Loan and Security Agreement between Silicon Valley Bank and Exa Corp



 Exhibit 10.12 
 



 
 (Working Capital Line of Credit) 

LOAN AND SECURITY AGREEMENT 
 This LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of May 24, 2010 (the “Effective Date”) is between SILICON VALLEY BANK, a California corporation
(“Bank”), with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 with a loan production office located at One Newton Executive Park, Suite 200, 2221 Washington Street, Newton, Massachusetts 02462 (FAX
617-969-5965) and EXA CORPORATION, a Delaware corporation (“Borrower”), with its principal place of business at 55 Network Drive, Burlington, Massachusetts 01803 (FAX
                    ), and 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. The term “financial statements” includes the notes
and schedules. The terms “including” and “includes” always mean “including (or includes) without limitation,” in this or any Loan Document. 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 meanings 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 unpaid principal amount of all Advances hereunder with all interest, fees and finance charges due thereon as and
when due in accordance with this Agreement. 
 2.1.1 Financing of Accounts. 

(a) Availability. 
 (i) Subject to the terms of this Agreement, Borrower may request that Bank finance specific Eligible Accounts. Bank may, in its good faith business discretion, finance such Eligible Accounts by extending
credit to Borrower in an amount equal to the result of the applicable Advance Rate multiplied by the face amount of the Eligible Account. Bank may, in its sole discretion, change the percentage of the Advance Rate for a particular Eligible Account
on a case by case basis. 
 (ii) Subject to the terms of this Agreement, Borrower may request that Bank finance
specific Renewal Invoices. Bank may, in its good faith business discretion, finance such Renewal Invoices by extending credit to Borrower in an amount equal to the result of the applicable Advance Rate multiplied by the face amount of the Renewal
Invoice. Bank may, in its sole discretion, change the percentage of the Advance Rate for a particular Renewal Invoice on a case by case basis. Notwithstanding the foregoing, Borrower may not request, and Bank has no obligation to make, any Advances
based upon Renewal Invoices prior to June 1, 2010 and after January 31, 2011. 
 (iii) Any extension of
credit made pursuant to the terms of subsections (i) or (ii) above shall hereinafter be referred to as an “Advance”. When Bank makes an Advance, the Eligible Account or Renewal Invoice each becomes a separate “Financed
Receivable”. 







 (b) Maximum Advances; Renewal Invoice Advances; Overadvances.

 (i) Maximum Advances; Renewal Invoice Advances. The aggregate face amount of all Financed Receivables
outstanding at any time may not exceed the Facility Amount. In addition and notwithstanding the foregoing, (i) the aggregate amount of Advances outstanding at any time may not exceed Ten Million Dollars ($10,000,000.00), minus the aggregate
amount of the Bank Services, and (ii) the aggregate amount of Advances made based upon Renewal Invoices outstanding at any time may not exceed the lesser of (A) Six Million Dollars ($6,000,000.00), and (B) (1) from June 1,
2010 through and including July 31, 2010, thirty percent (30.0%) of Borrower’s Renewal Invoices, and (2) from August 1, 2010 through and including January 31, 2011, fifty percent (50.0%) of Borrower’s Renewal
Invoices. 
 (ii) Overadvances. If, at any time, the aggregate amount of Advances outstanding at any time
exceeds the maximum amounts set forth in Section 2.1.1(b)(i) above, Borrower shall immediately pay to Bank the excess and, in connection with same, hereby irrevocably authorizes Bank to debit any account of Borrower maintained with Bank or any
of Bank’s Affiliates for the amount of such excess. 
 (c) Borrowing Procedure. Borrower will deliver
an Invoice Transmittal for each Eligible Account and Renewal Invoice it offers. Bank may rely on information set forth in or provided with the Invoice Transmittal. In addition, upon Bank’s request, Borrower shall deliver to Bank any contracts,
purchase orders, or other underlying supporting documentation with respect to such Eligible Account and/or Renewal Invoice. 
 (d) Credit Quality; Confirmations. Bank may, at its option, conduct a credit check of the Account Debtor for each Account requested by Borrower for financing hereunder in order to approve any such
Account Debtor’s credit before agreeing to finance such Account. Bank may also verify directly with the respective Account Debtors the validity, amount and other matters relating to the Accounts (including confirmations of Borrower’s
representations in Section 5.3) by means of mail, telephone or otherwise, either in the name of Borrower or Bank from time to time in its sole discretion. 
 (e) Accounts Notification/Collection. Bank may notify any Person owing Borrower money of Bank’s security interest in the funds and verify and/or collect the amount of the Account. 

(f) Early Termination. This Agreement may be terminated prior to the Maturity Date as follows: (i) by
Borrower, effective three Business Days after written notice of termination is given to Bank; or (ii) by Bank at any time after the occurrence and continuance of an Event of Default (after giving effect to all grace and cure periods, if any),
with notice (effective upon the provision of such notice). If this Agreement is terminated (A) by Bank in accordance with clause (ii) in the foregoing sentence, or (B) by Borrower for any reason, Borrower shall pay to Bank a
termination fee in an amount equal to One Hundred Thousand Dollars ($100,000.00) (the “Early Termination Fee”). The Early Termination Fee shall be due and payable on the effective date of such termination and thereafter shall bear interest
at a rate equal to the highest rate applicable to any of the Obligations. Notwithstanding the foregoing, Bank agrees to waive the Early Termination Fee if Bank agrees to refinance and redocument this Agreement under another division of Bank (in its
sole and exclusive discretion) prior to the Maturity Date. 
 (g) Maturity. This Agreement shall terminate
and all Obligations outstanding hereunder shall be immediately due and payable on the Maturity Date. 
 (h)
Suspension of Advances. Borrower’s ability to request that Bank finance Eligible Accounts and Renewal Invoices hereunder will terminate if, in Bank’s sole discretion, there has been a material adverse change in the general affairs,
management, results of operation, condition (financial or otherwise) or the prospect of repayment of the Obligations, or there has been any material adverse deviation by Borrower from the most recent business plan of Borrower presented to and
accepted by Bank prior to the execution of this Agreement. 
 2.2 Collections, Finance Charges, Remittances and
Fees. The Obligations shall be subject to the following fees and Finance Charges. Unpaid fees and Finance Charges may, in Bank’s discretion, accrue interest and fees as described in Section 9.2 hereof. 

  
 2 








 2.2.1 Collections. Collections will be credited to the Financed Receivable
Balance for such Financed Receivable, but if there is an Event of Default, Bank may apply Collections to the Obligations in any order it chooses. If Bank receives a payment for both a Financed Receivable and a non-Financed Receivable, the funds will
first be applied to the Financed Receivable and, if there is no Event of Default then existing, the excess will be remitted to Borrower, subject to Section 2.2.7. 
 2.2.2 Facility Fee. A fully earned, non-refundable facility fee of One Hundred Thousand Dollars ($100,000.00) is due upon execution of this Agreement (the “Facility Fee”).

 2.2.3 Finance Charges. In computing Finance Charges on the Obligations under this Agreement, all Collections
received by Bank shall be deemed applied by Bank on account of the Obligations three (3) Business Days after receipt of the Collections. Borrower will pay a finance charge (the “Finance Charge”) on the Financed Receivable Balance
which is equal to the Applicable Rate divided by 360 multiplied by the number of days each such Financed Receivable is outstanding multiplied by (a) with respect to Financed Receivables based upon Eligible Accounts, the
outstanding Financed Receivable Balance, and (b) with respect to Financed Receivables based upon Renewal Invoices, the Renewal Invoice Balance. The Finance Charge is payable when the Advance made based on such Financed Receivable is payable in
accordance with Section 2.3 hereof. After an Event of Default, the Applicable Rate will increase an additional three percent (3.0%) per annum effective immediately upon the occurrence of such Event of Default. 

