeding is conducted
including the time and place of hearings, the order of presentation of evidence,
and all other questions that arise with respect to the course of the reference
proceeding. All proceedings and hearings conducted before the referee, except
for trial, shall be conducted without a court reporter, except that when any
party so requests, a court reporter will be used at any hearing conducted before
the referee, and the referee will be provided a courtesy copy of the transcript.
The party making such a request shall have the obligation to arrange for and pay
the court reporter. Subject to the referee’s power to award costs to the
prevailing party, the parties will equally share the cost of the referee and the
court reporter at trial.
 
 
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12.8           The referee shall be required to determine all issues in
accordance with existing case law and the statutory laws of the State of
California. The rules of evidence applicable to proceedings at law in the State
of California will be applicable to the reference proceeding. The referee shall
be empowered to enter equitable as well as legal relief, enter equitable orders
that will be binding on the parties and rule on any motion which would be
authorized in a court proceeding, including without limitation motions for
summary judgment or summary adjudication. The referee shall issue a decision at
the close of the reference proceeding which disposes of all claims of the
parties that are the subject of the reference.  Pursuant to CCP § 644, such
decision shall be entered by the Court as a judgment or an order in the same
manner as if the action had been tried by the Court and any such decision will
be final, binding and conclusive.  The parties reserve the right to appeal from
the final judgment or order or from any appealable decision or order entered by
the referee.  The parties reserve the right to findings of fact, conclusions of
laws, a written statement of decision, and the right to move for a new trial or
a different judgment, which new trial, if granted, is also to be a reference
proceeding under this provision.
 
12.9           If the enabling legislation which provides for appointment of a
referee is repealed (and no successor statute is enacted), any dispute between
the parties that would otherwise be determined by reference procedure will be
resolved and determined by arbitration.   The arbitration will be conducted by a
retired judge or Justice, in accordance with the California Arbitration Act
§1280 through §1294.2 of the CCP as amended from time to time. The limitations
with respect to discovery set forth above shall apply to any such arbitration
proceeding.
 
12.10           THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES
AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE
AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT)
WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND
VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS
REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR
AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS.
 
13. GENERAL PROVISIONS.
 
13.1 Successors and Assigns.  This Agreement shall bind and inure to the benefit
of the respective successors and permitted assigns of each of the parties and
shall bind all persons who become bound as a debtor to this Agreement; provided,
however, that neither this Agreement nor any rights hereunder may be assigned by
Borrower without Bank’s prior written consent, which consent may be granted or
withheld in Bank’s sole discretion.  Bank 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, Bank’s obligations,
rights and benefits hereunder.
 
13.2 Indemnification.  Borrower shall defend, indemnify and hold harmless Bank
and its 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/or the Loan Documents;
and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by
Bank, its officers, employees and agents as a result of or in any way arising
out of, following, or consequential to transactions between Bank and Borrower
whether under this Agreement, or otherwise (including without limitation
reasonable attorneys fees and expenses), except for losses caused by Bank’s
gross negligence or willful misconduct.
 
13.3 Time of Essence.  Time is of the essence for the performance of all
obligations set forth in this Agreement.
 
13.4 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.
 
13.5 Correction of Loan Documents.  Bank may correct patent errors and fill in
any blanks in this Agreement and the other Loan Documents consistent with the
agreement of the parties.

 
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13.6 Amendments in Writing, Integration. All amendments to or terminations of
this Agreement or the other Loan Documents must be in writing signed by the
parties.  All prior agreements, understandings, representations, warranties, and
negotiations between the parties hereto with respect to the subject matter of
this Agreement and the other Loan Documents, if any, are merged into this
Agreement and the Loan Documents.
 
13.7 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.
 
13.8 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 Bank has any obligation to make any Credit Extension to
Borrower.  The obligations of Borrower to indemnify Bank with respect to the
expenses, damages, losses, costs and liabilities described in Section 13.2 shall
survive until all applicable statute of limitations periods with respect to
actions that may be brought against Bank have run.
 
