Document:

Exhibit
A

 

LOAN
AND SECURITY AGREEMENT

 

by
and between

 

EAST
WEST BANK

 

and

 

NTN
BUZZTIME, INC.

 

Dated
as of April 14, 2015

 

Loan
No. 3470001226

 

    	 

     

    

 

TABLE
OF CONTENTS

 

	 	Page
	 	 
	1.   DEFINITIONS
    AND CONSTRUCTION	1
	1.1   Definitions	1
	1.2   Accounting
    Terms	1
	2.   LOAN
    AND TERMS OF PAYMENT.	1
	2.1   Credit
    Extensions	1
	2.2   Interest
    Rates, Payments, and Calculations	3
	2.3   Crediting
    Payments	45
	2.4   Fees	5
	2.5   Additional
    Costs	5
	2.6   Term	56
	3.   CONDITIONS
    OF LOANS.	56
	3.1   Conditions
    Precedent to Initial Credit Extension	56
	3.2   Conditions
    Precedent to all Credit Extensions	67
	4.   CREATION
    OF SECURITY INTEREST.	7
	4.1   Grant
    of Security Interest	7
	4.2   Perfection
    of Security Interest	7
	4.3   Field
    Exams	78
	4.4   Collateral
    Collections	78
	5.   REPRESENTATIONS
    AND WARRANTIES.	8
	5.1   Due
    Organization and Qualification	8
	5.2   Due
    Authorization; No Conflict	8
	5.3   Collateral.	8
	5.4   Intellectual
    Property Collateral	8
	5.5   Name;
    Location of Chief Executive Office	89
	5.6   Litigation	89
	5.7   Accuracy
    of Financial Statements	9
	5.8   Solvency,
    Payment of Debts	9
	5.9   Compliance
    with Laws and Regulations	9
	5.10   Subsidiaries	9
	5.11   Government
    Consents	9
	5.12   Material
    Adverse Effect	9
	5.13   Inbound
    Licenses	9
	5.14   Full
    Disclosure	910
	6.   AFFIRMATIVE
    COVENANTS.	10
	6.1   Good
    Standing and Government Compliance	10
	6.2   Financial
    Statements, Reports, Certificates	10
	6.3   Inventory;
    Returns	11
	6.4   Taxes	11
	6.5   Insurance.	11
	6.6   Primary
    Depository	1112
	6.7   Financial
    Covenants	1112
	6.8   Registration
    of Intellectual Property Rights.	1213
	6.9   Consent
    of Inbound Licensors	13
	6.10   Creation/Acquisition
    of Subsidiaries	1314
	6.11   Further
    Assurances	1314

 

    	 

     

    

 

TABLE
OF CONTENTS continued

 

	7.   NEGATIVE
    COVENANTS.	1314
	7.1   Dispositions	1314
	7.2   Change
    in Name, Location, Executive Office, or Executive Management; Change in Business; Change in Fiscal Year; Change in Control	1314
	7.3   Mergers
    or Acquisitions	14
	7.4   Indebtedness	14
	7.5   Encumbrances	1415
	7.6   Distributions	1415
	7.7   Investments	1415
	7.8   Transactions
    with Affiliates	1415
	7.9   Subordinated
    Debt	15
	7.10   Inventory
    and Equipment	15
	7.11   No
    Investment Company; Margin Regulation	15
	8.   EVENTS
    OF DEFAULT.	1516
	8.1   Payment
    Default	1516
	8.2   Covenant
    Default.	1516
	8.3   Defective
    Perfection	1516
	8.4   [Reserved	1516
	8.5   Attachment	1516
	8.6   Insolvency	16
	8.7   Other
    Agreements	16
	8.8   Subordinated
    Debt	1617
	8.9   Judgments	1617
	8.10   Misrepresentations	1617
	8.11   Guaranty	1617
	9.   BANK’S
    RIGHTS AND REMEDIES.	1617
	9.1   Rights
    and Remedies	1617
	9.2   Power
    of Attorney	18
	9.3   Accounts
    Collection	1819
	9.4   Bank
    Expenses	1819
	9.5   Bank’s
    Liability for Collateral	1819
	9.6   No
    Obligation to Pursue Others	1819
	9.7   Remedies
    Cumulative	19
	9.8   Demand;
    Protest	19
	10.   NOTICES.	19
	11.   CHOICE
    OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL PREFERENCE.	1920
	11.1   Governing
    Law and Venue	1920
	11.2   JURY
    TRIAL WAIVER	20
	11.3   JUDICIAL
    REFERENCE PROVISION	20
	12.   GENERAL
    PROVISIONS.	2021
	12.1   Successors
    and Assigns	2021
	12.2   Indemnification	2021
	12.3   Time
    of Essence	2021
	12.4   Severability
    of Provisions	21
	12.5   Correction
    of Loan Documents	21
	12.6   Amendments
    in Writing, Integration	21
	12.7   Counterparts	21
	12.8   Survival	21
	12.9   Confidentiality	2122
	12.10   Patriot
    Act	2122
	12.11   No
    Consequential Damages	2122

 

	EXHIBITS	 	 
	A	-	Definitions
	B	-	Collateral Description
	C	-	Loan Advance/Paydown
    Request Form
	D	-	Form of Borrowing
    Base Certificate
	E	-	Form
    of Compliance Certificate
	F	-	Form of LIBOR Loan
    Continuation Certificate

 

DISCLOSURE
SCHEDULES

 

Permitted
Indebtedness (Exhibit A)

Permitted
Investments (Exhibit A)

Permitted
Liens (Exhibit A)

Prior
Names (Section 5.5)

Litigation
(Section 5.6)

Inbound
Licenses (Section 5.13)

Inventory
and Equipment (Section 7.10)

Excluded
Equipment (Exhibit B)

 

    	 	 i	 

    	 

    

 

This
LOAN AND SECURITY AGREEMENT (this “Agreement”), dated as of April 14, 2015, is entered into by and between
EAST WEST BANK, a California banking corporation (“Bank”), and NTN BUZZTIME, INC., a Delaware corporation (“Borrower”).

 

RECITALS

 

Borrower
wishes to obtain credit from time to time from Bank, and Bank desires to extend credit to Borrower. This Agreement sets forth
the terms on which Bank will extend credit to Borrower and Borrower will repay the amounts owing to Bank.

 

AGREEMENT

 

The
parties agree as follows:

 

1.
DEFINITIONS AND CONSTRUCTION.

 

1.1
Definitions. As used in this Agreement,
capitalized terms shall have the respective meanings set forth on Exhibit A. Any term used in the Code and not defined herein
shall have the meaning given to such term in the Code.

 

1.2
Accounting Terms. Any accounting term
not specifically defined on Exhibit A shall be construed in accordance with GAAP, and all financial covenant calculations shall
be made in accordance with GAAP. The term “financial statements” shall include the accompanying notes and schedules.

 

2.
LOAN AND TERMS OF PAYMENT.

 

2.1
Credit Extensions

 

(a)
Promise to Pay.
Borrower hereby unconditionally promises to pay to Bank, in lawful money of the United States of America, the aggregate unpaid
principal amount of all Credit Extensions made by Bank to Borrower, together with accrued and unpaid interest on the unpaid principal
amount of such Credit Extensions at the rates set forth herein, and all other Obligations owing by Borrower to Bank, in each case
as and when due in accordance with the terms hereof.

 

(b)
Advances Under Revolving Line.

 

(i)
Amount; Principal and Interest Payments.
Subject to and upon the terms and conditions of this Agreement, Borrower may request Advances in an aggregate outstanding amount
at any time not to exceed the amount (the “Availability Amount”), which is the lesser of (A) the Revolving
Line less the aggregate outstanding principal amount of the Advances made under this Section 2.1(b), or (B) the result
of (i) the Borrowing Base less plus (ii) the Non-Formula Sublimit Amount in effect at such time less (iii)
the aggregate outstanding principal amount of the Advances made under this Section 2.1(b). Amounts borrowed pursuant
to this Section 2.1(b) may be repaid and reborrowed at any time prior to the Revolving Line Maturity Date. On the Revolving
Line Maturity Date, all Advances under this Section 2.1(b) shall be immediately due and payable. If an Overadvance occurs
on any date or for any reason, Borrower shall immediately pay to Bank, upon Bank’s election and demand, in cash, the amount
of such Overadvance, which Bank shall use to repay the outstanding Advances. For the avoidance of doubt, if any Overadvance
exists on the Non-Formula Sublimit Maturity Date as a result of the Non-Formula Sublimit Amount reducing to $0, Borrower shall
immediately pay to Bank the total amount of the Overadvance. Borrower may prepay Advances under this Section 2.1(b)
without penalty or premium; provided that the prepayment of any Advance that constitutes a LIBOR Loan shall be subject
to Section 2.2(e)(iii). Interest shall accrue from the date of each Advance and until such Advance is repaid at the rate
specified in Section 2.2(a)(i) and shall be payable in accordance with Section 2.2(c). Notwithstanding the foregoing,
in respect of calculating the Availability Amount as of any date in Borrower’s 2017 fiscal year, the components of clause
(B) of such definition shall be determined by Bank no later than January 30, 2017 based on the financial projections delivered
pursuant to Section 6.2(a) in respect of Borrower’s 2017 fiscal year.

 

    	 	 1	 

    	 

    

 

(ii)
Form of Advance Request. Whenever Borrower
desires an Advance under this Section 2.1(b), Borrower will notify Bank by facsimile transmission, telephone or email no
later than 3:00 p.m. Pacific time (12:00 p.m. Pacific time for wire transfers) (A) on the Business Day that the Advance is to
be made if the Advance will be a Prime Rate Advance or (B) at least 3 Business Days prior to the day the Advance is to be made
if the Advance will be a LIBOR Loan. Each such notification shall be promptly confirmed by a Loan Advance/Paydown Request Form.
Bank is authorized to make Advances under this Agreement based upon instructions received from a Responsible Officer or a designee
of a Responsible Officer, or without instructions if in Bank’s discretion such Advances are necessary to meet Obligations
which have become due and remain unpaid. Bank shall be entitled to rely on any telephonic notice given by a person who Bank reasonably
believes to be a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages
or loss suffered by Bank as a result of such reliance. Bank will credit the amount of Advances made under this Section 2.1(b)
to such deposit account or Obligation as Borrower specifies.

 

(iii)
Letters of Credit. Subject to availability
under the Revolving Line and to the other terms and conditions of this Agreement, at any time and from time to time from the date
hereof through the Business Day immediately prior to the Revolving Line Maturity Date, Bank shall issue for the account of Borrower
such Letters of Credit denominated in Dollars as Borrower may request by delivering to Bank a duly executed letter of credit application
on Bank’s standard form. The amount available to be drawn under each such Letter of Credit shall reduce dollar-for-dollar
the amount of Advances available under the Revolving Line, and any drawn but unreimbursed amount under any Letter of Credit shall
be charged as an Advance. All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall
be subject to the terms and conditions of Bank’s standard form application and letter of credit agreement. Borrower agrees
to execute and deliver to Bank any further documentation in connection with any Letter of Credit as Bank may reasonably request.
Borrower will pay any standard issuance and other fees that Bank notifies Borrower it will charge for issuing and processing Letters
of Credit.

 

(iv)
Cash Collateralization of Obligations Extending
Beyond Maturity. If Borrower has not secured to Bank’s satisfaction Borrower’s obligations with respect to any
Letter of Credit by the Revolving Line Maturity Date, then, effective as of such date, the balance in any deposit accounts of
Borrower held by Bank and the certificates of deposit or time deposit accounts issued by Bank in Borrower’s name (and any
interest paid thereon or proceeds thereof, including any amounts payable upon the maturity or liquidation of such certificates
or accounts), shall automatically secure such obligations to the extent of the then continuing or outstanding and undrawn Letters
of Credit. Borrower authorizes Bank to hold such balances in pledge and to decline to honor any drafts thereon or any requests
by Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the Letters of Credit are
outstanding or continue. If the aggregate balance held in such accounts on the Revolving Line Maturity Date is insufficient to
secure all of Borrower’s obligations with respect to any Letter of Credit on the Revolving Line Maturity Date, then Borrower
shall pledge to Bank, and grant Bank a security interest in, such additional cash as Bank may request to secure such obligations
fully and in cash.

 

(c)
Request for Optional Increase.

 

(i)
Provided there exists no Event of Default, upon
notice to Bank, Borrower may on a one-time basis, request an increase in the Revolving Line by an amount not exceeding $2,500,000
in the aggregate.

 

(ii)
Bank’s Election to Increase; Effective
Date. Bank shall notify Borrower within 10 Business Days whether or not it agrees to increase the Revolving Line and, if so,
by what amount it agrees to do so and shall determine the effective date of such increase (the “Increase Effective Date”);
provided that if Bank does not respond within 10 Business Days it shall be deemed to have declined to increase the Revolving
Line.

 

(iii)
Conditions to Effectiveness of Increase.
The obligation of Bank to increasing the Revolving Line is subject to the condition precedent that Bank shall have received, in
form and substance satisfactory to Bank, the following:

 

    	 	 2	 

    	 

    

 

(1)
a certificate dated as of the Increase Effective
Date signed by a Responsible Officer of Borrower (x) certifying and attaching the resolutions adopted by Borrower approving or
consenting to such increase, (y) certifying that, before and after giving effect to such increase, (A) the representations and
warranties contained in Article 5 and the other Loan Documents are true and correct on and as of the Increase Effective
Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they
are true and correct as of such earlier date, (B) no Event of Default exists, and (C) Borrower is in pro forma compliance with
financial covenants set forth in Section 6.7 hereof.

 

(2)
such other agreements, instruments and information
(including supplements or modification to this Agreement or the other Loan Documents executed by Borrower as Bank reasonably deems
necessary in order to document the increase and to protect preserve and continue the perfection and priority of the liens, security
interests, rights and remedies of bank hereunder and under the other Loan Documents in light of such increase.

 

(3)
all costs and expenses incurred by Bank in connection
with the negotiations regarding, and the preparation, execution and delivery of all agreement and instruments executed in connection
with such increase and any additional facility fee required pursuant to Section 2.4 hereof.

 

2.2
Interest Rates, Payments, and Calculations.

 

(a)
Interest Rates.
Except as set forth in Section 2.2(b), the all Advances shall bear interest, on the outstanding daily
balance thereof, at Borrower’s option, either (i) on or before the Non-Formula Sublimit Maturity Date (A) if such Advance
is a Prime Rate Loan, at a variable rate per annum equal to the Prime Rate plus 2.75% or (B) if such Advance is a LIBOR Loan,
at a fixed rate per annum equal to the LIBOR-Based Rate for the Interest Period applicable to such Advance plus 5.50% and (ii)
at all times after the Non-Formula Sublimit Maturity Date (A) if such Advance is a Prime Rate Loan, at a variable rate per
annum equal to the Prime Rate plus 1.25% or (B) if such Advance is a LIBOR Loan, at a fixed rate per annum equal to the LIBOR-Based
Rate for the Interest Period applicable to such Advance plus 4.00%.

 

(b)
Default Rate. All Obligations shall
bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to 2 percentage
points above the respective interest rates applicable to such Obligations immediately prior to the occurrence of the Event of
Default.

 

(c)
Payments.
Interest hereunder on each Prime Rate Loan shall be due and payable on the last calendar day of each month during the term hereof,
commencing on April 30, 2015. Interest hereunder on each LIBOR Loan shall be due and payable on the last day of each Interest
Period applicable to such LIBOR Loan; provided, however, in the case of any Interest Period greater than 3 months in duration,
interest shall be payable at 3 month intervals after the commencement of the applicable Interest Period and on the last day of
such Interest Period. Bank shall, at its option, charge such interest, all Bank Expenses, and all Periodic Payments against any
of Borrower’s deposit accounts or against the Revolving Line, in which case those amounts shall thereafter accrue interest
at the rate then applicable hereunder. Any interest not paid when due shall be compounded by becoming a part of the Obligations,
and such interest shall thereafter accrue interest at the rate then applicable hereunder.

 

(d)
Changes in Prime Rate; Computation of Interest.
If the Prime Rate is changed from time to time hereafter, the applicable rate of interest hereunder shall be increased or decreased,
effective as of the day the Prime Rate is changed, by an amount equal to such change in the Prime Rate. All interest chargeable
under the Loan Documents shall be computed on the basis of a 360 day year for the actual number of days elapsed.

 

(e)
Additional Provisions Regarding LIBOR Loans.

 

(i)
Borrower may from time to time submit in writing
a request that any existing LIBOR Loan continue for an additional Interest Period or convert to a Prime Rate Loan. Each written
request for a continuation of a LIBOR Loan shall be substantially in the form of a LIBOR Loan Continuation Certificate substantially
in the form of Exhibit F, with appropriate insertions, which shall be duly executed by a Responsible Officer. Each written
request for a conversion from a LIBOR Loan to a Prime Rate Loan shall be substantially in the form of the Payment/Advance Form
attached as Exhibit C. Subject to the terms and conditions contained herein, after Bank’s receipt of such a request
from Borrower, such LIBOR Loan shall continue or convert, as the case may be provided that:

 

    	 	 3	 

    	 

    

 

i.
In the case of any request for the continuation
of a LIBOR Loan, no Event of Default or event which with notice or passage of time or both would constitute an Event of Default
exists;

 

ii.
no party hereto shall have sent any notice of
termination of this Agreement;

 

iii.
Borrower shall have complied with such reasonable
and customary procedures as Bank has established from time to time for requests for LIBOR Loans and provided written notice thereof
to Borrower at least 1 Business Day prior to the date of the request for such LIBOR Loan;

 

iv.
the amount of a LIBOR Loan shall be at least
$500,000;

 

v.
Bank shall have determined that the Interest
Period or LIBOR is available to Bank as of the date of the request for such LIBOR Loan; and

 

vi.
such request for a LIBOR Loan shall be delivered
to Bank by 3:00 p.m. Pacific time at least 3 Business Days prior to the proposed date of the requested LIBOR Loan.

 

Any
request by Borrower to continue any existing LIBOR Loan shall be irrevocable. Notwithstanding anything to the contrary contained
herein, Bank shall not be required to purchase United States Dollar deposits in the London interbank market or other applicable
LIBOR market to fund any LIBOR Loan, but the provisions hereof shall be deemed to apply as if Bank had purchased such deposits
to fund such LIBOR Loan.

 

(ii)
At no time shall more than five (5) different
Interest Periods be outstanding under this Agreement.

 

(iii)
Any LIBOR Loan shall automatically continue for
the same Interest Period upon the last day of the applicable Interest Period, unless Bank has received and approved a complete
and proper request to continue such LIBOR Loan for a different Interest Period by 3:00 p.m. Pacific time on the last day of the
applicable Interest Period in accordance with the terms hereof. Borrower shall pay to Bank, upon demand by Bank, any amounts required
to compensate Bank for any loss, cost or expense incurred by Bank, as a result of the conversion of any LIBOR Loan to a Prime
Rate Loan on a day that is not the last day of the applicable Interest Period.

 

(iv)
If for any reason (including voluntary or mandatory
prepayment or acceleration), Bank receives all or part of the principal amount of a LIBOR Loan prior to the last day of the Interest
Period for such LIBOR Loan, Borrower shall on demand by Bank, pay Bank the amount (if any) by which (i) the additional interest
which would have been payable on the amount so received had it not been received until the last day of such Interest Period or
term exceeds (ii) the interest that would have been recoverable by Bank by placing the amount so received on deposit in the certificate
of deposit markets or the offshore currency interbank markets or United States Treasury investment products, as the case may be,
for a period starting on the date on which it was so received and ending on the last day of such Interest Period or term at the
interest rate determined by Bank.

 

(v)
If Bank shall have determined in good faith that,
by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining LIBOR for
such Interest Period, Bank shall give email or telephonic notice (promptly confirmed in writing) thereof to Borrower. If such
notice is given (x) Borrower may revoke any Payment/Advance Form or LIBOR Loan Continuation Certificate then submitted by it,
and (y) if Borrower does not revoke such notice, Bank shall make, convert or continue the Advance, as proposed by the Borrower,
in the amount specified in the applicable Payment/Advance Form or LIBOR Loan Continuation Certificate, but such Advance shall
be made, converted or continued as a Prime Rate Loan. Until such notice has been withdrawn by Bank, no further LIBOR Loans shall
be made or continued as such, nor shall Borrower have the right to convert Advances to LIBOR Loans.