2.2.4 Collateral Handling Fee. Borrower will pay to Bank a collateral handling fee (the “Collateral Handling
Fee”) equal to (a) with respect to Financed Receivables based upon Eligible Accounts, 0.25% per month of the Financed Receivable Balance for each such Financed Receivable outstanding based upon a 360 day year, and (b) with
respect to Financed Receivables based upon Renewal Invoices, 0.375% per month of the Renewal Invoice Balance for each such Financed Receivable outstanding based upon a 360 day year. This fee is charged on a daily basis which is equal to the
Collateral Handling Fee divided by 30, multiplied by the number of days each such Financed Receivable is outstanding, multiplied by (a) with respect to Financed Receivables based upon Eligible Accounts, the outstanding Financed Receivable
Balance, and (b) with respect to Financed Receivables based upon Renewal Invoices, the Renewal Invoice Balance. The Collateral Handling Fee is payable when the Advance made based on such Financed Receivable is payable in accordance with
Section 2.3 hereof. In computing Collateral Handling Fees under this Agreement, all Collections received by Bank shall be deemed applied by Bank on account of Obligations three (3) Business Days after receipt of the
Collections. After the occurrence and during the continuance of an Event of Default, the Collateral Handling Fee will increase an additional 0.50% effective immediately upon such Event of Default. 

2.2.5 Accounting. After each Reconciliation Period, Bank will provide an accounting of the transactions for that
Reconciliation Period, including the amount of all Financed Receivables, all Collections, Adjustments, Finance Charges, Collateral Handling Fees and the Facility Fee. If Borrower does not object to the accounting in writing within thirty
(30) days it shall be considered accurate. All Finance Charges and other interest and fees are calculated on the basis of a 360 day year and actual days elapsed. 
 2.2.6 Deductions. Bank may deduct fees, Finance Charges, Advances which become due pursuant to Section 2.3, and other amounts due pursuant to this Agreement from any Advances made or
Collections received by Bank. 
 2.2.7 Lockbox; Account Collection Services. 

(a) Borrower shall direct each Account Debtor (and each depository institution where proceeds of Accounts are on deposit) to remit
payments with respect to the Accounts to a lockbox account established with Bank or to wire transfer payments to a cash collateral account that Bank controls (collectively, the “Lockbox”). It will be considered an immediate Event of
Default if the Lockbox is not set-up and operational on the Effective Date; provided, however, Borrower shall not be required to maintain a separate lockbox for purposes of collecting payments by check until forty-five (45) days after
Bank’s request that such lockbox be established (for sake of clarity, Borrower shall still be required to maintain a cash collateral account for collecting wire transfer payments as of the Effective Date and at all times thereafter).


  
 3 








 (b) For any time at which such Lockbox is not established, the proceeds of the Accounts
shall be paid by the Account Debtors to an address consented to by Bank. Upon receipt by Borrower of such proceeds, Borrower shall promptly transfer and deliver same to Bank, along with a detailed cash receipts journal. 

(c) Provided no Event of Default exists or an event that with notice or lapse of time will be an Event of Default, within three
(3) days of receipt of any amounts by Bank (whether in the Lockbox, directly from Borrower, or otherwise), Bank will turn over to Borrower the proceeds of the Accounts other than Collections with respect to Financed Receivables and the amount
of Collections in excess of the amounts for which Bank has made an Advance to Borrower, less any amounts due to Bank, such as the Finance Charge, the Facility Fee, payments due to Bank, other fees and expenses, or otherwise; provided, however, Bank
may hold such excess amount with respect to Financed Receivables as a reserve until the end of the applicable Reconciliation Period if Bank, in its discretion, determines that other Financed Receivable(s) may no longer qualify as an Eligible Account
or Renewal Invoice at any time prior to the end of the subject Reconciliation Period. 
 (d) This Section 2.2.7 does not
impose any affirmative duty on Bank to perform any act other than as specifically set forth herein. All Accounts and the proceeds thereof are Collateral and if an Event of Default occurs, Bank may apply the proceeds of such Accounts to the
Obligations. 
 2.2.8 Bank Expenses. Borrower shall pay all Bank Expenses (including reasonable attorneys’
fees and expenses, plus expenses, for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due upon demand. 
 2.3 Repayment of Obligations; Adjustments. 
 2.3.1
Repayment. 
 (a) Borrower will repay each Advance made based upon a specific Eligible Account on the
earliest of: (i) the date on which payment is received of the Financed Receivable with respect to which the Advance was made (but only to the extent of the payment if the Financed Receivable remains otherwise an Eligible Account), (ii) the
date on which the Financed Receivable is no longer an Eligible Account, (iii) the date on which any Adjustment is asserted to the Financed Receivable (but only to the extent of the Adjustment if the Financed Receivable remains otherwise an
Eligible Account), (iv) the date on which there is a breach of any warranty or representation set forth in Section 5.3, or a breach of any covenant in this Agreement, or (v) the Maturity Date (including any early termination). Each
payment will also include all accrued Finance Charges and Collateral Handling Fees with respect to such Advance and all other amounts then due and payable hereunder. 

(b) Borrower will repay each Advance made based upon a specific Renewal Invoice on the earliest of: (i) the receipt
by Borrower of a purchase order executed by an Account Debtor, (ii) the date on which there is a breach of any warranty or representation set forth in Section 5.4, or a breach of any covenant in this Agreement, (iii) the Maturity Date
(including any early termination), or (iv) January 31, 2011. Each payment will also include all accrued Finance Charges and Collateral Handling Fees with respect to such Advance and all other amounts then due and payable hereunder.

 Without limiting the foregoing repayment requirements, if, on January 31, 2011, there are any Obligations outstanding
with respect to Advances made based upon a Renewal Invoice, Borrower shall immediately pay to Bank a fee equal to One Hundred Thousand Dollars ($100,000.00). 
 2.3.2 Repayment on Event of Default. When there is an Event of Default, Borrower will, if Bank demands (or, upon the occurrence of an Event of Default under Section 8.5, immediately
without notice or demand from Bank) repay all of the Advances. The demand may, at Bank’s option, include the Advance for each Financed Receivable then outstanding and all accrued Finance Charges, the Early Termination Fee, Collateral Handling
Fees, attorneys’ and professional fees, court costs and expenses, and any other Obligations. 
 2.3.3 Debit of
Accounts. Bank may debit any of Borrower’s deposit accounts for payments or any amounts Borrower owes Bank hereunder. Bank shall promptly notify Borrower when it debits Borrower’s accounts. These debits shall not constitute
a set-off. 

