Exhibit 10.1


 


LOAN AND SECURITY
AGREEMENT


 


THIS LOAN AND SECURITY
AGREEMENT (this “Agreement”) dated as of January 24, 2018 (the “Effective Date”) between SILICON
VALLEY BANK, a California corporation (“Bank”), and DATAWATCH CORPORATION, a Delaware corporation
(“Borrower”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. The parties
agree as follows:


 


		1	ACCOUNTING AND OTHER TERMS



 


Accounting terms not defined
in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. Notwithstanding
the foregoing, except as explicitly set forth herein, all financial covenant and other financial calculations shall be computed
with respect to Borrower on a consolidated basis with its Subsidiaries. Capitalized terms not otherwise defined in this Agreement
shall have the meanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall
have the meaning provided by the Code to the extent such terms are defined therein.


 


		2	LOAN AND TERMS OF PAYMENT



 


2.1         Promise
to Pay. Borrower hereby unconditionally promises to pay Bank the outstanding principal amount of all Credit Extensions and
accrued and unpaid interest thereon as and when due in accordance with this Agreement.


 


		2.2	Revolving Line.



 


(a)          Availability.
Subject to the terms and conditions of this Agreement and to deduction of Reserves, Bank shall make Advances not exceeding the
Availability Amount. Amounts borrowed under the Revolving Line may be repaid and, prior to the Revolving Line Maturity Date, reborrowed,
subject to the applicable terms and conditions precedent herein.


 


(b)          Termination;
Repayment. The Revolving Line terminates on the Revolving Line Maturity Date, when the principal amount of all Advances, the
unpaid interest thereon, and all other Obligations relating to the Revolving Line shall be immediately due and payable.


 


		2.3	Term Loan.



 


(a)          Availability.
Subject to the terms and conditions of this Agreement, on the Effective Date Borrower shall request and Bank shall make one (1)
term loan advance in the original principal amount of Ten Million Dollars ($10,000,000.00) (the “Term Loan Advance”).
After repayment, the Term Loan Advance (or any portion thereof) may not be reborrowed.


 


(b)          Interest
Payments. Commencing on February 1, 2018 and continuing on each Payment Date thereafter, Borrower shall make monthly payments
of interest, in arrears, on the principal amount of the Term Loan Advance at the rate set forth in Section 2.5(a)(ii).


 


(c)          Repayment.
Commencing on March 1, 2018 and continuing on each Payment Date thereafter, Borrower shall repay the Term Loan Advance in (i) equal
monthly installments of principal based upon a forty-eight (48) month amortization schedule, plus (ii) monthly payments of accrued
interest at the rate set forth in Section 2.5(a)(ii). All outstanding principal and accrued and unpaid interest under the Term
Loan Advance, and all other outstanding Obligations with respect to the Term Loan Advance, are due and payable in full on the Term
Loan Maturity Date.


 




    	 	 	 



     


    

  


(d)          Permitted
Prepayment. Borrower shall have the option to prepay all or in an amount equal to fifty percent (50.0%) of the principal amount
of the Term Loan Advance outstanding, provided Borrower (i) delivers written notice to Bank of its election to prepay the Term
Loan Advance at least ten (10) days prior to such prepayment along with a notice of the portion of the principal amount being prepaid,
and (ii) pays, on the date of such prepayment (A) the outstanding principal being prepaid (which shall either be fifty percent
(50.0%) or one hundred percent (100.0%) of the principal outstanding) plus accrued and unpaid interest with respect to the Term
Loan Advance, (B) the Prepayment Fee and (C) all other sums, if any, that shall have become due and payable with respect to the
Term Loan Advance, including interest at the Default Rate with respect to any past due amounts. Any partial prepayment of principal
with respect to the Term Loan Advance made under this Section 2.3(d) will be applied to the principal balance of the Term Loan
Advance in the inverse order of maturity.


 


(e)          Mandatory
Prepayment Upon an Acceleration. If the Term Loan Advance is accelerated by Bank following the occurrence and during the continuance
of an Event of Default, Borrower shall immediately pay to Bank an amount equal to the sum of (i) all outstanding principal plus
accrued and unpaid interest with respect to the Term Loan Advance, (ii) the Prepayment Fee and (iii) all other sums, if any, that
shall have become due and payable with respect to the Term Loan Advance, including interest at the Default Rate with respect to
any past due amounts.


 


2.4         Overadvances.
If, at any time, the outstanding principal amount of any Advances exceeds the lesser of either the Revolving Line or the Borrowing
Base, Borrower shall immediately pay to Bank in cash the amount of such excess (such excess, the “Overadvance”).
Without limiting Borrower’s obligation to repay Bank any Overadvance, Borrower agrees to pay Bank interest on the outstanding
amount of any Overadvance, on demand, at a per annum rate equal to the rate that is otherwise applicable to Advances plus five
percent (5.0%). Notwithstanding the foregoing, in the event that an Overadvance results solely from a change by Bank to the Borrowing
Base percentage, Borrower shall have two (2) Business Days to repay the portion of such Overadvance resulting from such change.


 


		2.5	Payment of Interest on the Credit Extensions.



 


(a)          Interest
Rate.


 


(i)          Advances.
Subject to Section 2.5(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum
rate equal to one-half of one percent (0.50%) above the Prime Rate, which interest shall be payable monthly in accordance with
Section 2.5(d) below.


 


(ii)         Term
Loan Advance. Subject to Section 2.5(b), the principal amount outstanding under the Term Loan Advance shall accrue interest
at a floating per annum rate equal to one percent (1.0%) above the Prime Rate, which interest shall be payable monthly in accordance
with Section 2.5(d) below.


 


(b)          Default
Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear interest at
a rate per annum which is five percent (5.0%) above the rate that is otherwise applicable thereto (the “Default Rate”).
Fees and expenses which are required to be paid by Borrower pursuant to the Loan Documents (including, without limitation, Bank
Expenses) but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations.
Payment or acceptance of the increased interest rate provided in this Section 2.5(b) is not a permitted alternative to timely payment
and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank.


 


(c)          Adjustment
to Interest Rate. Changes to the interest rate of any Credit Extension based on changes to the Prime Rate shall be effective
on the effective date of any change to the Prime Rate and to the extent of any such change.


 


(d)          Payment;
Interest Computation. Interest is payable monthly on the Payment Date of each month and shall be computed on the basis of a
360-day year for the actual number of days elapsed. In computing interest, (i) all payments received after 12:00 p.m. Eastern time
on any day shall be deemed received at the opening of business on the next Business Day, and (ii) the date of the making of any
Credit Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit Extension is
repaid on the same day on which it is made, such day shall be included in computing interest on such Credit Extension.


 




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2.6         Fees.
Borrower shall pay to Bank:


 


(a)          Term
Loan Commitment Fee. A fully earned, non-refundable commitment fee of Fifty Thousand Dollars ($50,000.00), on the Effective
Date;


 


(b)          Revolving
Line Commitment Fee. A fully earned, non-refundable commitment fee of Seventeen Thousand Five Hundred Dollars ($17,500.00),
on the Effective Date;


 


(c)          Prepayment
Fee. The Prepayment Fee, when due hereunder;


 


(d)          Unused
Revolving Line Facility Fee. Payable monthly in arrears on the last day of each calendar month occurring prior to the Revolving
Line Maturity Date, and on the Revolving Line Maturity Date, a fee (the “Unused Revolving Line Facility Fee”)
in an amount equal to one-quarter of one percent (0.25%) per annum of the average unused portion of the Revolving Line, as determined
by Bank, computed on the basis of a year with the applicable number of days as set forth in Section 2.5(d). The unused portion
of the Revolving Line, for purposes of this calculation, shall be calculated on a calendar year basis and shall equal the difference
between (i) the Revolving Line, and (ii) the average for the period of the daily closing balance of the Revolving Line outstanding;
and


 


(e)          Bank
Expenses. All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this
Agreement) incurred through and after the Effective Date, when due (or, if no stated due date, upon demand by Bank).


 


Unless otherwise provided in this Agreement
or in a separate writing by Bank, Borrower shall not be entitled to any credit, rebate, or repayment of any fees earned by Bank
pursuant to this Agreement notwithstanding any termination of this Agreement or the suspension or termination of Bank’s obligation
to make loans and advances hereunder. Bank may deduct amounts owing by Borrower under the clauses of this Section 2.6 pursuant
to the terms of Section 2.7(c). Bank shall provide Borrower written notice of deductions made from the Designated Deposit Account
pursuant to the terms of the clauses of this Section 2.6, of which Bank will endeavor to provide within five (5) days of any such
deduction.


 


		2.7	Payments; Application of Payments; Debit of Accounts.



 


(a)          All
payments to be made by Borrower under any Loan Document shall be made in immediately available funds in Dollars, without setoff
or counterclaim, before 12:00 p.m. Eastern time on the date when due. Payments of principal and/or interest received after 12:00
p.m. Eastern time are considered received at the opening of business on the next Business Day. When a payment is due on a day that
is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall continue
to accrue until paid.


 


(b)          Subject
to the provisions of Sections 2.3(c) and (d) with respect to the Term Loan Advance, Bank has the exclusive right to determine the
order and manner in which all payments with respect to the Obligations may be applied. Borrower shall have no right to specify
the order or the accounts to which Bank shall allocate or apply any payments required to be made by Borrower to Bank or otherwise
received by Bank under this Agreement when any such allocation or application is not specified elsewhere in this Agreement.


 


(c)          Bank
may debit any of Borrower’s deposit accounts, including the Designated Deposit Account, for principal and interest payments
or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off.


 




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2.8         Withholding.
Payments received by Bank from Borrower under this Agreement will be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority (including any interest, additions to tax or penalties applicable thereto). Specifically, however, if at
any time any Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding
or deduction from any such payment or other sum payable hereunder to Bank, Borrower hereby covenants and agrees that the amount
due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure
that, after the making of such required withholding or deduction, Bank receives a net sum equal to the sum which it would have
received had no withholding or deduction been required, and Borrower shall pay the full amount withheld or deducted to the relevant
Governmental Authority. Borrower will, upon request, furnish Bank with proof reasonably satisfactory to Bank indicating that Borrower
has made such withholding payment; provided, however, that Borrower need not make any withholding payment if the amount or validity
of such withholding payment is contested in good faith by appropriate and timely proceedings and as to which payment in full is
bonded or reserved against by Borrower. The agreements and obligations of Borrower contained in this Section 2.8 shall survive
the termination of this Agreement.


 


		3	CONDITIONS OF LOANS



 


3.1         Conditions
Precedent to Initial Credit Extension. Bank’s obligation to make the initial Credit Extension is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate, including, without limitation:


 


(a)          duly
executed original signatures to the Loan Documents;


 


(b)          duly
executed original signatures to the Control Agreements;


 


(c)          the
Operating Documents and long-form good standing certificates of Borrower certified by the Secretary of State (or equivalent agency)
of Delaware and each other state in which Borrower is qualified to conduct business, each as of a date no earlier than thirty (30)
days prior to the Effective Date;


 


(d)          a
secretary’s certificate of Borrower with respect to Borrower’s Operating Documents, incumbency, specimen signatures
and resolutions authorizing the execution and delivery of this Agreement and the other Loan Documents to which it is a party;


 


(e)          duly
executed original signatures to the completed Borrowing Resolutions for Borrower;


 


(f)           certified
copies, dated as of a recent date, of financing statement searches, as Bank may request, accompanied by written evidence (including
any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or
have been or, in connection with the initial Credit Extension, will be terminated or released;


 


(g)          the
Perfection Certificate of Borrower, together with the duly executed original signature thereto;


 


(h)          a
landlord’s consent in favor of Bank for each of Borrower’s leased locations, by the respective landlord thereof, together
with the duly executed original signatures thereto;


 


(i)           a
bailee’s waiver in favor of Bank for each location where Borrower maintains property with a third party, by each such third
party, together with the duly executed original signatures thereto;


 


(j)           a
legal opinion (authority and enforceability) of Borrower’s counsel dated as of the Effective Date together with the duly
executed original signature thereto;


 


(k)          copies
of the documents evidencing the Angoss Acquisition;


 


(l)           with
respect to the initial Advance, the completion of the Initial Audit;


 




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(m)         with
respect to the initial Advance, a completed Borrowing Base Report (and any schedules related thereto and including any other information
requested by Bank with respect to Borrower’s Accounts); and


 


(n)          payment
of the fees and Bank Expenses then due as specified in Section 2.6 hereof.


 


3.2         Conditions
Precedent to all Credit Extensions. Bank’s obligations to make each Credit Extension, including the initial Credit Extension,
is subject to the following conditions precedent:


 


(a)          timely
receipt of (i) with respect to requests for Advances, the Credit Extension request and any materials and documents required by
Section 3.4 and (ii) with respect to the request for the Term Loan Advance, an executed Payment/Advance Form and any materials
and documents required by Section 3.4;


 


(b)          the
representations and warranties in this Agreement shall be true, accurate, and complete in all material respects on the date of
the proposed Credit Extension and/or of the Payment/Advance Form, as applicable, and on the Funding Date of each Credit Extension;
provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly
referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default
shall have occurred and be continuing or result from the Credit Extension. Each Credit Extension is Borrower’s representation
and warranty on that date that the representations and warranties in this Agreement remain true, accurate, and complete in all
material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties
that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and
warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date;
and


 


(c)          Bank
determines to its satisfaction that there has not been a Material Adverse Change.