 

    	 	 4	 

    	 

    

 

2.3
Crediting Payments.
Prior to the occurrence of an Event of Default, Bank shall credit a wire transfer of funds, check or other item of payment to
such deposit account or Obligation as Borrower specifies. After the occurrence of an Event of Default, Bank shall have the right,
in its sole discretion, to immediately apply any wire transfer of funds, check, or other item of payment Bank may receive to conditionally
reduce Obligations, but such applications of funds shall not be considered a payment on account unless such payment is of immediately
available federal funds or unless and until such check or other item of payment is honored when presented for payment. Notwithstanding
anything to the contrary contained herein, any wire transfer or payment received by Bank after 12:00 noon Pacific time shall be
deemed to have been received by Bank as of the opening of business on the immediately following Business Day. Whenever any payment
to Bank under the Loan Documents would otherwise be due (except by reason of acceleration) on a date that is not a Business Day,
such payment shall instead be due on the next Business Day, and additional fees or interest, as the case may be, shall accrue
and be payable for the period of such extension.

 

2.4
Fees.
Borrower shall pay to Bank the following:

 

(a)
Total Facility Fee. On the Closing
Date, a fee equal to $37,500 (i.e., 0.50% of the sum of the Revolving Line), which shall be non-refundable; Borrower has paid
to Bank a deposit of Ten Thousand Dollars ($10,000) (the “Good Faith Deposit”) to initiate Bank’s due diligence
review process. Any portion of the Good Faith Deposit not utilized to pay Bank Expenses will be applied to the Facility Fee. Additional
facility fees will be due and payable on the Increase Effective Date each time the amount of the Revolving Line is increased pursuant
to Section 2.1(c) hereof, with each such additional fee to be in an amount equal to the product of (x) 0.50% of the increase in
the Revolving Line times (y) the quotient of (A) the number of days remaining between such Increase Effective Date and
the Revolving Maturity Date, divided by (B) 1,095.

 

(b)
Letter of Credit Fees.
Bank’s customary fees and expenses for the issuance or renewal of Letters of Credit, upon the issuance of each Letter of
Credit, each anniversary of the issuance of such Letter of Credit, and each renewal of such Letter of Credit; and

 

(c)
Bank Expenses.
On the Closing Date, all Bank Expenses incurred through the Closing Date, and, after the Closing Date, all Bank Expenses, as and
when they become due.

 

(d)
Unused Fee.
An unused fee equal to 0.50% per annum of the difference between the amount of the Revolving Line as in effect from time to time
and the Average Monthly Balance in each month, which fee shall be payable monthly in arrears on the first day of each month and
shall be nonrefundable. For the purposes of this Section 2.4(d), “Average Monthly Balance” means the amount derived
from adding the ending outstanding balance under the Revolving Line for each day in the month and dividing by the number of days
in the month.

 

2.5
Additional Costs.
If Bank shall determine that the adoption or implementation of any applicable law, rule, regulation, or treaty regarding capital
adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority,
central bank, or comparable agency charged with the interpretation or administration thereof, or compliance by Bank (or its applicable
lending office) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank, or comparable agency, has or would have the effect of reducing the rate of return on capital of Bank
or any person or entity controlling Bank (a “Parent”) as a consequence of its obligations hereunder to a level below
that which Bank (or its Parent) could have achieved but for such adoption, change, or compliance (taking into consideration policies
with respect to capital adequacy) by an amount deemed by Bank to be material, then from time to time, within five (5) days after
demand by Bank, Borrower shall pay to Bank such additional amount or amounts as will compensate Bank for such reduction. A statement
of Bank claiming compensation under this Section 2.5 and setting forth the additional amount or amounts to be paid to it hereunder
shall be conclusive absent manifest error. Notwithstanding anything to the contrary in this Section 2.5, Borrower shall not be
required to compensate Bank pursuant to this Section 2.5 for any amounts incurred more than 6 months prior to the date that Bank
notifies Borrower of Bank’s intention to claim compensation therefor; provided that if the circumstances giving rise to
such claim have a retroactive effect, then such 6-month period shall be extended to include the period of such retroactive effect.
The obligations of the Borrower arising pursuant to this Section 2.5 shall survive the maturity of the Credit Extensions, the
termination of this Agreement and the repayment of all Obligations.

 

    	 	 5	 

    	 

    

 

2.6
Term.
This Agreement shall become effective on the Closing Date and, subject to Section 12.8, shall continue in full force and effect
for so long as any Obligations remain outstanding or Bank has any obligation to make Credit Extensions under this Agreement. Notwithstanding
the foregoing, Bank shall have the right to terminate its obligation to make Credit Extensions under this Agreement immediately
and without notice upon the occurrence and during the continuance of an Event of Default.

 

3.
CONDITIONS OF LOANS.

 

3.1
Conditions Precedent to Initial Credit
Extension

 

The
obligation of Bank to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in
form and substance satisfactory to Bank, the following:

 

(a)
this Agreement, duly executed by the parties
hereto;

 

(b)
an officer’s certificate of Borrower with
respect to incumbency and resolutions authorizing the execution and delivery of this Agreement, duly executed by Borrower;

 

(c)
a financing statement on Form UCC-1, reflecting
Borrower as debtor and Bank as secured party;

 

(d)
the IP Security Agreement, duly executed by Borrower;

 

(e)
[reserved];

 

(f)
certificates of insurance naming Bank as loss
payee on all property insurance policies and as an additional insured on all liability insurance policies;

 

(g)
payment of the fees and Bank Expenses then due
specified in Section 2.4;

 

(h)
current UCC reports indicating that except for
Permitted Liens and Liens to be terminated by satisfying obligations to the holders of such Liens with the proceeds of the initial
Advances on the Closing Date, there are no other security interests or Liens of record in the Collateral;

 

(i)
current financial statements, including audited
statements for Borrower’s most recently ended fiscal year, together with an unqualified opinion, company-prepared balance
sheets and income statements for the most recently ended month in accordance with Section 6.2, and such other updated financial
information as Bank may reasonably request;

 

(j)
a current Compliance Certificate in accordance
with Section 6.2, duly executed by Borrower;

 

(k)
subject to Section 6.6, Control Agreements
with respect to any accounts permitted hereunder to be maintained with a depository institution other than Bank;

 

(l)
a landlord waiver or subordination with respect
to each of Borrower’s leased locations, and a bailee waiver with respect to each third-party location where Borrower maintains
any Material Collateral;

 

(m)
an Authorization for Automatic Loan Payment on
Bank’s standing form, duly executed by Borrower; and

 

    	 	 6	 

    	 

    

 

(n)
an initial field examination of Borrower’s
Books and the Collateral; and

 

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

 

3.2
Conditions Precedent to all Credit Extensions.
The obligation of Bank to make each Credit Extension, including the initial Credit Extension, is further subject to the following
conditions:

 

(a)
timely receipt by Bank of a Payment/Advance Form;
and

 

(b)
the representations and warranties contained
in Section 5 shall be true and correct in all material respects on and as of the date of such Payment/Advance Form and
on the effective date of each Credit Extension as though made at and as of each such date, and no Event of Default shall have
occurred and be continuing, or would exist after giving effect to such Credit Extension (provided, however, that
those representations and warranties expressly referring to another date shall be true, correct and complete in all material respects
as of such other date). The making of each Credit Extension shall be deemed to be a representation and warranty by Borrower on
the date of such Credit Extension as to the accuracy of the facts referred to in this Section 3.2.

 

4.
CREATION OF SECURITY INTEREST.

 

4.1
Grant of Security Interest.
Borrower grants and pledges to Bank a continuing security interest in and Lien on the Collateral to secure the prompt repayment
of any and all Obligations and to secure the prompt performance by Borrower of each of its covenants and duties under the Loan
Documents. Except as set forth in the Disclosure Schedules, and subject only to Permitted Liens that may have priority by operation
of law, such security interest constitutes a valid, first-priority security interest in all presently existing Collateral, and
will constitute a valid, first-priority security interest in later-acquired Collateral. Borrower also hereby agrees not to sell,
transfer, assign, mortgage, pledge, lease, grant a security interest in, or encumber any of its Intellectual Property, except
as provided in this Agreement in connection with Permitted Liens and Permitted Transfers. Notwithstanding any termination of this
Agreement, Bank’s Lien on the Collateral shall remain in effect for so long as any Obligations (other than inchoate indemnification
obligations) are outstanding. Following the payment in full in cash of the Obligations (other than inchoate indemnification obligations)
and the termination of Bank’s obligations to make any Credit Extensions, Bank shall, at Borrower’s sole costs and
expense, and upon receipt of a written request from Borrower to do so, release its Liens in the Collateral and the rights therein
shall revert to Borrower.

 

4.2
Perfection of Security Interest.
Borrower authorizes Bank to file at any time financing statements, continuation statements, and amendments thereto that (i) either
specifically describe the Collateral or describe the Collateral as all assets of Borrower of the kind pledged hereunder, and (ii)
contain any other information required by the Code for the sufficiency of filing office acceptance of any financing statement,
continuation statement, or amendment, including whether Borrower is an organization, the type of organization and any organizational
identification number issued to Borrower, if applicable. Borrower shall from time to time endorse and deliver to Bank, at the
request of Bank, all Negotiable Collateral and other documents that Bank may reasonably request, in form satisfactory to Bank,
to perfect and continue perfected Bank’s security interests in the Collateral and in order to fully consummate all of the
transactions contemplated under the Loan Documents. Borrower shall have possession of the Collateral, except where expressly otherwise
provided in this Agreement or where Bank chooses to perfect its security interest by possession in addition to the filing of a
financing statement. Where material (as determined by Bank) Collateral is in possession of a third party bailee, Borrower shall
take such steps as Bank reasonably requests for Bank to (i) obtain an acknowledgment, in form and substance satisfactory to Bank,
of the bailee that the bailee holds such Collateral for the benefit of Bank, (ii) obtain “control” of any Collateral
consisting of investment property, deposit accounts, letter-of-credit rights or electronic chattel paper (as such items and the
term “control” are defined in Division 9 of the Code) by causing the securities intermediary or depositary institution
or issuing bank to execute a control agreement in form and substance satisfactory to Bank. Borrower will not create any chattel
paper without placing a legend on the chattel paper acceptable to Bank indicating that Bank has a security interest in the chattel
paper. Borrower from time to time may deposit with Bank specific cash collateral to secure specific Obligations; Borrower authorizes
Bank to hold such specific balances in pledge and to decline to honor any drafts thereon or any request by Borrower or any other
Person to pay or otherwise transfer any part of such balances for so long as the specific Obligations (other than inchoate indemnification
obligations) are outstanding.

 

    	 	 7	 

    	 

    

 

4.3
Field Exams.
Bank (through its officers, employees or agents) shall conduct, during Borrower’s usual business hours and at Borrower’s
expense, an initial field examination of Borrower’s Books and the Collateral. Thereafter, Bank (through any of its officers,
employees, or agents) shall have the right, upon reasonable prior notice, annually (or more frequently if an Event of Default
has occurred and is continuing), during Borrower’s usual business hours and at Borrower’s expense, to conduct additional
field examinations of Borrower’s Books and the Collateral. The cost of each field examination shall be $850 per day, per
examiner, plus expenses.

 

4.4
Collateral Collections.
Bank and Borrower will establish a lockbox and related cash collection deposit account at Bank for the remittance and deposit
of payments from Borrower’s customers. Borrower shall instruct its customers to remit all checks and other similar tangible
payment items to the lockbox and to remit all electronic payments directly to the collection account. If despite such instructions,
Borrower receives any checks or other tangible payment items from its customers, Borrower shall hold such items in trust and promptly
deposit the same, in kind, with any appropriate endorsement, into the collection account. Borrower authorizes Bank, at Bank’s
discretion, to apply all collections on deposit in the collection account to reduce the balance of the Advances.

 

5.
REPRESENTATIONS AND WARRANTIES.

 

Borrower
represents and warrants as follows:

 

5.1
Due Organization and Qualification.
Borrower is a corporation duly existing under the laws of the Borrower State and qualified and licensed to do business in any
state in which the conduct of its business or its ownership of property requires that it be so qualified, except where the failure
to do so would not reasonably be expected to cause a Material Adverse Effect.

 

5.2
Due Authorization; No Conflict.
The execution, delivery, and performance of the Loan Documents are within Borrower’s powers, have been duly authorized,
and are not in conflict with nor constitute a breach of any provision contained in Borrower’s organizational documents,
nor will they constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default
under any agreement by which it is bound, except to the extent such default would not reasonably be expected to cause a Material
Adverse Effect.

 

5.3
Collateral.

 

(a)
Borrower has rights in or the power to transfer
the Collateral, and its title to the Collateral is free and clear of Liens, adverse claims, and restrictions on transfer or pledge
except for Permitted Liens.

 

(b)
All Accounts are bona fide existing obligations.
Other than with respect to software subscription, maintenance and service contracts and other agreements pursuant to which Borrower
bills or invoices customers in advance, the property or services giving rise to such Accounts have been delivered or rendered
to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor.

 

(c)
All Inventory is in all material respects of
good and merchantable quality, free from all material defects, except for Inventory for which adequate reserves have been made
in accordance and as required by GAAP; provided however, the Borrower does from time to time discover, in the ordinary
course of its business, Inventory that may be defective in one or more respects and generally takes reserves for such Inventory
within three months of such discovery.

 

5.4
Intellectual Property Collateral. Borrower
is the sole owner of the Intellectual Property Collateral, except for non-exclusive licenses granted by Borrower to third parties
in the ordinary course of business and other licenses of property that may be exclusive in one or more respects but do not result
in a transfer of title to the underlying licensed property. To the best of Borrower’s knowledge, each of the material Copyrights,
Trademarks and Patents (other than pending applications) is valid and enforceable, and no part of any material Intellectual Property
Collateral has been judged invalid or unenforceable, in whole or in part, and no claim has been made to Borrower that any part
of the Intellectual Property Collateral violates the rights of any third party except to the extent such claim would not reasonably
be expected to cause a Material Adverse Effect.

 

    	 	 8	 

    	 

    

 

5.5
Name; Location of Chief Executive Office.
Except as disclosed in the Disclosure Schedules or as disclosed pursuant to Section 7.2, Borrower has not done business under
any name other than that specified on the signature page hereof, and its exact legal name is as set forth in the first paragraph
of this Agreement. Except as disclosed to Bank pursuant to Section 7.2, the chief executive office of Borrower is located in the
Chief Executive Office State at the address indicated in Section 10 hereof.

 

5.6
Litigation. Except as set forth in
the Disclosure Schedules or as disclosed pursuant to Section 6.2, there are no actions or proceedings pending by or against Borrower
or any Subsidiary before any court or administrative agency in which a likely adverse decision would reasonably be expected to
have a Material Adverse Effect.

 

5.7
Accuracy of Financial Statements.
All financial statements related to Borrower that are delivered by Borrower to Bank fairly present in all material respects Borrower’s
financial condition as of the date thereof and Borrower’s results of operations for the period then ended. There has not
been a material adverse change in the financial condition of Borrower since the date of the most recent of such financial statements
submitted to Bank.

 

5.8
Solvency, Payment of Debts.
Borrower is able to pay its debts (including trade debts) as they mature.

 

5.9
Compliance with Laws and Regulations.
Borrower has met the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. No event
has occurred resulting from Borrower’s failure to comply with ERISA that is reasonably likely to result in Borrower’s
incurring any liability that could have a Material Adverse Effect. Borrower is not an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment Company Act of 1940. Borrower
is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System).
Borrower has complied in all material respects with all the provisions of the Federal Fair Labor Standards Act. Borrower is in
compliance with all environmental laws, regulations and ordinances except where the failure to comply is not reasonably likely
to have a Material Adverse Effect. Borrower has not violated any statutes, laws, ordinances or rules applicable to it, the violation
of which could reasonably be expected to have a Material Adverse Effect. Borrower has filed or caused to be filed all tax returns
required to be filed, and has paid, or has made adequate provision for the payment of, all taxes reflected therein except those
being contested in good faith with adequate reserves under GAAP or where the failure to file such returns or pay such taxes would
not reasonably be expected to have a Material Adverse Effect.

 

5.10
Subsidiaries.
As of the Closing Date, Borrower has no Subsidiaries. Borrower does not own any stock, partnership interest or other equity securities
of any Person, except for Permitted Investments.

 

5.11
Government Consents. Borrower has
obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all governmental
authorities that are necessary for the continued operation of Borrower’s business as currently conducted, except where the
failure to do so would not reasonably be expected to cause a Material Adverse Effect.

 

5.12
Material Adverse Effect. Since December
31, 2014, no Material Adverse Effect has occurred.

 

5.13
Inbound Licenses. Except as disclosed
on the Disclosure Schedules or as disclosed pursuant to Section 6.9, Borrower is not a party to, nor is bound by, any license
or other agreement that is material to Borrower’s business (other than over-the-counter software, open-source software,
and other software that is commercially available to the public) which prohibits or otherwise restricts Borrower from granting
a security interest in Borrower’s interest in such license or agreement or any other property (other than to the extent
that any such prohibition would be rendered ineffective pursuant to Sections 9406, 9407, 9408 or 9409 of the Code or any other
applicable law or principles of equity).

 

    	 	 9	 

    	 

    

 

5.14
Full Disclosure.
No representation, warranty or other statement made by Borrower in any certificate or written statement furnished to Bank taken
together with all such certificates and written statements furnished to Bank contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading
in light of the circumstances in which they were made, it being recognized by Bank that the projections and forecasts provided
by Borrower in good faith and based upon reasonable assumptions are not to be viewed as facts and that actual results during the
period or periods covered by any such projections and forecasts may differ from the projected or forecasted results.

 

6.
AFFIRMATIVE COVENANTS.

 

Borrower
covenants that, until payment in full of all outstanding Obligations (other than inchoate indemnification obligations), and for
so long as Bank may have any commitment to make a Credit Extension hereunder, Borrower shall do all of the following:

 

6.1
Good Standing and Government Compliance.
Borrower shall maintain its and each of its Subsidiaries’ organizational existence and good standing in the Borrower State,
shall maintain qualification and good standing in each other jurisdiction in which the failure to so qualify could have a Material
Adverse Effect, and shall furnish to Bank the organizational identification number issued to Borrower by the authorities of the
Borrower State. Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements of ERISA with respect
to any employee benefit plans subject to ERISA. Borrower shall comply in all material respects with all applicable Environmental
Laws, and maintain all material permits, licenses and approvals required thereunder where the failure to do so could have a Material
Adverse Effect. Borrower shall comply, and shall cause each Subsidiary to comply, with all statutes, laws, ordinances and government
rules and regulations to which it is subject, and shall maintain, and shall cause each of its Subsidiaries to maintain, in force
all licenses, approvals and agreements, the loss of which or failure to comply with which would reasonably be expected to have
a Material Adverse Effect.

 

6.2
Financial Statements, Reports, Certificates.

 

(a)
Borrower shall deliver to Bank: (i) as soon as
available, but in any event within thirty (30) days after the end of each calendar month, a company-prepared balance sheet, income
statement, and cash flow statement covering Borrower’s operations during such period, in a form reasonably acceptable to
Bank and certified by a Responsible Officer; (ii) as soon as available, but in any event within 180 days after the end of Borrower’s
fiscal year, audited financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an
opinion which is unqualified (except with respect to a going concern clause specifying the need for future equity financings)
or otherwise consented to in writing by Bank on such financial statements of an independent certified public accounting firm reasonably
acceptable to Bank; (iii) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against
Borrower or any Subsidiary that could reasonably be expected to result in damages or costs to Borrower or any Subsidiary of $100,000
or more; (iv) promptly upon receipt, each management letter prepared by Borrower’s independent certified public accounting
firm regarding Borrower’s management control systems; (v) as soon as available, but in any event not later than February
15 of each calendar year, Borrower’s financial and business projections and budget, presented in a month-by-month format,
for such year, with written certification signed by a Responsible Officer of approval thereof by Borrower’s board of directors;
(vi) such budgets, sales projections, operating plans or other financial information generally prepared by Borrower in the ordinary
course of business as Bank may reasonably request from time to time; and (vii) within the time periods prescribed by Section 6.8(b),
a report signed by Borrower, in form reasonably acceptable to Bank, listing any applications or registrations that Borrower has
made or filed in respect of any Patents, Copyrights or Trademarks and the status of any outstanding applications or registrations,
as well as any material change in Borrower’s Patents, Copyrights or Trademarks, including but not limited to any subsequent
ownership right of Borrower in or to any Trademark, Patent or Copyright not previously identified to Bank.

 

    	 	 10	 

    	 

    

 

(b)
Within thirty (30) days after the end of each
month, Borrower shall deliver to Bank a company-prepared report of Borrower’s recurring revenue for such month in a form
reasonably satisfactory to Bank.

 

(c)
Within thirty (30) days after the end of each
month, Borrower shall deliver to Bank with the monthly financial statements a Compliance Certificate certified as of the last
day of the applicable month and signed by a Responsible Officer in substantially the form of Exhibit E hereto.

