Second Amended and Restated Loan and Security Agreement



 Exhibit 10.2 
 SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT 
 THIS LOAN AND
SECURITY AGREEMENT (this “Agreement”) dated as of June 27, 2011 (the “Effective Date”) between SILICON VALLEY BANK, a California corporation with a loan production office located at 380 Interlocken
Crescent, Suite 600, Broomfield, Colorado 80021 (“Bank”), SONIC FOUNDRY, INC., Maryland corporation (“Sonic Foundry”), and SONIC FOUNDRY MEDIA SYSTEMS, INC., a Maryland corporation (“Sonic
Systems” and together with Sonic Foundry, jointly and severally, individually and collectively, the “Borrower”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. This Agreement amends
and restates in its entirety a certain Amended and Restated Loan and Security Agreement dated as of June 16, 2008, between Borrower and Bank, as amended by a certain First Amendment to Amended and Restated Loan and Security Agreement, dated as
of April 1, 2009 (as amended, the “Prior Loan Agreement”). The parties hereby agree as follows: 
  

	 	1	ACCOUNTING AND OTHER TERMS 

 Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. Capitalized terms not otherwise defined in this Agreement
shall have the meanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein. 

 

	 	2	LOAN AND TERMS OF PAYMENT 

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

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

(b) Termination; Repayment. The Revolving Line terminates on the Revolving Line Maturity Date, when the principal
amount of all Advances, the unpaid interest thereon, and all other Obligations relating to the Revolving Line shall be immediately due and payable. 
 2.1.2 Letters of Credit Sublimit. 
 (a) As part of the
Revolving Line and subject to deduction of Reserves, Bank shall issue or have issued Letters of Credit denominated in Dollars or a Foreign Currency for Borrower’s account. The aggregate Dollar Equivalent amount utilized for the issuance of
Letters of Credit shall at all times reduce the amount otherwise available for Advances under the Revolving Line. The aggregate Dollar Equivalent of the face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit
and any Letter of Credit Reserve) may not exceed the lesser of (A) Seven Hundred Fifty Thousand Dollars ($750,000), minus (i) the sum of all amounts used for Cash Management Services, and minus (ii) the FX Reduction
Amount, or (B) the lesser of Revolving Line or the Borrowing Base, minus (i) the sum of all outstanding principal amounts of any Advances (including any amounts used for Cash Management Services), and minus (ii) the FX
Reduction Amount. 
 (b) If, on the Revolving Line Maturity Date (or the effective date of any termination of
this Agreement), there are any outstanding Letters of Credit, then on such date Borrower shall provide to Bank cash collateral in an amount equal to 105% (110% for any such Letters of Credit denominated in a currency other than U.S. Dollars) of the
Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating
to such Letters of Credit. All Letters of Credit shall be in form and substance 

  
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acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s standard Application and Letter of Credit Agreement (the “Letter of Credit
Application”). Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably request. Borrower further agrees to be bound by the regulations and interpretations of the issuer of any
Letters of Credit guarantied by Bank and opened for Borrower’s account or by Bank’s interpretations of any Letter of Credit issued by Bank for Borrower’s account, and Borrower understands and agrees that Bank shall not be liable for
any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments, or supplements thereto. 

(c) The obligation of Borrower to immediately reimburse Bank for drawings made under Letters of Credit shall be absolute,
unconditional, and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, such Letters of Credit, and the Letter of Credit Application. 

(d) Borrower may request that Bank issue a Letter of Credit payable in a Foreign Currency. If a demand for payment is made
under any such Letter of Credit, Bank shall treat such demand as an Advance to Borrower of the Dollar Equivalent of the amount thereof (plus fees and charges in connection therewith such as wire, cable, SWIFT or similar charges). 

(e) To guard against fluctuations in currency exchange rates, upon the issuance of any Letter of Credit payable in a
Foreign Currency, Bank shall create a reserve (the “Letter of Credit Reserve”) under the Revolving Line in an amount equal to ten percent (10%) of the face amount of such Letter of Credit. The amount of the Letter of Credit
Reserve may be adjusted by Bank from time to time to account for fluctuations in the exchange rate. The availability of funds under the Revolving Line shall be reduced by the amount of such Letter of Credit Reserve for as long as such Letter of
Credit remains outstanding. 
 2.1.3 Foreign Exchange Sublimit. As part of the Revolving Line and subject to the
deduction of Reserves, Borrower may enter into foreign exchange contracts with Bank under which Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency (each, a “FX Forward Contract”) on a specified
date (the “Settlement Date”). FX Forward Contracts shall have a Settlement Date of at least one (1) FX Business Day after the contract date. The aggregate amount of FX Forward Contracts at any one time may not exceed ten
(10) times the lesser of (A) Seven Hundred Fifty Thousand Dollars ($750,000), minus (i) the sum of all amounts used for Cash Management Services, and minus (ii) the Dollar Equivalent of the face amount of any
outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve), or (B) the lesser of Revolving Line or the Borrowing Base, minus (i) the sum of all outstanding principal amounts
of any Advances (including any amounts used for Cash Management Services), and minus (ii) the Dollar Equivalent of the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve). The amount otherwise available for Credit Extensions under the Revolving Line shall be reduced by an amount equal to ten percent (10%) of each outstanding FX Forward Contract (the “FX Reduction Amount”). Any
amounts needed to fully reimburse Bank for any amounts not paid by Borrower in connection with FX Forward Contracts will be treated as Advances under the Revolving Line and will accrue interest at the interest rate applicable to Advances.

 2.1.4 Cash Management Services Sublimit. Borrower may use the Revolving Line for Bank’s cash management services,
which may include merchant services, direct deposit of payroll, business credit card, and check cashing services identified in Bank’s various cash management services agreements (collectively, the “Cash Management Services”),
in an aggregate amount not to exceed the lesser of (A) Seven Hundred Fifty Thousand Dollars ($750,000), minus (i) the Dollar Equivalent of the face amount of any outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit and any Letter of Credit Reserve), and minus (ii) the FX Reduction Amount, or (B) the lesser of Revolving Line or the Borrowing Base, minus (i) the sum of all outstanding principal amounts of any
Advances, minus (ii) the Dollar Equivalent of the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve), and minus (iii) the FX Reduction
Amount. Any amounts Bank pays on behalf of Borrower for any Cash Management Services will be treated as Advances under the Revolving Line and will accrue interest at the interest rate applicable to Advances. 

2.1.5 Prior Term Loan. 

  
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 (a) Payments. Borrower is obligated to the Bank for the Term Loan 2
(as defined in the Original Loan Agreement and defined herein as the “Prior Term Loan”), made by Bank to Borrower pursuant to the Prior Loan Agreement. Borrower acknowledges that, as of the Effective Date, the outstanding principal
amount of the Prior Term Loan is $303,987.16. Borrower acknowledges there is no availability under the Prior Term Loan, and no amount of the Prior Term Loan may be reborrowed. Borrower shall continue to pay the Prior Term Loan in monthly
installments of principal (in accordance with the existing 36-month amortization schedule), plus accrued interest on the first day of each month, and with a final payment of all remaining principal amounts outstanding under the Prior Term
Loan and accrued interest thereon on the applicable Prior Term Loan Maturity Date. 
 (b) Prepayment. At
Borrower’s option, so long as an Event of Default has not occurred and is not continuing, Borrower shall have the option to prepay all or any portion of the Prior Term Loan advanced by Bank under the Prior Loan Agreement, provided
Borrower (a) provides written notice to Bank of its election to exercise to prepay all or some portion of the Prior Term Loan at least three (3) days prior to such prepayment, and (b) pays, on the date of the prepayment (i) all
accrued and unpaid interest with respect to the Prior Term Loan through the date the prepayment is made; (ii) the portion of the unpaid principal with respect to the Prior Term Loan being prepaid; and (iii) all other sums, if any, that
shall have become due and payable hereunder with respect to this Agreement. 
 2.1.6 Term Loan 2011. 

(a) Availability; Use of Proceeds. Subject to the terms and conditions of this Agreement, Bank agrees to lend to
Borrower from time to time prior to the Term Loan 2011 Commitment Termination Date, advances (each a “Term Loan 2011 Advance” and collectively the “Term Loan 2011 Advances”) in an aggregate amount not to exceed the
Term Loan 2011 Commitment; provided that, in each case, an Event of Default (including, without limitation, as a result of a violation of Section 6.9 hereof), has not occurred and is continuing or would result immediately after
giving effect to any such Term Loan Advance. Each Term Loan 2011 Advance shall be in an amount of not less than Two Hundred Fifty Thousand Dollars ($250,000). Borrower shall use the proceeds of the Term Loan 2011 to (i) repay the PFG
Subordinated Debt; provided that an Event of Default has not occurred and is continuing or would result immediately after giving effect to such repayment or (ii) to fund its general business requirements and not for personal,
family, household or agricultural purposes. 
 (b) Repayment. For each Term Loan 2011 Advance, commencing
on the first calendar day of each month following the month in which a Term Loan 2011 Funding Date occurs, Borrower shall make monthly payments, in arrears for each such Term Loan 2011 Advance in (i) thirty-six (36) consecutive equal
monthly installments of principal, based on a thirty-six (36) month amortization schedule (for each such Term Loan 2011 Advance, the “Amortization Period”) plus (ii) monthly payments in arrears of accrued interest
on such Term Loan 2011 Advance (each a “Term Loan 2001 Payment” and collectively the “Term Loan 2011 Payments”). All unpaid principal and accrued interest on each Term Loan 2011 Advance shall be due and payable in
full on the earlier to occur of (i) the termination of such Term Loan 2011 Advance’s Amortization Period or (ii) the Term Loan 2011 Maturity Date. After repayment, no Term Loan 2011 Advances may be reborrowed. 

(c) Prepayment. Borrower may prepay all but not less than all of each Term Loan 2011 Advances prior to the
termination of such Term Loan 2011 Advance’s Amortization Period, effective three (3) Business Days after written notice of such prepayment is given to Bank. Notwithstanding any such prepayment, Bank’s lien and security interest in
the Collateral shall continue until Borrower fully satisfies its Obligations. If such prepayment is at Borrower’s election or at Bank’s election due to the occurrence and continuance of an Event of Default, Borrower shall pay to Bank, in
addition to the payment of any other expenses or fees then-owing, a termination fee in an amount equal to (i) if such prepayment occurs after the Effective Date but on or prior to the day that is 365 days after the Effective Date (the
“2011 First Anniversary”), three percent (3.00%) of the principal amount of the Term Loan 2011 Advances so prepaid; (ii) if such prepayment occurs after the 2011 First Anniversary but on or prior to the day that is 365
days after the 2011 First Anniversary (the “2011 Second Anniversary”), two percent (2.00%) of the principal amount of the Term Loan 2011 Advances so prepaid; and (iii) if such prepayment occurs after the 2011 Second
Anniversary but prior to the earlier to occur of (i) the expiration of such Term Loan 2011 Advance’s Amortization Period or (ii) Term Loan 2011 Maturity Date, one percent (1.00%) of the Term Loan 2011 Advances so prepaid;
provided that no termination fee shall be charged if the Term Loan 2011 Advances hereunder are replaced with a new facility from another division of Silicon Valley Bank. 