  
 4 








 2.3.4 Adjustments. If, at any time during the term of this Agreement, any
Account Debtor asserts an Adjustment, Borrower issues a credit memorandum, or any of the representations and warranties in Section 5.3 or covenants in this Agreement are no longer true in all material respects, Borrower will promptly advise
Bank. 
 2.4 Power of Attorney. Borrower irrevocably appoints Bank and its successors and assigns as
attorney-in-fact and authorizes Bank, to: (a) following the occurrence and during the continuation of an Event of Default, (i) sell, assign, transfer, pledge, compromise, or discharge all or any part of the Financed Receivables;
(ii) demand, collect, sue, and give releases to any Account Debtor for monies due and compromise, prosecute, or defend any action, claim, case or proceeding about the Financed Receivables, including filing a claim or voting a claim in any
bankruptcy case in Bank’s or Borrower’s name, as Bank chooses; and (iii) prepare, file and sign Borrower’s name on any notice, claim, assignment, demand, draft, or notice of or satisfaction of lien or mechanics’ lien or
similar document; and (b) regardless of whether there has been an Event of Default, (i) notify all Account Debtors to pay Bank directly; (ii) receive, open, and dispose of mail addressed to Borrower in connection with the Lockbox;
(iii) endorse Borrower’s name on checks or other instruments (to the extent necessary to pay amounts owed pursuant to this Agreement); and (iv) execute on Borrower’s behalf any instruments, documents, financing statements to
perfect Bank’s interests in the Financed Receivables and Collateral and do all acts and things necessary or expedient, as determined solely and exclusively by Bank, to protect or preserve, Bank’s rights and remedies under this Agreement,
as directed by Bank. 
 3 CONDITIONS OF LOANS 

3.1 Conditions Precedent to Initial Advance. Bank’s agreement to make the initial Advance 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) a certificate of the Secretary of Borrower with respect to articles, by-laws, incumbency and resolutions authorizing
the execution and delivery of this Agreement; 
 (b) the IP Agreement; 

(c) Perfection Certificate by Borrower; 

(d) a legal opinion of Borrower’s counsel (authority/enforceability), in form and substance acceptable to Bank;

 (e) Securities Account Control Agreements (SVB Securities); 

(f) evidence satisfactory to Bank that the insurance policies required by Section 6.4 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; 
 (g) payment of the fees and Bank Expenses then due and payable; 

(h) Certificate of Foreign Qualification (Massachusetts); 

(i) long form Certificate of Good Standing/Legal Existence (Delaware); 

(j) termination of UCC financing statement in favor of FMR LLC; and 

(k) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

 3.2 Conditions Precedent to all Advances. Bank’s agreement to make each Advance, including the initial
Advance, is subject to the following: 
 (a) receipt of the Invoice Transmittal; 

  
 5 








 (b) Bank shall have (at its option) conducted the confirmations and
verifications as described in Section 2.1.1(d); and 
 (c) each of the representations and warranties in
Section 5 shall be true on the date of the Invoice Transmittal and on the effective date of each Advance and no Event of Default shall have occurred and be continuing, or result from the Advance. Each Advance is Borrower’s representation
and warranty on that date that the representations and warranties in Section 5 remain true. 
 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 and the performance of each of Borrower’s duties under the Loan Documents, 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 represents, warrants, and covenants that the security interest granted herein shall be a first priority security interest in the Collateral (subject only to Permitted Liens that
are permitted to have superior priority to Bank’s Liens). If Borrower shall at any time, acquire a commercial tort claim, 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 satisfactory to Bank. 
 Borrower acknowledges that it currently has previously entered, and may in the future enter, into Bank Services with Bank. Regardless of the terms of the documents governing such Bank Services, 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 security interest granted herein. 

If this Agreement and all Loan Documents are terminated, Bank’s Lien in the Collateral shall continue until the Obligations under
the Loan Documents (excluding any ummatured indemnity or similar obligations that survive the termination of this Agreement or the other Loan Documents) are repaid in full in cash. Upon payment in full in cash of the Obligations and at such time as
the Loan Documents have been terminated, Bank shall, at Borrower’s sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower. 

4.2 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. Any 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. 
 5 REPRESENTATIONS AND WARRANTIES 

Borrower represents and warrants as follows: 
 5.1 Due Organization and Authorization. Borrower and each of its Subsidiaries are duly existing and in good standing as Registered Organizations in their respective jurisdictions of
formation and are qualified and licensed to do business and are in good standing in any jurisdiction in which the conduct of their respective business or ownership of property requires that they 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 (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 

  
 6 








 
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) constitute an event of default under 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 have a material adverse effect on Borrower’s business. 

5.2 Collateral. Borrower has good title, has 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 deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any, described in the Perfection Certificate
delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors.
All Inventory is in all material respects of good and marketable quality, free from material defects. 
 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. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee, then Borrower will first receive the written consent of
Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. 
 Borrower is the sole owner of its intellectual property, except for non-exclusive licenses granted to its customers in the ordinary course of business. Each patent is valid and enforceable, and no part of
the intellectual property has been judged invalid or unenforceable, in whole or in part, and to the best of Borrower’s knowledge, no claim has been made that any part of the intellectual property violates the rights of any third party except to
the extent such claim could not reasonably be expected to have a material adverse effect on Borrower’s business. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is bound by, 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. Without prior consent from Bank, Borrower shall not enter into, or become bound by, any such license or agreement which is reasonably likely to have a material
impact on Borrower’s business or financial condition. 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 all such licenses or contract rights 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 license or agreement, whether now existing or entered into in the future. 

5.3 Financed Receivables. Borrower represents and warrants for each Financed Receivable (other than Financed Receivables
based upon Renewal Invoices): 
 (a) Such Financed Receivable is an Eligible Account; 

(b) Borrower is the owner of and has the legal right to sell, transfer, assign and encumber such Financed Receivable;

 (c) The correct amount is on the Invoice Transmittal and is not disputed; 

  
 7 








 (d) Payment is not contingent on any obligation or contract and Borrower has
fulfilled all its obligations as of the Invoice Transmittal date; 
 (e) Such Financed Receivable is based on an
actual sale and delivery of goods and/or services rendered, is due to Borrower, is not past due or in default, has not been previously sold, assigned, transferred, or pledged and is free of any liens, security interests and encumbrances other than
Permitted Liens; 
 (f) There are no defenses, offsets, counterclaims or agreements for which the Account Debtor
may claim any deduction or discount; 
 (g) Borrower reasonably believes no Account Debtor is insolvent or
subject to any Insolvency Proceedings; 
 (h) Borrower has not filed or had filed against it Insolvency
Proceedings and does not anticipate any filing; 
 (i) Bank has the right to endorse and/or require Borrower to
endorse all payments received on Financed Receivables and all proceeds of Collateral; and 
 (j) No
representation, warranty or other statement of Borrower in any certificate or written statement given to Bank contains any untrue statement of a material fact or omits to state a material fact necessary to make the statement contained in the
certificates or statement not misleading. 
 5.4 Renewal Invoices. With respect to Renewal Invoices, Borrower
represents and warrants that the estimated face value amount determined by Borrower is based upon the best information available to Borrower and accurately and fully (considering all known discounts available to each such Account Debtor) reflects
same. In addition, Borrower represents and warrants that there are no discounts, offsets or other rights of any Account Debtor under any Renewal Invoice. 
 5.5 Litigation. There are no actions or proceedings pending or, to the knowledge of Borrower’s Responsible Officers, threatened in writing by or against Borrower or any Subsidiary in
which an adverse decision could reasonably be expected to cause a Material Adverse Change. 
 5.6 No Material
Deterioration in Financial Statements. All consolidated financial statements for Borrower and any 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. 