 

(d)
Borrower shall deliver to Bank a duly completed Borrowing Base Certificate signed by a Responsible Officer on the Non-Formula
Sublimit Maturity Date and within thirty (30) days after the end of each month with the monthly financial statements;

 

Borrower
may deliver to Bank on an electronic basis any certificates, reports or information required pursuant to this Section 6.2,
and Bank shall be entitled to rely on the information contained in the electronic files, provided that Bank in good faith believes
that the files were delivered by a Responsible Officer. If Borrower delivers this information electronically, it shall also deliver
to Bank by U.S. Mail, reputable overnight courier service, hand delivery, facsimile or .pdf file within five (5) Business Days
after submission of the unsigned electronic copy the certification of monthly financial statements, the intellectual property
report, the Borrowing Base Certificate and the Compliance Certificate, each bearing the physical signature of the Responsible
Officer.

 

6.3
Inventory; Returns. Borrower shall
keep all Inventory in good and merchantable condition, free from all material defects except for Inventory for which adequate
reserves have been made. Returns and allowances, if any, as between Borrower and its account debtors shall be on the same basis
and in accordance with the usual customary practices of Borrower, as they exist on the Closing Date.

 

6.4
Taxes.
Borrower shall make and cause each Subsidiary to make, due and timely payment or deposit of all material federal, state, and
local taxes, assessments, or contributions required of it by law, including, but not limited to, those laws concerning income
taxes, F.I.C.A., F.U.T.A. and state disability, and will execute and deliver to Bank, on demand, proof satisfactory to Bank indicating
that Borrower or a Subsidiary has made such payments or deposits and any appropriate certificates attesting to the payment or
deposit thereof; provided that Borrower or a Subsidiary need not make any payment if the amount or validity of such payment is
contested in good faith by appropriate proceedings and is reserved against (to the extent required by GAAP) by Borrower.

 

6.5
Insurance.

 

(a)
Borrower, at its expense, shall keep the Collateral
insured against loss or damage by fire, theft, explosion, sprinklers, and all other hazards and risks, and in such amounts, as
ordinarily insured against by other owners in similar businesses conducted in the locations where Borrower’s business is
conducted on the date hereof. Borrower shall also maintain liability and other insurance in amounts and of a type that are customary
to businesses similar in size and scope to Borrower’s.

 

(b)
All such policies of insurance shall be in such
form, with such companies, and in such amounts as are reasonably satisfactory to Bank. All policies of property insurance shall
contain a lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank as an additional loss payee, and
all liability insurance policies shall show Bank as an additional insured. Upon Bank’s request, Borrower shall deliver to
Bank certified copies of the policies of insurance and evidence of all premium payments. If no Event of Default has occurred and
is continuing, proceeds payable under any casualty policy will, at Borrower’s option, be payable to Borrower to replace
the property subject to the claim, provided that any such replacement property shall be deemed Collateral in which Bank
has been granted a first priority security interest. If an Event of Default has occurred and is continuing, all proceeds payable
under any such policy shall, at Bank’s option, be payable to Bank to be applied on account of the Obligations.

 

    	 	 11	 

    	 

    

 

6.6
Primary Depository. Within 90 days
of the Closing Date (or such later date as Bank may agree in writing), Borrower shall maintain its primary depository and operating
accounts with Bank. At all times from and after the date that is 10 days after the Closing Date (or such later date
as Bank may agree in writing), Borrower shall cause all banks or other depositary institutions with which Borrower maintains any
deposit account to enter into a deposit account control agreement with Bank, in form and substance reasonably satisfactory to
Bank.

 

6.7
Financial Covenants.
Borrower shall at all times maintain the following financial ratios and covenants:

 

(a)
Adjusted EBITDA. Borrower shall achieve
Adjusted EBITDA for each periodsperiod noted below of not less than the applicable amount set forth
below for such fiscal quarter:

 

	Six
    Month Period EndingEnded	 	Minimum
    Adjusted EBITDA	 
	March 31, 2015	 	$	(2,200,000	)
	June 30, 2015	 	$	(3,250,000	)
	September 30, 2015	 	$	(2,750,000	)
	December 31, 2015	 	$	(2,000,000	)
	Three
    Month Period Ending	 	 	Minimum
                                         Adjusted EBITDA	 
	March 31, 2016	 	$	(1,500,000750,000	)
	June 30, 2016	 	$	(750,000250,000	)
	September 30, 2016	 	$	(250,000)100,000	 
	December 31, 2016
    and thereafter  
	 	$	0600,000	 
	March
    31, 2017 and thereafter	 	 	No
                                         later than January 30, 2017, Bank shall notify Borrower of the applicable minimum Adjusted
                                         EBITDA levels, which levels shall be based upon the financial projections delivered pursuant
                                         to Section 6.2(a) in respect of Borrower’s 2017 fiscal year.	 

 

Bank
shall test Borrower’s compliance with this covenant as of the last day of each fiscal quarter of Borrower.

 

(b)
Churn Rate. Borrower shall achieve a Churn
Rate (i) for each month during the term of this Agreement of not less than -1%, and (ii) for each trailing three month period
(calculate on a rolling basis) during the term of this Agreement of not less than -2%.

 

(c)
Minimum Cash Amount. Borrower shall maintain a balance on deposit in deposit accounts maintained with Bank at least equal to (i)
on March 31, 2017, 100% of the aggregate outstanding principal amount of the Advances at such time made under Section 2.1(b),
and (ii) at all times after March 31, 2017, an amount determined by Bank based on the financial projections delivered pursuant
to Section 6.2(a) in respect of Borrower’s 2017 fiscal year.

 

(d)
Minimum Liquidity. Borrower shall maintain
Liquidity at all times of not less than $2,000,000.

 

    	 	 12	 

    	 

    

 

6.8
Registration of Intellectual Property Rights.

 

(a)
Borrower shall register or cause to be registered
(to the extent not already registered) with the United States Patent and Trademark Office or the United States Copyright Office,
as the case may be, those registrable intellectual property rights now owned or hereafter developed or acquired by Borrower, to
the extent that Borrower, in its reasonable business judgment, deems it appropriate to so protect such intellectual property rights.

 

(b)
Borrower shall provide Bank written notice of
any applications or registrations of intellectual property rights filed with the United States Patent and Trademark Office or
the United States Copyright Office, as applicable, including the date of such filing and the registration or application numbers,
(i) with respect to any filings with the United States Patent and Trademark Office, within 30 days of each fiscal quarter-end,
and (ii) with respect to any filings with the United States Copyright Office, within 5 days of any such filing.

 

(c)
Borrower shall (i) give Bank written notice,
as required pursuant to Section 6.2(a)(vii) and 6.2(b), of the filing of any applications or registrations with
the United States Copyright Office, including the title of such intellectual property rights to be registered, as such title appears
on such applications or registrations, and the date such applications or registrations are filed; (ii) execute such documents
as Bank may reasonably request for Bank to maintain its perfection in such intellectual property rights to be registered by Borrower;
(iii) upon the request of Bank, either deliver to Bank or file such documents simultaneously with the filing of any such applications
or registrations; and (iv) upon filing any such applications or registrations, promptly provide Bank with a copy of such applications
or registrations together with any exhibits, evidence of the filing of any documents requested by Bank to be filed for Bank to
maintain the perfection and priority of its security interest in such intellectual property rights, and the date of such filing.

 

(d)
Borrower shall execute and deliver such additional
instruments and documents from time to time as Bank shall reasonably request to perfect and maintain the perfection and priority
of Bank’s security interest in the Intellectual Property Collateral.

 

(e)
Borrower shall use commercially reasonable efforts
in its reasonable business judgment to (i) protect, defend and maintain the validity and enforceability of the trade secrets,
Trademarks, Patents and Copyrights that are material to its business, (ii) detect infringements of the Trademarks, Patents and
Copyrights that are material to its business and promptly advise Bank in writing of material infringements detected and (iii)
not allow any material Trademarks, Patents or Copyrights to be abandoned, forfeited or dedicated to the public without the written
consent of Bank, which shall not be unreasonably withheld.

 

(f)
Bank may audit Borrower’s Intellectual
Property Collateral to confirm compliance with this Section 6.8, provided such audit may not occur more often than twice
per year, unless an Event of Default has occurred and is continuing. Bank shall have the right, but not the obligation, to take,
at Borrower’s sole expense, any actions that Borrower is required under this Section 6.8 to take but which Borrower
fails to take, after 15 days’ notice to Borrower. Borrower shall reimburse and indemnify Bank for all reasonable costs and
reasonable expenses incurred in the reasonable exercise of its rights under this Section 6.8.

 

6.9
Consent of Inbound Licensors.
Prior to entering into or becoming bound by any inbound license or agreement (other than over-the-counter software, open-source
software, and other software that is commercially available to the public) the failure, breach or termination of which could reasonably
be expected to cause a Material Adverse Effect, Borrower shall: (i) provide written notice to Bank of the material terms of such
license or agreement with a description of its likely impact on Borrower’s business or financial condition; and (ii) upon
the request of Bank, in good faith use commercially reasonable efforts to obtain the consent of, or waiver by, any person whose
consent or waiver is necessary for (A) Borrower’s interest in such licenses or contract rights to be deemed Collateral and
for Bank to have a security interest in it that might otherwise be restricted by the terms of the applicable license or agreement,
whether now existing or entered into in the future, and (B) Bank to have the ability in the event of a liquidation of any Collateral
to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents,
provided, however, the failure to obtain any such consent or waiver shall not constitute a default under this Agreement.

 

    	 	 13	 

    	 

    

 

6.10
Creation/Acquisition of Subsidiaries.
If Borrower creates or acquires any Subsidiary, Borrower shall promptly notify Bank of the creation or acquisition of such Subsidiary
and take all such action as may be reasonably required by Bank to cause such Subsidiary, if a domestic Subsidiary that is not
an Immaterial Subsidiary, to guarantee the Obligations of Borrower under the Loan Documents and to grant a continuing pledge and
security interest in and to the personal property of such domestic Subsidiary (substantially as described on Exhibit B hereto),
and Borrower shall grant and pledge to Bank a perfected security interest in 100% of the Shares of such Subsidiary, if a domestic
Subsidiary, or in 65% of the Shares of such Subsidiary, if such Subsidiary is a foreign Subsidiary.

 

6.11
Further Assurances. At any time and
from time to time Borrower shall execute and deliver such further instruments and take such further action as may reasonably be
requested by Bank to effect the purposes of this Agreement.

 

7.
NEGATIVE COVENANTS.

 

Borrower
covenants and agrees that, so long as any credit hereunder shall be available and until the outstanding Obligations (other than
inchoate indemnification obligations) are paid in full or for so long as Bank may have any commitment to make any Credit Extensions,
Borrower will not do any of the following:

 

7.1
Dispositions. Convey, sell, lease,
license, transfer or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer,
all or any part of its business or property, or, subject to Section 6.6, move cash balances on deposit with Bank to accounts
opened at another financial institution, other than Permitted Transfers.

 

7.2
Change in Name, Location, Executive Office,
or Executive Management; Change in Business; Change in Fiscal Year; Change in Control. Change its name or the Borrower State
or relocate its chief executive office without 30 days prior written notification to Bank; replace its chief executive officer
or chief financial officer (i) without prompt notice to Bank and (ii) unless a replacement for such officer is approved by Borrower’s
Board of Directors and engaged by Borrower within ninety (90) days after such change; engage in any business, or permit any of
its Subsidiaries to engage in any business, other than or reasonably related or incidental to the businesses currently engaged
in by Borrower; change its fiscal year end; have a Change in Control; provided that the foregoing clause shall not apply to any
Change in Control pursuant to which the Obligations are indefeasibly paid in full in cash contemporaneously with the close or
consummation of such transaction and the Bank’s obligations to make any Credit Extensions are terminated as of the close
or consummation of such transaction.

 

7.3
Mergers or Acquisitions.
Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization
(other than mergers or consolidations of a Subsidiary into another Subsidiary or into Borrower), or acquire, or permit any of
its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person without Bank’s
prior written consent (which shall not be unreasonably withheld) except where (i) such transactions do not in the aggregate exceed
$250,000 during any fiscal year, (ii) no Event of Default has occurred, is continuing or would exist after giving effect to such
transactions, (iii) such transactions do not result in a Change in Control, and (iv) Borrower is the surviving entity; provided
that the foregoing Section 7.3 shall not apply to any transaction pursuant to which the Obligations are indefeasibly paid in full
in cash contemporaneously with the close or consummation of such transaction and the Bank’s obligations to make any Credit
Extensions are terminated as of the close or consummation of such transaction.

 

7.4
Indebtedness. Create, incur, assume,
guarantee or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than, in each case,
with respect to Permitted Indebtedness, or prepay any Indebtedness or take any actions which impose on Borrower an obligation
to prepay any Indebtedness; provided however, Borrower may prepay (a) Indebtedness to Bank, (b) Indebtedness described in clause
(c) of the Permitted Indebtedness definition to the extent required by the terms thereof as a result of a casualty, condemnation
or similar event with respect to the assets securing such Indebtedness and (c) Indebtedness described in clause (d) of the Permitted
Indebtedness definition to the extent permitted under the terms of the applicable subordination agreement with Bank.

 

    	 	 14	 

    	 

    

 

7.5
Encumbrances. Create, incur, assume
or allow any Lien with respect to any of its property, or assign or otherwise convey any right to receive income, including the
sale of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens, or covenant to any other Person
(other than Bank or the lenders holding Subordinated Debt) that Borrower in the future will refrain from creating, incurring,
assuming or allowing any Lien with respect to any of Borrower’s property, other than Permitted Liens and customary restrictions
on Liens and assignments contained in-bound license agreements entered into by Borrower in the ordinary course of its business
to the extent such restrictions would be rendered ineffective pursuant to Sections 9406, 9407, 9408 or 9409 of the Code or any
other applicable law or principles of equity.

 

7.6
Distributions.
Pay any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital
stock of Borrower, except that Borrower may (i) repurchase the stock of former employees pursuant to stock repurchase agreements
as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase,
(ii) repurchase the stock of former employees pursuant to stock repurchase agreements by the cancellation of indebtedness owed
by such former employees to Borrower regardless of whether an Event of Default exists; (iii) make dividends and other distributions
payable solely in additional shares of capital stock and (iv) issue shares of capital stock in connection with the conversion
of other shares of capital stock or Indebtedness.

 

7.7
Investments. Directly or indirectly
acquire or own, or make any Investment in or to any Person, or permit any of its Subsidiaries so to do, other than Permitted Investments,
or maintain or invest any of its property with a Person other than Bank or Bank’s Affiliates or permit any Subsidiary to
do so unless such Person has entered into a control agreement with Bank, in form and substance satisfactory to Bank, or suffer
or permit any Subsidiary to be a party to, or be bound by, an agreement that restricts such Subsidiary from paying dividends or
otherwise distributing property to Borrower.

 

7.8
Transactions with Affiliates. Directly
or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower except for (i) 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, (ii) reasonable and customary fees paid
to members of Borrower’s Board of Directors or members of the Board of Directors of any Subsidiary, to the extent the payment
of such fees are consistent with past practices, (iii) reasonable and customary employment agreements in the ordinary course of
the Borrower’s business or otherwise approved by the Borrower’s Board of Directors; (iv) Permitted Investments, and
(v) bona fide equity and Subordinated Debt investments in Borrower from an Affiliate of Borrower.

 

7.9
Subordinated Debt.
Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except in compliance
with the terms of such Subordinated Debt and the terms of the subordination agreement relating to such Subordinated Debt, or amend
any provision of any document evidencing such Subordinated Debt, except in compliance with the terms of the subordination agreement
relating to such Subordinated Debt, or amend any provision affecting Bank’s rights contained in any documentation relating
to the Subordinated Debt without Bank’s prior written consent.

 

7.10
Inventory and Equipment.
Store any Material Collateral with a bailee, warehouseman, or similar third party unless the third party has been notified of
Bank’s security interest and Bank (a) has received an acknowledgment from the third party that it is holding or will hold
such Material Collateral for Bank’s benefit or (b) is in possession of the warehouse receipt, where negotiable, covering
such Material Collateral. Except for Inventory sold in the ordinary course of business and except for such other locations as
Bank may approve in writing, Borrower shall keep the Inventory and Equipment only at the location set forth on the Disclosure
Schedules, or such other locations of which Borrower gives Bank prior written notice.

 

7.11
No Investment Company; Margin Regulation.
Become or be controlled by an “investment company,” within the meaning of the Investment Company Act of 1940, or become
principally engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing
or carrying margin stock, or use the proceeds of any Credit Extension for such purpose.

 

    	 	 15	 

    	 

    

 

8.
EVENTS OF DEFAULT.

 

Any
one or more of the following events shall constitute an Event of Default by Borrower under this Agreement:

 

8.1
Payment Default.
If Borrower fails to pay when due any payment of principal or interest due on the Credit Extensions, or Borrower fails to pay
any fee within 3 Business Days of the due date thereof, or Borrower fails to pay any Bank Expenses or any other amount payable
hereunder or under any Loan Document within 10 Business Days of the due date thereof (provided that during the cure period, the
failure to cure such payment default shall not be an Event of Default);

 

8.2
Covenant Default.

 

(a)
If Borrower fails to perform any obligation under
Sections 6.2, 6.4, 6.5, 6.6, or 6.7 or violates any of the covenants contained in Section
7 of this Agreement; or

 

(b)
If Borrower fails or neglects to perform or observe
any other material term, provision, condition or covenant contained in this Agreement, in any of the Loan Documents, or in any
other present or future agreement between Borrower and Bank and as to any default under such other term, provision, condition
or covenant that can be cured, has failed to cure such default within 30 days after Borrower receives notice thereof or any officer
of Borrower becomes aware thereof;

 

8.3
Defective Perfection.
If Bank shall receive at any time following the Closing Date an SOS Report indicating that except for Permitted Liens, Bank’s
security interest in the Collateral is not prior to all other security interests or Liens of record reflected in the report;

 

8.4
[Reserved].

 

8.5
Attachment. If any material portion
of Borrower’s assets is attached, seized, subjected to a writ or distress warrant, or is levied upon, or comes into the
possession of any trustee, receiver or person acting in a similar capacity and such attachment, seizure, writ or distress warrant
or levy has not been removed, discharged or rescinded within 10 days, or if Borrower is enjoined, restrained, or in any way prevented
by court order from continuing to conduct all or any material part of its business affairs, or if a judgment or other claim becomes
a lien or encumbrance upon any material portion of Borrower’s assets, or if a notice of lien, levy, or assessment is filed
of record with respect to any of Borrower’s assets by the United States Government, or any department, agency, or instrumentality
thereof, or by any state, county, municipal, or governmental agency, and the same is not paid within 10 days after Borrower receives
notice thereof, provided that none of the foregoing shall constitute an Event of Default where such action or event is stayed
or an adequate bond has been posted pending a good faith contest by Borrower (provided that no Credit Extensions will be made
during such cure period);

 

8.6
Insolvency.
If Borrower becomes unable to pay its debts (including trade debts) as the come due, or if an Insolvency Proceeding is commenced
by Borrower, or if an Insolvency Proceeding is commenced against Borrower and is not dismissed or stayed within 60 days (provided
that no Credit Extensions will be made prior to the dismissal of such Insolvency Proceeding);

 

8.7
Other Agreements. If there is a default
or other failure to perform in any agreement to which Borrower is a party with a third party or parties resulting in a right by
such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of
$100,000 or that would reasonably be expected to have a Material Adverse Effect; provided, however, that the Event of Default
under this Section 8.7 caused by the occurrence of a breach or default under such other agreement shall be cured or waived for
purposes of this Agreement upon Bank receiving written notice from the party asserting such breach or default of such cure or
waiver of the breach or default under such other agreement, if at the time of such cure or waiver under such other agreement (x)
Bank has not declared an Event of Default under this Agreement or exercised any rights with respect thereto; (y) any such cure
or waiver does not result in an Event of Default under any other provision of this Agreement or any Loan Document; and (z) in
connection with any such cure or waiver under such other agreement, the terms of any agreement with such third party are not modified
or amended in any manner which could in the good faith business judgment of Bank be materially less advantageous to Borrower or
any Guarantor;

 

    	 	 16	 

    	 

    

 

8.8
Subordinated Debt.
If Borrower makes any payment on account of Subordinated Debt, except to the extent the payment is allowed under any subordination
agreement entered into with Bank relating to such Subordinated Debt;

 

8.9
Judgments.
If one or more final judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of
at least $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 or the Subsidiary and the same are not within 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).

 

8.10
Misrepresentations.
If any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth
herein or in any certificate delivered to Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to enter
into this Agreement or any other Loan Document.

 

8.11
Guaranty.
If any guaranty of all or a portion of the Obligations (a “Guaranty”) ceases for any reason to be in full force and
effect, or any “Event of Default” under any Guaranty or any security agreement securing any Guaranty (collectively,
the “Guaranty Documents”) has occurred and is continuing, or any guarantor revokes a Guaranty, or any material misrepresentation
or material misstatement exists now or hereafter in any warranty or representation set forth in any Guaranty Document or in any
certificate delivered to Bank in connection with any Guaranty Document, or if any of the circumstances described in Sections 8.3
through 8.8 occur with respect to any Guarantor.