  
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Upon payment in full of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall terminate and release its liens and security interests in
the Collateral and all rights therein shall revert to Borrower. 
 2.2 Overadvances. If, at any time, the sum of
(a) the outstanding principal amount of any Advances (including any amounts used for Cash Management Services); plus (b) the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and
any Letter of Credit Reserve); plus (c) the FX Reduction Amount exceeds the lesser of either (i) the Revolving Line or (ii) the Borrowing Base minus the Term Loan Reserve Amount, if applicable (such excess amount being
an “Overadvance”), Borrower shall immediately pay to Bank in cash such Overadvance. Without limiting Borrower’s obligation to repay Bank any amount of the Overadvance, Borrower agrees to pay Bank interest on the outstanding
amount of any Overadvance, on demand, at the Default Rate. 
 2.3 Payment of Interest on the Credit Extensions.

 (a) Interest Rate. 

(i) Advances. Subject to Section 2.3(b), the principal amount outstanding under the Revolving Line shall
accrue interest at a floating per annum rate equal to the Prime Rate plus one and one-half percent (1.50%); provided, that during a Streamline Period, the principal amount outstanding under the Revolving Line shall accrue interest at a
floating per annum rate equal to the Prime Rate plus one percent (1.00%), which interest shall in any event be payable monthly, in arrears, in accordance with Section 2.3(f) below. 

(ii) Prior Term Loan. Subject to Section 2.3(b), the principal amount outstanding under the Prior Term Loan
shall accrue interest at a floating per annum rate equal to the greater of (i) one percentage point (1.0%) above the SVB Prime Rate, or (ii) eight and three-quarters of one percent (8.75%), which interest shall be payable monthly.

 (iii) Term Loan 2011. Subject to Section 2.3(b), the principal amount outstanding under the Term
Loan 2011 shall accrue interest at a floating per annum rate equal to the Prime Rate plus three and three-quarters percent (3.75%); provided, that during a Streamline Period, the principal amount outstanding under the Term Loan 2011
shall accrue interest at a floating per annum rate equal to the Prime Rate plus three and one-quarter percent (3.25%), which interest shall in any event be payable monthly, in arrears, in accordance with Section 2.1.6(b). 

(b) Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations
shall bear interest at a rate per annum which is five percentage points (5.00%) above the rate that is otherwise applicable thereto (the “Default Rate”) unless Bank otherwise elects from time to time in its sole discretion to
impose a smaller increase. Fees and expenses which are required to be paid by Borrower pursuant to the Loan Documents (including, without limitation, Bank Expenses) but are not paid when due shall bear interest until paid at a rate equal to the
highest rate applicable to the Obligations. Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Bank. 
 (c) Adjustment to Interest Rate. Changes
to the interest rate of any Credit Extension based on changes to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of any such change. 

(d) Computation; 360-Day Year. In computing interest, the date of the making of any Credit Extension shall be
included and the date of payment shall be excluded; provided, 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. Interest shall be
computed on the basis of a 360-day year for the actual number of days elapsed. 

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

(f) Payment; Interest Computation; Float Charge. Unless otherwise provided herein, interest is payable monthly on
the last calendar day of each month. In computing interest on the Obligations, all Payments received after 12:00 noon Pacific time on any day shall be deemed received on the next Business Day. In addition, Bank shall be entitled to charge Borrower a
“float” charge in an amount equal to two (2) Business Days interest, at the interest rate applicable to the Advances, on all Payments received by Bank. The float charge for each month shall be payable on the last day of the month.
Bank shall not, however, be required to credit Borrower’s account for the amount of any item of payment which is unsatisfactory to Bank in its good faith business judgment, and Bank may charge Borrower’s Designated Deposit Account for the
amount of any item of payment which is returned to Bank unpaid. 
 2.4 Fees. Borrower shall pay to Bank: 

(a) Term Loan 2011 Commitment Fee. A fully earned, non-refundable Term Loan 2011commitment fee of Twenty Thousand
Dollars ($20,000) equal to one percent (1.00%) of the Term Loan 2011 Amount, payable on or before the Effective Date; 
 (b) Revolving Line Anniversary Fee. A fully earned, non-refundable Revolving Line anniversary fee of Twenty Thousand Dollars ($20,000), payable on or before June 16, 2012 and on each one-year
anniversary thereafter; 
 (c) Letter of Credit Fee. Bank’s customary fees and expenses for the
issuance or renewal of Letters of Credit, upon the issuance of such Letter of Credit, each anniversary of the issuance during the term of such Letter of Credit, and upon the renewal of such Letter of Credit by Bank; 

(d) Termination Fee. Subject to the terms of Section 2.1.6(c) with respect to the Term Loan 2011, and subject
to Section 12.1 with respect to the Revolving Line, a termination fee; and 
 (e) Unused Revolving Line
Facility Fee. A fee (the “Unused Revolving Line Facility Fee”), payable quarterly, in arrears, on a calendar year basis, in an amount equal to thirty–five one hundredth of one percent (0.35%) per annum of the average
unused portion of the Revolving Line. The unused portion of the Revolving Line, for purposes of this calculation, shall equal the difference between (x) the Revolving Line amount (as it may be reduced from time to time) and
(y) the average for the period of the daily closing balance of the Revolving Line outstanding plus the sum of the aggregate amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve) plus to the extent applicable, the Term Loan Reserve Amount. Borrower shall not be entitled to any credit, rebate or repayment of any Unused Revolving Line Facility Fee previously earned by Bank pursuant to this Section
notwithstanding any termination of the Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder; 
 (f) Collateral Monitoring Fee. A monthly collateral monitoring fee equal to One Thousand Dollars ($1,000), payable in arrears on the last day of each month (prorated for any partial month at the
beginning and upon termination of this Agreement); provided, that such fee shall be Zero Dollars ($0.00) during any Streamline Period; and 
 (g) Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when
due. 
 2.5 Payments; Application of Payments. 

(a) All payments (including prepayments) to be made by Borrower under any Loan Document shall be made in immediately
available funds in U.S. Dollars, without setoff or counterclaim, before 12:00 noon Pacific time on the date when due. Payments of principal and/or interest received after 12:00 noon Pacific time are considered received at the opening of business on
the next Business Day. When a payment is due 

  
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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 shall apply the whole or any part of collected funds against the Revolving Line or credit such collected funds to
a depository account of Borrower with Bank (or an account maintained by an Affiliate of Bank), the order and method of such application to be in the sole discretion of Bank. 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. 

 

	 	3	CONDITIONS OF LOANS 


3.1 Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial Credit Extension under this
Agreement is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate, including, without
limitation: 
 (a) duly executed original signatures to the Loan Documents; 

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

(c) Borrower’s Operating Documents and a good standing certificate of Borrower certified by the Secretary of State of
the State of each jurisdiction of formation of Borrower, together with certificates of foreign qualification from each other jurisdiction in which Borrower is qualified, in each case dated as of a date no earlier than thirty (30) days prior to
the Effective Date; 
 (d) duly executed original signatures to the Secretary’s Certificate with completed
Borrowing Resolutions for Borrower; 
 (e) the Amended and Restated Subordination Agreement by Partners for
Growth II, L.P. in favor of Bank, together with the duly executed original signatures thereto; 
 (f) certified
copies, dated as of a recent date, of financing statement searches, as Bank shall request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute
Permitted Liens or have been or, in connection with the initial Credit Extension hereunder, will be terminated or released; 
 (g) the Perfection Certificates of Borrower, together with the duly executed original signatures thereto; 
 (h) evidence satisfactory to Bank that the insurance policies required by Section 6.7 hereof are in full force and effect, together with appropriate evidence showing lender loss payable and/or
additional insured clauses and cancellation notice to Bank (or endorsements reflecting the same) in favor of Bank; and 
 (i) payment of the fees and Bank Expenses then due as specified in Section 2.4 hereof. 
 3.2 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) except as otherwise provided in Section 3.4(a), timely receipt of an executed Transaction Report;

 (b) the representations and warranties in this Agreement shall be true, accurate, and complete in all material
respects on the date of the Transaction Report and/or Payment/Advance Form and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and
warranties that already are qualified or modified by materiality in the text thereof; and 

  
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provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and
no 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, accurate, and complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof;
and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and 

(c) in Bank’s sole discretion, there has not been any material impairment in the general affairs, management, results
of operation, financial condition or the prospect of repayment of the Obligations, or any material adverse deviation by Borrower from the most recent business plan of Borrower presented to and accepted by Bank. 

3.3 Covenant to Deliver. Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a
condition precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the
making of any Credit Extension in the absence of a required item shall be in Bank’s sole discretion. 
 3.4 Procedures
for Borrowing. 
 (a) Advances. Subject to the prior satisfaction of all other applicable conditions
to the making of an Advance set forth in this Agreement, to obtain an Advance (other than Advances under Sections 2.1.2 or 2.1.4), Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00
noon Pacific time on the Funding Date of the Advance. Together with any such electronic or facsimile notification, Borrower shall deliver to Bank by electronic mail or facsimile a completed Transaction Report executed by a Responsible Officer or his
or her designee. Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee. Bank shall credit Advances to the Designated Deposit Account. Bank may make Advances under this Agreement based on
instructions from a Responsible Officer or his or her designee or without instructions if the Advances are necessary to meet Obligations which have become due. 
 (b) Term Loan 2011Advances. Subject to the prior satisfaction of all other applicable conditions to the making of Term Loan 2011 Advance set forth in this Agreement, to obtain a Term Loan 2011
Advance, Borrower must notify Bank (which notice shall be irrevocable) by electronic mail or facsimile no later than 12:00 noon Pacific time one (1) Business Day before the proposed Funding Date. The notice shall be a Payment/Advance Form and
must be signed by a Responsible Officer or designee. If Borrower satisfies the conditions of each Term Loan 2011 Advance, Bank shall disburse such Term Loan 2011 Advance by transfer to the Designated Deposit Account. 

