Exhibit 10.1


 


LOAN
AND SECURITY AGREEMENT


 


THIS LOAN AND SECURITY
AGREEMENT (this “Agreement”) is dated as of the Effective Date between SILICON VALLEY BANK, a California corporation
(“Bank”), and the borrowers listed on Schedule I hereto (“Borrower”). The parties agree as follows:


 


1             LOAN
AND TERMS OF PAYMENT


 


1.1          Hardware
Advances.


 


(a)           Availability.
Subject to the terms and conditions of this Agreement, upon Borrower’s request, during the Hardware Draw Period, Bank shall make
advances not exceeding the Hardware Availability Amount (each, a “Hardware Advance” and collectively, the “Hardware
Advances”). Borrower may request Hardware Advances as set forth on Schedule I hereto.


 


(b)           Repayment.
Borrower shall repay each Hardware Advance as set forth in Schedule I hereto. All outstanding principal and accrued and unpaid interest
under each Hardware Advance, and all other outstanding Obligations with respect to each Hardware Advance, are due and payable in full
on the Hardware Maturity Date.


 


(c)           Permitted
Prepayment. Borrower shall have the option to prepay all, but not less than all, of the Hardware Advances, provided Borrower (i) delivers
written notice to Bank of its election to prepay the Hardware Advances at least five (5) Business Days prior to such prepayment,
and (ii) pays, on the date of such prepayment (A) the outstanding principal plus accrued and unpaid interest with respect to
the Hardware Advances, (B) the Prepayment Fee, and (C) all other sums, if any, that shall have become due and payable with respect
to the Hardware Advances, including interest at the Default Rate with respect to any past due amounts.


 


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


 


1.2          Payment
of Interest on the Credit Extensions.


 


(a)           Interest
Payments.


 


(i)            Hardware
Advances. Interest on the principal amount of each Hardware Advance is payable as set forth on Schedule I hereto.


 


(b)           Interest
Rate.


 


(i)            Hardware
Advances. Subject to Section 1.2(c), the outstanding principal amount of any Hardware Advance shall accrue interest as set forth
on Schedule I hereto.


 


(ii)           All-In
Rate. Notwithstanding any terms in this Agreement to the contrary, if at any time the interest rate applicable to any Obligations
is less than zero percent (0.0%), such interest rate shall be deemed to be zero percent (0.0%) for all purposes of this Agreement.


 


(c)           Default
Rate. Immediately upon the occurrence and during the continuance of an Event of Default, the outstanding Obligations shall bear interest
at a rate per annum which is three percent (3.0%) above the rate that is otherwise applicable thereto (the “Default Rate”).
Fees and expenses which are required to be paid by Borrower pursuant to the Loan Documents (including, without limitation, Bank Expenses)
but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations. Payment or
acceptance of the increased interest rate provided in this Section 1.2(c) is not a permitted alternative to timely payment and
shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank.


 






     


     


    

 


(d)           Adjustment
to Interest Rate. Each change in the interest rate applicable to any amounts payable under the Loan Documents based on changes to
the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of such change.


 


(e)           Interest
Computation. Interest shall be computed as set forth on Schedule I hereto. In computing interest, the date of the making of any Credit
Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit Extension is repaid on the
same day on which it is made, such day shall be included in computing interest on such Credit Extension.


 


1.3          Fees.
Borrower shall pay to Bank:


 


(a)           Commitment
Fee. A fully earned, non-refundable commitment fee as set forth on Schedule I hereto;


 


(b)           Increase
Fee. A fully earned, non-refundable increase fee as set forth on Schedule I hereto;


 


(c)           Prepayment
Fee. The Prepayment Fee, when due hereunder, which shall be fully earned and non-refundable as of such date;


 


(d)           Bank
Expenses. All Bank Expenses incurred through and after the Effective Date, when due (or, if no stated due date, upon demand by Bank);
and


 


(e)           Good
Faith Deposit. Borrower has paid to Bank a good faith deposit of $50,000.00 prior to the date hereof which shall be applied towards
Bank Expenses incurred through the Effective Date, with remaining proceeds (if any), returned to Borrower.


 


Unless otherwise provided
in this Agreement or in a separate writing by Bank, Borrower shall not be entitled to any credit, rebate, or repayment of any fees earned
by Bank pursuant to this Agreement notwithstanding any termination of this Agreement or the suspension or termination of Bank’s
obligation to make loans and advances hereunder. Bank may deduct amounts owing by Borrower under the clauses of this Section 1.3
pursuant to the terms of Section 1.4(c). Bank shall provide Borrower written notice of deductions made pursuant to the terms of the
clauses of this Section 1.3.


 


1.4          Payments;
Application of Payments; Debit of Accounts.


 


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


 


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


 


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


 






     


     


    

 


1.5          Change
in Circumstances.


 


(a)           Increased
Costs. If any Change in Law shall: (i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance
charge or similar requirement against assets of, deposits with or for the account of, or advances, loans or other credit extended or participated
in by, Bank, (ii) subject Bank to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through
(d) of the definition of Excluded Taxes, and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitment,
or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto, or (iii) impose on Bank any other
condition, cost or expense (other than Taxes) affecting this Agreement or Credit Extensions made by Bank, and the result of any of the
foregoing shall be to increase the cost to Bank of making, converting to, continuing or maintaining any Credit Extension (or of maintaining
its obligation to make any such Credit Extension), or to reduce the amount of any sum received or receivable by Bank hereunder (whether
of principal, interest or any other amount) then, upon written request of Bank, Borrower shall promptly pay to Bank such additional amount
or amounts as will compensate Bank for such additional costs incurred or reduction suffered.


 


(b)           Capital
Requirements. If Bank determines that any Change in Law affecting Bank regarding capital or liquidity requirements, has or would have
the effect of reducing the rate of return on Bank’s capital as a consequence of this Agreement, any term loan facility, or the Credit
Extensions made by Bank to a level below that which Bank could have achieved but for such Change in Law (taking into consideration Bank’s
policies with respect to capital adequacy and liquidity), then from time to time upon written request of Bank, Borrower shall promptly
pay to Bank such additional amount or amounts as will compensate Bank for any such reduction suffered.


 


(c)           Delay
in Requests. Failure or delay on the part of Bank to demand compensation pursuant to this Section 1.5 shall not constitute a
waiver of Bank’s right to demand such compensation; provided that Borrower shall not be required to compensate Bank pursuant to
subsection (a) for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that Bank
notifies Borrower of the Change in Law giving rise to such increased costs or reductions (except that if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the nine (9) month period shall be extended to include the period of retroactive
effect).


 


1.6          Taxes.


 


(a)           Payments
Free of Taxes. Any and all payments by or on account of any obligation of Borrower under any Loan Document shall be made without deduction
or withholding for any Taxes, except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion
of Borrower) requires the deduction or withholding of any Tax from any such payment by Borrower, then (i) Borrower shall be entitled
to make such deduction or withholding, (ii) Borrower shall timely pay the full amount deducted or withheld to the relevant Governmental
Authority in accordance with Applicable Law, and (iii) if such Tax is an Indemnified Tax, the sum payable by Borrower shall be increased
as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional
sums payable under this Section 1.6) Bank receives an amount equal to the sum it would have received had no such deduction or withholding
been made.


 


(b)           Payment
of Other Taxes by Borrower. Without limiting the provisions of subsection (a) above, Borrower shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with Applicable Law.


 


(c)           Tax
Indemnification. Without limiting the provisions of subsections (a) and (b) above, Borrower shall, and does hereby, indemnify
Bank, within ten (10) days after demand therefor (or such later date as Bank may agree to in writing in its sole discretion), for
the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under
this Section 1.6) payable or paid by Bank or required to be withheld or deducted from a payment to Bank and any reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrower by Bank shall be conclusive
absent manifest error.


 


(d)           Evidence
of Payments. As soon as practicable after any payment of Taxes by Borrower to a Governmental Authority pursuant to this Section 1.6,
Borrower shall deliver to Bank a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably satisfactory to Bank.


 






     


     


    

 


(e)           Status
of Bank. If Bank (including any assignee or successor) is entitled to an exemption from or reduction of withholding tax with respect
to payments made under any Loan Document, it shall deliver to Borrower, at the time or times reasonably requested by Borrower, such properly
completed and executed documentation reasonably requested by Borrower as will permit such payments to be made without withholding or at
a reduced rate of withholding. In addition, Bank (including any assignee or successor), if reasonably requested by Borrower, shall deliver
such other documentation prescribed by Applicable Law or reasonably requested by Borrower as will enable Borrower to determine whether
or not Bank (including any assignee or successor) is subject to backup withholding or information reporting requirements. Without limiting
the generality of the foregoing, Bank (including any assignee or successor) shall deliver whichever of IRS Form W-9, IRS Form W-8BEN, IRS
Form W-8BEN-E, IRS Form W-8ECI or IRS Form W-8IMY is applicable, as well as any applicable supporting documentation
or certifications. Bank (including any assignee or successor) agrees that if any form or certification it previously delivered expires
or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Borrower in writing of
its legal inability to do so.


 


If a payment made to Bank
(including any assignee or successor) under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if it
were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Internal Revenue Code, as applicable), Bank (or the applicable assignee or successor) shall deliver to Borrower at
the time or times prescribed by law and at such time or times reasonably requested by Borrower such documentation prescribed by Applicable
Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably
requested by Borrower as may be necessary for Borrower to comply with its obligations under FATCA and to determine that Bank (or the applicable
assignee or successor) has complied with its obligations under FATCA or to determine the amount, if any, to deduct and withhold from such
payment. Solely for purposes of this Section 1.6(e), “FATCA” shall include any amendments made to FATCA after the Effective
Date.


 


(f)            Treatment
of Certain Refunds. If Bank determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 1.6 (including by the payment of additional amounts pursuant to this
Section 1.6), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments
made under this Section 1.6 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes)
of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such
refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this paragraph (f) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in
the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the
contrary in this paragraph (f), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant
to this paragraph (f) the payment of which would place the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph
(f) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating
to its Taxes that it deems confidential) to the indemnifying party or any other Person.


 


1.7          Procedures
for Borrowing.


 


(a)           Hardware
Advances. Subject to the prior satisfaction of all other applicable conditions to the making of a Hardware Advance set forth in this
Agreement (which must be satisfied no later than 12:00 p.m. Eastern time on the applicable Funding Date), to obtain a Hardware Advance,
Borrower shall notify Bank (which notice shall be irrevocable) by 12:00 p.m. Eastern time at least two (2) Business Days prior
to the proposed Funding Date of such Hardware Advance. Such notice shall be made by electronic mail or by telephone and, together with
any such notification, Borrower shall deliver to Bank by electronic mail a completed Payment/Advance Form executed by an Authorized
Signer, an Eligible Hardware Report (other than for the Initial Hardware Advance), and such other reports and information as Bank may
reasonably request. Bank may rely on any telephone notice given by a person whom Bank believes is an Authorized Signer. Borrower will
indemnify Bank for any loss Bank suffers due to such belief or reliance. Bank shall have received satisfactory evidence that the Board
has approved that such Authorized Signer may provide such notices and request a Hardware Advance (which requirement may be deemed satisfied
by the prior delivery, including on the Effective Date, of Borrowing Resolutions or a secretary’s certificate that certifies as
to such Board approval). Hardware Advances shall only be made once per calendar quarter, within thirty (30) days after the last day of
the most recently-ended calendar quarter prior thereto.


 






     


     


    

 


(b)           Bank
shall credit proceeds of a Credit Extension to the Designated Deposit Account. Bank may make Credit Extensions under this Agreement based
on instructions from an Authorized Signer or without instructions if such Credit Extensions are necessary to meet Obligations which have
become due.