 

9.
BANK’S RIGHTS AND REMEDIES.

 

9.1
Rights and Remedies. Upon the occurrence
and during the continuance of an Event of Default, Bank may, at its election, without notice of its election and without demand,
do any one or more of the following, all of which are authorized by Borrower:

 

(a)
Declare all Obligations, whether evidenced by
this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided that upon the occurrence
of an Event of Default described in Section 8.6, all Obligations shall become immediately due and payable without any action
by Bank);

 

(b)
Demand that Borrower (i) deposit cash with Bank
in an amount equal to the amount of any Letters of Credit remaining undrawn, as collateral security for the repayment of any future
drawings under such Letters of Credit, and (ii) pay in advance all Letter of Credit fees scheduled to be paid or payable over
the remaining term of the Letters of Credit, and Borrower shall promptly deposit and pay such amounts;

 

(c)
Cease advancing money or extending credit to
or for the benefit of Borrower under this Agreement or under any other agreement between Borrower and Bank;

 

(d)
Settle or adjust disputes and claims directly
with account debtors for amounts, upon terms and in whatever order Bank reasonably considers advisable;

 

(e)
Make such payments and do such acts as Bank considers
necessary or reasonable to protect its security interest in the Collateral. Borrower agrees to assemble the Collateral if Bank
so requires, and to make the Collateral available to Bank as Bank may designate. Borrower authorizes Bank to enter the premises
where the Collateral is located, to take and maintain possession of the Collateral, or any part of it, and to pay, purchase, contest,
or compromise any encumbrance, charge, or lien which in Bank’s determination appears to be prior or superior to its security
interest and to pay all expenses incurred in connection therewith. With respect to any of Borrower’s owned premises, Borrower
hereby grants Bank a license to enter into possession of such premises and to occupy the same, without charge, in order to exercise
any of Bank’s rights or remedies provided herein, at law, in equity, or otherwise;

 

    	 	 17	 

    	 

    

 

(f)
Set off and apply to the Obligations any and
all (i) balances and deposits of Borrower held by Bank, and (ii) indebtedness at any time owing to or for the credit or the account
of Borrower held by Bank;

 

(g)
Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided for herein) the Collateral. Bank is hereby granted
a license or other right, solely pursuant to the provisions of this Section 9.1, to use, without charge, Borrower’s
labels, patents, copyrights, rights of use of any name, trade secrets, trade names, trademarks, service marks, and advertising
matter, or any property of a similar nature, as it pertains to the Collateral, in completing production of, advertising for sale,
and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section 9.1, Borrower’s
rights under all licenses and all franchise agreements shall inure to Bank’s benefit;

 

(h)
Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including
Borrower’s premises) as Bank determines is commercially reasonable, and apply any proceeds to the Obligations in whatever
manner or order Bank deems appropriate. Bank may sell the Collateral without giving any warranties as to the Collateral. Bank
may specifically disclaim any warranties of title or the like. This procedure will not be considered adversely to affect the commercial
reasonableness of any sale of the Collateral. If Bank sells any of the Collateral upon credit, Borrower will be credited only
with payments actually made by the purchaser, received by Bank, and applied to the indebtedness of the purchaser. If the purchaser
fails to pay for the Collateral, Bank may resell the Collateral and Borrower shall be credited with the proceeds of the sale;

 

(i)
Bank may credit bid and purchase at any public
sale;

 

(j)
Apply for the appointment of a receiver, trustee,
liquidator or conservator of the Collateral, without notice and without regard to the adequacy of the security for the Obligations
and without regard to the solvency of Borrower, any guarantor or any other Person liable for any of the Obligations; and

 

(k)
Any deficiency that exists after disposition
of the Collateral as provided above will be paid immediately by Borrower.

 

Bank
may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance
will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

 

9.2
Power of Attorney.
Effective only upon the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably appoints
Bank (and any of Bank’s designated officers, or employees) as Borrower’s true and lawful attorney to: (a) send requests
for verification of Accounts or notify account debtors of Bank’s security interest in the Accounts; (b) endorse Borrower’s
name on any checks or other forms of payment or security that may come into Bank’s possession, cash or deposit such checks
or other items of payment or security, and apply to the Obligations all proceeds of such checks or other items; (c) sign Borrower’s
name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts,
verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral and apply all cash sale proceeds to the
Obligations; (e) make, settle, and adjust all claims under and decisions with respect to Borrower’s policies of insurance
and apply to the Obligations all amounts received by Bank pursuant to such policies; (f) settle and adjust disputes and claims
respecting the accounts directly with account debtors, for amounts and upon terms which Bank determines to be reasonable, and
apply to the Obligations all amounts received by Bank in connection with any such settlement and adjustment; (g) enter into a
short-form intellectual property security agreement consistent with the terms of this Agreement for recording purposes only or
modify, in its sole discretion, any intellectual property security agreement entered into between Borrower and Bank without first
obtaining Borrower’s approval of or signature to such modification by amending Exhibits A, B, and C, thereof, as appropriate,
to include reference to any right, title or interest in any Copyrights, Patents or Trademarks acquired by Borrower after the execution
hereof or to delete any reference to any right, title or interest in any Copyrights, Patents or Trademarks in which Borrower no
longer has or claims to have any right, title or interest; and (h) file, in its sole discretion, one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral; provided Bank may exercise such power of attorney to sign
the name of Borrower on any of the documents described in clause (g) above, regardless of whether an Event of Default has occurred.
The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s rights and powers, being
coupled with an interest, is irrevocable until all of the Obligations (other than inchoate indemnification obligations) have been
fully repaid and performed and Bank’s obligation to provide advances hereunder is terminated.

 

    	 	 18	 

    	 

    

 

9.3
Accounts Collection.
At any time after the occurrence and during the continuation of an Event of Default, Bank may notify any Person owing funds to
Borrower of Bank’s security interest in such funds and verify the amount of such Account. Borrower shall collect all amounts
owing to Borrower for Bank, receive in trust all payments as Bank’s trustee, and immediately deliver such payments to Bank
in their original form as received from the account debtor, with proper endorsements for deposit.

 

9.4
Bank Expenses.
If Borrower fails to pay any amounts or furnish any required proof of payment due to third persons or entities, as required under
the terms of this Agreement, then Bank may do any or all of the following after reasonable notice to Borrower: (a) make payment
of the same or any part thereof; (b) set up such reserves under the Revolving Line as Bank deems necessary to protect Bank from
the exposure created by such failure; or (c) obtain and maintain insurance policies of the type discussed in Section 6.5 of this
Agreement, and take any action with respect to such policies as Bank deems prudent. Any amounts so paid or deposited by Bank shall
constitute Bank Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove
provided, and shall be secured by the Collateral. Any payments made by Bank shall not constitute an agreement by Bank to make
similar payments in the future or a waiver by Bank of any Event of Default under this Agreement.

 

9.5
Bank’s Liability for Collateral.
Bank has no obligation to clean up or otherwise prepare the Collateral for sale. All risk of loss, damage or destruction of the
Collateral shall be borne by Borrower.

 

9.6
No Obligation to Pursue Others.
Bank has no obligation to attempt to satisfy the Obligations by collecting them from any other person liable for them and Bank
may release, modify or waive any collateral provided by any other Person to secure any of the Obligations, all without affecting
Bank’s rights against Borrower. Borrower waives any right it may have to require Bank to pursue any other Person for any
of the Obligations.

 

9.7
Remedies Cumulative.
Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative. Bank
shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise
by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of Default on Borrower’s
part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or acquiescence by it. No waiver
by Bank shall be effective unless made in a written document signed on behalf of Bank and then shall be effective only in the
specific instance and for the specific purpose for which it was given. Borrower expressly agrees that this Section 9.7 may not
be waived or modified by Bank by course of performance, conduct, estoppel or otherwise.

 

9.8
Demand; Protest. Except as otherwise
provided in this Agreement, Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment
and nonpayment and any other notices relating to the Obligations.

 

10.
NOTICES.

 

Unless
otherwise provided in this Agreement, all notices or demands by any party relating to this Agreement or any other agreement entered
into in connection herewith shall be in writing and (except for financial statements, compliance certificates and other informational
documents which may be sent by first-class mail, postage prepaid or e-mail) shall be personally delivered or sent by a recognized
overnight delivery service, certified mail, postage prepaid, return receipt requested, or by telefacsimile to Borrower or to Bank,
as the case may be, at its addresses set forth below:

 

    	 	 19	 

    	 

    

 

	 	If
                                         to Borrower:	NTN
                                         Buzztime, Inc.
			2231
                                         Rutherford Road, Suite 200
			Carlsbad,
                                         California 92008
	 	 	Attn:
                                         Allen Wolff
	 	 	E-mail:
                                         allen.wolff@buzztime.com
	 	 	 
	 	If
                                         to Bank:	East
                                         West Bank
			555
                                         Montgomery Street, 9th Floor
			San
                                         Francisco, CA 94111
			Attn:
                                         Alexis Coyle
	 	 	Fax:
                                         (415) 986-0847
	 	 	E-mail:
                                         alexis.coyle@eastwestbank.com

 

The
parties hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner
given to the other.

 

11.
CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER;
JUDICIAL PREFERENCE.

 

11.1
Governing Law and Venue.
This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California, without regard
to principles of conflicts of law. Each of Borrower and Bank hereby submits to the exclusive jurisdiction of the state and Federal
courts located in the County of Los Angeles, State of California; provided, however, that nothing in this Agreement shall be deemed
to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral
or any other security for the Obligations, or to enforce a judgment or other court order in favor of Bank. Borrower expressly
submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives
any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby
consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Borrower hereby waives personal
service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints,
and other process may be made by registered or certified mail addressed to Borrower at the address set forth in, or subsequently
provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon
the earlier to occur of Borrower’s actual receipt thereof or 3 days after deposit in the U.S. mails, proper postage prepaid.

 

11.2
JURY TRIAL WAIVER.
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 OTHER 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.

 

11.3
JUDICIAL REFERENCE PROVISION. WITHOUT
INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY, if the above waiver
of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any
nature between them arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or,
if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with
California Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within
the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties
hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with
the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the
power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing
preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential,
and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional
relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply
to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted
in the same manner as it would be before a court under the rules of evidence applicable to judicial proceedings. The parties shall
be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery
applicable to judicial proceedings. The private judge shall oversee discovery and may enforce all discovery rules and orders applicable
to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge
shall have the power to decide all issues in the action or proceeding, whether of fact or of law, and shall report a statement
of decision thereon pursuant to California Code of Civil Procedure§ 644(a). Nothing in this paragraph shall limit the right
of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The private
judge shall also determine all issues relating to the applicability, interpretation, and enforceability of this paragraph.

 

    	 	 20	 

    	 

    

 

12.
GENERAL PROVISIONS.

 

12.1
Successors and Assigns.
This Agreement shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties and
shall bind all persons who become bound as a debtor to this Agreement; provided, however, that neither this Agreement nor any
rights hereunder may be assigned by Borrower without Bank’s prior written consent, which consent may be granted or withheld
in Bank’s sole discretion. Bank shall have the right without the consent of or notice to Borrower to sell, transfer, negotiate,
or grant participation in all or any part of, or any interest in, Bank’s obligations, rights and benefits hereunder.

 

12.2
Indemnification.
Borrower shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against: (a) all obligations,
demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this
Agreement or any other Loan Document; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank, its
officers, employees and agents as a result of or in any way arising out of, following, or consequential to transactions between
Bank and Borrower whether under this Agreement, or otherwise (including without limitation reasonable attorneys’ fees and
expenses), except for losses caused by Bank’s gross negligence or willful misconduct.

 

12.3
Time of Essence.
Time is of the essence for the performance of all obligations set forth in this Agreement.

 

12.4
Severability of Provisions.
Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining
the legal enforceability of any specific provision.

 

12.5
Correction of Loan Documents. Bank
may correct patent errors and fill in any blanks in this Agreement and the other Loan Documents consistent with the agreement
of the parties.

 

12.6
Amendments in Writing, Integration.
All amendments to or termination of this Agreement or the other Loan Documents must be in writing and signed by the parties to
this Agreement or to such other Loan Document, as applicable. All prior agreements, understandings, representations, warranties,
and negotiations between the parties hereto with respect to the subject matter of this Agreement and the other Loan Documents,
if any, are merged into this Agreement and the other Loan Documents.

 

12.7
Counterparts. This Agreement may be
executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered,
shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement.

 

12.8
Survival.
All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations
(other than inchoate indemnification obligations) remain outstanding or Bank has any obligation to make any Credit Extension to
Borrower. The obligations of Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described
in Section 12.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought
against Bank have run.

 

    	 	 21	 

    	 

    

 

12.9
Confidentiality.
In handling any confidential information, Bank and all employees and agents of Bank shall exercise the same degree of care that
Bank exercises with respect to its own proprietary information of the same types to maintain the confidentiality of any non-public
information thereby received or received pursuant to this Agreement except that disclosure of such information may be made (i)
to the subsidiaries or Affiliates of Bank in connection with their present or prospective business relations with Borrower, (ii)
to prospective transferees or purchasers of any interest in the Credit Extensions, provided that they have entered into a comparable
confidentiality agreement in favor of Borrower and have delivered a copy to Borrower, (iii) as required by law, regulations, rule
or order, subpoena, judicial order or similar order, (iv) as may be required in connection with the examination, audit or similar
investigation of Bank, (v) to Bank’s accountants, auditors and regulations, and (vi) as Bank may determine in connection
with the enforcement of any remedies hereunder. Confidential information hereunder shall not include information that either:
(a) is in the public domain or in the knowledge or possession of Bank when disclosed to Bank, or becomes part of the public domain
after disclosure to Bank through no fault of Bank; or (b) is disclosed to Bank by a third party, provided Bank does not have actual
knowledge that such third party is prohibited from disclosing such information.

 

12.10
Patriot Act.
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions
to obtain, verify, and record information that identifies each person who opens an account. WHAT THIS MEANS FOR YOU: when you
open an account, we will ask your name, address, date of birth, and other information that will allow us to identify you. We may
also ask to see your driver’s license or other identifying documents.

 

12.11
No Consequential Damages. No party
to this Agreement or any other Loan Document, nor any agent or attorney of such party or Bank, shall be liable to any other party
to this Agreement or any other Person on any other theory of liability of any special, indirect, consequential or punitive damages.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

    	 	 22	 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as
of the date first above written.

 

	 	BORROWER:
	 	 
	 	NTN
    BUZZTIME, INC.,
	 	a
    Delaware corporation
	 	 	 
	 	By:	 
	 	Name:	Allen
    Wolff
	 	Title:	Chief
    Financial Officer

 

[Signature
Pages Continue]

 

Loan
and Security Agreement

 

    	 

     

    

 

 

	 	BANK:
	 	 
	 	EAST
    WEST BANK,
	 	a
    California banking corporation
	 	 	 
	 	By:	 
	 	Name:	Gregory
    Peterson
	 	Title:	Vice
    President

 

Loan
and Security Agreement

 

    	 

     

    

 

EXHIBIT
A

 

DEFINITIONS

 

“Accounts”
means all presently existing and hereafter arising accounts, contract rights, payment intangibles and all other forms of obligations
owing to Borrower arising out of the sale or lease of goods (including, without limitation, the licensing of software and other
technology) or the rendering of services by Borrower and any and all credit insurance, guaranties, and other security therefor,
as well as all merchandise returned to or reclaimed by Borrower and Borrower’s Books relating to any of the foregoing.

 

“Adjusted
EBITDA” means, as calculated on a consolidated basis for Borrower and its Subsidiaries for any period as at any date of
determination, (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 expenses, plus (f) other
non-cash expenses and charges, plus (g) to the extent approved by Bank, other one-time charges, plus (h) to the extent approved
by Bank, any losses arising from the sale, exchange, transfer or other disposition of assets not in the ordinary course of business.

 

“Advance”
or “Advances” means a cash advance or cash advances under the Revolving Line.

 

“Affiliate”
means, with respect to any Person, any Person that owns or controls directly or indirectly such Person, any Person that controls
or is controlled by or is under common control with such Person, and each of such Person’s senior executive officers, directors,
and partners.

 

“Availability
Amount” has the meaning assigned in Section 2.1(b)(i).

 

“Bank
Expenses” means all reasonable costs or expenses (including reasonable attorneys’ fees and expenses), incurred
in connection with the preparation, negotiation, administration, and enforcement of the Loan Documents; reasonable Collateral
audit fees; and Bank’s reasonable attorneys’ fees and expenses incurred in amending, enforcing or defending the Loan
Documents (including fees and expenses of appeal), incurred before, during and after an Insolvency Proceeding, whether or not
suit is brought.

 

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

 

“Borrower
State” means Delaware, the state under whose laws Borrower is organized.

 

“Borrower’s
Books” means all of Borrower’s books and records including: ledgers; records concerning Borrower’s assets
or liabilities, the Collateral, business operations or financial condition; and all computer programs, or tape files, and the
equipment, containing such information.

 

“Borrowing
Base” means, as of any date of determination thereof, an amount equal to the product of:

 

(a)
the average Monthly Recurring Revenue for the immediately preceding three months; times

 

(b)
one plus the Borrower’s average Churn Rate for the immediately preceding three months (not to exceed zero); times

 

(c)
300%.

 

    	 	Exhibit A
1
	 

     

    

 

“Borrowing
Base Certificate” means a certificate in the form attached hereto as Exhibit D, with appropriate insertions.

 

“Business
Day” means any day that is not a Saturday, Sunday, or other day on which banks in the State of California are authorized
or required to close.

 

“Change
in Control” means any event, transaction, or occurrence as a result of which 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) or a stockholder in Borrower as of the Closing Date, directly or indirectly, of securities of Borrower, representing more
than fifty percent (50%) or more of the combined voting power of Borrower’s then outstanding securities; provided, however,
that a Change in Control shall not include (i) any consolidation or merger effected exclusively to change the domicile of Borrower,
or (ii) any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received
by Borrower or indebtedness of Borrower is cancelled or converted or a combination thereof.

 

“Chief
Executive Office State” means California, the state in which Borrower’s chief executive office is located.

 

“Churn
Rate” means, with respect to any month, the quotient of (a) (i) Monthly Net Revenue Change calculated with respect to
such month, divided by (b) Borrower’s monthly revenue from subscriptions, as reflected in (i) of the definition of Monthly
Recurring Revenue for the month of such date of determination.

 

“Closing
Date” means the date of this Agreement.

 

“Code”
means the California Commercial Code as amended or supplemented from time to time.

 

“Collateral”
means the property described on Exhibit B attached hereto.

 

“Compliance
Certificate” means a certificate in the form attached hereto as Exhibit E, with appropriate insertions.

 

“Control
Agreement” means an agreement entered into among Borrower, Bank and, as applicable, a depository institution (other
than Bank) at which Borrower maintains a deposit account or a securities intermediary or commodity intermediary at which Borrower
maintains a securities account or a commodity account, pursuant to which Bank obtains control (within the meaning of the Code)
over such deposit account, securities account, or commodity account.

 

“Contingent
Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person
with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another, including, without limitation,
any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or
in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters
of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations arising
under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or
other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or
commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection
or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided,
however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support
arrangement.

 

    	 	Exhibit A
2
	 

     

    

 

“Copyrights”
means, collectively:

 

(a)
All present and future United States registered copyrights and copyright registrations (including all of the exclusive rights
afforded a copyright registrant in the United States under 17 U.S.C. Section 106 and any exclusive rights which may in the future
arise by act of Congress or otherwise), and all present and future applications for copyright registrations (including applications
for copyright registrations of derivative works and compilations) (collectively, “Registered Copyrights”),
and any and all royalties, payments and other amounts payable to Borrower in connection with Registered Copyrights, together with
all renewals and extensions of Registered Copyrights, the right to recover for all past, present and future infringements of Registered
Copyrights, and all computer programs and tangible property embodying or incorporating Registered Copyrights, and all other rights
of every kind whatsoever accruing thereunder or pertaining thereto; and

 

(b)
All present and future copyrights, computer programs and other rights subject to (or capable of becoming subject to) United States
copyright protection which are not registered in the United States Copyright Office (collectively, “Unregistered Copyrights”),
whether now owned or hereafter acquired, and any and all royalties, payments, and other amounts payable to Borrower in connection
with Unregistered Copyrights, together with all renewals and extensions of Unregistered Copyrights, the right to recover for all
past, present and future infringements of Unregistered Copyrights, and all computer programs and all tangible property embodying
or incorporating Unregistered Copyrights, and all other rights of every kind whatsoever accruing thereunder or pertaining thereto.