 


3.3         Covenant
to Deliver. Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a condition
precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by Bank of any such
item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the making of any Credit Extension
in the absence of a required item shall be in Bank’s sole discretion.


 


3.4         Procedures
for Borrowing.


 


(a)          Advances.
Subject to the prior satisfaction of all other applicable conditions to the making of an Advance set forth in this Agreement, to
obtain an Advance, Borrower (via an individual duly authorized by an Administrator) shall notify Bank (which notice shall be irrevocable)
by electronic mail by 12:00 p.m. Eastern time on the Funding Date of the Advance. Such notice shall be made by Borrower through
Bank’s online banking program, provided, however, if Borrower is not utilizing Bank’s online banking program, then
such notice shall be in a written format acceptable to Bank that is executed by an Authorized Signer. Bank shall have received
satisfactory evidence that the Board has approved that such Authorized Signer may provide such notices and request Advances. In
connection with any such notification, Borrower must promptly deliver to Bank by electronic mail or through Bank’s online
banking program such reports and information, including without limitation, sales journals, cash receipts journals, accounts receivable
aging reports, and Borrowing Base Reports, as Bank may request in its reasonable discretion. Bank shall credit proceeds of an Advance
to the Designated Deposit Account. Bank may make Advances under this Agreement based on instructions from an Authorized Signer
or without instructions if the Advances are necessary to meet Obligations which have become due.


 




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(b)          Term
Loan Advance. Subject to the prior satisfaction of all other applicable conditions to the making of the Term Loan Advance set
forth in this Agreement, to obtain the Term Loan Advance, Borrower (via an individual duly authorized by an Administrator) shall
notify Bank (which notice shall be irrevocable) by electronic mail by 12:00 noon Eastern time on the Funding Date of the Term Loan
Advance. Such notice shall be made by Borrower through Bank’s online banking program, provided, however, if Borrower is not
utilizing Bank’s online banking program, then such notice shall be in a written format acceptable to Bank that is executed
by an Authorized Signer. Bank shall have received satisfactory evidence that the Board has approved that such Authorized Signer
may provide such notices and request the Term Loan Advance. In connection with such notification, Borrower must promptly deliver
to Bank by electronic mail or through Bank’s online banking program a completed Payment/Advance Form executed by an Authorized
Signer together with such other reports and information, as Bank may request in its reasonable discretion. Bank shall credit proceeds
of any Term Loan Advance to the Designated Deposit Account. Bank may make the Term Loan Advance under this Agreement based on instructions
from an Authorized Signer or without instructions if the Term Loan Advance is necessary to meet Obligations which have become due.


 


		4	CREATION OF SECURITY INTEREST



 


4.1         Grant
of Security Interest. Borrower hereby grants Bank, to secure the payment and performance in full of all of the Obligations,
a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired
or arising, and all proceeds and products thereof.


 


Borrower acknowledges that
it previously has entered, and/or may in the future enter, into Bank Services Agreements with Bank. Regardless of the terms of
any Bank Services Agreement, Borrower agrees that any amounts Borrower owes Bank thereunder shall be deemed to be Obligations hereunder
and that it is the intent of Borrower and Bank to have all such Obligations secured by the first priority perfected security interest
in the Collateral granted herein (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to
have superior priority to Bank’s Lien in this Agreement).


 


If this Agreement is terminated,
Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid
in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time as
Bank’s obligation to make Credit Extensions has terminated, Bank shall, at the sole cost and expense of Borrower, release
its Liens in the Collateral and all rights therein shall revert to Borrower. In the event (x) all Obligations (other than inchoate
indemnity obligations), except for Bank Services, are satisfied in full, and (y) this Agreement is terminated, Bank shall terminate
the security interest granted herein upon Borrower providing cash collateral acceptable to Bank in its good faith business judgment
for Bank Services, if any. In the event such Bank Services consist of outstanding Letters of Credit, Borrower shall provide to
Bank cash collateral in an amount equal to (x) if such Letters of Credit are denominated in Dollars, then at least one hundred
five percent (105.0%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then at least one hundred ten percent
(110.0%), of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to
become due in connection therewith (as estimated by Bank in its business judgment), to secure all of the Obligations relating to
such Letters of Credit.


 


4.2         Priority
of Security Interest. Borrower represents, warrants, and covenants that the security interest granted herein is and shall at
all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that are
permitted pursuant to the terms of this Agreement to have superior priority to Bank’s Lien under this Agreement). If Borrower
shall acquire a commercial tort claim in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000.00), Borrower shall
promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to Bank.


 


4.3         Authorization
to File Financing Statements. Borrower hereby authorizes Bank to file financing statements, without notice to Borrower, with
all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition
of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Bank under the Code. Such financing
statements may indicate the Collateral as “all assets of the Debtor” or words of similar effect, or as being of an
equal or lesser scope, or with greater detail, all in Bank’s discretion.


 




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		5	REPRESENTATIONS AND WARRANTIES



 


Borrower represents and
warrants as follows:


 


5.1         Due
Organization, Authorization; Power and Authority. Borrower is duly existing and in good standing as a Registered Organization
in its jurisdiction of formation and is qualified and licensed to do business and is in good standing in any jurisdiction in which
the conduct of its business or its ownership of property requires that it be qualified except where the failure to do so could
not reasonably be expected to have a material adverse effect on Borrower’s business. In connection with this Agreement, Borrower
has delivered to Bank a completed certificate signed by Borrower, entitled “Perfection Certificate” (the “Perfection
Certificate”). Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is that indicated
on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized in
the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s
organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets
forth Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing
address (if different than its chief executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5)
years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction;
and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate
and complete in all material respects (it being understood and agreed that Borrower may from time to time update certain information
in the Perfection Certificate after the Effective Date to the extent permitted by one or more specific provisions in this Agreement).
If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence
and provide Bank with Borrower’s organizational identification number.


 


The execution, delivery
and performance by Borrower of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with
any of Borrower’s organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material
Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination
or award of any Governmental Authority by which Borrower or any of its Subsidiaries or any of their property or assets may be bound
or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental
Authority (except such Governmental Approvals which have already been obtained and are in full force and effect), or (v) conflict
with, contravene, constitute a default or breach under, or result in or permit the termination or acceleration of, any material
agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or by which it is bound
in which the default could reasonably be expected to have a material adverse effect on Borrower’s business.


 


5.2         Collateral.
Borrower has good title to, rights in, and the power to transfer each item of the Collateral upon which it purports to grant a
Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no Collateral Accounts at or with any
bank or financial institution other than Bank or Bank’s Affiliates except for the Collateral Accounts described in the Perfection
Certificate delivered to Bank in connection herewith and which Borrower has taken such actions as are necessary to give Bank a
perfected security interest therein, pursuant to the terms of Section 6.8(b). The Accounts are bona fide, existing obligations
of the Account Debtors.


 


The Collateral is not in
the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None
of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as
permitted pursuant to Section 7.2.


 


All Inventory is in all
material respects of good and marketable quality, free from material defects.


 


Borrower is the sole owner
of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in
the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual
Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is
material to Borrower’s business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or
purports to own and which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in part.
To the best of Borrower’s knowledge, no claim has been made that any part of Borrower’s Intellectual Property violates
the rights of any third party except to the extent such claim would not reasonably be expected to have a material adverse effect
on Borrower’s business.


 




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Except as noted on the
Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.


 


5.3         Accounts
Receivable. 


 


(a)          For
each Account with respect to which Advances are requested, on the date each Advance is requested and made, such Account shall be
an Eligible Account.


 


(b)          All
statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing the Eligible Accounts
are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower’s Books are
genuine and in all respects what they purport to be. All sales and other transactions underlying or giving rise to each Eligible
Account shall comply in all material respects with all applicable laws and governmental rules and regulations. Borrower has no
knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in any Borrowing
Base Report. To the best of Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements
relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance
with their terms.


 


5.4         Litigation.
 There are no actions or proceedings pending or, to the knowledge of any Responsible Officer, threatened in writing by or against
Borrower or any of its Subsidiaries involving more than, individually or in the aggregate, Fifty Thousand Dollars ($50,000.00).


 


5.5         Financial
Statements; Financial Condition.  All consolidated financial statements for Borrower and any of its Subsidiaries delivered
to Bank fairly present in all material respects Borrower’s consolidated financial condition and Borrower’s consolidated
results of operations. There has not been any material deterioration in Borrower’s consolidated financial condition since
the date of the most recent financial statements submitted to Bank.


 


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


 


5.7         Regulatory
Compliance. Borrower is not an “investment company” or a company “controlled” by an “investment
company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities
in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors). Borrower (a) has
complied in all material respects with all Requirements of Law, and (b) has not violated any Requirements of Law, in the case of
(a) or (b) the noncompliance or violation of which could reasonably be expected to have a material adverse effect on its business.
None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or,
to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any
hazardous substance other than legally. Borrower and each of its Subsidiaries 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 to continue
their respective businesses as currently conducted, except where the failure to do so could not reasonably be expected to have
a material adverse effect on Borrower’s business.


 


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


 


5.9         Tax
Returns and Payments; Pension Contributions. Borrower has timely filed all required tax returns and reports, and Borrower has
timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except (a) to
the extent such taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted,
so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made
therefor, or (b) if such taxes, assessments, deposits and contributions do not, individually or in the aggregate, exceed Twenty-Five
Thousand Dollars ($25,000.00).


 




    	 	8	 



     


    

  


To the extent Borrower
defers payment of any contested taxes, Borrower shall (i) notify Bank in writing of the commencement of, and any material development
in, the proceedings, and (ii) post bonds or take any other steps required to prevent the Governmental Authority levying such contested
taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien.” Borrower is unaware of
any claims or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes becoming
due and payable by Borrower in excess of Twenty-Five Thousand Dollars ($25,000.00). Borrower has paid all amounts necessary to
fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn
from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event
with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability
to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.


 


5.10       Use
of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business
requirements and not for personal, family, household or agricultural purposes, and with respect to the Term Loan Advance, for the
Angoss Acquisition.


 


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


 


5.12       Definition
of “Knowledge.” For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s
knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or
awareness means the actual knowledge, after reasonable investigation, of any Responsible Officer.


 


		6	AFFIRMATIVE COVENANTS



 


Borrower shall do all of
the following:


 


6.1         Government
Compliance. 


 


(a)          Except
to the extent permitted in Section 7.3 hereof, maintain its and all its Subsidiaries’ legal existence and good standing in
their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify
would reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower shall comply,
and have each Subsidiary comply, in all material respects, with all laws, ordinances and regulations to which it is subject, noncompliance
with which could reasonably be expected to have a material adverse effect on Borrower’s business.


 


(b)          Obtain
all of the Governmental Approvals necessary for the performance by Borrower of its obligations under the Loan Documents to which
it is a party and the grant of a security interest to Bank in all of its property. Borrower shall promptly provide copies of any
such obtained Governmental Approvals to Bank.


 


6.2         Financial
Statements, Reports, Certificates.  Provide Bank with the following:


 


(a)          a
Borrowing Base Report (and any schedules related thereto and including any other information reasonably requested by Bank with
respect to Borrower’s Accounts) (i) with each request for an Advance and (ii) within thirty (30) days after the end of each
month;


 




    	 	9	 



     


    

  


(b)          within
thirty (30) days after the end of each month, (i) monthly accounts receivable agings, aged by invoice date, (ii) monthly accounts
payable agings, aged by invoice date, and outstanding or held check registers, if any, and (iii) monthly reconciliations of accounts
receivable agings (aged by invoice date), transaction reports, Deferred Revenue report and general ledger, each in a form acceptable
to Bank;


 


(c)          as
soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated balance
sheet and income statement covering Borrower’s consolidated operations for such month certified by a Responsible Officer
and in a form acceptable to Bank (it being acknowledged that the form of such statements delivered by Borrower to Bank prior to
the Effective Date is a form acceptable to Bank) (the “Monthly Financial Statements”);


 


(d)          within
thirty (30) days after the last day of each month and together with the Monthly Financial Statements, a duly completed Compliance
Certificate signed by a Responsible Officer, certifying that as of the end of such month, Borrower was in full compliance with
all of the terms and conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants
set forth in this Agreement and such other information as Bank may reasonably request;


 


(e)          within
thirty (30) days after the earlier to occur of (i) the end of each fiscal year of Borrower and (ii) approval by the Board, and
contemporaneously with any updates or amendments thereto, (A) annual operating budgets (including income statements, balance sheets
and cash flow statements, by month), and (B) annual financial projections (on a quarterly basis), in each case as approved by the
Board, together with any related business forecasts used in the preparation of such annual financial projections;


 


(f)           as
soon as available, and in any event within the earlier to occur of (i) ninety (90) days following the end of Borrower’s fiscal
year and (ii) within five (5) days of filing with the SEC, audited consolidated financial statements prepared under GAAP, consistently
applied, together with an unqualified opinion (other than as to a going concern or a qualification resulting solely from the scheduled
maturity of the Credit Extensions occurring within one year from the date such opinion is delivered) on the financial statements
from either RSM US LLP or another independent certified public accounting firm reasonably acceptable to Bank;


 


(g)          within
five (5) days of filing, copies of all periodic and other reports, proxy statements and other materials filed by Borrower and/or
any Guarantor with the SEC, any Governmental Authority succeeding to any or all of the functions of the SEC or with any national
securities exchange, or distributed to its shareholders in accordance with the Exchange Act, as the case may be. Documents required
to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower
posts such documents, or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address;
provided, however, Borrower shall promptly notify Bank in writing (which may be by electronic mail) of the posting of any such
documents;


 


(h)          within
five (5) days of delivery, copies of all statements, reports and notices made available to any holders of Subordinated Debt;


 


(i)           prompt
report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries that could result in damages
or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, One Hundred Thousand Dollars ($100,000.00)
or more; and


 


(j)           promptly,
from time to time, such other information regarding Borrower or compliance with the terms of any Loan Documents as reasonably requested
by Bank.