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

5.8 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). Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and
used in the Public Utility Holding Company Act of 2005. Borrower has complied in all material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be
expected to cause a Material Adverse Change. None of Borrower’s or any Subsidiary’s properties or assets have 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 Government Authorities that are necessary to continue their respective businesses as currently conducted, except where the failure to obtain or make such consents, declarations, notices or filings would not reasonably be expected to cause a
Material Adverse Change. 

  
 8 








 5.9 Subsidiaries. Borrower does not own any stock, partnership interest or
other equity securities except for Permitted Investments, and its equity interest in its Subsidiaries shown on the Perfection Certificate. 
 5.10 Tax Returns and Payments; Pension Contributions. Borrower and each Subsidiary have timely filed all required tax returns and reports (or have properly filed extensions of time to file),
and Borrower and each Subsidiary have timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each Subsidiary. Borrower may defer payment of any contested taxes, provided that Borrower
(a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Bank in writing of the commencement of, and any material development in, the proceedings,
and (c) posts bonds or takes 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. 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. 

5.11 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 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). 
 6 AFFIRMATIVE COVENANTS 
 Borrower shall do all of the following:

 6.1 Government Compliance. 

(a) 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, with all laws, ordinances and regulations to which it is subject, noncompliance with which could 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 the Collateral. Borrower shall promptly provide copies of any such obtained Governmental Approvals to Bank. 

6.2 Financial Statements, Reports, Certificates. 

(a) Deliver to Bank: (i) 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 during the period certified by a Responsible Officer and in a form acceptable to Bank; (ii) as soon as available, but no
later than one hundred eighty (180) days after the last day of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion (other than, with respect to
Borrower’s fiscal year ended January 31, 2010 only, for a going concern qualification) on the financial statements from an independent certified public accounting firm reasonably acceptable to Bank; (iii) in the event that
Borrower’s stock becomes publicly held, within five (5) days of filing, copies of all statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt and all reports on Form 10-K,
10-Q and 8-K filed with the Securities and Exchange Commission; (iv) a prompt report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in damages or costs to Borrower or any Subsidiary of One
Hundred Thousand Dollars ($100,000.00) or more; (v)

  
 9 








 
prompt notice of any material change in the composition of the Intellectual Property Collateral, or the registration of any copyright, including any subsequent ownership right of Borrower in or
to any copyright, patent or trademark not shown in the IP Agreement or knowledge of an event that materially adversely affects the value of the Intellectual Property Collateral; and (vi) budgets, sales projections, operating plans or other
financial information reasonably requested by Bank. 
 (b) Within thirty (30) days after the last day of
each month, deliver to Bank with the monthly financial statements a Compliance Certificate signed by a Responsible Officer in the form of Exhibit B. 

(c) Allow Bank to audit Borrower’s Collateral, including, but not limited to, Borrower’s Accounts at
Borrower’s expense, upon reasonable notice to Borrower; provided, however, prior to the occurrence and continuance of an Event of Default, Borrower shall be obligated to pay for not more than one (1) audit per year. The charge for such
audit shall be Eight Hundred Fifty Dollars ($850.00) 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. After the occurrence and during the
continuation of an Event of Default, Bank may audit Borrower’s Collateral, including, but not limited to, Borrower’s Accounts at Borrower’s expense and at Bank’s sole and exclusive discretion and without notification and
authorization from Borrower. 
 (d) Upon Bank’s request, provide a written report respecting any Financed
Receivable, if payment of any Financed Receivable does not occur by its due date and include the reasons for the delay. 
 (e) Provide Bank with, as soon as available, but no later than thirty (30) days following each Reconciliation Period, an aged listing of accounts receivable and accounts payable by invoice date, in
form acceptable to Bank. 
 (f) Provide Bank with, as soon as available, but no later than thirty (30) days
following each Reconciliation Period, a Deferred Revenue report, in form acceptable to Bank. 
 (g) Provide Bank
with, as soon as available, but not later than (i) ten (10) days following each Reconciliation Period (but only if an Advance was outstanding at any time during such Reconciliation Period or is outstanding at such time), (ii) ten
(10) days following the last day of each fiscal quarter, and (iii) contemporaneously with the delivery an Invoice Transmittal in connection with each request by Borrower for an Advance, a backlog schedule (including, when applicable,
quarterly renewal license schedule and annual projections) in form and substance acceptable to Bank in its sole and absolute discretion. 
 6.3 Taxes. Make, and cause each Subsidiary to make, timely payment of all federal, state, and local taxes or assessments (other than taxes and assessments which Borrower is contesting in
good faith, with adequate reserves maintained in accordance with GAAP) and will deliver to Bank, on demand, appropriate certificates attesting to such payments. 
 6.4 Insurance. Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location, and as Bank may reasonably request.
Insurance policies shall be in a form, with companies, and in amounts that are satisfactory to Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as the sole lender loss payee and waive subrogation against
Bank, and all liability policies shall show, or have endorsements showing, Bank as an additional insured. All policies (or the loss payable and additional insured endorsements) shall provide that the insurer must give Bank at least twenty
(20) days notice before canceling, amending, or declining to renew its policy. At Bank’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at
Bank’s option, be payable to Bank on account of the Obligations. If Borrower fails to obtain insurance as required under this Section 6.4 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 6.4, and take any action under the policies Bank deems prudent. 

  
 10 









 6.5 Accounts. 

(a) To permit Bank to monitor Borrower’s financial performance and condition, Borrower, and all Borrower’s
domestic Subsidiaries, shall maintain Borrower’s and such domestic Subsidiaries’ primary depository, operating accounts and securities accounts with Bank and Bank’s affiliates, which accounts shall represent at least eighty five
percent (85.0%) of the dollar value of Borrower’s and such domestic Subsidiaries’ accounts at all financial institutions. Any Guarantor shall maintain all depository and operating accounts with Bank, and, with respect to
securities accounts, with an affiliate of Bank. 
 (b) Identify to Bank, in writing, any deposit or securities
account opened by Borrower with any institution other than Bank. In addition, for each such account that Borrower or Guarantor at any time opens or maintains, Borrower shall, at Bank’s request and option, pursuant to an agreement in form and
substance acceptable to Bank, cause the depository bank or securities intermediary to agree that such account is the collateral of Bank pursuant to 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. 

6.6 Reserved. 
 6.7 Financial Covenant – Adjusted Quick Ratio. Maintain at all times, to be tested as of the last day of each quarter, an Adjusted Quick Ratio of at least (a) 1.0 to 1.0 for the
quarter ending April 30, 2010, (b) 0.75 to 1.0 for the quarters ending July 31, 2010 and October 31, 2010, and (c) 1.25 to 1.0 for the quarter ending January 31, 2010, and as of the last day of each quarter thereafter.