 


2             CONDITIONS
OF CREDIT EXTENSIONS


 


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


 


(a)           duly
executed Loan Documents;


 


(b)           the
Operating Documents of Borrower and a long-form good standing certificate of (i) Borrower certified by the Secretary of State of
the State of Delaware and (ii) Evolv Technologies certified by the Secretary of the Commonwealth (or equivalent agency) of Massachusetts,
in each case as of a date no earlier than 30 days prior to the Effective Date;


 


(c)           certificate
duly executed by a Responsible Officer or secretary of Borrower with respect to Borrower’s (i) Operating Documents and (ii) Borrowing
Resolutions;


 


(d)           certified
copies, dated as of a recent date, of searches for financing statements filed in the central filing office of the State of Delaware, accompanied
by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute
Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;


 


(e)           duly
executed Perfection Certificate of Borrower;


 


(f)            a
legal opinion of Borrower’s counsel dated as of the Effective Date;


 


(g)           confirmation
by Bank in writing that Borrower is in compliance with the Liquidity Ratio financial covenant in Section 5.8 as of the Effective
Date; and


 


(h)           payment
of the fees and Bank Expenses then due as specified in Section 1.3 hereof.


 


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


 


(a)           receipt
of Borrower’s Credit Extension request and the related materials and documents as required by and in accordance with Section 1.7;


 


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


 






     


     


    

 


(c)           a
Material Adverse Change shall not have occurred and be continuing.


 


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


 


3             CREATION
OF SECURITY INTEREST


 


3.1          Grant
of Security Interest.


 


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


 


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


 


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


 


3.3          Termination.
If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity
obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and
at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at Borrower’s sole cost and expense,
terminate its security interest in the Collateral and all rights therein shall revert to Borrower. In the event (a) all Obligations
(other than inchoate indemnity obligations), except for Bank Services, are satisfied in full, and (b) this Agreement is terminated,
Bank shall terminate the security interest granted herein upon Borrower providing cash collateral acceptable to Bank in its sole discretion
for Bank Services, if any. In the event such Bank Services consist of outstanding Letters of Credit, Borrower shall provide to Bank cash
collateral in an amount equal to at least (x) 105.0% of the face amount of all such Letters of Credit denominated in Dollars and
(y) 115.0% of the Dollar Equivalent of the face amount of all such Letters of Credit denominated in a Foreign Currency, plus, in
each case, all interest, fees, and costs due or estimated by Bank to become due in connection therewith, to secure all of the Obligations
relating to such Letters of Credit.


 


4             REPRESENTATIONS
AND WARRANTIES


 


Borrower represents and warrants
as follows:


 


4.1          Due
Organization, Authorization; Power and Authority.


 


(a)           Borrower
and each of its Subsidiaries are each duly existing and in good standing as a Registered Organization in their respective jurisdiction
of formation and are qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of their respective
business or their 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 or operations.


 






     


     


    

 


(b)           All
information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is true and correct in all material
respects (it being understood and agreed that Borrower may from time to time update certain information in the Perfection Certificate
after the Effective Date to the extent permitted by one or more specific provisions in this Agreement and the Perfection Certificate shall
be deemed to be updated to the extent such notice is provided to Bank of such permitted update).


 


(c)           The
execution, delivery and performance by Borrower and each of its Subsidiaries of the Loan Documents to which it is a party have been duly
authorized, and do not (i) conflict with any of Borrower’s or any such Subsidiary’s organizational documents, (ii) contravene,
conflict with, constitute a default under or violate any material Applicable Law, (iii) contravene, conflict with or violate any
applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any of
its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any action by, filing, registration, or
qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been
obtained and are in full force and effect), or (v) conflict with, contravene, constitute a default or breach under, or result in
or permit the termination or acceleration of, any material agreement by which Borrower or any of its Subsidiaries is bound. Neither Borrower
nor any of its Subsidiaries are in default under any agreement to which it is a party or by which it is bound in which the default could
reasonably be expected to have a material adverse effect on Borrower’s or any of its Subsidiary’s business or operations.


 


4.2          Collateral.


 


(a)           The
security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral
(subject to Permitted Liens). Borrower has good title to, rights in, and the power to transfer each item of the Collateral upon which
it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens.


 


(b)           Borrower
has no Collateral Accounts at or with any bank or financial institution other than Bank or Bank’s Affiliates except for the Collateral
Accounts described in the Perfection Certificate delivered to Bank in connection herewith and which Borrower, subject to Section 5.15(d),
has taken such actions as are necessary to give Bank a perfected security interest therein, pursuant to the terms of Section 5.7.
The Accounts are bona fide, existing obligations of the Account Debtors.


 


(c)           The
Collateral is not in the possession of any third party bailee (such as a warehouse, but excluding any customer of Borrower) except as
otherwise provided in the Perfection Certificate or as permitted pursuant to Section 6.2. 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 6.2.


 


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


 


(e)           Borrower
owns, or possesses the right to use to the extent necessary in its business, all Intellectual Property, licenses and other intangible
assets that are used in the conduct of its business as now operated, except to the extent that such failure to own or possess the right
to use such asset would not reasonably be expected to have a material adverse effect on Borrower’s business or operations, and no
such asset, to the knowledge of Borrower, conflicts with the valid Intellectual Property, license, or intangible asset of any other Person
to the extent that such conflict could reasonably be expected to have a material adverse effect on Borrower’s business or operations.


 


(f)            Except
as noted on the Perfection Certificate or for which notice has been given to Bank pursuant to and in accordance with Section 5.9(b),
Borrower is not a party to, nor is it bound by, any Restricted License.


 


4.3          Litigation.
 Other than as set forth in the Perfection Certificate or as disclosed to Bank pursuant to Section 5.3(i), there are no actions,
investigations or proceedings pending or, to the knowledge of any Responsible Officer, threatened in writing by or against Borrower or
any of its Subsidiaries involving more than, individually or in the aggregate, $1,000,000.00, not covered by independent third party insurance
as to which liability has been accepted by the carrier providing such insurance.


 






     


     


    

 


4.4          Financial
Statements; Financial Condition.  All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Bank
by submission to the Financial Statement Repository or otherwise submitted to Bank fairly present in all material respects Borrower’s
consolidated financial condition and Borrower’s consolidated results of operations for the periods covered thereby, subject, in
the case of unaudited financial statements, to normal year-end adjustments and the absence of footnote disclosures. There has not been
any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements
submitted to the Financial Statement Repository or otherwise submitted to Bank.


 


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


 


4.6          Regulatory
Compliance. Borrower is not an “investment company” or a company “controlled” by an “investment company”
under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for
margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors). Borrower and each of its Subsidiaries (a) have
complied in all material respects with all Applicable Law, and (b) have not violated any Applicable Law the violation of which could
reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower and each of its Subsidiaries
have duly complied with, and their respective facilities, business, assets, property, leaseholds, real property and Equipment are in compliance
with, Environmental Laws, except where the failure to do so could not reasonably be expected to have a material adverse effect on Borrower’s
business or operations; there have been no outstanding citations, notices or orders of non-compliance issued to Borrower or any of its
Subsidiaries or relating to their respective facilities, businesses, assets, property, leaseholds, real property or Equipment under such
Environmental Laws, except as could not reasonably be expected to have a material and adverse effect on Borrower’s business and
operations. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or
filings with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently
conducted, except where the failure to obtain or make or file the same would not reasonably be expected to have a material adverse effect
on Borrower’s business or operations.


 


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


 


4.8          Tax
Returns and Payments; Pension Contributions.


 


(a)           Borrower
and each of its Subsidiaries have timely filed (subject to validly filed extensions), or submitted extensions for, all required tax returns
and reports, and Borrower and each of its Subsidiaries have timely paid all foreign, federal, state and local taxes, assessments, deposits
and contributions owed by Borrower and each of its Subsidiaries except (a) to the extent such taxes are being contested in good faith
by appropriate proceedings promptly instituted and diligently conducted, so long as such reserve or other appropriate provision, if any,
as shall be required in conformity with GAAP shall have been made therefor, or (b) if such taxes, assessments, deposits and contributions
do not, individually or in the aggregate, exceed $300,000.00. Borrower is unaware of any claims or adjustments proposed for any of Borrower’s
or any of its Subsidiary’s prior tax years which could result in additional taxes becoming due and payable by Borrower or any of
its Subsidiaries in excess of $300,000.00 in the aggregate.


 


(b)           Borrower
and each of its Subsidiaries have paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans
in accordance with their terms, and neither Borrower nor any of its Subsidiaries has 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 or any of its Subsidiaries, including any liability to the Pension Benefit Guaranty
Corporation or its successors or any other Governmental Authority.


 






     


     


    

 


4.9          Full
Disclosure.  No written representation, warranty or other statement of Borrower or any of its Subsidiaries in any report, certificate
or written statement submitted to the Financial Statement Repository or otherwise submitted to Bank, as of the date such representation,
warranty, or other statement was made, taken together with all such reports, certificates and written statements submitted to the Financial
Statement Repository or otherwise submitted 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 reports, certificates or written statements not misleading in light of the circumstances
under which they were made (it being recognized by Bank that the projections and forecasts provided by Borrower or any of its Subsidiaries
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).


 


4.10        Sanctions.
Neither Borrower nor any of its Subsidiaries is: (a) in violation of any Sanctions; or (b) a Sanctioned Person. Neither Borrower
nor any of its Subsidiaries, directors, officers, employees, agents or Affiliates: (i) conducts any business or engages in any transaction
or dealing with any Sanctioned Person, including making or receiving any contribution of funds, goods or services to or for the benefit
of any Sanctioned Person; (ii) deals in, or otherwise engages in any transaction relating to, any property or interests in property
blocked pursuant to any Sanctions; (iii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Sanctions; or (iv) otherwise engages in
any transaction that could cause Bank to violate any Sanctions.


 


4.11        Eligible
Hardware. All Eligible Hardware shall (i) consist of bills of materials associated with Eligible Hardware that has been shipped
to customer locations; (ii) be evidenced by an Eligible Hardware Report in form and substance acceptable to Bank in its commercially
reasonable discretion; (iii) meet all applicable governmental standards; (iv) have been manufactured in compliance with the
Fair Labor Standards Act; and (v) not be subject to any Liens (other than Permitted Liens), except the first priority Liens granted
or in favor of Bank under this Agreement or any of the other Loan Documents.


 


5             AFFIRMATIVE
COVENANTS


 


Borrower shall do all of the
following:


 


5.1          Use
of Proceeds. Cause the proceeds of the Credit Extensions to be used solely (a) as working capital or (b) to fund its general
business purposes, and not for personal, family, household or agricultural purposes.


 


5.2          Government
Compliance.


 


(a)           Maintain
its and all of its Subsidiaries’ legal existence (except as permitted under Section 6.3 with respect to Subsidiaries only)
and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure
to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower shall
comply, and have each Subsidiary comply, in all material respects, with all laws, ordinances and regulations to which it is subject.


 


(b)           Obtain
all of the Governmental Approvals necessary for the performance by Borrower and each of its Subsidiaries of their obligations under the
Loan Documents to which it is a party, including any grant of a security interest to Bank. Borrower shall promptly provide copies of any
such obtained Governmental Approvals to Bank upon Bank’s reasonable request.