 




    	 	10	 



     


    

  


6.3         Accounts
Receivable.


 


(a)          Schedules
and Documents Relating to Accounts. Borrower shall deliver to Bank transaction reports and schedules of collections, as provided
in Section 6.2, on Bank’s standard forms; provided, however, that Borrower’s failure to execute and deliver the same
shall not affect or limit Bank’s Lien and other rights in all of Borrower’s Accounts, nor shall Bank’s failure
to advance or lend against a specific Account affect or limit Bank’s Lien and other rights therein. If reasonably requested
by Bank, Borrower shall furnish Bank with copies (or, at Bank’s request, originals) of all contracts, orders, invoices, and
other similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for
any goods the sale or disposition of which gave rise to such Accounts. In addition, Borrower shall promptly (and in any event within
one (1) Business Day) deliver to Bank, after its request, the originals of all instruments, chattel paper, security agreements,
guarantees and other documents and property evidencing or securing any Accounts, in the same form as received, with all necessary
indorsements, and copies of all credit memos.


 


(b)          Disputes.
Borrower shall promptly notify Bank of all disputes or claims relating to Accounts in excess of One Hundred Thousand Dollars ($100,000.00)
in the aggregate existing at any time. Borrower may forgive (completely or partially), compromise, or settle any Account for less
than payment in full, or agree to do any of the foregoing so long as (i) Borrower does so in good faith, in the ordinary course
of business, in arm’s-length transactions, and reports the same to Bank in the regular reports provided to Bank; (ii) no
Event of Default has occurred and is continuing; and (iii) after taking into account all such discounts, settlements and forgiveness,
the total outstanding Advances will not exceed the lesser of the Revolving Line or the Borrowing Base.


 


(c)          Collection
of Accounts. Borrower shall direct Account Debtors to deliver or transmit all proceeds of Accounts into a lockbox account,
or via electronic deposit capture into a “blocked account” as specified by Bank (either such account, the “Cash
Collateral Account”). Whether or not an Event of Default has occurred and is continuing, Borrower shall immediately deliver
all payments on and proceeds of Accounts to the Cash Collateral Account. Subject to Bank’s right to maintain a reserve pursuant
to Section 6.3(d), so long as no Event of Default exists, all amounts received in the Cash Collateral Account shall be transferred
on a daily basis to Borrower’s operating account with Bank. Borrower hereby authorizes Bank to transfer to the Cash Collateral
Account any amounts that Bank reasonably determines are proceeds of the Accounts (provided that Bank is under no obligation to
do so and this allowance shall in no event relieve Borrower of its obligations hereunder).


 


(d)          Reserves.
Notwithstanding any terms in this Agreement to the contrary, at times when an Event of Default exists, Bank may hold any proceeds
of the Accounts and any amounts in the Cash Collateral Account that are not applied to the Obligations pursuant to Section 6.3(c)
above (including amounts otherwise required to be transferred to Borrower’s operating account) as a reserve to be applied
to any Obligations regardless of whether such Obligations are then due and payable.


 


(e)          Returns.
Provided no Event of Default has occurred and is continuing, if any Account Debtor returns any Inventory to Borrower, Borrower
shall promptly (i) determine the reason for such return, (ii) issue a credit memorandum to the Account Debtor in the appropriate
amount, and (iii) provide a copy of such credit memorandum to Bank, upon request from Bank. In the event any attempted return occurs
after the occurrence and during the continuance of any Event of Default, Borrower shall hold the returned Inventory in trust for
Bank, and immediately notify Bank of the return of the Inventory.


 


(f)           Verifications;
Confirmations; Credit Quality; Notifications. Following the occurrence and during the continuance of an Event of Default, Bank
may, from time to time, (i) verify and confirm directly with the respective Account Debtors the validity, amount and other matters
relating to the Accounts, either in the name of Borrower or Bank or such other name as Bank may choose, and notify any Account
Debtor of Bank’s security interest in such Account and/or (ii) conduct a credit check of any Account Debtor to approve any
such Account Debtor’s credit.


 


(g)          No
Liability. Bank shall not be responsible or liable for any shortage or discrepancy in, damage to, or loss or destruction of,
any goods, the sale or other disposition of which gives rise to an Account, or for any error, act, omission, or delay of any kind
occurring in the settlement, failure to settle, collection or failure to collect any Account, or for settling any Account in good
faith for less than the full amount thereof, nor shall Bank be deemed to be responsible for any of Borrower’s obligations
under any contract or agreement giving rise to an Account. Nothing herein shall, however, relieve Bank from liability for its own
gross negligence or willful misconduct.


 




    	 	11	 



     


    

  


6.4         Remittance
of Proceeds. Except as otherwise provided in Section 6.3(c), deliver, in kind, all proceeds arising from the disposition of
any Collateral to Bank in the original form in which received by Borrower not later than the following Business Day after receipt
by Borrower, to be applied to the Obligations (a) prior to an Event of Default, pursuant to the terms of Section 6.3(c) hereof,
and (b) after the occurrence and during the continuance of an Event of Default, pursuant to the terms of Section 9.4 hereof; provided
that, if no Event of Default has occurred and is continuing, Borrower shall not be obligated to remit to Bank the proceeds of the
sale of assets to the extent permitted by Section 7.1; provided, however, that Borrower shall remit such proceeds to Bank with
respect to any Transfer in connection with Section 7.1(b) to the extent that such proceeds exceed One Hundred Thousand Dollars
($100,000.00) in the aggregate (for all such transactions in any fiscal year). To the extent that Borrower is required to remit
the proceeds to Bank, Borrower agrees that it will not commingle proceeds of Collateral with any of Borrower’s other funds
or property, but will hold such proceeds separate and apart from such other funds and property and in an express trust for Bank.
Nothing in this Section 6.4 limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement.


 


6.5         Taxes;
Pensions. Timely file, and require each of its Subsidiaries to timely file, all required tax returns and reports and timely
pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments, deposits and
contributions owed by Borrower and each of its Subsidiaries, except for deferred payment of any taxes contested pursuant to the
terms of Section 5.9 hereof, and shall deliver to Bank, on demand, appropriate certificates attesting to such payments, and pay
all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms.


 


6.6         Access
to Collateral; Books and Records.  At reasonable times, on two (2) Business Days’ prior notice (provided no notice is
required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right to inspect the Collateral
and the right to audit and copy Borrower’s Books. The foregoing inspections and audits shall be conducted no more often than
twice every twelve (12) months unless an Event of Default has occurred and is continuing in which case such inspections and audits
shall occur as often as Bank shall determine is necessary. The foregoing inspections and audits shall be conducted at Borrower’s
expense and the charge therefor shall be One Thousand Dollars ($1,000.00) per person per day (or such higher amount as shall represent
Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses. In the event Borrower and Bank
schedule an audit more than ten (10) days in advance, and Borrower cancels or seeks to or reschedules the audit with less than
ten (10) days written notice to Bank, then (without limiting any of Bank’s rights or remedies) Borrower shall pay Bank a
fee of One Thousand Dollars ($1,000.00) plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated
costs and expenses of the cancellation or rescheduling. Borrower acknowledges that the first such audit will occur within thirty
(30) days of the Effective Date.


 


6.7         Insurance.



 


(a)          Keep
its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location.
Insurance policies shall be in a form, with financially sound and reputable insurance companies that are not Affiliates of Borrower,
and in amounts that are standard for companies in Borrower’s industry and location. All property policies shall have a lender’s
loss payable endorsement showing Bank as the sole lender loss payee. All liability policies shall show, or have endorsements showing,
Bank as an additional insured. Bank shall be named as lender loss payee and/or additional insured with respect to any such insurance
providing coverage in respect of any Collateral.


 


(b)          Ensure
that proceeds payable under any property policy are, at Bank’s option, payable to Bank on account of the Obligations.


 


(c)          At
Bank’s request, Borrower shall deliver certified copies of insurance policies and evidence of all premium payments. Each
provider of any such insurance required under this Section 6.7 shall agree, by endorsement upon the policy or policies issued by
it or by independent instruments furnished to Bank, that it will give Bank thirty (30) days prior written notice before any such
policy or policies shall be materially altered or canceled. If Borrower fails to obtain insurance as required under this Section
6.7 or to pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make all or part of such
payment or obtain such insurance policies required in this Section 6.7, and take any action under the policies Bank reasonably
deems prudent.


 




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6.8         Accounts.


 


(a)          Maintain
all of its and all of its Domestic Subsidiaries’ operating and other deposit accounts, the Cash Collateral Account and securities/investment
accounts with Bank and Bank’s Affiliates. Any Guarantor shall maintain all depository, operating and securities/investment
accounts with Bank and Bank’s Affiliates.


 


(b)          In
addition to and without limiting the restrictions in (a), Borrower shall provide Bank five (5) days prior written notice before
establishing any Collateral Account at or with any bank or financial institution other than Bank or Bank’s Affiliates. For
each Collateral Account that Bank (in its sole discretion) permits Borrower to open or maintain at any time, Borrower shall cause
the applicable bank or financial institution (other than Bank) at or with which any Collateral Account is maintained to execute
and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Bank’s
Lien in such Collateral Account in accordance with the terms hereunder which Control Agreement may not be terminated without the
prior written consent of Bank. The provisions of the previous sentence shall not apply to deposit accounts exclusively used for
payroll, payroll taxes, and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified
to Bank by Borrower as such.


 


6.9         Financial
Covenants.


 


(a)          Adjusted
Quick Ratio. To be tested as of the last day of each month, have an Adjusted Quick Ratio of at least (i) 1.25 to 1.0 for the
month ending December 31, 2017, (ii) 1.10 to 1.0 for the months ending January 31, 2018 and February 28, 2018, (iii) 1.25 to 1.0
for the month ending March 31, 2018, (iv) 1.10 to 1.0 for the months ending April 30, 2018 and May 31, 2018 and (v) 1.25 to 1.0
for the month ending June 30, 2018 and for each month thereafter.


 


(b)          Trailing
Three Month Adjusted EBITDA. To be tested as of the last day of each calendar quarter, have Adjusted EBITDA for the trailing
three (3) month period ending on such day, of at least (a) ($3,000,000.00) for the trailing three (3) month period ending March
31, 2018, (b) ($1,000,000.00) for the trailing three (3) month period ending June 30, 2018, (c) ($250,000.00) for the trailing
three (3) month period ending September 30, 2018, (d) $1.00 for the trailing three (3) month period ending December 31, 2018, (e)
$250,000.00 for the trailing three (3) month period ending March 31, 2019, (f) $500,000.00 for the trailing three (3) month period
ending June 30, 2019, (g) $750,000.00 for the trailing three (3) month period ending September 30, 2019 and (h) $1,000,000.00 for
the trailing three (3) month period ending December 31, 2019 and for each trailing three (3) month period ending on the last day
of each calendar quarter thereafter.


 


6.10       Protection
of Intellectual Property Rights. 


 


(a)          Use
commercially reasonable efforts to (i) protect, defend and maintain the validity and enforceability of the Intellectual Property
material to its business; (ii) promptly advise Bank in writing of material infringements or any other event that could reasonably
be expected to materially and adversely affect the value of its Intellectual Property; and (iii) not allow any Intellectual Property
material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent.


 


(b)          Provide
written notice to Bank within ten (10) days of entering or becoming bound by any Restricted License (other than over-the-counter
software that is commercially available to the public). Borrower shall take such steps as Bank reasonably requests to obtain the
consent of, or waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral”
and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such
Restricted License, whether now existing or entered into in the future, and (ii) 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.