 

	 	4	CREATION OF SECURITY INTEREST 

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

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

  
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 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 and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall,
at Borrower’s sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower. 

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

  

	 	5	REPRESENTATIONS AND WARRANTIES 

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

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

 5.2 Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon
which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any described in the Perfection Certificate
delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors.

 The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise
provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2. In the event that Borrower, after
the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee, 

  
 8 








 
then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion.

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

 Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for
(a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted
on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is
material to Borrower’s business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party
except to the extent such claim would not have a material adverse effect on Borrower’s business. 
 Except
as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License. 
 5.3
Accounts Receivable; Inventory. For any Eligible Account in any Borrowing Base Certificate, all statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing such Eligible Accounts are and shall be
true and correct and all such invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all respects what they purport to be. Whether or not an Event of Default has occurred and is continuing, Bank may notify any
Account Debtor owing Borrower money of Bank’s security interest in such funds and verify the amount of such Eligible Account. All sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material
respects with all applicable laws and governmental rules and regulations. Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in any Borrowing Base Certificate. To the
best of Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance
with their terms. 
 5.4 Litigation. There are no actions or proceedings pending or, to the knowledge of the Responsible
Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than, individually or in the aggregate, One Hundred Thousand Dollars ($100,000). 

5.5 Financial Condition. All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Bank fairly
present in all material respects Borrower’s consolidated financial condition and Borrower’s consolidated results of operations. There has not been any material deterioration in Borrower’s consolidated financial condition since the
date of the most recent financial statements submitted to Bank. 
 5.6 Solvency. The fair salable value of
Borrower’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts
(including trade debts) as they mature. 
 5.7 Regulatory Compliance. Borrower is not an “investment company”
or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T
and U of the Federal Reserve Board of Governors). Borrower has complied in all material respects with the Federal Fair Labor Standards Act. Neither Borrower nor any of its Subsidiaries is a “holding company” or an “affiliate” of
a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding Company Act of 2005. Borrower has not violated any laws, ordinances or rules, the
violation of which could reasonably be expected to have a material adverse effect on its business. None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to the best of
Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations


  
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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. 

5.8 Subsidiaries; Investments. Borrower does not own any stock, partnership interest or other equity securities except for
Permitted Investments. 
 5.9 Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required tax
returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower. Borrower may defer payment of any contested taxes, provided that Borrower (a) in good faith
contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Bank in writing of the commencement of, and any material development in, the proceedings, (c) posts bonds or
takes any other steps required to prevent the Governmental Authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien”. Borrower is unaware of any claims or adjustments
proposed for any of Borrower’s prior tax years which could result in additional taxes becoming due and payable by Borrower. Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in
accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be
expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency. 
 5.10 Use of Proceeds. Borrower shall use the proceeds of the Revolving Line solely as working capital and to fund its general business requirements, and not for personal, family, household or
agricultural purposes. 
 5.11 Full Disclosure. No written representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Bank, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based
upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results). 

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

 5.13 Designated Senior Indebtedness. The Loan Documents and all of the Obligations shall be deemed “Designated
Senior Indebtedness” or a similar concept thereof for purposes of any Indebtedness of the Borrower. 
  

	 	6	AFFIRMATIVE COVENANTS 

 Borrower shall do all of the following: 
 6.1 Government Compliance.
(a) Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to
have a material adverse effect on Borrower’s business or operations. Borrower shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject, the noncompliance with which could have a material
adverse effect on Borrower’s business. 
 (b) Obtain all of the Governmental Approvals necessary for the
performance by Borrower of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Bank in all of its property. Borrower shall promptly provide copies of any such obtained Governmental Approvals to
Bank. 
 6.2 Financial Statements, Reports, Certificates. 

  
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 (a) Borrower shall provide Bank with the following: 

(i) (A) weekly (within fifteen (15) days after the end of each month during a Streamline Period), and
(B) upon each request for a Credit Extension under the Revolving Line, a Transaction Report; 

(ii) within fifteen (15) days after the end of each month, (A) monthly accounts receivable agings, aged by
invoice date, (B) monthly accounts payable agings, aged by invoice date, and outstanding or held check registers, if any, and (C) monthly reconciliations of accounts receivable agings (aged by invoice date), transaction reports, Deferred
Revenue report and general ledger; 
 (iii) as soon as available, and in any event within thirty
(30) days after the end of each month, monthly unaudited financial statements; provided, that such monthly unaudited financial statement for the last month in each fiscal year shall be delivered as soon as available, but in any
event within sixty (60) days after the end of such month; 
 (iv) within thirty (30) days after
the end of each month a monthly Compliance Certificate signed by a Responsible Officer, certifying that as of the end of such month, Borrower was in full compliance with all of the terms and conditions of this Agreement, and setting forth
calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Bank shall reasonably request, including, without limitation, a statement that at the end of such month there were no held checks;

 (v) within fifteen (15) days following approval by the Borrower’s board of directors, and in any
event within thirty (30) days after the end of each fiscal year of Borrower, and as requested by Bank (A) annual operating budgets (including income statements, balance sheets and cash flow statements, by quarter) for the upcoming fiscal
year of Borrower, and (B) annual financial projections for the following fiscal year (on a quarterly basis) as approved by Borrower’s board of directors, together with any supporting information used in the preparation of such annual
financial projections; 
 (vi) as soon as available, and in any event within one hundred twenty
(120) days following the end of Borrower’s fiscal year, annual audited financial statements certified by, and with an unqualified opinion of, independent certified public accountants acceptable to Bank or a link thereto on Borrower’s
or another website on the Internet; 
 (vii) 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; 

(viii) a prompt report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries
that could result in damages or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, One Hundred Thousand Dollars ($100,000) or more; 

(b) In the event that Borrower is or becomes subject to the reporting requirements under the Securities Exchange Act of
1934, as amended, within five (5) days after filing, all reports on Form 10-K, 10-Q and 8-K filed with the SEC or a link thereto on Borrower’s or another website on the Internet. 

(c) Borrower shall provide Bank with prompt written notice of (i) any material change in the composition of the
Intellectual Property, (ii) the registration of any Copyright (including any subsequent ownership right of Borrower in or to any Copyright), Patent or Trademark not previously disclosed to Bank, or (iii) Borrower’s knowledge of an
event that materially adversely affects the value of the Intellectual Property. 
 6.3 Accounts Receivable. 

(a) Schedules and Documents Relating to Accounts. Borrower shall deliver to Bank transaction reports and
schedules of collections, as provided in Section 6.2, on Bank’s standard forms; provided, however, that Borrower’s failure to execute and deliver the same shall not affect or limit Bank’s Lien and other rights in all of
Borrower’s Accounts, nor shall Bank’s failure to advance or lend against a specific Account affect 

  
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or limit Bank’s Lien and other rights therein. If requested by Bank, Borrower shall furnish Bank with copies (or, at Bank’s request, originals) of all contracts, orders, invoices, and
other similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for any goods the sale or disposition of which gave rise to such Accounts. In addition, Borrower shall deliver to Bank, on
its request, the originals of all instruments, chattel paper, security agreements, guarantees and other documents and property evidencing or securing any Accounts, in the same form as received, with all necessary endorsements, and copies of all
credit memos. 
 (b) Disputes. Borrower shall promptly notify Bank of all disputes or claims relating to
Accounts. Borrower may forgive (completely or partially), compromise, or settle any Account for less than payment in full, or agree to do any of the foregoing so long as (i) Borrower does so in good faith, in a commercially reasonable manner,
in the ordinary course of business, in arm’s-length transactions, and reports the same to Bank in the regular reports provided to Bank; (ii) no Default or Event of Default has occurred and is continuing; and (iii) after taking into
account all such discounts, settlements and forgiveness, the total outstanding Advances will not exceed the Availability Amount. 
 (c) Collection of Accounts. Borrower shall have the right to collect all Accounts, unless and until a Default or an Event of Default has occurred and is continuing. All payments on, and proceeds
of, Accounts shall be deposited directly by the applicable Account Debtor into a lockbox account, or such other “blocked account” as Bank may specify, pursuant to a blocked account agreement in form and substance satisfactory to Bank in
its sole discretion. Whether or not an Event of Default has occurred and is continuing, Borrower shall immediately deliver all payments on and proceeds of Accounts to an account maintained with Bank to be applied (i) prior to an Event of
Default, to the Revolving Line pursuant to the terms of Section 2.5(b) hereof, and (ii) after the occurrence and during the continuance of an Event of Default, pursuant to the terms of Section 9.4 hereof; provided that during a
Streamline Period, such payments and proceeds shall be transferred to an account of Borrower maintained at Bank; provided further, that so long as an Event of Default has not occurred and is not continuing, subject to
Section 6.8(a) and Section 6.8(b), Borrower may maintain amounts sent by the applicable Account Debtor in its U.S. Bank Account (which U.S. Bank Account is subject to a Control Agreement in favor of Bank), in an aggregate amount not to
exceed One Hundred Thousand Dollars ($100,000) for each such Account Debtor. 
 (d) Returns.
Provided no Event of Default has occurred and is continuing, if any Account Debtor returns any Inventory to Borrower, Borrower shall promptly (i) determine the reason for such return, (ii) issue a credit memorandum to the Account Debtor in
the appropriate amount, and (iii) provide a copy of such credit memorandum to Bank, upon request from Bank. In the event any attempted return occurs after the occurrence and during the continuance of any Event of Default, Borrower shall
immediately notify Bank of the return of the Inventory. 
 (e) Verification. Bank may, from time to
time, verify directly with the respective Account Debtors the validity, amount and other matters relating to the Accounts, either in the name of Borrower or Bank or such other name as Bank may choose. 