 


5.3          Financial
Statements, Reports.  Deliver to Bank by submitting to the Financial Statement Repository:


 


(a)           Monthly
Financial Statements. As soon as available, but no later than 30 days after the last day of each month, commencing with the month
ending November 30, 2022, a company prepared consolidated balance sheet, income statement, and cash flow statement covering Parent’s
consolidated operations for such month and in a form reasonably acceptable to Bank (which may be subject, for the avoidance of doubt,
to normal year-end audit adjustments and the absence of footnotes);


 






     


     


    

 


(b)           Compliance
Statement. Within 30 days after the last day of each month, commencing with the month ending November 30, 2022, and together
with the statements set forth in Section 5.3(a), a duly completed Compliance Statement, confirming that as of the end of such month,
Borrower was in full compliance with all of the terms and conditions of this Agreement, and setting forth calculations showing compliance
with the financial covenants set forth in this Agreement and such other information as Bank may reasonably request;


 


(c)           Annual
Operating Budget and Financial Projections. As soon as available, and in any event no later than the earlier to occur of 90 days (i) following
the end of each fiscal year of Parent (commencing with the fiscal year end of Parent ending December 31, 2022) and (ii) following
the first Board meeting of Parent following the end of the fiscal year of Parent (commencing with the fiscal year end of Parent ending
December 31, 2022), and substantially contemporaneously with delivery to the Board of any updates or amendments thereto, (A) annual
operating budgets (including income statements, balance sheets and cash flow statements, in each case, by quarter) for the upcoming fiscal
year of Parent, and (B) annual financial projections for the upcoming fiscal year (on a quarterly basis), in each case as approved
by the Board, together with any related business forecasts delivered to the Board used in the preparation of such annual financial projections;


 


(d)           Annual
Audited Financial Statements. As soon as available, and in any event within 180 days following the end of Parent’s fiscal year
(commencing with the fiscal year end of Parent ending December 31, 2022), audited consolidated financial statements of Parent prepared
under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public
accounting firm reasonably acceptable to Bank;


 


(e)           Eligible
Hardware Report. With each request for a Hardware Advance (other than the Initial Hardware Advance), an Eligible Hardware Report;


 


(f)            SEC
Filings. In the event that Borrower or any of its Subsidiaries becomes subject to the reporting requirements under the Exchange Act
within five (5) days of filing, notification of the filing and copies of all periodic and other reports, proxy statements and other
materials filed by Borrower and/or any of its Subsidiaries or any Guarantor with the SEC, any Governmental Authority succeeding to any
or all of the functions of the SEC or with any national securities exchange, or distributed to its shareholders, as the case may be. Documents
required to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with
the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered (and Bank shall be deemed to have
been so notified as contemplated in the first sentence of this Section 5.3(f)) on the date on which Borrower or any of its Subsidiaries
posts such documents, or provides a link thereto, on Borrower’s or any of its Subsidiaries’ website on the internet at Borrower’s
or any of its Subsidiaries’ website address;


 


(g)           Security
Holder and Subordinated Debt Holder Reports. Within five (5) days of delivery, copies of all statements, reports and notices
made available to Borrower’s security holders or to any holders of Subordinated Debt (solely in their capacities as security holders
or holders of Subordinated Debt and not in any other role);


 


(h)           Beneficial
Ownership Information. Prompt written notice of any changes to the beneficial ownership information set out in Section 14 of
the Perfection Certificate. Borrower understands and acknowledges that Bank relies on such true, accurate and up-to-date beneficial ownership
information to meet Bank’s regulatory obligations to obtain, verify and record information about the beneficial owners of its legal
entity customers;


 


(i)            Legal
Action Notice. Prompt written notice of any legal actions, investigations or proceedings pending or threatened in writing against
Borrower or any of its Subsidiaries that could reasonably be expected to result in damages or costs to Borrower or any of its Subsidiaries
of, individually or in the aggregate, $1,000,000.00 or more;


 


(j)            Tort
Claim Notice. If Borrower shall acquire a commercial tort claim with a value in excess of, individually or in the aggregate, $1,000,000.00,
Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a
security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to Bank;


 






     


     


    

 


(k)           Government
Filings. Within five (5) days after the same are sent or received (or such later date as Bank may agree to in writing in its
sole discretion), copies of all correspondence, reports, documents and other filings by Borrower or any of its Subsidiaries with any Governmental
Authority regarding compliance with or maintenance of Governmental Approvals or Applicable Law or that could reasonably be expected to
have a material effect on any of the Governmental Approvals or otherwise on the business of Borrower or any of its Subsidiaries;


 


(l)            Registered
Organization. If Borrower is not a Registered Organization as of the Effective Date but later becomes one, promptly notify Bank of
such occurrence and provide Bank with Borrower’s organizational identification number;


 


(m)           Default.
Prompt written notice of the occurrence of a Default or Event of Default; and


 


(n)           Other
Information. Promptly, from time to time, such other information regarding Borrower or any of its Subsidiaries or compliance with
the terms of any Loan Documents as reasonably requested by Bank.


 


Any submission by Borrower
of a Compliance Statement or any other financial statement submitted to the Financial Statement Repository pursuant to this Section 5.3
or otherwise submitted to Bank shall be deemed to be a representation by Borrower that (i) as of the date of such Compliance Statement
or other financial statement, the information and calculations set forth therein are true and correct (provided that, with respect to
financial statements only, such financial statements are subject to the same terms and qualifications set forth in Section 4.4 of
this Agreement), (ii) as of the end of the compliance period set forth in such submission, Borrower is in compliance with all required
covenants hereunder except as noted in such Compliance Statement or other financial statement, as applicable, (iii) as of the date
of such submission, no Events of Default have occurred or are continuing, (iv) all representations and warranties other than any
representations or warranties that are made as of a specific date in Section 4 remain true and correct in all material respects as
of the date of such submission except as noted in such Compliance Statement or other financial statement, as applicable, (v) as of
the date of such submission, Borrower and each of its Subsidiaries has timely filed (subject to validly filed extensions) all required
tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions
owed by Borrower except as otherwise permitted pursuant to the terms of Section 4.8, and (vi) as of the date of such submission,
no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of
which Borrower has not previously provided written notification to Bank.


 


It is understood and agreed
that, to the extent applicable, any documents required to be delivered pursuant to this Section 5.3 and which are also required to
be posted on the SEC website, shall be deemed to be delivered on the date that such documents are publicly available on “EDGAR”,
on the SEC website, or on the Borrower’s website.


 


5.4          Taxes;
Pensions.


 


(a)           Timely
file, and require each of its Subsidiaries to timely file (in each case, unless subject to a valid extension), all required tax returns
and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments,
deposits and contributions owed by Borrower and each of its Subsidiaries, except for deferred payment or non-payment of any such taxes,
assessments, deposits or contributions to the extent permitted in Section 4.8(a) hereof, and shall deliver to Bank, on demand,
appropriate certificates attesting to such payments, and pay, and require each of its Subsidiaries to pay, all amounts necessary to fund
all present pension, profit sharing and deferred compensation plans in accordance with their terms.


 


(b)           To
the extent Borrower or any of its Subsidiaries defers payment of any contested taxes, (i) notify Bank in writing of the commencement
of, and any material development in, the proceedings, and (ii) post bonds or take any other steps required to prevent the Governmental
Authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien.”


 






     


     


    

 


5.5          Insurance.


 


(a)           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 financially sound and reputable insurance companies that are
not Affiliates of Borrower, and in amounts that are reasonably satisfactory to Bank.


 


(b)           Subject
to Section 5.15(c), all property policies shall have a lender’s loss payable endorsement showing Bank as lender loss payee.
All liability policies shall show, or have endorsements showing, Bank as an additional insured. Bank shall be named as lender loss payee
and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral.


 


(c)           Ensure
that proceeds payable under any property policy are, at Bank’s option, payable to Bank on account of the Obligations; provided that,
notwithstanding the foregoing, (i) so long as no Event of Default has occurred and is continuing, Borrower shall have the option
of applying the proceeds of any casualty policy not exceeding $1,000,000.00 individually with respect to any loss or $2,000,000.00 in
the aggregate for all losses under all casualty policies in any twelve (12) month period, toward the replacement or repair of destroyed
or damaged property; provided that any such replaced or repaired property (A) shall be of equal or like value as the replaced or
repaired Collateral and (B) shall be deemed Collateral in which Bank has been granted a first priority security interest (subject
only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have superior priority to Bank’s Lien), and
(ii) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall,
at the option of Bank, be payable to Bank on account of the Obligations then due.


 


(d)           At
Bank’s reasonable request, Borrower shall deliver certified copies of insurance policies and evidence of all premium payments. Each
provider of any such insurance required under this Section 5.5 shall agree, by endorsement upon the policy or policies issued by
it or by independent instruments furnished to Bank, that it will give Bank 30 days’ prior written notice before any such policy
or policies shall be canceled or altered in any material respect. If Borrower fails to obtain insurance as required under this Section 5.5
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 5.5, and take any action under the policies Bank deems prudent.


 


5.6          Access
to Collateral; Books and Records.  At reasonable times, on three (3) Business Days’ notice (provided no notice is required
if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right to inspect the Collateral and the right
to audit and copy Borrower’s Books. Such inspections and audits shall be conducted no more often than once every twelve (12) months,
unless an Event of Default has occurred and is continuing, in which case such inspections and audits shall occur as often as Bank shall
determine is necessary. The foregoing inspections and audits shall be conducted at Borrower’s expense and the charge therefor shall
be $1,000.00 per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus
any documented out-of-pocket expenses. In the event Borrower and Bank schedule an audit more than eight (8) days in advance, and
Borrower cancels or reschedules the audit with less than eight (8) days written notice to Bank, then (without limiting any of Bank’s
rights or remedies) Borrower shall pay Bank a fee of $2,000.00 plus any documented out-of-pocket expenses incurred by Bank to compensate
Bank for the anticipated costs and expenses of the cancellation or rescheduling.


 


5.7          Accounts.


 


(a)           Upon
the expiration of the Transition Period, maintain all of Borrower’s, any of its Subsidiaries’, and any Guarantor’s operating
accounts, depository accounts and excess cash with Bank or Bank’s Affiliates; provided that, Borrower shall be permitted to maintain
the Collections Account during the Collections Account Transition Period so long as (i) subject to Section 5.15(d), the Collections
Accounts shall be subject to a Control Agreement in favor of Bank, (ii) the maximum account balance in the Collections Account shall
not exceed $2,000,000.00 at any time, and (iii) Borrower shall transfer any and all funds deposited into the Collections Account
into an account in the name of Borrower maintained at Bank not later than within 10 Business Days (or such longer period as Bank may agree
in writing) following the end of any month ending after the Effective Date.


 


(b)           In
addition to the foregoing, Borrower, any Subsidiary of Borrower and any Guarantor, shall obtain any business credit card and letter of
credit (other than the Permitted JPM Letter of Credit during the JPM Letter of Credit Transition Period) exclusively from Bank.


 






     


     


    

 


(c)           In
addition to and without limiting the restrictions in (a), Borrower shall provide Bank five (5) days prior written notice (or such
shorter period as Bank may agree in writing in its sole discretion) before establishing any Collateral Account at or with any bank or
financial institution other than Bank or Bank’s Affiliates. Subject to Section 5.15(d) with respect to the Collections
Account, for each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution
(other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate
instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms
hereunder which Control Agreement may not be terminated without the prior written consent of Bank. The provisions of the previous sentence
shall not apply (i) during the Transition Period (other than with respect to the Collections Account, subject to Section 5.15(d))
or (ii) to deposit accounts exclusively used for payroll, payroll taxes, and other employee wage and benefit payments to or for the
benefit of Borrower’s employees and identified to Bank by Borrower as such.


 


5.8          Financial
Covenant – Liquidity Ratio. Commencing as of the Effective Date, Borrower shall maintain, at all times, to be tested as of the
last day of each month, a Liquidity Ratio of equal to or greater than 2.0 to 1.0.


 


5.9          Protection
of Intellectual Property Rights.


 


(a)           (i) Protect,
defend and maintain the validity and enforceability of Borrower’s and each Subsidiary’s Intellectual Property, except to the
extent that such failure to do so would not reasonably be expected to have a material adverse effect on Borrower’s business or operations;
(ii) promptly advise Bank in writing of infringements or any other event that could reasonably be expected to materially and adversely
affect the value Borrower’s and each Subsidiary’s Intellectual Property; and (iii) not allow any Intellectual Property
material to Borrower’s or any Subsidiary’s business to be abandoned, forfeited or dedicated to the public without Bank’s
written consent.


 


(b)           Provide
written notice to Bank within ten (10) days (or such longer period as Bank may agree in writing in its sole discretion) of entering
or becoming bound by any Restricted License (other than over-the-counter software that is commercially available to the public). Borrower
shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (i) any
such Restricted License to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted
or prohibited by law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) Bank
to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights
and remedies under this Agreement and the other Loan Documents.


 


5.10        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.


 


5.11        Inventory;
Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower
and its Account Debtors shall follow Borrower’s customary practices as they exist at the Effective Date. Borrower shall promptly
notify Bank of all returns, recoveries, disputes and claims that involve more than $1,000,000.00.


 


5.12        Further
Assurances. Execute any further instruments and take such further action as Bank reasonably requests to perfect, protect, ensure the
priority of or continue Bank’s Lien on the Collateral or to effect the purposes of this Agreement.