13.9 Confidentiality.  In handling any confidential information, Bank and all
employees and agents of Bank shall exercise the same degree of care that Bank
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 Bank in connection with
their present or prospective business relations with Borrower, (ii) to
prospective transferees or purchasers of any interest in the Loans, (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 Bank, (v) to Bank’s accountants, auditors and
regulators, and (vi) as Bank may determine in connection with the enforcement of
any remedies hereunder.  Confidential information hereunder shall not include
information that either:  (a) is in the public domain or in the knowledge or
possession of Bank when disclosed to Bank, or becomes part of the public domain
after disclosure to Bank through no fault of Bank; or (b) is disclosed to Bank
by a third party, provided Bank does not have actual knowledge that such third
party is prohibited from disclosing such information.
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.
 

   
GLOWPOINT, INC.
         
By: /s/ Joseph Laezza
   
Name: Joseph Laezza
   
Title: President & CEO
         
COMERICA BANK
         
By: /s/ Robert Hernandez
   
Name: Robert Hernandez
   
Title: Senior Vice President

 
 
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EXHIBIT A
 
DEFINITIONS
 
“Accounts” means 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 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.
 
 “Advance” or “Advances” means a cash advance or cash advances under the
Revolving Line.
 
“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, and each of such Person’s senior
executive officers, directors, and partners.
 
“Affinity Video” means Affinity VideoNet, Inc., a Delaware corporation.
 
“Bank Expenses” means all reasonable costs or expenses (including reasonable
attorneys’ fees and expenses, whether generated in-house or by outside counsel)
incurred in connection with the preparation, negotiation, administration, and
enforcement of the Loan Documents;  reasonable Collateral audit fees; and Bank’s
reasonable attorneys’ fees and expenses (whether generated in-house or by
outside counsel) incurred in 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.
 
“Borrower State” means Delaware, the state under whose laws Borrower is
organized.
 
“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 an amount equal to eighty percent (80%) of Eligible
Accounts, as determined by Bank with reference to the most recent Borrowing Base
Certificate delivered by Borrower.
 
“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 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 of Borrower, who did not
have such power before such transaction.
 
“Chief Executive Office State” means New Jersey, where Borrower’s chief
executive office is located.
 
“Cisco” means Cisco Systems Capital Corporation and any Affiliates, successors
or assigns.
 
“Closing Date” means the date of this Agreement.
 
“Code” means the California Uniform Commercial Code as amended or supplemented
from time to time.
 
“Collateral” means the property described on Exhibit B attached hereto and all
Negotiable Collateral and Intellectual Property Collateral to the extent not
described on Exhibit B, except to the extent any such property (i) is
nonassignable by its terms without the consent of the licensor thereof or
another party (but only to the extent such prohibition on transfer is
enforceable under applicable law, including, without limitation, Sections 9406
and 9408 of the Code), (ii) the granting of a security interest therein is
contrary to applicable law, provided that upon the cessation of any such
restriction or prohibition, such property shall automatically become part of the
Collateral, or (iii) constitutes the capital stock of a controlled foreign
corporation (as defined in the IRC), in excess of 65% of the voting power of all
classes of capital stock of such controlled foreign corporations entitled to
vote.

 
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“Collateral State” means the state or states where the Collateral is located,
which is New Jersey, Pennsylvania, Illinois, California and Colorado.
 
“Consolidated Net Income (or Deficit)” means the consolidated net income (or
deficit) of any Person and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with GAAP, after
eliminating therefrom all extraordinary nonrecurring items of income.
 
“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 a
Person and its Subsidiaries during such period on all Indebtedness of such
Person and its Subsidiaries 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.
 
“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,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed, co-made or discounted or sold with recourse by that
Person, or in respect of which that Person is otherwise directly or indirectly
liable; (ii) any obligations with respect to undrawn letters of credit,
corporate credit cards or merchant services issued for the account of that
Person; and (iii) all obligations arising under any interest rate, currency or
commodity swap agreement, interest rate cap agreement, interest rate collar
agreement, or other agreement or arrangement designated to protect a 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 such Person 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, whether published or unpublished and whether or not the
same also constitutes a trade secret, now or hereafter existing, created,
acquired or held.
 
 “Credit Extension” means each Advance, Growth Capital Advance or any other
extension of credit by Bank to or for the benefit of Borrower hereunder.
 
“Dell” means Dell Financial Services L.L.C. and any Affiliates, successors or
assigns.
 