 6.8 Protection and Registration of Intellectual Property Rights. Borrower shall: (a) protect, defend and
maintain the validity and enforceability of its intellectual property; (b) promptly advise Bank in writing of material infringements of its intellectual property; and (c) not allow any intellectual property material to Borrower’s
business to be abandoned, forfeited or dedicated to the public without Bank’s written consent. If Borrower (i) obtains any patent, registered trademark or servicemark, registered copyright, registered mask work, or any pending application
for any of the foregoing, whether as owner, licensee or otherwise, or (ii) applies for any patent or the registration of any trademark or servicemark, then Borrower shall immediately provide written notice thereof to Bank and shall execute such
intellectual property security agreements and other documents and take such other actions as Bank shall request in its good faith business judgment to perfect and maintain a first priority perfected security interest in favor of Bank in such
property. If Borrower decides to register any copyrights or mask works in the United States Copyright Office, Borrower shall: (x) provide Bank with at least fifteen (15) days prior written notice of Borrower’s intent to register such
copyrights or mask works together with a copy of the application it intends to file with the United States Copyright Office (excluding exhibits thereto); (y) execute an intellectual property security agreement and such other documents and take
such other actions as Bank may request in its good faith business judgment to perfect and maintain a first priority perfected security interest in favor of Bank in the copyrights or mask works intended to be registered with the United States
Copyright Office; and (z) record such intellectual property security agreement with the United States Copyright Office contemporaneously with filing the copyright or mask work application(s) with the United States Copyright Office. Borrower
shall promptly provide to Bank copies of all applications that it files for patents or for the registration of trademarks, servicemarks, copyrights or mask works, together with evidence of the recording of the intellectual property security
agreement necessary for Bank to perfect and maintain a first priority perfected security interest in such property. 
 6.9
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. 

6.10 Further Assurances. Borrower shall execute any further instruments and take further action as Bank reasonably requests
to perfect or continue Bank’s security interest in the Collateral or to effect the purposes of this Agreement. 
 7
NEGATIVE COVENANTS 
 Borrower shall not do any of the following without Bank’s prior written consent.


  
 11 









 7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose
of (collectively a “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 or obsolete
Equipment and furniture; (c) in connection with Permitted Liens and Permitted Investments; and (d) of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries in the ordinary course of business. 

7.2 Changes in Business, Ownership, Management or Business Locations. Engage in or permit any of its Subsidiaries to engage
in any business other than the businesses currently engaged in by Borrower or reasonably related thereto, or have a material change in its ownership (other than by the sale of Borrower’s equity securities in a public offering or to venture
capital investors so long as Borrower identifies to Bank the venture capital investors prior to the closing of the investment), or management. Borrower shall not, without at least thirty (30) days prior written notice to Bank: (a) relocate
its chief executive office, or add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Five Thousand Dollars ($5,000.00) in Borrower’s assets or property), or
(b) change its jurisdiction of organization, or (c) change its organizational structure or type, or (d) change its legal name, or (e) change any organizational number (if any) assigned by its jurisdiction of organization.

 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. A Subsidiary may merge or consolidate into another Subsidiary or into Borrower. 

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, or permit any Collateral not to be subject to the first priority security interest granted
herein (subject to Permitted Liens that are permitted to have superior priority to Bank’s Lien), 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. 
 7.6
Distributions; Investments. (a) Directly or indirectly acquire or own any Person (other than its ownership interests in its Subsidiaries shown on the Perfection Certificate that are existing on the Effective Date), or make any
Investment in any Person, other than Permitted Investments, or permit any of its Subsidiaries to do so; or (b) pay any dividends or make any distribution or payment on, or redeem, retire or purchase, any capital stock (excluding any conversion
into other equity securities of Borrower). 
 7.7 Transactions with Affiliates. Directly or indirectly enter into
any material transaction with any Affiliate of Borrower, except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an
arm’s length transaction with a non-affiliated Person. 
 7.8 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
which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed to Bank. 
 7.9
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 Advance for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable
Event or Prohibited Transaction, each 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 could reasonably be expected to have a material adverse effect on
Borrower’s business, or permit any of its Subsidiaries to 

  
 12 









 
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 pay any of the Obligations when due; 
 8.2 Covenant Default. Borrower fails or neglects to perform any obligation in Section 6 or violates any covenant in Section 7 or fails or neglects to perform, keep, or observe any
other material term, provision, condition, covenant or agreement contained in this Agreement, any Loan Documents and as to any default 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, grace and cure periods provided under this Section 8.2 shall not apply to financial covenants or any other covenants that are required to be satisfied, completed
or tested by a date certain; 
 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 control of Borrower (including a Subsidiary) on deposit with Bank or any Bank Affiliate, or (ii) a notice of lien, levy, or assessment is filed against any of Borrower’s assets
by any government agency, 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
Advances shall be made during any ten (10) day cure period; and (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 any part of its business; 
 8.5 Insolvency.
(a) Borrower is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower and not
dismissed or stayed within thirty (30) days (but no Advances 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. If there is a default in any agreement to which Borrower is a party with a third party or parties
resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of One Hundred Thousand Dollars ($100,000.00) or that could result in a Material Adverse Change;

 8.7 Judgments. One or more judgments, orders, or decrees for the payment of money in an amount, individually or
in the aggregate, of at least Two Hundred Thousand Dollars ($200,000.00) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower and shall remain
unsatisfied, unvacated, or unstayed for a period of ten (10) days after the entry thereof (provided that no Advances will be made prior to the satisfaction, vacation, or stay of such 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 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. A default or breach occurs under any agreement between Borrower and any creditor of
Borrower that signed a subordination agreement, intercreditor agreement, or other similar agreement with Bank, or any creditor that has signed such an agreement with Bank breaches any terms of the agreement; 

  
 13 









 8.10 Guaranty. (a) Any guaranty of any Obligations terminates or ceases
for any reason to be in full force and effect; (b) any Guarantor does not perform any obligation or covenant under any guaranty of the Obligations; (c) any circumstance described in Sections 8.3, 8.4, 8.5, 8.7, or 8.8. occurs with respect
to any Guarantor; (d) the liquidation, winding up, or termination of existence of any Guarantor; or (e) (i) a material impairment in the perfection or priority of Bank’s Lien in the collateral provided by Guarantor or in the
value of such collateral or (ii) a material adverse change in the general affairs, management, results of operation, condition (financial or otherwise) or the prospect of repayment of the Obligations occurs with respect to any Guarantor; or

 8.11 Governmental Approvals. Any Governmental Approval shall have been (a) revoked, rescinded, suspended,
modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Authority that designates a hearing with respect to any applications for renewal of any 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 (i) has, or could reasonably be
expected to have, a Material Adverse Change, or (ii) adversely affects the legal qualifications of Borrower or any of its Subsidiaries to hold such Governmental Approval in any applicable jurisdiction and such revocation, rescission,
suspension, modification or non-renewal could reasonably be expected to affect the status of or legal qualifications of Borrower or any of its Subsidiaries to hold any Governmental Approval in any other jurisdiction. 

9 BANK’S RIGHTS AND REMEDIES 
 9.1 Rights and Remedies. When an Event of Default occurs and continues 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) deposits cash with Bank in an amount equal to the aggregate amount of any letters of credit remaining undrawn, 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) 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 and verify the amount of such account. 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; 
 (e)
make any payments and do any acts it considers necessary or reasonable to protect 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; 
 (f) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or for the credit or the account of Borrower; 

(g) 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, service
marks, 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; 

  
 14 









 (h) 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 (it being agreed that, notwithstanding the terms of any
such control agreement, Bank will deliver a notice of exclusive control only if an Event of Default has occurred and is continuing and will rescind any such notice when the relevant Event of Default ceases to exist); 

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

(j) 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 Protective
Payments. If Borrower fails to obtain insurance called for by Section 6.4 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement or by any other Loan Document, 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 applicable rate, and secured by the Collateral. Bank will make reasonable effort
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. 
 9.3 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking
practices regarding the safekeeping of Collateral in 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. 

9.4 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 Bank
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 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.