 


5.13        Sanctions.
(a) Not, and not permit any of its Subsidiaries to, engage in any of the activities described in Section 4.10 in the future;
(b) not, and not permit any of its Subsidiaries to, become a Sanctioned Person; (c) ensure that the proceeds of the Obligations
are not used to violate any Sanctions; and (d) deliver to Bank any certification or other evidence requested from time to time by
Bank in its sole discretion, confirming each such Person’s compliance with this Section 5.13. In addition, have implemented,
and will consistently apply while this Agreement is in effect, procedures to ensure that the representations and warranties in Section 4.10
remain true and correct while this Agreement is in effect.


 






     


     


    

 


5.14        Formation
or Acquisition of Subsidiaries. Notwithstanding and without limiting the negative covenants contained in Sections 6.3 and 6.7 hereof,
within 30 days (or such longer period as Bank may agree in writing in its sole discretion) after the date that Borrower or any Guarantor
forms any Subsidiary or acquires any Subsidiary after the Effective Date (including, without limitation, pursuant to a Division), Borrower
and such Guarantor shall (a) cause such new Subsidiary to provide to Bank a joinder to this Agreement to become a co-borrower hereunder
or a guaranty to become a Guarantor hereunder (as determined by Bank in its sole discretion), together with documentation, all in form
and substance satisfactory to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and
to the assets of such newly formed or acquired Subsidiary), (b) provide to Bank appropriate certificates and powers and financing
statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary, in form and substance satisfactory to
Bank; and (c) provide to Bank all other documentation in form and substance satisfactory to Bank, including, at Bank’s election,
one or more opinions of counsel satisfactory to Bank, which in its opinion is appropriate with respect to the execution and delivery of
the applicable documentation referred to above. Any document, agreement, or instrument executed or issued pursuant to this Section 5.14
shall be a Loan Document.


 


5.15        Post-Closing
Conditions. Within 30 days of the Effective Date (or such longer period as Bank may agree in writing in its sole discretion) and each
in form and substance acceptable to Bank, Borrower shall deliver to Bank:


 


(a)           subject
to Borrower’s use of commercially reasonable efforts, a duly executed landlord’s consent in favor of Bank for Borrower’s
leased location at 500 Totten Pond Road, 4th Floor, Waltham, Massachusetts 02451, by the respective landlord thereof;


 


(b)           subject
to Borrower’s use of commercially reasonable efforts, duly executed bailee’s waiver in favor of Bank for Borrower’s
third party location at 27 Otis Street, Westborough, Massachusetts 01581, by the respective third party thereof;


 


(c)           evidence
satisfactory to Bank that the insurance policies and endorsements required by Section 5.5 hereof are in full force and effect, together
with appropriate evidence showing lender loss payable and additional insured clauses or endorsements in favor of Bank; and


 


(d)           a
duly executed Control Agreement with respect to the Collections Account.


 


6              NEGATIVE
COVENANTS


 


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


 


6.1          Dispositions.
Convey, sell, lease, transfer, assign, or otherwise dispose of (including, without limitation, pursuant to a Division) (collectively,
 “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for
Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment that is, in the reasonable
judgment of Borrower, no longer economically practicable to maintain or useful in the ordinary course of business of Borrower; (c) consisting
of Permitted Liens and Permitted Investments; (d) consisting of the sale or issuance of any stock, partnership, membership, or other
ownership interest or other equity securities of Borrower permitted under Section 6.2 of this Agreement; (e) consisting of Borrower’s
or its Subsidiaries’ use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement
or the other Loan Documents; (f) consisting of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries
in the ordinary course of business; (g) other assets not otherwise permitted under this Section 6.1 with a value not exceeding
$750,000.00 in the aggregate in any fiscal year; and (h) between Borrowers or any secured Guarantor (to the extent not otherwise
permitted under clause (j) of the definition of Permitted Investments).


 






     


     


    

 


6.2          Changes
in Business, Management, Control, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business
other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate
or dissolve or permit any of its Subsidiaries to liquidate or dissolve (unless the assets of such Subsidiaries are transferred to Borrower
free and clear of all Liens); (c) fail to provide notice to Bank of any Key Person departing from or ceasing to be employed by Borrower
within ten (10) days after such Key Person’s departure from Borrower (provided that, for the avoidance of doubt, such notice
may be delivered electronically subject to compliance with the terms of this Agreement); (d) permit, allow or suffer to occur any
Change in Control; or (e) without at least 30 days prior written notice to Bank (or such shorter period as Bank may agree in writing
in its sole discretion), (i) add any new offices or business locations, including warehouses (unless such new offices or business
locations contain less than $300,000.00 in Borrower’s assets or property) or deliver any portion of the Collateral valued, individually
or in the aggregate, in excess of $300,000.00 to a bailee (excluding any customer of Borrower) at a location other than to a bailee and
at a location already disclosed in the Perfection Certificate or as otherwise disclosed to Bank, (ii) change its jurisdiction of
organization, (iii) change its organizational structure or type, (iv) change its legal name, or (v) change any organizational
number (if any) assigned by its jurisdiction of organization. If Borrower intends to add any new offices or business locations, including
warehouses, containing in excess of $300,000.00 of Borrower’s assets or property, then Borrower will use commercially reasonable
efforts to cause the landlord of any such new offices or business locations, including warehouses, to execute and deliver a landlord consent
in form and substance satisfactory to Bank. If Borrower intends to deliver any portion of the Collateral valued, individually or in the
aggregate, in excess of $300,000.00 to a bailee (excluding any customer of Borrower), and Bank and such bailee are not already parties
to a bailee agreement governing both the Collateral and the location to which Borrower intends to deliver the Collateral, then Borrower
will use commercially reasonable efforts to cause such bailee to execute and deliver a bailee agreement in form and substance satisfactory
to Bank.


 


6.3          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 stock, partnership, membership, or other ownership interest
or other equity securities or property of another Person (including, without limitation, by the formation of any Subsidiary or pursuant
to a Division), other than Permitted Acquisitions. Notwithstanding the foregoing, a Subsidiary may merge or consolidate into another Subsidiary
or into Borrower.


 


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


 


6.5          Encumbrance.
Create, incur, allow, or suffer to exist any Lien on any of its property, or assign or convey any right to receive income, including the
sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject
to the first priority security interest granted herein, 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 6.1 hereof and the definition of “Permitted Liens”
herein.


 


6.6          Maintenance
of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 5.7(c).


 


6.7          Distributions;
Investments. (a) Pay any dividends or make any distribution or payment or redeem, retire or purchase any stock, partnership,
membership, or other ownership interest or other equity securities provided that Borrower may (or, with respect to clause (iv) below,
Evolv Technologies may) (i) convert any of its convertible securities into other securities pursuant to the terms of such convertible
securities or otherwise in exchange thereof, (ii) pay dividends solely in common stock, (iii) repurchase the stock, partnership,
membership, or other ownership interest or other equity securities of current or former employees, directors, or consultants pursuant
to stock repurchase agreements so long as an Event of Default does not exist at the time of any such repurchase and would not exist after
giving effect to any such repurchase, provided that the aggregate amount of all such repurchases does not exceed $250,000.00 in any twelve
(12) month period; (iv) pay any dividends or make any distribution or payment to Parent, or redeem, retire or purchase from Parent,
Evolv Technologies’ stock, partnership, membership, or other ownership interest or other equity securities (to the extent not otherwise
permitted under clause (j) of the definition of Permitted Investments); or (v) make cash payments in an amount not to exceed
$25,000.00 in the aggregate per fiscal year in lieu of the issuance of fractional shares upon the conversion of convertible securities;
or (b) directly or indirectly make any Investment (including, without limitation, by the formation of any Subsidiary) other than
Permitted Investments, or permit any of its Subsidiaries to do so.


 






     


     


    

 


6.8          Transactions
with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower, except
(a) transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable
to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person, (b) equity and bridge financings
with Borrower’s existing investors, provided that any such equity financing is not prohibited by Section 6.2 and any such bridge
financing shall constitute Subordinated Debt, and (c) reasonable and customary indemnification, compensation, and benefits arrangements
approved by the Board or a duly authorized committee thereof; provided that the foregoing restrictions will not apply to transactions
which are otherwise permitted under Section 6.1(h), 6.7(a)(iv) and clause (j) of Permitted Investments).


 


6.9          Subordinated
Debt. Except as expressly permitted under the terms of the subordination, intercreditor, or other similar agreement to which any Subordinated
Debt is subject: (a) make or permit any payment on such Subordinated Debt; or (b) amend any provision in any document relating
to such Subordinated Debt which would increase the amount thereof, provide for earlier or greater principal, interest, or other payments
thereon, or adversely affect the subordination thereof to Obligations owed to Bank.


 


6.10        Compliance.
(a) Become an “investment company” or a company controlled by an “investment company”, under the Investment
Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as
defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that
purpose; (b)(i) fail to meet the minimum funding requirements of ERISA, (ii) permit a Reportable Event or Prohibited Transaction,
as defined in ERISA, to occur, (iii) fail to comply with the Federal Fair Labor Standards Act or (iv) violate any other law
or regulation, if the foregoing subclauses (i) through (iv), individually or in the aggregate, could reasonably be expected to have
a material adverse effect on Borrower’s business or operations, or permit any of its Subsidiaries to do so; or (c) 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 Authority.


 


7              EVENTS
OF DEFAULT


 


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


 


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


 


7.2          Covenant
Default.


 


(a)           Borrower
fails or neglects to perform any obligation in Section 5 (other than Sections 5.2 (Government Compliance), 5.9 (Litigation Cooperation),
5.10 (Inventory; Returns) and 5.11 (Further Assurances)) or violates any covenant in Section 6; or


 


(b)           Borrower
fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement
or any Loan Documents, and as to any default (other than those specified in this Section 7) under such other term, provision, condition,
covenant or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided,
however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower
be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have
an additional period (which shall not in any case exceed 30 days) to attempt to cure such default, and within such reasonable time period
the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period).
Cure periods provided under this section shall not apply, among other things, to financial covenants or any other covenants that are required
to be satisfied, completed or tested by a date certain or any covenants set forth in clause (a) above;


 






     


     


    

 


7.3          Material
Adverse Change. A Material Adverse Change occurs;


 


7.4          Attachment;
Levy; Restraint on Business.


 


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


 


(b)           (i) any
material portion of Borrower’s or any of its Subsidiaries’ 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 or any of its Subsidiaries from conducting
all or any material part of its business;


 


7.5          Insolvency.
(a) Borrower or any of its Subsidiaries is unable to pay its debts (including trade debts) as they become due or otherwise becomes
insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun
against Borrower or any of its Subsidiaries and is not dismissed or stayed within 30 days (but no Credit Extensions shall be made while
any of the conditions described in clause (a) exist or until any Insolvency Proceeding is dismissed);


 


7.6          Other
Agreements. There is, under any agreement to which Borrower, any of Borrower’s Subsidiaries, or any Guarantor is a party with
a third party or parties, (a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate
the maturity of any such Indebtedness in an amount individually or in the aggregate in excess of $1,000,000.00; or (b) any breach
or default by Borrower, any of Borrower’s Subsidiaries, or Guarantor, the result of which could have a material adverse effect on
Borrower’s, any of Borrower’s Subsidiaries’, or any Guarantor’s business or operations;


 


7.7          Judgments;
Penalties. One or more fines, penalties or final judgments, orders or decrees for the payment of money in an amount, individually
or in the aggregate, of at least $1,000,000.00 (not covered by independent third-party insurance as to which liability has been accepted
by such insurance carrier) shall be rendered against Borrower or any of its Subsidiaries by any Governmental Authority, and the same are
not, within ten (10) days after the entry, assessment or issuance thereof, discharged, or after execution thereof, or stayed pending
appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that no Credit Extensions will be made
prior to the discharge, or stay of such fine, penalty, judgment, order or decree);


 


7.8          Misrepresentations.
Borrower or any of its Subsidiaries or any Person acting for Borrower or any of its Subsidiaries makes any representation, warranty, or
other statement now or later in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this
Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made (it
being agreed and acknowledged by Bank that the projections and forecasts provided by Borrower or any of its Subsidiaries 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);


 


7.9          Subordinated
Debt. If: (a) any document, instrument, or agreement evidencing the subordination terms applicable to any Subordinated Debt shall
for any reason be revoked or invalidated or otherwise cease to be in full force and effect (other than in accordance with its terms),
or any Person (other than Bank) shall be in breach thereof or contest in any manner the validity or enforceability thereof or deny that
it has any further liability or obligation thereunder; (b) a default or event of default (however defined) has occurred under any
document, instrument, or agreement evidencing any Subordinated Debt, which default shall not have been cured or waived within any applicable
grace period; or (c) the Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement
or any applicable subordination or intercreditor agreement;


 






     


     


    

 


7.10        Lien
Priority. There is a material impairment in the perfection or priority of Bank’s security interest in the Collateral not caused
by the action, or inaction, of Bank;


 


7.11        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 7.3, 7.4,
7.5, 7.6, 7.7, or 7.8 of this Agreement occurs with respect to any Guarantor, (d) the death, liquidation, winding up, or termination
of existence of any Guarantor, other than to the extent permitted hereby; 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 (other than if caused by the action, or
inaction, of Bank) 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


 


7.12        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 of such Governmental Approval or that could result in the Governmental Authority taking
any of the actions described in clause (a) above, and in either case, such decision or such revocation, rescission, suspension, modification
or non-renewal (i) causes, or could reasonably be expected to cause, a Material Adverse Change, or (ii) materially 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 materially adversely affect the
status of or legal qualifications of Borrower or any of its Subsidiaries to hold any Governmental Approval in any other jurisdiction.