“EBITDA” means with respect to any fiscal period an amount equal to the sum of
(a) Consolidated Net Income of the Borrower and its Subsidiaries for such fiscal
period, plus (b) in each case to the extent deducted in the calculation of the
Borrower's Consolidated Net Income 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 issuing capital stock and granting
stock options, and minus, to the extent added in computing Consolidated Net
Income, and without duplication, all extraordinary and non-recurring revenue and
gains (including income tax benefits) for such period, all as determined in
accordance with GAAP.  Prior to the Merger, “EBITDA” shall be calculated as the
sum of EBITDA of Borrower and Affinity.
 
“Eligible Accounts” means those Accounts that arise in the ordinary course of
Borrower’s business that comply with all of Borrower’s representations and
warranties to Bank set forth in Section 5.3; provided, that Bank may change the
standards of eligibility by giving Borrower thirty (30) days prior written
notice.  Unless otherwise agreed to by Bank, Eligible Accounts shall not include
the following:
 
(a)  
Accounts that the account debtor has failed to pay in full within ninety (90)
days of invoice date;

 
(b)  
Credit balances over ninety (90) days;

 
(c)  
Accounts with respect to an account debtor, twenty-five percent (25%) of whose
Accounts the account debtor has failed to pay within ninety (90) days of invoice
date;

 
(d)  
Accounts with respect to an account debtor, including Subsidiaries and
Affiliates, whose total obligations to Borrower exceed twenty-five percent (25%)
of all Accounts, to the extent such obligations exceed the aforementioned
percentage, except as approved in writing by Bank;

 
 
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(e)  
Accounts with respect to which the account debtor does not have its principal
place of business in the United States, except for Eligible Foreign Accounts;

 
(f)  
Accounts with respect to which the account debtor is the United States or any
department, agency, or instrumentality of the United States, except for Accounts
of the United States if the payee has assigned its payment rights to Bank and
the assignment has been acknowledged under the Assignment of Claims Act of 1940
(31 U.S.C. 3727);

 
(g)  
Accounts with respect to which Borrower is liable to the account debtor for
goods sold or services rendered by the account debtor to Borrower, but only to
the extent of any amounts owing to the account debtor against amounts owed to
Borrower;

 
(h)  
Accounts with respect to which goods are placed on consignment, guaranteed sale,
sale or return, sale on approval, bill and hold, demo or promotional, or other
terms by reason of which the payment by the account debtor may be conditional;

 
(i)  
Accounts with respect to which the account debtor is an individual;

 
(j)  
Accounts with respect to which the account debtor is an officer, employee, agent
or Affiliate of Borrower;

 
(k)  
Accounts that have not yet been billed to the account debtor or that relate to
deposits (such as good faith deposits) or other property of the account debtor
held by Borrower for the performance of services or delivery of goods which
Borrower has not yet performed or delivered;

 
(l)  
Accounts with respect to which the account debtor disputes liability or makes
any claim with respect thereto as to which Bank believes, in its sole
discretion, that there may be a basis for dispute (but only to the extent of the
amount subject to such dispute or claim), or is subject to any Insolvency
Proceeding, or becomes insolvent, or goes out of business;

 
(m)  
Accounts the collection of which Bank reasonably determines after inquiry and
consultation with Borrower to be doubtful; and

 
(n)  
Retentions and hold-backs.

 
“Eligible Foreign Accounts” means Accounts with an aggregate value equal to or
less than $350,000 with respect to which the account debtor does not have its
principal place of business in the United States and is not located in an OFAC
sanctioned country and that are (i) Accounts with respect to which the account
debtor is Tata Communication, (ii) supported by one or more letters of credit in
an amount and of a tenor, and issued by a financial institution, acceptable to
Bank, (iii) insured by the Export Import Bank of the United States, (iv)
generated by an account debtor with its principal place of business in Canada,
provided that the Bank has perfected its security interest in the appropriate
Canadian province, or (v) approved by Bank on a case-by-case basis; provided
however that the aggregate amount of Eligible Foreign Accounts shall not exceed
$350,000 at any time.  All Eligible Foreign Accounts must be calculated in U.S.
Dollars.
 
“Environmental Laws” means all laws, rules, regulations, orders and the like
issued by any federal state, local foreign or other governmental or
quasi-governmental authority or any agency pertaining to the environment or to
any hazardous materials or wastes, toxic substances, flammable, explosive or
radioactive materials, asbestos or other similar materials.
 
“Equipment” means all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the regulations thereunder.
 
“Escalate” means Escalate Capital, L.P. and each of its Affiliates, successors
and assigns, including Escalate Capital Partners SBIC I, L.P.
 