(f) No Liability. Bank shall not be responsible or liable for any shortage or discrepancy in, damage to, or
loss or destruction of, any goods, the sale or other disposition of which gives rise to an Account, or for any error, act, omission, or delay of any kind occurring in the settlement, failure to settle, collection or failure to collect any Account,
or for settling any Account in good faith for less than the full amount thereof, nor shall Bank be deemed to be responsible for any of Borrower’s obligations under any contract or agreement giving rise to an Account. Nothing herein shall,
however, relieve Bank from liability for its own gross negligence or willful misconduct. 
 6.4 Remittance of Proceeds.
Except as otherwise provided in Section 6.3(c), deliver, in kind, all proceeds arising from the disposition of any Collateral to Bank in the original form in which received by Borrower not later than the following Business Day after receipt by
Borrower, to be applied to the Obligations (1) prior to an Event of Default, pursuant to the terms of Section 2.5(b) hereof, and (2) after the occurrence and during the continuance of an Event of Default, pursuant to the terms of
Section 9.4 hereof; provided that, if no Event of Default has occurred and is continuing, Borrower shall not be obligated to remit to Bank the proceeds of the sale of surplus, 

  
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worn out or obsolete Equipment disposed of by Borrower in good faith in an arm’s length transaction for an aggregate purchase price of Two Hundred Thousand Dollars ($200,000) or less (for
all such transactions in any fiscal year). Borrower agrees that it will maintain all proceeds of Collateral in an account maintained with Bank. Nothing in this Section limits the restrictions on disposition of Collateral set forth
elsewhere in this Agreement. 
 6.5 Taxes; Pensions; Withholding. Timely file, and require each of its Subsidiaries to
timely file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each of its Subsidiaries,
except for deferred payment of any taxes contested pursuant to the terms of Section 5.9 hereof, and shall deliver to Bank, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present
pension, profit sharing and deferred compensation plans in accordance with their terms. 
 6.6 Access to Collateral; Books
and Records. At reasonable times, on one (1) Business Day’s 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 audits shall be conducted no more often than twice per year unless an Event of Default has occurred and is continuing. The foregoing inspections and audits shall be at Borrower’s expense, and
the charge therefor shall be $750 per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses. In the event Borrower and Bank schedule an audit more than
ten (10) days in advance, and Borrower cancels or seeks to reschedule the audit with less than ten (10) days written notice to Bank, then (without limiting any of Bank’s rights or remedies), Borrower shall pay Bank a fee of $1,000
plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling. 
 6.7 Insurance. Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Bank may reasonably request. Insurance
policies shall be in a form, with companies, and in amounts that are satisfactory to Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as a lender loss payee and waive subrogation against Bank. All
liability policies shall show, or have endorsements showing, Bank as an additional insured. All policies (or their respective endorsements) shall provide that the insurer shall give Bank at least twenty (20) days notice before canceling,
amending, or declining to renew its policy. At Bank’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at Bank’s option, be payable to Bank on
account of the Obligations. Notwithstanding the foregoing, (a) 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 up to One Hundred Thousand Dollars
($100,000) with respect to any loss, in the aggregate for all losses under all casualty policies in any one year, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall
be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Bank has been granted a first priority security interest, and (b) 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. If Borrower fails to obtain insurance as required under this Section 6.7 or to pay any amount or furnish
any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.7, and take any action under the policies Bank deems prudent. 

6.8 Operating Accounts. 
 (a) Maintain its and its Subsidiaries’ primary operating and other deposit accounts and securities accounts with Bank and Bank’s Affiliates, which accounts shall represent at least eighty-five
percent (85%) of the dollar value of Borrower’s and such Subsidiaries accounts at all financial institutions. In the event that, at any time, more than fifteen percent (15%) of the dollar value of Borrower’s and its
Subsidiaries’ accounts are held at financial institutions other than Bank or Bank’s Affiliates, Borrower shall promptly, and in any event within five (5) Business Days, transfer such excess amounts to an account of Borrower maintained
at Bank or at Bank’s Affiliates; 
 (b) Provide Bank five (5) days prior-written notice before
establishing any Collateral Account at or with any bank or financial institution other than Bank or Bank’s Affiliates. For each Collateral Account that Borrower at any time maintains, including, without limitation, the U.S. Bank Account,
Borrower shall 

  
 13 









 
cause the applicable bank or financial institution (other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate
instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder which Control Agreement may not be terminated without the prior written consent of Bank. The provisions
of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such.

 6.9 Financial Covenants. 
 Maintain at all times, to be tested as of the last day of each month, unless otherwise noted, on a consolidated basis with respect to Borrower and its Subsidiaries: 

(a) Adjusted Quick Ratio. An Adjusted Quick Ratio of at least 1.75:1.00. 

(b) Debt Service Coverage Ratio. As of the last day of each fiscal month, measured on a trailing three
(3) month basis ending as of the date of measurement, maintain a ratio of EBITDA divided by Debt Service (the “Debt Service Coverage Ratio”) of at least 1.25:1.00; provided, that no Event of Default
shall be deemed to have occurred and be continuing solely as a result of Borrower’s failure to maintain such Debt Service Coverage Ratio, but only to the extent that Borrower immediately enters into a Term Loan Reserve Period and no other Event
of Default has occurred and is continuing or would immediately occur as a result of entering into such Term Loan Reserve Period; including, without limitation, Overadvances described in Section 2.2. 

(c) Maximum Term Debt. The outstanding principal balance of the Term Loan 2011 plus the outstanding
principal balance of the Prior Term Loan plus the outstanding principal balance of all PFG Subordinated Debt plus any other balance sheet term debt of Borrower, shall not exceed Two Million Four Hundred Thousand Dollars ($2,400,000) at
any time. 
 6.10 Protection and Registration of Intellectual Property Rights. 

(a) (i) Protect, defend and maintain the validity and enforceability of its Intellectual Property; (ii) promptly
advise Bank in writing of material infringements of its Intellectual Property; and (iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written
consent. 
 (b) If Borrower (i) obtains any Patent, registered Trademark, registered Copyright, registered
mask work, or any pending application for any of the foregoing, whether as owner, licensee or otherwise, or (ii) applies for any Patent or the registration of any Trademark, then Borrower shall immediately provide written notice thereof to Bank
and shall execute such intellectual property security agreements and other documents and take such other actions as Bank shall request in its good faith business judgment to perfect and maintain a first priority perfected security interest in favor
of Bank in such property. If Borrower decides to register any Copyrights or mask works in the United States Copyright Office, Borrower shall: (x) provide Bank with at least fifteen (15) days prior written notice of Borrower’s intent
to register such Copyrights or mask works together with a copy of the application it intends to file with the United States Copyright Office (excluding exhibits thereto); (y) execute an intellectual property security agreement and such other
documents and take such other actions as Bank may request in its good faith business judgment to perfect and maintain a first priority perfected security interest in favor of Bank in the Copyrights or mask works intended to be registered with the
United States Copyright Office; and (z) record such intellectual property security agreement with the United States Copyright Office contemporaneously with filing the Copyright or mask work application(s) with the United States Copyright
Office. Borrower shall promptly provide to Bank copies of all applications that it files for Patents or for the registration of Trademarks, Copyrights or mask works, together with evidence of the recording of the intellectual property security
agreement necessary for Bank to perfect and maintain a first priority security interest in such property. 
 (c)
Provide written notice to Bank within ten (10) days of entering or becoming bound by any Restricted License (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to
obtain the consent of, or waiver by, any person whose consent 

  
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or waiver is necessary for (i) any Restricted License to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by
law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with
Bank’s rights and remedies under this Agreement and the other Loan Documents. 
 (d) Each Borrower hereby
ratifies, confirms and reaffirms, all and singular, the terms and conditions of each respective IP Agreement, and acknowledges, confirms and agrees that said IP Agreements contain an accurate and complete listing of all Intellectual Property
Collateral as defined in said IP Agreements, and shall remain in full force and effect. 
 6.11 Litigation Cooperation.
From the date hereof and continuing through the termination of this Agreement, make available to Bank, without expense to Bank, Borrower and its officers, employees and agents and Borrower’s Books, to the extent that Bank may deem them
reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower. 
 6.12 Creation/Acquisition of Subsidiaries. Notwithstanding and without limiting the negative covenant contained in Section 7.3 hereof, in the event Borrower or any Subsidiary creates or
acquires any Subsidiary, Borrower and such Subsidiary shall promptly notify Bank of the creation or acquisition of such new Subsidiary and, at Bank’s request, in its sole discretion, take all such action as may be reasonably required by Bank to
cause each such Subsidiary to, in Bank’s sole discretion, become a co-Borrower or Guarantor under the Loan Documents and grant a continuing pledge and security interest in and to the assets of such Subsidiary (substantially as described on
Exhibit A hereto); and Borrower shall grant and pledge to Bank a perfected security interest in the stock, units or other evidence of ownership of each Subsidiary. 
 6.13 Ratification of Prior Loan Documents. To the extent not specifically modified by this Agreement, Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all other
existing Loan Documents and all other security or other collateral granted to the Bank, and confirms that the Indebtedness secured thereby includes, without limitation, the Obligations. 

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

	 	7	NEGATIVE COVENANTS 

 Borrower shall not do any of the following without Bank’s prior written consent: 
 7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its
business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn out or obsolete Equipment; (c) in connection with Permitted Liens and Permitted Investments; and (d) non-exclusive
licenses for use of property in the ordinary course of business. 
 7.2 Changes in Business, Management, Ownership or
Business Locations. (a) Engage in or permit any of its Subsidiaries, if any, 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 (c) (i) any Key Person ceases to hold such office with Borrower and replacements satisfactory to Borrower’s board of directors are not made within sixty (60) days after such Key Person’s
departure from Borrower; or (ii) permit or suffer any Change in Control. 
 Borrower shall not, without at
least thirty (30) days prior written notice to Bank: (1) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than


  
 15 









 
Fifty Thousand Dollars ($50,000) in Borrower’s assets or property) or deliver any portion of the Collateral valued, individually or in the aggregate, in excess of Fifty Thousand Dollars
($50,000) to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificate, (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its
legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization. If Borrower intends to deliver any portion of the Collateral valued, individually or in the aggregate, in excess of Fifty Thousand
Dollars ($50,000) to a bailee, and Bank and such bailee are not already parties to a bailee agreement governing both the Collateral and the location to which Borrower intends to deliver the Collateral, then Borrower will first receive the written
consent of Bank, and such bailee shall execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. 
 7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or
substantially all of the capital stock or property of another Person. A Subsidiary may merge or consolidate into another Subsidiary or into Borrower. 
 7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness. 

7.5 Encumbrance. Create, incur, allow, or suffer any Lien on any of the Collateral, 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 7.1 hereof and the definition of “Permitted Liens” herein. 

7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 6.8(b)
hereof. 
 7.7 Distributions; Investments. Borrower shall not do any of the following without Bank’s prior written
consent, which consent shall not be unreasonably withheld or delayed, (a) Pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock; provided that (i) Borrower may convert any of
its convertible securities into other securities pursuant to the terms of such convertible securities or otherwise in exchange thereof, (ii) Borrower may pay dividends solely in common stock; and (iii) Borrower may repurchase the stock of
former employees or consultants pursuant to stock repurchase agreements so long as an Event of Default does not exist at the time of such repurchase and would not exist after giving effect to such repurchase, provided such repurchase does not exceed
in the aggregate of One Hundred Thousand Dollars ($100,000) per fiscal year; or (b) directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do so. 