 


8              BANK’S
RIGHTS AND REMEDIES


 


8.1          Rights
and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, without notice or demand, do any or
all of the following:


 


(a)           declare
all Obligations immediately due and payable (but if an Event of Default described in Section 7.5 occurs all Obligations are immediately
due and payable without any action by Bank);


 


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


 


(c)           demand
that Borrower (i) deposit cash with Bank in an amount equal to at least (A) 105.0% of the aggregate face amount of any Letters
of Credit denominated in Dollars remaining undrawn, and (B) 115.0% of the Dollar Equivalent of the aggregate face amount of any Letters
of Credit denominated in a Foreign Currency remaining undrawn (plus, in each case, all interest, fees, and costs due or estimated by Bank
to become due in connection therewith), to secure all of the Obligations relating to such Letters of Credit, as collateral security for
the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay
in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit;


 


(d)           terminate
any FX Contracts (it being understood and agreed that (i) Bank is not obligated to deliver the currency which Borrower has contracted
to receive under any FX Contract, and Bank may cover its exposure for any FX Contracts by purchasing or selling currency in the interbank
market as Bank deems appropriate; (ii) Borrower shall be liable for all losses, damages, costs, margin obligations and expenses incurred
by Bank arising from Borrower’s failure to satisfy its obligations under any FX Contract or the execution of any FX Contract; and
(iii) Bank shall not be liable to Borrower for any gain in value of a FX Contract that Bank may obtain in covering Borrower’s
breach);


 






     


     


    

 


(e)           verify
the amount of, demand payment of and performance under, and collect any Accounts and General Intangibles, settle or adjust disputes and
claims directly with Account Debtors for amounts on terms and in any order that Bank considers advisable, and notify any Person owing
Borrower money of Bank’s security interest in such funds;


 


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


 


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


 


(h)           ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral. For use solely upon
the occurrence and during the continuation of an Event of Default, Bank is hereby granted a non-exclusive, royalty-free license or other
right to use, without charge, Borrower’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade
names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising
for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section 8.1, Borrower’s
rights under all licenses and all franchise agreements inure to Bank’s benefit;


 


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


 


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


 


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


 


8.2          Power
of Attorney. Borrower hereby irrevocably appoints Bank as its true and lawful attorney-in-fact, (a) exercisable upon the occurrence
and during the continuance of an Event of Default, to: (i) endorse Borrower’s name on any checks, payment instruments, or other
forms of payment or security; (ii) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against
Account Debtors; (iii) demand, collect, sue, and give releases to any Account Debtor for monies due, settle and adjust disputes and
claims about the Accounts directly with Account Debtors, and compromise, prosecute, or defend any action, claim, case, or proceeding about
any Collateral (including filing a claim or voting a claim in any bankruptcy case in Bank’s or Borrower’s name, as Bank chooses);
(iv) make, settle, and adjust all claims under Borrower’s insurance policies; (v) pay, contest or settle any Lien, charge,
encumbrance, security interest, or other claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to
terminate or discharge the same; and (vi) transfer the Collateral into the name of Bank or a third party as the Code permits; and
(b) regardless of whether an Event of Default has occurred, to sign Borrower’s name on any documents necessary to perfect or
continue the perfection of Bank’s security interest in the Collateral. Bank’s foregoing appointment as Borrower’s attorney
in fact, and all of Bank’s rights and powers, coupled with an interest, are irrevocable until such time as all Obligations (other
than inchoate indemnity obligations) have been satisfied in full, Bank is under no further obligation to make Credit Extensions and the
Loan Documents have been terminated. Bank shall not incur any liability in connection with or arising from the exercise of such power
of attorney and shall have no obligation to exercise any of the foregoing rights and remedies.


 


8.3          Protective
Payments. If Borrower fails to obtain the insurance called for by Section 5.5 or fails to pay any premium thereon or fails to
pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document or which may be required to preserve
the Collateral, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately
due and payable, bearing interest at the then highest rate applicable to the Obligations, and secured by the Collateral. Bank will make
reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable
time thereafter. No payments by Bank are deemed an agreement to make similar payments in the future or Bank’s waiver of any Event
of Default.


 






     


     


    

 


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


 


8.5          Bank’s
Liability for Collateral. Bank’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral
in its possession or under its control, under Section 9-207 of the Code or otherwise, shall be to deal with it in the same manner
as Bank deals with its own property consisting of similar instruments or interests. Other than with respect to the gross negligence or
willful misconduct of Bank, Borrower bears all risk of loss, damage or destruction of the Collateral.


 


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


 


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


 


8.8          Borrower
Liability. Any Borrower may, acting singly, request Credit Extensions hereunder. Each Borrower hereby appoints each other Borrower
as agent for the other for all purposes hereunder, including with respect to requesting Credit Extensions hereunder. Each Borrower hereunder
shall be liable for the Credit Extensions and Obligations as set forth on Schedule I hereto. Each Borrower waives (a) any suretyship
defenses available to it under the Code or any other Applicable Law, and (b) any right to require Bank to: (i) proceed against
any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy. Bank may exercise
or not exercise any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial
or non-judicial sale) without affecting any Borrower’s liability. Notwithstanding any other provision of this Agreement or other
related document, each Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation, any
law subrogating Borrower to the rights of Bank under this Agreement) to seek contribution, indemnification or any other form of reimbursement
from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment
made by Borrower with respect to the Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit
from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations
in connection with this Agreement or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited
under this Section 8.8 shall be null and void. If any payment is made to a Borrower in contravention of this Section 8.8, such
Borrower shall hold such payment in trust for Bank and such payment shall be promptly delivered to Bank for application to the Obligations,
whether matured or unmatured.


 






     


     


    

 


9              NOTICES


 


All notices, consents, requests,
approvals, demands, or other communication by any party to this Agreement or any other Loan Document must be in writing and shall be deemed
to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit
in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission,
when sent by electronic mail; (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 email address indicated below; provided that, for clause (b), if such notice, consent, request, approval, demand or other communication
is not sent during the normal business hours of the recipient, it shall be deemed to have been sent at the opening of business on the
next Business Day of the recipient. Bank or Borrower may change its mailing or electronic mail address by giving the other party written
notice thereof in accordance with the terms of this Section 9.


 


	 	If to Borrower:	Evolv Technologies Holdings, Inc.
	 	 	Evolv Technologies, Inc.
	 	 	500 Totten Pond Road 4th Floor
	 	 	Waltham, MA 02451
	 	 	Attn: Mark Donohue, Chief Financial Officer
	 	 	Email: [***]
	 	Website URL: https://www.evolvtechnology.com
	 	 
	 	with a copy to (which shall
	 	not constitute notice):
	 	 
	 	 	Latham & Watkins LLP
	 	 	200 Clarendon Street
	 	 	Boston, Massachusetts 02116
	 	 	Attn: Susan Parker
	 	 	Email: [***]
	 	 
	 	If to Bank:	Silicon Valley Bank
	 	 	53 State Street, 28th Floor
	 	 	Boston, Massachusetts 02109
	 	 	Attn: Chris Morrison
	 	 	Email: [***]
	 	 
	 	with a copy to (which	Morrison & Foerster LLP
	 	shall not constitute	 200 Clarendon Street
	 	notice):	Boston, Massachusetts 02116
	 	 	Attn:	David A. Ephraim, Esquire
	 	 	Email:	[***]




 


10           CHOICE
OF LAW, VENUE and JURY TRIAL WAIVER


 


Except as otherwise expressly
provided in any of the Loan Documents, New York law governs the Loan Documents without regard to principles of conflicts of law that would
require the application of the laws of another jurisdiction. Borrower and Bank each irrevocably and unconditionally submit to the exclusive
jurisdiction of the State and Federal courts in New York, New York; provided, however, that nothing in this Agreement shall be deemed
to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction with respect to the Loan Documents
or 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, irrevocably and unconditionally submits and consents in advance to such jurisdiction in any action or suit commenced
in any such court, and Borrower hereby irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any
objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby irrevocably and
unconditionally consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Borrower hereby waives
personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons,
complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth in, or subsequently
provided by Borrower in accordance with, Section 9 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.


 






     


     


    

 


TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVES ITS 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 THE PARTIES HERETO TO ENTER INTO THIS AGREEMENT. EACH PARTY HERETO HAS REVIEWED THIS WAIVER WITH
ITS COUNSEL.


 


This Section 10 shall
survive the termination of this Agreement and the repayment of all Obligations.


 


11           GENERAL
PROVISIONS


 


11.1        Termination
Prior to Hardware Maturity Date; Survival.  All covenants, representations and warranties made in this Agreement shall continue in
full force until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations) have
been satisfied. So long as Borrower has satisfied the Obligations (other than inchoate indemnity obligations, and any other obligations
which, by their terms, are to survive the termination of this Agreement and the repayment of all Obligations, and any Obligations under
Bank Services Agreements that are cash collateralized in accordance with Section 3.3 of this Agreement), this Agreement may be terminated
prior to the Hardware Maturity Date by Borrower, effective three (3) Business Days after written notice of termination is given to
Bank. Those obligations that are expressly specified in this Agreement as surviving this Agreement’s termination and the repayment
of all Obligations shall continue to survive notwithstanding this Agreement’s termination and the repayment of all Obligations.


 


11.2        Successors
and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each party. Borrower may not assign
or transfer this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be granted or withheld
in Bank’s sole discretion) and any other attempted assignment or transfer by Borrower shall be null and void. Bank has the right,
without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any
interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents. Notwithstanding the foregoing,
so long as no Event of Default shall have occurred and is continuing, Bank shall not assign its interest in the Loan Documents to any
Person who in the reasonable estimation of Bank is (a) a direct competitor of Borrower, whether as an operating company or direct
or indirect parent with voting control over such operating company or (b) a vulture fund or distressed debt fund. Bank, acting solely
for this purpose as a non-fiduciary agent of Borrower, shall maintain a register for the recordation of the names and addresses of the
applicable lenders hereunder, and the applicable commitment(s) of, and principal amount (and stated interest) of the applicable loans
owing to, each lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register
shall be conclusive absent manifest error, and Borrower, Bank and the other lenders hereunder shall treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a lender hereunder for all purposes of this Agreement and the other Loan Documents. The
Register shall be available for inspection by Borrower and any lender hereunder, at any reasonable time and from time to time upon reasonable
prior notice.