“Event of Default” has the meaning assigned in Article 8.
 
“GAAP” means generally accepted accounting principles, consistently applied, as
in effect from time to time.
 
“GP Communications” means GP COMMUNICATIONS, LLC, a Delaware limited liability
company.
 
"Growth Capital Advance(s)" means a cash advance or cash advances under the
Growth Capital Line.

 
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"Growth Capital Line" means a Credit Extension of up to Two Million Dollars
($2,000,000).
 
"Growth Capital Maturity Date" means November 1, 2015.
 
“Guarantor” is any present or future guarantor of the Obligations, including GP
Communications and Affinity Video.
 
“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
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 Collateral” means all of Borrower’s right, title, and
interest in and to the following:
 
(a)  
Copyrights, Trademarks and Patents;

 
(b)  
Any and all trade secrets, and any and all intellectual property rights in
computer software and computer software products now or hereafter existing,
created, acquired or held;

 
(c)  
Any and all design rights which may be available to Borrower now or hereafter
existing, created, acquired or held;

 
(d)  
Any and all claims for damages by way of past, present and future infringement
of any of the rights included above, with the right, but not the obligation, to
sue for and collect such damages for said use or infringement of the
intellectual property rights identified above;

 
(e)  
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;

 
(f)  
All amendments, renewals and extensions of any of the Copyrights, Trademarks or
Patents; and

 
(g)  
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.

 
“Intercreditor Agreement” means the Subordination and Intercreditor Agreement
dated as of the Closing Date entered into between Bank and Escalate, as amended
from time to time.
 
“Inventory” means all present and future inventory in which Borrower has any
interest.
 
“Investment” means any beneficial ownership of (including stock, partnership or
limited liability company 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.
 
“Lien” means any mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.
 
 “Loan Documents” means, collectively, this Agreement, any note or notes
executed by Borrower, and any other document, instrument or agreement entered
into in connection with this Agreement, all as amended or extended from time to
time.
 
“Material Adverse Effect” means (i) a material adverse change in Borrower’s
prospects, business or financial condition (including without limitation,
evidence of a lack of investor support and/or Borrower’s inability to attract
sufficient additional equity financing from its investors), or (ii) a material
impairment in the prospect of repayment of all or any portion of the Obligations
or in otherwise performing Borrower’s obligations under the Loan Documents,
(iii) a material impairment in the perfection, value or priority of Bank’s
security interests in the Collateral.
 
“Merger” means the acquisition by Borrower of all the capital stock of Affinity
pursuant to the Merger Agreement.

 
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“Merger Agreement” means that certain Agreement and Plan of Merger dated August
12, 2012, among Borrower, GPAV Merger Sub, Inc., a Delaware corporation,
Affinity and GP Communications, in the form delivered to Bank on the Closing
Date.
 
“Negotiable Collateral” means all of Borrower’s present and future letters of
credit of which it is a beneficiary, drafts, instruments (including promissory
notes), securities, documents of title, and chattel paper, and Borrower’s Books
relating to any of the foregoing.
 
“Obligations” means all debt, principal, interest, Bank Expenses and other
amounts owed to Bank by Borrower pursuant to this Agreement or any other
agreement, 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 and including any debt, liability, or obligation owing
from Borrower to others that Bank may have obtained by assignment or otherwise.
 
“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 Bank pursuant to the
terms and provisions of any instrument, or agreement now or hereafter in
existence between Borrower and Bank.
 
“Permitted Indebtedness” means:
 
(a)  
Indebtedness of Borrower in favor of Bank arising under this Agreement or any
other Loan Document;

 
(b)  
Indebtedness existing on the Closing Date and disclosed in the Schedule provided
however that Borrower shall not incur any Indebtedness in favor of Cisco and
Dell which Indebtedness, in the aggregate owing to Cisco and Dell, exceeds
$750,000;

 
(c)  
Indebtedness not to exceed One Hundred Thousand Dollars ($100,000) in the
aggregate in any fiscal year of Borrower secured by a lien described in clause
(c) of the defined term “Permitted Liens,” provided such Indebtedness does not
exceed the lesser of the cost or fair market value of the equipment financed
with such Indebtedness and provided further that Borrower shall not incur any
Indebtedness in favor of Cisco and Dell which Indebtedness, in the aggregate
owing to Cisco and Dell, shall exceed $750,000;

 
(d)  
Subordinated Debt;

 
(e)  
Indebtedness to trade creditors incurred in the ordinary course of business; and

 
(f)  
Extensions, refinancings and renewals of any items of Permitted Indebtedness,
provided that the principal amount is not increased or the terms modified to
impose more burdensome terms upon Borrower or its Subsidiary, as the case may
be.