7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate
of Borrower, except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated
Person. 
 7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of
the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof or adversely affect
the subordination thereof to Obligations owed to Bank. 
 7.10 Compliance. Become an “investment company” or a
company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or non-exempt Prohibited Transaction, as defined in


  
 16 









 
ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect
on Borrower’s business, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any
present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental
agency. 
  

	 	8	EVENTS OF DEFAULT 

 Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement: 
 8.1 Payment Default. Borrower fails to (a) make any payment of principal or interest on any Credit Extension 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 Revolving Line Maturity Date and/or the Term Loan 2011 Maturity Date). During the cure period,
the failure to make or pay any payment specified under clause (a) or (b) hereunder is not an Event of Default (but no Credit Extension will be made during the cure period); 

8.2 Covenant Default. 
 (a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.4, 6.6, 6.7, 6.8, or 6.9, or violates any covenant in Section 7; 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 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within
ten (10) days after the occurrence thereof; provided, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day
period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period
the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period). Cure periods provided under this section shall not apply, among other things, to financial covenants or any
other covenants set forth in clause (a) above; 
 8.3 Material Adverse Change. A Material Adverse Change occurs;

 8.4 Attachment; Levy; Restraint on Business. 

(a) (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any
entity under the control of Borrower (including a Subsidiary) on deposit or otherwise maintained with Bank or any Bank Affiliate, or (ii) a notice of lien or levy is filed against any of Borrower’s assets by any government agency, and the
same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions
shall be made during any ten (10) day cure period; or 
 (b) (i) any material portion of Borrower’s
assets is attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower from conducting any material part of its business; 

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

  
 17 









 8.6 Other Agreements. There is, under any agreement to which Borrower is a party with
a third party or parties, (a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount individually or in the aggregate in excess of One Hundred
Thousand Dollars ($100,000); or (b) any default by Borrower, the result of which could have a material adverse effect on Borrower’s business; 
 8.7 Judgments. One or more final judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least One Hundred Thousand Dollars ($100,000) (not
covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower and the same are not, within ten (10) days after the entry thereof, discharged or execution
thereof stayed or bonded pending appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that no Credit Extensions will be made prior to the discharge, stay, or bonding of such judgment, order, or decree);

 8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation, warranty, or other
statement now or later in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material
respect when made; 
 8.9 Subordinated Debt. Any document, instrument, or agreement evidencing any Subordinated Debt
shall for any reason be revoked or invalidated or otherwise cease to be in full force and effect, any Person shall be in breach thereof or contest in any manner the validity or enforceability thereof or deny that it has any further liability or
obligation thereunder, or the Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement or the Subordination Agreement or 
 8.10 Governmental Approvals. Any Governmental Approval shall have been (a) revoked, rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course 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 such decision or such revocation, rescission, suspension, modification or non-renewal has, or could reasonably be expected to have, a Material Adverse Change. 

 

	 	9	BANK’S RIGHTS AND REMEDIES 

 9.1 Rights and Remedies. While an Event of Default occurs and continues Bank may, without notice or demand, do any or all of the following: 

(a) declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs
all Obligations are immediately due and payable without any action by Bank); 
 (b) stop advancing money or
extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Bank; 
 (c) demand that Borrower (i) deposit cash with Bank in an amount equal to 105% (110% if such Letters of Credit are denominated in a currency other than U.S. Dollars) of the Dollar Equivalent of the
aggregate face amount of all Letters of Credit remaining undrawn plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating to
such Letters of Credit, as collateral security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter of credit fees scheduled to be
paid or payable over the remaining term of any Letters of Credit; provided, however, if an Event of Default described in Section 8.5 occurs, the obligation of Borrower to cash collateralize all Letters of Credit remaining
undrawn shall automatically become effective without any action by Bank; 
 (d) terminate any FX Forward
Contracts; 

  
 18 









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

(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) any 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. 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, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit; 

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

(k) exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all
remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof). 
 9.2 Power of
Attorney. Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of Default, to: (a) endorse Borrower’s name on any checks or other forms of
payment or security; (b) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts
and on terms Bank determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the
Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Bank or a third party as the Code permits. Borrower hereby appoints Bank as its lawful
attorney-in-fact to sign Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations have been
satisfied in full and Bank is under no further obligation to make Credit Extensions hereunder. Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers, being coupled with an interest, are
irrevocable until all Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions terminates. 
 9.3 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.7 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to
pay under this Agreement or any other Loan Document, 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. 

  
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 9.4 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 to other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency. If Bank, in its good faith business judgment, 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. 
 9.5 Bank’s
Liability for Collateral. So long as Bank complies with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the
safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of
loss, damage or destruction of the Collateral. 
 9.6 No Waiver; Remedies Cumulative. Bank’s failure, at any time or
times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith. No
waiver hereunder shall be effective unless signed by the party granting the waiver and then is only effective for the specific instance and purpose for which it is given. Bank’s rights and remedies under this Agreement and the other Loan
Documents are cumulative. Bank has all rights and remedies provided under the Code, by law, or in equity. Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy under this
Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence. 

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

 

	 	10	NOTICES 

 All notices, consents, requests, approvals, demands, or other communication (collectively, “Communication”), other than Advance requests made pursuant to Section 3.4, by any party to this
Agreement or any other Loan Document must be in writing and be delivered or sent by facsimile at the addresses or facsimile numbers listed below. Bank or Borrower may change its notice address by giving the other party written notice thereof. Each
such Communication 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, registered or certified mail, return receipt requested,
with proper postage prepaid; (b) upon transmission, when sent by facsimile transmission (with such facsimile promptly confirmed by delivery of a copy by personal delivery or United States mail as otherwise provided in this Section 10);
(c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the
address or facsimile number indicated below. Advance requests made pursuant to Section 3.4 must be in writing and may be in the form of electronic mail, delivered to Bank by Borrower at the e-mail address of Bank provided below and shall be
deemed to have been validly served, given, or delivered when sent (with such electronic mail promptly confirmed by delivery of a copy by personal delivery or United States mail as otherwise provided in this Section 10). Bank or Borrower may
change its address, facsimile number, or electronic mail address by giving the other party written notice thereof in accordance with the terms of this Section 10. 
 If to Borrower:             Sonic Foundry, Inc. 
 Sonic Foundry Media Systems, Inc. 
 222 W. Washington Avenue 

Madison, Wisconsin 53703 
 Attn: Mr. Kenneth Minor 

  
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Fax: (608) 443-1609 
 Email: kenm@sonicfoundry.com 

If to Bank:                    Silicon
Valley Bank 
 380 Interlocken Crescent, Suite 600 
 Broomfield, CO 80021 
 Attn: Mr. Tom Hertzberg 

Fax: (303) 469-9088 
 Email: thertzberg@svb.com 
 with a copy
to:             Riemer & Braunstein LLP 
 Three
Center Plaza 
 Boston, Massachusetts 02108 
 Attn: Charles W. Stavros, Esquire 
 Fax: (617) 880-3456 

Email: cstavros@riemerlaw.com 
  

	 	11	CHOICE OF LAW, VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE 


New York law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to
the exclusive jurisdiction of the State and Federal courts in 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 to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Bank. Borrower expressly submits and consents in advance to such jurisdiction in any action or suit
commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is
deemed appropriate by such court. Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or
certified mail addressed to Borrower at the address set forth in Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after
deposit in the U.S. mails, proper postage prepaid. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH HEREINABOVE, BANK SHALL SPECIFICALLY HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION WHICH BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE BANK’S RIGHTS AGAINST BORROWER OR ITS PROPERTY. 
 TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN
DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

  

	 	12	GENERAL PROVISIONS 


12.1 Termination Prior to Maturity Date. This Agreement may be terminated prior to the Revolving Line Maturity Date by Borrower,
effective three (3) Business Days after written notice of termination is given to Bank or if Bank’s obligation to fund Credit Extensions terminates pursuant to the terms of Section 2.1.1(b). Notwithstanding any such termination,
Bank’s lien and security interest in the Collateral shall continue until Borrower fully satisfies its Obligations. If such termination is at Borrower’s election or at Bank’s election due to the occurrence and continuance of an Event
of Default, Borrower shall pay to Bank, in addition to the payment of any other expenses or fees then-owing, a termination fee in an amount equal to Fifteen Thousand Dollars ($15,000) (i.e. one-half percent (0.50%) of Three Million Dollars
($3,000,000)); provided that no termination fee shall be charged if the credit facility hereunder is replaced with a new facility from another division of Silicon Valley Bank. Upon


  
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payment in full of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall release its liens and security interests in the Collateral and
all rights therein shall revert to Borrower. 
 12.2 Successors and Assigns. This Agreement binds and is for the benefit
of the successors and permitted assigns of each party. Borrower may not assign this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be granted or withheld in Bank’s discretion). Bank has the
right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan
Documents. 
 12.3 Indemnification. Borrower agrees to indemnify, defend and hold Bank and its directors, officers,
employees, agents, attorneys, or any other Person affiliated with or representing Bank (each, an “Indemnified Person”) harmless against: (a) all obligations, demands, claims, and liabilities (collectively,
“Claims”) claimed or asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (b) all losses or expenses (including Bank Expenses) in any way suffered, incurred, or paid by such
Indemnified Person as a result of, following from, consequential to, or arising from transactions between Bank and Borrower contemplated by the Loan Documents (including reasonable attorneys’ fees and expenses), except for Claims and/or losses
directly caused by such Indemnified Person’s gross negligence or willful misconduct. 
 12.4 Time of Essence. Time
is of the essence for the performance of all Obligations in this Agreement. 
 12.5 Correction of Loan Documents. Bank
may correct patent errors and fill in any blanks in the Loan Documents consistent with the agreement of the parties. 
 12.6
Severability of Provisions. Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision. 
 12.7 Amendments in Writing; Waiver; Integration. No purported amendment or modification of any Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, shall be
enforceable or admissible unless, and only to the extent, expressly set forth in a writing signed by the party against which enforcement or admission is sought. Without limiting the generality of the foregoing, no oral promise or statement, nor any
action, inaction, delay, failure to require performance or course of conduct shall operate as, or evidence, an amendment, supplement or waiver or have any other effect on any Loan Document. Any waiver granted shall be limited to the specific
circumstance expressly described in it, and shall not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or commitment to grant any further waiver. The Loan Documents represent
the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of the Loan Documents
merge into the Loan Documents. 
 12.8 Counterparts. This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement. 
 12.9 Survival. All covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations (other than
inchoate indemnity obligations and any other obligations which, by their terms, are to survive the termination of this Agreement) have been paid in full and satisfied. The obligation of Borrower in Section 12.3 to indemnify Bank shall survive
until the statute of limitations with respect to such claim or cause of action shall have run. 
 12.10 Confidentiality.
In handling any confidential information, Bank shall exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates (such
Subsidiaries and Affiliates, together with Bank, collectively, “Bank Entities”); (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall use
commercially reasonable efforts to obtain any prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as
otherwise 

  
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required in connection with Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies under the Loan Documents; and (f) to third-party service providers
of Bank so long as such service providers have executed a confidentiality agreement with Bank with terms no less restrictive than those contained herein. Confidential information does not include information that is either: (i) in the
public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public domain after disclosure to Bank; or (ii) disclosed to Bank by a third party if Bank does not know that the third party is prohibited from
disclosing the information. 
 Bank Entities may use the confidential information for reporting purposes and the development and
distribution of databases and market analyses so long as such confidential information is aggregated and anonymized prior to distribution, unless otherwise expressly permitted by Borrower. The provisions of the immediately preceding
sentence shall survive the termination of this Agreement. 
 12.11 [Reserved]. 