 


Bank and each other lender
hereunder that sells a participation in any Credit Extension, acting solely for this purposes as a non-fiduciary agent of Borrower, shall
maintain a register on which it enters the name and address of each participant and the principal amounts (and stated interest) of each
participant’s interest in the applicable Credit Extensions or other Obligations under the Loan Documents (the “Participant
Register”); provided that, neither Bank nor any other lender hereunder shall have any obligation to disclose all or any portion
of the Participant Register (including the identity of any participant or any information relating to a participant’s interest in
any Credit Extensions or its other Obligations under any Loan Document) to any Person, except to the extent that such disclosure is necessary
to establish that such Credit Extension or other Obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such lender hereunder shall
treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement
and the other Loan Documents notwithstanding notice to the contrary.


 






     


     


    

 


11.3        Indemnification.


 


(a)           General
Indemnification. Borrower shall indemnify, defend and hold Bank and its Affiliates and the partners, directors, officers, employees,
agents, trustees, administrators, managers, advisors and representatives of Bank and its Affiliates (each, an “Indemnified Person”)
harmless against: all losses, claims, damages, liabilities and related expenses (including Bank Expenses and the reasonable fees, charges
and disbursements of any counsel for any Indemnified Person) (collectively, “Claims”) arising out of, in connection
with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, (ii) any Credit Extension or the use or proposed use of the proceeds therefrom,
(iii) any actual or alleged presence or release of hazardous materials on or from any property owned or operated by Borrower or any
of its Subsidiaries, or any environmental liability related in any way to Borrower or any of its Subsidiaries, or (iv) any actual
or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any
other theory, whether brought by a third party or by Borrower, and regardless of whether any Indemnified Person is a party thereto; provided
that such indemnity shall not, as to any Indemnified Person, be available to the extent that such losses, claims, damages, liabilities
or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnified Person. All amounts due under this Section 11.3 shall be payable promptly
after demand therefor.


 


(b)           Waiver
of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, Borrower shall not assert, and hereby waives, any
claim against any Indemnified Person, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) or any loss of profits arising out of, in connection with, or as a result of, this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Credit Extension, or
the use of the proceeds thereof. No Indemnified Person shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications, electronic or other information transmission systems
in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.


 


This Section 11.3 shall
survive the termination of this Agreement and the repayment of all Obligations until all statutes of limitation with respect to the Claims,
losses, and expenses for which indemnity is given shall have run.


 


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


 


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


 


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


 


11.7        Counterparts.
This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed
and delivered, is an original, and all taken together, constitute one Agreement. Delivery of an executed signature page of this Agreement
by electronic mail transmission shall be effective as delivery of a manually executed counterpart hereof.


 






     


     


    

 


11.8        Confidentiality.
Bank agrees to maintain the confidentiality of Information (as defined below), except that Information may be disclosed (a) to Bank’s
Subsidiaries and Affiliates and their respective employees, directors, agents, attorneys, accountants and other professional advisors
(collectively, “Representatives” and, together with Bank, collectively, “Bank Entities”) provided
such Bank Entities are bound by confidentiality obligations substantially similar to those set forth in this Section; (b) to prospective
transferees, assignees, credit providers or purchasers of Bank’s interests under or in connection with this Agreement and their
Representatives (provided, however, any such prospective transferee, assignee, credit provider, purchaser or their Representatives shall
have entered into an agreement containing provisions substantially the same as those in this Section); (c) as required by law, regulation,
subpoena, or other order; (d) to Bank’s regulators or as otherwise required or requested in connection with Bank’s examination
or audit; (e) in connection with the exercise of remedies under the Loan Documents or any action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder; 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. “Information” means all information received from Borrower regarding Borrower or its business, in each case
other than information that is either: (i) in the public domain or in Bank’s possession when disclosed to Bank, or becomes
part of the public domain (other than as a result of its disclosure by Bank in violation of this Agreement) after disclosure to Bank;
or (ii) disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information.


 


11.9        Electronic
Execution of Documents. The words “execution,” “signed,” “signature” and words of like import
in any Loan Document shall be deemed to include electronic signatures, including any Electronic Signature as defined in the Electronic
Transactions Law (2003 Revision) of the Cayman Islands (the “Cayman Islands Electronic Signature Law”), if applicable,
or the keeping of records in electronic form, including any Electronic Record, as defined in Cayman Islands Electronic Signature Law,
each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a paper-based
recordkeeping systems, as the case may be, to the extent and as provided for in any Applicable Law, including, without limitation, any
state law based on the Uniform Electronic Transactions Act or the Cayman Islands Electronic Signature Law; provided, however that sections
8 and 19(3) of the Cayman Islands Electronic Signature Law shall not apply to this Agreement or the execution or delivery thereof.


 


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


 


11.11     Captions
and Section References. The headings used in this Agreement are for convenience only and shall not affect the interpretation
of this Agreement. Unless indicated otherwise, section references herein are to sections of this Agreement.


 


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


 


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


 


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


 






     


     


    

 


11.15     Anti-Terrorism
Law. Bank hereby notifies Borrower that, pursuant to the requirements of Anti-Terrorism Law, Bank may be required to obtain, verify
and record information that identifies Borrower, which information may include the name and address of Borrower and other information
that will allow Bank to identify Borrower in accordance with Anti-Terrorism Law. Borrower hereby agrees to take any action necessary to
enable Bank to comply with the requirements of Anti-Terrorism Law.


 


12           accounting
terms and other DEFINITIONS


 


12.1        Accounting
and Other Terms.


 


(a)           Accounting
terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP (except
for with respect to unaudited financial statements for the absence of footnotes and subject to year-end audit adjustments), provided that
if at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and
either Borrower or Bank shall so request, Borrower and Bank shall negotiate in good faith to amend such ratio or requirement to preserve
the original intent thereof in light of such change in GAAP; provided, further, that, until so amended, (i) such ratio or requirement
shall continue to be computed in accordance with GAAP prior to such change therein and (ii) Borrower shall provide Bank financial
statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to such change in GAAP. In addition to the foregoing, any
obligations of any Person that are or would have been treated as operating leases for purposes of GAAP prior to the issuance by the Financial
Accounting Standards Board on February 25, 2016 of an Accounting Standards Update (the “ASU”) shall continue to
be accounted for as operating leases for purposes of all financial definitions, calculations and covenants for purpose of this Agreement
(whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required
in accordance with the ASU (on a prospective or retroactive basis or otherwise) to be treated as capitalized lease obligations in accordance
with GAAP. Notwithstanding the foregoing, all financial covenant and other financial calculations shall be computed with respect to Borrower
only, and not on a consolidated basis.


 


(b)           As
used in the Loan Documents: (i) the words “shall” or “will” are mandatory, the word “may” is
permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting,
the singular includes the plural, and numbers denoting amounts that are set off in brackets are negative; (ii) the term “continuing”
in the context of an Event of Default means that the Event of Default has not been remedied (if capable of being remedied) or waived;
and (iii) whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of”
Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation,
of any Responsible Officer.


 


12.2        Definitions.
Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in this Section 12.2. All other terms
contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined
therein. As used in this Agreement, the following capitalized terms have the following meanings:


 


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


 


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


 


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


 






     


     


    

 


“Agreement”
is defined in the preamble hereof.


 


“Anti-Terrorism Law”
means any law relating to terrorism or money-laundering, including Executive Order No. 13224 and the USA Patriot Act.


 


“Applicable Law”
means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.


 


“ASU” is
defined in Section 12.1(a).


 


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


 


“Bank”
is defined in the preamble hereof.


 


“Bank Entities”
is defined in Section 11.8.


 


“Bank Expenses”
are all audit fees, costs and reasonable expenses (including reasonable, out-of-pocket and documented 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 or any Guarantor.


 


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


 


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


 


“Board”
is Borrower’s board of directors or equivalent governing body.


 


“Borrower”
is set forth on Schedule I hereto.


 


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


 


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


 






     


     


    

 


“Business Day”
is a day other than a Saturday, Sunday or other day on which commercial banks in the State of California are authorized or required by
law to close, except that if any determination of a “Business Day” shall relate to an FX Contract, the term “Business
Day” shall also mean a day on which dealings are carried on in the country of settlement of the Foreign Currency.


 


“Cash Equivalents”
are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof
having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one
(1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s
Investors Service, Inc.; (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue;
and (d) money market funds at least 95.0% of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through
(c) of this definition.


 


“Cayman Islands Electronic
Signature Law” is defined in Section 11.9.


 


“Change in Control”
means (a) at any time, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial
owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 25.0% or more of the ordinary
voting power for the election of directors, partners, managers and members, as applicable, of Parent (determined on a fully diluted basis)
other than by the sale of Parent’s equity securities in a public offering or to venture capital or private equity investors so long
as Borrower identifies to Bank the venture capital or private equity investors at least seven (7) Business Days prior to the closing
of the transaction and provides to Bank a description of the material terms of the transaction; (b) during any period of 12
consecutive months, a majority of the members of the Board of Parent cease to be composed of individuals (i) who were members of
that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent
governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination
at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election
or nomination at least a majority of that board or equivalent governing body; or (c) at any time, Parent shall cease to own and control,
of record and beneficially, directly or indirectly, 100.0% of each class of outstanding stock, partnership, membership, or other ownership
interest or other equity securities of each Subsidiary of Parent free and clear of all Liens (except Permitted Liens).


 


“Change in Law”
means the occurrence, after the Effective Date, of: (a) the adoption or taking effect of any law, rule, regulation or treaty; (b) any
change in Applicable Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority;
or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental
Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection
Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules,
guidelines or directives promulgated by Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor
or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be
deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.


 


“Claims”
is defined in Section 11.3.


 


“Code”
is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of New York; provided, that,
to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different
Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 shall govern; provided further,
that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies
with respect to, Bank’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than
the State of New York, 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”
consists of all of Borrower’s right, title and interest in and to the following personal property:


 


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


 


(b)           Notwithstanding
the foregoing, the Collateral does not include any Intellectual Property; provided, however, the Collateral shall include all Accounts
and all proceeds of Intellectual Property. If a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest
in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that are proceeds
of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property
to the extent necessary to permit perfection of Bank’s security interest in such Accounts and such other property of Borrower that
are proceeds of the Intellectual Property.


 


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


 


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


 


“Collections Account”
is Borrower’s checking account maintained at JPMorgan Chase with account number xxxxxx06 listed on the Perfection Certificate as
of the Effective Date.


 


“Collections Account
Transition Period” is the period of time commencing on the Effective Date, through the earlier to occur of (i) December 21, 2023 or (ii) an
Event of Default.


 


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


 


“Compliance Statement”
is that certain statement in the form attached hereto as Exhibit A.


 


“Connection Income
Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise
Taxes or branch profits Taxes.


 


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


 






     


     


    

 


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


 


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


 


“Credit Extension”
is any FX Contract, Hardware Advance, or any other extension of credit by Bank for Borrower’s benefit.


 


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


 


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


 


“Default Rate”
is defined in Section 1.2(c).


 


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


 


“Designated Deposit
Account” is the deposit account established by Borrower with Bank for purposes of receiving Credit Extensions.


 


“Division”
means, in reference to any Person which is an entity, the division of such Person into two (2) or more separate Persons, with the
dividing Person either continuing or terminating its existence as part of such division, including, without limitation, as contemplated
under Section 18-217 of the Delaware Limited Liability Company Act for limited liability companies formed under Delaware law, Section 17-220
of the Delaware Revised Uniform Limited Partnership Act for limited partnerships formed under Delaware law, or any analogous action taken
pursuant to any other Applicable Law with respect to any corporation, limited liability company, partnership or other entity.


 


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


 


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


 


“Effective Date”
is set forth on Schedule I hereto.


 


“Eligible Hardware”
means the bills of materials (inclusive of taxes and fees) of Borrower’s hardware which has been shipped to customer locations;
provided that such hardware is (a) subject to signed lease contracts with a minimum tenor of 36 months and are otherwise on terms
acceptable to Bank in its commercially reasonable discretion and (b) meets all of Borrower’s representations and warranties
in Section 4.11 and are otherwise acceptable to Bank in its commercially reasonable discretion in all respects.