 
“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) Bank’s certificates of deposit maturing no more
than one (1) year from the date of investment therein, and (iv) Bank’s money
market accounts;

 
(c)  
Repurchases of stock from former employees or directors of Borrower under the
terms of applicable repurchase agreements (i) in an aggregate amount not to
exceed One Hundred Thousand Dollars ($100,000) in any fiscal year, provided that
no Event of Default has occurred, is continuing or would exist after giving
effect to the repurchases, or (ii) in any amount where the consideration for the
repurchase is the cancellation of indebtedness owed by such former employees to
Borrower regardless of whether an Event of Default exists;

 
(d)  
Investments accepted in connection with Permitted Transfers;

 
(e)  
Investments of Subsidiaries in or to other Subsidiaries or Borrower and
Investments by Borrower in Subsidiaries not to exceed One Hundred Thousand
Dollars ($100,000) in the aggregate in any fiscal year;

 
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(f)  
Investments not to exceed One Hundred Thousand Dollars ($100,000) in the
aggregate in any fiscal year consisting of (i) travel advances and employee
relocation loans and other employee loans and advances in the ordinary course of
business, and (ii) loans to employees, officers or directors relating to the
purchase of equity securities of Borrower or its Subsidiaries pursuant to
employee stock purchase plan agreements approved by Borrower’s Board of
Directors;

 
(g)  
Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of customers or suppliers and in settlement of
delinquent obligations of, and other disputes with, customers or suppliers
arising in the ordinary course of Borrower’s business;

 
(h)  
Investments consisting of notes receivable of, or prepaid royalties and other
credit extensions, to customers and suppliers who are not Affiliates, in the
ordinary course of business, provided that this subparagraph (h) shall not apply
to Investments of Borrower in any Subsidiary; and

 
(i)  
Joint ventures or strategic alliances in the ordinary course of Borrower’s
business consisting of the non-exclusive licensing of technology, the
development of technology or the providing of technical support, provided that
any cash Investments by Borrower do not exceed One Hundred Thousand Dollars
($100,000) in the aggregate in any fiscal year.

 
“Permitted Liens” means the following:
 
(a)  
Any Liens existing on the Closing Date and disclosed in the Schedule (excluding
Liens to be satisfied with the proceeds of the Advances) or arising under this
Agreement or the other Loan Documents provided that Borrower shall not permit
any new Lien after the Closing Date in favor of Cisco and/or Dell (unless such
new Lien shall extend solely to financed Equipment and the scope of such Lien
shall be approved by Bank in writing);

 
(b)  
Liens for taxes, fees, assessments or other governmental charges or levies,
either not delinquent or being contested in good faith by appropriate
proceedings and for which Borrower maintains adequate reserves, provided the
same have no priority over any of Bank’s security interests;

 
(c)  
Liens not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate (i)
upon or in any Equipment (other than Equipment financed by an Equipment Advance)
acquired or held by Borrower or any of its Subsidiaries to secure the purchase
price of such Equipment or indebtedness incurred solely for the purpose of
financing the acquisition or lease of such Equipment, or (ii) existing on such
Equipment at the time of its acquisition, provided that the Lien is confined
solely to the property so acquired and improvements thereon, and the proceeds of
such Equipment;

 
(d)  
Liens incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by Liens of the type described in clauses (a) through (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; and

 
(e)  
Liens arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default under Sections 8.5 (attachment) or 8.9
(judgments).

 
“Permitted Transfer” means the conveyance, sale, lease, transfer or disposition
by Borrower or any Subsidiary of:
 
(a)  
Inventory in the ordinary course of business;

 
(b)  
Non-exclusive licenses and similar arrangements for the use of the property of
Borrower or its Subsidiaries in the ordinary course of business;

 
(c)  
Permitted Investments, including the sale or disposition of delinquent notes,
accounts or accounts receivable solely for collection purposes in the ordinary
course of Borrower’s business and consitent with past practices;

 
(d)  
Intellectual Property of Borrower and its Subsidiaries that is permitted to be
abandoned, forfeited or dedicated to the public without the written consent of
Bank pursuant to the terms of Section 6.8;

 
(e)  
Assets or property from Guarantors to Borrower, among Guarantors and from
Borrower to any GuarantorWorn-out or obsolete Equipment not financed with the
proceeds of Equipment Advances; or

 
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(f)  
Other assets of Borrower or its Subsidiaries that do not in the aggregate exceed
One Hundred Thousand Dollars ($100,000) during any fiscal 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 variable rate of interest, per annum, most recently
announced by Bank, as its “prime rate,” whether or not such announced rate is
the lowest rate available from Bank.
 