 9.5 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 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 or facsimile number provided at the beginning of this Agreement. Bank or Borrower may change its address or facsimile number by giving the other party written notice thereof in accordance
with the terms of this Section 10. 

  
 15 









 11 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER 

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 if for any reason Bank cannot avail itself of such courts in the Commonwealth of Massachusetts, Borrower accepts jurisdiction of the courts and venue in
Santa Clara County, California. Notwithstanding the foregoing, 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 at the beginning 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. 
 12 GENERAL PROVISIONS 

12.1 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, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits under this Agreement, the Loan Documents or any related agreement. 

12.2 Indemnification. Borrower agrees to indemnify, defend, and hold Bank and its officers, directors, employees, agents,
attorneys or any other Person affiliated with or representing Bank (each, an “Indemnified Person”) harmless against: (a) all obligations, demands, claims, and liabilities (collectively, “Claims”) asserted by any other party
in connection with the transactions contemplated by the Loan Documents; and (b) all losses or Bank Expenses incurred, or paid by such Indemnified Person from, following, 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. 
 12.3 Right of Set-Off. Borrower hereby grants to Bank, a lien, security interest and 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 Bank subsidiary) 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 set off 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. 
 12.4
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. 

  
 16 









 12.6 Correction of Loan Documents. Bank may correct patent errors and fill in
any blanks in this Agreement and the other Loan Documents consistent with the agreement of the parties. 
 12.7 Amendments
in Writing; Integration. All amendments to this Agreement must be in writing signed by both Bank and Borrower. This Agreement and 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 this Agreement and the Loan Documents merge into this Agreement and 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, are an original, and all taken together, constitute one Agreement. 

12.9 Survival. All covenants, representations and warranties made in this Agreement continue in full force until this
Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied. The obligation of
Borrower in Section 12.2 to indemnify Bank shall survive until the statute of limitations with respect to such claim or cause of action shall have run. 
 12.10 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; (b) to prospective transferees or purchasers of any interest in the Advances (provided, however, Bank shall use commercially reasonable efforts to obtain such
prospective transferee’s or purchaser’s agreement to the terms of this provision); (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 either: (i) is in the public domain or in Bank’s possession when disclosed to Bank, or becomes part
of the public domain after disclosure to Bank; or (ii) is disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information. 

Bank may use confidential information for any purpose, including, without limitation, for the development of client databases, reporting
purposes, and market analysis, so long as Bank does not disclose Borrower’s identity or the identity of any person associated with Borrower unless otherwise expressly permitted by this Agreement. The provisions of the immediately preceding
sentence shall survive the termination of this Agreement. 
 13 DEFINITIONS 

13.1 Definitions. In this Agreement: 
 “Acceptable Foreign Accounts” are Accounts due and owing from Acceptable Foreign Account Debtors and payable in the United States that either (a) Borrower has made arrangements
satisfactory to Bank in its sole discretion with respect to a hedge on such Accounts (which shall be required with respect to foreign Accounts on open account terms), (b) are supported by letter(s) of credit acceptable to Bank, or (c) are
otherwise acceptable to Bank in its sole and absolute discretion. 
 “Acceptable Foreign Account Debtor” are
Account Debtors with their principal place of business located outside of the United States and deemed acceptable to Bank (in its good faith business discretion); provided, however, Account Debtors located in a country in which Export-Import Bank of
the United States is legally prohibited from doing business or in which Export-Import Bank of the United States coverage is not available as designated in the Country Limitation Schedule shall not be deemed Acceptable Foreign Account Debtors
hereunder. 
 “Account” is any “account” as 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 Borrower. 

  
 17 









 “Account Debtor” is as defined in the Code and shall include, without
limitation, any person liable on any Financed Receivable, such as, a guarantor of the Financed Receivable and any issuer of a letter of credit or banker’s acceptance. 
 “Adjusted Quick Ratio” is, as 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. 
 “Adjustments” are all discounts, allowances, returns, disputes, counterclaims,
offsets, defenses, rights of recoupment, rights of return, warranty claims, or short payments, asserted by or on behalf of any Account Debtor for any Financed Receivable. 
 “Advance” is defined in Section 2.1.1. 
 “Advance
Rate” is (a) with respect to Eligible Accounts, eighty percent (80.0%), net of any offsets related to each specific Account Debtor other than Deferred Revenue, or such other percentage as Bank establishes under Section 2.1.1, and
(b) with respect to Renewal Invoices, (i) from June 1, 2010 through and including July 31, 2010, thirty percent (30.0%), net of any offsets related to each specific Account Debtor, other than Deferred Revenue, or such other
percentage as Bank establishes under Section 2.1.1, and (ii) from August 1, 2010 through and including January 31, 2011, fifty percent (50.0%), net of any offsets related to each specific Account Debtor, other than Deferred
Revenue, or such other percentage as Bank establishes under Section 2.1.1. 
 “Affiliate” of any Person is
a 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. 
 “Applicable Rate” is
(a) with respect to Financed Receivables based upon Eligible Accounts, a per annum rate equal to the Prime Rate plus one and one-half of one percent (1.50%), and (b) with respect to Financed Receivables based upon Renewal Invoices, a per
annum rate equal to the Prime Rate plus two and one-half of one percent (2.50%). 
 “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 with respect to Borrower. 
 “Bank
Services” is the aggregate amount of all outstanding credit services and products provided to Borrower by Bank (exclusive of amounts set forth in subsection (a) of the definition of Obligations), including, without limitation, all
letters of credit, guidance facilities, cash management services (including, without limitation, merchant services, direct deposit of payroll, business credit card, and check cashing services identified in Bank’s various cash management
services agreements) and foreign exchange contract under which Borrower commits to purchase from or sell to Bank a specific amount of lawful money of a country other than the United States. 

“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. 

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

“Claims” are defined in Section 12.2. 
 “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


  
 18 









 
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 Handling Fee” is defined in Section 2.2.4. 

“Collections” are (a) all funds received by Bank from or on behalf of an Account Debtor for Financed Receivables,
and (b) all funds received by Bank pursuant to the repayment of outstanding principal, Finance Charges and Collateral Handling Fees in connection with Advances made based upon Renewal Invoices, as received by Bank pursuant to
Section 2.3.1(b). 
 “Compliance Certificate” is attached 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 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. 
 “Current Liabilities” are, as calculated on a consolidated basis for Borrower and its Subsidiaries, all obligations and liabilities of Borrower and its Subsidiaries to Bank, plus, without
duplication, the aggregate amount of Borrower’s and its Subsidiaries’ Total Liabilities that mature within one (1) year. 
 “Deferred Revenue” is all amounts received or invoiced, as appropriate, in advance of performance under contracts and not yet recognized as revenue. 

“Early Termination Fee” is defined in Section 2.1.1. 

“Effective Date” is defined in the preamble of this Agreement. 