 

“Credit
Extension” means each Advance or any other extension of credit by Bank to or for the benefit of Borrower hereunder.

 

“Disclosure
Schedules” means the schedule of exceptions attached hereto and approved by Bank, if any.

  

“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.

 

 “EBITDA”
means, as calculated on a consolidated basis for Borrower and its Subsidiaries for any period as at any date of determination,
(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 expenses, plus (f) other non-cash
expenses and charges, plus (g) to the extent approved by Bank, other one-time charges, plus (h) to the extent approved by Bank,
any losses arising from the sale, exchange, transfer or other disposition of assets not in the ordinary course of business.

 

“Environmental
Laws” means all laws, rules, regulations, orders and the like issued by any federal state, local foreign or other governmental
or quasi-governmental authority or any agency pertaining to the environment or to any hazardous materials or wastes, toxic substances,
flammable, explosive or radioactive materials, asbestos or other similar materials.

 

“Equipment”
means all present and future machinery, equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and attachments
in which Borrower has any interest.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and the regulations thereunder.

 

“Event
of Default” has the meaning assigned in Section 8.

 

“GAAP”
means United States generally accepted accounting principles, consistently applied, as in effect from time to time.

 

“Guaranties”
means, collectively, any guaranty of the Obligations hereafter made by any other Person in favor of Bank, and “Guaranty”
means any such guaranty individually.

 

“Guarantors”
means, collectively, (i) each domestic Subsidiary of Borrower that is not an Immaterial Subsidiary, and (ii) any Person that guarantees
Borrower’s payment and performance of the Obligations pursuant to a Guaranty, and “Guarantor” means such Person
individually.

 

“IBM
Indebtedness” means Indebtedness in an aggregate amount not to exceed $2,500,000 at any time owing
by Borrower to IBM Credit LLC or its Affiliates (“IBM”), which Indebtedness is either (i) unsecured or (ii)
secured by Liens (ia) upon or in any Equipment acquired or held by Borrower or any of its Subsidiaries
to secure the purchase price of such Equipment or indebtedness incurred solely for the purpose of financing the acquisition or
lease of such Equipment, or (iib) existing on such Equipment at the time of its acquisition, provided
that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such Equipment, and
such Liens are subject to a subordination agreement in favor of Bank, in form and substance reasonably satisfactory to Bank.

 

    	 	Exhibit A
3
	 

     

    

 

“Immaterial
Subsidiary”: at any date of determination, any Subsidiary of any Borrower designated as such by such Borrower in writing
and which as of such date holds assets representing 5% or less of the Borrower’s consolidated total assets as of such date
(determined in accordance with GAAP), and which has generated less than 5% of the Borrower’s consolidated total revenues
determined in accordance with GAAP for the four fiscal quarter period ending on the last day of the most recent period for which
financial statements have been delivered after the Closing Date pursuant to Section 6.2; provided that all Subsidiaries
that are individually “Immaterial Subsidiaries” shall not have aggregate consolidated total assets that would
represent 10% or more of the Borrower’s consolidated total assets as of such date or have generated 10% or more of the Borrower’s
consolidated total revenues for such four fiscal quarter period, in each case determined in accordance with GAAP.

 

“Indebtedness”
means (a) all indebtedness for borrowed money or the deferred purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes,
bonds, debentures or similar instruments, (c) all capital lease obligations, and (d) all Contingent Obligations.

 

“Insolvency
Proceeding” means any proceeding commenced by or against any Person or entity under any provision of the United States
Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors,
formal or informal moratoria, compositions, extension generally with its creditors, or proceedings seeking reorganization, arrangement,
or other relief.

 

“Intellectual
Property” means Copyrights, Patents, Trademarks, servicemarks and applications therefor, now owned or hereafter acquired,
or any claims for damages by way of any past, present or future infringement of any of the foregoing.

 

“Intellectual
Property Collateral” means all of Borrower’s right, title, and interest in and to the following:

 

	(a)	Copyrights,
    Trademarks and Patents;
	 	 
	(b)	Any
    and all right, title and interest in and to any and all present and future licensing agreements with respect to Copyrights;
	 	 
	(c)	Any
    and all present and future accounts, accounts receivable, royalties and other rights to payment arising from, in connection
    with, or relating to Copyrights;
	 	 
	(d)	Any
    and all trade secrets, and any and all intellectual property rights in computer software and computer software products now
    or hereafter existing, created, acquired or held;
	 	 
	(e)	Any
    and all design rights which may be available to Borrower now or hereafter existing, created, acquired or held;
	 	 
	(f)	Any
    and all claims for damages by way of past, present and future infringement of any of the rights included above, with the right,
    but not the obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights
    identified above;
	 	 
	(g)	All
    licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and royalties arising from
    such use to the extent permitted by such license or rights;
	 	 
	(h)	All
    amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents; and
	 	 
	(i)	All
    proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty
    payable in respect of any of the foregoing, and all license royalties and proceeds of infringement suits, and all rights corresponding
    to the foregoing throughout the world and all re-issues, divisions, continuations, renewals, extensions and continuations-in-part
    of the foregoing.

 

    	 	Exhibit A
4
	 

     

    

 

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

 

“Interest
Period” means, for any LIBOR Loan, the period commencing on the date of such LIBOR Loan, or on the conversion/continuation
date on which such LIBOR Loan is converted into or continued as a LIBOR Loan, and ending on the date that is 1, 2, 3 or 6 months
thereafter, or such other period upon which Bank and Borrower may agree, in each case as Borrower may elect in the applicable
Payment/Advance Form or LIBOR Loan Continuation Certificate; provided, however, that (a) no Interest Period with
respect to any LIBOR Loan shall end later than the Revolving Maturity Date, (b) the last day of an Interest Period shall be determined
in accordance with the practices of the LIBOR interbank market as from time to time in effect, (c) if any Interest Period would
otherwise end on a day that is not a Business Day, that Interest Period shall be extended to the following Business Day unless,
in the case of a LIBOR Loan, the result of such extension would be to carry such Interest Period into another calendar month,
in which event such Interest Period shall end on the preceding Business Day, (d) any Interest Period pertaining to a LIBOR Loan
that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such
Interest Period, and (e) interest shall accrue from and include the first Business Day of an Interest Period but exclude the last
Business Day of such Interest Period.

 

“Inventory”
means all present and future inventory in which Borrower has any interest.

 

“Investment”
means any beneficial ownership of (including stock, partnership or limited liability company interest or other securities) any
Person, or any loan, advance or capital contribution to any Person.

 

“IP
Security Agreement” means the Intellectual Property Security Agreement dated as of the Closing Date by and between Borrower
and Bank.

 

“IRC”
means the Internal Revenue Code of 1986, as amended, and the regulations thereunder.

 

“Letter
of Credit” means a commercial or standby letter of credit or similar undertaking issued by Bank at Borrower’s
request in accordance with Section 2.1(b)(iii).

 

“LIBOR”
means, for any LIBOR Determination Date with respect to an Interest Period for any Advance to be made, continued as or converted
into a LIBOR Loan, the rate of interest per annum for such Interest Period that appears on Bloomberg Page BBAM1 (or on such other
substitute Bloomberg page that displays rates at which U.S. dollar deposits are offered by leading banks in the London interbank
deposit market) as of 11:00 a.m. (local time in such interbank market) 3 Business Days prior to the first day of such Interest
Period for a period approximately equal to such Interest Period and in an amount approximately equal to the amount of such Advance.

 

“LIBOR-Based
Rate” means, for any Interest Period in respect of any LIBOR Loan, an interest rate per annum (rounded upward, if necessary,
to the nearest 1/16 of 1%) equal to LIBOR for such Interest Period divided by 1 minus the Reserve Requirement for such Interest
Period.

 

“LIBOR
Interest Payment Date” means, with respect to any LIBOR Loan, the last day of each Interest Period applicable to such
LIBOR Loan.

 

“LIBOR
Loan” means the portion of any Advance that bears interest based on the LIBOR-Based Rate.

 

    	 	Exhibit A
5
	 

     

    

 

“LIBOR
Rate Determination Date” means each date for calculating the LIBOR for the purpose of determining the interest rate
in respect of an Interest Period. The LIBOR Rate Determination Date shall be the second Business Day prior to the first day of
the related Interest Period for a LIBOR Loan.

 

“Lien”
means any mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.

 

“Liquidity”
is, at any time, the sum of (a) the aggregate amount of unrestricted cash held at such time by Borrower in deposit accounts or
securities accounts maintained with Bank, and (b) the Availability Amount at such time.

 

“Loan
Documents” means, collectively, this Agreement, any Bank Services Agreement, any note or notes executed by Borrower,
the IP Security Agreement, the Guaranties and any other document, instrument or agreement entered into in connection with this
Agreement, all as amended or extended from time to time.

 

“Material
Collateral” means Collateral having a fair market value of at least $200,000.

 

“Material
Adverse Effect” means a material adverse effect on (i) the business operations, financial condition of Borrower and
its Subsidiaries taken as a whole, (ii) the ability of Borrower to repay the Obligations or otherwise perform its obligations
under the Loan Documents, or (iii) Borrower’s interest in, or the value, perfection or priority of Bank’s security
interest in the Collateral.

 

“Monthly
Net Revenue Change” means, with respect to any month of determination, (a) the sum of the One Month Recurring Revenue
Amounts for recurring revenues attributable to subscriptions, software and hardware initially leased, sold or licensed by Borrower
during the month of determination, minus (b) the sum of the One Month Recurring Revenue Amounts for recurring revenues lost during
the month of determination due to customer cancellations and terminations.

 

Monthly Recurring Revenue
“Monthly Recurring Revenue” means,
with respect to any month, (i) all recurring subscription revenue attributable to software sold or licensed by Borrower and all
recurring revenue relating to services delivered by Borrower (including revenue under software maintenance and service contracts
regardless of whether services are required to be actually delivered), and (ii) 50% of all revenue
attributable to Borrower’s “Arcade” and “Stump” product lines, and (iii)
50% of all revenues attributable to the sale or leasing of hardware to an account debtor in connection with the revenues described
in clauses (i) or (ii) of this definition, in each case  which have been earned during such period and calculated on a basis
consistent with the financial statements delivered to Bank prior to the Closing Date.

 

“Negotiable
Collateral” means all of Borrower’s present and future letters of credit of which it is a beneficiary, drafts,
instruments (including promissory notes), securities, documents of title, and chattel paper, and Borrower’s Books relating
to any of the foregoing.

 

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

 

“Non-Formula
Sublimit Amount” means, for any date of determination, commencing on (i) March 8, 2016 through and including the Non-Formula
Sublimit Maturity Date, $2,000,000 and (ii) the Non-Formula Sublimit Maturity Date and at all times thereafter, $0.

 

“Non-Formula
Sublimit Maturity Date” means March 31, 2017.

 

“Obligations”
means all debt, principal, interest, Bank Expenses and other amounts owed to Bank by Borrower pursuant to this Agreement, the
other 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, Bank 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.

 

“One
Month Recurring Revenue Amount” means, with respect to a given stream of recurring revenue, the amount of recurring
revenue expected for a period of one month.

 

    	 	Exhibit A
6
	 

     

    

 

“Overadvance”
means as of any date of determination, that (a) the sum of (i) the aggregate outstanding Advances on any date and (ii)
the aggregate undrawn amount under all Letters of Credit outstanding on such date exceeds (b) the lesser of (i) the Revolving
Line or (ii) the Borrowing Base plus the Non-Formula Sublimit Amount in effect on such date.

 

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

 

“Payment/Advance
Form” shall be a form substantially similar to Exhibit C attached hereto, with appropriate insertions.

 

“Periodic
Payments” means all installments or similar recurring payments that Borrower may now or hereafter become obligated to
pay to Bank pursuant to the terms and provisions of any instrument, or agreement now or hereafter in existence between Borrower
and Bank.

 

“Permitted
Indebtedness” means:

 

	(a)	Indebtedness
    of Borrower in favor of Bank;
	 	 
	(b)	Indebtedness
    existing on the Closing Date and disclosed in the Disclosure Schedules;
	 	 
	(c)	(i)
    The IBM Indebtedness and such, (ii) other Indebtedness similar Indebtedness
    in an amount not to exceed $2,000,000 in the aggregate over the term of this Agreement for the purpose of equipment financing
    to the extent Bank provides prior written approval of such Indebtedness, and (iii) such other Indebtedness incurred solely
    for the purpose of financing the acquisition or lease of such Equipment in an amount not to exceed $250,000 in the aggregate
    in any fiscal year of Borrower secured by a lien described in clause (c) of the defined term “Permitted Liens”;
    provided that in each case, such Indebtedness does not exceed the lesser of the cost or fair market value of the equipment
    financed with such Indebtedness;
	 	 
	(d)	Subordinated
    Debt;
	 	 
	(e)	Indebtedness
    to trade creditors incurred in the ordinary course of business;
	 	 
	(f)	Indebtedness
    not exceeding $100,000 in the aggregate with respect to surety bonds and similar obligations incurred in the ordinary course
    of business;
	 	 
	(g)	Indebtedness
    arising with respect to customary indemnification and purchase price adjustment obligations incurred in connection with Permitted
    Transfers ;
	 	 
	(h)	Indebtedness
    to the extent it is described in clause (i) of the defined term “Permitted Investments”;
	 	 
	(i)	Indebtedness
    in the form of the obligation to reimburse or prepay any bank or other Person in respect to amounts paid under a letter of
    credit, banker’s acceptance, or similar instruments, whether drawn or undrawn; and
	 	 
	(j)	Extensions,
    refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the
    terms modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.

 

“Permitted
Investment” means: Investments existing on the Closing Date disclosed in the Disclosure Schedules;

 

	(a)	(i)
    Marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State
    thereof maturing within one year from the date of acquisition thereof, (ii) commercial paper maturing no more than one year
    from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s
    Corporation or Moody’s Investors Service, (iii) Bank’s certificates of deposit maturing no more than one year
    from the date of investment therein, and (iv) Bank’s deposit and money market accounts;

 

    	 	Exhibit A
7
	 

     

    

 

	(b)	Repurchases
    of stock from current or former employees, contractors or directors of Borrower under the terms of applicable repurchase agreements
    (i) in an aggregate amount not to exceed $100,000 in any fiscal year, provided that no Event of Default has occurred,
    is continuing or would exist after giving effect to the repurchases, or (ii) in any amount where the consideration for the
    repurchase is the cancellation of indebtedness owed by such employees, contractors or directors to Borrower regardless of
    whether an Event of Default exists;
	 	 
	(c)	Investments
    accepted in connection with Permitted Transfers;
	 	 
	(d)	Investments
    of Subsidiaries in or to other Subsidiaries or Borrower and Investments by Borrower in Subsidiaries not to exceed $100,000
    in the aggregate in any fiscal year;
	 	 
	(e)	Investments
    not to exceed $100,000 in the aggregate in any fiscal year consisting of (i) travel advances and employee relocation loans
    and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors
    relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plan agreements
    approved by Borrower’s Board of Directors;
	 	 
	(f)	Investments
    (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in
    settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of
    Borrower’s business;
	 	 
	(g)	Investments
    consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not
    Affiliates, in the ordinary course of business, provided that this subparagraph (h) shall not apply to Investments of Borrower
    in any Subsidiary; and
	 	 
	(h)	Joint
    ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non-exclusive licensing
    of technology, the development of technology or the providing of technical support, provided that any cash Investments by
    Borrower do not exceed $100,000 in the aggregate in any fiscal year.

 

“Permitted
Liens” means the following:

 

	(a)	Any
    Liens existing on the Closing Date and disclosed in the Disclosure Schedules (excluding Liens to be satisfied with the proceeds
    of the Advances) and any Liens in favor of Bank;
	 	 
	(b)	Liens
    for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith
    by appropriate proceedings and for which Borrower maintains adequate reserves, provided the same have no priority over any
    of Bank’s security interests;
	 	 
	(c)	Liens
    securing the IBM Indebtedness and Liens securing such other Indebtedness not to exceed $250,000 in the aggregate at
    any time (i (i) the IBM Indebtedness to the extent such Liens are subject to a subordination agreement in favor
    of Bank, in form and substance reasonably satisfactory to Bank, (ii) the Indebtedness permitted pursuant to clause (c)(ii)
    of the definition of Permitted Indebtedness, and (iii) the Indebtedness permitted pursuant to clause (c)(iii) of the definition
    of Permitted Indebtedness, in each case (y) upon or in any Equipment acquired or held by Borrower or any of its Subsidiaries
    to secure the purchase price of such Equipment or indebtedness incurred solely for the purpose of financing the acquisition
    or lease of such Equipment, or (iiz) existing on such Equipment at the time of its acquisition, provided
    that the Liens are confined solely to the property so acquired and improvements thereon, and the proceeds of such Equipment;
	 	 
	(d)	Liens
    securing Subordinated Debt;

 

    	 	Exhibit A
8
	 

     

    

 

	(e)	Liens
    incurred in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described
    in clauses (a) through (d) above, provided that any extension, renewal or replacement Lien shall be limited to the property
    encumbered by the existing Lien and the principal amount of the indebtedness being extended, renewed or refinanced does not
    increase;
	 	 
	(f)	Liens
    arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Sections 8.5
    or 8.9;
	 	 
	(g)	Liens
    in favor of other financial institutions arising in connection with Borrower’s deposit accounts held at such institutions
    to secure standard fees for deposit services charged by, but not financing made available by such institutions, provided that
    Bank has a perfected security interest in the amounts held in such deposit accounts;
	 	 
	(h)	non-exclusive
    licenses of Intellectual Property granted to third parties in the ordinary course of business and other licenses of property
    that may be exclusive in one or more respects but do not result in a transfer of title to the underlying licensed property;
	 	 
	(i)	the
    interests of licensors under licenses;
	 	 
	(j)	Liens
    to secure payment of worker’s compensation, employment insurance, old age pensions or other social security obligations
    of Borrower in the ordinary course of business;
	 	 
	(k)	Liens,
    deposits and pledges to secure the performance of bids, tenders, contracts (other than contracts for the payment of money),
    public or statutory obligations, surety, stay, appeal, indemnity, performance or other similar bonds or other similar obligations
    arising in the ordinary course of business; and
	 	 
	(l)	Liens
    in the form of cash deposited with owners/lessors of premises that Borrower leases in the ordinary course of business.

 

“Permitted
Transfer” means the conveyance, sale, lease, sale-leaseback, transfer or disposition by Borrower or any Subsidiary of:

 

	(a)	Inventory
    in the ordinary course of business;
	 	 
	(b)	Non-exclusive
    licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries in the ordinary course of business
    and other licenses of property that may be exclusive in one or more respects but do not result in a transfer of title to the
    underlying licensed property;
	 	 
	(c)	Worn-out,
    surplus or obsolete Equipment;
	 	 
	(d)	Permitted
    Liens and Permitted Investments; or
	 	 
	(e)	Other
    assets of Borrower or its Subsidiaries that do not in the aggregate exceed $100,000 during any fiscal year.

 

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

 

“Prime
Rate” means the variable rate of interest, per annum, set forth in the “Money Rates” section of the Wall
Street Journal as the “prime rate.”

 

“Prohibited
Territory” means any person or country listed by the Office of Foreign Assets Control of the United States Department
of Treasury as to which transactions between a United States Person and that territory are prohibited.

 

    	 	Exhibit A
9
	 

     

    

 

“Regulatory
Change” means, with respect to Bank, any change on or after the date of this Agreement in United States federal, state,
or foreign laws or regulations, or the adoption or making on or after such date of any interpretations, directives, or requests
applying to a class of lenders including Bank, of or under any United States federal or state, or any foreign laws or regulations
(whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or
administration thereof.

 

“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.

 

“Reserve
Requirement” means, for any Interest Period, the average maximum rate at which reserves (including any marginal, supplemental,
or emergency reserves) are required to be maintained during such Interest Period under Regulation D against “Eurocurrency
liabilities” (as such term is used in Regulation D) by member banks of the Federal Reserve System. Without limiting the
effect of the foregoing, the Reserve Requirement shall reflect any other reserves required to be maintained by Bank by reason
of any Regulatory Change against (a) any category of liabilities which includes deposits by reference to which the LIBOR Rate
is to be determined as provided in the definition of “LIBOR” or (b) any category of extensions of credit or other
assets which include Advances.

 

“Responsible
Officer” means each of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the
Controller of Borrower.

 

“Revolving
Line” means a Credit Extension of up to $7,500,000, or such greater amount agreed to by Bank pursuant to Section
2.1(c) hereof.

 

“Revolving
Line Maturity Date” meansApril 14 December 31,2018 2017.

 

“Shares”
means (i) 65% of the issued and outstanding capital stock, membership units or other securities owned or held of record by Borrower
in any Subsidiary of Borrower which is not an entity organized under the laws of the United States or any territory thereof, and
(ii) 100% of the issued and outstanding capital stock, membership units or other securities owned or held of record by Borrower
in any Subsidiary or Borrower which is an entity organized under the laws of the United States or any territory thereof.