 


“Eligible Hardware
Report” is set forth on Schedule I hereto.


 


“Environmental Laws”
means any Applicable Law (including any permits, concessions, grants, franchises, licenses, agreements or governmental restrictions) relating
to pollution or the protection of health, safety or the environment or the release of any materials into the environment (including those
related to hazardous materials, air emissions, discharges to waste or public systems and health and safety matters).


 






     


     


    

 


“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, as amended, and its regulations.


 


“Event of Default”
is defined in Section 7.


 


“Evolv Technologies”
is set forth on Schedule I hereto.


 


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


 


“Excluded Taxes”
means any of the following Taxes imposed on or with respect to Bank or required to be withheld or deducted from a payment to Bank, (a) Taxes
imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed
as a result of Bank being organized under the laws of, or having its principal office or its applicable lending office located in, the
jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal
withholding Taxes imposed on amounts payable to or for the account of Bank with respect to an applicable interest in a Credit Extension
pursuant to a law in effect on the date on which (i) Bank acquires such interest in the Credit Extensions or (ii) Bank changes
its lending office, except in each case to the extent that, pursuant to Section 1.6, amounts with respect to such Taxes were payable
either to Bank’s assignor immediately before Bank became a party hereto or to Bank immediately before it changed its lending office,
(c) Taxes attributable to Bank’s failure to comply with Section 1.6(e), and (d) any withholding Taxes imposed under
FATCA.


 


“FATCA”
means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that
is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations
thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code and any fiscal or regulatory
legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities
and implementing such Sections of the Internal Revenue Code.


 


“Financial Statement
Repository” is Bank’s e-mail address specified in Section 9 or such other means of collecting information approved
and designated by Bank after providing notice thereof to Borrower from time to time.


 


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


 


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


 


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


 


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


 


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


 






     


     


    

 


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


 


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


 


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


 


“Guaranty”
is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise
supplemented.


 


“Hardware Advance”
and “Hardware Advances” are each defined in Section 1.1(a) of this Agreement.


 


“Hardware Availability
Amount” is set forth on Schedule I hereto.


 


“Hardware Amortization
Date” is set forth on Schedule I hereto.


 


“Hardware Draw Period”
is set forth on Schedule I hereto.


 


“Hardware Maturity
Date” is set forth on Schedule I hereto.


 


“Increase Approval”
is set forth on Schedule I hereto.


 


“Increase Event”
is set forth on Schedule I hereto.


 


“Increase Fee”
is set forth on Schedule I hereto.


 


“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, (d) Contingent Obligations and (e) other short- and long-term obligations under debt agreements, lines of
credit and extensions of credit.


 


“Indemnified Person”
is defined in Section 11.3.


 


“Indemnified Taxes”
means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of
Borrower under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.


 


“Initial Hardware
Advance” is set forth on Schedule I.


 


“Information”
is defined in Section 11.8.


 


“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, receivership or other relief.


 


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


 


(a)           its
Copyrights, Trademarks and Patents;


 






     


     


    

 


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


 


(c)           any
and all source code;


 


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


 


(e)           any
and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation,
to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and


 


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


 


“Internal Revenue
Code” means the U.S. Internal Revenue Code of 1986, and the rules and regulations promulgated thereunder, each as amended
or modified from time to time.


 


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


 


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


 


“JPM Letter of Credit
Transition Period” is the period of time commencing on the Effective Date, through the earlier to occur of (i) April 15,
2023 or (ii) an Event of Default.


 


“Key Person”
is Borrower’s Chief Executive Officer.


 


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


 


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


 


“Liquidity Ratio”
means the ratio of (a) (i) Borrower’s unrestricted and unencumbered (other than Liens in favor of Bank or Bank’s
Affiliates which constitute Permitted Liens) cash and Cash Equivalents maintained at Bank or Bank’s Affiliates plus (ii) 60.0%
of Borrower’s net billed accounts receivable determined according to GAAP to (b) all outstanding Obligations of Borrower to
Bank.


 


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


 


“Material Adverse
Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the value
of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower;
(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 likelihood that Borrower shall fail to comply with one or
more of the financial covenants in Section 5 during the next succeeding financial reporting period.


 






     


     


    

 


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


 


“OFAC”
is the Office of Foreign Assets Control of the United States Department of the Treasury and any successor thereto.


 


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


 


“Other Connection
Taxes” means, with respect to Bank, Taxes imposed as a result of a present or former connection between Bank and the jurisdiction
imposing such Tax (other than connections arising from Bank having executed, delivered, become a party to, performed its obligations under,
received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Credit Extension or Loan Document).


 


“Other Taxes”
means all present or future stamp, court, documentary, intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest
under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to
an assignment.


 


“Parent”
is set forth on Schedule I hereto.


 


“Participant Register”
is defined in Section 11.2.


 


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


 


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


 


“Payment Date”
is set forth on Schedule I hereto.


 


“Perfection Certificate”
is the Perfection Certificate delivered by Borrower in connection with this Agreement.


 


“Permitted Acquisition”
means a transaction whereby Borrower acquires all or substantially all of the equity interests or property of another Person, which satisfies
each of the following conditions:


 


(a)           Borrower
has delivered to Bank, evidence satisfactory to Bank in its sole discretion that Borrower’s Liquidity Ratio is greater than or equal
to 2.0 to 1.0 on a pro forma basis at the time of any Permitted Acquisition and after giving effect to such Permitted Acquisition at all
times during the term of this Agreement;


 


(b)           the
acquisition costs (including the purchase price) expended by Borrower in the transaction are not paid with any Credit Extensions made
hereunder;


 






     


     


    

 


(c)           such
transaction shall only involve an entity formed, and assets located, in the United States, and the party or parties being acquired is
in the same or a substantially similar line of business as Borrower;


 


(d)           no
Event of Default has occurred and is continuing or would exist immediately after giving effect to the transaction and Bank has received
satisfactory evidence that Borrower is in compliance with all terms and conditions of this Agreement (and that it will be in compliance
immediately after giving effect to the transaction);


 


(e)           the
acquisition is approved by the board of directors (or equivalent control group) of all parties to the transaction;


 


(f)            the
total aggregate consideration to be paid by Borrower and its Subsidiaries (including, without limitation the value of Borrower’s
or its Subsidiaries’ stock issued by Borrower or its Subsidiaries, any earnout obligations, and any other property used in satisfaction
of the purchase price) in connection therewith in all of such contemplated transactions during the term of this Agreement does not exceed
$10,000,000.00;


 


(g)           Borrower
provides Bank (i) written notice of the transaction at least thirty (30) days (or such later date as Bank may agree in writing) before
the closing of such transaction, (ii) at least ten (10) days (or such later date as Bank may agree in writing) before the closing
of such transaction, copies (in draft form) of the acquisition agreement and other material agreements relative to the contemplated transaction
and such other financial information, financial analysis, documentation or other information relating to such transaction as Bank shall
reasonably request, and (iii) upon the closing date of such transaction, the executed acquisition agreement and other executed material
agreements relative to the contemplated transaction;


 


(h)           Borrower
is a surviving legal entity after completion of the contemplated transaction;


 


(i)            the
contemplated transaction is consensual and non-hostile;


 


(j)            no
Indebtedness will be incurred, assumed, or would exist with respect to Borrower  or its Subsidiaries as a result of the contemplated
transaction, other than Permitted Indebtedness, and no Liens will be incurred, assumed, or would exist with respect to the assets of Borrower
or its Subsidiaries as a result of the contemplated transaction, other than Permitted Liens;


 


(k)           any
direct Subsidiary of Borrower acquired in the contemplated transaction shall, within thirty (30) days (or such longer period of time as
Bank may agree in writing) of the consummation of the transaction, become a  Borrower) hereunder and provide to Bank a joinder to
the Loan Agreement to cause such Subsidiary to become a co-borrower hereunder, together with such appropriate financing statements and/or
Control Agreements, all in form and substance satisfactory to Bank (including being sufficient to grant Bank a first priority Lien (subject
to Permitted Liens) in and to the assets of such Subsidiary);


 


(l)            the
transaction and the company being acquired is accretive in all respects; and


 


(m)          Borrower
shall have delivered to Bank, at least five (5) Business Days prior to the date on which any such acquisition is to be consummated
(or such later date as is agreed by Bank in its sole discretion), a certificate of a Responsible Officer of Borrower, in form and substance
reasonably satisfactory to Bank, certifying that all of the requirements set forth in this definition have been satisfied or will be satisfied
on or prior to the consummation of such purchase or other acquisition.


 


“Permitted Indebtedness”
is:


 


(a)            Borrower’s
Indebtedness to Bank under this Agreement and the other Loan Documents (which, for the avoidance of doubt, includes Bank Services);


 


(b)           Indebtedness
existing on the Effective Date which is shown on the Perfection Certificate (other than the Permitted JPM Letter of Credit);


 






     


     


    

 


(c)           Subordinated
Debt;


 


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


 


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


 


(f)            Indebtedness
secured by Liens permitted under clauses (a), (c) and (l) of the definition of “Permitted Liens” hereunder;


 


(g)           unsecured
Indebtedness consisting of financing of insurance premiums in the ordinary course of business; provided such financing arrangement has
been approved in writing by Bank;


 


(h)           Indebtedness
constituting Permitted Investments;


 


(i)            extensions,
refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (h) 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;


 


(j)            other
unsecured Indebtedness not otherwise permitted by Section 6.4 (specifically excluding any Indebtedness with respect to letters of
credit and business credit cards) not exceeding $500,000.00 in the aggregate outstanding at any time; and


 


(k)           during
the JPM Letter of Credit Transition Period, Indebtedness consisting of Evolv Technologies’ letter of credit owing to JPMorgan
Chase Bank in a maximum amount not to exceed $275,000.00 (the “Permitted JPM Letter of Credit”).


 


“Permitted Investments”
are:


 


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


 


(b)           (i) Investments
consisting of Cash Equivalents, and (ii) any Investments permitted by Borrower’s investment policy, as amended from time to
time, provided that such investment policy (and any such amendment thereto) has been approved in writing by Bank;


 


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


 


(d)           Investments
consisting of deposit accounts (but only to the extent that Borrower is permitted to maintain such accounts pursuant to Section 5.7
of this Agreement) in which Bank has a perfected security interest subject to Section 5.15(d);


 


(e)           Investments
in connection with Transfers permitted by Section 6.1;


 


(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, directors, partners, managers and members relating to the purchase of equity securities of
Borrower or its Subsidiaries pursuant to employee equity purchase plans or similar agreements approved by the Board;


 


(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 the creation of a Subsidiary for the purpose of consummating a merger transaction permitted by Section 6.3 of this
Agreement, which is otherwise a Permitted Investment;


 


(i)            Investments
consisting of Permitted Acquisitions;


 


(j)            Investments
(i) by any Subsidiary or Borrower in Borrower or a secured Guarantor, (ii) by any Subsidiary that is not a Borrower or a secured
Guarantor in another Subsidiary that is not a Borrower or a secured Guarantor, (iii) by Borrower or secured Guarantors in Subsidiaries
that are not a Borrower or a secured Guarantor for the ordinary, necessary and current operating expenses of such Subsidiaries not to
exceed $2,000,000.00 in any fiscal year of Borrower, so long as an Event of Default does not exist at the time of such Investment and
would not occur after giving effect to such Investment;


 


(k)           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 (k) shall not apply to Investments of Borrower in any Subsidiary;
and


 


(l)            other
Investments not otherwise permitted by Section 6.7 not exceeding $500,000.00 in the aggregate outstanding in any twelve (12) month
period.


 


“Permitted JPM Letter
of Credit” is defined in clause (k) of the definition of Permitted Indebtedness.