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

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

12.14 Captions. The headings used in this Agreement are for convenience only and shall not affect the interpretation of this
Agreement. 
 12.15 Construction of Agreement. The parties mutually acknowledge that they and their attorneys have
participated in the preparation and negotiation of this Agreement. In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the uncertainty to exist. 

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

12.17 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. 
 12.18 Borrower Liability. Either Borrower may, acting singly, request Credit Extensions hereunder. Each Borrower hereby appoints the other as agent for the other for all purposes hereunder,
including with respect to requesting Credit Extensions hereunder. Each Borrower hereunder shall be jointly and severally obligated to repay all Credit Extensions made hereunder, regardless of which Borrower actually receives said Credit Extension,
as if each Borrower hereunder directly received all Credit Extensions. 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. 

  
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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 shall be null and void. If any payment is
made to a Borrower in contravention of this Section, 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. 

 

	 	13	DEFINITIONS 


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

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

“Adjusted Quick Ratio” is (x) (i) Borrower’s unrestricted cash at Bank plus
(ii) net billed accounts receivable divided by (y) (i) Current Liabilities minus (ii) current portion of Deferred Revenue. 

“Advance” or “Advances” means an advance (or advances) under the Revolving Line.

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

 “Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the
amount available under the Borrowing Base minus the Term Loan Reserve Amount minus (b) the Dollar Equivalent amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit plus an amount equal to
the Letter of Credit Reserve), minus (c) the FX Reduction Amount, minus (d) any amounts used for Cash Management Services, and minus (e) the outstanding principal balance of any Advances. 

“Bank” is defined in the preamble hereof. 

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

“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. 

  
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 “Borrowing Base” is (a) eighty percent (80%) of
Eligible Accounts plus (b) the lesser of (i) seventy-five percent (75%) of Eligible Foreign Accounts or (ii) Five Hundred Thousand Dollars ($500,000); provided, however, that Bank may decrease the foregoing amount
and/or percentages in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect the Collateral. 

“Borrowing Base Certificate” is that certain certificate included within each Transaction Report.

 “Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such
Person’s Board of Directors or other appropriate body 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 that (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 attached as Exhibit A 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 on behalf of such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such Person
shall have delivered to Bank a further certificate canceling or amending such prior certificate. 

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

“Capital Expenditures” means, with respect to any Person for any period, the sum of (a) the
aggregate of all expenditures by such Person and its Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or financed, plus (b) to the extent not
covered by clause (a), the aggregate of all expenditures by such Person and its Subsidiaries during such period to acquire by purchase or otherwise the business or capitalized assets or the capital stock of any other Person. 

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

“Cash Management Services” is defined in Section 2.1.4. 

“Change in Control” means any event, transaction, or occurrence as a result of which (a) any
“person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of Borrower, is or becomes a beneficial owner (within the
meaning Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of Borrower, representing forty-nine percent (49%) or more of the combined voting power of Borrower’s then outstanding securities; or
(b) during any period of twelve consecutive calendar months, individuals who at the beginning of such period constituted the board of directors of Borrower (together with any new directors whose election by the board of directors of Borrower
was approved by a vote of not less than two-thirds of the directors then still in office who either were directions at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason other
than death or disability to constitute a majority of the directors then in office. 
 “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


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

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

“Commodity Account” is any “commodity account” as defined in the Code with such additions to
such term as may hereafter be made. 
 “Communication” is defined in Section 10.

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

“Control Agreement” is any control agreement entered into among the depository institution at which
Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of
the Code) over such Deposit Account, Securities Account, or Commodity Account. 
 “Copyrights”
are any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade
secret. 
 “Credit Extension” is any Advance, Letter of Credit, Prior Term Loan, Term Loan 2011
Advance, FX Forward Contract, amount utilized for Cash Management Services, or any other extension of credit by Bank for Borrower’s benefit. 
 “Current Liabilities” are all obligations and liabilities of Borrower to Bank, plus, without duplication, the aggregate amount of Borrower’s Total Liabilities that mature
within one (1) year. 
 “Debt Service” means, for any period of measurement, all regularly
scheduled payments of principal and interest of Indebtedness of Borrower and its Subsidiaries determined on a consolidated basis due within the trailing three (3) month period ended as of such date of measurement. 

“Debt Service Coverage Ratio” is defined in Section 6.9(b). 

“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 2.3(b). 

  
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 “Deferred Revenue” is all amounts received or invoiced in
advance of performance under contracts and not yet recognized as revenue. 
 “Deposit Account”
is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made. 
 “Designated Deposit Account” is Borrower’s deposit account, account number 3300556589, maintained with Bank. 

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

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

“EBITDA” shall mean (a) Net Income, plus (b) Interest Expense, plus (c) to
the extent deducted in the calculation of Net Income, depreciation expense and amortization expense, plus (d) income tax expense, plus (e) non-cash stock compensation expense, plus (f) other non-cash and non-recurring
expenses acceptable to Bank, in its reasonable discretion. 
 “Effective Date” is the date Bank
executes this Agreement and as indicated on the signature page hereof. 
 “Eligible Accounts”
means Accounts which arise in the ordinary course of Borrower’s business that meet all Borrower’s representations and warranties in Section 5.3. Bank reserves the right at any time and from time to time after the Effective Date upon
notice to Borrower, to adjust any of the criteria set forth below and to establish new criteria in its good faith business judgment. Without limiting the fact that the determination of which Accounts are eligible for borrowing is a matter of
Bank’s good faith judgment, the following (“Minimum Eligibility Requirements”) are the minimum requirements for an Account to be an Eligible Account. Unless Bank agrees otherwise in writing, Eligible Accounts shall not include:

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

 (b) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date regardless of
invoice payment period terms; 
 (c) Accounts with credit balances over ninety (90) days from invoice date;

 (d) Accounts owing from an Account Debtor, in which fifty percent (50%) or more of the Accounts have not
been paid within ninety (90) days of invoice date; 
 (e) Accounts owing from an Account Debtor which does
not have its principal place of business in the United States or Canada, unless such accounts are otherwise Eligible Accounts and (i) are backed by letters of credit acceptable to Bank, in its sole discretion and (ii) are approved by Bank,
in its sole discretion, on a case-by-case basis; 
 (f) Accounts billed and/or payable outside of the United
States (sometimes called foreign invoiced accounts); 
 (g) Accounts owing from an Account Debtor to the extent
that Borrower is indebted or obligated in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts); 

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

(i) Accounts for demonstration or promotional equipment, or in which goods are consigned, or sold on a “sale
guaranteed”, “sale or return”, “sale on approval”, or other terms if Account Debtor’s payment may be conditional; 
 (j) other than Accounts described in clause (u) below, Accounts owing from an Account Debtor where goods or services have not yet been rendered to the Account Debtor (sometimes called memo billings
or pre-billings); 
 (k) Accounts subject to contractual arrangements between Borrower and an Account Debtor
where payments shall be scheduled or due according to completion or fulfillment requirements where the Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to perform in accordance with the contract
(sometimes called contracts accounts receivable, progress billings, milestone billings, or fulfillment contracts); 
 (l) Accounts owing from an Account Debtor the amount of which may be subject to withholding based on the Account Debtor’s satisfaction of Borrower’s complete performance (but only to the extent
of the amount withheld; sometimes called retainage billings); 
 (m) Accounts subject to trust provisions,
subrogation rights of a bonding company, or a statutory trust; 
 (n) Accounts owing from an Account Debtor that
has been invoiced for goods that have not been shipped to the Account Debtor unless Bank, Borrower, and the Account Debtor have entered into an agreement acceptable to Bank in its sole discretion wherein the Account Debtor acknowledges that
(i) it has title to and has ownership of the goods wherever located, (ii) a bona fide sale of the goods has occurred, and (iii) it owes payment for such goods in accordance with invoices from Borrower (sometimes called “bill and
hold” accounts); 
 (o) Accounts for which the Account Debtor has not been invoiced; 

(p) Accounts that represent non-trade receivables or that are derived by means other than in the ordinary course of
Borrower’s business; 
 (q) Accounts for which Borrower has permitted Account Debtor’s payment to
extend beyond ninety (90) days; 
 (r) Accounts arising from chargebacks, debit memos or other payment
deductions given to an Account Debtor; 
 (s) Accounts arising from product returns and/or exchanges (sometimes
called “warranty” or “RMA” accounts); 
 (t) Accounts in which the Account Debtor disputes
liability or makes any claim (but only up to the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or goes out of business; 

(u) other than during a Streamline Period, Accounts owing from an Account Debtor with respect to which Borrower has
received Deferred Revenue (but only to the extent of such Deferred Revenue); 
 (v) Accounts owing from an
Account Debtor, whose total obligations to Borrower exceed twenty-five percent (25%) of all Accounts (forty percent (40%) for Accounts the Account Debtor for which is Synnex Corporation, and thirty percent (30%) for Accounts the
Account Debtor for which is Starin Marketing, Inc., or any Affiliate thereof), for the amounts that exceed that percentage, unless Bank approves in writing; 

  
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 (w) Accounts for which Bank in its good faith business judgment determines
collection to be doubtful, including, without limitation, accounts represented by “refreshed” or “recycled” invoices; and 
 (x) other Accounts Bank deems ineligible in the exercise of its good faith business judgment. 
 “Eligible Foreign Accounts” are Accounts for which the Account Debtor does not have its principal place of business in the United States but are otherwise Eligible Accounts that are owing
from (i) Mediasite KK (Japan); (ii) Content Bank (Australia), (iii) Media Mission (Holland); (iv) Comm-Vertrievsgesellschaft (Germany) and (v) Visionaire (UAE). 