 


6.11       Litigation
Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to Bank, without
expense to Bank, Borrower and its officers, employees and agents and Borrower’s books and records, to the extent that Bank
may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Bank with
respect to any Collateral or relating to Borrower.


 




    	 	13	 



     


    

  


6.12       Online
Banking.


 


(a)          Utilize
Bank’s online banking platform for all matters requested by Bank which shall include, without limitation (and without request
by Bank for the following matters), uploading information pertaining to Accounts and Account Debtors, requesting approval for exceptions,
requesting Credit Extensions, and uploading financial statements and other reports required to be delivered by this Agreement (including,
without limitation, those described in Section 6.2 of this Agreement).


 


(b)          Comply
with the terms of the “Banking Terms and Conditions” and ensure that all persons utilizing the online banking platform
are duly authorized to do so by an Administrator. Bank shall be entitled to assume the authenticity, accuracy and completeness
on any information, instruction or request for a Credit Extension submitted via the online banking platform and to further assume
that any submissions or requests made via the online banking platform have been duly authorized by an Administrator.


 


6.13       Further
Assurances. Execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s
Lien in the Collateral or to effect the purposes of this Agreement. Deliver to Bank, within five (5) days after the same are sent
or received, copies of all material correspondence, reports, documents and other filings with any Governmental Authority regarding
compliance with or maintenance of Governmental Approvals or Requirements of Law or that could reasonably be expected to have a
material effect on any of the Governmental Approvals or otherwise on the operations of Borrower or of its Subsidiaries taken as
a whole.


 


6.14       Joinder
of Angoss. No later than fifteen (15) Business Days following the closing of the Angoss Acquisition, Borrower shall (a) cause
Angoss to provide to Bank a joinder to this Agreement to cause Angoss to become a co-borrower hereunder, together with such appropriate
documents, all in form and substance reasonably satisfactory to Bank (including being sufficient to grant Bank a first priority
Lien in and to the assets of Angoss), (b) provide to Bank appropriate certificates and powers and financing statements, pledging
all of the direct or beneficial ownership interest in Angoss, 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 opinion is appropriate with
respect to the execution and delivery of the applicable documentation referred to above, including, without limitation, one or
more opinions of counsel reasonably satisfactory to Bank. Any document, agreement, or instrument executed or issued pursuant to
this Section 6.14 shall be a Loan Document.


 


6.15       Post-Closing
Requirement. Deliver to Bank, within thirty (30) days of the Effective Date, evidence satisfactory to Bank that the insurance
policies and endorsements required by Section 6.7 hereof are in full force and effect, together with appropriate evidence showing
lender loss payable and/or additional insured clauses or endorsements in favor of Bank.


 


		7	NEGATIVE COVENANTS



 


Borrower shall not do any
of the following without Bank’s prior written consent:


 


7.1         Dispositions.
Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”), or permit any of
its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary
course of business; (b) of worn-out, obsolete or other Equipment that is, in the reasonable judgment of Borrower, no longer economically
practicable to maintain or useful in the ordinary course of business of Borrower; (c) consisting of Permitted Liens and Permitted
Investments; (d) consisting of the sale or issuance of any stock of Borrower to the extent not prohibited under Section 7.2 of
this Agreement; (e) consisting of Borrower’s and its Subsidiaries’ use or transfer of money or Cash Equivalents in
the ordinary course of its business for the payment of ordinary course business expenses in a manner that is not prohibited by
the terms of this Agreement or the other Loan Documents; (f) consisting of distributions, dividends or payments of the type described
in, and permitted pursuant to, Section 7.7; (g) consisting of any sale or issuance by any Subsidiary of Borrower of its own capital
stock to Borrower; (h) consisting of any sublease of real property by Borrower not constituting Indebtedness and not entered into
as part of a sale and leaseback transaction; (i) of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries
in the ordinary course of business; and (j) settlements, discounts, write-offs for bad debt and other similar reductions to Accounts
in the ordinary course of business, in each case in accordance with GAAP and in accordance with Section 6.3(b).


 




    	 	14	 



     


    

  


7.2         Changes
in Business, Management, Control, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business
other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b)
liquidate or dissolve (provided that any Subsidiary of Borrower which is not a Borrower or a Guarantor may liquidate or dissolve
if its assets are transferred to Borrower or another Subsidiary of Borrower); (c) fail to provide notice to Bank of any Key Person
departing from or ceasing to be employed by Borrower within five (5) days after any such Key Person’s departure from Borrower;
or (d) permit or suffer any Change in Control.


 


Borrower shall not, without
at least thirty (30) days prior written notice to Bank: (1) add any new offices or business locations, including warehouses (unless
such new offices or business locations contain less than Twenty-Five Thousand Dollars ($25,000.00) in Borrower’s assets or
property) or deliver any portion of the Collateral valued, individually or in the aggregate, in excess of Twenty-Five Thousand
Dollars ($25,000.00) to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificate,
(2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5)
change any organizational number (if any) assigned by its jurisdiction of organization. If Borrower intends to deliver any portion
of the Collateral valued, individually or in the aggregate, in excess of Twenty-Five Thousand Dollars ($25,000.00) to a bailee,
and Bank and such bailee are not already parties to a bailee agreement governing both the Collateral and the location to which
Borrower intends to deliver the Collateral, then Borrower and such bailee shall first execute and deliver a bailee agreement in
form and substance reasonably satisfactory to Bank.


 


7.3         Mergers
or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or
acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person
(including, without limitation, by the formation of any Subsidiary). A Subsidiary may merge or consolidate into another Subsidiary
or into Borrower. Notwithstanding the foregoing, Bank agrees that Borrower may enter into the Angoss Acquisition provided that
Bank’s consent to such acquisition is conditioned upon (a) Borrower not assuming or incurring any Indebtedness or Liens in
connection with the Angoss Acquisition, (b) Borrower not using or transferring any of its cash or other property in connection
with the Angoss Acquisition except for (i) Twenty-Four Million Five Hundred Thousand Dollars ($24,500,000.00) in cash to be paid
as the purchase price at the closing of the Angoss Acquisition, (ii) any working capital adjustments and (iii) One Million Five
Hundred Thousand Dollars ($1,500,000.00) for expenses and other costs directly related to the Angoss Acquisition, (c) Borrower
being a surviving legal entity after the Angoss Acquisition, (d) no Event of Default having occurred and continuing and no Event
of Default existing after giving effect to the Angoss Acquisition and (e) Bank receiving fully-executed copies of the Share Purchase
Agreement and the other documents in connection with the Angoss Acquisition.


 


7.4         Indebtedness.
Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.


 


7.5         Encumbrance.
Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the
sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject
to the first priority security interest granted herein (subject only to Permitted Liens that are permitted pursuant to the terms
of this Agreement to have superior priority to Bank’s Lien in this Agreement),or enter into any agreement, document, instrument
or other arrangement (except with or in favor of Bank) with any Person which directly or indirectly prohibits or has the effect
of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering
any of Borrower’s or any Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof
and the definition of “Permitted Liens” herein.


 




    	 	15	 



     


    

  


7.6         Maintenance
of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 6.8(b) hereof.


 


7.7         Distributions;
Investments. (a) Pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock provided
that Borrower may (i) pay dividends solely in common stock and (ii) Borrower’s Subsidiaries may pay dividends to Borrower;
or (b) directly or indirectly make any Investment (including, without limitation, by the formation of any Subsidiary) other than
Permitted Investments, or permit any of its Subsidiaries to do so.


 


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) transactions
of the type described in and permitted by Sections 7.3, 7.4 or 7.7 hereof, (c) the payment of compensation, severance or employee
benefit arrangements to employees, officers and directors of Borrower and its Subsidiaries in the ordinary course of business and
(d) any indemnity provided to employees, officers, and directors of Borrower or any of its Subsidiaries solely in such Person’s
capacity as an employee, officer or director and to the extent not otherwise prohibited by this Agreement.


 


7.9         Subordinated
Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor,
or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the
Subordinated Debt, except as permitted under the terms of the subordination, intercreditor, or other similar agreement to which
such Subordinated Debt is subject.


 


7.10       Compliance.
Become an “investment company” or a company controlled by an “investment company”, under the Investment
Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock
(as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension
for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction,
as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation,
if the violation or failure to comply could reasonably be expected to have a material adverse effect on Borrower’s business,
or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial
or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and
deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability to
the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.


 


		8	EVENTS OF DEFAULT



 


Any one of the following
shall constitute an event of default (an “Event of Default”) under this Agreement:


 


8.1         Payment
Default. Borrower fails to (a) make any payment of principal or interest on any Credit Extension when due, or (b) pay any other
Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day cure period
shall not apply to payments due on the Revolving Line Maturity Date or the Term Loan Maturity Date). During the cure period, the
failure to make or pay any payment specified under clause (b) hereunder is not an Event of Default (but no Credit Extension will
be made during the cure period);


 


8.2         Covenant
Default.


 


(a) Borrower fails or neglects
to perform any obligation in Sections 6.2, 6.3, 6.4, 6.5, 6.6, 6.8, 6.9, 6.10(b), 6.12, 6.14, or 6.15 or violates any covenant
in Section 7; or


 




    	 	16	 



     


    

  


(b) Borrower fails or neglects
to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any Loan
Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant
or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence 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 period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such
reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall
be made during such cure period). Cure periods provided under this section shall not apply, among other things, to financial covenants
or any other covenants set forth in clause (a) above;


 


8.3         Material
Adverse Change. A Material Adverse Change occurs;


 


8.4         Attachment;
Levy; Restraint on Business. 


 


(a)          (i)
The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any entity under the control
of Borrower (including a Subsidiary), or (ii) a notice of lien or levy is filed against any of Borrower’s assets by any Governmental
Authority, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged
or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any
ten (10) day cure period; or


 


(b)          
(i) any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver,
or (ii) any court order enjoins, restrains, or prevents Borrower from conducting all or any material part of its business;


 


8.5         Insolvency.
(a) Borrower or any of its Subsidiaries is generally unable to pay its debts (including trade debts) as they become due or otherwise
becomes insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is
begun against Borrower or any of its Subsidiaries and is not dismissed or stayed within forty-five (45) days (but no Credit Extensions
shall be made while any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed);


 


8.6         Other
Agreements. There is, under any agreement to which Borrower or any Guarantor is a party with a third party or parties, (a)
any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness
in an amount individually or in the aggregate in excess of Three Hundred Fifty Thousand Dollars ($350,000.00); or (b) any breach
or default by Borrower or any Guarantor, the result of which could reasonably be expected to have a material adverse effect on
Borrower’s and the Guarantor’s business taken as a whole;


 


8.7         Judgments;
Penalties. One or more fines, penalties or final judgments, orders or decrees for the payment of money in an amount, individually
or in the aggregate, of at least Three Hundred Fifty Thousand Dollars ($350,000.00) (not covered by independent third-party insurance
as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower by any Governmental Authority,
and the same are not, within ten (10) days after the entry, assessment or issuance thereof, discharged, satisfied, or paid, or
after execution thereof, stayed or bonded pending appeal, or such judgments are not discharged prior to the expiration of any such
stay (provided that no Credit Extensions will be made prior to the satisfaction, payment, discharge, stay, or bonding of such fine,
penalty, judgment, order or decree);


 


8.8         Misrepresentations.
Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now or later in this Agreement,
any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such
representation, warranty, or other statement is incorrect in any material respect when made;


 


8.9         Subordinated
Debt. Any document, instrument, or agreement evidencing any Subordinated Debt shall for any reason be revoked or invalidated
or otherwise cease to be in full force and effect, any Person shall be in breach thereof or contest in any manner the validity
or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations shall for any
reason be subordinated or shall not have the priority contemplated by this Agreement or any applicable subordination or intercreditor
agreement;


 




    	 	17	 



     


    

  


8.10       Governmental
Approvals. Any Governmental Approval shall have been (a) revoked, rescinded, suspended, modified in an adverse manner or not
renewed in the ordinary course or (b) subject to any decision by a Governmental Authority that designates a hearing with respect
to any applications for renewal of any of such Governmental Approval or that could result in the Governmental Authority taking
any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension, modification or
non-renewal causes, or could reasonably be expected to cause, a Material Adverse Change; or


 


8.11       Subsidiary
Cash. Borrower’s Subsidiaries (which are not a Borrower) acquire, receive, own or hold cash or Cash Equivalents in an
aggregate amount (for all such Subsidiaries together) of greater than Three Million Dollars ($3,000,000.00) at any time.