 

“SOS
Reports” means the official reports from the Secretary of State of the Borrower State and from all other applicable
federal, state or local government offices identifying all current security interests and Liens of record filed against the Collateral
as of the date of such report.

 

“Subordinated
Debt” means any debt incurred by Borrower that is subordinated in writing to the debt owing by Borrower to Bank on terms
reasonably acceptable to Bank (and identified as being such by Borrower and Bank).

 

“Subsidiary”
means any corporation, partnership or limited liability company or joint venture in which (i) any general partnership interest
or (ii) more than 50% of the stock, limited liability company interest or joint venture of which by the terms thereof ordinary
voting power to elect the Board of Directors, managers or trustees of the entity, at the time as of which any determination is
being made, is owned by Borrower, either directly or through an Affiliate.

 

“Trademarks”
means any trademark and servicemark rights, whether registered or not, applications to register (other than “intent to use”
applications until a verified statement of use is filed with respect to such application) and registrations of the same and like
protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.

 

    	 	Exhibit A
10
	 

     

    

 

	DEBTOR	NTN
    BUZZTIME, INC.
	 	 
	SECURED
    PARTY:	EAST
    WEST BANK

 

EXHIBIT
B

 

COLLATERAL
DESCRIPTION ATTACHMENT TO LOAN AND SECURITY AGREEMENT

 

All
personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether presently
existing or hereafter created or acquired, and wherever located, including, but not limited to:

 

	(a)	all
    accounts (including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), deposit
    accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), general
    intangibles (including payment intangibles and software), goods (including fixtures), instruments (including promissory notes),
    inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including returns
    and repossessions), investment property (including securities and securities entitlements), letter of credit rights, money,
    and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment containing
    said books and records;
	 	 
	(b)	All
    present and future United States registered copyrights and copyright registrations (including all of the exclusive rights
    afforded a copyright registrant in the United States under 17 U.S.C. Section 106 and any exclusive rights which may in the
    future arise by act of Congress or otherwise), and all present and future applications for copyright registrations (including
    applications for copyright registrations of derivative works and compilations) (collectively, “Registered Copyrights”),
    and any and all royalties, payments and other amounts payable to Borrower in connection with Registered Copyrights, together
    with all renewals and extensions of Registered Copyrights, the right to recover for all past, present and future infringements
    of Registered Copyrights, and all computer programs and tangible property embodying or incorporating Registered Copyrights,
    and all other rights of every kind whatsoever accruing thereunder or pertaining thereto;
	 	 
	(c)	All
    present and future copyrights, computer programs and other rights subject to (or capable of becoming subject to) United States
    copyright protection which are not registered in the United States Copyright Office (collectively, “Unregistered
    Copyrights”), whether now owned or hereafter acquired, and any and all royalties, payments, and other amounts payable
    to Borrower in connection with Unregistered Copyrights, together with all renewals and extensions of Unregistered Copyrights,
    the right to recover for all past, present and future infringements of Unregistered Copyrights, and all computer programs
    and all tangible property embodying or incorporating Unregistered Copyrights, and all other rights of every kind whatsoever
    accruing thereunder or pertaining thereto.
	 	 
	(d)	All
    trademark and servicemark rights, whether registered or not, applications to register (other than “intent to use”
    applications until a verified statement of use is filed with respect to such application) and registrations of the same and
    like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.
	 	 
	(e)	all
    (i) patents and patent applications filed in the United States Patent and Trademark Office or any similar office of any foreign
    jurisdiction, and interests under patent license agreements, including, without limitation, the inventions and improvements
    described and claimed therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii) income,
    royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or payable under and with respect
    thereto, including, without limitation, damages and payments for past, present or future infringements thereof, (iv) right
    (but not the obligation) to sue in the name of Debtor and/or in the name of Secured Party for past, present and future infringements
    thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such patents have been issued
    or applied for, and (vi) reissues, divisions, continuations, renewals, extensions and continuations-in-part with respect to
    any of the foregoing; and

 

    	 	Exhibit B
1
	 

     

    

 

	(f)	any
    and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds,
    and all supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given
    to them in the California Uniform Commercial Code, as amended or supplemented from time to time.

 

Notwithstanding
the foregoing, the Collateral shall not include any of the following: (i) all leasehold interests in real property, (ii) equity
interests in any foreign Subsidiaries in excess of 65% of the voting stock in such Subsidiaries, (iii) any permit or license issued
to Borrower, any document, instrument or agreement of Borrower and any general intangibles (whether owned or held as licensee
or lessee or otherwise) or other property of Borrower, in each case, only to the extent and for so long as the grant or existence
of a security interest in such permit, license, document, instrument, agreement. general intangible or other property is prohibited,
would give another person the right to terminate Borrower’s rights, accelerate Borrower’s obligations, or otherwise
alter Borrower’s rights, titles, interests or obligations thereunder (including upon the giving of notice or the lapse of
time or both) (other than to the extent that any such prohibition would be rendered ineffective pursuant to Sections 9406, 9407,
9408 or 9409 of the Code or any other applicable law or principles of equity), (iv) any asset or property that is subject to a
Permitted Lien of the type described in clause (c) of the definition of Permitted Lien, to the extent that the documents, instruments
or agreements relating to such Lien would not permit such asset or property to be subject to the security interests created hereby
(other than to the extent that any such restriction in any such document would be rendered ineffective pursuant to Sections 9406,
9407, 9408 or 9409 of the Code or any other applicable law or principles of equity), and (v) any “intent to use” trademarks.

 

    	 	Exhibit B
2
	 

     

    

 

EXHIBIT
C

 

LOAN
ADVANCE/PAYDOWN REQUEST FORM

 

DEADLINE
FOR SAME BUSINESS-DAY PROCESSING IS 1:00 P.M., Pacific Time

 

	To:	Alexis
    Coyle (alexis.coyle@eastwestbank.com)	Date:	 
	Copy:	Gregory
    Peterson (gregory.peterson@eastwestbank.com)	 	 
	FAX
    #:	(415)
    986-0847	 	 

 

FROM

 

	Borrower’s
    Name:	NTN
    Buzztime, Inc.	 	 
	 	 	 	 
	 	Authorized
    Signer’s Name:	 	 
	 	 	 	 
	 	Authorized
    Signature:	 	 
	 	 	 	 

 

All
representations and warranties of Borrower stated in the Loan and Security Agreement are true and correct in all material respects
as of the date of the telephone or email request for an Advance confirmed by this Loan Advance/Paydown Request Form; provided,
however, that those representations and warranties expressly referring to another date shall be true and correct in all material
respects as of such date.

 

	DRAWDOWN	 	 	PAYDOWN	 
	 	 	 	 	 
	 	 	 	 	 	 	 
	FROM
    LOAN #:	 	 	 	FROM
    ACCOUNT #:	 	 
	 	 	 	 	 	 	 
	TO
    ACCOUNT #	 	 	 	TO
    LOAN#:	 	 
	 	 	 	 	 	 	 
	AMOUNT:	 	 	 	PRINCIPAL
    AMOUNT:	 	 
	 	 	 	 		 	 
	 	 	 	 	INTEREST
    AMOUNT:	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

*IS
THERE A WIRE REQUEST TIED TO THIS LOAN ADVANCE? (PLEASE CIRCLE ONE) YES NO

 

If
YES, the Outgoing Wire Transfer Instructions must be completed below.

 

	OUTGOING
    WIRE TRANSFER INSTRUCTIONS	Fed
    Reference Number	Bank
    Transfer Number
	The
    items marked with an asterisk (*) are required to be completed.
	*Beneficiary
    Name	 
	*Beneficiary
    Account Number	 
	*Beneficiary
    Address	 
	Amount	[SAME
    AS AMOUNT OF DRAWDOWN ABOVE]
	*Routing
    Number (ABA/SWIFT/IBAN)	 
	*Receiving
    Institution Name	 
	*Receiving
    Institution Address	 
	Other
    Instructions	 
	 	 	 	 

  

    	 	Exhibit C

 1	 

    	 

    

 

EXHIBIT
D

BORROWING BASE CERTIFICATE

 

Measurement
Period Ending [____ __, 20__]

 

Borrower:
NTN Buzztime, Inc.

 

	Availability Amount:	The lesser of (a) $7,500,000 (or such greater amount agreed to by Bank pursuant to
    Section 2.1(c) hereof) less the aggregate outstanding principal amount of the Advances made under Section 2.1(b) of the Loan
    Agreement or (b) the product of (i) the average Monthly Recurring Revenue for the immediately preceding three month period;
    times (ii) one plus the Borrower’s average Churn Rate for the immediately preceding three month period; times (iii)
    300%.

  

Availability
Amount Calculation:

 

	1.	Non-Formula
    Sublimit Amount in effect as of the date above	 	$__[2,000,000][0]____
	 	 	 	 
	2.	1.Average
    Monthly Recurring Revenue for the immediately preceding 3 months	 	$_________________
	 	 	 	 
	3.	2.One
    plus the Borrower’s average Churn Rate (not to exceed 0) for the immediately preceding three month period	 	_________________%
	 	 	 	 
	34.	300%	 	300%
	 	 	 	 
	45.	Line
    1 times plus (Line 2 times Line 3 times Line 4)	 	$__________________
	 	 	 	 
	56.	Revolving
    Line Commitment amount:	 	$[7,500,000]1
	 	 	 	 
	67.	Total
    Availability (the lessor of Line 45 and Line 56)	 	$
    _________________
	 	 	 	 
	78.	The
    aggregate principal amount of the Advances made under Section 2.1(b) then outstanding	 	$
    _________________
	 	 	 	 
	89.	Net
    Availability (Line 67 minus Line 78)	 	$
    _________________

 

The
undersigned represents and warrants to East West Bank the accuracy of the foregoing calculations.

 

	 	BORROWER:
	 	 
	 	NTN
    BUZZTIME, INC.,
	 	a
    Delaware corporation
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

 

1
Revolving Line Commitment amount may be increased in accordance with Section 2.1(c) of the Loan Agreement

  

    Exhibit
D	 	1	 

    	 	 	 

    

 

EXHIBIT
E

 

COMPLIANCE
CERTIFICATE

 

TO:
EAST WEST BANK

 

FROM:
NTN BUZZTIME, INC.

 

The
undersigned authorized officer of NTN Buzztime, Inc., a Delaware corporation (Borrower”), for and on behalf of Borrower,
hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement dated as of April 14, 2015
by and between Bank and Borrower (the “Agreement”), (i) Borrower is in complete compliance for the period ending
_______________ with all required covenants except as noted below and (ii) except as noted below all representations and warranties
of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof except that those representations
and warranties referring to another date shall be true and correct in all material respects on that other date. Attached hereto
are the required documents supporting the above certification. The summary descriptions in the Reporting Covenants below are qualified
by, and subject to, the terms of the Agreement.

 

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

 

	Reporting
    Covenant	Required	Complies
	 	 	 	 
	Annual
    audited consolidated and consolidating financial statements and Compliance Certificate	FYE
    within 180 days	Yes	No
	 	 	 	 
	Monthly
    balance sheet , income statements and statements of cash (Borrower prepared)	Monthly
    within 30 days after each month	Yes	No
	 	 	 	 
	Recurring
    revenue report	Monthly
    within 30 days after each month	Yes	No
	 	 	 	 
	Annual
    financial projections	Annually,
    within 45 days after the start of each fiscal year	Yes	No
	 	 	 	 
	Compliance
    Certificate	Monthly
    within 30 days after each month	Yes	No
	 	 	 	 
	Financial
    Covenants	Required	Complies
	 	 	 
	Minimum
    Adjusted EBITDA	$_______2	Yes	No
	 	 	 	 
	Churn
    Rate – one month period	Not
    < -1%	Yes	No
	 	 	 	 
	Churn
    Rate – trailing three month period	Not
    < -2%	Yes	No
	 	 	 	 
	Minimum
    Cash Amount	$_______3	Yes	No
	 	 	 	 
	Minimum
    Liquidity	$2,000,000	Yes	No

 

	Comments
    Regarding Exceptions: See Attached.	 	BANK
    USE ONLY
	 	 	 	 
	 	 	Verified:	 
	SIGNATURE	 	AUTHORIZED
    SIGNER
	 	 	 	 
	 	 	Date:	 
	TITLE	 	 	 

 

	 	 	Compliance
    Status	Yes	No
	 	 	 	 
	DATE	 	 	 

 

 

2
Insert applicable amount pursuant to Section 6.7(a).

 

3
Insert applicable amount pursuant to Section 6.7(c).

  

    	 	Exhibit
E

1	 

    	 	 	 

    

 

EXHIBIT
F

 

LIBOR
LOAN CONTINUATION CERTIFICATE

 

The
undersigned hereby certifies as follows:

 

I,
___________________, am the duly elected and acting ________________ of NTN Buzztime, Inc., a Delaware corporation (“Borrower”).

 

This
LIBOR Loan Continuation Certificate (this “Certificate”) is delivered by Borrower to East West Bank (“Bank”)
pursuant to the Loan and Security Agreement dated as of April 14, 2015 by and among Borrower and Bank (as amended, restated, supplemented
or otherwise modified from time to time, the “Loan Agreement”). The terms used herein that are defined in the
Loan Agreement have the same respective meanings herein as ascribed to them in the Loan Agreement.

 

Borrower
requests on ______________, 201_ a LIBOR Loan (the “Loan”) as follows:

 

(a)
A continuation of an existing LIBOR Loan.

 

(b)
The date on which the Loan is to be continued is _____________________, 201__.

 

(c)
The amount of the Loan is to be ___________________ ($____________), for an Interest Period of: (select one) [1 month ] [2 months]
[3 months] [6months].

 

All
representations and warranties stated in the Loan Agreement are true, correct and complete in all material respects as of the
date of this Certificate; provided, however, that those representations and warranties expressly referring to another date
shall be true, correct and complete in all material respects as of such date.

 

IN
WITNESS WHEREOF, this Certificate is executed by the undersigned as of this _____________ day of ____________________,
201_.

 

	 	NTN
    BUZZTIME, INC.,
	 	a
    Delaware corporation
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

For
Internal Use Only

 

	LIBOR
    Pricing Date	 	LIBOR
    Rate	 	LIBOR
    Rate Variance	 	Maturity
    Date
	 	 	 	 	____	%	 

 

Disclosure
Schedules

 

    	 	Exhibit F

1	 

    	 	 	 

    

 

DISCLOSURE
SCHEDULE EXHIBIT A

 

Permitted
Indebtedness

 

None,
except as publicly disclosed.

 

Disclosure
Schedules

 

    	 	 	 

    	 	 	 

    

 

DISCLOSURE
SCHEDULE EXHIBIT A

 

Permitted
Investments

 

None,
except as publicly disclosed.

 

Disclosure
Schedules

 

    	 	 	 

    	 	 	 

    

 

DISCLOSURE
SCHEDULE EXHIBIT A

 

Permitted
Liens

 

None,
except as publicly disclosed.

 

Disclosure
Schedules

 

    	 	 	 

    	 	 	 

    

 

DISCLOSURE
SCHEDULE 5.5

 

Prior
Names

 

Incorporated
on April 13, 1984 as Alroy Industries, Inc.

 

Amended
certificate of incorporation to change name to NTN Communications, Inc. effective Nov. 13, 1996.

 

Amended
certificate of incorporation to change name to NTN Buzztime, Inc. effective Dec. 28, 2005.

 

Disclosure
Schedules

 

    	 	 	 

    	 	 	 

    

 

DISCLOSURE
SCHEDULE 5.6

 

Litigation

 

None,
except as publicly disclosed.

 

Disclosure
Schedules

 

    	 	 	 

    	 	 	 

    

 

DISCLOSURE
SCHEDULE 5.13

 

Inbound
Licenses

 

None,
except as publicly disclosed.

 

Disclosure
Schedules

 

    	 	 	 

    	 	 	 

    

 

DISCLOSURE
SCHEDULE 7.10

 

Inventory
and Equipment

 

	 	●	Ohio
    Warehouse
	 	 	4138
    Weaver Court, East Hilliard, OH 43026
	 	 	Mid-Ohio
    Development Corporation – Landlord
	 	 	Property
    at premises: customer site equipment (PCs, tablets, playmakers, Wi-Fi’s, and other peripheral equipment)
	 	 	 
	 	●	Stump
    Trivia Office
	 	 	14
    New England Executive Park, Burlington, MA 01903
	 	 	Regus
    - Landlord
	 	 	Property
    at premises: desks and PCs/laptops for 2 – 3 people)
	 	 	 
	 	●	Stump
    Trivia Office
	 	 	May
    1, 2015 estimated start of lease
	 	 	159
    Overland Road, Waltham, MA 02451
	 	 	Source
    Code Corporation – Sublessor; ABC Commercial Properties - Landlord
	 	 	Property
    at premises: desks and PCs/laptops for 2 – 3 people)
	 	 	 
	 	●	Data
    Center
	 	 	CenturyLink
	 	 	17838
    Gillette Ave., Irvine, CA 92614
	 	 	Property
    at premises: production servers, switches and firewall currently at facility. Within the next three months, the production
    data warehouse and development environment servers will also be located at facility.

 

Disclosure
Schedules

 

    	 	 	 

    	 	 	 

    

 

DISCLOSURE
SCHEDULE EXHIBIT B

 

Excluded
Equipment

 

None,
except as publicly disclosed.

 

Disclosure
SchedulesTHIS
WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS
OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER
THAT SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
This warrant must be surrendered to the coMPANY or its transfer agent as a condition precedent
to the sale, transfer, pledge or hypothecation of any interest in any of the securities represented hereby.

 

WARRANT
TO PURCHASE SHARES OF COMMON STOCK

of

TEARLAB
CORPORATION

 

Dated
as of April 7, 2016

Void
after the date specified in Section 8

 

	 	Warrant
                                         to Purchase

        [  ]
        Shares of

        Common
        Stock

        (subject
        to adjustment)

 

THIS
CERTIFIES THAT, for value received, [  ], or its registered assigns (the “Holder”), is entitled,
subject to the provisions and upon the terms and conditions set forth herein, to purchase from Tearlab Corporation, a Delaware
corporation (the “Company”), shares of the Company’s common stock, $0.001 par value per share
(the “Shares”), in the amounts, at such times and at the price per share set forth in Section 1. The
term “Warrant” as used herein shall include this Warrant and any warrants delivered in substitution
or exchange therefor as provided herein. This Warrant is issued in connection with the transactions described in the Term Loan
Agreement, dated as of March 4, 2015, by and between the Company, the Subsidiary Guarantors party thereto, and Capital Royalty
Partners II L.P., Capital Royalty Partners II – Parallel Fund “A” L.P. and Parallel Investment Opportunities
Partners II L.P., as amended.

 

The
following is a statement of the rights of the Holder and the conditions to which this Warrant is subject, and to which Holder,
by acceptance of this Warrant, agrees:

 

1.Number
and Price of Shares; Exercise Period.

 

(a)Number
of Shares. Subject to any previous exercise of the Warrant, the Holder shall have the right to purchase up to [  ]
Shares, as may be adjusted pursuant hereto prior to (or in connection with) the expiration of this Warrant as provided in Section
8.

 

(b)Exercise
Price. The exercise price per Share shall be equal to $1.50, subject to adjustment pursuant hereto (the “Exercise
Price”).

 

    	 	 

    	 

    

 

(c)Exercise
Period. This Warrant shall be exercisable, in whole or in part, prior to (or in connection with) the expiration of this
Warrant as set forth in Section 8.

 

2.Exercise
of the Warrant.

 

(a)Exercise.
The purchase rights represented by this Warrant may be exercised at the election of the Holder, in whole or in part, in
accordance with Section 1, by:

 

(i)the
tender to the Company at its principal office (or such other office or agency as the Company may designate) of a notice of exercise
in the form of Exhibit A (the “Notice of Exercise”), duly completed and executed by or on behalf of
the Holder, together with the surrender of this Warrant; and

 

(ii)the
payment to the Company of an amount equal to (x) the Exercise Price multiplied by (y) the number of Shares being purchased, by
wire transfer or certified, cashier’s or other check acceptable to the Company and payable to the order of the Company.