 


“Permitted Liens”
are:


 


(a)           Liens
existing on the Effective Date which are shown on the Perfection Certificate (other than the Permitted JPM Letter of Credit) or arising
under this Agreement or the other Loan Documents;


 


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


 


(c)           purchase
money Liens (i) on Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment securing no more
than $500,000.00 in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Lien is confined to the
property and improvements and the proceeds of the Equipment;


 


(d)           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 $500,000.00 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;


 


(e)           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);


 


(f)            Liens
incurred in the extension, renewal or refinancing of the Indebtedness secured by Liens described in (a) through (e), 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;


 


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


 






     


     


    

 


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


 


(i)            Liens
arising from attachments or judgments, orders, or decrees in circumstances not constituting an Event of Default under Sections 7.4 and
7.7;


 


(j)            easements,
rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not material in amount,
and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;


 


(k)           Liens
in favor of customs or revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation
of goods in the ordinary course of business;


 


(l)            deposits
to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds, and other
obligations of a like nature, in each case, in the ordinary course of Borrower’s business; provided that the aggregate amount pursuant
to this clause does not exceed $200,000.00 in the aggregate at any time;


 


(m)           customary
Liens of any bank in connection with statutory, common law and contractual rights of setoff and recoupment with respect to any deposit
account or securities account of Borrower, provided that (i) subject to Section 5.15(d), Bank has a first priority perfected
security interest in such account and (ii) such account is permitted to be maintained pursuant to Section 5.7 of this Agreement;


 


(n)           Liens
securing Subordinated Debt in an aggregate amount not exceeding $400,000.00; provided, however, that such Liens are only permitted to
the extent that such Liens do not cover any property not subject to Bank’s Liens; and


 


(o)           during
the JPM Letter of Credit Transition Period, the Lien on the collateral account securing the obligations with respect to the Permitted
JPM Letter of Credit in an amount not to exceed $275,000.00.


 


“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.


 


“Prepayment Fee”
shall be an additional fee, payable to Bank, with respect to each Hardware Advance, in an amount equal to:


 


(a)           for
a prepayment of the Hardware Advances made on or prior to the first (1st) anniversary of the Effective Date, 1.0% of the then-outstanding
principal amount of the Hardware Advances immediately prior to the date of such prepayment;


 


(b)           for
a prepayment of the Hardware Advances made after the first (1st) anniversary of the Effective Date, but on or prior to the second (2nd)
anniversary of the Effective Date, 0.75% of the then-outstanding principal amount of the Hardware Advances immediately prior to the date
of such prepayment;


 


(c)           for
a prepayment of the Hardware Advances made after the second (2nd) anniversary of the Effective Date, but on or prior to the
third (3rd) anniversary of the Effective Date, 0.50% of the then-outstanding principal amount of the Hardware Advances immediately
prior to the date of such prepayment; and


 


(d)           for
a prepayment of the Hardware Advances made after the third (3rd) anniversary of the Effective Date, 0.0% of the then-outstanding
principal amount of the Hardware Advances immediately prior to the date of such prepayment.


 






     


     


    

 


Notwithstanding the foregoing,
provided no Event of Default has occurred and is continuing, the Prepayment Fee shall be waived by Bank, if Bank, in its commercially
reasonable discretion, closes on the refinance and redocumentation (including pursuant to terms different from those set forth in this
Agreement) of the Hardware Advances prior to the Hardware Maturity Date.


 


“Prime Rate”
is set forth on Schedule I hereto.


 


“Prime Rate Margin”
is set forth on Schedule I hereto.


 


“Register”
is defined in Section 11.2.


 


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


 


“Representatives”
is defined in Section 11.8.


 


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


 


“Restricted License”
is any material license or other material 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.


 


“Sanctioned Person”
means a Person that: (a) is listed on any Sanctions list maintained by OFAC or any similar Sanctions list maintained by any other
Governmental Authority having jurisdiction over Borrower; (b) is located, organized, or resident in any country, territory, or region
that is the subject or target of Sanctions; or (c) is 50.0% or more owned or controlled by one (1) or more Persons described
in clauses (a) and (b) hereof.


 


“Sanctions”
means the economic sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by the United States
government and any of its agencies, including, without limitation, OFAC and the U.S. State Department, or any other Governmental Authority
having jurisdiction over Borrower.


 


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


 


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


 


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


 


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


 






     


     


    

 


“Taxes”
means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees
or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.


 


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


 


“Transfer”
is defined in Section 6.1.


 


“Transition Period”
is the period of time commencing on the Effective Date, through the earlier to occur of (i) March 19, 2023  or (ii) an Event
of Default.


 


“USA Patriot Act”
means the “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001” (Public Law 107-56, signed into law on October 26, 2001), as amended from time to time.


 


[Signature page follows]


 






     


     


    

 


IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed as of the Effective Date.


 


	 	BORROWER:
	 	 
	 	EVOLV TECHNOLOGIES HOLDINGS, INC.
	 	 
	 	By:	 /s/ Mark Donohue
	 	 
	 	Name:	Mark Donohue
	 	 
	 	Title:	Chief Financial Officer
	 	 
	 	EVOLV TECHNOLOGIES, INC.
	 	 
	 	By:	 /s/ Mark Donohue                 
	 	 
	 	Name:	Mark Donohue
	 	 
	 	Title:	Chief Financial Officer and Treasurer
	 	 
	 	BANK:
	 	 
	 	SILICON VALLEY BANK
	 	 
	 	By:	/s/ Karen Sperling



 


	 	Name:	Karen Sperling



 


	 	Title:	Vice President




 






     


     


    

 


SCHEDULE I


LSA PROVISIONS


 


	LSA Section	LSA Provision
	1.1(a) – Hardware Advances - Availability	Hardware Advances shall (a) be used to finance Eligible Hardware (including with respect to reimbursements), (b) may only be made within the ninety (90) days after such Eligible Hardware is shipped to customer locations (determined based upon applicable date of shipment as set forth in the Eligible Hardware Report (as defined below) delivered by Borrower to Bank) and (c) be requested by Borrower and shall made by Bank once per calendar quarter, within thirty (30) days after the last day of the most recently-ended calendar quarter then ended. Notwithstanding the foregoing, the initial Hardware Advance shall be requested by Borrower and made by Bank on or about the Effective Date in an original principal amount equal to $30,000,000.00, and shall not be required to be related to any Eligible Hardware and/or the shipment of Eligible Hardware to a customer location (the “Initial Hardware Advance”). No Hardware Advance (other than the Initial Hardware Advance) may exceed 100.0% of the amount of the invoices issued to the Borrower for such Eligible Hardware which shall be set forth in a written report submitted by Borrower to Bank on or prior to the date of the applicable Hardware Advance (in form and substance acceptable to Bank in its commercially reasonable discretion) that is signed by a Responsible Officer and includes (i) the invoices issued to Borrower with respect to the Eligible Hardware purchased by Borrower, (ii) evidence of payment of such invoices by Borrower, and (iii) a report listing the “pure subscription” Eligible Hardware shipped to customer locations in the preceding quarter, including the cost (inclusive of taxes and fees) to Borrower thereof (each, a “Eligible Hardware Report”).  For the avoidance of doubt, no more than one (1) Hardware Advance shall be made with respect to each Eligible Hardware Report.  After repayment, no Hardware Advance (or any portion thereof) may be reborrowed.
	1.1(b) – Hardware Advances – Repayment 	Commencing on the applicable Hardware Amortization Date for such Hardware Advance and continuing on each Payment Date thereafter, Borrower shall repay each Hardware Advance in (i) 36 consecutive equal monthly installments of principal, plus (ii) monthly payments of accrued interest at the rate set forth in Section 1.2(b)(ii).  All outstanding principal and accrued and unpaid interest with respect to such Hardware Advance, and all other outstanding Obligations with respect to such Hardware Advances, are due and payable in full on the applicable Hardware Maturity Date.
	1.2(a)(i) – Interest Payments – Hardware Advances	Interest on the principal amount of each Hardware Advance is payable in arrears monthly (A) on each Payment Date commencing on the first Payment Date following the Funding Date of such Hardware Advance, (B) on the date of any prepayment and (C) on the Hardware Maturity Date.
	1.2(b)(i) – Interest Rate – Hardware Advances	The outstanding principal amount of each Hardware Advance shall accrue interest at a floating rate per annum equal to the greater of (1) 7.25% and (2) the Prime Rate plus the Prime Rate Margin, which interest shall be payable in accordance with Section 1.2(a)(i).
	1.2(e) – Interest Computation	Interest shall be computed on the basis of the actual number of days elapsed and a 360-day year.



 






     


     


    

 


	1.3(a) – Term Loan Advance Commitment Fee	A fully earned, non-refundable commitment fee of $50,000.00 on the Effective Date.
	1.3(a) – Increase Fee	A fully earned, non-refundable increase fee of $25,000.00 upon the occurrence of the Increase Event (the “Increase Fee”). 
	8.8 – Borrower Liability	Each Borrower hereunder shall be jointly and severally obligated to repay all Credit Extensions made hereunder and any other Obligations related thereto, regardless of which Borrower actually receives said Credit Extension, as if each Borrower hereunder directly received all Credit Extensions.
	12.2 – “Borrower”	“Borrower” means, individually and collectively, jointly and severally, (a) EVOLV TECHNOLOGIES HOLDINGS, INC., a Delaware corporation (“Parent”) and (b) EVOLV TECHNOLOGIES, INC., a Delaware corporation (“Evolv Technologies”). 
	12.2 – “Effective Date”	“Effective
Date” is December 21, 2022.
	12.2 – “Hardware Availability Amount”	“Hardware Availability Amount” is an aggregate principal amount equal to $50,000,000.00, which shall be increased to an aggregate principal amount equal to $75,000,000.00 upon the occurrence of the Increase Event.
	12.2 – “Hardware Amortization Date”	“Hardware Amortization Date” is, for each Hardware Advance, the first (1st) Payment Date immediately following the Funding Date of such Hardware Advance.
	12.2 – “Hardware Draw Period”	“Hardware
Draw Period” is the period commencing on the Effective Date and ending on the earlier to occur of (a) June 19, 2024, and (b) an
Event of Default.
	12.2 – “Hardware Maturity Date”	“Hardware Maturity Date” is, with respect to each Hardware Advance, the thirty-fifth (35th) Payment Date after the applicable Hardware Amortization Date for such Hardware Advance.
	12.2 – “Increase Approval”	“Increase Approval” means the occurrence of all of the following: (a) Borrower has requested in writing to Bank to increase the Hardware Availability Amount to an aggregate principal amount equal to $75,000,000.00, (b) Bank has received all necessary internal and credit approvals for such increase, (c) Borrower is in pro forma covenant compliance with the financial covenant in Section 5.8 of this Agreement at the time the requested increase is to go into effect and will continue to be in compliance immediately after giving effect to such increase and continuing throughout the duration of the term of this Agreement, (d) no Event of Default exists at the time the requested increase is to go into effect or would exist as a result of such increase, and (e) Bank has provided written approval in its sole discretion that such increase will occur. For clarity, upon satisfaction of each of the conditions in (a) through (e), the determination of whether to provide any such increase shall be in Bank’s sole discretion and shall in no event occur automatically.
	12.2 – “Increase Event”	“Increase Event” means the occurrence of all of the following: (a) the Increase Approval has occurred, (b) Bank has confirmed to Borrower in writing that the Hardware Availability Amount will be increased to an aggregate principal amount equal to $75,000,000.00, and (c) Borrower has paid to Bank the Increase Fee.
	12.2 – “Payment Date”	“Payment Date” is the first (1st) calendar day of each month.



 






     


     


    

 


	12.2 – “Prime Rate”	“Prime Rate” is the rate of interest per annum from time to time published in the money rates section of The Wall Street Journal or any successor publication thereto as the “prime rate” then in effect; provided that if such rate of interest, as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable for any reason as determined by Bank, the “Prime Rate” shall mean the rate of interest per annum announced by Bank as its prime rate in effect at its principal office in the State of California (such Bank announced Prime Rate not being intended to be the lowest rate of interest charged by Bank in connection with extensions of credit to debtors); provided that, in the event such rate of interest is less than zero percent (0.0%) per annum, such rate shall be deemed to be zero percent (0.0%) per annum for purposes of this Agreement.
	12.2 – “Prime Rate Margin”	“Prime Rate Margin” is 1.0%.


 






     


     


    

 


EXHIBIT A


COMPLIANCE STATEMENT


 






     


     


    

 


EXHIBIT B


LOAN PAYMENT/ADVANCE REQUEST FORM