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

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

“Event of Default” is defined in Section 8. 

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

“Funding Date” is any date on which a Credit Extension is made to or for the account of Borrower which
shall be a Business Day. 
 “FX Business Day” is any day when (a) Bank’s Foreign
Exchange Department is conducting its normal business and (b) the Foreign Currency being purchased or sold by Borrower is available to Bank from the entity from which Bank shall buy or sell such Foreign Currency. 

“FX Forward Contract” is defined in Section 2.1.3. 

“FX Reserve” is defined in Section 2.1.3. 

“FX Reduction Amount” is defined in Section 2.1.3. 

“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. 

  
 29 









 “Indebtedness” is (a) indebtedness for borrowed money
or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations,
and (d) Contingent Obligations. 
 “Indemnified Person” is defined in Section 12.3.

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

“Intellectual Property” means all of Borrower’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, operating manuals; 
 (c) any and all source code; 

(d) any and all design rights which may be available to a Borrower; 

(e) any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the
right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and 
 (f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents. 
 “Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash) determined in accordance with GAAP for the relevant period ending on such date, including, in
any event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower and its Subsidiaries, if any, including, without limitation or duplication, all commissions, discounts, or related amortization and other fees and
charges with respect to letters of credit and bankers’ acceptance financing and the net costs associated with interest rate swap, cap, and similar arrangements, and the interest portion of any deferred payment obligation (including leases of
all types). 
 “Inventory” is all “inventory” as defined in the Code in effect on the
date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without
limitation such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above. 

“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or
other securities), and any loan, advance or capital contribution to any Person. 
 “IP
Agreement” is each Intellectual Property Security Agreement executed and delivered by Borrower to Bank dated as of June 16, 2008, as amended and/or modified from time to time. 

“Key Person” is any of Borrower’s Chief Executive Officer and/or Chief Financial Officer, who are,
as of the Effective Date, Gary Weis and Kenneth Minor, respectively. 
 “Letter of Credit” means
a standby letter of credit issued by Bank or another institution based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set forth in Section 2.1.2. 

  
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 “Letter of Credit Application” is defined in
Section 2.1.2(a). 
 “Letter of Credit Reserve” has the meaning set forth in
Section 2.1.2(d). 
 “Lien” is a claim, mortgage, deed of trust, levy, charge, pledge,
security interest or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property. 
 “Loan Documents” are, collectively, this Agreement, the Perfection Certificate, each IP Agreement, each Subordination Agreement, any note, or notes or guaranties executed by Borrower or
any Guarantor, and any other present or future agreement between Borrower any Guarantor and/or for the benefit of Bank in connection with this Agreement, all as amended, restated, or otherwise modified. 

“Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s
Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; (c) a material impairment of the prospect of repayment of any portion
of the Obligations or (d) Bank determines, based upon information available to it and in its reasonable judgment, that there is a reasonable likelihood that Borrower shall fail to comply with one or more of the financial covenants in
Section 6 during the next succeeding financial reporting period. 
 “Minimum Eligibility
Requirements” is defined in the defined term “Eligible Accounts”. 
 “Net
Income” means, as calculated on a consolidated basis for Borrower and its Subsidiaries, if any, for any period as at any date of determination, the net profit (or loss), exclusive of any extraordinary gains, after provision for taxes, of
Borrower and its Subsidiaries for such period taken as a single accounting period. 

“Obligations” are Borrower’s obligation to pay when due any debts, principal, interest, Bank
Expenses and other amounts Borrower owes Bank now or later, whether under this Agreement, the Loan Documents, or otherwise, including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for drawn
and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and to perform
Borrower’s duties under the Loan Documents. 
 “Operating Documents” are, for any Person,
such Person’s formation documents, as certified with the Secretary of State of such Person’s state of formation 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, its partnership agreement (or similar agreement), each of
the foregoing with all current amendments or modifications thereto. 
 “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” means all checks, wire transfers and other items of payment received by Bank (including
proceeds of Accounts and payment of all the Obligations in full) for credit to Borrower’s outstanding Credit Extensions or, if the balance of the Credit Extensions has been reduced to zero, for credit to its Deposit Accounts. 

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

“Perfection Certificate” is defined in Section 5.1. 

“Permitted Indebtedness” is: 

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

  
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 (b) Indebtedness existing on the Effective Date and shown on the Perfection
Certificate; 
 (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 Permitted Liens; and 

(g) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness
(a) through (f) 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. 

“Permitted Investments” are: 

(a) Investments shown on the Perfection Certificate and existing on the Effective Date; 

(b) Cash Equivalents; 
 (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 in which Bank has a perfected security interest; 

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

(f) Investments of Subsidiaries in or to other Subsidiaries or Borrower and Investments by Borrower in Subsidiaries not to
exceed Fifty Thousand Dollars ($50,000) in the aggregate in any fiscal year; 
 (g) Investments consisting
of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or
its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s board of directors; 
 (h) 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; and 
 (i) 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 (i) shall not apply to Investments of Borrower in
any Subsidiary. 
 “Permitted Liens” are: 

(a) Liens existing on the Effective Date and shown on the Perfection Certificate or arising under this Agreement and the
other Loan Documents; 
 (b) Liens for taxes, fees, assessments or other government charges or levies, either not
delinquent or being contested in good faith and for which Borrower maintains adequate reserves on its Books; provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended, and
the Treasury Regulations adopted thereunder; 

  
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 (c) purchase money Liens (i) on Equipment acquired or held by Borrower
incurred for financing the acquisition of the Equipment securing no more than Four Hundred Thousand Dollars ($400,000) 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 Fifty Thousand Dollars ($50,000) 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), provided, they have no priority over any of Bank’s Liens and the aggregate amount of the Indebtedness secured by such Liens does not at any
time exceed $50,000; 
 (f) Liens incurred in the extension, renewal or refinancing of the indebtedness secured
by Liens described in (a) through (c), 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 business, and leases, subleases, non-exclusive
licenses or sublicenses of property (other than real property or intellectual property) granted in the ordinary course of Borrower’s business, if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security
interest; 
 (h) non-exclusive license 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 8.4 and 8.7; and 
 (j) Liens in favor of other financial
institutions arising in connection with Borrower’s deposit and/or securities accounts held at such institutions, provided that Bank has a perfected security interest in the amounts held in such deposit and/or securities accounts. 

“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. 

“PFG Subordinated Debt” is all Indebtedness of Borrower owed to Partners for Growth II, L.P., which shall
at all time be subject to a subordination agreement in favor of Bank. 
 “Prime Rate” means the
rate of interest published in the “Money Rates” section of The Wall Street Journal, Eastern Edition as the “United States Prime Rate.” In the event that The Wall Street Journal, Eastern Edition is not published or
such rate does not appear in The Wall Street Journal, Eastern Edition, the Prime Rate shall be determined by Bank until such time as the Prime Rate becomes available in accordance with past practices. 

“Prior Term Loan” is defined in Section 2.1.5 hereof. 

“Registered Organization” is any “registered organization” as defined in the Code with such
additions to such term as may hereafter be made. 
 “Requirement of Law” is as to any Person,
the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is subject. 

  
 33 









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

“Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial Officer and
Controller of Borrower. 
 “Restricted License” is any material license or other agreement with
respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under
or termination of could interfere with the Bank’s right to sell any Collateral. 
 “Revolving
Line” is an Advance or Advances in an amount not to exceed Three Million Dollars ($3,000,000) outstanding at any time. 
 “Revolving Line Maturity Date” is October 1, 2013. 
 “SEC” shall mean the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority 

“Securities Account” is any “securities account” as defined in the Code with such additions to
such term as may hereafter be made. 
 “Streamline Period” is, on and after
the Effective Date, provided no Default or Event of Default has occurred and is continuing, the period (i) beginning on the first (1st) day of the month following the month in which Borrower has, as of the last day of each of the immediately
preceding two (2) Subject Months, maintained an Adjusted Quick Ratio of not less than 2.00:1.00, as determined by Bank, in its sole discretion (the “Streamline Threshold”); and (ii) ending on the earlier to occur of
(A) the occurrence of a Default or an Event of Default; and (B) the first day thereafter in which Borrower fails to maintain the Streamline Threshold, as determined by Bank, in its sole discretion. Upon the termination of a Streamline
Period, Borrower must maintain the Streamline Threshold for two (2) consecutive Subject Months, as determined by Bank, in its sole discretion, prior to entering into a subsequent Streamline Period. Borrower shall give Bank prior-written notice
of Borrower’s intention to enter into any such Streamline Period. 
 “Subject Month” and
“Subject Months” is the latest calendar month or months for which Borrower has timely delivered the reports and schedules required pursuant to Section 6.2(a) hereof. 

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

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

  
 34 









 “SVB Prime Rate” is Bank’s most recently announced
“prime rate,” even if it is not Bank’s lowest rate. 
 “Term Loan 2011” is a loan
made by Bank pursuant to the terms of Section 2.1.6 hereof. 
 “Term Loan 2011 Amount” is
an aggregate amount up to Two Million Dollars ($2,000,000) outstanding at any time. 
 “Term Loan
Commitment” is, at any time, the lesser of (i) The Term Loan 2011 Amount minus the aggregate amount of previously funded Term Loan Advances or (ii) Two Million Four hundred Thousand Dollars ($2,400,000) minus the
aggregate amount of previously funded Term Loan Advances minus the outstanding principal balance of the Prior Term Loan minus the outstanding principal amount of the PFG Indebtedness minus all other term debt listed on the
Borrower’s balance sheet. 
 “Term Loan 2011 Commitment Termination Date” is April
            , 2012 
 “Term Loan 2011
Maturity Date” is, with respect to each Term Loan 2011 Advance, the earlier of (a) the expiration of the Amortization Period for such Term Loan 2011 Advance, (b) April [        ],
2015 or (c) the occurrence of an Event of Default. 
 “Term Loan Reserve Amount” is,
(i) during a Term Loan Reserve Period, an amount equal to all outstanding amounts under the Term Loan 2011 plus all outstanding amounts under the Prior Term Loan and (ii) at any other time, Zero Dollars ($0.00). 

“Term Loan Reserve Period” is the period commencing on the earlier of (i) the occurrence and
continuance of an Event of Default, and (ii) the date that that Borrower reports, or Bank otherwise determines, in its sole discretion, that Borrower has failed to maintain a Debt Service Coverage Ratio of not less than 1.25:1.00 (the
“Term Loan Reserve Threshold”) and terminating on the first day of the month following the month in which Borrower reports that is has maintained the Term Loan Reserve Threshold for the then-prior three (3) consecutive monthly
periods. 
 “Term Loan 2011 Payment” is defined in Section 2.1.6(b). 