“Eligible Accounts” are billed Accounts in the ordinary course of Borrower’s business that meet all Borrower’s
representations and warranties in Section 5.3, have been, at the option of Bank, confirmed in accordance with Section 2.1.1(d), and are due and owing from Account Debtors deemed creditworthy by Bank in its sole discretion. Without limiting
the fact that the determination of which Accounts are eligible hereunder is a matter of Bank’s good faith business discretion in each instance, Eligible Accounts shall not include the following Accounts (which listing may be amended or changed
in Bank’s good faith business discretion with notice to Borrower): 
 (a) Accounts that the Account Debtor has not paid
within one hundred twenty (120) days of invoice date regardless of invoice payment period terms; 
 (b) Accounts owing from
an Account Debtor which does not have its principal place of business in the United States, other than with respect to (i) Eligible Foreign Subsidiary Accounts approved by Bank in writing on a case by case basis in its sole discretion in an
aggregate amount not to exceed One Million Dollars ($1,000,000.00) (inclusive of all Advances made based upon Eligible Foreign Subsidiary Accounts pursuant to subsection (c) below), and (ii) Acceptable Foreign Accounts; 

  
 19 









 (c) Accounts billed and/or payable outside of the United States, other than with respect to
Eligible Foreign Subsidiary Accounts approved by Bank in writing on a case-by-case basis in its sole discretion in an aggregate amount not to exceed One Million Dollars ($1,000,000.00) (inclusive of all Advances made based upon Eligible Foreign
Subsidiary Accounts pursuant to subsection (b)(i) above); 
 (d) 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), with the exception of
customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the ordinary course of its business; 

(e) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or agent; 

(f) 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; 
 (g) 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; 
 (h) Accounts owing from an Account Debtor that has not been invoiced or
where goods or services have not yet been rendered to the Account Debtor (sometimes called memo billings or pre-billings); 

(i) Accounts subject to contractual arrangements between Borrower and an Account Debtor where payments shall be scheduled or due
according to completion or fulfillment requirements where the Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to perform in accordance with the contract (sometimes called contracts accounts
receivable, progress billings, milestone billings, or fulfillment contracts); 
 (j) 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); 

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

(l) 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 in its sole discretion 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); 
 (m) Accounts for which the Account Debtor has not been invoiced; 
 (n) Accounts
that represent non-trade receivables or that are derived by means other than in the ordinary course of Borrower’s business; 
 (o) Accounts subject to chargebacks or other payment deductions taken by an Account Debtor (but only to the extent the chargeback is determined invalid and subsequently collected by Borrower); 

(p) 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, or becomes insolvent, or goes out of business; and 
 (q) Accounts for
which Bank in its good faith business judgment determines collection to be doubtful. 
 “Eligible Foreign Subsidiary
Accounts” are, as determined and approved by Bank in writing in its sole and absolute discretion, an Account which would be an Eligible Account but for the fact that it is due and owing to a foreign Subsidiary of Borrower. 

  
 20 









 “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. 

“Events of Default” are set forth in Section 8. 

“Facility Amount” is Twenty Five Million Dollars ($25,000,000.00). 

“Facility Fee” is defined in Section 2.2.2. 

“Finance Charges” is defined in Section 2.2.3. 

“Financed Receivables” are all those Eligible Accounts and Renewal Invoices, including their proceeds which Bank
finances and makes an Advance, as set forth in Section 2.1.1. A Financed Receivable stops being a Financed Receivable (but remains Collateral) when the Advance made for the Financed Receivable has been fully paid. 

“Financed Receivable Balance” is the total outstanding gross face amount, at any time, of any Financed Receivable.

 “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. 

“Good Faith Deposit” is defined in Section 2.2.9. 

“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 present or future guarantor of the Obligations. 

“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 12.2. 

“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 relief. 

“Intellectual Property Collateral” is defined in the IP Agreement. 

“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. 

  
 21 









 “Investment” is any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital contribution to any Person. 
 “Invoice
Transmittal” shows Eligible Accounts and Renewal Invoices which Bank may finance and, (a) with respect to requests for Advances based upon Eligible Accounts, includes the Account Debtor’s, name, address, invoice amount, invoice
date and invoice number, and (b) with respect to requests for Advances based upon Renewal Invoices, includes the Account Debtor’s name, address and estimated purchase order amount. 

“IP Agreement” is that certain Intellectual Property Security Agreement executed and delivered by Borrower to Bank dated
as of the Effective Date, as amended. 
 “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, the Perfection Certificate, the IP Agreement, any subordination agreements, any note, or notes or guaranties executed by Borrower or
any Guarantor, and any other present or future agreement between Borrower and any Guarantor and/or for the benefit of Bank, whether in connection with this Agreement, Bank Services, or otherwise, all as amended, restated, or otherwise modified.

 “Lockbox” is defined in Section 2.2.7. 

“Material Adverse Change” is: (a) a material impairment in the perfection or priority of Bank’s security
interest 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; (c) a material impairment of the prospect of repayment of any
portion of the Obligations; or (d) Bank determines, based upon information available to it and in its reasonable judgment, that there is a reasonable likelihood that Borrower shall fail to comply with one or more of the financial covenants in
Section 6 during the next succeeding financial reporting period. 
 “Maturity Date” is 364 days from the
Effective Date. 
 “Obligations” are Borrower’s obligation to pay when due (a) any debts, principal,
interest, Bank Expenses, and other amounts Borrower owes Bank now or later, whether under this Agreement, the Loan Documents, or otherwise, including, without limitation, any interest accruing after Insolvency Proceedings begin and debts,
liabilities, or obligations of Borrower assigned to Bank, and the performance of Borrower’s duties under the Loan Documents, and (b) Bank Services, whether in existence now or later, including, without limitation, letter of credit number
SVBSF005401 dated as of July 29, 2008. 
 “Perfection Certificate” is defined in Section 5.1. 

“Permitted Indebtedness” is: 
 (a) Borrower’s indebtedness to Bank under this Agreement or the Loan Documents; 
 (b) Indebtedness existing on the Effective Date which is shown on the Perfection Certificate; 
 (c) Subordinated Debt; 
 (d) Indebtedness to trade creditors incurred in the
ordinary course of business; 
 (e) Indebtedness secured by Permitted Liens; and 

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

  
 22 









 “Permitted Investments” are: 

(a) marketable direct obligations issued or unconditionally guaranteed by the United States or its agency or any state maturing within
one (1) year from its acquisition; 
 (b) commercial paper maturing no more than one (1) year after its creation and
having the highest rating from either Standard & Poor’s Corporation or Moody’s Investors Service, Inc.; 

(c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue; 

(d) Investments (including Subsidiaries) existing on the Effective Date which are shown on the Perfection Certificate , in an aggregate
amount not to exceed the amounts invested therein as of the Effective Date (and specifically excluding any future Investments); 

(e) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary
course of Borrower’s business; 
 (f) Investments 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 Borrower’s board of directors; 
 (g) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business; 

(h) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are
not Affiliates, in the ordinary course of business; provided that this paragraph (h) shall not apply to Investments of Borrower in any Subsidiary; 
 (i) Investments accepted in connection with Transfers permitted by Section 7.1; 
 (j) Investments in connection with joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non-exclusive licensing of technology, the development of
technology or the providing of technical support, provided that any cash investments by Borrower do not exceed One Hundred Thousand Dollars ($100,000.00) in the aggregate in any fiscal year; 

(k) Investments in Borrower’s Subsidiaries for the ordinary and necessary current operating expenses of such Subsidiaries in an
aggregate amount not to exceed Five Hundred Thousand Dollars ($500,000.00) per year; and 
 (l) any other investments
administered through Bank. 
 “Permitted Liens” are: 

(a) Liens existing on the Effective Date which are shown on the Perfection Certificate or arising under this Agreement or other Loan
Documents; 
 (b) Liens for taxes, fees, assessments or other government charges or levies, either not delinquent or being
contested in good faith and for which Borrower maintains adequate reserves on its Books, if they have no priority over any of Bank’s security interests; 
 (c) Purchase money Liens and capital leases securing no more than One Million Five Hundred Thousand Dollars ($1,500,000.00) in the aggregate amount outstanding (i) on equipment acquired or held by
Borrower incurred for financing the acquisition of the equipment, or (ii) existing on equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the equipment; 