 “Prime Referenced Rate Addendum” means that certain Prime Referenced Rate
Addendum between Borrower and Bank dated as of the Closing Date.
 
“Prohibited Territory” means any person or country listed by the Office of
Foreign Assets Control of the United States Department of Treasury as to which
transactions between a United States Person and that territory are prohibited.
 
 “Responsible Officer” means each of the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer and the Controller of Borrower.
 
“Revolving Line” means a Credit Extension of up to Three Million Dollars
($3,000,000).
 
“Revolving Maturity Date” means April 1, 2014.
 
“Schedule” means the schedule of exceptions attached hereto and approved by
Bank, if any.
 
“Seller Subordination Agreement” means the Subordination Agreement (Shareholder
Representative Services LLC, as Sellers’ Representative for the benefit of the
Stockholders (as defined in the Merger Agreement)), dated as of the Closing Date
entered into between Bank and Shareholder Representative Services LLC as
Sellers’ Representative for the benefit of the Stockholders, as amended from
time to time.
 
“SOS Reports” means the official reports from the Secretaries of State of each
Collateral State, Chief Executive Office State and the Borrower State and other
applicable federal, state or local government offices identifying all current
security interests filed in the Collateral and Liens of record as of the date of
such report.
 
“Subordinated Debt” means any debt incurred by Borrower that is subordinated in
writing to the debt owing by Borrower to Bank on terms reasonably acceptable to
Bank (and identified as being such by Borrower and Bank).
 
“Subsidiary” means any corporation, partnership or limited liability company or
joint venture in which (i) any general partnership interest or (ii) more than
50% of the stock, limited liability company interest or joint venture of which
by the terms thereof ordinary voting power 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 Borrower, either directly or through an Affiliate.
 
“Tangible Net Worth” means at any date as of which the amount thereof shall be
determined, the sum of the capital stock, partnership interest or limited
liability company interest of Borrower and its Subsidiaries plus Subordinated
Debt minus goodwill and intangible assets, determined in accordance with GAAP.
 
“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.

 
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DEBTOR                                           GLOWPOINT, INC.
 
SECURED PARTY:                         COMERICA BANK
 
EXHIBIT B
 
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), deposit 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)  
all common law and statutory copyrights and copyright registrations,
applications for registration, now existing or hereafter arising, in the United
States of America or in any foreign jurisdiction, obtained or to be obtained on
or in connection with any of the foregoing, or any parts thereof or any
underlying or component elements of any of the foregoing, together with the
right to copyright and all rights to renew or extend such copyrights and the
right (but not the obligation) of Secured Party to sue in its own name and/or in
the name of the Debtor for past, present and future infringements of copyright;

(c)  
all trademarks, service marks, trade names and service names and the goodwill
associated therewith, together with the right to trademark and all rights to
renew or extend such trademarks and the right (but not the obligation) of
Secured Party to sue in its own name and/or in the name of the Debtor for past,
present and future infringements of trademark;

(d)  
all (i) patents and patent applications filed in the United States Patent and
Trademark Office or any similar office of any foreign jurisdiction, and
interests under patent license agreements, including, without limitation, the
inventions and improvements described and claimed therein, (ii) licenses
pertaining to any patent whether Debtor is licensor or  licensee, (iii) income,
royalties, damages, payments, accounts and accounts receivable now or hereafter
due and/or payable under and with respect thereto, including, without
limitation, damages and payments for past, present or future infringements
thereof, (iv) right (but not the obligation) to sue in the name of Debtor and/or
in the name of Secured Party for past, present and future infringements thereof,
(v) rights corresponding thereto throughout the world in all jurisdictions in
which such patents have been issued or applied for, and (vi) reissues,
divisions, continuations, renewals, extensions and continuations-in-part with
respect to any of the foregoing; and

(e)  
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