 


		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, without notice or demand, do
any or all of the following:


 


(a)          declare
all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations are immediately
due and payable without any action by Bank);


 


(b)          stop
advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower
and Bank;


 


(c)          demand
that Borrower (i) deposit cash with Bank in an amount equal to at least (A) one hundred five percent (105.0%) of the Dollar Equivalent
of the aggregate face amount of all Letters of Credit denominated in Dollars remaining undrawn, and (B) one hundred ten percent
(110.0%) of the Dollar Equivalent of the aggregate face amount of all Letters of Credit denominated in a Foreign Currency remaining
undrawn (plus, in each case, all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in
its good faith business judgment)), to secure all of the Obligations relating to such Letters of Credit, as collateral security
for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts,
and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit;


 


(d)          terminate
any FX Contracts;


 


(e)          verify
the amount of, demand payment of and performance under, and collect any Accounts and General Intangibles, settle or adjust disputes
and claims directly with Account Debtors for amounts on terms and in any order that Bank considers advisable, and notify any Person
owing Borrower money of Bank’s security interest in such funds. Borrower shall collect all payments in trust for Bank and,
if requested by Bank, immediately deliver the payments to Bank in the form received from the Account Debtor, with proper endorsements
for deposit;


 


(f)           make
any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the
Collateral. Borrower shall assemble the Collateral if Bank requests and make it available as Bank designates. Bank may enter premises
where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise
any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license
to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies;


 


(g)          apply
to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) amount held by Bank owing to or for the credit or
the account of Borrower;


 




    	 	18	 



     


    

  


(h)          ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral. Bank is hereby
granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, Patents, Copyrights,
mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar property
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
inure to Bank’s benefit;


 


(i)           place
a “hold” on any account maintained with Bank and/or deliver a notice of exclusive control, any entitlement order, or
other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;


 


(j)           demand
and receive possession of Borrower’s Books; and


 


(k)          exercise
all rights and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided under the
Code (including disposal of the Collateral pursuant to the terms thereof).


 


9.2         Power
of Attorney. Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact, exercisable following the occurrence
and during the continuance of an Event of Default, to: (a) endorse Borrower’s name on any checks, payment instruments, or
other forms of payment or security; (b) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against
Account Debtors; (c) demand, collect, sue, and give releases to any Account Debtor for monies due, settle and adjust disputes and
claims about the Accounts directly with Account Debtors, and compromise, prosecute, or defend any action, claim, case, or proceeding
about any Collateral (including filing a claim or voting a claim in any bankruptcy case of a Person other than Borrower in Bank’s
or Borrower’s name, as Bank chooses); (d) make, settle, and adjust all claims under Borrower’s insurance policies;
(e) pay, contest or settle any Lien, charge, encumbrance, security interest, or other claim in or to the Collateral, or any judgment
based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of
Bank or a third party as the Code permits. Borrower hereby appoints Bank as its lawful attorney-in-fact to sign Borrower’s
name on any documents necessary to perfect or continue the perfection of Bank’s security interest in the Collateral regardless
of whether an Event of Default has occurred until all Obligations have been satisfied in full and the Loan Documents have been
terminated. Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers,
coupled with an interest, are irrevocable until all Obligations have been fully repaid and performed and the Loan Documents have
been terminated.


 


9.3         Protective
Payments. If Borrower fails to obtain the insurance called for by Section 6.7 or fails to pay any premium thereon or fails
to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document or which may be required
to preserve the Collateral, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses
and immediately due and payable, bearing interest at the then highest rate applicable to the Obligations, and secured by the Collateral.
Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or
within a reasonable time thereafter. No payments by Bank are deemed an agreement to make similar payments in the future or Bank’s
waiver of any Event of Default.


 


9.4         Application
of Payments and Proceeds. If an Event of Default has occurred and is continuing, Bank shall have the right to apply in any
order any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection
of Accounts or other disposition of the Collateral, or otherwise, to the Obligations. Bank shall pay any surplus to Borrower by
credit to the Designated Deposit Account or to other Persons legally entitled thereto; Borrower shall remain liable to Bank for
any deficiency. If Bank, directly or indirectly, enters into a deferred payment or other credit transaction with any purchaser
at any sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the Obligations by the principal
amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor.


 




    	 	19	 



     


    

  


9.5         Bank’s
Liability for Collateral. So long as Bank complies with reasonable banking practices regarding the safekeeping of the Collateral
in the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral;
(b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier,
warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral.


 


9.6         No
Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to require strict performance by Borrower of any provision
of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict
performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by the party granting the
waiver and then is only effective for the specific instance and purpose for which it is given. Bank’s rights and remedies
under this Agreement and the other Loan Documents are cumulative. Bank has all rights and remedies provided under the Code, by
law, or in equity. Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising
any other remedy under this Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event of Default
is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence.


 


9.7         Demand
Waiver. Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment
at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees
held by Bank on which Borrower is liable.


 


		10	NOTICES



 


All notices, consents,
requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document must be in writing
and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business
Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid;
(b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable
overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed
to the party to be notified and sent to the address, facsimile number, or email address indicated below. Bank or Borrower may change
its mailing or electronic mail address or facsimile number by giving the other party written notice thereof in accordance with
the terms of this Section 10.


 


	 	If to Borrower:	DATAWATCH CORPORATION
	 	 	4 Crosby Drive
	 	 	Bedford, Massachusetts 01730
	 	 	Attn:  Jim Eliason, Chief Financial Officer
	 	 	Email:  Jim_Eliason@datawatch.com
	 	 	 
	 	with a copy to:	Choate, Hall & Stewart LLP
	 	 	Two International Place
	 	 	Boston, MA  02110
	 	 	Attn:   Stephen J. Tonkovich
	 	 	Fax:   617-248-4000
	 	 	Email:  stonkovich@choate.com
	 	 	 
	 	If to Bank:	Silicon Valley Bank
	 	 	275 Grove Street, Suite 2-200
	 	 	Newton, Massachusetts 02466
	 	 	Attn:     Mr. Chris Michael
	 	 	Fax:       (617) 527-0177
	 	 	Email:   CMichael@svb.com
	 	 	 
	 	with a copy to:	Riemer & Braunstein LLP
	 	 	Three Center Plaza
	 	 	Boston, Massachusetts 02108
	 	 	Attn: David A. Ephraim, Esquire
	 	 	Fax: (617) 880-3456
	 	 	Email: DEphraim@riemerlaw.com


 




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		11	CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER



 


Except as otherwise expressly
provided in any of the Loan Documents, Massachusetts law governs the Loan Documents without regard to principles of conflicts of
law. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in Massachusetts; provided, however,
that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any
other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court
order in favor of Bank. Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced
in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper
venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by
such court. Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit
and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to
Borrower at the address set forth in, or subsequently provided by Borrower in accordance with, Section 10 of this Agreement and
that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3)
days after deposit in the U.S. mails, proper postage prepaid.


 


BORROWER AND BANK EACH
WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS
OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT
FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.


 


This Section 11 shall survive
the termination of this Agreement.


 


		12	GENERAL PROVISIONS



 


12.1       Termination
Prior to Maturity Date; Survival.  All covenants, representations and warranties made in this Agreement shall continue in full
force until this Agreement has terminated pursuant to its terms and all Obligations have been satisfied. So long as Borrower has
satisfied the Obligations (other than inchoate indemnity obligations, and any other obligations which, by their terms, are to survive
the termination of this Agreement, and any Obligations under Bank Services Agreements that are cash collateralized in accordance
with Section 4.1 of this Agreement), this Agreement may be terminated prior to the Revolving Line Maturity Date and the Term Loan
Maturity Date by Borrower, effective three (3) Business Days after written notice of termination is given to Bank. Those obligations
that are expressly specified in this Agreement as surviving this Agreement’s termination shall continue to survive notwithstanding
this Agreement’s termination.


 


12.2       Successors
and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may
not assign this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be granted
or withheld in Bank’s discretion). Bank has the right, without the consent of or notice to Borrower, to sell, transfer, assign,
negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under
this Agreement and the other Loan Documents. Notwithstanding the foregoing, so long as no Event of Default shall have occurred
and is continuing, Bank shall not assign its interest in the Loan Documents to any Person who in the reasonable estimation of Bank
is (a) a direct competitor of Borrower, whether as an operating company or direct or indirect parent with voting control over such
operating company, or (b) a vulture fund or distressed debt fund.


 


12.3       Indemnification.
Borrower agrees to indemnify, defend and hold Bank and its directors, officers, employees, agents, attorneys, or any other
Person affiliated with or representing Bank (each, an “Indemnified Person”) harmless against: (i) all obligations,
demands, claims, and liabilities (collectively, “Claims”) claimed or asserted by any other party in connection
with the transactions contemplated by the Loan Documents; and (ii) all losses or expenses (including Bank Expenses) in any way
suffered, incurred, or paid by such Indemnified Person as a result of, following from, consequential to, or arising from transactions
between Bank and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused
by such Indemnified Person’s gross negligence or willful misconduct.


 




    	 	21	 



     


    

  


This Section 12.3 shall
survive until all statutes of limitation with respect to the Claims, losses, and expenses for which indemnity is given shall have
run.


 


12.4       Time
of Essence. Time is of the essence for the performance of all Obligations in this Agreement.


 


12.5       Severability
of Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability of
any provision.


 


12.6       Correction
of Loan Documents. Bank may correct patent errors and fill in any blanks in the Loan Documents consistent with the agreement
of the parties.


 


12.7       Amendments
in Writing; Waiver; Integration. No purported amendment or modification of any Loan Document, or waiver, discharge or termination
of any obligation under any Loan Document, shall be enforceable or admissible unless, and only to the extent, expressly set forth
in a writing signed by the party against which enforcement or admission is sought. Without limiting the generality of the foregoing,
no oral promise or statement, nor any action, inaction, delay, failure to require performance or course of conduct shall operate
as, or evidence, an amendment, supplement or waiver or have any other effect on any Loan Document. Any waiver granted shall be
limited to the specific circumstance expressly described in it, and shall not apply to any subsequent or other circumstance, whether
similar or dissimilar, or give rise to, or evidence, any obligation or commitment to grant any further waiver. The Loan Documents
represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the parties about the subject matter of the Loan Documents
merge into the Loan Documents.


 


12.8       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, is an original, and all taken together, constitute one Agreement.


 


12.9       Confidentiality.
In handling any confidential information, Bank shall exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates (such Subsidiaries and Affiliates,
together with Bank, collectively, “Bank Entities”); (b) to prospective transferees or purchasers of any interest
in the Credit Extensions (provided, however, that any prospective transferee or purchaser shall have entered into an agreement
containing provisions substantially the same as those in this Section 12.9); (c) as required by law, regulation, subpoena, or other
order; (d) to Bank’s regulators or as otherwise required in connection with Bank’s examination or audit; (e) as Bank
considers appropriate in exercising remedies under the Loan Documents; and (f) to third-party service providers of Bank so long
as such service providers have executed a confidentiality agreement with Bank with terms no less restrictive than those contained
herein. Confidential information does not include information that is either: (i) in the public domain or in Bank’s possession
when disclosed to Bank, or becomes part of the public domain (other than as a result of its disclosure by Bank in violation of
this Agreement) after disclosure to Bank; or (ii) disclosed to Bank by a third party, if Bank does not know that the third party
is prohibited from disclosing the information.


 


Bank Entities may use anonymous
forms of confidential information for aggregate datasets, for analyses or reporting, and for any other uses not expressly prohibited
in writing by Borrower. The provisions of the immediately preceding sentence shall survive the termination of this Agreement.


 


12.10    Electronic
Execution of Documents. The words “execution,” “signed,” “signature” and words of like
import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each
of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a paper-based
recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation,
any state law based on the Uniform Electronic Transactions Act.


 




    	 	22	 



     


    

  


12.11    Right
of Setoff. Borrower hereby grants to Bank a Lien and a right of setoff as security for all Obligations to Bank, whether now
existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession,
custody, safekeeping or control of Bank or any entity under the control of Bank (including a subsidiary of Bank) or in transit
to any of them. At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Bank
may setoff the same or any part thereof and apply the same to any liability or Obligation of Borrower even though unmatured and
regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF
WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.


 


12.12    Captions.
The headings used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.


 


12.13    Construction
of Agreement. The parties mutually acknowledge that they and their attorneys have participated in the preparation and negotiation
of this Agreement. In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the
uncertainty to exist.


 


12.14    Relationship.
The relationship of the parties to this Agreement is determined solely by the provisions of this Agreement. The parties do not
intend to create any agency, partnership, joint venture, trust, fiduciary or other relationship with duties or incidents different
from those of parties to an arm’s-length contract.


 


12.15    Third
Parties. Nothing in this Agreement, whether express or implied, is intended to: (a) confer any benefits, rights or remedies
under or by reason of this Agreement on any persons other than the express parties to it and their respective permitted successors
and assigns; (b) relieve or discharge the obligation or liability of any person not an express party to this Agreement; or (c)
give any person not an express party to this Agreement any right of subrogation or action against any party to this Agreement.