“Total Liabilities” is on any day, obligations that should, under GAAP, be classified as liabilities on
Borrower’s consolidated balance sheet, including all Indebtedness. 
 “Trademarks” means
any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.

 “Transaction Report” is the Bank’s standard reporting package provided by Bank to
Borrower. 
 “Transfer” is defined in Section 7.1. 

“Unused Revolving Line Facility Fee” is defined in Section 2.4(d). 

“U.S. Bank Account” is Borrower’s existing bank account no. 182380236444, maintained at U.S. Bank,
N.A. 
 [Signature page follows.] 

  
 35 









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

			
	BORROWER:
	
	SONIC FOUNDRY, INC.
		
	By	 	/s/ Kenneth Minor
	Name:	 	Kenneth Minor
	Title:	 	CFO
	
	SONIC FOUNDRY MEDIA SYSTEMS, INC.
		
	By	 	/s/ Kenneth Minor
	Name:	 	Kenneth Minor
	Title:	 	Vice President
	
	BANK:
	
	SILICON VALLEY BANK
		
	By	 	/s/ Tom Hertzberg
	Name:	 	Tom Hertzberg
	Title:	 	Relationship Manager

 [Signature page to Loan and Security Agreement] 

  
 36 









 EXHIBIT A – COLLATERAL DESCRIPTION 

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

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

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

  
 1 








 EXHIBIT B – LOAN PAYMENT/ADVANCE REQUEST FORM 

DEADLINE FOR SAME DAY PROCESSING IS 12:00
NOON PACIFIC TIME 
  

			
	Fax To: ____________	  	Date: ____________

 LOAN PAYMENT: 

SONIC FOUNDRY, INC. AND SONIC FOUNDRY MEDIAA SYSTEMS, INC. 

 


 From Account #_____________________________ 

                      
  (Deposit Account #) 
 Principal $__________________________________ 
 Authorized Signature:______________________ 
 Print Name/Title: __________________________



 To Account #______________________________ 

                      
              (Loan Account #) 
 and/or Interest $______________________

 Phone Number: ______________________


 

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

 


 From Account #_____________________________ 

                      
  (Loan Account #) 


 To Account #______________________________ 

                      
              (Deposit Account #) 

 

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

 


 Authorized Signature:______________________ 
 Print Name/Title:__________________________



 Phone Number: ___________________________


 

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

 Deadline for same day processing is noon, Pacific Time 

 


 Beneficiary Name: _____________________________ 
 Beneficiary Bank: ______________________________ 
 City and State: ______________________________

 Beneficiary Bank Transit (ABA) #: __________________



 Amount of Wire: $________________________ 
 Account Number: _________________________ 
  
 Beneficiary Bank Code (Swift, Sort, Chip, etc.): _________ 

 

  
 (For International
Wire Only) 
 Intermediary Bank:
________________________                                Transit (ABA) #:
___________________________ 
 For Further Credit to: ________________________________________________________________________________

 Special Instruction: _________________________________________________________________________________ 

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

 


 Authorized Signature: ___________________________ 
 Print Name/Title: ______________________________ 
 Telephone #: _________________________________



 2nd Signature (if required): ____________________ 
 Print Name/Title: ____________________________ 
 Telephone #: ________________________________


 


  
 1 








 EXHIBIT C 

COMPLIANCE CERTIFICATE 
  

									
	TO:	 	SILICON VALLEY BANK	 		 	Date:
                            
	 FROM:  
	 	SONIC FOUNDRY, INC.	 		 	
		 	SONIC FOUNDRY MEDIA SYSTEMS, INC.	 		 	

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

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

 

							
	 Reporting Covenant
	  	 Required
	  	Complies	 
	Monthly financial statements with Compliance Certificate	  	Monthly within 30 days	  	 	Yes  No	  
			
	Annual financial statement (CPA Audited) + CC	  	FYE within 120 days	  	 	Yes  No	  
			
	10-Q, 10-K and 8-K	  	Within 5 days after filing with SEC	  	 	Yes  No	  
			
	A/R & A/P Agings	  	Monthly within 15 days	  	 	Yes  No	  
			
	Transaction Reports	  	 Weekly (monthly within 15 days
 during a Streamline Period) and
 with each request for a

Credit Extension
	  	 	Yes  No	  
			
	Projections	  	 Within fifteen (15) following approval
 by the Borrower’s board of directors,
 and in any event within fifteen (15)

days after the end of each fiscal year
 of
Borrower, and as amended and/or updated
	  	 	Yes  No	  
	
	 The following Intellectual Property was registered after the Effective Date (if no registrations, state
“None”)

                         
                                         
                                         
                                         
        
	   

  


  

													
	 Financial Covenant
	  	Required	 	  	Actual	 	  	Complies	 
	 Maintain as indicated:
	  				  				  			
	 Minimum Adjusted Quick Ratio (monthly)
	  	 	1.75:1.00	  	  	 	        :1.0	  	  	 	Yes  No	  


  
 1 









													
	 Minimum Debt Service Ratio (monthly)
	  	 	1.25:1.00	  	  	 	        :1.0	  	  	 	Yes  No	  
	 Maximum Term Debt (at all times)
	  	$	2,400,000	  	  	$	_______	  	  	 	Yes  No	  

 Performance Pricing 

 

									
	 	  	Term Loan 2011	 	Revolving Line	 	Applies	 
				
	 Adjusted Quick Ratio > 2.00:1.00
	  	Prime + 3.25%	 	Prime +1.00%	 	 	Yes  No	  
	 Adjusted Quick Ratio < 2.00:1.00
	  	Prime + 3.75%	 	Prime + 1.50%	 	 	Yes  No	  

 The following financial covenant analyses and information set forth in Schedule 1 attached hereto are
true and accurate as of the date of this Certificate. 
 The following are the exceptions with respect to the certification
above: (If no exceptions exist, state “No exceptions to note.”) 
  

 
   

 
   

 
  

									
	 SONIC FOUNDRY, INC.

SONIC FOUNDRY MEDIA SYSTEMS, INC.
	 		 	BANK USE ONLY
					
		 		 		 	Received by:	 	 
		 		 		 		 	AUTHORIZED SIGNER
	By:	 	 	 		 	Date:	 	 
	Name:	 	 	 		 		 	
	Title:	 	 	 		 	Verified:	 	 
		 		 		 		 	AUTHORIZED SIGNER
		 		 		 	Date:	 	 


									
					
		 		 		 	      Compliance Status:	 	Yes  No


  
 2 








 Schedule 1 to Compliance Certificate 

Financial Covenants of Borrower 
 In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern. 
 Dated:                      

 

	I.	Adjusted Quick Ratio (Section 6.9(a)) 


Required:             An Adjusted Quick Ratio of at least 1.75:1.00. 

Actual: 
  

							
	 A.
	  	Aggregate value of Borrower’s unrestricted cash at Bank	  	 	$            	  
			
	 B.
	  	Aggregate value of the net billed accounts receivable of Borrower	  	 	$            	  
			
	 C.
	  	Quick Assets (the sum of lines A plus B)	  	 	$            	  
			
	 D.
	  	Aggregate value of Obligations to Bank	  	 	$            	  
			
	 E.
	  	Without duplication, Aggregate value of liabilities of Borrower and its Subsidiaries (including all Indebtedness) that matures within one (1) year and current portion of
Subordinated Debt permitted by Bank to be paid by Borrower	  	 	$            	  
			
	 F.
	  	Current Liabilities (the sum of lines D plus line E)	  	 	$            	  
			
	 G.
	  	Current portion of Deferred Revenue	  	 	$            	  
			
	 H.
	  	Adjusted Current Liabilities (line F minus line G).	  	 	$            	  
			
	 I.
	  	Adjusted Quick Ratio (line D divided by line H), expressed as a ratio	  	 	            :1.00	  

 Is line I equal to or greater than 1.75:1:00? 

 

					
		 	  ̈  No, not in compliance
	  	 ̈  Yes, in compliance


  
 3 









	II.	Debt Service Coverage Ratio (Section 6.9(b)) 

 Required:             Maintain, as of the last day of each fiscal month, measured on a trailing three (3) month basis ending as of the date
of measurement, maintain a ratio of EBITDA divided by Debt Service (the “Debt Service Coverage Ratio”) of at least 1.25:1.00. 
 Actual: All amounts measured on a trailing three (3) month basis 
  

							
	 A.
	  	EBITDA	  	 	$            	  
			
	 B.
	  	all regularly scheduled payments of principal and interest of Indebtedness of Borrower and its Subsidiaries determined on a consolidated basis due within the trailing three (3)
month period ended as of such date of measurement.	  	 	$            	  
			
	 C.
	  	Debt Service Coverage Ratio (line A divided by line B)	  	 	            :1.00	  

 Is line C equal to or greater than 1.25:1.00? 

 

			
		 	  ̈  No, not in compliance; Term Loan Reserve Period in
effect.


  

			
		 	  ̈  Yes, in compliance.


 If not in compliance, no Event of Default shall be deemed to have occurred and be continuing solely as a result of
Borrower’s failure to maintain such Debt Service Coverage Ratio, but only to the extent that Borrower immediately enters into a Term Loan Reserve Period and no other Event of Default has occurred and is continuing or would immediately occur as
a result of entering into such Term Loan Reserve Period; including, without limitation, an “Overadvance as describe in Section 2.2. 

  
 1 









	III.	Maximum Term Debt (Section 6.9(c)) 


Required:             The outstanding principal balance of the Term Loan 2011 plus the
outstanding principal balance of the Prior Term Loan plus the outstanding principal balance of all PFG Subordinated Debt shall not exceed Two Million Four Hundred Thousand Dollars ($2,400,000) at any time. 

Actual: 
  

							
	 A.
	  	Outstanding principal balance of the Term Loan 2011	  	 	$            	  
			
	 B.
	  	Outstanding principal balance of the Prior Term Loan	  	 	$            	  
			
	 C.
	  	Outstanding principal balance of all PFG Subordinated Debt	  	 	$            	  
			
	 D.
	  	All other balance sheet term debt of Borrower	  	 	$            	  
			
	 E.
	  	Total Term Debt (line A plus Line B plus line C plus line D)	  	 	$            	  

 Is line E equal to or less than $2,400,000? 

 

					
		 	  ̈  No, not in compliance
	  	 ̈  Yes, in compliance


  
 1