 

(b)Net
Issue Exercise. In lieu of exercising this Warrant pursuant to Section 2(a)(ii), if the fair market value of one Share
is greater than the Exercise Price (at the date of calculation as set forth below), the Holder may elect to receive a number of
Shares equal to the value of this Warrant (or of any portion of this Warrant being canceled) by surrender of this Warrant at the
principal office of the Company (or such other office or agency as the Company may designate) together with a properly completed
and executed Notice of Exercise reflecting such election, in which event the Company shall issue to the Holder that number of
Shares computed using the following formula:

 

	X	=	Y
    (A – B)
	 	 	A

 

Where:

 

	 	X	=	The
    number of Shares to be issued to the Holder
	 	 	 	 
	 	Y	=	The
    number of Shares purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the
    Warrant being canceled (at the date of such calculation)
	 	 	 	 
	 	A	=	The
    fair market value of one Share (at the date of such calculation)
	 	 	 	 
	 	B	=	The
    Exercise Price (as adjusted to the date of such calculation)

 

For
purposes of the calculation above, the fair market value of one Share shall be determined by the Board of Directors of the Company,
acting in good faith; provided, however, that where a public market exists for the Company’s common stock at the
time of such exercise, the fair market value per Share shall be the average of the closing bid prices of the common stock or the
closing price quoted on the national securities exchange on which the common stock is listed as published in the Wall Street
Journal, as applicable, for the ten (10) trading day period ending five (5) trading days prior to the date of determination
of fair market value.

 

    	 	- 2
                                                                                                                                                                                                                                                                 -	 

    	 

    

 

(c)Stock
Certificates. The rights under this Warrant shall be deemed to have been exercised and the Shares issuable upon such exercise
shall be deemed to have been issued immediately prior to the close of business on the date this Warrant is exercised in accordance
with its terms, and the person entitled to receive the Shares issuable upon such exercise shall be treated for all purposes as
the holder of record of such Shares as of the close of business on such date. As promptly as reasonably practicable on or after
such date, the Company shall issue and deliver to the person or persons entitled to receive the same a certificate or certificates
for that number of shares issuable upon such exercise. In the event that the rights under this Warrant are exercised in part and
have not expired, the Company shall execute and deliver a new Warrant reflecting the number of Shares that remain subject to this
Warrant.

 

(d)No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of the rights under this Warrant. In lieu of such fractional share to which the Holder would otherwise be entitled, the Company
shall make a cash payment equal to the Exercise Price multiplied by such fraction.

 

(e)Conditional
Exercise. The Holder may exercise this Warrant conditioned upon (and effective immediately prior to) consummation of any
transaction that would cause the expiration of this Warrant pursuant to Section 8 by so indicating in the notice of exercise.

 

(f)Reservation
of Stock. The Company agrees during the term the rights under this Warrant are exercisable to reserve and keep available
from its authorized and unissued shares of common stock of the Company for the purpose of effecting the exercise of this Warrant
such number of shares as shall from time to time be sufficient to effect the exercise of the rights under this Warrant; and if
at any time the number of authorized but unissued shares of common stock shall not be sufficient for purposes of the exercise
of this Warrant in accordance with its terms, without limitation of such other remedies as may be available to the Holder, the
Company will use all reasonable efforts to take such corporate action as may be necessary to increase its authorized and unissued
shares of common stock of the Company to a number of shares as shall be sufficient for such purposes. The Company represents and
warrants that all shares that may be issued upon the exercise of this Warrant will, when issued in accordance with the terms hereof,
be validly issued, fully paid and nonassessable.

 

3.Replacement
of the Warrant. Subject to the receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably
satisfactory in form and substance to the Company or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at the expense of the Holder shall execute and deliver, in lieu of this Warrant, a new warrant of like tenor and amount.

 

4.Transfer
of the Warrant.

 

(a)Warrant
Register. The Company shall maintain a register (the “Warrant Register”) containing the name
and address of the Holder or Holders. Until this Warrant is transferred on the Warrant Register in accordance herewith, the Company
may treat the Holder as shown on the Warrant Register as the absolute owner of this Warrant for all purposes, notwithstanding
any notice to the contrary. Any Holder of this Warrant (or of any portion of this Warrant) may change its address as shown on
the Warrant Register by written notice to the Company requesting a change.

 

(b)Warrant
Agent. The Company may appoint an agent for the purpose of maintaining the Warrant Register referred to in Section 4(a),
issuing the Shares or other securities then issuable upon the exercise of the rights under this Warrant, exchanging this Warrant,
replacing this Warrant or conducting related activities.

 

    	 	- 3
                                                                                                                                                                                                                                                                 -	 

    	 

    

 

(c)Transferability
of the Warrant. Subject to the provisions of this Warrant with respect to compliance with the Securities Act of 1933,
as amended (the “Securities Act”) and limitations on assignments and transfers, including without limitation
compliance with the restrictions on transfer set forth in Section 5, title to this Warrant may be transferred by endorsement (by
the transferor and the transferee executing the assignment form attached as Exhibit B (the “Assignment Form”))
and delivery in the same manner as a negotiable instrument transferable by endorsement and delivery.

 

(d)Exchange
of the Warrant upon a Transfer. On surrender of this Warrant (and a properly endorsed Assignment Form) for exchange, subject
to the provisions of this Warrant with respect to compliance with the Securities Act and limitations on assignments and transfers,
the Company shall issue to or on the order of the Holder a new warrant or warrants of like tenor, in the name of the Holder or
as the Holder (on payment by the Holder of any applicable transfer taxes) may direct, for the number of shares issuable
upon exercise hereof, and the Company shall register any such transfer upon the Warrant Register. This Warrant (and the securities
issuable upon exercise of the rights under this Warrant) must be surrendered to the Company or its warrant or transfer agent,
as applicable, as a condition precedent to the sale, pledge, hypothecation or other transfer of any interest in any of the securities
represented hereby.

 

(e)Taxes.
In no event shall the Company be required to pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of any certificate in a name other than that of the Holder, and the Company shall not be required to issue
or deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid or is not payable.

 

5.Restrictions
on Transfer of the Warrant and Shares; Compliance with Securities Laws. By acceptance of this Warrant, the Holder
agrees to comply with the following:

 

(a)Restrictions
on Transfers. Subject to Section 5(b), this Warrant may not be transferred or assigned in whole or in part without the
Company’s prior written consent (which shall not be unreasonably withheld), and any attempt by Holder to transfer or assign
any rights, duties or obligations that arise under this Warrant without such permission shall be void. Any transfer of this Warrant
or the Shares (the “Securities”) must be in compliance with all applicable federal and state securities
laws. The Holder agrees not to make any sale, assignment, transfer, pledge or other disposition of all or any portion of the Securities,
or any beneficial interest therein, unless and until the transferee thereof has agreed in writing for the benefit of the Company
to take and hold such Securities subject to, and to be bound by, the terms and conditions set forth in this Warrant to the same
extent as if the transferee were the original Holder hereunder, and

 

(i)there
is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is
made in accordance with such registration statement, or

 

(ii)(A)
such Holder shall have given prior written notice to the Company of such Holder’s intention to make such disposition and
shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition, (B)
the transferee shall have confirmed to the satisfaction of the Company in writing, substantially in the form of Exhibit A-1, that
the Securities are being acquired (i) solely for the transferee’s own account and not as a nominee for any other party,
(ii) for investment and (iii) not with a view toward distribution or resale, and shall have confirmed such other matters related
thereto as may be reasonably requested by the Company, and (C) if requested by the Company, such Holder shall have furnished the
Company, at the Holder’s expense, with (i) evidence reasonably satisfactory to the Company that such disposition will not
require registration of such Securities under the Securities Act or (ii) a “no action” letter from the Securities
and Exchange Commission to the effect that the transfer of such Securities without registration will not result in a recommendation
by the staff of the Securities and Exchange Commission that action be taken with respect thereto, whereupon such Holder shall
be entitled to transfer such Securities in accordance with the terms of the notice delivered by the Holder to the Company.

 

    	 	- 4
                                                                                                                                                                                                                                                                 -	 

    	 

    

 

(b)Permitted
Transfers. Permitted transfers with respect to Section 5(a) include (i) a transfer not involving a change in beneficial
ownership, or (ii) transactions involving the distribution without consideration of Securities by any Holder to (x) a parent,
subsidiary or other affiliate of a Holder that is a corporation, (y) any of the Holder’s partners, members or other equity
owners, or retired partners or members, or to the estate of any of its partners, members or other equity owners or retired partners
or members, or (z) a venture capital fund that is controlled by or under common control with one or more general partners or managing
members of, or shares the same management company with, the Holder; provided, however, that the Holder may not effect a
transfer under this Section 5(b) to any entity reasonably determined by the Company to be a competitor of the Company and that,
in each case, the Holder shall give written notice to the Company of the Holder’s intention to effect such disposition and
shall have furnished the Company with a detailed description of the manner and circumstances of the proposed disposition.

 

(c)Investment
Representation Statement. Unless the rights under this Warrant are exercised pursuant to an effective registration statement
under the Securities Act that includes the Shares with respect to which the Warrant was exercised, it shall be a condition to
any exercise of the rights under this Warrant that the Holder shall have confirmed to the satisfaction of the Company in writing,
substantially in the form of Exhibit A-1, that the Shares so purchased are being acquired solely for the Holder’s own account
and not as a nominee for any other party, for investment and not with a view toward distribution or resale and that the Holder
shall have confirmed such other matters related thereto as may be reasonably requested by the Company.

 

(d)Securities
Law Legend. The Securities shall (unless otherwise permitted by the provisions of this Warrant) be stamped or imprinted
with a legend substantially similar to the following (in addition to any legend required by state securities laws):

 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED
EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS IN ACCORDANCE WITH APPLICABLE REGISTRATION REQUIREMENTS
OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER
THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
LAWS. This certificate must be surrendered to the coMPANY or its transfer agent as a condition
precedent to the sale, TRANSFER, pledge OR hypothecation of any interest in any of the securities represented hereby.

 

    	 	- 5
                                                                                                                                                                                                                                                                 -	 

    	 

    

 

(e)Instructions
Regarding Transfer Restrictions. The Holder consents to the Company making a notation on its records and giving instructions
to any transfer agent in order to implement the restrictions on transfer established in this Section 5.

 

(f)Removal
of Legend. The legend referring to federal and state securities laws identified in Section 5(d) stamped on a certificate
evidencing the Shares and the stock transfer instructions and record notations with respect to such securities shall be removed
and the Company shall issue a certificate without such legend to the holder of such securities if (i) such securities are registered
under the Securities Act, or (ii) such holder provides the Company with an opinion of counsel reasonably acceptable to the Company
to the effect that a sale or transfer of such securities may be made without registration or qualification.

 

(g)Compliance
with Securities Laws. The Holder is aware of the restrictions imposed by the United States securities laws on the purchase
or sale of securities by any person who has received material, non-public information from the issuer of such securities and on
the communication of such information to any other person when it is reasonably foreseeable that such other person is likely to
purchase or sell such securities in reliance upon such information.

 

(h)No
Transfers to Bad Actors; Notice of Bad Actor Status. The Holder agrees not to sell, assign, transfer, pledge or otherwise
dispose of any securities of the Company, or any beneficial interest therein, to any person (other than the Company) unless and
until the proposed transferee confirms to the reasonable satisfaction of the Company that neither the proposed transferee nor
any of its directors, executive officers, other officers that may serve as a director or officer of any company in which it invests,
general partners or managing members nor any person that would be deemed a beneficial owner of those securities (in accordance
with Rule 506(d) of the Securities Act) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i)
through (viii) under the Securities Act, except as set forth in Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act
and disclosed, reasonably in advance of the transfer, in writing in reasonable detail to the Company. The Holder will promptly
notify the Company in writing if the Holder or, to the Holder’s knowledge, any person specified in Rule 506(d)(1) under
the Securities Act becomes subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) through
(viii) under the Securities Act.

 

6.Adjustments.
Subject to the expiration of this Warrant pursuant to Section 8, the number and kind of shares purchasable hereunder and the
Exercise Price therefor are subject to adjustment from time to time, as follows:

 

(a)Merger
or Reorganization. If at any time there shall be any reorganization, recapitalization, merger or consolidation (a “Reorganization”)
involving the Company (other than as otherwise provided for herein or as would cause the expiration of this Warrant under Section
8) in which shares of the Company’s stock are converted into or exchanged for securities, cash or other property, then,
as a part of such Reorganization, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon
exercise of this Warrant, the kind and amount of securities, cash or other property of the successor corporation resulting from
such Reorganization, equivalent in value to that which a holder of the Shares deliverable upon exercise of this Warrant would
have been entitled in such Reorganization if the right to purchase the Shares hereunder had been exercised immediately prior to
such Reorganization. In any such case, appropriate adjustment (as determined in good faith by the Board of Directors of the successor
corporation, subject to the rules of TSX) shall be made in the application of the provisions of this Warrant with respect to the
rights and interests of the Holder after such Reorganization to the end that the provisions of this Warrant shall be applicable
after the event, as near as reasonably may be, in relation to any shares or other securities deliverable after that event upon
the exercise of this Warrant.

 

    	 	- 6
                                                                                                                                                                                                                                                                 -	 

    	 

    

 

(b)Reclassification
of Shares. If the securities issuable upon exercise of this Warrant are changed into the same or a different number of
securities of any other class or classes by reclassification, capital reorganization or otherwise (other than as otherwise provided
for herein) (a “Reclassification”), then, in any such event, in lieu of the number of Shares which the
Holder would otherwise have been entitled to receive, the Holder shall have the right thereafter to exercise this Warrant for
a number of shares of such other class or classes of stock that a holder of the number of securities deliverable upon exercise
of this Warrant immediately before that change would have been entitled to receive in such Reclassification, all subject to further
adjustment as provided herein with respect to such other shares.

 

(c)Subdivisions
and Combinations. In the event that the outstanding shares of common stock are subdivided (by stock split, by payment
of a stock dividend or otherwise) into a greater number of shares of such securities, the number of Shares issuable upon exercise
of the rights under this Warrant immediately prior to such subdivision shall, concurrently with the effectiveness of such subdivision,
be proportionately increased, and the Exercise Price shall be proportionately decreased, and in the event that the outstanding
shares of common stock are combined (by reclassification or otherwise) into a lesser number of shares of such securities, the
number of Shares issuable upon exercise of the rights under this Warrant immediately prior to such combination shall, concurrently
with the effectiveness of such combination, be proportionately decreased, and the Exercise Price shall be proportionately increased.

 

(d)Notice
of Adjustments. Upon any adjustment in accordance with this Section 6(d), the Company shall give notice thereof to the
Holder, which notice shall state the event giving rise to the adjustment, the Exercise Price as adjusted and the number of securities
or other property purchasable upon the exercise of the rights under this Warrant, setting forth in reasonable detail the method
of calculation of each. The Company shall, upon the written request of any Holder, furnish or cause to be furnished to such Holder
a certificate setting forth (i) such adjustments, (ii) the Exercise Price at the time in effect and (iii) the number of securities
and the amount, if any, of other property that at the time would be received upon exercise of this Warrant.

 

7.Notification
of Certain Events. Prior to the expiration of this Warrant pursuant to Section 8, in the event that the Company
shall authorize:

 

(a)the
issuance of any dividend or other distribution on the capital stock of the Company (other than (i) dividends or distributions
otherwise provided for in Section 6(d), (ii) repurchases of common stock issued to or held by employees, officers, directors or
consultants of the Company or its subsidiaries upon termination of their employment or services pursuant to agreements providing
for the right of said repurchase; (iii) repurchases of common stock issued to or held by employees, officers, directors or consultants
of the Company or its subsidiaries pursuant to rights of first refusal or first offer contained in agreements providing for such
rights; or (iv) repurchases of capital stock of the Company in connection with the settlement of disputes with any stockholder
), whether in cash, property, stock or other securities;

 

(b)the
voluntary liquidation, dissolution or winding up of the Company; or

 

(c)any
transaction resulting in the expiration of this Warrant pursuant to Section 8(b);

 

the
Company shall send to the Holder of this Warrant at least ten (10) calendar days prior written notice of the date on which a record
shall be taken for any such dividend or distribution specified in clause (a) or the expected effective date of any such other
event specified in clause (b) or (c), as applicable. The notice provisions set forth in this section may be shortened or waived
prospectively or retrospectively by the consent of the Holder of this Warrant.

 

    	 	- 7
                                                                                                                                                                                                                                                                 -	 

    	 

    

 

8.Expiration
of the Warrant. This Warrant shall expire and shall no longer be exercisable as of the earlier of:

 

(a)5:00
p.m., Pacific time, on April 7, 2021; or

 

(b)(i)
the acquisition of the Company by another entity by means of any transaction or series of related transactions to which the Company
is a party (including, without limitation, any stock acquisition, reorganization, merger or consolidation, but excluding any sale
of stock for capital raising purposes and any transaction effected primarily for purposes of changing the Company’s jurisdiction
of incorporation) other than a transaction or series of related transactions in which the holders of the voting securities of
the Company outstanding immediately prior to such transaction or series of related transactions retain, immediately after such
transaction or series of transactions, as a result of shares in the Company held by such holders prior to such transaction or
series of transactions, at least a majority of the total voting power represented by the outstanding voting securities of the
Company or such other surviving or resulting entity (or if the Company or such other surviving or resulting entity is a wholly-owned
subsidiary immediately following such acquisition, its parent), or (ii) a sale, lease or other disposition of all or substantially
all of the assets of the Company and its subsidiaries taken as a whole by means of any transaction or series of related transactions,
except where such sale, lease or other disposition is to a wholly-owned subsidiary of the Company. 

 

9.No
Rights as a Stockholder. Nothing contained herein shall entitle the Holder to any rights as a stockholder of the Company or
to be deemed the holder of any securities that may at any time be issuable on the exercise of the rights hereunder for any purpose
nor shall anything contained herein be construed to confer upon the Holder, as such, any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change of par value or change of stock to no par value,
consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights
or any other rights of a stockholder of the Company until the rights under the Warrant shall have been exercised and the Shares
purchasable upon exercise of the rights hereunder shall have become deliverable as provided herein.

 

10.Representations
and Warranties of the Holder. By acceptance of this Warrant, the Holder represents and warrants to the Company as follows:

 

(a)No
Registration. The Holder understands that the Securities have not been, and will not be, registered under the Securities
Act by reason of a specific exemption from the registration provisions of the Securities Act, the availability of which depends
upon, among other things, the bona fide nature of the investment intent and the accuracy of the Holder’s representations
as expressed herein or otherwise made pursuant hereto.

 

(b)Investment
Intent. The Holder is acquiring the Securities for investment for its own account, not as a nominee or agent, and not
with a view to, or for resale in connection with, any distribution thereof. The Holder has no present intention of selling, granting
any participation in, or otherwise distributing the Securities, nor does it have any contract, undertaking, agreement or arrangement
for the same.

 

(c)Investment
Experience. The Holder has substantial experience in evaluating and investing in private placement transactions of securities
in companies similar to the Company, and has such knowledge and experience in financial or business matters so that it is capable
of evaluating the merits and risks of its investment in the Company and protecting its own interests.

 

    	 	- 8
                                                                                                                                                                                                                                                                 -	 

    	 

    

 

(d)Speculative
Nature of Investment. The Holder understands and acknowledges that its investment in the Company is highly speculative
and involves substantial risks. The Holder can bear the economic risk of its investment and is able, without impairing its financial
condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its investment.

 

(e)Access
to Data. The Holder has had an opportunity to ask questions of officers of the Company, which questions were answered
to its satisfaction. The Holder believes that it has received all the information that it considers necessary or appropriate for
deciding whether to acquire the Securities. The Holder understands that any such discussions, as well as any information issued
by the Company, were intended to describe certain aspects of the Company’s business and prospects, but were not necessarily
a thorough or exhaustive description. The Holder acknowledges that any business plans prepared by the Company have been, and continue
to be, subject to change and that any projections included in such business plans or otherwise are necessarily speculative in
nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary
significantly from actual results.

 

(f)Accredited
Investor. The Holder is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated
by the Securities and Exchange Commission and agrees to submit to the Company such further assurances of such status as may be
reasonably requested by the Company. The Holder has furnished or made available any and all information requested by the Company
or otherwise necessary to satisfy any applicable verification requirements as to “accredited investor” status. Any
such information is true, correct, timely and complete.

 

(g)Residency.
The residency of the Holder (or, in the case of a partnership or corporation, such entity’s principal place of business)
is correctly set forth on the signature page hereto.

 

(h)Restrictions
on Resales. The Holder acknowledges that the Securities must be held indefinitely unless subsequently registered under
the Securities Act or an exemption from such registration is available. The Holder is aware of the provisions of Rule 144 promulgated
under the Securities Act, which permit resale of shares purchased in a private placement subject to the satisfaction of certain
conditions, which may include, among other things, the availability of certain current public information about the Company; the
resale occurring not less than a specified period after a party has purchased and paid for the security to be sold; the number
of shares being sold during any three-month period not exceeding specified limitations; the sale being effected through a “broker’s
transaction,” a transaction directly with a “market maker” or a “riskless principal transaction”
(as those terms are defined in the Securities Act or the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder); and the filing of a Form 144 notice, if applicable. The Holder acknowledges and understands that the
Company may not be satisfying the current public information requirement of Rule 144 at the time the Holder wishes to sell the
Securities and that, in such event, the Holder may be precluded from selling the Securities under Rule 144 even if the other applicable
requirements of Rule 144 have been satisfied. The Holder acknowledges that, in the event the applicable requirements of Rule 144
are not met, registration under the Securities Act or an exemption from registration will be required for any disposition of the
Securities. The Holder understands that, although Rule 144 is not exclusive, the Securities and Exchange Commission has expressed
its opinion that persons proposing to sell restricted securities received in a private offering other than in a registered offering
or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available
for such offers or sales and that such persons and the brokers who participate in the transactions do so at their own risk.