 


		13	DEFINITIONS



 


13.1       Definitions.
As used in the Loan Documents, the word “shall” is mandatory, the word “may” is permissive, the word “or”
is not exclusive, the words “includes” and “including” are not limiting, the singular includes the plural,
and numbers denoting amounts that are set off in brackets are negative. As used in this Agreement, the following capitalized terms
have the following meanings:


 


“Account”
is, as to any Person, any “account” of such Person as “account” is defined in the Code with such
additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing
to such Person.


 


“Account Debtor”
is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.


 


“Adjusted EBITDA”
shall mean, calculated on a consolidated basis, (a) Net Income, plus (b) to the extent deducted in the calculation of Net Income
(i) Interest Expense, (ii) depreciation expense and amortization expense, (iii) income tax expense and (iv) non-cash Intellectual
Property amortization (to the extent not included in the calculation of (ii)), (v) any cash received from future billing obligations
acquired in connection with the Angoss Acquisition which is not otherwise recognized as revenue, (vi) non-cash stock based compensation
and (vii) any increase in Deferred Revenue from the immediately preceding three (3) month period, minus (c) to the extent included
in the calculation of Net Income, (i) any decrease in Deferred Revenue from the immediately preceding three (3) month period, (ii)
unfinanced capital expenditures, and (iii) capitalized software development costs.


 


“Adjusted Quick
Ratio” is, calculated on a consolidated basis for Borrower and its Subsidiaries, the ratio of (a) Quick Assets to (b)
Current Liabilities minus the current portion of Deferred Revenue.


 




    	 	23	 



     


    

  


“Administrator”
is an individual that is named:


 


(a)        as
an “Administrator” in the “SVB Online Services” form completed by Borrower with the authority to determine
who will be authorized to use SVB Online Services (as defined in the “Banking Terms and Conditions”) on behalf of Borrower;
and


 


(b)        as
an Authorized Signer of Borrower in an approval by the Board.


 


“Advance”
or “Advances” means a revolving credit loan (or revolving credit loans) under the Revolving Line.


 


“Affiliate”
is, with respect to any Person, each other Person that owns or controls directly or indirectly the Person, any Person that controls
or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors,
partners and, for any Person that is a limited liability company, that Person’s managers and members. For purposes of the
definition of Eligible Accounts, Affiliate shall include a Specified Affiliate.


 


“Agreement”
is defined in the preamble hereof.


 


“Angoss”
is Angoss Software Corporation, a Canadian corporation.


 


“Angoss Acquisition”
is the acquisition by Borrower of all of the capital stock of Angoss after the Effective Date.


 


“Authorized Signer”
is any individual listed in Borrower’s Borrowing Resolution who is authorized to execute the Loan Documents, including making
(and executing if applicable) any Credit Extension request, on behalf of Borrower.


 


“Availability
Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base minus (b) the
outstanding principal balance of any Advances.


 


“Bank”
is defined in the preamble hereof.


 


“Bank Entities”
is defined in Section 12.9.


 


“Bank Expenses”
are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses) for preparing, amending,
negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection
with appeals or Insolvency Proceedings) or otherwise incurred in connection with the Loan Documents with respect to Borrower or
any Guarantor.


 


“Bank Services”
are any products, credit services, and/or financial accommodations previously, now, or hereafter provided to Borrower or any of
its Subsidiaries by Bank or any Bank Affiliate, including, without limitation, any letters of credit, cash management services
(including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services),
interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s
various agreements related thereto (each, a “Bank Services Agreement”).


 


“Bank Services
Agreement” is defined in the definition of Bank Services.


 


“Board”
is Borrower’s board of directors.


 


“Borrower”
is defined in the preamble hereof.


 




    	 	24	 



     


    

  


“Borrower’s
Books” are all Borrower’s books and records including ledgers, federal and state tax returns, records regarding
Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or
storage or any equipment containing such information.


 


“Borrowing Base”
is eighty percent (80.0%) of Eligible Accounts, as determined by Bank from Borrower’s most recent Borrowing Base Report (and
as may subsequently be updated by Bank based upon information received by Bank including, without limitation, Accounts that are
paid and/or billed following the date of the Borrowing Base Report); provided, however, that, upon notice to Borrower, Bank has
the right to decrease the foregoing percentage in its reasonable business judgment to mitigate the impact of events, conditions,
contingencies, or risks which may adversely affect the Collateral or its value.


 


“Borrowing Base
Report” is that certain report of the value of certain Collateral in the form specified by Bank to Borrower from time
to time.


 


“Borrowing Resolutions”
are, with respect to any Person, those resolutions adopted by such Person’s board of directors (and, if required under the
terms of such Person’s Operating Documents, stockholders) and delivered by such Person to Bank approving the Loan Documents
to which such Person is a party and the transactions contemplated thereby, together with a certificate executed by its secretary
on behalf of such Person certifying (a) such Person has the authority to execute, deliver, and perform its obligations under each
of the Loan Documents to which it is a party, (b) that set forth as a part of or attached as an exhibit to such certificate is
a true, correct, and complete copy of the resolutions then in full force and effect authorizing and ratifying the execution, delivery,
and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute
the Loan Documents, including making (and executing if applicable) any Credit Extension request, on behalf of such Person, together
with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and
until such Person shall have delivered to Bank a further certificate canceling or amending such prior certificate.


 


“Business Day”
is any day that is not a Saturday, Sunday or a day on which Bank is closed.


 


“Cash Collateral
Account” is defined in Section 6.3(c).


 


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


 


“Change in Control”
means (a) at any time, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial
owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of forty-nine percent (49.0%)
or more of the ordinary voting power for the election of directors of Borrower (determined on a fully diluted basis) other than
by the sale of Borrower’s equity securities in a public offering or to venture capital or private equity investors so long
as Borrower identifies to Bank the venture capital or private equity investors at least seven (7) Business Days prior to the closing
of the transaction and provides to Bank a description of the material terms of the transaction; or (b) at any time, Borrower shall
cease to own and control, of record and beneficially, directly or indirectly, one hundred percent (100.0%) of each class of outstanding
capital stock of each Subsidiary of Borrower free and clear of all Liens (except Liens created by this Agreement).


 


“Claims”
is defined in Section 12.3.


 




    	 	25	 



     


    

 


“Code”
is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the Commonwealth of Massachusetts;
provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined
differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall
govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection,
or priority of, or remedies with respect to, Bank’s Lien on any Collateral is governed by the Uniform Commercial Code in
effect in a jurisdiction other than the Commonwealth of Massachusetts, the term “Code” shall mean the Uniform Commercial
Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment,
perfection, priority, or remedies and for purposes of definitions relating to such provisions.


 


“Collateral”
is any and all properties, rights and assets of Borrower described on Exhibit A.


 


“Collateral Account”
is any Deposit Account, Securities Account, or Commodity Account.


 


“Commodity Account”
is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.


 


“Compliance Certificate”
is that certain certificate in the form attached hereto as Exhibit B.


 


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


 


“Control Agreement”
is any control agreement entered into among the depository institution at which Borrower maintains a Deposit Account or the securities
intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Bank
pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity
Account.


 


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


 


“Credit Extension”
is any Advance, any Overadvance, the Term Loan Advance, or any other extension of credit by Bank for Borrower’s benefit.


 


“Currency”
is coined money and such other banknotes or other paper money as are authorized by law and circulate as a medium of exchange.


 


“Current Liabilities”
are (a) all obligations and liabilities of Borrower and its Subsidiaries’ to Bank, plus (b) without duplication of (a), the
aggregate amount of Borrower’s Total Liabilities that mature within one (1) year.


 


“Default Rate”
is defined in Section 2.5(b).


 


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


 


“Deposit Account”
is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.


 




    	 	26	 



     


    

  


“Designated Deposit
Account” is the account number ending __ (last three digits) maintained by Borrower with Bank (provided, however, if
no such account number is included, then the Designated Deposit Account shall be any deposit account of Borrower maintained with
Bank as chosen by Bank).


 


“Dollars,”
“dollars” or use of the sign “$” means only lawful money of the United States and not any other
currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted
into lawful money of the United States.


 


“Dollar Equivalent”
is, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated
in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing
rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign
Currency.


 


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


 


“Effective Date”
is defined in the preamble hereof.


 


“Eligible Accounts”
means Accounts owing to Borrower which arise in the ordinary course of Borrower’s business that meet all Borrower’s
representations and warranties in Section 5.3, that have been, at the option of Bank, confirmed in accordance with Section 6.3(f)
of this Agreement, and are due and owing from Account Debtors deemed creditworthy by Bank in its good faith business judgment.
Bank reserves the right at any time after the Effective Date, upon prior or contemporaneous notice to Borrower, to adjust any of
the criteria set forth below and to establish new criteria in its reasonable business judgment. Unless Bank otherwise agrees in
writing, Eligible Accounts shall not include:


 


(a)          Accounts
(i) for which the Account Debtor is Borrower’s Affiliate, officer, employee, investor, or agent, or (ii) that are intercompany
Accounts;


 


(b)          Accounts
that the Account Debtor has not paid within ninety (90) days of invoice date regardless of invoice payment period terms;


 


(c)          Accounts
with credit balances over ninety (90) days from invoice date;


 


(d)          Accounts
owing from an Account Debtor if fifty percent (50%) or more of the Accounts owing from such Account Debtor have not been paid within
ninety (90) days of invoice date;


 


(e)          Accounts
owing from an Account Debtor (i) which does not have its principal place of business in the United States or (ii) whose billing
address (as set forth in the applicable invoice for such Account) is not in the United States, unless in the case of both (i) and
(ii) such Accounts are otherwise approved by Bank in writing, provided, however, in no event shall such Accounts exceed twenty-five
percent (25.0%) of the Borrowing Base;


 


(f)           Accounts
billed from and/or payable to Borrower outside of the United States (sometimes called foreign invoiced accounts);


 


(g)          Accounts
in which Bank does not have a first priority, perfected security interest under all applicable laws;


 


(h)          Accounts
billed and/or payable in a Currency other than Dollars;


 


(i)           Accounts
owing from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to the Account Debtor (as creditor,
lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts);


 




    	 	27	 



     


    

  


(j)           Accounts
with or in respect of accruals for marketing allowances, incentive rebates, price protection, cooperative advertising and other
similar marketing credits, to the extent of such allowances, rebates or credits, unless otherwise approved by Bank in writing;


 


(k)          Accounts
owing from an Account Debtor which is a United States government entity or any department, agency, or instrumentality thereof unless
Borrower has assigned its payment rights to Bank and the assignment has been acknowledged under the Federal Assignment of Claims
Act of 1940, as amended;


 


(l)           Accounts
with customer deposits and/or with respect to which Borrower has received an upfront payment, to the extent of such customer deposit
and/or upfront payment;


 


(m)         Accounts
for demonstration or promotional equipment, or in which goods are consigned, or sold on a “sale guaranteed”, “sale
or return”, “sale on approval”, or other terms if Account Debtor’s payment may be conditional;


 


(n)          Accounts
owing from an Account Debtor where goods or services have not yet been rendered to the Account Debtor (sometimes called memo billings
or pre-billings);


 


(o)          Accounts
subject to contractual arrangements between Borrower and an Account Debtor where payments shall be scheduled or due according to
completion or fulfillment requirements (sometimes called contracts accounts receivable, progress billings, milestone billings,
or fulfillment contracts);


 


(p)          Accounts
owing from an Account Debtor the amount of which may be subject to withholding based on the Account Debtor’s satisfaction
of Borrower’s complete performance (but only to the extent of the amount withheld; sometimes called retainage billings);


 


(q)          Accounts
subject to trust provisions, subrogation rights of a bonding company, or a statutory trust;


 


(r)           Accounts
owing from an Account Debtor that has been invoiced for goods that have not been shipped to the Account Debtor unless Bank, Borrower,
and the Account Debtor have entered into an agreement acceptable to Bank wherein the Account Debtor acknowledges that (i) it has
title to and has ownership of the goods wherever located, (ii) a bona fide sale of the goods has occurred, and (iii) it owes payment
for such goods in accordance with invoices from Borrower (sometimes called “bill and hold” accounts);


 


(s)          Accounts
for which the Account Debtor has not been invoiced;


 


(t)          Accounts
that represent non-trade receivables or that are derived by means other than in the ordinary course of Borrower’s business;


 


(u)          Accounts
for which Borrower has permitted Account Debtor’s payment to extend beyond ninety (90) days (including Accounts with a due
date that is more than ninety (90) days from invoice date);


 


(v)          Accounts
arising from chargebacks, debit memos or other payment deductions taken by an Account Debtor;


 


(w)         Accounts
arising from product returns and/or exchanges (sometimes called “warranty” or “RMA” accounts);


 


(x)          Accounts
in which the Account Debtor disputes liability or makes any claim (but only up to the disputed or claimed amount), or if the Account
Debtor is subject to an Insolvency Proceeding (whether voluntary or involuntary), or becomes insolvent, or goes out of business;


 




    	 	28	 



     


    

  


(y)          Accounts
owing from an Account Debtor with respect to which Borrower has received Deferred Revenue (but only to the extent of such Deferred
Revenue), other than Deferred Revenue related solely to subscriptions and licenses;


 


(z)          Accounts
owing from an Account Debtor, whose total obligations to Borrower exceed twenty-five percent (25.0%) of all Accounts, for the amounts
that exceed that percentage, unless Bank approves in writing; and


 


(aa)        Accounts
for which Bank in its reasonable business judgment determines collection to be doubtful, including, without limitation, accounts
represented by “refreshed” or “recycled” invoices.