  
 23 









 (d) Leases or subleases and non-exclusive licenses or sublicenses granted in the ordinary
course of Borrower’s business, if the leases, subleases, licenses and sublicenses permit granting Bank a security interest; 
 (e) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (d), 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; 
 (f) Liens arising
from attachments or judgments, orders, or decrees in circumstances not constituting an Event of Default under Sections 8.4 and 8.7; 
 (g) Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory, securing
liabilities in the aggregate amount not to exceed Fifty Thousand Dollars ($50,000.00) 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; and 
 (h) 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), provided they have no priority over any of Bank’s Liens and the
aggregate amount of such Liens does not at any time exceed Fifty Thousand Dollars ($50,000.00). 
 “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. 
 “Prime Rate” is Bank’s most recently announced “prime rate,” even if it is
not Bank’s lowest rate. 
 “Quick Assets” is, as calculated on a consolidated basis for Borrower and its
Subsidiaries, on any date, Borrower’s and its Subsidiaries’ unrestricted cash maintained with Bank and net billed accounts receivable, determined according to GAAP. 
 “Reconciliation Period” is each calendar month. 

“Registered Organization” is any “registered organization” as defined in the Code with such additions to such
term as may hereafter be made. 
 “Renewal Invoice” is the estimated face value amount (as determined by
Borrower, subject to Section 5.4 hereof) of a domestic or foreign purchase order that will be executed by an existing Account Debtor of Borrower (but has not yet been executed by such Account Debtor) by January 31, 2011 pursuant to a
renewal backlog schedule provided to Bank pursuant to Section 6.2(g), which invoice is generated by Borrower in the United States and which is payable in the United States, and which is deemed acceptable by Bank in its sole and absolute
discretion. 
 “Renewal Invoice Balance” is the aggregate outstanding amount of all Advances made based upon
Renewal Invoices multiplied by 1.25. 
 “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. 
 “Responsible Officer” is each of the
Chief Executive Officer, President, Chief Financial Officer and Controller of 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. 

  
 24 









 “Subsidiary” is, with respect to any Person, any Person of which more than
fifty percent (50.0%) of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled directly or indirectly by such Person or one or more of Affiliates of such Person. 

“Total Liabilities” is, as calculated on a consolidated basis for Borrower and its Subsidiaries, on any day, obligations
that should, under GAAP, be classified as liabilities on Borrower’s and its Subsidiaries’ consolidated balance sheet, including all Indebtedness, but excluding all Subordinated Debt. 

[Signature page follows.] 

  
 25 









 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:
  

EXA CORPORATION

		
	By:	 	/s/ Edmond L. Furlong
	Name:	 	Edmond L. Furlong
	Title:	 	COO/CFO
	
	 BANK:
  

SILICON VALLEY BANK

		
	By:	 	/s/ Michael McMahon
	Name:	 	Michael McMahon
	Title:	 	VP


  
 26 









 EXHIBIT A 

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

All goods, equipment, inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, general
intangibles (including payment intangibles) accounts (including health-care receivables), documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit
rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located;
and any copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, now owned or later acquired; any patents, trademarks, service marks and
applications therefor; trade styles, trade names, any trade secret rights, including any rights to unpatented inventions, know-how, operating manuals, license rights and agreements and confidential information, now owned or hereafter acquired; or
any claims for damages by way of any past, present and future infringement of any of the foregoing; 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. 

  
 1 








 EXHIBIT B 
 



 
 SPECIALTY FINANCE DIVISION 

Compliance Certificate 
 I, an authorized officer of EXA CORPORATION (“Borrower”) certify (on behalf of Borrower and not in my individual capacity) under the Loan and Security Agreement (as amended, the
“Agreement”) between Borrower and Silicon Valley Bank (“Bank”) as follows (all capitalized terms used herein shall have the meaning set forth in the Agreement): 
 Borrower represents and warrants for each Financed Receivable (other than Financed Receivables based upon Renewal Invoices): 
 Each Financed Receivable is an Eligible Account; 
 Borrower is the owner with legal right to sell,
transfer, assign and encumber such Financed Receivable; 
 The correct amount is on the Invoice Transmittal and is not disputed; 

Payment is not contingent on any obligation or contract and Borrower has fulfilled all its obligations as of the Invoice Transmittal date; 

Each Financed Receivable is based on an actual sale and delivery of goods and/or services rendered, is due to Borrower, is not past due or in default,
has not been previously sold, assigned, transferred, or pledged and is free of any liens, security interests and encumbrances other than Permitted Liens; 
 There are no defenses, offsets, counterclaims or agreements for which the Account Debtor may claim any deduction or discount; 
 It reasonably believes no Account Debtor is insolvent or subject to any Insolvency Proceedings; 

It has not filed or had filed against it Insolvency Proceedings and does not anticipate any filing; 

Bank has the right to endorse and/or require Borrower to endorse all payments received on Financed Receivables and all proceeds of Collateral; and

 No representation, warranty or other statement of Borrower in any certificate or written statement given to Bank contains any untrue
statement of a material fact or omits to state a material fact necessary to make the statement contained in the certificates or statement not misleading. 
 Additionally, Borrower represents and warrants as follows: 
 Borrower and each Subsidiary
is duly existing and in good standing in its state of formation and qualified and licensed to do business in, and in good standing in, any state 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 cause a Material Adverse Change. The execution, delivery and performance of the Loan Documents have been duly authorized, and do not conflict with Borrower’s organizational
documents, nor constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which or by which it is bound in which the default could reasonably be expected to cause a
Material Adverse Change. 

  
 1 








 Borrower has good title to the Collateral, free of Liens except Permitted Liens. All inventory is in all
material respects of good and marketable quality, free from material defects. 
 Borrower is not an “investment company” or a company
“controlled” by an “investment company” under the Investment Company Act of 1940, as amended. Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate” of a “holding
company” or a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding Company Act of 2005. 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 has complied in all material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation
of which could reasonably be expected to cause a Material Adverse Change. None of Borrower’s or any Subsidiary’s properties or assets have 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 Subsidiary has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes,
except those being contested in good faith with adequate reserves under GAAP. Borrower and each Subsidiary has obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all government
authorities that are necessary to continue its business as currently conducted except where the failure to obtain or make such consents, declarations, notices or filings would not reasonably be expected to cause a Material Adverse Change.

 Borrower is in compliance with the financial covenant set forth in Section 6.7 of the Agreement. 

All other representations and warranties in the Agreement are true and correct in all material respects on this date, except to the extent that any such
representation and warranty relates solely to an earlier date (in which case such representation and warranty shall be true and correct on and as of such earlier date), and Borrower represents that there is no existing Event of Default. 

Financial Covenant 
  

									
	 	  	Required	  	Actual	 	  	Compliance
	 Adjusted Quick Ratio (quarterly)
	  	            :1.0*	  	 	            :1.0	  	  	Yes No

  

	*	As set forth in Section 6.7 of the Agreement. 

  

	
	 Sincerely,
  
 EXA CORPORATION

	
	  
	Signature
	
	  
	
	Title
	
	  
	
	Date


  
 2