 

    	 	- 9
                                                                                                                                                                                                                                                                 -	 

    	 

    

 

(i)Brokers
and Finders. The Holder has not engaged any brokers, finders or agents in connection with the Securities, and the Company
has not incurred nor will incur, directly or indirectly, as a result of any action taken by the Holder, any liability for brokerage
or finders’ fees or agents’ commissions or any similar charges in connection with the Securities.

 

(j)Legal
Counsel. The Holder has had the opportunity to review this Warrant, the exhibits and schedules attached hereto and the
transactions contemplated by this Warrant with its own legal counsel. The Holder is not relying on any statements or representations
of the Company or its agents for legal advice with respect to this investment or the transactions contemplated by this Warrant.

 

(k)Tax
Advisors. The Holder has reviewed with its own tax advisors the U.S. federal, state and local and non-U.S. tax consequences
of this investment and the transactions contemplated by this Warrant. With respect to such matters, the Holder relies solely on
any such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The Holder
understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment
and the transactions contemplated by this Warrant.

 

(l)Authorization.
The Holder has full legal capacity, power and authority to execute and deliver this Warrant and to perform its obligations hereunder.
This Warrant constitutes the valid and binding obligations of the Holder, enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general application relating to or affecting the enforcement of creditors’
rights generally and general principles of equity.

 

(m)No
“Bad Actor” Disqualification. Neither (i) the Holder, (ii) any of its directors, executive officers, other
officers that may serve as a director or officer of any company in which it invests, general partners or managing members, nor
(iii) any beneficial owner of any of the Company’s voting equity securities (in accordance with Rule 506(d) of the Securities
Act) held by the Holder is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) through
(viii) under the Securities Act, except as set forth in Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and disclosed,
reasonably in advance of the acceptance of this Warrant, in writing in reasonable detail to the Company.

 

11.Miscellaneous.

 

(a)Amendments.
Except as expressly provided herein, neither this Warrant nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument referencing this Warrant and signed by the Company and the Holder of this Warrant.

 

(b)Waivers.
No waiver of any single breach or default shall be deemed a waiver of any other breach or default theretofore or thereafter
occurring.

 

(c)Notices.
All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered
or certified mail, postage prepaid, sent by facsimile or electronic mail (if to the Holder) or otherwise delivered by hand, messenger
or courier service addressed:

 

(i)if
to the Holder, to the Holder at the Holder’s address, facsimile number or electronic mail address as shown in the Company’s
records, as may be updated in accordance with the provisions hereof, or until any such Holder so furnishes an address, facsimile
number or electronic mail address to the Company, then to and at the address, facsimile number or electronic mail address of the
last holder of this Warrant for which the Company has contact information in its records; or

 

    	 	- 10
                                                                                                                                                                                                                                                                 -	 

    	 

    

 

(ii)if
to the Company, to the attention of the Chief Executive Officer or Chief Financial Officer of the Company at the Company’s
address as shown on the signature page hereto, or at such other current address as the Company shall have furnished to the Holder.

 

Each
such notice or other communication shall for all purposes of this Warrant be treated as effective or having been given (i) if
delivered by hand, messenger or courier service, when delivered (or if sent via a nationally-recognized overnight courier service,
freight prepaid, specifying next-business-day delivery, one business day after deposit with the courier), or (ii) if sent via
mail, at the earlier of its receipt or five days after the same has been deposited in a regularly-maintained receptacle for the
deposit of the United States mail, addressed and mailed as aforesaid, or (iii) if sent via facsimile, upon confirmation of facsimile
transfer or, if sent via electronic mail, upon confirmation of delivery when directed to the relevant electronic mail address,
if sent during normal business hours of the recipient, or if not sent during normal business hours of the recipient, then on the
recipient’s next business day. In the event of any conflict between the Company’s books and records and this Warrant
or any notice delivered hereunder, the Company’s books and records will control absent fraud or error.

 

(d)Governing
Law. This Warrant and all actions arising out of or in connection with this Warrant shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to the conflicts of law provisions of the State of Delaware,
or of any other state.

 

(e)Jurisdiction
and Venue. Each of the Holder and the Company irrevocably consents to the exclusive jurisdiction and venue of any
court within San Diego County, State of California, in connection with any matter based upon or arising out of this Warrant or
the matters contemplated herein, and agrees that process may be served upon them in any manner authorized by the laws of the State
of California for such persons.

 

(f)Titles
and Subtitles. The titles and subtitles used in this Warrant are used for convenience only and are not to be considered
in construing or interpreting this Warrant. All references in this Warrant to sections, paragraphs and exhibits shall, unless
otherwise provided, refer to sections and paragraphs hereof and exhibits attached hereto.

 

(g)Severability.
If any provision of this Warrant becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, portions of such provision, or such provision in its entirety, to the extent necessary, shall be severed from this Warrant,
and such illegal, unenforceable or void provision shall be replaced with a valid and enforceable provision that will achieve,
to the extent possible, the same economic, business and other purposes of the illegal, unenforceable or void provision. The balance
of this Warrant shall be enforceable in accordance with its terms.

 

(h)Waiver
of Jury Trial. Each of the Holder and the Company waives, to the fullest extent
permitted by law, any and all right to trial by jury in any legal proceeding (whether based on contract, tort or otherwise) arising
out of or related to this Warrant.

 

(i)California
Corporate Securities Law. THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY
PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION
BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS WARRANT ARE EXPRESSLY
CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

 

    	 	- 11
                                                                                                                                                                                                                                                                 -	 

    	 

    

 

(j)Saturdays,
Sundays and Holidays. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall be a Saturday, Sunday or U.S. federal holiday, then such action may be taken or such right may be exercised
on the next succeeding day that is not a Saturday, Sunday or U.S. federal holiday.

 

(k)Rights
and Obligations Survive Exercise of the Warrant. Except as otherwise provided herein, the rights and obligations of the
Company and the Holder under this Warrant shall survive exercise of this Warrant.

 

(l)Entire
Agreement. Except as expressly set forth herein, this Warrant (including the exhibits attached hereto) constitutes the
entire agreement and understanding of the Company and the Holder with respect to the subject matter hereof and supersede all prior
agreements and understandings relating to the subject matter hereof.

 

(signature
page follows)

 

    	 	- 12
                                                                                                                                                                                                                                                                 -	 

    	 

    

 

The
Company and the Holder sign this Warrant as of the date stated on the first page.

 

	 	TEARLAB
    CORPORATION
	 	 	 
	 	By:
    	               
	 	Name:
    	 
	 	Title:
    	 
	 	 	 
	 	Address:	 
	 	 	 
	 	9980
    Huennekens St 
	 	San
    Diego, CA 92121

 

	AGREED
    AND ACKNOWLEDGED,	 
	 	 	 
	By:
    	                      	 
	Name:
    	 	 
	Title:
    	 	 

 

Address:

 

(Signature
page to the Notice of Exercise)

 

    	 	 

    	 

    

 

EXHIBIT
A

 

NOTICE
OF EXERCISE

 

	TO:	TEARLAB
    CORPORATION (the “Company”) 
	 	 
	Attention:	CHIEF
    EXECUTIVE OFFICER

 

	(1)	Exercise.
    The undersigned elects to purchase the following pursuant to the terms of the attached warrant:

 

Number
of shares: __________________________________________________________________________

 

Type
of security: ___________________________________________________________________________

 

	(2)	Method
    of Exercise. The undersigned elects to exercise the attached warrant pursuant to:

 

	 	[  ]	A
    cash payment, and tenders herewith payment of the purchase price for such shares in full, together with all applicable
    transfer taxes, if any.
	 	 	 
	 	[  ]	The
    net issue exercise provisions of Section 2(b) of the attached warrant.

 

	(3)	Conditional
    Exercise. Is this a conditional exercise pursuant to Section 2(e):

 

	 	[  ]	Yes	 	[  ]	No

 

	 	If
    “Yes,” indicate the applicable condition:
	 	 
	 	 

 

	(4)	Stock
    Certificate. Please issue a certificate or certificates representing the shares in the name of:

 

	 	[  ]	The
    undersigned	 
	 	 	 	 
	 	[  ]	Other—Name:	 
	 	 	 	 
	 	 	Address:	 
	 	 	 	 
	 	 	 	 

 

	(5)	Unexercised
    Portion of the Warrant. Please issue a new warrant for the unexercised portion of the attached warrant in the name of:

 

	 	[  ]	The
    undersigned	 
	 	 	 	 
	 	[  ]	Other—Name:	 
	 	 	 	 
	 	 	Address:	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	[  ]	Not
    applicable	 

 

    	 	A-1	 

    	 

    

 

	(6)	Tax
    Advisors. The undersigned has reviewed with its own tax advisors the U.S. federal, state and local and non-U.S. tax consequences
    of this investment and the transactions contemplated by this warrant. With respect to such matters, the undersigned relies
    solely on any such advisors and not on any statements or representations of the Company or any of its agents, written or oral.
    The undersigned understands that it (and not the Company) shall be responsible for its own tax liability that may arise as
    a result of this investment and the transactions contemplated by this warrant.
	 	 
	(7)	Investment
    Intent. The undersigned represents and warrants that the aforesaid shares are being acquired for investment for its own
    account, not as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and
    that the undersigned has no present intention of selling, granting any participation in, or otherwise distributing the shares,
    nor does it have any contract, undertaking, agreement or arrangement for the same, and all representations and warranties
    of the undersigned set forth in Section 10 of the attached warrant are true and correct as of the date hereof. 
	 	 
	(8)	Investment
    Representation Statement. The undersigned has executed, and delivers herewith, an Investment Representation Statement
    in a form substantially similar to the form attached to the warrant as Exhibit A-1.
	 	 
	(9)	Consent
    to Receipt of Electronic Notice. Subject to the limitations set forth in Delaware General Corporation Law §232(e),
    the undersigned consents to the delivery of any notice to stockholders given by the Company under the Delaware General Corporation
    Law or the Company’s certificate of incorporation or bylaws by (i) facsimile telecommunication to the facsimile number
    provided below (or to any other facsimile number for the undersigned in the Company’s records), (ii) electronic mail
    to the electronic mail address provided below (or to any other electronic mail address for the undersigned in the Company’s
    records), (iii) posting on an electronic network together with separate notice to the undersigned of such specific posting
    or (iv) any other form of electronic transmission (as defined in the Delaware General Corporation Law) directed to the undersigned.
    This consent may be revoked by the undersigned by written notice to the Company and may be deemed revoked in the circumstances
    specified in Delaware General Corporation Law §232.

 

	 	 
	 	(Print
    name of the warrant holder)
	 	 
	 	 
	 	(Signature)
	 	 
	 	 
	 	(Name
    and title of signatory, if applicable)
	 	 
	 	 
	 	(Date)
	 	 
	 	 
	 	(Fax
    number)
	 	 
	 	 
	 	(Email
    address)

 

(Signature
page to the Notice of Exercise)

 

    	 	A-2	 

    	 

    

 

EXHIBIT
A-l

 

INVESTMENT
REPRESENTATION STATEMENT

 

	INVESTOR:	 
	 	 
	COMPANY:	TEARLAB
    CORPORATION
	 	 
	SECURITIES:	THE
    WARRANT ISSUED ON April 7, 2016 (THE “WARRANT”) AND
    THE SECURITIES ISSUED OR ISSUABLE UPON EXERCISE THEREOF 

 

DATE:

 

In
connection with the purchase or acquisition of the above-listed Securities, the undersigned Investor represents and warrants to,
and agrees with, the Company as follows:

 

1.No
Registration. The Investor understands that the Securities have not been, and will not be, registered under the Securities
Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the
investment intent and the accuracy of the Investor’s representations as expressed herein or otherwise made pursuant hereto.

 

2.Investment
Intent. The Investor is acquiring the Securities for investment for its own account, not as a nominee or agent, and not with
a view to, or for resale in connection with, any distribution thereof. The Investor has no present intention of selling, granting
any participation in, or otherwise distributing the Securities, nor does it have any contract, undertaking, agreement or arrangement
for the same.

 

3.Investment
Experience. The Investor has substantial experience in evaluating and investing in private placement transactions of securities
in companies similar to the Company, and has such knowledge and experience in financial or business matters so that it is capable
of evaluating the merits and risks of its investment in the Company and protecting its own interests.

 

4.Speculative
Nature of Investment. The Investor understands and acknowledges that its investment in the Company is highly speculative and
involves substantial risks. The Investor can bear the economic risk of its investment and is able, without impairing its financial
condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its investment.

 

5.Access
to Data. The Investor has had an opportunity to ask questions of officers of the Company, which questions were answered to
its satisfaction. The Investor believes that it has received all the information that it considers necessary or appropriate for
deciding whether to acquire the Securities. The Investor understands that any such discussions, as well as any information issued
by the Company, were intended to describe certain aspects of the Company’s business and prospects, but were not necessarily
a thorough or exhaustive description. The Investor acknowledges that any business plans prepared by the Company have been, and
continue to be, subject to change and that any projections included in such business plans or otherwise are necessarily speculative
in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will
vary significantly from actual results.

 

    	A-1-1

    	 

    

 

6.Accredited
Investor. The Investor is an “accredited investor” within the meaning of Regulation D, Rule 501(a), promulgated
by the Securities and Exchange Commission and agrees to submit to the Company such further assurances of such status as may be
reasonably requested by the Company. The Investor has furnished or made available any and all information requested by the Company
or otherwise necessary to satisfy any applicable verification requirements as to “accredited investor” status. Any
such information is true, correct, timely and complete.

 

7.Residency.
The residency of the Investor (or, in the case of a partnership or corporation, such entity’s principal place of business)
is correctly set forth on the signature page hereto.

 

8.Restrictions
on Resales. The Investor acknowledges that the Securities must be held indefinitely unless subsequently registered under the
Securities Act or an exemption from such registration is available. The Investor is aware of the provisions of Rule 144 promulgated
under the Securities Act, which permit resale of shares purchased in a private placement subject to the satisfaction of certain
conditions, which may include, among other things, the availability of certain current public information about the Company; the
resale occurring not less than a specified period after a party has purchased and paid for the security to be sold; the number
of shares being sold during any three-month period not exceeding specified limitations; the sale being effected through a “broker’s
transaction,” a transaction directly with a “market maker” or a “riskless principal transaction”
(as those terms are defined in the Securities Act or the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder); and the filing of a Form 144 notice, if applicable. The Investor acknowledges and understands that the
Company may not be satisfying the current public information requirement of Rule 144 at the time the Investor wishes to sell the
Securities and that, in such event, the Investor may be precluded from selling the Securities under Rule 144 even if the other
applicable requirements of Rule 144 have been satisfied. The Investor understands and acknowledges that, in the event the applicable
requirements of Rule 144 are not met, registration under the Securities Act or an exemption from registration will be required
for any disposition of the Securities. The Investor understands that, although Rule 144 is not exclusive, the Securities and Exchange
Commission has expressed its opinion that persons proposing to sell restricted securities received in a private offering other
than in a registered offering or pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption
from registration is available for those offers or sales and that those persons and the brokers who participate in the transactions
do so at their own risk.

 

9.Brokers
and Finders. The Investor has not engaged any brokers, finders or agents in connection with the Securities, and the Company
has not incurred nor will incur, directly or indirectly, as a result of any action taken by the Investor, any liability for brokerage
or finders’ fees or agents’ commissions or any similar charges in connection with the Securities.

 

10.Legal
Counsel. The Investor has had the opportunity to review the Warrant, the exhibits and schedules attached thereto and the transactions
contemplated by the Warrant with its own legal counsel. The Investor is not relying on any statements or representations of the
Company or its agents for legal advice with respect to this investment or the transactions contemplated by the Warrant.

 

11.Tax
Advisors. The Investor has reviewed with its own tax advisors the U.S. federal, state and local and non-U.S. tax consequences
of this investment and the transactions contemplated by the Warrant. With respect to such matters, the Investor relies solely
on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The Investor
understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment
or the transactions contemplated by the Warrant.

 

    	A-1-2

    	 

    

 

12.No
“Bad Actor” Disqualification. Neither (i) the Investor, (ii) any of its directors, executive officers, other officers
that may serve as a director or officer of any company in which it invests, general partners or managing members, nor (iii) any
beneficial owner of any of the Company’s voting equity securities (in accordance with Rule 506(d) of the Securities Act)
held by the Investor is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) through
(viii) under the Securities Act, except as set forth in Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities Act and disclosed,
reasonably in advance of the purchase or acquisition of the Securities, in writing in reasonable detail to the Company.

 

(signature
page follows)

 

    	A-1-3

    	 

    

 

The
Investor is signing this Investment Representation Statement on the date first written above.

 

	 	INVESTOR
	 	 
	 	 
	 	(Print
    name of the investor)
	 	 
	 	 
	 	(Signature)
	 	 
	 	 
	 	(Name
    and title of signatory, if applicable)
	 	 
	 	 
	 	(Street
    address)
	 	 
	 	 
	 	(City,
    state and ZIP)

 

    	A-1-4

    	 

    

 

EXHIBIT
B

 

ASSIGNMENT
FORM

 

	ASSIGNOR:	_________________________
	 	 
	COMPANY:	TEARLAB
    CORPORATION
	 	 
	WARRANT:	THE
    WARRANT TO PURCHASE SHARES OF COMMON STOCK ISSUED ON April 7, 2016 (THE “WARRANT”)

 

	DATE:	_________________________

 

	(1)	Assignment.
    The undersigned registered holder of the Warrant (“Assignor”) assigns and transfers to the assignee
    named below (“Assignee”) all of the rights of Assignor under the Warrant, with respect to the number
    of shares set forth below:

 

	 	Name
    of Assignee: 	 
	 	 	 
	 	Address
    of Assignee:	 
	 	 	 
	 	 	 
	 	 	 
	 	Number
    of Shares Assigned: 	 

 

and
does irrevocably constitute and appoint ______________________ as attorney to make such transfer on the books of TearLab Corporation,
maintained for the purpose, with full power of substitution in the premises.

 

	(2)	Obligations
    of Assignee. Assignee agrees to take and hold the Warrant and any shares of stock to be issued upon exercise of the rights
    thereunder (the “Securities”) subject to, and to be bound by, the terms and conditions set forth
    in the Warrant to the same extent as if Assignee were the original holder thereof.
	 	 
	(3)	Investment
    Intent. Assignee represents and warrants that the Securities are being acquired for investment for its own account, not
    as a nominee or agent, and not with a view to, or for resale in connection with, the distribution thereof, and that Assignee
    has no present intention of selling, granting any participation in, or otherwise distributing the shares, nor does it have
    any contract, undertaking, agreement or arrangement for the same, and all representations and warranties set forth in Section
    10 of the Warrant are true and correct as to Assignee as of the date hereof.
	 	 
	(4)	Investment
    Representation Statement. Assignee has executed, and delivers herewith, an Investment Representation Statement in a form
    substantially similar to the form attached to the Warrant as Exhibit A-1.
	 	 
	(5)	No
    “Bad Actor” Disqualification. Neither (i) Assignee, (ii) any of its directors, executive officers, other officers
    that may serve as a director or officer of any company in which it invests, general partners or managing members, nor (iii)
    any beneficial owner of any of the Company’s securities held or to be held by Assignee is subject to any of the “bad
    actor” disqualifications described in Rule 506(d)(1)(i) through (viii) under the Securities Act of 1933, as amended
    (the “Securities Act”), except as set forth in Rule 506(d)(2)(ii) or (iii) or (d)(3) under the Securities
    Act and disclosed, reasonably in advance of the transfer of the Securities, in writing in reasonable detail to the Company.

 

    	 	- 1 -	 

    	 

    

 

Assignor
and Assignee are signing this Assignment Form on the date first set forth above.

 

	ASSIGNOR	 	ASSIGNEE
	 	 	 
	 	 	 
	(Print
    name of Assignor)	 	(Print
    name of Assignee)
	 	 	 
	 	 	 
	(Signature
    of Assignor)	 	(Signature
    of Assignee)
	 	 	 
	 	 	 
	(Print
    name of signatory, if applicable)	 	(Print
    name of signatory, if applicable)
	 	 	 
	 	 	 
	(Print
    title of signatory, if applicable)	 	(Print
    title of signatory, if applicable)
	 	 	 
	Address:	 	Address:
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

    	 	- 2 -

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