 


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


 


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


 


“Event of Default”
is defined in Section 8.


 


“Exchange Act”
is the Securities Exchange Act of 1934, as amended.


 


“Foreign Currency”
means lawful money of a country other than the United States.


 


“Funding Date”
is any date on which a Credit Extension is made to or for the account of Borrower which shall be a Business Day.


 


“FX Contract”
is any foreign exchange contract by and between Borrower and Bank under which Borrower commits to purchase from or sell to Bank
a specific amount of Foreign Currency on a specified date.


 


“GAAP”
is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of determination.


 


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


 


“Governmental
Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration,
filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.


 


“Governmental
Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative
functions of or pertaining to government, any securities exchange and any self-regulatory organization.


 


“Guarantor”
is any Person providing a guaranty in favor of Bank.


 




    	 	29	 



     


    

  


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


 


“Indemnified Person”
is defined in Section 12.3.


 


“Initial Audit”
is Bank’s inspection of Borrower’s Accounts, the Collateral, and Borrower’s Books, with results satisfactory
to Bank in its sole and absolute discretion.


 


“Insolvency Proceeding”
is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking
reorganization, arrangement, or other similar relief.


 


“Intellectual
Property” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following:


 


(a)          its
Copyrights, Trademarks and Patents;


 


(b)          any
and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how and
operating manuals;


 


(c)          any
and all source code;


 


(d)          any
and all design rights which may be available to such Person;


 


(e)          any
and all claims for damages by way of past, present and future infringement of any of the foregoing, 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;
and


 


(f)           all
amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.


 


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


 


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


 


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


 


“Key Person”
is each of Borrower’s (a) Chief Executive Officer, (b) Chief Financial Officer and (c) Chief Operating Officer.


 


“Letter of Credit”
is a standby or commercial letter of credit issued by Bank upon request of Borrower based upon an application, guarantee, indemnity,
or similar agreement.


 




    	 	30	 



     


    

  


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


 


“Loan Documents”
are, collectively, this Agreement and any schedules, exhibits, certificates, notices, and any other documents related to this Agreement,
the Perfection Certificate, any Control Agreement, any Bank Services Agreement, any subordination agreement, any note, or notes
or guaranties executed by Borrower or any Guarantor, and any other present or future agreement by Borrower and/or any Guarantor
with or for the benefit of Bank in connection with this Agreement and/or the provision of Bank Services, all as amended, restated,
or otherwise modified.


 


“Material Adverse
Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the value
of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower;
or (c) a material impairment of the prospect of repayment of any portion of the Obligations.


 


“Monthly Financial
Statements” is defined in Section 6.2(c).


 


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


 


“Obligations”
are Borrower’s obligations to pay when due any debts, principal, interest, fees, Bank Expenses, the Prepayment Fee, the Unused
Revolving Line Facility Fee, and other amounts Borrower owes Bank now or later, under this Agreement or the other Loan Documents,
including, without limitation, all obligations relating to Bank Services and interest accruing after Insolvency Proceedings begin
and debts, liabilities, or obligations of Borrower assigned to Bank, and to perform Borrower’s duties under the Loan Documents.


 


“Operating Documents”
are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of
such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date,
and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited
liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar
agreement), each of the foregoing with all current amendments or modifications thereto.


 


“Overadvance”
is defined in Section 2.4.


 


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


 


“Payment/Advance
Form” is that certain form in the form attached hereto as Exhibit C.


 


“Payment Date”
is (a) with respect to the Term Loan Advance, the first (1st) calendar day of each month and (b) with respect to Advances, the
last calendar day of each month.


 


“Perfection Certificate”
is defined in Section 5.1.


 


“Permitted Indebtedness”
is:


 


(a)          Borrower’s
Indebtedness to Bank under this Agreement and the other Loan Documents;


 


(b)          Indebtedness
existing on the Effective Date which is shown on the Perfection Certificate;


 


(c)          Subordinated
Debt;


 


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


 




    	 	31	 



     


    

  


(e)          Indebtedness
of any Subsidiary (that is not a Borrower) to Borrower consisting of loans made by Borrower as described in subjection (c) of the
definition of Permitted Investments, subject to the cap set forth therein;


 


(f)           Indebtedness
in respect of taxes, assessments or governmental charges to the extent that payment thereof shall not at the time be due and payable
or with respect to which Borrower or any Guarantor is contesting the amount or validity thereof in accordance with Section 5.9;


 


(g)          Indebtedness
consisting of judgments not otherwise constituting an Event of Default under Section 8.7;


 


(h)          Indebtedness
secured by Liens permitted under clause (c) of the definition of “Permitted Liens” hereunder;


 


(i)           Indebtedness
consisting of overdraft protections incurred in the ordinary course of business with respect to deposit accounts (but only to the
extent that Borrower is permitted to maintain such accounts pursuant to Section 6.8 of this Agreement) in which Bank has a first
priority perfected security interest (to the extent required by Section 6.8(b));


 


(j)           any
Indebtedness of any Borrower to another Borrower; and


 


(k)          extensions,
refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (j) above, provided
that the principal amount thereof is not increased in excess of the applicable caps set forth above.


 


“Permitted Investments”
are:


 


(a)          Investments
(including, without limitation, Subsidiaries) existing on the Effective Date which are shown on the Perfection Certificate;


 


(b)          Investments
consisting of Cash Equivalents;


 


(c)          Investments
by (i) Subsidiaries (other than a Borrower) in other Subsidiaries, (ii) Borrower in another Borrower, and (iii) Borrower in Subsidiaries
(that are not a Borrower) (including loans described in subsection (e) of the definition of Permitted Indebtedness) for the ordinary
and necessary current operating expenses of such Subsidiary in an aggregate amount not to exceed Five Million Dollars ($5,000,000.00)
per calendar year;


 


(d)          Investments
in an aggregate amount not to exceed One Hundred Thousand Dollars ($100,000.00) 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
plans or agreements approved by the Board;


 


(e)          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 business;


 


(f)           Investments
consisting of deposit accounts (but only to the extent that Borrower is permitted to maintain such accounts pursuant to Section
6.8 of this Agreement) in which Bank has a first priority perfected security interest (to the extent required by Section 6.8(b));


 


(g)          Investments
accepted in connection with Transfers permitted by Section 7.1; and


 




    	 	32	 



     


    

  


(h)          Investments
consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course
of Borrower.


 


“Permitted Liens”
are:


 


(a)          Liens
existing on the Effective Date which are shown on the Perfection Certificate or arising under this Agreement or the other Loan
Documents;


 


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


 


(c)          purchase
money Liens and Liens created pursuant to capital lease obligations (i) on Equipment acquired or held by Borrower incurred for
financing the acquisition of the Equipment securing no more than Fifty Thousand Dollars ($50,000.00) in the aggregate amount outstanding,
or (ii) existing on Equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the Equipment;


 


(a)          Liens
of carriers, warehousemen, suppliers, landlords, materialmen, repairmen or other Persons that are possessory in nature arising
in the ordinary course of business so long as such Liens only secure liabilities in the aggregate amount not to exceed One Hundred
Thousand Dollars ($100,000.00) and which are not delinquent or remain payable without penalty or which are being contested in good
faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject
thereto;


 


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


 


(c)          Liens,
deposits and pledges to secure the performance of bids, tenders, leases, contracts (other than contracts for the payment of money),
public or statutory obligations, surety, stay, appeal, indemnity, performance or other similar bonds or other similar obligations
arising in the ordinary course of business;


 


(d)          Liens
arising from attachments or judgments, orders, or decrees in circumstances not constituting an Event of Default under Sections
8.4 and 8.7;


 


(e)          leases
or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person,
in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal
property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring to another
Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit
granting Bank a security interest therein;


 


(f)           Liens
in favor of other financial institutions arising in connection with Borrower’s deposit and/or securities accounts held at
such institutions, provided that (i) Bank has a first priority perfected security interest in the amounts held in such deposit
and/or securities accounts (to the extent required by Section 6.8(b)) and (ii) such accounts are permitted to be maintained pursuant
to Section 6.8 of this Agreement;


 


(g)          the
title and interest of, and precautionary financing statements under the applicable UCC (and any similar filing in other jurisdictions
governing preference or priority among creditors) with respect to the title, interest and other rights of, a lessor or sublessor
in and to personal property leased or subleased (other than through a capital lease), in each case extending only to such leased
personal property;


 


(h)          non-exclusive
licenses of Intellectual Property granted to third parties in the ordinary course of business; and


 




    	 	33	 



     


    

  


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


 


“Person”
is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.


 


“Prepayment Fee”
shall be an additional fee payable to Bank, for a prepayment of the Term Loan Advance, in an amount equal to:


 


(a)         for
a prepayment made on or prior to the first (1st) anniversary of the Effective Date, one percent (1.0%) of the outstanding
principal balance of the Term Loan Advance being prepaid; and


 


(b)         for
a prepayment made after the first (1st) anniversary of the Effective Date but on or prior to the second (2nd)
anniversary of the Effective Date, one-half of one percent (0.50%) of the outstanding principal balance of the Term Loan Advance
being prepaid.


 


Notwithstanding the foregoing,
Bank agrees to waive the Prepayment Fee and no Prepayment Fee is due if all of the following is true: (i) the Angoss Acquisition
does not occur within thirty (30) days of the Effective Date, (ii) such prepayment is not made with funds from any other lender
and (iii) such prepayment is made on or prior to the date that is thirty (30) days after the Effective Date.


 


“Prime Rate”
is the rate of interest per annum from time to time published in the money rates section of The Wall Street Journal or any successor
publication thereto as the “prime rate” then in effect; provided that, in the event such rate of interest is less than
zero, such rate shall be deemed to be zero for purposes of this Agreement; and provided further that if such rate of interest,
as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable for any reason as determined
by Bank, the “Prime Rate” shall mean the rate of interest per annum announced by Bank as its prime rate in effect at
its principal office in the State of California (such Bank announced Prime Rate not being intended to be the lowest rate of interest
charged by Bank in connection with extensions of credit to debtors); provided that, in the event such rate of interest is less
than zero, such rate shall be deemed to be zero for purposes of this Agreement.


 


“Quick Assets”
is, on any date, Borrower’s consolidated, unrestricted and unencumbered cash maintained with Bank, plus net billed accounts
receivable determined according to GAAP.


 


“Registered Organization”
is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made.


 


“Requirement of
Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or any of its property is subject.


 


“Reserves”
means, as of any date of determination, such amounts as Bank may from time to time establish and revise in its reasonable business
judgment, reducing the amount of Advances and other financial accommodations which would otherwise be available to Borrower (a)
to reflect events, conditions, contingencies or risks which, as determined by Bank in its reasonable business judgment, do or may
adversely affect (i) the Collateral or any other property which is security for the Obligations or its value (including without
limitation any increase in delinquencies of Accounts), (ii) the assets or business of Borrower or any Guarantor, or (iii) the security
interests and other rights of Bank in the Collateral (including the enforceability, perfection and priority thereof); or (b) to
reflect Bank's reasonable belief that any collateral report or financial information furnished by or on behalf of Borrower or any
Guarantor to Bank is or may have been incomplete, inaccurate or misleading in any material respect; or (c) in respect of any state
of facts which Bank determines constitutes an Event of Default or may, with notice or passage of time or both, constitute an Event
of Default; provided, that Bank shall use commercially reasonable efforts to notify Borrower at or before the time any such Reserve
is to be established or increased.


 




    	 	34	 



     


    

  


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


 


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


 


“Revolving Line”
is an aggregate principal amount equal to Five Million Dollars ($5,000,000.00).


 


“Revolving Line
Maturity Date” is two (2) years from the Effective Date.


 


“SEC”
shall mean the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.


 


“Securities Account”
is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.


 


“Specified Affiliate”
is any Person (a) more than ten percent (10.0%) of whose aggregate issued and outstanding equity or ownership securities or interests,
voting, non-voting or both, are owned or held directly or indirectly, beneficially or of record, by Borrower, and/or (ii) whose
equity or ownership securities or interests representing more than ten percent (10.0%) of such Person’s total outstanding
combined voting power are owned or held directly or indirectly, beneficially or of record, by Borrower.


 


“Subordinated
Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to Bank
(pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into
between Bank and the other creditor), on terms acceptable to Bank.


 


“Subsidiary”
is, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of
the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership
or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or
more intermediaries, or both, by such Person. Unless the context otherwise requires, each reference to a Subsidiary herein shall
be a reference to a Subsidiary of Borrower or Guarantor.


 


“Term Loan Advance”
is defined in Section 2.3 of this Agreement.


 


“Term Loan Maturity
Date” is the date that is thirty-six (36) months after the Effective Date.


 


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


 


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


 


“Transfer”
is defined in Section 7.1.


 


“Unused Revolving
Line Facility Fee” is defined in Section 2.6(d).


 




    	 	35	 



     


    

  


[Signature page follows.]


 




    	 	36	 



     


    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as a sealed instrument under the laws of the Commonwealth of Massachusetts
as of the Effective Date.


 


	 	BORROWER:
	 	 
	 	DATAWATCH CORPORATION
	 	 	 
	 	By   	/s/ James  Eliason
	 	 	 
	 	Name:	James Eliason
	 	 	 
	 	Title:	Chief Financing Officer
	 	 	 
	 	BANK:
	 	 
	 	SILICON VALLEY BANK
	 	 	 
	 	By	/s/ Kate Leland
	 	 	 
	 	Name:	Kate Leland
	 	 	 
	 	Title:	Managing Director


 


Signature Page to Loan and Security Agreement


 




    	 	 	 



     


    

 


EXHIBIT A - COLLATERAL DESCRIPTION


 


The Collateral consists
of all of Borrower’s right, title and interest in and to the following personal property:


 


All goods, Accounts (including
health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise
agreements, General Intangibles (except as provided below), commercial tort claims, documents, instruments (including any promissory
notes), chattel paper (whether tangible or electronic), cash, deposit accounts, certificates of deposit, fixtures, letters of credit
rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting
obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and


 


all Borrower’s Books
relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or
all of the foregoing.


 


Notwithstanding the foregoing,
the Collateral does not include (a) any rights held under a license or contract that are not assignable by their terms without
the consent of the licensor or contracting Person (that is not a Borrower) thereof (but only to the extent such restriction on
assignment is enforceable under applicable law), (b) any interest of Borrower as a lessee or sublessee under a real property lease
or an Equipment lease if Borrower is prohibited by the terms of such lease from granting a security interest in such lease or under
which such an assignment or Lien would cause a default to occur under such lease (but only to the extent that such prohibition
is enforceable under all applicable laws including, without limitation, the Code); provided, however, that upon termination of
such prohibition, such interest shall immediately become Collateral without any action by Borrower or Bank, and (c) any Intellectual
Property; provided, however, the Collateral shall include all Accounts and all proceeds of Intellectual Property. If a judicial
authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary
to have a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral
shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit
perfection of Bank’s security interest in such Accounts and such other property of Borrower that are proceeds of the Intellectual
Property.


 


Pursuant to the terms of
a certain negative pledge arrangement with Bank, Borrower has agreed not to encumber any of its Intellectual Property without Bank’s
prior written consent.


 


 




    	 	 	 



     


    

 


Exhibit 10.1


 


EXHIBIT B


COMPLIANCE CERTIFICATE


 


	TO:	SILICON VALLEY BANK	Date:	 
	FROM:	DATAWATCH CORPORATION	 	 


 


The undersigned authorized
officer of DATAWATCH CORPORATION (“Borrower”) certifies that under the terms and conditions of the Loan and
Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the
period ending _______________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all
representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below;
provided, however, that such materiality qualifier shall not be applicable to any representations and warranties
that already are qualified or modified by materiality in the text thereof; and provided, further that those representations
and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such
date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely
paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise
permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower
or any of its Subsidiaries, if any, relating to unpaid employee payroll or benefits of which Borrower has not previously provided
written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies that
these are prepared in accordance with GAAP consistently applied from one period to the next except for year-end adjustments or
as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time
or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined
not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings
given them in the Agreement.


 


Please indicate compliance status by circling Yes/No under “Complies”
column.


 


	Reporting Covenants	 	Required	 	Complies
	 	 	 	 	 
	Monthly Financial Statements with Compliance Certificate	 	Monthly within 30 days	 	Yes   No
	10-Q, 10-K and 8-K	 	Within 5 days after filing with SEC	 	Yes   No
	A/R & A/P Agings	 	Monthly within 30 days	 	Yes   No
	Deferred Revenue Reports	 	Monthly within 30 days	 	Yes   No
	Annual financial statements (CPA Audited)	 	Earlier to occur of (i) FYE within 90 days and (ii) within 5 days of filing with SEC	 	Yes   No
	Borrowing Base Reports	 	(i) with each request for an Advance and (ii) monthly within 30 days	 	Yes   No
	Board approved projections	 	Within 30 days of the earlier of (i) FYE or (ii) Board approval, and as amended/updated	 	Yes   No


 


	Financial Covenants	 	Required	 	Actual	 	Complies
	 	 	 	 	 	 	 
	Maintain as indicated:	 	 	 	 	 	 
	Adjusted Quick Ratio (tested monthly)	 	> ____* : 1.0	 	______ : 1.0	 	Yes   No
	Adjusted EBITDA (trailing three (3) month, tested quarterly)	 	> $______**	 	$_________	 	Yes   No


 


* As set forth in Section 6.9(a).


** As set forth in Section 6.9(b).


 




    	 	 	 



     


    

  


The following financial
covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.


 


The following are the exceptions
with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)


  


 






 





 



 





	DATAWATCH CORPORATION
	 	 



 


	By:	 










	Name:	 





	Title:	 





	BANK USE ONLY
	 
	Received by:	 
	 	authorized signer





	Date:	 


 


	Verified:	 
	 	authorized signer





	Date:	 



 


	 	 
	Compliance Status:             Yes      No


 




















 




    	 	 	 



     


    

 


Schedule 1 to Compliance Certificate


 


Financial Covenants of Borrower


 


In the event of a conflict between this Schedule and the Loan Agreement,
the terms of the Loan Agreement shall govern.


 


Dated:   ____________________


 


		I.	Adjusted Quick Ratio (at all times, tested monthly)
(Section 6.9(a))



 


		Required:	Adjusted Quick Ratio of at least (i) 1.25 to 1.0 for the
month ending December 31, 2017, (ii) 1.10 to 1.0 for the months ending January 31, 2018 and February 28, 2018, (iii) 1.25 to 1.0
for the month ending March 31, 2018, (iv) 1.10 to 1.0 for the months ending April 30, 2018 and May 31, 2018 and (v) 1.25 to 1.0
for the month ending June 30, 2018 and for each month thereafter.



 


		Actual:	____:1.0



 


	A.	Aggregate value of Borrower’s consolidated unrestricted and unencumbered cash and Cash Equivalents	 	$	 	 
	 	 	 	 	 	 
	B.	Aggregate value of Borrower’s consolidated net billed accounts receivable, determined according to GAAP	 	$	 	 
	 	 	 	 	 	 
	C.	Quick Assets (the sum of lines A and B)	 	$	 	 
	 	 	 	 	 	 
	D.	All obligations and liabilities of Borrower to Bank 	 	$	 	 
	 	 	 	 	 	 
	E.	Aggregate value of liabilities that should, under GAAP, be classified as liabilities on Borrower’s and its Subsidiaries’’ balance sheet, including all Indebtedness, not otherwise reflected in line C above, that mature within one (1) year	 	$	 	 
	 	 	 	 	 	 
	F.	Current Liabilities (the sum of lines D and E)	 	$	 	 
	 	 	 	 	 	 
	G.	Current portion of Deferred Revenue	 	$	 	 
	 	 	 	 	 	 
	H.	Line F minus G	 	$	 	 
	 	 	 	 	 	 
	I.	Adjusted Quick Ratio (line C divided by line H)	 	 	 	 


 


Is line I equal to or greater than _____*:1.00?


 


* As set forth above


 


             No,
not in compliance                                      Yes,
in compliance


 


		II.	Adjusted EBITDA (trailing three (3) month, tested
quarterly) (Section 6.9(b))



 




    	 	 	 



     


    

  


Required: See chart below


 


	Three (3) Month Period Ending	 	EBITDA	 
	March 31, 2018	 	$	(3,000,000.00	)
	June 30, 2018	 	$	(1,000,000.00	)
	September 30, 2018	 	$	(250,000.00	)
	December 31, 2018	 	$	1.00	 
	March 31, 2019	 	$	250,000.00	 
	June 30, 2019	 	$	500,000.00	 
	September 30, 2019	 	$	750,000.00	 
	December 31, 2019 and each calendar quarter thereafter	 	$	1,000,000.00	 



 


Actual:          $_________________


 


	A.	Net Income	 	$	 	 
	 	 	 	 	 	 	 
	B.	To the extent included in the determination of Net Income	 	 	 	 
	 	 	 	 	 	 	 
	 	1.	Interest Expense	 	$	 	 
	 	 	 	 	 	 	 
	 	2.	Income tax expense	 	$	 	 
	 	 	 	 	 	 	 
	 	3.	Depreciation expense	 	$	 	 
	 	 	 	 	 	 	 
	 	4.	Amortization expense	 	$	 	 
	 	 	 	 	 	 	 
	 	5.	Non-cash Intellectual Property amortization (to the extent not included in B.4)	 	$	 	 
	 	 	 	 	 	 	 
	 	6.	Any cash received from future billing obligations which is not otherwise recognized as revenue acquired in connection with the Angoss Acquisition	 	$	 	 
	 	 	 	 	 	 	 
	 	7.	Non-cash stock based compensation	 	$	 	 
	 	 	 	 	 	 	 
	 	8.	Any increase in Deferred Revenue from the immediately preceding three (3) month period	 	$	 	 
	 	 	 	 	 	 	 
	 	9.	The sum of lines 1 through 8	 	$	 	 
	 	 	 	 	 	 	 
	C.	To the extent included in the calculation of Net Income	 	 	 	 
	 	 	 	 	 	 	 
	 	1.	Any decrease in Deferred Revenue from the immediately preceding three (3) month period	 	$	 	 
	 	 	 	 	 	 	 
	 	2.	Unfinanced Capital Expenditures	 	$	 	 
	 	 	 	 	 	 	 
	 	3.	Capitalized software development costs	 	$	 	 
	 	 	 	 	 	 	 
	 	4.	The sum of lines 1 through 3	 	$	 	 
	 	 	 	 	 	 	 
	D.	Adjusted EBITDA (line A plus line B.9 minus line C.4)	 	$	 	 


 




    	 	 	 



     


    

  


Is line D equal to at least the amount set forth above?


 


             No,
not in compliance                                      Yes,
in compliance


 




    	 	 	 



     


    

  


EXHIBIT C


 


LOAN PAYMENT/ADVANCE REQUEST FORM


 


Deadline
for same day processing is Noon Eastern Time


 


	Fax To:  	Date: _____________________


 


	 	Loan Payment:
	 	 
	 	
        DATAWATCH CORPORATION

	 	 





	 	From Account #	 	 	To Account #	 	 
	 	 	  (Deposit Account #)	 	 	(Loan Account #)	 





	 	Principal $	 	 	and/or Interest $	 	 
	 	 	 	 	 	 	 





	 	Authorized Signature:	 	 	Phone Number:	 	 





	 	Print Name/Title:	 	 	 	 	 
	 	 	 	 	 	 	 


 


	 	Loan Advance:	 
	 	 	 
	 	Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire.	 
	 	 	 





	 	From Account #	 	 	To Account #	 	 
	 	 	  (Loan Account #)	 	 	(Deposit Account #)	 
	 	 	 	 	 	 	 





	 	Amount of Term Loan Advance $	 	 	 





	 	 	 
	 	All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and complete in all material respects on the date of the request for an advance; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date:	 
	 	 	 





	 	Authorized Signature:	 	 	Phone Number:	 	 





	 	Print Name/Title:	 	 	 	 	 
	 	 	 	 	 	 	 


 


	 	
        Outgoing Wire Request:

        Complete only if all or a portion of funds from the loan advance
        above is to be wired.

        Deadline for same day processing is noon, Eastern Time
	 
	 	 	 





	 	Beneficiary Name:	 	 	Amount of Wire: $	 	 
	 	Beneficiary Bank:	 	 	Account Number:	 	 





	 	City and State:	 	 	 
	 	 	 	 	 





	 	Beneficiary Bank Transit (ABA) #:	 	 	Beneficiary Bank Code (Swift, Sort, Chip, etc.):	 	 
	 	 	 	 	(For International Wire Only)	 
	 	 	 	 	 	 





	 	Intermediary Bank: 	 	 	Transit (ABA) #: 	 	 





	 	For Further Credit to: 	 	 
	 	 	 	 





	 	Special Instruction: 	 	 





	 	 	 
	 	
        By signing below, I (we) acknowledge
        and agree that my (our) funds transfer request shall be processed in accordance with and subject to the terms and conditions
        set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed
        by me (us).

         
	 


 




    	 	 	 



     


    

  


	 	 	 	 	 	 	 
	 	Authorized Signature:	 	 	2nd Signature (if required):	 	 





	 	Print Name/Title:	 	 	Print Name/Title:	 	 





	 	Telephone #:	 	 	Telephone #: