Document:

Securities Purchase Agreement

 Exhibit 10.2 
 SECURITIES PURCHASE AGREEMENT 
 THIS SECURITIES PURCHASE AGREEMENT (the “Agreement”)
is made as of October 18, 2006 by and between Vertical Communications, Inc., a Delaware corporation (the “Company”), and the investors set forth on Exhibit A attached hereto (individually, an “Investor”
and collectively, the “Investors”). 
 WITNESSETH: 
 WHEREAS, the Company desires to sell to the Investors and the Investors desire to purchase from the Company (the “Offering”),
(i) 22,000 shares (the “Shares”) of the Company’s Series E Convertible Preferred Stock, par value $1.00 per share (the “Series E Preferred Stock”) at a price per share of $1,000.00, (ii) warrants to
purchase an aggregate of 20,754,717 shares of common stock, par value $0.01 per share (the “Common Stock”) with an initial exercise price of $0.58 per share (the “Tranche I Warrants”), and (iii) additional
warrants to purchase an aggregate of 20,754,717 shares of Common Stock with an initial exercise price of $0.58 per share (the “Tranche II Warrants,” and together with the Tranche I Warrants, the “Warrants”), for a
total purchase price of $22,000,000 (the “Purchase Price”) pursuant to the terms of this Agreement; 
 WHEREAS,
the Company may sell additional shares of its Series E Preferred Stock on identical terms and conditions as set forth herein pursuant to certain rights of first refusal (the “ROFR Rights”) contained in (i) the Stock
Purchase Agreement dated as of September 28, 2004 (the “2004 Agreement”), between the Company and the investors specified therein, (ii) the Stock Purchase Agreement dated as of September 28, 2005 (the “2005
Agreement”), between the Company and the investors specified therein, and (iii) the Securities Purchase Agreement dated as of February 9, 2006 (the “February 2006 Agreement,” and together with the 2004 Agreement
and the 2005 Agreement, the “Prior Agreements”), between the Company and the investors specified therein; 
 WHEREAS,
concurrently with the execution of this Agreement, the Company, Vertical Acquisition Sub, Inc., a wholly owned subsidiary of the Company (“Acquisition Sub”) and Vodavi Technology, Inc. (“Vodavi”) will execute an
Agreement and Plan of Merger substantially in the form attached hereto as Exhibit B (the “Merger Agreement”) pursuant to which, as a condition to the transactions contemplated by this Agreement, Vodavi shall merge with
Acquisition Sub (with Vodavi being the surviving corporation thereof) and Vodavi will become a wholly owned subsidiary of the Company (the “Merger”); and 
 WHEREAS, the parties hereto desire to enter into this Agreement for the purpose of setting forth certain representations, warranties and covenants made by each to the other as an inducement to the execution and
delivery of this Agreement and the conditions precedent to the consummation of the transactions set forth in this Agreement. 
 NOW,
THEREFORE, in consideration of the premises and of the mutual provisions, agreements and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows: 
 ARTICLE I 
 PURCHASE AND SALE OF THE SHARES 
 1.1 Authorization and Sale of the Shares and Warrants. Subject to the terms and
conditions set forth in this Agreement, the Company has authorized the sale of (a) up to 50,000 shares of Series E 

 
Preferred Stock, (b) warrants to purchase an aggregate of 20,754,717 shares of the Company’s Common Stock pursuant to the Tranche I Warrants, and
(c) warrants to purchase an aggregate of 20,754,717 shares of the Company’s Common Stock pursuant to the Tranche II Warrants (of which the Investors set forth on Exhibit A have committed to purchase the amounts set forth thereon).
The shares of Common Stock issuable upon conversion of the Shares are referred to herein as the “Conversion Shares”. The shares of Common Stock issuable upon the exercise of the Warrants are referred to herein as the
“Warrant Shares”. 
 1.2 Agreement to Sell and Purchase the Shares and the Warrants. Subject to the terms and
conditions of this Agreement, each Investor, severally and not jointly, agrees to purchase at the Closing (as such term is defined in Section 1.3 hereof), and the Company agrees to issue and sell to each such Investor at the Closing, for
the purchase price set forth opposite each such Investor’s name on Exhibit A attached hereto, that number of Shares and Warrants set forth opposite each such Investor’s name on Exhibit A attached hereto. 
 1.3 Delivery of the Shares and Warrants at Closing. 
 (a) The completion of the purchase and sale of the Shares and the Warrants (the “Closing”) shall occur immediately following consummation of the Merger (the “Closing Date”) at the
offices of Goodwin Procter LLP, 53 State Street, Boston, MA 02109 or at such other place as may be mutually agreed by the Company and the Investors. At the Closing, the Company shall (i) deliver to the Investors one or more stock certificates
representing the number of Shares set forth on Exhibit A, each such certificate to be registered in the name of each Investor or, if so indicated on the signature page of this Agreement, in the name of a nominee designated by such Investor
(at the address of each Investor set forth on the signature pages hereto); (ii) deliver to each Investor a Tranche I Warrant substantially in the form attached hereto as Exhibit C to purchase the number of shares of Common Stock set
forth opposite each such Investor’s name on Exhibit A or, if so indicated on the signature page of this Agreement, in the name of a nominee designated by such Investor; and (iii) deliver to each Investor a Tranche II Warrant
substantially in the form attached hereto as Exhibit D to purchase the number of shares of Common Stock set forth opposite each such Investor’s name on Exhibit A or, if so indicated on the signature page of this Agreement, in the
name of a nominee designated by such Investor. 
 (i) The Tranche II Warrants shall be (i) exercisable only if the
Company fails to consummate a Future Financing Transaction (as hereinafter defined) within the time period specified in that definition and (ii) void ab initio if a Future Financing Transaction is consummated within such time period.

 (ii) For purposes hereof, “Future Financing Transaction” shall mean any financing (or series of related
financings) of the Company (including in connection with the purchase and sale by the ROFR Offerees upon exercise of the ROFR Rights set forth in Section 1.4 hereof) that closes within 270 days after the Closing Date and involving the
issuance of a Future Financing Security in which the aggregate gross proceeds to the Company equals or exceeds $2.5 million. 
 (iii) “Future Financing Security” shall mean the class and type of any security, instrument or indebtedness (but not debt securities with no equity feature) of the Company issued to investors at the closing of a Future
Financing Transaction (but excluding the conversion of the Shares). 
 (b) The Company’s obligation to issue the Shares
and the Warrants to the Investors shall be subject to the following conditions, any one or more of which may be waived by the Company: 
 (i) receipt by the Company of a wire transfer of funds to an account designated by the Company in the full amount of the Purchase Price for all of the Shares and Warrants being purchased hereunder as set forth on
Exhibit A; 
  

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 (ii) consummation of the Merger; and 
 (iii) the accuracy of the representations and warranties made by the Investors and the satisfaction of the undertakings of the Investors
to be fulfilled prior to the Closing. 
 (c) The Investors’ obligations to purchase the Shares and the Warrants shall be
subject to the following conditions, any one or more of which may be waived by any Investor hereunder as to itself only: 
 (i) consummation of the Merger on terms and conditions satisfactory to the Investors; 
 (ii) consummation of the
transaction, contemplated by the Loan Agreement and related Security Agreement, dated as of October 18, 2006 (the “Loan Agreement”), by and among the Company, Vertical Communications Acquisition Corp., Acquisition Sub, on one
hand, and Columbia Partners, L.L.C. Investment Management and NEIPF, L.P. (collectively, “Lender”), on terms and conditions satisfactory to the Investors; 
 (iii) the Company shall have caused the Certificate of Powers, Designations, Preferences and Rights of the Series E Preferred Stock in
substantially the form attached hereto as Exhibit E (the “Certificate of Designations”) to be duly adopted and approved by the Company’s Board of Directors (the “Board of Directors”) and to be duly filed
with the Secretary of State of Delaware (and the Investors shall have received written confirmation of the same certified by the Secretary of State of Delaware); 
 (iv) the Company having authorized, unissued and unreserved shares sufficient to permit issuance of all of the Shares proposed to be sold
hereunder; 
 (v) the representations and warranties of the Company set forth herein shall be true, correct and complete as of
the Closing Date in all respects (except for representations and warranties that speak as of a specific date, which representations and warranties shall be true, correct and complete as of such date); 
 (vi) performance and compliance by the Company with all covenants, agreements obligations and conditions required to be performed on or
before the date hereof; 
 (vii) the execution of a Consent and Waiver Agreement (the “Consent and Waiver
Agreement”), in substantially the form attached hereto as Exhibit F; and 
 (viii) the Investors shall have
received such documents as the Investors shall reasonably have requested, including, a standard opinion of Company counsel as to the matters set forth in the form attached as Exhibit G hereto and as to exemption from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act”), of the sale of the Shares. The Warrants, the Merger Agreement, the Loan Agreement, the Certificate of Designations and the Consent and Waiver Agreement
shall collectively be referred to herein as the “Ancillary Agreements.” 
  

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 1.4. Rights Offering. Pursuant to Section 3.4 of the 2004 Agreement,
Section 3.4 of the 2005 Agreement and Section 3.1 of the February 2006 Agreement, promptly following the execution and delivery of this Agreement by the Investors listed on Exhibit A, the Company shall submit this
Agreement and all Ancillary Agreements to the 20% Investors (as defined each of the Prior Agreements) and each other person or entity that has such a right (each an “ROFR Offeree” and collectively, the “ROFR
Offerees”), all of whom are listed on Exhibit H attached hereto. Each ROFR Offeree shall have the right to purchase a number of shares of Series E Preferred Stock (the “ROFR Shares”) equal to (x) that portion of
the Shares as the number of shares of Common Stock then held (including shares then issuable upon the exercise or conversion of outstanding securities) by such ROFR Offeree bears to the total number of shares of issued and outstanding Common Stock
of the Company calculated on a fully diluted basis to include (i) the total number of shares of Common Stock subject to outstanding awards granted under stock plans of the Company and (ii) the total number of shares that could be issued
upon the exercise or conversion of outstanding securities (the “Basic Amount”), and (y) such additional shares Series E Preferred Stock as such ROFR Offeree shall indicate it will purchase should the other ROFR Offerees
subscribe for less than their Basic Amounts, at a price and on such other terms as shall have been specified by the Company in writing delivered to such ROFR Offeree (the “Offer”), which Offer by its terms shall remain open and
irrevocable for a period of twenty (20) days from receipt of the offer. Upon receipt of a Notice of Acceptance (as defined in the Prior Agreements), from any ROFR Offeree, the Company shall issue and sell to such ROFR Offeree the ROFR Shares in
accordance with Section 3.4 of the 2004 Agreement, Section 3.4 of the 2005 Agreement, Section 3.1 of the February 2006 Agreement, as applicable. 
 ARTICLE II 
 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 
 2. Except as disclosed by the Company in a written Disclosure Schedule provided by the Company to the Investors (the “Disclosure
Schedule”), the Company hereby represents, warrants and covenants to the Investors, as follows: 
 2.1 Organization. The
Company is duly organized and validly existing in good standing under the laws of the jurisdiction of its organization. Each of the Company and its Subsidiaries (as such term is defined in Rule 405 under the Securities Act) has all requisite
corporate power and authority to own, operate and occupy its properties and to conduct its business as presently conducted and as described in the documents filed by the Company under the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder (the “Exchange Act”), since June 30, 2004 through the date hereof, including, without limitation, its most recent report on Form 10-K (the “Exchange Act Documents”) and is
registered or qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it or the location of the properties owned or leased by it requires such qualification and where the failure to be so
qualified would have a material adverse effect upon the condition (financial or otherwise), results of operations, business or business prospects, properties or operations of the Company and its Subsidiaries, considered as one enterprise (a
“Material Adverse Effect”), and no proceeding to which the Company or any Subsidiary is a party has been instituted in any such jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification. 
 2.2 Due Authorization and Valid Issuance. The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement and the Ancillary Agreements, and this Agreement and the Ancillary Agreements have been duly authorized and validly executed and delivered by the Company and constitutes the legal,
valid and binding agreement of the Company enforceable against the Company in accordance with its terms, except as rights to indemnity 

  

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and contribution may be limited by state or federal securities laws or the public policy underlying such laws, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law). The Shares and the Warrants being purchased by the Investors hereunder will, and the Conversion Shares and the Warrant Shares, upon issuance and payment therefor pursuant to the
terms hereof or thereof, as applicable, be duly authorized, validly issued, fully-paid and nonassessable. 
 2.3 Non-Contravention.
The execution and delivery of this Agreement and the Ancillary Agreements, the issuance and sale of the Shares under this Agreement, the issuance of the Conversion Shares upon conversion of the Shares, the issuance of the Warrants and the issuance
of the Warrant Shares upon exercise of the Warrants, the fulfillment of the terms of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby do not and will not (a) conflict with or
constitute a violation of, or default (with the passage of time or otherwise) under, (i) any bond, debenture, note or other evidence of indebtedness, lease, contract, indenture, mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument to which the Company or any Subsidiary is a party or by which it or any of its Subsidiaries or their respective properties are bound, (ii) the charter, by-laws or other organizational documents of the Company or any
Subsidiary, or (iii) any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or any Subsidiary or their respective properties, except in the case of
clauses (i) and (iii) for any such conflicts, violations or defaults which are not reasonably likely to have a Material Adverse Effect or (b) result in the creation or imposition of any lien, encumbrance, claim, security interest or
restriction whatsoever upon any of the material properties or assets of the Company or any Subsidiary or an acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any bond, debenture, note or any other evidence
of indebtedness or any indenture, mortgage, deed of trust or any other agreement or instrument to which the Company or any Subsidiary is a party or by which any of them is bound or to which any of the material property or assets of the Company or
any Subsidiary is subject. No consent, approval, authorization or other order of, or registration, qualification or filing with, any regulatory body, administrative agency, or other governmental body or any other person is required for the execution
and delivery of this Agreement or the Ancillary Agreements by the Company, the valid issuance and sale of the Shares to be sold pursuant to this Agreement, the issuance of the Conversion Shares upon conversion of the Shares, the issuance of the
Warrants and the issuance of the Warrant Shares upon exercise of the Warrants, and the performance by the Company of its other obligations hereunder and thereunder, other than such as have been made or obtained, and except for any post-closing
securities filings or notifications required to be made under federal or state securities laws. 
 2.4 Capitalization. The
capitalization of the Company as of October 15, 2006 is as set forth on Schedule 2.4, increased as set forth in the next sentence. The Company has not issued any capital stock since that date other than pursuant to (a) employee
benefit plans disclosed in the Exchange Act Documents, or (b) outstanding warrants, options or other securities disclosed in the Exchange Act Documents. The Company has authorized, unissued, unreserved and undesignated shares of preferred stock
sufficient to sell all Shares proposed to be issued under this Agreement. The designations, powers, preferences, rights qualifications, limitations and restrictions in respect of the Series E Preferred Stock are as set forth in the Certificate of
Designations, and all such designations, powers, preferences, rights, qualifications, limitations and restrictions are valid, binding and enforceable and in accordance with all applicable laws. The Shares to be sold pursuant to this Agreement, the
Conversion Shares to be issued upon conversion of the Shares, the Warrants and the Warrant Shares to be issued upon exercise of the Warrants have all been duly authorized, and when issued and paid for in accordance with the terms of this Agreement,
upon conversion of the Shares or upon exercise of the Warrants, as applicable, will be duly and validly issued, fully paid and nonassessable. The Shares and the Warrants shall represent 

  

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approximately 52.3% of the outstanding capital stock of the Company immediately following the Closing (calculated on a fully diluted basis, but without
regard to the exercise of any of the ROFR Rights or the Subsequent Purchased Shares). The outstanding shares of capital stock of the Company have been duly and validly issued and are fully paid and nonassessable, have been issued in compliance with
all federal and state securities laws, and were not issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except as set forth in or contemplated by the Exchange Act Documents, there are no
outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any unissued shares of capital stock or other equity interest in the Company or any
Subsidiary, or any contract, commitment, agreement, understanding or arrangement of any kind to which the Company is a party or of which the Company has knowledge and relating to the issuance or sale of any capital stock of the Company or any
Subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options. Without limiting the foregoing and except as provided herein, no preemptive right, co-sale right, right of first refusal, registration right, or
other similar right exists with respect to the Shares and the Warrants or the issuance and sale thereof, the issuance of the Conversion Shares upon conversion of the Shares or the Warrant Shares upon exercise of the Warrants. No further approval or
authorization of any stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Shares and the Warrants. The Company owns the entire equity interest in each of its Subsidiaries, free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable interest, other than as described in the Exchange Act Documents. Except as disclosed in the Exchange Act Documents, there are no stockholders agreements, voting agreements or other
similar agreements with respect to the Common Stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders. 
 2.5 Legal Proceedings; Disagreements with Advisors. There is no material legal or governmental proceeding pending or, to the knowledge of the
Company, threatened to which the Company or any Subsidiary is or may be a party or of which the business or property of the Company or any Subsidiary is subject that is not disclosed in the Exchange Act Documents. There are no disagreements of any
kind presently existing, or reasonably anticipated by the Company to arise, between the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers.

 2.6 No Violations. Neither the Company nor any Subsidiary is in violation of (a) its charter, bylaws, or other organizational
document; (b) in violation of any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or any Subsidiary, which violation, individually or in the
aggregate, would be reasonably likely to have a Material Adverse Effect; or (c) is in default (and there exists no condition which, with the passage of time or otherwise, would constitute a default) in the performance of any bond, debenture,
note or any other evidence of indebtedness in any indenture, mortgage, deed of trust or any other agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or by which the properties
of the Company or any Subsidiary are bound, which would be reasonably likely to have a Material Adverse Effect. 
 2.7 Governmental
Permits, Etc. With the exception of the matters which are dealt with separately in Sections 2.1, 2.12, 2.13, and 2.14, each of the Company and its Subsidiaries has all necessary franchises, licenses, certificates
and other authorizations from any foreign, federal, state or local government or governmental agency, department, or body that are currently necessary for the operation of the business of the Company and its Subsidiaries as currently conducted and
as described in the Exchange Act Documents except where the failure to currently possess could not reasonably be expected to have a Material Adverse Effect. 
  

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 2.8 Intellectual Property. Except as specifically disclosed in the Exchange Act Documents
(a) each of the Company and its Subsidiaries owns or possesses sufficient rights to use all patents, patent rights, trademarks, copyrights, licenses, inventions, trade secrets, trade names and know-how (collectively, “Intellectual
Property”) described or referred to in the Exchange Act Documents as owned or possessed by it or that are necessary for the conduct of its business as now conducted or as proposed to be conducted as described in the Exchange Act Documents,
except where the failure to currently own or possess would not have a Material Adverse Effect, (b) neither the Company nor any of its Subsidiaries is infringing, or has received any notice of, or has any knowledge of, any asserted infringement
by the Company or any of its Subsidiaries of, any rights of a third party with respect to any Intellectual Property that, individually or in the aggregate, would have a Material Adverse Effect and (c) neither the Company nor any of its
Subsidiaries has received any notice of, or has any knowledge of, infringement by a third party with respect to any Intellectual Property rights of the Company or of any Subsidiary that, individually or in the aggregate, would have a Material
Adverse Effect. Except as specifically disclosed in the Exchange Act Documents, all software applications and portions of applications, including, without limitation, interfaces, functions, and class definitions included in whole or in part in any
Company Software (as hereinafter defined) are either: (a) owned by the Company, (b) currently in the public domain or otherwise available for use, modification and distribution by the Company without a license from or the approval or
consent of any third party, or (c) licensed or otherwise used by the Company pursuant to the terms of valid, binding written agreements (a “Software Contract”). Except as specifically disclosed in the Exchange Act Documents, no
Software Contract creates, or purports to create, obligations or immunities with respect to any intellectual property rights of the Company enforceable in any jurisdiction of the world, including but not limited to, obligations requiring the
disclosure or distribution of all or a portion of the source code for any Company Software. For purposes of this Agreement, “Company Software” means any and all computer programs or portions thereof owned, licensed, distributed,
copied, modified, displayed, sublicensed or otherwise used by the Company in connection with the operation of its business as now conducted or as now proposed to be conducted as described in the Exchange Act Documents. 
 2.9 Financial Statements; Solvency; Obligations to Related Parties. 
 (a) The financial statements of the Company and the related notes contained in the Exchange Act Documents present fairly, in
accordance with U.S. generally accepted accounting principles (“GAAP”), the financial position of the Company and its Subsidiaries as of the dates indicated, and the results of its operations and cash flows for the periods therein
specified consistent with the books and records of the Company and its Subsidiaries except that the unaudited interim financial statements were or are subject to normal and recurring year-end adjustments which are not expected to be material in
amount except as otherwise described in the Exchange Act Documents. Such financial statements (including the related notes) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods therein specified, except as
may be disclosed in the notes to such financial statements, or in the case of unaudited statements, as may be permitted by the Securities and Exchange Commission (the “SEC”) on Form 10-Q under the Exchange Act and except as
disclosed in the Exchange Act Documents. The other financial information contained in the Exchange Act Documents has been prepared on a basis consistent with the financial statements of the Company. 
 (b) The (i) fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of
the Company’s existing liabilities and other obligations as such matures or is otherwise payable; (ii) Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted
and as proposed to be conducted taking into account the current and projected capital requirements of the business conducted by the Company and projected capital availability; and (iii) current cash flow of the Company, together with the
proceeds the Company would receive upon liquidation of its assets, after taking into account all anticipated uses of 

  

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such amounts, would be sufficient to pay all such liabilities and obligations when such is required to be paid. The Company does not intend to incur
liabilities and other obligations beyond its ability to pay such as they mature or are required to be paid. The Company has no knowledge of any facts or circumstances which lead it to believe that it will be required to file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction, and has no present intention to so file. 
 (c)
Except as set forth in any Exchange Act Documents, there are no obligations of the Company to officers, directors, stockholders or employees of the Company other than: 
 (i) for payment of salary for services rendered and for bonus payments; 
 (ii) reimbursements for reasonable expenses incurred on behalf of the Company; 
 (iii) for other standard employee benefits made generally available to all employees (including stock option agreements outstanding under
any stock option plan approved by the Board of Directors); 
 (iv) obligations listed in the Company’s financial
statements; and 
 (v) under applicable laws. 
 (d) Except as described above or in any Exchange Act Filings, (i) none of the officers, directors or, to the best of the
Company’s knowledge, key employees or stockholders of the Company or any members of their immediate families, are indebted to the Company, individually or in the aggregate, in excess of $60,000; and (ii) none of the officers, directors or,
to the best of the Company’s knowledge, key employees have any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or
corporation which competes with the Company, other than passive investments in publicly traded companies (representing less than one percent (1%) of such company) which may compete with the Company. Except as described above, no officer,
director, or any member of their immediate families, is, directly or indirectly, interested in any material contract with the Company and no agreements, understandings or proposed transactions are contemplated between the Company and any such
person. Except as set forth in any Exchange Act Documents, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation. 
 2.10 No Material Adverse Change. Except as disclosed in the Exchange Act Documents, since March 31, 2006, there has not been (a) any material adverse change in the financial condition or results of
operations of the Company and its Subsidiaries considered as one enterprise, (b) any material adverse event affecting the Company or its Subsidiaries, (c) any obligation, direct or contingent, that is material to the Company and its
Subsidiaries considered as one enterprise, incurred by the Company, except obligations incurred in the ordinary course of business or with respect to the transactions contemplated by this Agreement or the Merger Agreement or Loan Agreement,
(d) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any of its Subsidiaries, or (e) any loss or damage (whether or not insured) to the physical property of the Company or any of its
Subsidiaries which has been sustained which has a Material Adverse Effect. 
 2.11 Disclosure. The representations and warranties of
the Company contained in this ARTICLE II as of the date hereof and as of the Closing Date, do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading. The 

  

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Company understands and confirms that the Investors will rely on the foregoing representations in effecting transactions in the securities of the Company.

 2.12 Exchange Act and OTCBB Compliance. The Company’s Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and is quoted on The Nasdaq Stock Market, Inc.’s OTC Bulletin Board quotation service (the “OTCBB”), and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of
the Common Stock under the Exchange Act or removal from quotation of the Common Stock from the OTCBB, nor has the Company received any notification that the SEC, the OTCBB or the National Association of Securities Dealers, Inc.
(“NASD”) is contemplating terminating such registration or quotation, except as disclosed in the Exchange Act Documents. 
 2.13 Reporting Status. The Company has filed in a timely manner all documents that the Company was required to file under the Exchange Act during the twelve (12) months preceding the date of this Agreement. The following
documents complied as to form in all material respects with the SEC’s requirements as of their respective filing dates, and the information contained therein as of the date thereof did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances under which they were made not misleading: 
 (a) all Forms 10-K, 10-Q, 8-K (including any and all amendments thereto) and all Definitive Proxy Statements on Schedule 14A and
additional Definitive Proxy Materials filed with the SEC since June 30, 2006; and 
 (b) all other documents, if any,
filed by the Company with the SEC since June 30, 2006. 
 2.14 Issuance and Quotation. The Company shall comply with all
requirements of the NASD and the SEC with respect to the issuance of the Shares, the Conversion Shares, the Warrants and the Warrant Shares and the OTCBB with respect to the quotation of the Conversion Shares and the Warrant Shares on the OTCBB.

 2.15 No Manipulation of Stock. The Company has not taken and will not, in violation of applicable law, take, any action designed to
or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares, the Warrant Shares and the Conversion Shares. 
 2.16 Company Not an “Investment Company”. The Company has been advised of the rules and requirements under the Investment Company Act of
1940, as amended (the “Investment Company Act”). The Company is not, and immediately after receipt of payment for the Shares and the Warrants will not be, an “investment company” within the meaning of the Investment
Company Act and shall conduct its business in a manner so that it will not become subject to the Investment Company Act. 
 2.17 Foreign
Corrupt Practices; Embargoed Person. 
 (a) Neither the Company, nor to the knowledge of the Company, any agent or
other person acting on behalf of the Company, has (i) directly or indirectly, corruptly used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made
any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose to the extent required by law any contribution made by the
Company (or made by any 

  

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person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended. 
 (b) None of the funds or other assets of the Company constitute or shall
constitute property of, or shall be beneficially owned, directly or indirectly, by any person with whom U.S. persons are restricted from engaging in financial or other transactions under United States law, including, but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any executive orders or regulations promulgated under any such
United States laws (each, an “Embargoed Person”), with the result that the investments evidenced by the Shares are or would be in violation of law and (i) no Embargoed Person has or shall have any interest of any nature
whatsoever in the Company with the result that the investments evidenced by the Shares are or would be in violation of law; and (ii) none of the funds of the Company are or shall be derived from any unlawful activity with the result that the
investments evidenced by the Shares are or would be in violation of law; provided, that with respect to the covenants contained in this Section 2.17(b), the Company may assume that the Investors are not Embargoed Persons. The Company
certifies that, to the Company’s knowledge, the Company has not been designated, and is not owned or controlled, by an Embargoed Person. 
 2.18 Accountants. To the Company’s knowledge, KPMG LLP and Vitale Caturano & Company, Ltd, each of whom the Company expects will express their respective opinion with respect to the financial statements to be
incorporated by reference from the Company’s Annual Report on Form 10-K for the year ended June 30, 2004, 2005 and/or 2006, as applicable, into the Registration Statement (as defined below) and the prospectus which forms a part thereof,
are independent accountants as required by the Securities Act and the rules and regulations promulgated thereunder and are registered with the Public Company Accounting Oversight Board. 
 2.19 Contracts. The contracts filed as exhibits to the Exchange Act Documents are in full force and effect on the date hereof, and neither the
Company nor, to the Company’s knowledge, any other party to such contracts is in breach of or default under any of such contracts which would have a Material Adverse Effect. The Company has filed with the SEC all contracts and agreements
required to be filed by the Exchange Act. 
 2.20 Taxes. The Company has filed all necessary federal, state and foreign income and
franchise tax returns due to be filed as of the date hereof and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been or might be asserted or threatened against it which would have a
Material Adverse Effect. 
 2.21 Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income taxes)
which are required to be paid in connection with the sale and transfer of the Shares to be sold to the Investor hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have
been fully complied with. 
 2.22 Private Offering. Assuming the correctness of the representations and warranties of the Investors
set forth in ARTICLE V hereof, the offer and sale of Shares and Warrants hereunder is exempt from registration under the Securities Act. The Company has not in the past nor will it hereafter take any action to sell, offer for sale or solicit
offers to buy any securities of the Company which would bring the offer, issuance or sale of the Shares and the Warrants as contemplated by this Agreement, within the provisions of Section 5 of the Securities Act, unless such offer, issuance or
sale was or shall be within the exemptions of Section 4 of the Securities Act. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Shares and/or the Warrants by any form of general solicitation

  

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or general advertising (as those terms are used in Regulation D under the Securities Act). The Company has offered the Shares and Warrants for sale only to
the Investors and certain other “accredited investors” within the meaning of Rule 501 of Regulation D under the Securities Act. 
 2.23 Controls and Procedures. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company has established and maintains an effective
system of internal control over financial reporting (as such term is defined in the Exchange Act ) regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with GAAP and includes
policies and procedures that (i) pertain to maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the issuer’s assets that could have a Material Adverse Effect on the financial statements. Except as set forth
in the Exchange Act Documents, the Company has established and maintains disclosure controls and procedures (as defined in Exchange Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, including, without limitation, controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in the
applicable Exchange Act Documents their conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the periods covered by such Exchange Act Documents based on such evaluation. Since the last such evaluation date,
there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting, and no significant
deficiencies or material weaknesses in internal controls over financial reporting, or other factors that could significantly affect the Company’s internal control over financial reporting, have been identified. 
 2.24 Merger Agreement and Loan Agreement. Each of the representations and warranties of each party to (i) the Merger Agreement (including,
without limitation, those of Vodavi), as qualified by the disclosure schedule provided by Vodavi, were true and correct in all respects when made and will be true and correct in all material respects at the time of the consummation of the Merger,
and (ii) the Loan Agreement (including, without limitation, those of the Company), as qualified by the disclosure schedule provided by the Company, were true and correct in all respects when made and will be true and correct in all material
respects at the time of the consummation of the transactions contemplated by the Loan Agreement. The execution, delivery and performance by the Company of each of the Merger Agreement and the Loan Agreement and the consummation by the Company of the
transactions contemplated thereby, were within the powers of the Company and were duly authorized by all necessary action of the Company. The Merger Agreement and the Loan Agreement each constitutes a valid and binding agreement of the Company
enforceable against the Company in accordance with their respective terms, except to the extent that the validity or binding nature of either agreement may be subject or affected by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or conveyance or other laws relating to or affecting the rights of creditors generally, or the availability of any equitable or other specific remedy upon breach of such agreements, or public policy. Upon consummation of the
Merger, the Company will be, subject to the terms and conditions of the Merger Agreement, the sole stockholder of Vodavi. 
  

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 ARTICLE III 
 AFFIRMATIVE COVENANTS OF THE COMPANY 
 3. The Company hereby covenants (i) with respect to
Section 3.3, with all of the Investors for so long as such Investors beneficially own any Shares and/or Conversion Shares and/or Warrant Shares, (ii) with respect to Section 3.1, with those Investors who, after the
issuance and sale of the Shares and the Warrants pursuant to this Agreement, will beneficially own at least 30% of the Common Stock (calculated on a full diluted basis) (the “30% Investors”) for so long as such Investors
beneficially own at least 30% of the Common Stock (calculated on a fully diluted basis); (iii) in addition to and not in lieu of the foregoing with respect to Sections 3.1-3.2 and Sections 3.4-3.7, M/C Venture
Partners for so long as M/C Venture Partners owns at least 50% of the Shares initially purchased by it hereunder, as follows: 
 3.1 Right
of First Refusal. 
 (a) Right of First Refusal. The Company shall not issue, sell or exchange, agree or obligate
itself to issue, sell or exchange, or reserve or set aside for issuance, sale or exchange, in a transaction not involving a public offering, any (i) shares of Common Stock, (ii) any other equity security of the Company, including without
limitation, preferred shares, (iii) any debt security of the Company (other than debt with no equity feature) including without limitation, any debt security which by its terms is convertible into or exchangeable for any equity security of the
Company, (iv) any security of the Company that is a combination of debt and equity, or (v) any option, warrant or other right to subscribe for, purchase or otherwise acquire any such equity security or any such debt security of the
Company, unless in each case the Company shall have first offered to sell such securities (the “Offered Securities”) to the 30% Investors and each other person or entity, if any, that has such a right (each an
“Offeree” and collectively, the “Offerees”) as follows: Each Offeree shall have the right to purchase (x) that portion of the Offered Securities as the number of shares of Common Stock then held (including
shares then issuable upon the exercise or conversion of outstanding securities) by such Offeree bears to the total number of shares of issued and outstanding Common Stock of the Company calculated on a fully diluted basis to include (i) the
total number of shares of Common Stock subject to outstanding awards granted under stock plans of the Company and (ii) the total number of shares that could be issued upon the exercise or conversion of outstanding securities (the “Basic
Amount”), and (y) such additional portion of the Offered Securities as such Offeree shall indicate it will purchase should the other Offerees subscribe for less than their Basic Amounts (the “Undersubscription
Amount”), at a price and on such other terms as shall have been specified by the Company in writing delivered to such Offeree (the “Offer”), which Offer by its terms shall remain open and irrevocable for a period of twenty
(20) days from receipt of the offer. 
 (b) Notice of Acceptance. Notice of each Offeree’s intention to
accept, in whole or in part, any Offer made shall be evidenced by a writing signed by such Offeree and delivered to the Company prior to the end of the 20-day period of such offer, setting forth such of the Offeree’s Basic Amount as such
Offeree elects to purchase and, if such Offeree shall elect to purchase all of its Basic Amount, such Undersubscription Amount as such Offeree shall elect to purchase (the “Notice of Acceptance”). If the Basic Amounts subscribed for
by all Offerees are less than the total Offered Securities, then each Offeree who has set forth Undersubscription Amounts in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, all
Undersubscription Amounts it has subscribed for; provided, however, that should the Undersubscription Amounts subscribed for exceed the difference between the Offered Securities and the Basic Amounts subscribed for (the
“Available Undersubscription Amount”), each Offeree who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Undersubscription Amount
subscribed for by such Offeree bears to the total Undersubscription Amounts 

  

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subscribed for by all Offerees, subject to rounding by the Board of Directors to the extent it reasonably deems necessary. 
 (c) Conditions to Acceptances and Purchase. 
 (i) Permitted Sales of Refused Securities. In the event that Notices of Acceptance are not given by the Offerees in respect of all
the Offered Securities, the Company shall have ninety (90) days from the expiration of the period set forth above to close the sale of all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by the
Offerees (the “Refused Securities”) to the Person or Persons specified in the Offer, but only for cash and otherwise in all respects upon terms and conditions, including, without limitation, unit price and interest rates, which are
no more favorable, in the aggregate, to such other person or persons or less favorable to the Company than those set forth in the Offer. 
 (ii) Reduction in Amount of Offered Securities. In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified above), then
each Offeree may, at its sole option and in its sole discretion, reduce the number of, or other units of the Offered Securities specified in its respective Notices of Acceptance to an amount which shall be not less than the amount of the Offered
Securities which the Offeree elected to purchase pursuant to (b) above multiplied by a fraction, (i) the numerator of which shall be the amount of Offered Securities which the Company actually proposes to sell, and (ii) the
denominator of which shall be the amount of all Offered Securities the Company proposed to sell in its writing delivered pursuant to Section 3.1(a) above. In the event that any Offeree so elects to reduce the number or amount of Offered
Securities specified in its respective Notices of Acceptance, the Company may not sell or otherwise dispose of more than the reduced amount of the Offered Securities until such securities have again been offered to the Offerees in accordance with
Section 3.1(a). 
 (iii) Closing. Upon the closing, which shall include full payment to the Company, of the
sale to such other person or persons of all or less than all the Refused Securities, the Offerees shall purchase from the Company, and the Company shall sell to the Offerees, the number of Offered Securities specified in the Notices of Acceptance,
as reduced pursuant to Section 3.1(b) above if the Offerees have so elected, upon the terms and conditions specified in the Offer. The purchase by the Offerees of any Offered Securities is subject in all cases to the preparation,
execution and delivery by the Company and the Offerees of a purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to the Company and the Offerees and their respective counsel. 
 (d) Further Sale. In each case, any Offered Securities not purchased by the Offerees or other person or persons in accordance with
Section 3.1(c)(iii) above may not be sold or otherwise disposed of until they are again offered to the Offerees under the procedures specified in Section 3.1(c)(i)-(iii) above. 
 (e) Exceptions. The rights of the Investors under this Section 3.1 shall not apply to: 
 (i) Common Stock issued as a stock dividend to holders of Common Stock or upon any subdivision or combination of shares of Common Stock;

 (ii) any capital stock or derivative thereof granted to an employee, director or consultant under a stock plan approved by
the Board of Directors and the Company’s stockholders; 
 (iii) any securities issued as consideration for the
acquisition of another entity by the Company by merger or share exchange (whereby the Company owns no less than 51% of the 

  

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voting power of the surviving entity) or purchase of substantially all of such entity’s stock or assets, if such acquisition is approved by the Board of
Directors; 
 (iv) any securities issued in connection with a strategic partnership, joint venture or other similar agreement,
provided that the purpose of such arrangement is not primarily the raising of capital and that such arrangement is approved unanimously by the Board of Directors; 
 (v) any securities issued to a financial institution in connection with a bank loan or lease with such financial institution provided that
such is approved unanimously by the Board of Directors; 
 (vi) securities issuable upon the exercise or conversion of
securities outstanding on the Closing Date; and 
 (vii) the Shares, the Warrants, the Conversion Shares issued upon
conversion of the Shares and the Warrant Shares issued upon the exercise of the Warrants. 
 3.2 Further Assurances. The Company
hereby agrees to take all further actions, execute all further documents and perform all further things necessary to give effect to the provisions of this Agreement and consult with and keep informed, and shall cause the appropriate officers,
directors and legal counsel to consult with and keep informed, legal counsel to the Investors (including, without limitation, legal counsel to M/C Venture Partners) including, but not limited to the status of the proposed Merger and Loan Agreement.

 3.3. Registration of the Shares; Compliance with the Securities Act. 
 (a) Registration Procedures and Other Matters. The Company shall: 
 (i) subject to receipt of necessary information from the Investors after prompt request from the Company to the Investors to provide such
information, prepare and file with the SEC within 210 days after the consummation of the Merger (the date such registration statement is filed, the “Filing Date”), a registration statement on Form S-3 or Form S-1 (the
“Registration Statement”) to enable the resale of Conversion Shares and/or Warrant Shares (for purposes of this Section 3.3 only, the term “Warrant Shares” shall include shares of Common Stock issuable upon
exercise of the Warrants and any warrants to purchase Common Stock issued in connection with the Loan Agreement), as applicable, by the Investors from time to time through any quotation system on which the Common Stock is quoted or listed, if
applicable, or in privately-negotiated transactions (as used in this Section 3.3 and in Section 3.7 only, the term “Conversion Shares” shall include any securities into which the Conversion Shares are
reclassified after the date hereof); 
 (ii) use its best efforts, subject to receipt of necessary information from the
Investors after prompt request from the Company to the Investors, to provide such information (provided that failure on the part of one Investor shall not relieve the Company from its obligation to use best efforts with respect to complying
Investors), to cause the Registration Statement to become effective as soon as reasonably practicable after (A) being informed by the staff of the SEC (the “Staff”) that the Staff has decided not to review the Registration
Statement, or (B) being informed by the Staff that the Staff have no further comments on such Registration Statement (the date the Registration Statement is initially declared effective by the SEC, the “Effective Date”), such
efforts to include, without limiting the generality of the foregoing, preparing and filing with the SEC in such period any financial statements that are required to be filed prior to the effectiveness of such Registration Statement; and, in the
event that the filing referred to in Section 3.3(a)(i) above is on a form other than Form S-3, the Company shall use its best efforts, 

  

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subject to receipt of necessary information from the Investors after prompt request from the Company to the Investors to provide such information (provided
that failure on the part of one Investor shall not relieve the Company from its obligation to use best efforts with respect to complying Investors), to prepare and file with the SEC, as soon as reasonably practicable after the Company first becomes
eligible to file a registration statement on Form S-3, a registration statement on Form S-3 (the “S-3 Registration Statement”) to enable the resale of the Conversion Shares and the Warrant Shares by the Investors from time to time
through any quotation system on which the Common Stock is quoted or listed or in privately-negotiated transactions; and to use its best efforts to cause the S-3 Registration Statement to become effective as soon as reasonably practicable thereafter,
such efforts to include, without limiting the generality of the foregoing, preparing and filing with the SEC as promptly as reasonably practicable any financial statements that are required to be filed prior to the effectiveness of such S-3
Registration Statement (the term “Registration Statement” shall mean the Form S-1 Registration Statement until the S-3 Registration Statement is declared effective by the SEC, after which time it shall mean the S-3 Registration
Statement). 
 (iii) use its best efforts to prepare and file with the SEC such amendments and supplements to the Registration
Statement and the Prospectus (as used herein, the term “Prospectus” shall mean (1) the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Conversion Shares covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus,
and (2) any “free writing prospectus” as defined in Rule 163 under the Securities Act) used in connection therewith as may be necessary to keep the Registration Statement current, effective and free from any material misstatement or
omission to state a material fact for a period not exceeding, with respect to each Investor’s Conversion Shares or Warrant Shares purchased hereunder, the earlier of (x) the date on which such Investor may sell all Conversion Shares or
Warrant Shares then held by the Investor without restriction by the volume limitations of Rule 144(e) of the Securities Act and (y) such time as all Conversion Shares or Warrant Shares held by such Investor have been sold pursuant to a
registration statement; 
 (iv) comply with Rule 172 of the Securities Act and (x) advise the Investors promptly of any
failure by the Company to satisfy the conditions of such Rule 172 and (y) promptly furnish to the Investors with respect to the Conversion Shares or Warrant Shares registered under the Registration Statement such number of copies of the
Registration Statement, Prospectuses and Preliminary Prospectuses in conformity with the requirements of the Securities Act and such other documents as the Investors may reasonably request, in order to facilitate the public sale or other disposition
of all or any of the Conversion Shares or Warrant Shares by the Investors; 
 (v) file documents required of the Company for
blue sky clearance in states specified in writing by any Investor and use its best efforts to maintain such blue sky qualifications during the period the Company is required to maintain the effectiveness of the Registration Statement pursuant to
Section 3.3(a)(iii); provided, however, that the Company shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented; 

(vi) bear all expenses in connection with the procedures in paragraph (i) through (v), (viii) and the last paragraph of this
Section 3.3(a) and the registration of the Conversion Shares and Warrant Shares pursuant to the Registration Statement; 
 (vii) advise the Investors, promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the SEC delaying or suspending the effectiveness of the 

  

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Registration Statement or of the initiation or threat of any proceeding for that purpose; and it will promptly use its best efforts to prevent the issuance
of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued; and 
 (viii) provide a “Plan of Distribution” section of the Registration Statement substantially in the form attached hereto as Exhibit I hereto (subject to the comments of the SEC). 
 Notwithstanding anything to the contrary herein, (i) the Registration Statement shall cover only the Conversion Shares, the Warrant Shares and any
other securities with respect to which the Company has registration obligations as of the date hereof. In no event at any time before the Registration Statement becomes effective shall the Company publicly announce or file any other registration
statement, other than registrations on Form S-8, without the prior written consent of each individual holder (together with any Affiliates of such holder) of 30% of the Series E Preferred Stock to be purchased pursuant to this Agreement (the
“30% Investors’ Consent”). 
 The Company understands that the Investors disclaim being underwriters, but any Investor
being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has hereunder; provided, however that if the Company receives notification from the SEC that a Investor is deemed an underwriter, then the period by
which the Company is obligated to submit an acceleration request to the SEC shall be extended to the earlier of (a) the 90th day after such SEC notification, or (b) 120 days after the initial filing of the Registration Statement with the
SEC. 
 Within three (3) business days of the Effective Date, the Company shall advise its transfer agent that the shares are subject to
an effective registration statement and can be reissued free of restrictive legend upon notice of a sale by a Investor and confirmation by such Investor that it has complied with the prospectus delivery requirements, provided that the Company has
not advised the transfer agent orally or in writing that the registration statement has been suspended; provided, however, in the event the Company’s transfer agent requires an opinion of counsel to the Company for an such reissuance,
within three business days of any such request for an opinion by the transfer agent, the Company shall cause its counsel to issue a blanket opinion to the transfer agent stating the foregoing. 
 (b) Transfer of Conversion and Warrant Shares After Registration; Suspension. 
 (i) Each Investor, severally and not jointly, agrees that it will not effect any disposition of the Conversion Shares or the Warrant
Shares or its right to purchase the Conversion Shares or the Warrant Shares that would constitute a sale within the meaning of the Securities Act except as contemplated in the Registration Statement referred to in Section 3.3(a) and as
described below or as otherwise permitted by law, and that it will promptly notify the Company of any material changes in the information set forth in the Registration Statement regarding the Investor or its plan of distribution. 
 (ii) Except in the event that paragraph (iii) below applies, the Company shall (A) if deemed necessary by the Company, prepare
and file from time to time with the SEC a post-effective amendment to the Registration Statement or a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required
document so that such Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and so that such
Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(B) provide the Investors copies of any documents filed pursuant to Section 3.3(b)(ii)(A); and (C) inform each Investor that the Company has complied with its obligations in Section 3.3(b)(ii)(A) (or that, if the
Company has filed a post-effective 

  

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amendment to the Registration Statement which has not yet been declared effective, the Company will notify the Investor to that effect, will use its best
efforts to secure the effectiveness of such post-effective amendment as promptly as possible and will promptly notify the Investor pursuant to Section 3.3(b)(ii)(A) hereof when the amendment has become effective). 
 (iii) Subject to paragraph (iv) below, in the event (A) of any request by the SEC or any other federal or state governmental
authority during the period of effectiveness of the Registration Statement for amendments or supplements to a Registration Statement or related Prospectus or for additional information; (B) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose; (C) of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Conversion Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; or (D) of any event or circumstance which, upon the advice of
its counsel, necessitates the making of any changes in the Registration Statement or Prospectus, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of the Registration Statement, it will not contain
any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue
statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; then the Company shall
deliver a notice in writing to each Investor (the “Suspension Notice”) to the effect of the foregoing and, upon receipt of such Suspension Notice, the Investor will refrain from selling any Conversion Shares pursuant to the
Registration Statement (a “Suspension”) until the Investor’s is advised in writing by the Company that the Suspension is no longer effective. In the event of any Suspension, the Company will use its best efforts to cause the
Suspension to be terminated as soon as reasonably practicable within twenty (20) business days after the delivery of a Suspension Notice to the Investors. In addition to and without limiting any other remedies (including, without limitation, at
law or at equity) available to the Investors, each Investor shall be entitled to specific performance in the event that the Company fails to comply with the provisions of this Section 3.3(b)(iii). 
 (iv) Notwithstanding the foregoing paragraphs of this Section 3.3(b), the Investors shall not be prohibited from selling
Conversion Shares or the Warrant Shares under the Registration Statement as a result of Suspensions on more than two occasions of not more than thirty (30) days each in any twelve (12) month period, unless, in the good faith judgment of
the Company’s Board of Directors, upon the advice of counsel, the sale of Conversion Shares or Warrant Shares under the Registration Statement in reliance on this Section 3.3(b)(iv) would be reasonably likely to cause a violation of
the Securities Act or the Exchange Act and result in liability to the Company. 
 (v) Provided that a Suspension is not then
in effect, any Investor may sell Conversion Shares or Warrant Shares under the Registration Statement upon compliance with its obligations under this Section 3.3. 
 (vi) In the event of a sale of Conversion Shares or Warrant Shares by a Investor pursuant to the Registration Statement, the Investor must
also deliver to the Company’s transfer agent, with a copy to the Company, a Certificate of Subsequent Sale substantially in the form attached hereto as Exhibit J, so that the Conversion Shares or Warrant Shares, as applicable, may
be properly transferred. 
  

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 (c) Indemnification. 
 (i) For the purposes of this Section 3.3(c): 
 (A) the term “Selling Stockholder” shall include each Investor and any Affiliate of such Investor; 
 (B) the term “Registration Statement” shall include the Prospectus in the form first filed with the SEC pursuant to
Rule 424(b) of the Securities Act or filed as part of the Registration Statement at the time of effectiveness if no Rule 424(b) filing is required, exhibit, supplement or amendment included in or relating to the Registration Statement
referred to in Section 3.3(a); and 
 (C) the term “untrue statement” shall include any untrue
statement or alleged untrue statement, or any omission or alleged omission to state in the Registration Statement a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under
which they were made, not misleading. 
 (ii) The Company agrees to indemnify and hold harmless each Selling Stockholder from
and against any losses, claims, damages or liabilities to which such Selling Stockholder may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon (A) any breach of the representations or warranties of the Company contained in this Section 3.3 or failure to comply with the covenants and agreements of the Company contained in this
Section 3.3, (B) any untrue statement of a material fact contained in the Registration Statement as amended at the time of effectiveness or any omission of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (C) any failure by the Company to fulfill any undertaking included in the Registration Statement as amended at the time of effectiveness, and the Company will reimburse such Selling Stockholder for any
reasonable legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim, or preparing to defend any such action, proceeding or claim, provided, however, that the Company
shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of, or is based upon, an untrue statement made in such Registration Statement or any omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Selling Stockholder specifically for use in preparation of the Registration
Statement or the failure of such Selling Stockholder to comply with its covenants and agreements contained in Section 3.3(b) hereof respecting sale of the Conversion Shares or, in the event the Company has advised the Investors in
writing that the Company does not meet the conditions for using Rule 172 of the Securities Act and has provided the Investors with a copy of a current Prospectus, any statement or omission in any earlier Prospectus that is corrected in the
Prospectus so delivered to the Investors and delivered to the Selling Stockholder prior to the pertinent sale or sales by the Selling Stockholder. The Company shall reimburse each Selling Stockholder for the amounts provided for herein on demand as
such expenses are incurred. 
 (iii) Each Investor, severally but not jointly, agrees to indemnify and hold harmless the
Company (and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, each officer of the Company who signs the Registration Statement and each director of the Company) from and against any losses,
claims, damages or liabilities to which the Company (or any such officer, director or controlling person) may become subject (under the Securities Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of, or are based upon, (A) any failure to comply with the covenants and 

  

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agreements contained in Section 3.3(b) hereof respecting sale of the Conversion Shares or Warrant Shares, or (B) any untrue statement of a
material fact contained in the Registration Statement or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading if such untrue statement or omission was made in reliance upon and in
conformity with written information furnished by or on behalf of such Investor specifically for use in preparation of the Registration Statement, and such Investor will reimburse the Company (or such officer, director or controlling person), as the
case may be, for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided, however that such Investor’s obligation to indemnify the Company
shall be limited to the net amount received by such Investor from the sale of the Conversion Shares or Warrant Shares giving rise to such obligation. 
 (iv) Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this
Section 3.3(c), such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action, but the omission to so notify the indemnifying person will not relieve it from any liability
which it may have to any indemnified person under this Section 3.3(c) (except to the extent that such omission materially and adversely affects the indemnifying person’s ability to defend such action) or from any liability otherwise
than under this Section 3.3(c). Subject to the provisions hereinafter stated, in case any such action shall be brought against an indemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent
that it shall elect by written notice delivered to the indemnified person promptly after receiving the aforesaid notice from such indemnified person, shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to such
indemnified person. After notice from the indemnifying person to such indemnified person of its election to assume the defense thereof, such indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof, provided, however, that if there exists or shall exist a conflict of interest that would make it inappropriate, in the opinion of counsel to the indemnified person,
for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the reasonable expense of such indemnifying
person; provided, however, that no indemnifying person shall be responsible for the fees and expenses of more than one separate counsel (together with appropriate local counsel) for all indemnified parties. In no event shall any indemnifying
person be liable in respect of any amounts paid in settlement of any action unless the indemnifying person shall have approved the terms of such settlement; provided that such consent shall not be unreasonably withheld. No indemnifying person
shall, without the prior written consent of the indemnified person, effect any settlement of any pending or threatened proceeding in respect of which any indemnified person is or could have been a party and indemnification could have been sought
hereunder by such indemnified person, unless such settlement includes an unconditional release of such indemnified person from all liability on claims that are the subject matter of such proceeding. 
 (v) If the indemnification provided for in this Section 3.3(c) is unavailable to or insufficient to hold harmless an
indemnified person under subsection (ii) or (iii) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying person shall contribute to the
amount paid or payable by such indemnified person as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and the
applicable Investor, as well as any other Selling Shareholders under such registration statement on the other in connection with the statements or omissions or other matters which resulted in such losses, claims, damages or liabilities (or actions
in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, in the case of an untrue statement, whether the untrue statement relates to information supplied
by the Company on the one hand or an Investor, or other 

  

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Selling Stockholder on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement. The Company and each Investor, severally but not jointly, agree that it would not be just and equitable if contribution pursuant to this subsection (v) were determined by pro rata allocation (even if the Investor and other Selling
Stockholders were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection (v). The amount paid or payable by an indemnified
person as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (v) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified person in
connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (v), each Investor shall not be required to contribute any amount in excess of the amount by which the net amount received by such
Investor from the sale of the Conversion Shares or the Warrant Shares to which such loss relates exceeds the amount of any damages which such Investor has otherwise been required to pay by reason of such untrue statement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Each Investor’s obligations in this
subsection to contribute shall be in proportion to its sale of Conversion Shares or Warrant Shares to which such loss relates and shall not be joint with any other Selling Stockholders. 
 (vi) The parties to this Agreement hereby acknowledge that they are sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions hereof including, without limitation, the provisions of this Section 3.3(c), and are fully informed regarding said provisions. They further acknowledge that the provisions of this
Section 3.3(c) fairly allocate the risks in light of the ability of the parties to investigate the Company and its business in order to assure that adequate disclosure is made in the Registration Statement as required by the Act and the
Exchange Act. The parties are advised that federal or state public policy as interpreted by the courts in certain jurisdictions may be contrary to certain of the provisions of this Section 3.3(c), and the parties hereto hereby expressly
waive and relinquish any right or ability to assert such public policy as a defense to a claim under this Section 3.3(c) and further agree not to attempt to assert any such defense. 
 (d) Termination of Conditions and Obligations. The conditions precedent imposed by Section 5.5 or this
Section 3.3 upon the transferability of the Conversion Shares or Warrant Shares shall cease and terminate as to any particular number of the Conversion Shares or Warrant Shares when such Conversion Shares or Warrant Shares shall have
been effectively registered under the Securities Act and sold or otherwise disposed of in accordance with the intended method of disposition set forth in the Registration Statement covering such Conversion Shares or Warrant Shares, at the time such
Shares are eligible for sale pursuant to Rule 144(k) (and the Investor provides the Company with such reasonable and appropriate customary representations as may be reasonably requested by the Company) or at such time as an opinion of counsel
reasonably satisfactory to the Company shall have been rendered to the effect that such conditions are not necessary in order to comply with the Securities Act. 
 (e) Information Available. So long as the Registration Statement is effective covering the resale of Conversion Shares or Warrant
Shares owned by any Investor, the Company will furnish to such Investors, upon the reasonable request of a Investor, an adequate number of copies of the Prospectuses to supply to any other party requiring such Prospectuses; and upon the reasonable
request of such Investor, the President or the Chief Financial Officer of the Company (or an appropriate designee thereof) will meet with such Investor or a representative thereof at the Company’s headquarters to discuss all information
relevant for disclosure in the Registration Statement covering the Conversion Shares or Warrant Shares and will otherwise cooperate with any Investor conducting an investigation for the purpose of reducing or eliminating such Investor’s
exposure to liability under the Securities Act, including the reasonable production of information at the Company’s headquarters; provided, that the 

  

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Company shall not be required to disclose any confidential information to or meet at its headquarters with any Investor until and unless the Investor shall
have entered into a confidentiality agreement in form and substance reasonably satisfactory to the Company with the Company with respect thereto. 
 3.4 Delivery of Shares; Liquidated Damages. The Company and each Investor agree that such Investor will suffer damages if the Company fails to fulfill its obligations pursuant to Section 1.3 hereof and that it would not
be possible to ascertain the extent of such damages with precision. Accordingly, the Company hereby agrees to pay liquidated damages to each Investor if the Company fails to deliver to the Investors the stock certificates evidencing the Shares and
the Warrants being purchased by the Investors hereunder within three (3) business days after the date hereof (such an event, a “Covenant Default”). The Company shall pay an amount in cash equal to 1% of the aggregate purchase
price paid by the Investors pursuant to this Agreement (the “Liquidated Damages”) in connection with a Covenant Default, on the business day following the Covenant Default, and each 30th day thereafter until the certificates evidencing the Shares and the Warrants purchased by the Investors hereunder have been delivered to the Investors.
Notwithstanding the foregoing, all periods shall be tolled during delays directly caused by the action or inaction of the Investor, and the Company shall have no liability to any Investor in respect of any such delay. The Liquidated Damages payable
herein shall apply on a pro rata basis for any portion of a 30-day period of a Covenant Default. 
 3.5 Reservation of Shares of Common
Stock. From and after the Closing Date, the Company will at all times reserve and keep available, solely for issuance and delivery upon the conversion of the Shares and exercise of the Warrants, all Common Stock issuable from time to time upon
such conversion and exercise. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of the Shares and/or exercise of the Warrants without limitation of any remedies available to
any Investor, the Company will forthwith take such corporate action (and shall use its best efforts to cause the Company’s stockholders to take such action) as may be necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purposes. The Company shall obtain any authorization, consent, approval or other action by, or make any filing with, any court or administrative body that may be required under applicable state
securities laws in connection with the issuance of shares of Common Stock upon conversion of the Shares and exercise of the Warrants. 
 3.6
Extinguishment of Prior Debt. Prior to the Closing Date, the Company shall have completely satisfied and extinguished all of its payment obligations and amounts due to (i) Silicon Valley Bank (“SVB”) pursuant to that
certain Loan and Security Agreement, dated as of September 28, 2005 (“SVB Loan Agreement”), including, without limitation the promissory notes made to SVB in connection therewith, and (ii) Comdial Corporation
(“Comdial”), pursuant to that certain Promissory Note, dated as of September 28, 2005 (the “Comdial Note”), made by the Company to Comdial, and the Company shall have no further obligations under the SVB Loan
Agreement or the Comdial Note (and 30% Investors shall have received evidence in writing of such satisfaction and extinguishment from the Company). 
 3.7 Removal of Legends. Upon the earlier of (i) registration of the Conversion Shares for sale pursuant to Section 3.3 or (ii) Rule 144(k) becoming available with respect to an Investor’s Conversion Shares,
the Company shall, (A) deliver to the transfer agent for the Common Stock (the “Transfer Agent”) irrevocable instructions that the Transfer Agent shall reissue a certificate representing shares of Common Stock without legends
upon receipt by such Transfer Agent of the legended certificates for such shares, together with either (1) a customary representation by such Investor that Rule 144(k) of the Securities Act applies to the shares of Common Stock represented
thereby or (2) the Certificate of Subsequent Sale in substantially the form of Exhibit J hereto, and (B) cause its counsel to deliver to the Transfer Agent one or more blanket opinions to the effect that the removal of such legends
in such circumstances may be effected under the Securities Act. From and after the earlier of such dates, 

  

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upon an Investor’s written request, the Company shall promptly cause certificates evidencing such Investor’s securities to be replaced with
certificates which do not bear such restrictive legends, and Conversion Shares subsequently issued upon conversion of the Shares or the due exercise of the Warrants shall not bear such restrictive legends. When the Company is required to cause
unlegended certificates to replace previously issued legended certificates, if unlegended certificates are not delivered to an Investor within three (3) business days of submission by that Investor of legended certificate(s) to the Transfer
Agent as provided above (or to the Company, in the case of the Warrants), the Company shall be liable to such Investor for a penalty equal to 1% of the aggregate purchase price of the Conversion Shares evidenced by such certificate(s) for each
thirty (30) day period (or portion thereof) beyond such three (3) business day period that the unlegended certificates have not been so delivered; provided that in no event shall the aggregate amount of cash to be paid to such
Investor pursuant to this Section 3.7 exceed 9% of such aggregate purchase price. 
 3.8 Board and Committee
Configuration. 
 (a) Size. The Board of Directors following the consummation of the Merger shall consist of, and
be fixed at, eight (8) members. If the Merger is not consummated, the Board of Directors shall consist of, and be fixed at, seven (7) members. 
 (b) Membership – Post-Merger. Immediately following the Closing, the members of the Board of Directors shall consist of (and the Company agrees to nominate for election) (i) the chief executive
officer of the Company who shall serve as a Class II director, currently William Y. Tauscher, (ii) one member who shall serve as a Class II director designated by the written consent of the majority-in-interest of the shares of Common Stock
held by the investors (including the affiliated assignees of such investors, the “Series B Investors”) named on the signature pages to the Company’s Series B purchase agreement dated as of August 8, 2001 that
were acquired upon the conversion of the shares of Series B Preferred Stock held by them pursuant to the terms of the Consent, Waiver and Amendment Agreement dated September 25, 2004 (the “2004 Consent”), acting as a single
class, currently Robert J. Majteles, (iii) one member who shall serve as a Class II director designated by the written consent of the majority-in-interest of the shares of Common Stock held by the investors (including the affiliated assignees
of such investors, the “Series C Investors”) named on the signature pages to the Company’s Series C purchase agreement dated as of June 27, 2003, as amended that were acquired upon the conversion of the shares of
Series C Preferred Stock held by them pursuant to the terms of the 2004 Consent, acting as a single class, currently R. Randy Stolworthy, (iv) two members who shall serve as Class III directors designated in writing by M/C Venture Partners,
currently John W. Watkins and Matthew J. Rubins, (v) two non-executive members who shall serve as Class I directors designated by the mutual agreement of M/C Venture Partners and the Board of Directors (reflected by approval of the Board of
Directors (or its Nominating or Corporate Governance committee) of a written designation by M/C Venture Partners), provided that each such non-executive member has relevant industry experience (each, an “Industry Director”), which
such Industry Directors are currently Michael P. Downey and Francis E. Girard, and (vi) subject to the consummation of the Merger, one member who shall serve as a Class I director designated in writing, by LG-Nortel Co., Ltd.
(“LG”). 
 (c) Membership-Post-Annual Meeting. Following the date which is six months from the Closing
Date, the members of the Board of Directors shall consist of (and the Company agrees to nominate for election) (i) the chief executive officer of the Company who shall serve as a Class II director, (ii) one member who shall serve as a
Class II director designated by the written consent of (A) Special Situations Fund III, L.P. and its Affiliates (collectively, “SSF”) so long as SSF and its Affiliates continue to beneficially own at least 50% of the shares of
Common Stock acquired by SSF and its Affiliates upon the conversion of the shares of Series B Preferred Stock held by them pursuant to the terms of the 2004 Consent or (B) in the event that SSF is not entitled to appoint a director pursuant to

  

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clause (A), the majority-in-interest of the shares of Common Stock held by the Series B and C Investors that were acquired by them upon the conversion,
pursuant to the terms of the 2004 Consent, of the shares of Series B Preferred Stock and Series C Preferred Stock held by them, acting as a single class, (iii) two members who shall serve as Class III directors designated in writing by M/C
Venture Partners (at least one of whom shall be an Industry Director), (iv) three Industry Directors who shall serve as Class I directors designated by the mutual agreement of M/C Venture Partners and the Board of Directors (reflected by
approval of the Board of Directors (or its Nomination or Corporate Governance committee) of a written designation by M/C Venture Partners) and (v) subject to the Merger having been consummated, one member who shall serve as a Class I director
designated in writing, by LG. 
 (d) Term. The directors to be elected shall serve for terms in accordance with the
Company’s bylaws. 
 (e) Vacancy. A vacancy in any directorship provided for pursuant to
Sections 3.8(b) and (c) hereof shall be filled or in accordance with such Sections 3.8(b) and (c) by a director designated by the persons or entities that hold the right to designate such person under
Sections 3.8(b) and (c). 
 (f) Committees. The Company shall maintain Compensation, Audit and
Nominating or Corporate Governance committees, and the Investors’ designees shall be entitled to membership on the Compensation and Nominating or Corporate Governance committees. 
 3.9 Prior Round Liquidated Damages. The Company shall property account for and record as a liability on the Company’s balance sheet all
accrued and unpaid liquidated damages payable with respect to prior financings (which the Company hereby acknowledges remain outstanding). 
 ARTICLE IV 
 NEGATIVE COVENANTS OF THE COMPANY 
 For so long as any shares of Series E Preferred Stock are issued and outstanding, the Company hereby covenants with (i) M/C Venture Partners that so
long as M/C Venture Partners owns at least 50% of the Shares initially purchased by it hereunder and (ii) with respect to Sections 4.6 and 4.11, with all of the 30% Investors for so long as such Investors beneficially own at least
30% of the Common Stock (calculated on a fully diluted basis), in addition to any other vote required by law or the Company’s certificate of incorporation without the prior written consent of M/C Venture Partners, the Company will not:

 4.1 Change in Control; Sale of Assets; Merger. Enter into any transaction, or series of related transactions, constituting a Change
of Control (or agree to enter into any such transaction or series of related transactions, or permit any Subsidiary to do so). For purposes of this Section 4.1, “Change of Control” shall mean the existence or occurrence of any
of the following: (a) the sale, conveyance or disposition of all or substantially all of the assets of the Company; (b) the effectuation of a transaction or series or related transactions in which more than fifty percent (50%) of the
voting power of the Company is disposed of (other than as a direct result of normal, uncoordinated trading activities in the Common Stock generally); (c) the consolidation, merger or other business combination of the Company with or into any
other entity, immediately following which the prior stockholders of the Company fail to own, directly or indirectly, at least fifty percent (50%) of the voting equity of the surviving entity; and (d) a transaction or series of related
transactions in which any person or group, other than the Investors and their affiliates, acquires more than fifty percent (50%) of the voting equity of the Company, provided, that the Company shall not be deemed to have violated this
Section 4.1(d) in the event the Investors sell, 

  

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convey or transfer more than 50% of the outstanding equity securities of the Company to an unaffiliated third party. 
 4.2 Creation of Senior or Pari Passu Equity; Issuance of Equity Securities. Create or authorize the creation of any additional class or series of
shares of stock (or any debt security which by its terms is convertible into or exchangeable for any equity security of the Company and any security which is a combination of debt and equity) unless the same ranks junior to the Common Stock as to
dividends and the distribution of assets on the liquidation, dissolution or winding up of the Company; or issue, or agree to issue, any equity security (or any security convertible, exercisable or exchangeable for or into any equity security) of the
Company other than securities set forth in Section 3.1(e). Notwithstanding any other provision of this Agreement, the Company shall not issue any shares of the Series E Preferred Stock except for the Shares and the ROFR Shares.

 4.3 Repurchases, Redemptions, Dividends. Purchase or redeem, or set aside any sums for the purchase or redemption of, or pay any
dividend or make any distribution on, any shares of capital stock of the Company or permit any Subsidiary to do any of the foregoing, except for (1) dividends or other distributions payable on the Common Stock solely in the form of additional
shares of Common Stock; (2) redemption of the Shares as contemplated by the Certificate of Designations and/or the Company’s certificate of incorporation; (3) the dividends and/or distributions with respect to the Shares contemplated
by the Certificate of Designations and/or the Company’s certificate of incorporation, as amended; and (4) the repurchase of shares of Common Stock from employees or consultants at the original purchase price thereof pursuant to awards
granted prior to the date hereof under a stock plan approved by the Board of Directors. 
 4.4 Transfers of Intellectual Property.
Transfer any ownership or interest in, or material rights relating to, or the granting of any liens or encumbrances on, any of the Intellectual Property to any person or entity which is not a member of the consolidated group of the Company and its
Subsidiaries; provided, however, that this restriction shall not apply to transfers of Intellectual Property accomplished in the ordinary course of business (such as pursuant to software license agreements in the ordinary course of business).

 4.5 Liquidation or Dissolution. Consent to or effect any liquidation, dissolution or winding up of the Company or any
recapitalization or reorganization of the Company, or permit any Subsidiary to do any of the foregoing. 
 4.6 Change in Size of
Board. Increase or decrease the number of directors constituting the size of the Board of Directors from eight (8) members. 
 4.7
Change to Charter/By-laws. Amend, alter or repeal any provision of the certificate of incorporation or by-laws of the Company. 
 4.8
Change in Nature of Business. Make, or permit any Subsidiary to make, any change in the nature of its business in the Exchange Act Documents existing on the Closing Date. 
 4.9 Restrictions on Indebtedness. Create, incur, assume or suffer to exist, or permit any Subsidiary to create, incur, assume or suffer to exist,
any liability with respect to indebtedness for money borrowed which exceeds, in the aggregate, $3,000,000, provided that indebtedness for borrowed money assumed, guaranteed, endorsed or upon which the Company or any Subsidiary has
otherwise become directly or contingently liable on, shall count as indebtedness for money borrowed for the purpose of this restriction. 
  

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 4.10 Change in Authorized Capital Stock. Increase or decrease in the authorized amount of any
shares of capital stock of the Company, whether any such change shall be by means of amendment to the Company’s certificate of incorporation or by merger, consolidation or otherwise. 
 4.11 No Disparate Voting Rights. Take any action, including, without limitation, amendments to the Certificate of Incorporation, that would enable
any holder of a share of capital stock of the Company to vote such shares on any matter at a rate exceeding the number of votes that such share would be entitled to had it been purchased at a purchase price equal to one share of Common Stock of the
Company on the date of its purchase (and the Company shall not use indebtedness to evade this covenant). 
 4.12 Issuance of Compensatory
Equity Awards. Grant any options or other rights to purchase capital stock except to employees, directors and consultants as authorized by vote of the Board of Directors or its Compensation Committee, if such committee has been formed.

 4.13 Adjustments to Warrants. Take any action which would cause any adjustment under Section 8 of the Warrants. 
 4.14 Loan Agreement. Amend the Loan Agreement or the warrants issued in connection therewith, or take any action that would cause any increase in
the number of shares of Common Stock for which such warrants may be exercised. 
 ARTICLE V 
 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTORS 
 5. Each Investor, severally and not jointly, represents and warrants to, and covenants with, the Company that: 
 5.1 Authorization. The Investor has all requisite power and authority to execute, deliver and perform its obligations under this Agreement. The execution of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of such Investor and this Agreement has been duly executed and delivered and constitutes the valid and binding obligation of the Investor enforceable in accordance with its terms, except
as rights to indemnity and contribution may be limited by state or federal securities laws or the public policy underlying such laws, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 5.2 Purchase Entirely for Own Account. The Shares and Warrants to be purchased by the Investor will be acquired for investment for
the Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act, and such Investor has no present intention of selling, granting any participation
in, or otherwise distributing the same. Such Investor does not have any contract, undertaking, agreement, or arrangement with any person to sell, transfer, or grant participation to any person with respect to any of the Shares or the Warrants.
Nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Shares, Warrants or any Conversion Shares for any period of time. 
 5.3 Disclosure of Information. The Investor acknowledges that it has received all the information that it has requested relating to the Company and the purchase of the Shares and the 

  

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Warrants. The Investor further represents that it has had an opportunity to ask questions and receive answers from the Company regarding the terms and
conditions of the offering of the Shares and the Warrants. The foregoing, however, does not limit or modify the representations and warranties of the Company in this Agreement or the right of the Investor to rely thereon. 
 5.4 Accredited Investor. The Investor is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities
Act, as presently in effect and the Investor is also knowledgeable, sophisticated and experienced in making, and is qualified to make decisions with respect to the transactions contemplated hereby. 
 5.5 Restricted Securities. Investor understands that the Shares and Warrants that it is purchasing is characterized as “restricted
securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering, and that under such laws and applicable regulations such securities may be resold without
registration under the Securities Act, only in certain limited circumstances. In this connection, the Investor represents that it is familiar with SEC Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by
the Securities Act. 
 5.6 Legends. It is understood that the certificates evidencing the Conversion Shares and Warrant Shares shall
bear a legend, reading substantially as follows: 
 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. THE SECURITIES REPRESENTED HEREBY MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS EXCEPT PURSUANT TO RULE 144(K) OR PURSUANT TO AN OPINION OF COUNSEL, REASONABLY
ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.” 
 5.7 Investor Questionnaire. The Investor covenants to execute and deliver to the Company at or promptly following the Closing an investor
questionnaire supplied by the Company to facilitate the registration of the Conversion Shares and the Warrant Shares pursuant to the registration rights set forth herein and the information contained therein shall be true and correct. 
 5.8 Prohibited Transactions. During the last thirty (30) days prior to the date hereof, neither such Investor nor any Affiliate of such
Investor which (a) had knowledge of the transactions contemplated hereby, (b) has or shares discretion relating to such Investor’s investments or trading or information concerning such Investor’s investments, including in respect
of the Securities, or (c) is subject to such Investor’s review or input concerning such Affiliate’s investments or trading (collectively, “Trading Affiliates”) has, directly or indirectly, effected or agreed to effect any
short sale, whether or not against the box, established any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange Act) with respect to the Conversion Shares or Warrant Shares, granted any other right (including, without
limitation, any put or call option) with respect to the Conversion Shares or Warrant Shares or with respect to any security that includes, relates to or derived any significant part of its value from the Conversion Shares or Warrant Shares or
otherwise sought to hedge its position in the 

  

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Conversion Shares or Warrant Shares (each, a “Prohibited Transaction”). Prior to the earliest to occur of the termination of this Agreement or the
Effective Date, such Investor shall not, and shall cause its Trading Affiliates not to, engage, directly or indirectly, in a Prohibited Transaction. Such Investor acknowledges that the representations, warranties and covenants contained in this
Section 5.8 are being made for the benefit of the Investors as well as the Company and that each of the other Investors shall have an independent right to assert any claims against such Investor arising out of any breach or violation of the
provisions of this Section 5.8. 
 5.9 Restrictions on Certain Payments. The Investor acknowledges and agrees that, pursuant to
the provisions of the Loan Agreement, the Company will be prohibited from (a) paying or declaring any dividends on or with respect to the Shares (except for dividends payable solely in stock of the Company) or (b) redeeming, retiring,
purchasing or otherwise acquiring any of the Shares until such time as all indebtedness under the Loan Agreement, and any extensions, renewals or refinancings thereof, has been repaid in full, without, in any case, obtaining the prior written
consent of Lender. 
 ARTICLE VI 
 SURVIVAL; INDEMNITY 
 6.1 Survival of Representations, Warranties and Agreements. Notwithstanding any investigation
made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Company herein shall survive the execution of this Agreement, the delivery to the Investors of the Shares and Warrants being purchased and the
payment therefor; provided, that the representations and warranties of the parties hereunder shall only survive for a period of one year following the Closing Date. 
 6.2 Indemnity. Company agrees to indemnify and hold each Investor, and its respective directors, managers, officers, shareholders, members, partners, affiliates, employees, attorneys and agents (each, an
“Indemnified Person”), harmless from and against any and all suits, actions, proceedings, claims, damages, losses, liabilities and expenses of any kind or nature whatsoever (including attorneys’ fees and disbursements and other
costs of investigation or defense, including those incurred upon any appeal) which may be instituted or asserted against or incurred by any such Indemnified Person as the result of their investment in the Shares and Warrants under this Agreement or
with respect to any breach (or alleged breach) of any representation, warranty or covenant of the Company contained in this Agreement or with respect to the execution, delivery, enforcement, performance and administration of, or in any other way
arising out of or relating to, this Agreement or transactions contemplated by or referred to herein and any actions or failures to act with respect to any of the foregoing, except to the extent that any such indemnified liability is finally
determined by a court of competent jurisdiction to have resulted from such Indemnified Person’s gross negligence or willful misconduct. The Company shall reimburse each Investor for amounts provided for herein on demand as such expenses are
incurred. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO THE COMPANY OR TO ANY OTHER PARTY OR TO ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THEIR INVESTMENT IN THE SHARES AND WARRANTS UNDER THIS AGREEMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER. THE COMPANY SHALL NOT BE RESPONSIBLE OR
LIABLE TO ANY INDEMNIFIED PERSON OR TO ANY OTHER PARTY OR TO ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY, 

  

 -27- 

 
CONSEQUENTIAL OR SPECIAL DAMAGES WHETHER OR NOT SUCH DAMAGES WERE REASONABLY FORESEEABLE. 
 ARTICLE VII 
 MISCELLANEOUS 
 7.1 Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed (a) if within the United
States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by facsimile, or (b) if delivered from outside the United States, by International Federal Express or facsimile, and
shall be deemed given and received (i) if delivered by first-class registered or certified mail, three business days after so mailed, (ii) if delivered by nationally recognized overnight carrier, one business day after so mailed,
(iii) if delivered by International Federal Express, two business days after so mailed, (iv) if delivered by facsimile, upon electronic confirmation of receipt and shall be delivered as addressed as follows: 
 (a) if to the Company, to: 
 Vertical Communications, Inc. 
 One Memorial Drive 
 Cambridge, MA 02142 
 Attn: William Y. Tauscher, 
 Chief Executive Officer 
 (b)
with a copy to: 
 Andrews Kurth LLP 
 1717 Main Street, Suite 3700 
 Dallas, TX 75201 
 Attn: Victor B. Zanetti, Esq. 
 (c) if to the Investors, at their respective addresses on the signature page
hereto, or at such other address or addresses as may have been furnished to the Company in writing, with a copy to counsel to M/C Venture Partners: 
 Goodwin | Procter LLP 
 Exchange Place 
 53 State Street 
 Boston, MA 02109 
 Attn: Jocelyn M. Arel, Esq. 
 7.2
Changes. This Agreement may not be modified, waived or amended except pursuant to an instrument in writing signed by the Company and with Investors constituting the 30% Investors’ Consent (provided, that, if such modification, waiver or
amendment does not equally affect all Investors to whom such modification, waiver or amendment is applicable (taking into account the relative ownership interests of such Investors), such modification, waiver or amendment must be signed by all
Investors). 
 7.3 Headings. The headings of the various sections of this Agreement have been inserted for convenience of reference
only and shall not be deemed to be part of this Agreement. 
  

 -28- 

 7.4 Severability. In case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 
 7.5 Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York. Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York located in New York County and the United States District Court for the Southern District of New York for the purpose of any suit, action, proceeding or judgment relating
to or arising out of this Agreement and the transactions contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Agreement. Each of the parties hereto irrevocably consents to the jurisdiction of any such court in any such suit, action or proceeding and to the laying of venue in such court. Each party hereto irrevocably waives
any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. EACH OF
THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER. 
 7.6 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties. 
 7.7 Press Release. The Company shall on the Closing Date issue a press release disclosing the material terms of the transactions contemplated
hereby (including at least the number of Shares sold and proceeds therefrom). 
 7.8 Prior Agreements. This Agreement constitutes the
entire agreement between the parties and supersedes any prior understandings or agreements (including without limitation oral agreements) concerning the purchase and sale of the Shares and the Warrants. 
 7.9 Costs, Expenses and Taxes. The Company agrees to pay the reasonable out-of-pocket costs and expenses of M/C Venture Partners incurred in
connection with the transactions contemplated by this Agreement, including the reasonable fees and expenses of Goodwin Procter LLP, special counsel for M/C Venture Partners, as well as the reasonable fees and out-of-pocket expenses of legal counsel,
independent public accountants, technical professionals and other outside experts retained by M/C Venture Partners in connection with the transactions contemplated by this Agreement and the amendment or enforcement of this Agreement. 
 7.10 Transfer of Rights. All covenants and agreements contained in this Agreement by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties hereto (including without limitation transferees of any Shares, Warrants, Conversion Shares and/or Warrant Shares), whether so expressed or not. 
 7.11 Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under this Agreement are several and not joint
with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under this Agreement. Nothing contained herein or in any other document, and no action taken by
any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a 

  

 -29- 

 
joint venture or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement. Each Investor shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other related
documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. Each Investor has been represented by its own separate legal counsel in their review and negotiation of this
Agreement. The Company has elected to provide all Investors with the same terms and documents for the convenience of the Company and not because it was required or requested to do so by the Investors. 
 [Signature Page Follows] 
  

 -30- 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written. 
  

			
	VERTICAL COMMUNICATIONS, INC.
		
	 By:
	 	 /s/ KEN CLINEBELL

	 Name:
	 	 Ken Clinebell

	 Title:
	 	 Chief Financial Officer

			
	INVESTOR:
		
	 By:
	 	 /s/ WILLIAM Y. TAUSCHER

	 Print Name:
	 	 William Y. Tauscher

	 Address:
	 	 c/o Vertical Communications, Inc.
 One Memorial Drive
 Cambridge, MA 02142

	 Tax ID No.:
	 	  
	 Contact name:
	 	  
	 Telephone:
	 	 (617) 354-0600

	 Name in which shares should be registered (if different):

	  

			
		
	 INVESTOR:
	 	 Pathfinder Ventures IV, L.L.C.

  

			
	 By:
	 	 RRS Investments II, L.L.C., an Arizona limited liability company

		
	 By:
	 	 Stolworthy Revocable Trust, its Manager

		
	 By:
	 	 /s/ R. RANDY STOLWORTHY

			
	 Print Name:
	 	 R. Randy Stolworthy, its Trustee

	 Address:
	 	 Pathfinder Ventures IV, L.L.C.
 c/o RRS & Company
 4131 N. 24th Street, Suite C-207
 Phoenix, AZ 85016

	 Tax ID No.:
	 	 51-0605634

	 Contact name:
	 	 R. Randy Stolworthy

	 Telephone:
	 	 (602) 553-4565

	 Name in which shares should be registered (if different):

	  

			
		
	 INVESTOR:
	 	 M/C Venture Partners V, L.P.

  

			
	 By:
	 	 M/C VP, LLC, its General Partner

		
	 By:
	 	 /s/ MATTHEW RUBINS

			
	 Print Name:
	 	 Matthew Rubins

	 Title:
	 	 General Partner

	 Address:
	 	 75 State Street, Suite 2500
 Boston, MA 02109

	 Tax ID No.:
	 	  
	 Contact name:
	 	  
	 Telephone:
	 	 (617) 345-7200

	 Name in which shares should be registered (if different):

	  

			
		
	 INVESTOR:
	 	 M/C Venture Investors, LLC

			
		
	 By:
	 	 /s/ MATTHEW J. RUBINS

			
	 Print Name:
	 	 Matthew J. Rubins

	 Title:
	 	 Managing Member

	 Address:
	 	 75 State Street, Suite 2500
 Boston, MA 02109

	 Tax ID No.:
	 	  
	 Contact name:
	 	  
	 Telephone:
	 	 (617) 345-7200

	 Name in which shares should be registered (if different):

	  

			
		
	 INVESTOR:
	 	 Chestnut Venture Partners, L.P.

			
		
	 By:
	 	 Chestnut Street Partners, Inc., its General Partner

		
	 By:
	 	 /s/ MATTHEW RUBINS

			
	 Print Name:
	 	 Matthew Rubins

	 Title:
	 	 Duly Authorized Signatory

	 Address:
	 	 75 State Street, Suite 2500
 Boston, MA 02109

	 Tax ID No.:
	 	  
	 Contact name:
	 	  
	 Telephone:
	 	 (617) 345-7200

	 Name in which shares should be registered (if different):

	  

			
	INVESTOR: LG-Nortel Co. Ltd.
		
	 By:
	 	 /s/ PETER DANS

			
	 Print Name:
	 	 Peter Dans

	 Title:
	 	 Chief Financial Officer

	 Address:
	 	 GS Tower 8th Floor
 679 Yoksam-dong
 Kangnam-gu, Seoul
 135-985, Korea

	 Tax ID No.:
	 	  
	 Contact name:
	 	 Peter Dans

	 Telephone:
	 	 82 2 2005 2300

	 Name in which shares should be registered (if different):

	  

 EXHIBIT A 
 SCHEDULE OF INVESTORS 
  

										
	 Investor1
	  	Shares	  	Tranche I
Warrants	  	Tranche II
Warrants	  	Purchase Price
	 M/C Venture Partners2
	  		  		  		  		
	 M/C Venture Partners V, L.P.
	  	9,437	  	8,902,516	  	8,902,516	  	$	9,437,000.00
	 M/C Venture Investors, LLC
	  	176	  	166,667	  	166,666	  	$	176,000.00
	 Chestnut Venture Partners, L.P.
	  	387	  	364,780	  	364,780	  	$	387,000.00
		  	 	  	 	  	 	  	 	 
	 Total
	  	10,000	  	9,433,963	  	9,433,962	  	$	10,000,000.00
	 Pathfinder Ventures IV, L.L.C.
	  	5,000	  	4,716,981	  	4,716,981	  	$	5,000,000.00
	 William Y. Tauscher
	  	500	  	471,698	  	471,698	  	$	500,000.00
	 LG-Nortel Co., Ltd.
	  	6,500	  	6,132,076	  	6,132,076	  	$	6,500,000.00
	 Total
	  	22,000	  	20,754,718	  	20,754,718	  	$	22,000,000.00

  

	1	For purposes of Section 3.3 of this Agreement, “Investors” shall
include the holder of warrants issued in connection with the Loan Agreement. 

  

	2	For purposes of this Agreement, the entities listed below are collectively referred to as
“M/C Venture Partners”. 

 EXHIBIT B 
 FORM OF MERGER AGREEMENT 

 EXHIBIT C 
 FORM OF TRANCHE I WARRANT 

 EXHIBIT D 
 FORM OF TRANCHE II WARRANT 

 EXHIBIT E 
 CERTIFICATE OF DESIGNATIONS 

 EXHIBIT F 
 FORM OF CONSENT AND WAIVER AGREEMENT 

 EXHIBIT G 
 FORM OF COMPANY COUNSEL OPINION 

 EXHIBIT H 
 ROFR OFFEREES FOR ROFR RIGHTS 
  

										
	 Name
	  	Shares	  	Tranche I
Warrants	  	Tranche II
Warrants	  	Purchase Price
	 Special Situations Fund III, L.P.
	  	3,627	  	3,598,162	  	3,598,162	  	$	3,627,000.00
	 Special Situations Cayman Fund, L.P.
	  	1,153	  	1,144,438	  	1,144,438	  	$	1,153,000.00
	 Special Situations Private Equity Fund, L.P.
	  	1,127	  	1,118,119	  	1,118,118	  	$	1,127,000.00
	 Special Situations Technology Fund, L.P.
	  	108	  	106,866	  	106,866	  	$	108,000.00
	 Special Situations Technology Fund II, L.P.
	  	590	  	585,454	  	585,453	  	$	590,000.00
	 Coral’s Momentum Fund, Limited Partnership
	  	2,449	  	2,450,138	  	2,450,138	  	$	2,449,000.00
	 SRB Greenway Capital, L.P.
	  	101	  	147,599	  	147,599	  	$	101,000.00
	 SRB Greenway Capital (Q.P.), L.P.
	  	750	  	1,099,309	  	1,099,309	  	$	750,000.00
	 SRB Greenway Offshore Operating Fund, L.P.
	  	58	  	85,314	  	85,314	  	$	58,000.00
	 Walker Smith Capital, L.P.
	  	25	  	37,096	  	37,096	  	$	25,000.00
	 Walker Smith Capital (Q.P.), L.P.
	  	143	  	209,513	  	209,513	  	$	143,000.00
	 Walker Smith International Fund, Ltd.
	  	215	  	315,703	  	315,703	  	$	215,000.00
	 HHMI Investments, L.P.
	  	80	  	117,926	  	117,926	  	$	80,000.00

 EXHIBIT I 
 Plan of Distribution 
 The selling stockholders, which as used herein includes donees, pledgees, transferees
or other successors-in-interest selling shares of common stock or interests in shares of common stock received after the date of this prospectus from a selling stockholder as a gift, pledge, partnership distribution or other transfer, may, from time
to time, sell, transfer or otherwise dispose of any or all of their shares of common stock or interests in shares of common stock on any stock exchange, market or trading facility on which the shares are traded or in private transactions. These
dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. 
 The selling stockholders may use any one or more of the following methods when disposing of shares or interests therein: 
  

	 	•	 	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; 

  

	 	•	 	block trades in which the broker-dealer will attempt to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;

  

	 	•	 	purchases by a broker-dealer as principal and resale by the broker-dealer for its account; 

  

	 	•	 	an exchange distribution in accordance with the rules of the applicable exchange; 

  

	 	•	 	privately negotiated transactions; 

  

	 	•	 	short sales effected after the date the registration statement of which this Prospectus is a part is declared effective by the SEC; 

  

	 	•	 	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; 

  

	 	•	 	broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; 

  

	 	•	 	a combination of any such methods of sale; and 

  

	 	•	 	any other method permitted pursuant to applicable law. 

 The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares of common stock in other circumstances, in which case the
transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus. 

 In connection with the sale of our common stock or interests therein, the selling stockholders may enter
into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling stockholders may also sell shares of our
common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling stockholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares
such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). 
 The aggregate proceeds to the selling stockholders from the sale of the common stock offered by them will be the purchase price of the common stock less discounts or commissions, if any. Each of the selling stockholders reserves the right
to accept and, together with their agents from time to time, to reject, in whole or in part, any proposed purchase of common stock to be made directly or through agents. We will not receive any of the proceeds from this offering. Upon any exercise
of the warrants by payment of cash, however, we will receive the exercise price of the warrants. 
 The selling stockholders also may resell
all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule. 
 The selling stockholders and any underwriters, broker-dealers or agents that participate in the sale of the common stock or interests therein may be
“underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act.
Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act. 
 To the extent required, the shares of our common stock to be sold, the names of the selling stockholders, the respective purchase prices and public
offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to
the registration statement that includes this prospectus. 
 In order to comply with the securities laws of some states, if applicable, the
common stock may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the common stock may not be sold unless it has been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is complied with. 
 We have advised the selling stockholders that the
anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of shares in the market and to the activities of the selling stockholders and their affiliates. In addition, we will make copies of this prospectus (as it may be
supplemented or amended from time to time) available to the selling stockholders for the purpose of satisfying the prospectus delivery requirements of the Securities Act. The selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act. 
 We have
agreed to indemnify the selling stockholders against liabilities, including liabilities under the Securities Act and state securities laws, relating to the registration of the shares offered by this prospectus. 

 We have agreed with the selling stockholders to keep the registration statement of which this prospectus
constitutes a part effective until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance with the registration statement or (2) the date on which the shares may be
sold pursuant to Rule 144(k) of the Securities Act. 

 EXHIBIT J 
 CERTIFICATE OF SUBSEQUENT SALE 
 [Name and Address of Transfer Agent] 
  

	 	RE:	Sale of Shares of Common Stock of Artisoft, Inc. (the “Company”) pursuant to the Company’s Prospectus dated
                    ,              (the “Prospectus”)

 Dear Sir/Madam: 
 The undersigned hereby certifies, in connection with the sale of shares of Common Stock of the Company included in the table of Selling Shareholders in the Prospectus, that the undersigned has sold the shares pursuant
to the Prospectus and in a manner described under the caption “Plan of Distribution” in the Prospectus and that such sale complies with all securities laws applicable to the undersigned, including, without limitation, the Prospectus
delivery requirements of the Securities Act of 1933, as amended. 
  

			
	 Selling Shareholder (the beneficial owner):
	  	  
		
	 Record Holder (e.g., if held in name of nominee): 
	  	  
		
	 Restricted Stock Certificate No.(s):
	  	  
		
	 Number of Shares Sold:
	  	  
		
	 Date of Sale:
	  	  

 In the event that you receive a stock certificate(s) representing more shares of Common Stock than
have been sold by the undersigned, then you should return to the undersigned a newly issued certificate for such excess shares in the name of the Record Holder and BEARING A RESTRICTIVE LEGEND. Further, you should place a stop transfer on
your records with regard to such certificate. 
  

									
		 		 	 Very truly yours,

					
	 Dated:
	 	  	 		 	 By:
	 	  
					
		 		 		 	 Print Name:
	 	  
					
		 		 		 	 Title:
	 	  
					
		 		 		 	 cc:
	 	 [Company Name and Address]Credit Agreement dated October 18, 2006

 Exhibit 10.3 
 CREDIT AGREEMENT 
 DATED AS OF OCTOBER 18, 2006 
 by and among 
 VERTICAL
COMMUNICATIONS, INC. AND 
 VERTICAL COMMUNICATIONS ACQUISITION CORP. 
 as Borrower 
 and 
 COLUMBIA PARTNERS, L.L.C. INVESTMENT MANAGEMENT 
 as Investment Manager

 and 
 NEIPF, L.P.

 as Lender 

 Table of Contents 
  

					
	 	  	 	  	Page
	 ARTICLE 1
	  	AMOUNTS AND TERMS OF LOANS	  	1
			
	1.1  	  	Loans	  	1
			
	1.2  	  	Warrant	  	2
			
	1.3  	  	Notes	  	3
			
	1.4  	  	Payment Premium; Default Interest on Term Note	  	4
			
	1.5  	  	Facility Fees	  	4
			
	1.6  	  	Expenses and Attorneys Fees	  	4
			
	1.7  	  	Payments	  	5
			
	1.8  	  	Prepayments.	  	5
			
	1.9  	  	Application of Payments	  	6
			
	1.10	  	Maximum Lawful Rate	  	6
			
	 ARTICLE 2
	  	CONDITIONS TO LOANS	  	7
			
	2.1  	  	Initial Closing	  	7
			
	2.2  	  	Subsequent Closing	  	9
			
	 ARTICLE 3
	  	REPRESENTATIONS AND WARRANTIES	  	11
			
	3.1  	  	Disclosure	  	11
			
	3.2  	  	No Material Adverse Effect	  	11
			
	3.3  	  	No Conflict; Compliance	  	11
			
	3.4  	  	Organization, Powers, Capitalization, Subsidiaries and Good Standing	  	11
			
	3.5  	  	Financial Statements and Projections	  	12
			
	3.6  	  	Intellectual Property	  	13
			
	3.7  	  	Investigations, Audits, Etc.	  	13
			
	3.8  	  	Employee Matters	  	13
			
	3.9  	  	Solvency	  	13
			
	3.10	  	Litigation; Adverse Facts	  	13
			
	3.11	  	Use of Proceeds; Margin Regulations	  	13
			
	3.12	  	Ownership of Property; Liens	  	14
			
	3.13	  	Environmental Matters	  	14
			
	3.14	  	ERISA	  	15
			
	3.15	  	Brokers	  	15

  

 -i- 

 Table of Contents 
 (continued) 
  

					
	 	  	 	  	Page
	3.16	  	Deposit and Disbursement Accounts	  	16
			
	3.17	  	Material Agreements; Customers and Suppliers	  	16
			
	3.18	  	Insurance	  	16
			
	ARTICLE 4	  	AFFIRMATIVE COVENANTS	  	16
			
	4.1  	  	Maintenance of Financial Records; Inspections	  	16
			
	4.2  	  	Further Assurances	  	17
			
	4.3  	  	Insurance and Condemnation	  	17
			
	4.4  	  	Payment of Taxes	  	19
			
	4.5  	  	Compliance With Laws	  	19
			
	4.6  	  	Notices Concerning Environmental, Employee Benefit and Pension Matters	  	20
			
	4.7  	  	Business Qualification	  	20
			
	4.8  	  	Anti-Money Laundering and Terrorism Regulations	  	20
			
	4.9  	  	Maintenance of Properties	  	21
			
	4.10	  	Lender Meeting	  	21
			
	4.11	  	Organizational Existence	  	21
			
	4.12	  	Landlords’ Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases	  	21
			
	4.13	  	New Subsidiaries	  	22
			
	4.14	  	Board Observer Rights	  	22
			
	ARTICLE 5	  	NEGATIVE COVENANTS	  	22
			
	5.1  	  	Liens and Encumbrances; No Negative Pledges	  	22
			
	5.2  	  	Indebtedness	  	22
			
	5.3  	  	Sale of Assets	  	22
			
	5.4  	  	Corporate Change	  	23
			
	5.5  	  	Guaranty Obligations	  	23
			
	5.6  	  	Dividends and Distributions	  	23
			
	5.7  	  	Investments	  	23
			
	5.8  	  	Related Party Transactions	  	24
			
	5.9  	  	Restricted Payments	  	24
			
	5.10	  	Use of Proceeds	  	25

  

 -ii- 

 Table of Contents 
 (continued) 
  

					
	 	  	 	  	Page
	5.11	  	No Restrictions on Subsidiary Distributions to Borrower	  	25
			
	5.12	  	Conduct of Business	  	25
			
	5.13	  	Changes Relating to Subordinated Debt	  	25
			
	5.14	  	Press Release; Public Offering Materials	  	25
			
	5.15	  	Bank Accounts	  	26
			
	5.16	  	Activities of Inactive Subsidiaries	  	26
			
	5.17	  	ERISA	  	27
			
	ARTICLE 6	  	FINANCIAL COVENANTS/REPORTING	  	27
			
	6.1  	  	Financial Statements and Other Reports	  	27
			
	6.2  	  	Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement	  	30
			
	6.3  	  	Financial Covenants	  	30
			
	ARTICLE 7	  	DEFAULT, RIGHTS AND REMEDIES	  	31
			
	7.1  	  	Event of Default	  	31
			
	7.2  	  	Acceleration and other Remedies	  	33
			
	7.3  	  	Performance by Investment Manager	  	34
			
	7.4  	  	Set Off and Sharing of Payments	  	34
			
	7.5  	  	Application of Proceeds after Default	  	34
			
	ARTICLE 8	  	ASSIGNMENT	  	35
			
	8.1  	  	Assignment	  	35
			
	ARTICLE 9	  	PROVISIONS RELATED TO INVESTMENT MANAGER	  	36
			
	9.1  	  	Appointment	  	36
			
	9.2  	  	Reliance	  	36
			
	9.3  	  	Successor Investment Manager	  	36
			
	9.4  	  	Collateral Matters	  	37
			
	9.5  	  	Agency for Perfection	  	38
			
	9.6  	  	Notice of Default	  	38
			
	9.7  	  	Lender Actions Against Collateral	  	38
			
	9.8  	  	Payment; Information; Actions in Concert	  	38

  

 -iii- 

 Table of Contents 
 (continued) 
  

					
	 	  	 	  	Page
			
	ARTICLE 10	  	MISCELLANEOUS	  	39
			
	10.1  	  	Indemnities	  	39
			
	10.2  	  	Amendments and Waivers	  	39
			
	10.3  	  	Notices	  	40
			
	10.4  	  	Obligations Absolute; Failure or Indulgence Not Waiver; Remedies Cumulative	  	40
			
	10.5  	  	Marshaling; Payments Set Aside	  	41
			
	10.6  	  	Severability	  	41
			
	10.7  	  	Headings	  	41
			
	10.8  	  	Applicable Law	  	41
			
	10.9  	  	Successors and Assigns	  	41
			
	10.10	  	No Fiduciary Relationship; Limited Liability	  	42
			
	10.11	  	Construction	  	42
			
	10.12	  	Confidentiality	  	42
			
	10.13	  	CONSENT TO JURISDICTION	  	42
			
	10.14	  	WAIVER OF JURY TRIAL	  	43
			
	10.15	  	Survival of Warranties and Certain Agreements	  	43
			
	10.16	  	Entire Agreement	  	44
			
	10.17	  	Counterparts; Effectiveness	  	44
			
	10.18	  	Delivery of Termination Statements and Mortgage Releases	  	44
			
	10.19	  	Suretyship Waivers	  	44

  

 -iv- 

 CREDIT AGREEMENT 
 This CREDIT AGREEMENT is dated as of October 18, 2006 and entered into by and among (i) VERTICAL COMMUNICATIONS,
INC., a Delaware corporation (“VCI”), (ii) VERTICAL COMMUNICATIONS ACQUISITION CORP., a Delaware corporation
(“VCAC” and together with VCI, “Borrower”), (iii) solely for purposes of Sections 3.4(c) and 5.16 herein: Vertical Communications GmbH (“Vertical Germany”), Artisoft “FSC”, Ltd.
(“Artisoft FSC”), and Triton Technologies, Inc. (“Triton”), (iv) COLUMBIA PARTNERS, L.L.C. INVESTMENT MANAGEMENT, as
“Investment Manager”, and (v) NEIPF, L.P., as “Lender”. The “Borrower” shall mean, for all purposes under this Agreement as the context requires: (a) each of VCI, VCAC and any other
Subsidiaries of such Persons that become parties to this Agreement after the date hereof pursuant to Section 4.13 below, or (b) VCI, VCAC and such additional Subsidiary parties, collectively and on a joint and several, consolidated basis.

 RECITALS: 
 WHEREAS, Borrower desires that Lender extend certain bridge credit and term credit facilities to Borrower, to (i) pay off existing loans to working capital lenders and other lenders; (ii) complete the
acquisition of Vodavi Technology, Inc. (“Vodavi”); and (iii) provide working capital financing and funds for other general corporate purposes of Borrower; 
 WHEREAS, Borrower desires to secure all of its Obligations (as hereinafter defined) under the Loan Documents (as hereinafter
defined) by granting to Investment Manager, for the benefit of Investment Manager and Lender, a security interest in and lien upon substantially all of its personal and real property; and 
 WHEREAS, all capitalized terms herein shall have the meanings ascribed thereto in Annex A hereto which is incorporated
herein by reference. 
 NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Borrower, Lender and Investment Manager agree as follows: 
 ARTICLE 1 
 AMOUNTS AND TERMS OF LOANS 
 1.1
Loans. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Borrower contained herein: 
 (a) Initial Bridge Loan. Borrower shall issue and sell to Lender on the Initial Closing Date (as defined below), and Lender shall
purchase for face value on the Initial Closing Date (the “Initial Closing”) a senior secured promissory note containing the terms and conditions set forth herein and in the form of note attached hereto as Exhibit 1.1(a),
payable to the order of Lender in the principal amount of Ten Million Dollars 

 
($10,000,000) (the “Initial Bridge Note”), subject to the satisfaction of the conditions to closing set forth in Section 2.1 of
this Agreement. The date on which the Initial Closing shall take place is referred to herein as the “Initial Closing Date.” 
 (b) Subsequent Bridge Loan and Term Loan. Within 90 days (or such longer period as is agreed to between VCI and the Investment Manager) following the Initial Closing Date (the “Subsequent
Closing”), so long as (i) the Initial Bridge Note is outstanding, (ii) no Default or Event of Default has occurred and is continuing or would result from the consummation of the Subsequent Closing and the use of proceeds
therefrom, and (iii) all of the conditions set forth in Section 2.2 have been satisfied, if Borrower so elects, Borrower shall issue and sell to Lender, and Lender shall purchase for face value: (1) a senior secured promissory
note containing the terms and conditions set forth herein and in the form of note attached hereto as Exhibit 1.1(a), payable to the order of Lender in the principal amount of Five Million Dollars ($5,000,000) (or such other amount, when
combined with the principal amount of the Initial Bridge Note, equals $15,000,000) (the “Subsequent Bridge Note” and together with the Initial Bridge Note, the “Bridge Notes”)) and (2) a senior secured
promissory note containing the terms and conditions set forth herein and in the form of note attached hereto as Exhibit 1.1(b), payable to the order of Lender in the principal amount of Fifteen Million Dollars ($15,000,000) (the “Term
Note” and collectively with the Initial Bridge Note and the Subsequent Bridge Note, the “Notes” and each such Note, a “Note”). The date on which the Subsequent Closing takes place is hereinafter referred to
as the “Subsequent Closing Date”. 
 1.2 Warrants. At the Initial Closing, VCI shall issue and sell to Lender,
as part of its inducement to purchase the Notes, (i) a warrant (the “Initial Warrant”) entitling Lender to purchase 4,500,000 shares of VCI’s common stock, par value $0,01 per share (“Common Stock”) at an
exercise price equal to $0.01 per share on the basis set forth therein, which Initial Warrant shall be in the form attached hereto as Exhibit 1.2(a), and (ii) a warrant (the “Additional Warrant, and together with the Initial
Warrant, the “Warrants”), entitling Lender to purchase 500,000 shares of Common Stock at an exercise price equal to $0.01 per share on the basis set forth therein, which Additional Warrant shall be in the form attached hereto as
Exhibit 1.2(b). Lender shall have registration rights with respect to the shares of Common Stock issuable upon exercise of the Warrants on substantial parity with those of the holders of warrants issued in connection with VCI’s Series E
Convertible Preferred Stock offering on or around the date hereof, as further described in the Warrants. In addition, Borrower and Lender, as a result of arm’s length bargaining, agree that: 
 (a) Neither Lender, Investment Manager nor any affiliated company of Lender or Investment Manager has rendered any services to
Borrower in connection with this Agreement; 
 (b) The Warrants are not being issued as compensation; 
  

 2 

 (c) The aggregate fair market value of the Initial Warrant, if issued apart from
the Notes, is $1,845,000, and the aggregate fair market value of the Additional Warrant, if issued apart from the Notes is $205,000; and 
 (d) All tax returns and other information return of each party relative to this Agreement and the Notes and Warrants issued pursuant hereto shall consistently reflect the matters agreed to in (a) through
(c) above. 
 1.3 Notes. 
 (a) Security. The Notes and the Obligations of Borrower shall be secured in accordance with the terms of the Collateral Documents. 
 (b) Maturity. The principal amount of the Term Note issued under this Agreement, any accrued and unpaid interest thereon,
the applicable Payment Premium (as defined below) and all other amounts then owing by Borrower to Lender or Investment Manager hereunder in connection with the Term Note shall be due and payable on the date that is thirty six (36) months from
the Subsequent Closing Date (the “Term Loan Maturity Date”), unless such amounts become due and payable earlier in accordance with the terms hereof or otherwise. The principal amount of the Bridge Notes issued under this Agreement,
any accrued and unpaid interest thereon and all other amounts then owing by Borrower to Lender or Investment Manager hereunder in connection with the Bridge Notes shall be due and payable on July 1, 2007 (the “Bridge Loan Maturity
Date” and together with the Term Loan Maturity Date, the “Maturity Dates”), unless such amounts become due and payable earlier in accordance with the terms hereof or otherwise. 
 (c) Interest. The outstanding principal amount of each Bridge Note shall bear interest at a rate per annum equal to fourteen
percent (14%) (the “Bridge Rate”), which accrued interest shall be payable by Borrower to Investment Manager, for the benefit of Lender, in cash in arrears on each Quarterly Interest Payment Date, or upon a Liquidity Event or
Partial Liquidity Event, on the date of any prepayment or at such time such amount becomes otherwise due and payable in accordance with the terms hereof. The outstanding principal amount of the Term Note shall bear interest at a rate per annum equal
to the Applicable Federal Rate (the “Term Rate”). A portion of the interest accruing at the Term Rate equal to one-half of one percent (0.5%) of the outstanding principal amount of the Term Note shall be payable in cash in arrears
on each Quarterly Interest Payment Date. The remaining accrued and unpaid interest on the Term Note shall be payable by Borrower to Investment Manager, for the benefit of Lender, on the Term Loan Maturity Date, upon a Liquidity Event or Partial
Liquidity Event, on the date of any prepayment or at such time such amount becomes due and payable in accordance with the terms hereof. All computations of interest payable hereunder (i.e., on both Bridge Notes and the Term Note) shall be on
the basis of a 360-day year consisting of twelve 30-day months and actual days elapsed in the period of which such interest is payable. 
 (d) Default Interest on Bridge Notes. Upon the occurrence and during the continuance of any Event of Default under any Bridge Note, the outstanding principal 

  

 3 

 
amount on each such Bridge Note then due and payable and all other amounts otherwise due and payable hereunder (including accrued and unpaid interest at the
Bridge Rate) shall bear additional interest on each day until paid at a rate per annum equal to two percent (2%). 
 1.4 Payment
Premium on Term Note; Default Interest on Term Note. Upon any payment or prepayment of any principal amount of the Term Note by the Borrower, whether on the Maturity Date or upon the occurrence of a Liquidity Event, Partial Liquidity Event,
voluntary prepayment or acceleration, Borrower shall pay to Investment Manager, for the benefit of Lender, a payment premium (the “Payment Premium”) equal to the amount required to provide the Lender with an IRR with respect to the
principal amount of the Term Note being repaid of thirteen and one-half of one percent (13.5%); provided that during any period in which an Event of Default under the Term Note shall have occurred and be continuing, the IRR for such period
shall be automatically adjusted to equal fifteen and one-half of one percent (15.5%), all in accordance with the calculation examples set forth on Exhibit 1.4. Notwithstanding anything to the contrary contained herein, in the event of
a prepayment made pursuant to Section 1.8, the Payment Premium shall be calculated assuming the payment of all outstanding principal and accrued and unpaid interest, whether or not such amounts are actually paid in connection with the
subject prepayment. 
 1.5 Facility Fees. 
 (a) The parties hereto acknowledge that Borrower has paid to Investment Manager, for the benefit of Lender, an amount equal to
$150,000 (the “Bridge Fee”). 
 (b) At the Subsequent Closing, Borrower shall pay to Investment
Manager, for the benefit of Lender, an amount equal to two percent (2%) of the principal amount of the Term Note issued at the Subsequent Closing (the “Term Fee,” and collectively with the Bridge Fee, the “Facility
Fees”). 
 1.6 Expenses and Attorneys Fees. Borrower agrees to pay or reimburse Investment Manager and Lender for:
(a) all costs, expenses and other charges in respect of any lien, tax and judgment searches performed by a service firm, to be chosen by Investment Manager in its sole discretion, in connection with the transactions contemplated by the Loan
Documents and other collateral searches and filings; (b) all reasonable out-of-pocket costs and expenses of Investment Manager and Lender including the legal fees and disbursements of Cooley Godward Kronish LLP, incurred in
connection with the negotiation, preparation, execution and delivery of this Agreement and the other Loan Documents and the other instruments and agreements entered into pursuant hereto and thereto; provided, that any legal fees of Investment
Manager and Lender in excess of $70,000 and any out-of-pocket expenses of Investment Manager and Lender in excess of $10,000 shall be subject to approval by Borrower prior to reimbursement; (c) all reasonable out-of-pocket costs and expenses of
Investment Manager and Lender including the fees and disbursements of counsel for Investment Manager and Lender, incurred in connection with the negotiation, preparation, execution and delivery of any modification, supplement or waiver of this
Agreement and any 

  

 4 

 
other Loan Documents (whether or not consummated); (d) all expenses of Investment Manager and Lender including the fees and disbursements of counsel for
Investment Manager and Lender in connection with (1) any Default or Event of Default and any enforcement or collection proceedings resulting therefrom, including, without limitation, all manner of participation in or other involvement with
(A) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation proceedings, (B) judicial or regulatory proceedings and (C) workout, restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (2) the enforcement of this Section 1.6; and (e) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental
or revenue authority in respect of this Agreement or any of the other Loan Documents or any other document referred to herein or therein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by the Collateral Documents or any other document referred to therein. Payments under this Section shall be made promptly and in any case no later than ten (10) days
after written demand therefor. Upon the Initial Closing, the non-refundable advance from Borrower to Investment Manager in the amount of $40,000 shall be credited to the reimbursement of any expenses of Investment Manager and Lender incurred as of
the Initial Closing and entitled to reimbursement hereunder. The remaining amount, if any, of the non-refundable advance from Borrower shall be credited to the reimbursement of any expenses of Investment Manager and Lender incurred as of the
Subsequent Closing and entitled to reimbursement hereunder and to the Term Fee payable under Section 1.5(b) above. Any payments under this Section 1.6 which remain outstanding more than sixty (60) days after written
demand therefor shall accrue interest at a per annum rate equal to (x) the “prime rate” as set forth in the Wall Street Journal on the date of determination, plus (y) two percent (2.00%). 
 1.7 Payments. All payments by Borrower of the Obligations shall be without deduction, defense, setoff or counterclaim and shall be made in
same day funds and delivered to Lender, for the benefit of Investment Manager and Lender, as applicable, by wire transfer to the account of Lender specified on the signature page hereof or such other place as Investment Manager may from time to time
designate in writing. Borrower shall receive credit on the day of receipt for funds received by Investment Manager by 2:00 p.m. (Eastern Time). Funds received after 2:00 pm (Eastern Time) shall be deemed to have been paid on the next Business Day.
Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, the payment may be made on the next succeeding Business Day and such extension of time shall be included in the computation of the amount of
interest and Fees due hereunder. 
 1.8 Prepayments. 
 (a) Voluntary Prepayments. At any time and from time to time, Borrower may prepay the amounts due under the Notes, in whole
or in part. Any prepayment shall include all costs and fees incurred as of the date of payment, all accrued and unpaid interest, the principal amount intended to be prepaid, and any applicable Payment Premium. Prepayments shall be applied in
accordance with Section 1.9 or as otherwise may be agreed by Lender. If Borrower elects to prepay all or any part of the principal due under the Notes 

  

 5 

 
pursuant to this Section 1.8(a), Borrower shall give notice of such prepayment to the Investment Manager to be prepaid not less than ten
(10) days or more than sixty (60) days prior to the date fixed for prepayment, specifying the amounts to be repaid as required by this Section 1.8(a). 
 (b) Mandatory Prepayment. 
 (i) Liquidity Event. Upon the occurrence of a Liquidity Event, Borrower shall immediately pay to Investment Manager, for the benefit of Lender, all amounts due under the Loans as set forth in this
Agreement, including, without limitation, all costs and fees incurred as of the date of payment, all accrued and unpaid interest, the principal outstanding as of the date of such payment, and the applicable Payment Premium. The payments made
pursuant to this Section 1.8(b)(i) shall be applied in accordance with Section 1.9. 
 (ii)
Partial Liquidity Event. Upon the occurrence of a Partial Liquidity Event, Borrower shall immediately pay to the Investment Manager, for the benefit of Lender, in respect of the Loans an amount equal to (A) the net cash proceeds received
by Borrower in the Partial Liquidity Event minus (B) Thirty Million Dollars ($30,000,000), but not in excess of all amounts due under the Loans as set forth in this Agreement, including, without limitation, all costs and fees incurred as of the
date of payment, all accrued and unpaid interest, the principal outstanding as of the date of such payment, and the applicable Payment Premium. The payments made pursuant to this Section 1.8(b)(ii) shall be applied in accordance with
Section 1.9. 
 1.9 Application of Payments. With respect to any payment hereunder, including without limitation
the prepayments described in Sections 1.8(a) and 1.8(b), such payments shall be applied first to reduce the Obligations under the Bridge Notes and then to reduce the Obligations under the Term Note, in each case in the following order:
(a) with respect to the Bridge Notes: first, to the payment of all fees and expenses due and payable pursuant to this Agreement as apportioned to the principal amount of the Bridge Notes (compared to the principal amount of all Notes); second,
to accrued and unpaid interest due on the Bridge Notes; third, to reduce the outstanding principal balance under the Bridge Notes; and fourth, to any other Obligations of Borrower owing to Investment Manager or Lender with respect to the Bridge
Notes hereunder; and (b) with respect to the Term Note: first, to the applicable Payment Premium; second, to the payment of all fees and expenses due and payable pursuant to this Agreement as apportioned to the principal amount of the Term Note
(compared to the principal amount of all Notes); third, to reduce the outstanding principal balance under the Term Note; and fourth, to any other Obligations of Borrower owing to Investment Manager or Lender with respect to the Term Note hereunder;
provided that notwithstanding any prior allocation of payments to the Payment Premium, upon the final payment in full of all outstanding principal under the Term Note, the Payment Premium shall be recalculated and any additional Payment
Premium shall be immediately due and payable. 
 1.10 Maximum Lawful Rate. Notwithstanding anything to the contrary contained
herein, if a court of competent jurisdiction determines in a final order that the effective Bridge 

  

 6 

 
Rate payable hereunder exceeds the highest rate of interest permissible under law (the “Maximum Lawful Rate”), then so long as the Maximum
Lawful Rate would be so exceeded, the effective Bridge Rate payable hereunder shall be equal to the Maximum Lawful Rate; provided, however, that if at any time thereafter the effective Bridge Rate payable hereunder is less than the
Maximum Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum Lawful Rate until such time as the total interest received by Investment Manager, on behalf of Lender, is equal to the total interest that would have been received
had the effective Bridge Rate payable hereunder been (but for the operation of this paragraph) the interest rate payable since the respective date of issuance of the subject Bridge Note as otherwise provided in this Agreement. Thereafter, the
effective Bridge Rate payable hereunder shall be paid at the rate(s) of interest and in the manner provided hereunder, unless and until the rate of interest again exceeds the Maximum Lawful Rate, and at that time this paragraph shall again apply. In
no event shall the total interest received by any Lender under the Bridge Notes pursuant to the terms hereof exceed the amount that such Lender could lawfully have received had the Bridge Rate of interest due hereunder been calculated for the full
term of the Bridge Notes at the Maximum Lawful Rate. If the Maximum Lawful Rate is calculated pursuant to this paragraph, such interest shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made. If, notwithstanding the provisions of this Section 1.10, a court of competent jurisdiction shall determine by a final, non-appealable order that Lender has received interest on the Bridge Notes in excess
of the Maximum Lawful Rate, the Investment Manager shall, to the extent permitted by applicable law, promptly apply such excess to the outstanding principal amount of the outstanding Bridge Loan(s) and thereafter, Lender shall refund any excess to
Borrower or as such court of competent jurisdiction may otherwise order. 
 ARTICLE 2 
 CONDITIONS TO LOANS 
 The obligation of
Lender to make the Loans on each Closing Date, as provided in Section 1.1 hereof, shall be subject to the performance by Borrower of its agreements to be performed hereunder and to the satisfaction, prior thereto or concurrently
therewith, of the following further conditions: 
 2.1 Initial Closing. 
 (a) Representations and Warranties. The representations and warranties of Borrower contained in Article 3 hereof
shall be true and correct in all material respects as of the Initial Closing Date (as modified by the Disclosure Schedules delivered as of the Initial Closing Date) as though such warranties and representations were made at and as of such date,
except as otherwise affected by the transactions contemplated hereby. 
 (b) Compliance with Loan Documents, No
Default or Event of Default. Borrower shall have performed and complied with all agreements, covenants and conditions contained in the Loan Documents which are required to be performed or 

  

 7 

 
complied with by it prior to or on the Initial Closing Date. No Default or Event of Default shall exist prior to or after giving effect to the transactions
contemplated on the Initial Closing Date. 
 (c) Officer’s Certificate. Investment Manager shall have
received a certificate, dated the Initial Closing Date, signed by the President or the Chief Financial Officer of Borrower, certifying that the conditions specified in Sections 2.1(a), (b), (d) and (i) hereof have been fulfilled.

 (d) Injunction. There shall be no effective injunction, writ, preliminary restraining order or any order of
any nature issued by a court of competent jurisdiction directing that the transactions provided for herein or any of them not be consummated as herein provided. 
 (e) Counsel’s Opinion. Investment Manager shall have received from Borrower’s counsel an opinion, dated the
Initial Closing Date, substantially in the form of Exhibit 2.1(e) hereto. 
 (f) Approval of Proceedings.
All proceedings to be taken in connection with the transactions contemplated by this Agreement, and all documents incident thereto, shall be reasonably satisfactory in form and substance to Investment Manager or Lender and their counsel; and
Investment Manager shall have received copies of all documents or other evidence which they and their counsel may reasonably request in connection with such transactions and of all records of corporate proceedings in connection therewith in form and
substance reasonably satisfactory to Investment Manager or Lender and their counsel. 
 (g) Other Fees and
Expenses. Borrower shall have paid to Investment Manager all other amounts payable hereunder, including the payment of the fees and expenses of Cooley Godward Kronish LLP, counsel to Investment Manager. 
 (h) Secretary’s Certificate. Investment Manager shall have received a certificate, dated the Initial Closing Date,
signed by the Secretary or Assistant Secretary, as the case may be, of Borrower certifying that (i) its certificate of incorporation annexed thereto is in full force and effect without any amendment, (ii) the by-laws annexed thereto are
correct and complete as in effect on the date thereof; and (iii) the resolutions annexed thereto approving the transactions contemplated herein have been duly approved by the Board of Directors of Borrower and remain in full force and effect.

 (i) Registration Rights. Lender shall have received certain registration rights in respect of the Common
Stock underlying the Warrants as provided in the Warrants. 
 (j) Security Interests. All action necessary or
determined by Investment Manager to be desirable to create and perfect the security interests purported to be created by the Collateral Documents shall have been taken or completed, including the 

  

 8 

 
execution and delivery of the Collateral Documents and provisions shall have been made for the filing of the Uniform Commercial Code financing statements,
delivery of instruments or securities and delivery of “control” agreements necessary to establish control of deposit accounts and securities accounts as contemplated by Articles 8 and 9 of the Uniform Commercial Code. 
 (k) Insurance. Investment Manager shall have received evidence that the insurance required to be maintained under this
Agreement and the Collateral Documents is in full force and effect and that Investment Manager or Lender has been named as loss payee or additional insured, as appropriate, under the applicable insurance policies. 
 (l) Payoff Letters. Investment Manager shall have received payoff letters from Silicon Valley Bank and Comdial Corporation
evidencing the release of all liens and claims from such lenders upon the repayment of their existing loans with the proceeds received by Borrower from the funding of the Initial Bridge Note, each in form and substance satisfactory to the Investment
Manager and its counsel. 
 (m) Equity Financing – Signing. VCI shall have entered into a definitive
Securities Purchase Agreement in substantially the form attached hereto as Exhibit 2.1(m) with institutional investors for the sale of at least $15 million of VCI’s Series E Convertible Preferred Stock. 
 (n) Other Documents. Borrower shall have executed and delivered to Investment Manager, for the benefit of Lender, the
Initial Bridge Note and the Warrants. 
 2.2 Subsequent Closing. 
 (a) Representations and Warranties. The representations and warranties of Borrower contained in Article 3 hereof
shall be true and correct in all material respects on the Subsequent Closing Date (as modified by the Disclosure Schedules delivered as of the Subsequent Closing Date) as though such warranties and representations were made at and as of such date,
except to the extent such representations and warranties speak as of a specific date and as otherwise affected by the transactions contemplated hereby. 
 (b) Compliance with Loan Documents, No Default or Event of Default. Borrower shall have performed and complied with all agreements, covenants and conditions contained in the Loan Documents which are
required to be performed or complied with by it prior to or on the Subsequent Closing Date, or failure to so comply shall have previously been cured or waived. No Default or Event of Default shall exist prior to or after giving effect to the
transactions contemplated on the Subsequent Closing Date. 
 (c) Officer’s Certificate. Investment Manager
shall have received a certificate, dated the Subsequent Closing Date, signed by the President or the Chief 

  

 9 

 
Financial Officer of Borrower, certifying that the conditions specified in Sections 2.2(a), (b) and (d) hereof have been fulfilled.

 (d) Injunction. There shall be no effective injunction, writ, preliminary restraining order or any order of
any nature issued by a court of competent jurisdiction directing that the transactions provided for herein or any of them not be consummated as herein provided. 
 (e) Approval of Proceedings. All proceedings to be taken in connection with the transactions contemplated by this Agreement,
and all documents incident thereto, shall be reasonably satisfactory in form and substance to Investment Manager or Lender and their counsel; and Investment Manager and Lender shall have received copies of all documents or other evidence which they
and their counsel may reasonably request in connection with such transactions and of all records of corporate proceedings in connection therewith in form and substance reasonably satisfactory to Investment Manager and Lender and their counsel.

 (f) Other Fees and Expenses. Borrower shall have paid to Investment Manager all other amounts payable
hereunder, including the payment of the fees and expenses of Cooley Godward Kronish LLP, counsel to Investment Manager. 
 (g) Secretary’s Certificate. Investment Manager shall have received a certificate, dated the Subsequent Closing Date, signed by the Secretary or Assistant Secretary, as the case may be, of Borrower
certifying that (i) its certificate of incorporation annexed thereto is in full force and effect without any amendment, (ii) the by-laws annexed thereto are correct and complete as in effect on the date thereof; and (iii) the
resolutions annexed thereto approving the transactions contemplated herein have been duly approved by the Board of Directors of Borrower and remain in full force and effect. 
 (h) Other Documents. Borrower shall have executed and delivered to Investment Manager, for the benefit of Lender, the
Subsequent Bridge Note and the Term Note. 
 (i) Vodavi Technology, Inc. Closing. VCI shall have closed (on the
Subsequent Closing Date) its acquisition by merger of Vodavi Technology, Inc., a Delaware corporation, through the merger of VCI’s wholly owned subsidiary Vertical Acquisition Sub Inc., a Delaware corporation into Vodavi Technology, Inc.
pursuant to that certain Agreement and Plan of Merger in substantially the form set forth on Exhibit 2.2(i) hereto, and Vodavi Technology, Inc. shall have entered into a Joinder Agreement as set forth in Section 4.13. 

(j) Equity Financing - Closing. VCI shall have received (on the Subsequent Closing Date) net cash proceeds of at least
$15 million in connection with the sale and issuance of shares of its Series E Convertible Preferred Stock pursuant to that certain Securities Purchase Agreement in substantially the form attached hereto as Exhibit 2.1(m). 
  

 10 

 ARTICLE 3 
 REPRESENTATIONS AND WARRANTIES 
 To induce Investment Manager and Lender to enter into the Loan
Documents and to make Loans, each of VCI and VCAC (and for purposes of Section 3.4(c) only, each of Vertical Germany, Triton and Artisoft FSC), jointly and severally represent, warrant and covenant to Investment Manager and Lender that the
following statements are true, correct and complete as of each Closing Date. Such representations and warranties are subject to the qualifications and exceptions set forth in the Disclosure Schedules delivered to Investment Manager in connection
herewith. 
 3.1 Disclosure. No representation or warranty of Borrower contained in this Agreement, the Financial Statements,
or any other document, certificate or written statement furnished to Investment Manager or Lender by Borrower or its auditor at Closing contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the circumstances in which the same were made. 
 3.2 No Material
Adverse Effect. Since June 30, 2006, there have been no events or changes in facts or circumstances affecting Borrower which individually or in the aggregate have had or would reasonably be expected to have a Material Adverse Effect and
that have not been disclosed herein or in the attached Disclosure Schedules. 
 3.3 No Conflict; Compliance. The consummation
of the transactions contemplated by this Agreement and the other Loan Documents does not and will not violate or conflict with any laws, rules, regulations or orders of any Governmental Authority or violate, conflict with, result in a breach of, or
constitute a default (with due notice or lapse of time or both) under any Contractual Obligation or organizational documents of Borrower except if such violations, conflicts, breaches or defaults could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Borrower (i) is in compliance with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority and the obligations, conditions and covenants
contained in all Contractual Obligations other than those laws, rules, regulations, orders and provisions of such Contractual Obligations the noncompliance with which could not be reasonably expected to have, either individually or in the aggregate,
a Material Adverse Effect, and (ii) maintains all licenses, qualifications and permits necessary for the conduct of its business as presently conducted and expected to be conducted. 
 3.4 Organization, Powers, Capitalization, Subsidiaries and Good Standing. 
 (a) Organization and Powers. Each of VCI and VCAC is duly organized, validly existing and in good standing under the laws of
its respective jurisdiction of organization and qualified to do business in all states where such qualification is required except where failure to be so qualified could not reasonably be expected to have a Material Adverse Effect. The jurisdiction
of organization and all jurisdictions in which each of VCI and VCAC is qualified to do business are set forth on Schedule 3.4(a). Each of VCI and 

  

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VCAC has all requisite organizational power and authority to own and operate its properties, to carry on its business as now conducted and proposed to be
conducted, to enter into each of the Loan Documents to which it is a party and to incur the Obligations, grant liens and security interests in the Collateral and carry out the transactions contemplated by this Agreement and the other Loan Documents.

 (b) Capitalization. As of the Closing Date: (i) the authorized Stock of each of VCI and VCAC is as set
forth on Schedule 3.4(b); (ii) all issued and outstanding Stock of VCI and VCAC is duly authorized and validly issued, fully paid, nonassessable, free and clear of all Liens other than those in favor of Investment Manager for the benefit
of Investment Manager and Lender, and such Stock was issued in compliance with all applicable state, federal and foreign laws concerning the issuance of securities; (iii) the identity of the holders of the Stock of VCI and VCAC and the
percentage of their fully diluted ownership of the Stock of each of VCI and VCAC is set forth on Schedule 3.4(b); and (iv) no Stock of VCI or VCAC, other than as described above, is issued and outstanding. Except as provided in
Schedule 3.4(b), as of the Closing Date, there are no preemptive or other outstanding rights, options, warrants, conversion rights or similar agreements or understandings for the purchase or acquisition from VCI and VCAC of any Stock of any
such entity. 
 (c) Subsidiaries. Neither VCI nor VCAC has any Subsidiaries other than Artisoft FSC and Triton
(collectively, the “Inactive Subsidiaries”) and Vertical Germany and Vertical Acquisition Sub Inc., which entity will merge into Vodavi Technology, Inc. upon the closing of the merger referenced in Section 2.2(i). Other
than as set forth in Schedule 3.4(c), none of the Inactive Subsidiaries employ any Persons, has any assets or liabilities, has any customers or suppliers, performs any operations or is party to any contracts or commitments, whether oral,
written or contingent. There is no judgment outstanding against any of the Subsidiaries or affecting any such entity’s property, nor is there any Litigation pending, or to the knowledge of Borrower threatened, against any Subsidiaries which
would reasonably be expected to result in any Material Adverse Effect. Each of the Subsidiaries is wholly owned by VCI. Vertical Germany is the principal sales and marketing arm for Borrower for European sales. Its assets and operations are
reflected in VCI’s consolidated and consolidating financial statements. Vertical Germany employs not more than five persons, has no material assets or liabilities other than not more than $200,000 of inventory and accounts receivables at any
date and office furniture and equipment, has no material suppliers other than the Borrower and has no customers or performs any operations other than with respect to sales of inventory in the ordinary course of its business. 
 (d) Binding Obligation. This Agreement is, and the other Loan Documents when executed and delivered will be, the legally
valid and binding obligations of the applicable parties thereto, each enforceable against each of such parties, as applicable, in accordance with their respective terms except as enforceability may be limited by applicable bankruptcy, insolvency,
moratorium and laws affecting the rights of creditors generally and by general principles of equity whether considered at law or in equity. 
 3.5 Financial Statements and Projections. All Financial Statements concerning Borrower which have been or will hereafter be furnished to Investment Manager or Lender 

  

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pursuant to this Agreement, including those listed below, have been or will be prepared in accordance with GAAP consistently applied (except as disclosed
therein) and do or will present fairly in all material respects the financial condition of the entities covered thereby as at the dates thereof and the results of their operations for the periods then ended, subject to, in the case of unaudited
Financial Statements, the absence of footnotes and normal year end adjustments. The Projections delivered on or prior to the Closing Date and the updated Projections delivered pursuant to Section 6.1(g) were (or will be) prepared on the
basis of the assumptions stated therein and such assumptions were (or will be) reasonable at the time prepared. 
 3.6 Intellectual
Property. Borrower owns, is licensed to use or otherwise has the right to use, all registered Intellectual Property used in or necessary for the conduct of its business as currently conducted, and all such Intellectual Property (other than off
the shelf software) is identified on Schedule 3.6 and fully protected and/or duly and properly registered, filed or issued in the appropriate office and jurisdictions for such registrations, filings or issuances. Except as disclosed in
Schedule 3.6, the use of such Intellectual Property by Borrower and the conduct of its business does not, and, to the knowledge of the Borrower, have not been alleged by any Person to infringe on the rights of any Person. 
 3.7 Investigations, Audits, Etc. As of the Closing Date, except as set forth on Schedule 3.7, Borrower is not the subject of any
review or audit by the IRS or any governmental investigation concerning the violation or possible violation of any law. 
 3.8
Employee Matters. Except as set forth on Schedule 3.8, there are no strikes, slowdowns, work stoppages or controversies pending or, to the knowledge of Borrower after due inquiry, threatened between VCI and VCAC and their respective
employees, other than employee grievances arising in the ordinary course of business which could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect and (d) hours worked by and payment made to
employees of VCI and VCAC comply with the Fair Labor Standards Act and each other federal, state, local or foreign law applicable to such matters. Except as set forth on Schedule 3.8, neither VCI nor VCAC is party to an employment contract.

 3.9 Solvency. Each Borrower is Solvent. 
 3.10 Litigation; Adverse Facts. Except as set forth on Schedule 3.10, there are no judgments outstanding against Borrower or affecting any property of Borrower, nor is there any Litigation
pending, or to the knowledge of Borrower threatened, against Borrower which would reasonably be expected to result in any Material Adverse Effect. 
 3.11 Use of Proceeds; Margin Regulations. 
 (a) No part of the proceeds of any Loan will be
used for “buying” or “carrying” “margin stock” within the respective meanings of such terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect or
for any other purpose that violates the provisions of the regulations of 

  

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the Board of Governors of the Federal Reserve System. If requested by Investment Manager, Borrower will furnish to Investment Manager and Lender a statement
to the foregoing effect in conformity with the requirements of FR Form G 3 or FR Form 0 1, as applicable, referred to in Regulation U. 
 (b) Borrower shall utilize the proceeds of the Loans solely for uses set forth in the first Recital set forth in this Agreement. 
 3.12 Ownership of Property; Liens. As of the Closing Date, the real estate (“Real Estate”) listed in Schedule 3.12 constitutes all of the real property owned, leased, subleased,
or used by Borrower. Borrower owns good and marketable fee simple title to all of its owned Real Estate, and valid and marketable leasehold interests in all of its leased Real Estate, all as described on Schedule 3.12, and copies of all such
leases or an accurate summary of terms thereof reasonably satisfactory to Investment Manager have been delivered to Investment Manager. Schedule 3.12 further describes any Real Estate with respect to which Borrower is a lessor, sublessor or
assignor as of the Closing Date. Borrower also has good and marketable title to, or valid leasehold interests in, all of its personal property and assets. As of the Closing Date, none of the properties and assets of Borrower is subject to any Liens
other than Permitted Encumbrances, and there are no facts, circumstances or conditions known to Borrower that may result in any Liens (including Liens arising under Environmental Laws) other than Permitted Encumbrances against the properties or
assets of Borrower. Borrower has received all deeds, assignments, waivers, consents, nondisturbance and attornment or similar agreements, bills of sale and other documents, and has duly effected all recordings, filings and other actions necessary to
establish, protect and perfect Borrower’s right, title and interest in and to all such Real Estate and other properties and assets. Schedule 3.12 also describes any purchase options, rights of first refusal or other similar contractual
rights pertaining to any Real Estate. As of the Closing Date, no portion of Borrower’s Real Estate has suffered any material damage by fire or other casualty loss that has not heretofore been repaired and restored in all material respects to
its original condition or otherwise remedied. As of the Closing Date, all permits required to have been issued or appropriate to enable the Real Estate to be lawfully occupied and used for all of the purposes for which it is currently occupied and
used have been lawfully issued and are in full force and effect. 
 3.13 Environmental Matters. 
 (a) None of the operations of Borrower is the subject of any federal, state or local investigation to determine whether any
remedial action is needed to address the presence or disposal of any environmental pollution, hazardous material or environmental clean-up of the Real Estate or any of Borrower’s leased Real Estate. No enforcement proceeding, complaint,
summons, citation, notice, order, claim, litigation, investigation, letter or other communication from a federal, state or local authority has been filed against or delivered to any Borrower, regarding or involving any release of any environmental
pollution or hazardous material on any real property now or previously owned or operated by Borrower. 
  

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 (b) Borrower has no known contingent liability with respect to any release of any
environmental pollution or hazardous material on any real property now or previously owned or operated by Borrower. 
 (c) Borrower is in compliance with all environmental statutes, acts, rules, regulations and orders applicable to the operation of Borrower’s business, except to the extent that the failure to so comply would not be reasonably
likely to have a Material Adverse Effect. 
 (d) Borrower hereby acknowledges and agrees that neither Investment
Manager nor Lender (i) is now, or has ever been, in control of any of the Real Estate or affairs of Borrower, and (ii) has the capacity through the provisions of the Loan Documents or otherwise to influence Borrower’s conduct with
respect to the ownership, operation or management of any of their Real Estate or compliance with Environmental Laws or Environmental Permits. 
 3.14 ERISA. Schedule 3.14 lists: (i) all Plans, separately identifying all Pension Plans, ESOPs and Welfare Plans, including all Retiree Welfare Plans; and (ii) each instance known to Borrower of a material failure
to comply with ERISA or the Code with respect to a Plan. Copies of all such listed Plans, together with a copy of the latest form IRS/DOL 5500-series for each such Plan have been delivered to the Investment Manager. Neither the Borrower nor any
ERISA Affiliate has at any time during the six-year period preceding the Closing Date maintained, contributed to, or had an obligation to contribute to, any Title IV Plan or any other Plan subject to Section 412 of the Code or Section 302
of ERISA on behalf of participants who are or were employed by such Borrower. Except to the extent that any noncompliance would not reasonably be expected to have a Material Adverse Effect: (i) each Plan is in compliance with the applicable
provisions of ERISA and the IRC, including the timely filing of all reports required under the IRC or ERISA; (ii) each Qualified Plan has been determined by the IRS to qualify under Section 401 of the IRC, the trusts created thereunder
have been determined to be exempt from tax under the provisions of Section 501 of the IRC, and, nothing has occurred that would reasonably be expected to cause the loss of such qualification or tax exempt status; (iii) no Borrower or ERISA
Affiliate has engaged in a “prohibited transaction,” as defined in Section 406 of ERISA and Section 4975 of the IRC, in connection with any Plan;. (iv) there are no pending, or to the knowledge of Borrower, threatened claims
(other than claims for benefits in the normal course), sanctions, actions or lawsuits, asserted or instituted against any Plan or any Person as fiduciary or sponsor of any Plan; and (v) except in the case of any ESOP, Stock of such Borrower and
its ERISA Affiliates makes up, in the aggregate, no more than 10% of fair market value of the assets of any Plan measured on the basis of fair market value as of the latest valuation date of any Plan. 
 3.15 Brokers. No broker or finder acting on behalf of Borrower or its Affiliates brought about the obtaining, making or closing of the
Loans, and neither Borrower nor its Affiliates have any obligation to any Person in respect of any finder’s or brokerage fees in connection therewith. 
  

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 3.16 Deposit and Disbursement Accounts. Schedule 3.16 lists all banks and other
financial institutions at which Borrower maintains deposit or other accounts as of the Closing Date, and such Schedule correctly identifies the name, address and telephone number of each depository, the name in which the account is held, a
description of the purpose of the account, and the complete account number therefor. 
 3.17 Material Agreements; Customers and
Suppliers. 
 (a) Schedule 3.17(a) sets forth a true and complete list of each Material Agreement to which
Borrower is a party or is otherwise bound. Each Material Agreement is valid, binding and enforceable against VCI and/or VCAC, as the case may be, in full force and effect and, to Borrower’s knowledge, the other parties thereto, in accordance
with its terms, except as limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium, and other laws of general application affecting enforcement of creditors’ rights generally, (ii) laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) state and federal securities laws with respect to rights to indemnification or contribution. No Borrower is in default or breach under any of the Material
Agreements, nor, to the knowledge of Borrower, is any other party thereto in default or breach thereunder, nor are there facts or circumstances which have occurred which, with or without the giving of notice or the passage of time or both, would
constitute a material default or breach under any of the Material Agreements. 
 (b) The relationships of Borrower with
its suppliers are commercial working relationships and no material customer or material supplier has canceled or otherwise terminated its relationship with Borrower. To Borrower’s knowledge, no material customer or material supplier intends to
cancel or materially curtail its relationship with Borrower. 
 3.18 Insurance. Schedule 3.18 lists all insurance
policies of any nature maintained, as of the Closing Date, for current occurrences by Borrower, as well as a certificate setting forth the deductibles, coverage limits and durations of such policies. 
 ARTICLE 4 
 AFFIRMATIVE COVENANTS

 Borrower covenants and agrees that from and after the date hereof until the Termination Date: 
 4.1 Maintenance of Financial Records; Inspections. Borrower agrees to maintain books and records pertaining to their financial matters in
such detail, form and scope, for so long as the Investment Manager reasonably may require. Borrower agrees that Investment Manager, accompanied by any Lender (at such Lender’s expense), and/or any agent designated by Investment Manager, upon
notice to Borrower (provided that such notice shall not be required after any Default or Event of Default shall have occurred), may enter upon the applicable Borrower’s premises at any time during normal business hours, and from time to time,
in order to (i) examine and inspect the books and records of Borrower, and make copies thereof and take extracts therefrom, and (ii) verify, inspect and perform physical counts 

  

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and other valuations of the Collateral and any and all records pertaining thereto. Borrower irrevocably authorizes all accountants and third parties to
disclose and deliver directly to Investment Manager and Lender, at Borrower’s expense, all financial statements and information, books, records, work papers and management reports generated by them or in their possession regarding Borrower or
the Collateral. All costs, fees and expenses incurred by Investment Manager in connection with such examinations, inspections, physical counts and other valuations shall constitute fees reimbursable by Borrower pursuant to Section 1.6
for purposes of this Agreement. 
 4.2 Further Assurances. Borrower agrees to comply with the requirements of all state and
federal laws in order to grant to Investment Manager, for the benefit of Lender, valid and perfected first priority security interests in the Collateral pursuant to the Collateral Documents, subject only to the Permitted Encumbrances. Investment
Manager is hereby authorized by Borrower to file any financing statements, continuations and amendments covering the Collateral without Borrower’s signature in accordance with the provisions of the Code. Borrower hereby consents to and ratifies
the filing of any financing statements covering the Collateral by Investment Manager on or prior to the Closing Date. Each Borrower agrees to do whatever Investment Manager reasonably may request from time to time, by way of (i) filing notices
of liens, financing statements, amendments, renewals and continuations thereof, (ii) cooperating with agents and employees of Investment Manager, (iii) keeping Collateral records, (iv) transferring proceeds of Collateral to Investment
Manager’s possession in accordance with the terms of this Agreement and the Collateral Documents and (v) performing such further acts as Investment Manager reasonably may require in order to effect the purposes of this Agreement and the
Collateral Documents, including the execution of control agreements with respect to deposit accounts and investment property. 
 4.3
Insurance and Condemnation. 
 (a) Required Insurance. Borrower agrees to maintain insurance on the Real
Estate, Equipment and Inventory under such policies of insurance, with such insurance companies, in such reasonable amounts and covering such insurable risks, as are at all times reasonably satisfactory to Investment Manager (the “Required
Insurance”). All policies covering the Real Estate, Equipment and Inventory are, subject to the rights of any holder of a Permitted Encumbrance having priority over the security interests of Investment Manager, to be made payable solely to
Investment Manager, for the benefit of Lender, in case of loss, under a standard non contributory “mortgagee”, “secured party” or “lender’s loss payable” clause or endorsement, and are to contain such other
provisions as Investment Manager reasonably may require to fully protect Investment Manager’s interest in the Real Estate, Inventory and Equipment and to any payments to be made under such policies. Each loss payable endorsement in favor of
Investment Manager shall provide (x) for not less than thirty (30) days prior written notice to Investment Manager of the exercise of any right of cancellation and (y) that Investment Manager’s right to payment under any property
insurance policy will not be invalidated by any act or neglect of, or any breach of warranty or condition by, any Borrower or any other party. If an Event of Default shall have occurred and remain outstanding, Investment Manager, subject to the
rights of any holder of a Permitted Encumbrance having priority over the security interests of Investment Manager, shall have the 

  

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sole right, in the name of Investment Manager or any Borrower, to file claims under any insurance policies, to receive, receipt and give acquittance for any
payments that may be payable thereunder, and to execute any and all endorsements, receipts, releases, assignments, reassignments or other documents that may be necessary to effect the collection, compromise or settlement of any claims under any such
insurance policies. 
 (b) Investment Manager’s Purchase of Insurance. Unless Borrower provides Investment
Manager with evidence of the Required Insurance in the manner set forth in Section 4.3(a) above, Investment Manager may purchase insurance at Borrower’s expense to protect Investment Manager’s interests in the Collateral. The
insurance purchased by the Investment Manager may, but need not, protect Borrower’s interests in the Collateral, and therefore such insurance may not pay any claim which Borrower makes or any claim which is made against Borrower in connection
with the Collateral. Borrower may later request that Investment Manager cancel any insurance purchased by Investment Manager, but only after providing Investment Manager with satisfactory evidence that Borrower has the Required Insurance. If
Investment Manager purchases insurance covering all or any portion of the Collateral, Borrower shall be responsible for the costs of such insurance, including interest (at the applicable rate set forth hereunder) and other charges accruing on the
purchase price therefor, until the effective date of the cancellation or the expiration of the insurance. The costs of the premiums of any insurance purchased by Investment Manager may exceed the costs of insurance which Borrower may be able to
purchase on its/their own. In the event that Investment Manager purchases insurance, Investment Manager will notify Borrower of such purchase within thirty (30) days after the date of such purchase. If, within thirty (30) days after the
date of receipt of such notice, Borrower provides Investment Manager with proof that Borrower had the Required Insurance as of the date on which Investment Manager purchased insurance and Borrower has continued at all times thereafter to have the
Required Insurance, then Investment Manager agrees to cancel the insurance purchased by Investment Manager. 
 (c)
Application of Insurance and Condemnation Proceeds. So long as no Default or Event of Default shall have occurred and remain outstanding as of the date of Investment Manager’s receipt of any Casualty Proceeds: 
 (i) Except as may otherwise be provided in any intercreditor or subordination agreement between Investment Manager and another creditor of Borrower, in
the event of any loss or damage to any item of Equipment by condemnation, fire or other casualty, if the Casualty Proceeds relating to such condemnation, fire or other casualty exceed $100,000, Borrower may elect (by delivering written notice to
Investment Manager within ten (10) Business Days following Investment Manager’s receipt of such Casualty Proceeds) to replace or repair such item of Equipment. 
 (ii) In the event of any loss or damage to any Real Estate leased by Borrower by condemnation, fire or other casualty, Borrower may use the Casualty Proceeds in the manner required or permitted by the lease agreement
relating thereto. In the event of any loss or damage to any Real Estate owned by Borrower by condemnation, fire or other casualty, if the Casualty Proceeds relating to such condemnation, fire or other casualty exceed $100,000, and 

  

 18 

 
so long as Borrower has sufficient business interruption insurance to replace the lost profits of the facilities affected by the condemnation, fire or other
casualty, Borrower may elect to repair or replace such Real Estate, subject to the following terms: 
 (1) If Borrower reasonably determines
that the Real Estate may be repaired to substantially the same condition of the Real Estate prior to the condemnation, fire or other casualty, Borrower may elect to repair the Real Estate by delivering written notice to Investment Manager within
thirty (30) days following Investment Manager’s receipt of such Casualty Proceeds. 
 (2) Borrower may elect to replace the Real
Estate owned by Borrower only on terms and conditions satisfactory to Investment Manager in its sole discretion. 
 If a Default or an Event
of Default shall have occurred and remain outstanding as of the date of Investment Manager’s receipt of any Casualty Proceeds, or if the Borrower does not or cannot elect to use the Casualty Proceeds in the manner set forth in paragraphs
(i) or (ii) above, Investment Manager may, subject to the terms of any intercreditor or subordination agreement between Investment Manager and another creditor of Borrower, and subject to the rights of any holder of a Permitted Encumbrance
having priority over the security interests of Investment Manager, apply the Casualty Proceeds to the payment of the Obligations in such manner and in such order as Investment Manager may elect in its sole discretion. 
 4.4 Payment of Taxes. Borrower agrees to pay when due all Taxes lawfully levied, assessed or imposed upon Borrower or the Collateral
(including all sales taxes collected by Borrower on behalf of Borrower’s customers in connection with sales of Inventory and all payroll taxes collected by such Borrower on behalf of such Borrower’s employees), unless Borrower is
contesting such Taxes in good faith, by appropriate proceedings, and is maintaining adequate reserves for such Taxes in accordance with GAAP. Notwithstanding the foregoing, if a lien securing any Taxes is filed in any public office and such lien is
not a Permitted Tax Lien, then the applicable Borrower shall pay all taxes secured by such lien immediately and remove such lien of record promptly. Pending the payment of such taxes and removal of such lien, Investment Manager may, at its election
and without curing or waiving any Event of Default which may have occurred as a result thereof, pay such taxes on behalf of such Borrower, and the amount paid by Investment Manager shall become an Obligation which is due and payable on demand by
Investment Manager. 
 4.5 Compliance With Laws. 
 (a) Borrower agrees to comply with all federal, state and local acts, rules and regulations, and all orders of any federal, state
or local legislative, administrative or judicial body or official, if the failure to so comply would be reasonably likely to have a Material Adverse Effect, provided that Borrower may contest any acts, rules, regulations, orders and directions of
such bodies or officials in any reasonable manner which Investment Manager determines, in the exercise of its reasonable business judgment, will not materially and adversely effect Investment Manager’s or Lender’s rights or priorities in
the Collateral. 
  

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 (b) Without limiting the generality of the foregoing, Borrower agrees to comply
with all environmental statutes, acts, rules, regulations or orders, as presently existing or as adopted or amended in the future, applicable to the ownership and/or use of its/their real property and operation of its business, if the failure to so
comply would be reasonably likely to have a Material Adverse Effect. Borrower shall not be deemed to have breached any provision of this Section 4.5(b) if (x) the failure to comply with the requirements of this
Section 4.5 resulted from good faith error or innocent omission, (y) Borrower promptly commences and diligently pursues a cure of such breach and (z) such failure is cured within thirty (30) days following Borrower’s
receipt of notice from Investment Manager of such failure, or if such breach cannot in good faith be cured within thirty (30) days following Borrower’s receipt of such notice, then such breach is cured within a reasonable time frame based
on the extent and nature of the breach and the necessary remediation, and in conformity with any applicable consent order, consensual agreement and applicable law. 
 4.6 Notices Concerning Environmental, Employee Benefit and Pension Matters. Borrower agrees to notify Investment Manager in writing of: 
 (a) any expenditure (actual or anticipated) by any Borrower in excess of $100,000 for environmental clean up, environmental
compliance or environmental testing and the impact of said expenses on Borrower’s working capital; 
 (b)
Borrower’s receipt of notice from any local, state or federal authority advising such Borrower of any environmental liability (real or potential) arising from Borrower’s operations, its premises, its waste disposal practices, or waste
disposal sites used by Borrower; and 
 (c) Borrower’s receipt of notice from any governmental agency or any
sponsor of any “multiemployer plan” (as that term is defined in ERISA) to which Borrower has contributed, relating to any ERISA Event. 
 Borrower agrees to provide Investment Manager promptly with copies of all such notices and other information pertaining to any matter set forth above if Investment Manager so requests. 
 4.7 Business Qualification. Borrower agrees to qualify to do business, and to remain qualified to do business and in good standing, in each
jurisdiction where the failure to so qualify, or to remain qualified or in good standing, would have, or would be reasonably likely to have, a Material Adverse Effect. 
 4.8 Anti-Money Laundering and Terrorism Regulations. Borrower agrees to comply with all applicable anti-money laundering and terrorism laws, regulations and executive orders in effect from time to time
(including, without limitation, the USA Patriot Act (Pub. L. No. 107-56)). Borrower also agrees to ensure that no Person who owns a controlling interest in or otherwise controls either VCI or VCAC, as the case may be, is a Person designated
under Section 1(b), (c) or (d) of Executive Order No. 13224 (issued September 23, 2001) or any other similar Executive Order. Borrower acknowledges that 

  

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Investment Manager’s and Lender’s performance hereunder is subject to compliance with all such laws, regulations and executive orders, and in
furtherance of the foregoing, Borrower agrees to provide to Investment Manager and Lender all information about Borrower’s ownership, officers, directors, customers and business structure as Investment Manager and Lender reasonably may require
to comply with, such laws, regulations and executive orders. 
 4.9 Maintenance of Properties. Borrower will maintain or cause
to be maintained in good repair, working order and condition all material properties used in the business of Borrower and its Subsidiaries (as the case may be) and will make or cause to be made all appropriate repairs, renewals and replacements
thereof, ordinary wear and tear excepted. 
 4.10 Lender Meeting. Borrower will participate and will cause its key management
personnel (and those of its Subsidiaries as the case may be) to participate in a meeting with Investment Manager and Lender at least once during each year, which meeting shall be held at such time and such place as may be reasonably requested by
Investment Manager. 
 4.11 Organizational Existence. Except as permitted by Section 5.4, Borrower will and will
cause its Subsidiaries to at all times preserve and keep in full force and effect its organizational existence and all rights and franchises the absence of which could reasonably be expected to have a Material Adverse Effect. 
 4.12 Landlords’ Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases. Borrower shall use its best efforts to
obtain a landlord’s agreement, mortgagee agreement or bailee letter, as applicable, from each lessor of leased property, mortgagee of owned property or bailee with respect to any warehouse, processor or converter facility or other location
where Collateral is stored or located, which agreement or letter shall contain a waiver or subordination of all Liens or claims that the landlord, mortgagee or bailee may assert against the Collateral at that location, and shall otherwise be
reasonably satisfactory in form and substance to Investment Manager. After the Closing Date, no real property or warehouse space shall be leased by Borrower or any Subsidiary of Borrower and no Inventory shall be shipped to a processor or converter
under arrangements established after the Closing Date without the prior written consent of Investment Manager or, unless and until a satisfactory landlord agreement or bailee letter, as appropriate, shall first have been obtained with respect to
such location. Borrower shall and shall cause each of its Subsidiaries (as the case may be) to timely and fully pay and perform their obligations under all leases and other agreements with respect to each leased location or public warehouse where
any Collateral is or may be located. In the event Borrower acquires a fee interest in real property after the Closing Date, Borrower shall deliver to Investment Manager a fully executed mortgage or deed of trust over such real property in form and
substance satisfactory to Investment Manager, together with such title insurance policies, surveys, appraisals, evidence of insurance, legal opinions, environmental assessments and other documents and certificates as shall be reasonably requested by
Investment Manager. 
  

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 4.13 New Subsidiaries. Borrower shall (a) cause each Person, upon its becoming a Subsidiary
of any Borrower after the date of this Agreement (provided that this shall not be construed to constitute consent by Lender to any transaction not expressly permitted by the terms of this Agreement), promptly to guaranty the Obligations and to grant
to Investment Manager, for the benefit of Investment Manager and Lender, a security interest in the real, personal and mixed property of such Person to secure the Obligations and (b) pledge, or cause to be pledged, to Investment Manager, for
the benefit of Investment Manager and Lender, all of the Stock of such Subsidiary owned by any Borrower to secure the Obligations. The documentation for such guaranty, security and pledge shall be substantially similar to the Loan Documents executed
concurrently herewith, including pursuant to the form of Joinder Agreement attached as Exhibit 4.13 hereto, with such modifications as are reasonably requested by Investment Manager. 
 4.14 Board Observer Rights. Borrower shall permit Lender to have one representative present (whether in person or by telephone) in an observer
capacity at all meetings (whether in person or via teleconference) of the respective Board of Directors of each of VCI, VCAC and all Subsidiaries of Borrower, if any (collectively, the “Respective Boards”). Borrower shall send to
such representative all of the notices, information and other materials that are distributed to the directors on the Respective Boards and shall provide the Lender representative with a notice and agenda of each meeting of the Respective Boards, all
at the same time and in the same manner as such notices, agenda, information and other materials are provided to the directors on the Respective Boards. Lender shall provide notice to the Borrower of the identity and address of, or any change with
respect to the identity or address of, such representative. 
 ARTICLE 5 
 NEGATIVE COVENANTS 
 Borrower covenants and agrees that from and after the date
hereof until the Termination Date, Borrower shall not, nor shall it permit any Subsidiary to: 
 5.1 Liens and Encumbrances; No
Negative Pledges. Mortgage, assign, pledge, transfer or otherwise permit any lien, charge, security interest, encumbrance or judgment (whether as a result of a purchase money or title retention transaction, or other security interest, or
otherwise) to exist on any of the Collateral or its other assets, whether now owned or hereafter acquired, except for the Permitted Encumbrances. No Borrower shall, or cause or permit its Subsidiaries to, directly or indirectly, enter into or
assume any agreement (other than the Loan Documents) prohibiting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired. 
 5.2 Indebtedness. Incur or create any Indebtedness other than the Permitted Indebtedness. 
 5.3 Sale of Assets. Sell, lease, assign, transfer or otherwise dispose of (i) Collateral, except for the disposition of Inventory and
Equipment in the ordinary course of business or as otherwise specifically permitted by this Agreement, or (ii) all or any substantial 

  

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part of its assets, if any, which do not constitute Collateral. Borrower may sell obsolete Equipment or surplus Equipment from time to time, provided
that in each such instance: (i) no Event of Default shall have occurred and remain outstanding at the time of such sale; (ii) the aggregate book value of all Equipment owned by the Borrower subject to sale does not exceed $100,000 in
any fiscal year, and (iii) all net proceeds of such sales are, within 90 days of such sale, used to purchase replacement Equipment that such selling Borrower determines in its reasonable business judgment to have a value at least equal to the
Equipment sold. Upon the sale, transfer, lease or other disposition of Equipment, the security interest of Investment Manager and Lender in the Equipment shall, without break in continuity and without further formality or act, continue in, and
attach to, all proceeds thereof. As to any such sale, transfer, lease or other disposition, Investment Manager shall have all of the rights of an unpaid seller, including stoppage in transit, replevin, rescission and reclamation. 
 5.4 Corporate Change. (i) Merge or consolidate with any other entity except in connection with a Permitted Acquisition or a Change of
Control, (ii) change its name or principal place of business, (iii) change its structure or organizational form, or reincorporate or reorganize in a new jurisdiction, (iv) enter into or engage in any operation or activity materially
different from that presently being conducted by such Borrower; provided that such Borrower may (x) change its name or its principal place of business or (y) change its structure or organizational form, or reincorporate or
reorganize in a new jurisdiction, so long as such Borrower provides Investment Manager with thirty (30) days prior written notice thereof and such Borrower executes and delivers to Investment Manager, prior to making such change, all documents
and agreements required by Investment Manager in order to ensure that the liens and security interests granted to Investment Manager, for the benefit of Lender, hereunder continue in effect without any break or lapse in perfection. In addition,
Subsidiaries of a Borrower may merge with and into a Borrower or with and into each other so long as such action does not conflict with the covenants set forth in Section 5.16 of this Agreement. For the purposes of this Section, any operation
or activity by a Borrower that materially involves producing, manufacturing, designing, reselling, marketing, licensing or providing products (including intellectual property and software) or services relating to information technology shall be
deemed not to be an operation or activity materially different from that presently conducted by such Borrower. 
 5.5 Guaranty
Obligations. Assume, guarantee, endorse, or otherwise become liable upon the obligations of any Person, firm, entity or corporation, except by the endorsement of negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business and other than guarantees permitted under the definition of Permitted Indebtedness herein. 
 5.6 Dividends
and Distributions. Pay any dividend or distribution of any kind on, or purchase, acquire, redeem or retire, any of its equity interests (of any class or type whatsoever), whether now or hereafter issued and outstanding, other than Permitted
Distributions. 
 5.7 Investments. (i) Create any new subsidiary (other than to consummate a Permitted Acquisition), or
(ii) make any advance or loan to, or any investment in, any firm, 

  

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entity, Person or corporation, or (iii) acquire all or substantially all of the assets of, or any capital stock or any equity interests in, any firm,
entity or corporation, other than current investments of such Borrower in its existing subsidiaries, provided, however that (x) such Borrower may make loans and advances on an unsecured basis, in the ordinary course of its
business and on fair and reasonable terms, to any other Borrower and (y) such Borrower may make a Permitted Acquisition. 
 5.8
Related Party Transactions. Enter into any transaction, including, without limitation, any purchase, sale, lease, loan or exchange of property, with any shareholder, officer, director, parent (direct or indirect), subsidiary (direct or
indirect) or other Person otherwise affiliated with such Borrower unless (i) such transaction otherwise complies with the provisions of this Agreement, (ii) such transaction is for the sale of goods or services rendered in the ordinary
course of business and pursuant to the reasonable requirements of the Borrower or for the sale of Subordinated Debt or equity interests of the Borrower and, in each case, and upon standard terms and conditions and fair and reasonable terms, no less
favorable to such entity than such entity could obtain in a comparable arms length transaction with an unrelated third party, and (iii) except (x) for the reimbursement of business expenses and the payment of compensation (including,
without limitation, fees, salaries, bonuses and other forms of compensation pursuant to employment or other agreements) in the ordinary course of business and (y) ordinary course of business payments and relationships with any vendor, supplier
or customer who is also a shareholder provided any such arrangements are upon standard terms and conditions and fair and reasonable terms, no less favorable to Borrower than it could obtain in a comparable arms length transaction with an unrelated
third party, no Event of Default shall have occurred and remain outstanding at the time such transaction occurs, or would occur after giving effect to such transaction. 
 5.9 Restricted Payments. (i) Pay, make or set apart any sum for any Restricted Payment, except that unless otherwise prohibited in Section 5.16 below, wholly-owned Subsidiaries of Borrower may
make Restricted Payments to Borrower; (ii) make any payment of the principal of, or interest on, any Subordinated Debt, or purchase, acquire or redeem any of the Subordinated Debt, unless (x) such payment, purchase, acquisition or
redemption is expressly permitted by the terms of the applicable intercreditor or subordination agreement and (y) no Default or Event of Default shall have occurred and remain outstanding on the date on which such payment or transaction occurs,
or would occur as a result thereof; provided, that so long as such payment, purchase, acquisition or redemption does not cause a Default or Event of Default to occur, it may be paid in Stock of any Borrower or from the proceeds of
Subordinated Debt; or (iii) pay any management, consulting or other similar fees to any shareholder, director, parent (direct or indirect), subsidiary (direct or indirect) or other Person otherwise affiliated with Borrower, or any Subsidiary of
the Borrower (other than as permitted in the definition of Restricted Payments and other than the current, customary or prevailing fees and expenses to members of such Borrower’s Board of Directors, and fees and salaries of any shareholder or
other Person paid to such Person in their capacity as officer or employee of such Borrower, including, without limitation, fees, salaries, bonuses and other forms of compensation pursuant to employment or other agreements). 
  

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 5.10 Use of Proceeds. Use the proceeds of any loan made under this Agreement, directly or
indirectly, (i) in violation of any applicable law or regulation, including without limitation Regulations T, U or X of the Board of Governors of the Federal Reserve System as from time to time in effect (and any successor regulation or
official interpretation of such Board), (ii) to purchase or carry any “margin stock”, as defined in Regulations U and X, or any “margin security”, “marginable OTC stock” or “foreign margin stock” within
the meaning of Regulation T, U or X, (iii) for any purpose other than to payoff loans to working capital lenders and other lenders existing as of the Initial Closing Date, finance the Vodavi Technology, Inc. acquisition and fund the working
capital needs of Borrower. 
 5.11 No Restrictions on Subsidiary Distributions to Borrower. Except as provided in
Section 5.16 and elsewhere in this Agreement, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the ability of any such Subsidiary to: (1) pay dividends or make any
other distribution on any of such Subsidiary’s Stock owned by any Borrower or any other Subsidiary; (2) pay any Indebtedness owed to any Borrower or any other Subsidiary; (3) make loans or advances to any Borrower or any other
Subsidiary; or (4) transfer any of its property or assets to any Borrower or any other Subsidiary. 
 5.12 Conduct of Business.
Engage in any business other than businesses of the type described on Schedule 5.12. 
 5.13 Changes Relating to Subordinated
Debt. Change or amend the terms of any of its Subordinated Debt if the effect of such amendment is to: (a) increase the interest rate on such Indebtedness; (b) accelerate the dates upon which payments of principal or interest are due
on such Indebtedness; (c) add or make more likely any event of default or add or make more restrictive any covenant with respect to such Indebtedness; (d) add or make more onerous on any Borrower the redemption or prepayment provisions of
such Indebtedness; (e) change the subordination provisions thereof (or the subordination terms of any guaranty thereof) in a manner adverse to any Borrower, Investment Manager or Lender; (f) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer additional material rights on the holder of such Indebtedness in a manner adverse to any Borrower or Lender; or (g) increase the portion of interest payable in cash
with respect to any Indebtedness for which interest is payable by the issuance of payment-in-kind notes or is permitted to accrue. 
 5.14
Press Release; Public Offering Materials. Issue any press releases, using the name of Investment Manager or Lender or their respective Affiliates or referring to this Agreement or the other Loan Documents without at least two (2) Business
Days’ prior notice to Investment Manager or Lender unless (and only to the extent that) Borrower or such Affiliate is required to do so under law and then, in any event, Borrower or such Affiliate will consult with Investment Manager before
issuing such press release. Borrower consents to the publication by Investment Manager or Lender of a tombstone or similar advertising material relating to the financing transactions contemplated by this Agreement; provided that such tombstone or
material complies with applicable law. Investment Manager or Lender shall provide a draft of any such tombstone or similar advertising material to Borrower for review 

  

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and comment prior to the publication thereof. Investment Manager and Lender reserve the right to provide to industry trade organizations information
necessary and customary for inclusion in league table measurements. 
 5.15 Bank Accounts. Establish any new bank accounts without
prior written notice to Investment Manager and unless Investment Manager and the bank at which the account is to be opened enter into a tri-party agreement regarding such bank account pursuant to which such bank (i) acknowledges the security
interest of Investment Manager in such bank account, (ii) subject to the terms of the Subordination Agreement, agrees to comply with instructions originated by Investment Manager directing disposition of the funds in the bank account without
further consent from any Borrower or Subsidiary of any Borrower following the occurrence and during the continuance of an Event of Default, and (iii) agrees to subordinate and limit any security interest the bank may have in the bank account on
terms satisfactory to Investment Manager. Additionally, to the extent the level cash collateral required to secure Borrower’s SVB L/Cs obligations is reduced, all available cash or Cash Equivalents above the new required level maintained in the
accounts over which Silicon Valley Bank has a security interest shall be transferred out of such accounts and into any account over which there exists an account control agreement for the benefit of the Investment Manager. Further, to the extent
Borrower is no longer required to maintain cash collateral to secure Borrower’s SVB L/Cs obligations, Borrower shall (y) use its best efforts to arrange for a control agreement covering the bank account (where such cash or Cash Equivalents
is held) for the benefit of the Investment Manager upon terms set for in clause (i) though (iii) of this paragraph or (z) transfer all such cash or Cash Equivalents to any account over which there exists an account control agreement
for the benefit of the Investment Manager. At no time shall Borrower maintain a balance in its Bank of America account (account number 003765414103) greater than $10,000. 
 5.16 Activities of Certain Subsidiaries. (a) Pay dividends or make any other distribution or payment to any of the Inactive Subsidiaries; (b) make loans or advances to any of the Inactive
Subsidiaries; (c) transfer any of its property, cash, assets or Stock to any of the Inactive Subsidiaries; in each case except with the prior consent of the Investment Manager and the Lender, which consent may be withheld in their sole
discretion. In addition, the Inactive Subsidiaries will not incur any Contractual Obligations, hire any Persons, acquire any assets, incur any liabilities, operate any business outside the scope of their respective businesses as such exists on the
date of this Agreement, or otherwise take any actions other than in connection with the winding down and liquidation of their respective operations in accordance with applicable law at such time as agreed to among Borrower, Investment Manager and
Lender. Additionally, Vertical Germany shall not, and Borrower shall not permit Vertical Germany to, (i) engage in any business, other than sales and marketing for Borrower for European sales, (ii) possess or own any assets, other than not
more than $200,000 of inventory and accounts receivables and office furniture and equipment, (iii) incur any liabilities other than immaterial trade liabilities incurred in connection with its sale and marketing business, (iii) contract
with suppliers, other than the Borrower, or (iv) incur any Contractual Obligations to any customers. 
  

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 5.17 ERISA. Permit any ERISA Affiliate to, cause or permit to occur an ERISA Event to the extent
such ERISA Event could reasonably be expected to have a Material Adverse Effect. 
 ARTICLE 6 
 FINANCIAL COVENANTS/REPORTING 
 Borrower covenants and agrees that from and after the date hereof until the Termination Date, Borrower and its Subsidiaries shall perform and comply with all covenants in this Article 6. 
 6.1 Financial Statements and Other Reports. Borrower will maintain, and cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business practices to permit preparation of Financial Statements in conformity with GAAP (it being understood that monthly Financial Statements are not required to have footnote disclosures).
Borrower will deliver each of the Financial Statements and other reports described below to Investment Manager. 
 (a)
Monthly Financials and Forecasts. Only if requested by Investment Manager, as soon as available but in any event within thirty (30) days after the end of each month (except the last month of Borrower’s Fiscal Quarters), Borrower will
deliver (if so requested): (i) the consolidated and consolidating balance sheets of Borrower and its Subsidiaries, as at the end of such month, and the related consolidated statements of income, stockholders’ equity and cash flow for such
month and for the period from the beginning of the then current Fiscal Year of Borrower to the end of such month, (ii) a report setting forth in comparative form the corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures for the current Fiscal Year delivered pursuant to Section 6.1(g). 
 (b)
Quarterly Financials. As soon as available and in any event within forty-five (45) days after the end of each calendar quarter (including the last quarter of Borrower’s Fiscal Year), Borrower will deliver (i) the consolidated and
consolidating balance sheets of Borrower and its Subsidiaries, as at the end of such quarter, and the related consolidated statements of income, stockholders’ equity and cash flow for such quarter and for the period from the beginning of the
then current Fiscal Year of Borrower to the end of such quarter and (ii) a report setting forth in comparative form the corresponding figures for the corresponding periods of the previous Fiscal Year and the corresponding figures from the
current Fiscal Year delivered pursuant to Section 6.1(g). 
 (c) Year-End Financials. As soon as available
and in any event within ninety (90) days after the end of each Fiscal Year of Borrower, Borrower will deliver (1) the consolidated and consolidating balance sheets of Borrower and its Subsidiaries, as at the end of such year, and the
related consolidated statements of income, stockholders’ equity and cash flow for such Fiscal Year, (2) a schedule of the outstanding Indebtedness for borrowed money of Borrower and its Subsidiaries describing in reasonable detail each
such debt issue or loan outstanding and the principal amount and amount of accrued and unpaid interest with respect 

  

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to each such debt issue or loan and (3) a report with respect to the consolidated Financial Statements from Vitale, Caturano & Company, Ltd. or
another nationally recognized firm of Certified Public Accountants selected by Borrower, which report shall be prepared in accordance with Statement of Auditing Standards No. 58 (the “Statement”) “Reports on Audited
Financial Statements” and such report shall be “Unqualified” (as such term is defined in such Statement). 
 (d) Accountants’ Reports. Promptly upon receipt thereof, Borrower will deliver copies of all significant reports submitted by Borrower’s firm of certified public accountants in connection with each annual, interim or
special audit or review of any type of the Financial Statements or related internal control systems of Borrower and its Subsidiaries made by such accountants, including any comment letter submitted by such accountants to management in connection
with their services. 
 (e) Management Report. Together with each delivery of Financial Statements of Borrower pursuant
to Sections 6.1(b) and (c), Borrower will deliver, in electronic form and hard copy, a management report (1) describing the operations and financial condition of Borrower and its Subsidiaries for the applicable period then ended and the
portion of the current Fiscal Year then elapsed (or for the Fiscal Year then ended in the case of year-end financials) and (2) discussing the reasons for any significant variations. The information above shall be presented in reasonable detail
and shall be certified by the chief financial officer of Borrower to the effect that such information fairly presents in all material respects the results of operations and financial condition of Borrower and its Subsidiaries as at the dates and for
the periods indicated. The Investment Manager and Lender each agree that the delivery of a copy of the Borrower’s applicable Form 10-K as filed with the SEC by Borrower to the Investment Manager shall satisfy the requirements of this
Section 6.1(e). 
 (f) Appraisals. At Borrower’s expense, Investment Manager may, from time to time, obtain
appraisal reports in form and substance and from appraisers satisfactory to Investment Manager, stating the then current market values of all or any portion of the Real Estate and personal property owned by Borrower. 
 (g) Projections. As soon as available and in any event no later than the later of (x) thirty (30) days prior to the
beginning of each of Borrower’s Fiscal Years and (y) approval by VCI’s Board of Directors, Borrower will deliver Projections of Borrower and its Subsidiaries for the forthcoming three (3) fiscal years, year by year, and for the
forthcoming fiscal year, month by month; provided, however, that in no event shall such Projections be required to extend beyond the Term Loan Maturity Date. Additionally, Borrower shall immediately notify Investment Manager if any
then-current Projections are modified in any manner and provide a copy thereof to Investment Manager promptly after such modifications are provided to VCI’s Board of Directors. 
 (h) Senior Indebtedness Reports. Upon the request of Investment Manager, Borrower will promptly deliver to Investment Manager any
reports or other information delivered by Borrower under the Senior Indebtedness, if any. 
  

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 (i) Events of Default, Etc. Promptly upon any officer of Borrower obtaining
knowledge of any of the following events or conditions, Borrower shall deliver copies of all written notices given or received by Borrower or any of its Subsidiaries with respect to any such event or condition and a certificate of such
Borrower’s chief executive officer specifying the nature and period of existence of such event or condition and what action such Borrower or its Subsidiary has taken, is taking and proposes to take with respect thereto: (1) any condition
or event that constitutes, or which could reasonably be expected to result in the occurrence of, an Event of Default or; (2) any notice that any Person has given to any Borrower or any of their Subsidiaries or any other action taken with
respect to a claimed default or event or condition of the type referred to in Section 7.1(b); (3) any event or condition that could reasonably be expected to result in any Material Adverse Effect; or (4) any default or event of
default with respect to any Indebtedness of Borrower or any of its Subsidiaries. 
 (j) Litigation. Promptly upon any
officer of any Borrower obtaining knowledge of (1) the institution of any action, charge, claim, demand, suit, proceeding, petition, governmental investigation, tax audit or arbitration now pending or, to the best knowledge of Borrower after
due inquiry, threatened in writing against any Borrower or any of its Subsidiaries or affecting any property of Borrower or any of its Subsidiaries (“Litigation”) not previously disclosed by Borrower to Investment Manager or
(2) any material development in any action, suit, proceeding, governmental investigation or arbitration at any time pending against any Borrower or affecting any property of any Borrower which, in each case, could reasonably be expected to have
a Material Adverse Effect, Borrower will promptly give notice thereof to Investment Manager and provide such other information as may be reasonably available to them to enable Investment Manager and its counsel to evaluate such matter. 

(k) Notice of Corporate and other Changes. Borrower shall provide prompt written notice of (1) all jurisdictions in which
Borrower becomes qualified after the Initial Closing Date to transact business, (2) any change after the Initial Closing Date in the authorized and issued Stock of Borrower or any Subsidiary of Borrower or any amendment to their articles or
certificate of incorporation, by-laws, partnership agreement or other organizational documents, (3) any Subsidiary created or acquired by any Borrower or any of its Subsidiaries after the Initial Closing Date, such notice, in each case, to
identify the applicable jurisdictions, capital structures or Subsidiaries, as applicable, and (4) any other event that occurs after the Initial Closing Date which would cause any of the representations and warranties in Article 3 of this
Agreement or in any other Loan Document to be untrue or misleading in any material respect. The foregoing notice requirement shall not be construed to constitute consent by Lender to any transaction referred to above which is not expressly permitted
by the terms of this Agreement. 
 (l) Other Information. With reasonable promptness, Borrower will deliver such other
information, reports and data with respect to Borrower or any Subsidiary (including any of the Inactive Subsidiaries) as from time to time may be reasonably requested by Investment Manager. 
  

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 (m) Compliance Certificate. Together with each delivery of Financial
Statements of Borrower and its Subsidiaries pursuant to Sections 6.1(a), (b) and (c), Borrower will deliver a fully and properly completed Compliance Certificate (in substantially the same form as Exhibit 6.1(m) signed by
Borrower’s respective chief executive officer or chief financial officer. 
 (n) Taxes. Borrower shall
provide prompt written notice of (i) the execution or filing with the IRS or any other Governmental Authority of any agreement or other document extending, or having the effect of extending, the period for assessment or collection of any
Charges by Borrower or any of its Subsidiaries and (ii) any agreement by any Borrower or any of its Subsidiaries or request directed to any Borrower or any of its Subsidiaries to make any adjustment under IRC Section 481(a), by reason of a
change in accounting method or otherwise, which could reasonably be expected to have a Material Adverse Effect. 
 6.2 Accounting Terms;
Utilization of GAAP for Purposes of Calculations Under Agreement. For purposes of this Agreement, all accounting terms not otherwise defined herein shall have the meanings assigned to such terms in conformity with GAAP. Financial Statements and
other information furnished to Investment Manager pursuant to Section 6.1 or any other section (unless specifically indicated otherwise) shall be prepared in accordance with GAAP as in effect at the time of such preparation;
provided that no Accounting Change shall affect financial covenants, standards or terms in this Agreement; provided further that Borrower shall prepare footnotes to the Financial Statements required to be delivered hereunder that show
the differences between the Financial Statements delivered (which reflect such Accounting Changes) and the basis for calculating financial covenant compliance (without reflecting such Accounting Changes). All such adjustments described in clause
(c) of the definition of the term Accounting Changes resulting from expenditures made subsequent to the Initial Closing Date (including capitalization of costs and expenses or payment of pre-Initial Closing Date liabilities) shall be treated as
expenses in the period the expenditures are made. In the event that any Accounting Change shall occur and such change results in a change in the method of calculation of financial covenants, standards or terms in this Agreement, then Borrower and
Investment Manager agree to negotiate in good faith in order to amend such provisions of this Agreement so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating the financial condition of Borrower
shall be the same after such Accounting Changes as if such Accounting Changes had not been made. Until such time as such an amendment shall have been executed and delivered by Borrower, Investment Manager and Lender, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or construed as if such Accounting Changes had not occurred. 
 6.3
Financial Covenants. 
 (a) Liquidity. For each Fiscal Quarter commencing with the Fiscal Quarter ending
December 31, 2006, Borrower shall maintain cash, Cash Equivalents or available borrowing capacity without restriction (other than under this Agreement) of at least Five Million Dollars ($5,000,000) in the aggregate (including Borrower and each
of 

  

 30 

 
its Subsidiaries on a consolidated basis as of the date of calculation), as determined on the last day of each such Fiscal Quarter; provided that once
Borrower’s EBITDA for any trailing twelve month period is $1 or greater as certified in writing to Investment Manager and Lender by Borrower’s chief financial officer or chief accountant, this Liquidity covenant will be automatically
terminated and of no further force or effect. 
 (b) Minimum EBITDA. Beginning with the trailing twelve month
period ended September 30, 2007, and for each trailing twelve month period measured on a calendar quarterly basis thereafter, Borrower shall not permit EBITDA to be less than One Dollar ($1) as measured in such relevant twelve month period
(including Borrower and each of its Subsidiaries on a consolidated basis as of the date of calculation). 
 (c)
Minimum Revenues. Beginning with the trailing twelve month period ended September 30, 2007, Borrower shall not permit total consolidated Revenues for the twelve month period so ended to be less than Eighty Million Dollars ($80,000,000)
(including Borrower and each of its Subsidiaries on a consolidated basis as of the date of calculation). For every trailing twelve month period measured on a calendar quarterly basis thereafter, Borrower shall not permit total consolidated Revenues
to be less than two percent (2%) greater than in the same trailing twelve month period from the immediately preceding twelve month period (including Borrower and each of its Subsidiaries on a consolidated basis as of the date of calculation).

 (d) Period Ended March 31, 2007. For the six (6) month period ended March 31, 2007,
Borrower’s total consolidated Revenues shall be no less than Thirty Million Dollars ($30,000,000) and Borrower’s consolidated EBITDA losses shall be no greater than Two Million Dollars ($2,000,000) (including Borrower and each of its
Subsidiaries on a consolidated basis as of the date of calculation). 
 ARTICLE 7 
 DEFAULT, RIGHTS AND REMEDIES 
 7.1 Event of Default. “Event of Default” shall mean the occurrence or existence of any one or more of the following: 
 (a) Payment. Failure to pay any installment or other payment of principal on the Loans or any interest on the Loans, any Payment
Premium, in any such case, within three (3) Business Days when due, or failure to pay any other amount due under this Agreement or any of the other Loan Documents within ten (10) calendar days after written demand for payment thereof from
Investment Manager or Lender; or 
 (b) Default in Other Agreements. Borrower or any of its Subsidiaries fails to pay
when due or within any applicable grace period any principal or interest on Indebtedness (other than the Loan) or breaches or defaults under the terms of any Indebtedness (other than the Loan), or any condition or event occurs with respect to any

  

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Indebtedness (other than the Loan), if the effect of such failure to pay, breach, default or occurrence is to cause the holder or holders of Indebtedness
having an aggregate principal amount in excess of $250,000 to declare due prior to their stated maturity; or 
 (c)
Breach of Certain Provisions. Failure of any Borrower to perform or comply with any term or condition contained in Sections 4.1, 4.3 (as it relates to Borrower’s obligation to maintain insurance), 4.10, Article 5 or Article
6; or 
 (d) Breach of Warranty. Any representation, warranty, certification or other statement made by Borrower in
any Loan Document or in any statement or certificate at any time given by such Person in writing pursuant or in connection with any Loan Document is false in any material respect (without duplication of materiality qualifiers contained therein) on
the date made; or 
 (e) Other Defaults Under Loan Documents. Borrower defaults in the performance of or compliance
with any term contained in this Agreement or the other Loan Documents (other than occurrences described in other provisions of this Section 7.1 for which a different grace or cure period is specified, or for which no cure period is
specified and which constitute immediate Events of Default) and such default is not remedied or waived within thirty (30) days after the earlier of (1) receipt by Borrower of notice from Investment Manager or Lender of such default or
(2) the actual knowledge of Borrower of such default; or 
 (f) Involuntary Bankruptcy; Appointment of Receiver,
Etc. (1) A court enters a decree or order for relief with respect to Borrower in an involuntary case under the Bankruptcy Code, which decree or order is not stayed or other similar relief is not granted under any applicable federal or state
law; or (2) the continuance of any of the following events for sixty (60) days unless dismissed, bonded or discharged: (a) an involuntary case is commenced against any Borrower, under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect; or (b) a decree or order of a court for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over any Borrower, or over all or a substantial
part of its property, is entered; or (c) a receiver, trustee or other custodian is appointed without the consent of any Borrower, for all or a substantial part of the property of such Borrower; or 
 (g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (1) Borrower commences a voluntary case under the Bankruptcy Code, or
consents to the entry of an order for relief in an involuntary case or to the conversion of an involuntary case to a voluntary case under any such law or consents to the appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or (2) any Borrower makes any assignment for the benefit of creditors; or (3) the Board of Directors of Borrower adopts any resolution or otherwise authorizes action to approve any of the
actions referred to in this Section 7.1(g); or 
 (h) Judgment and Attachments. Any final, non-appealable
money judgment, writ or warrant of attachment, or similar process (other than those described 

  

 32 

 
elsewhere in this Section 7.1) involving (1) an amount in any individual case in excess of $250,000 or (2) an amount in the aggregate
at any time in excess of $1,000,000 (in either case to the extent not adequately covered by insurance in Investment Manager’s sole discretion as to which the insurance company has acknowledged coverage) is entered or filed against any Borrower
or any of its assets and remains undischarged, unvacated or unstayed for a period of thirty (30) days or in any event later than five (5) Business Days prior to the date of any proposed sale thereunder; or 
 (i) Dissolution. Any order, judgment or decree is entered against Borrower decreeing the dissolution or split up of Borrower and
such order remains undischarged or unstayed for a period in excess of fifteen (15) days; or 
 (j) Solvency.
Borrower fails to pay its debts as they become due or admits in writing its present or prospective inability to pay its debts as they become due; or 
 (k) Invalidity of Loan Documents. Any of the Loan Documents for any reason, other than a partial or full release in accordance with the terms thereof, ceases to be in full force and effect or is declared to be
null and void, or Borrower denies that it has any further liability under any Loan Documents to which it is party, or gives notice to such effect; or 
 (l) Subordinated Indebtedness. The failure of Borrower or any creditor of Borrower or any of their Subsidiaries to comply with the terms of any subordination or intercreditor agreement or any subordination
provisions of any note or other document running to the benefit of Investment Manager or Lender, or if any such document becomes null and void or any party denies further liability under any such document or provides notice to that effect.

 7.2 Acceleration and other Remedies. 
 (a) Upon the occurrence of any Event of Default described in Sections 7.1(f) or 7.1(g), all of the Obligations shall automatically become immediately due and payable, without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other requirements of any kind, all of which are hereby expressly waived by Borrower. 
 (b) Upon the occurrence and during the continuance of any Event of Default other than described in Sections 7.1(f) or 7.1(g), Investment Manager may, and at the request of Lender, Investment Manager
shall by written notice to Borrower: (i) declare all or any portion of the Obligations to be, and the same shall forthwith become, immediately due and payable together with accrued interest thereon and (ii) exercise any other remedies
which may be available under the Loan Documents or applicable law, including all remedies provided under the Code. 
 (c) Except as otherwise provided for in this Agreement or by applicable law, Borrower waives: (i) presentment, demand and protest and notice of presentment, 

  

 33 

 
dishonor, notice of intent to accelerate, notice of acceleration, protest, default, nonpayment, maturity, release, compromise, settlement, extension or
renewal of any or all commercial paper, accounts, contract rights, documents, instruments, chattel paper and guaranties at any time held by Investment Manager on which Borrower may in any way be liable, and hereby ratifies and confirms whatever
Investment Manager may do in this regard, (ii) all rights to notice and a hearing prior to Investment Manager’s taking possession or control of, or to Investment Manager’s replevy, attachment or levy upon, the Collateral or any bond
or security that might be required by any court prior to allowing Investment Manager to exercise any of its remedies, and (iii) the benefit of all valuation, appraisal, marshaling and exemption laws. 
 7.3 Performance by Investment Manager. If Borrower shall fail to perform any covenant, duty or agreement contained in any of the Loan Documents,
Investment Manager may perform or attempt to perform such covenant, duty or agreement on behalf of Borrower after the expiration of any cure or grace periods set forth herein. In such event, Borrower shall, at the request of Investment Manager,
promptly pay any amount reasonably expended by Investment Manager in such performance or attempted performance to Investment Manager. Notwithstanding the foregoing, it is expressly agreed that Investment Manager shall not have any liability or
responsibility for the performance of any obligation of Borrower under this Agreement or any other Loan Document. 
 7.4 Set Off and
Sharing of Payments. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, during the continuance of any Event of Default, Lender is hereby authorized by Borrower at any time or
from time to time, with reasonably prompt subsequent notice to Borrower (any prior or contemporaneous notice being hereby expressly waived) to set off and to appropriate and to apply any and all (A) balances held by Lender at any of its offices
for the account of Borrower or any of its Subsidiaries (regardless of whether such balances are then due to such Borrower or Subsidiary), and (B) other property at any time held or owing by Lender to or for the credit or for the account of
Borrower or any of its Subsidiaries, against and on account of any of the Obligations; except that Lender shall not exercise any such right without the prior written consent of Investment Manager. Lender, in exercising a right to set off or
otherwise receiving any payment on account of the Obligations, shall deliver such amounts to Investment Manager and Investment Manager shall apply such funds to the payment of the Obligations in accordance with Section 7.5. 

7.5 Application of Proceeds after Default. Notwithstanding anything to the contrary contained in this Agreement, upon the occurrence and during
the continuance of an Event of Default, (a) Borrower irrevocably waives the right to direct the application of any and all payments at any time or times thereafter received by Lender or Investment Manager from or on behalf of Borrower, and
Investment Manager shall have the continuing and exclusive right to apply and to reapply any and all payments received at any time or times after the occurrence and during the continuance of an Default or Event of Default against the Obligations in
such manner as Investment Manager may deem advisable notwithstanding any previous application by Investment Manager and (b) in the absence of a specific determination by Investment Manager with respect thereto, the proceeds of any sale of, or

  

 34 

 
other realization upon, all or any part of the Collateral shall be applied in accordance with Section 1.9 hereof. Any balance remaining shall be
delivered to Borrower or to whomever may be lawfully entitled to receive such balance or as a court of competent jurisdiction may direct. 
 ARTICLE 8 
 ASSIGNMENT 
 8.1 Assignment. 
 (a) Subject to the terms of this Section 8.1,
Lender may make an assignment, at any time or times, of the Loan Documents, the Loans or any portion thereof or interest therein, including Lender’s rights, title, interests, remedies, powers or duties thereunder. Any assignment by Lender
shall: (i) require the consent of Investment Manager and the execution of an assignment agreement in form and substance reasonably satisfactory to, and acknowledged by, Investment Manager); and (iii) be conditioned on such assignee Lender
representing to the assigning Lender and Investment Manager that it is purchasing the Loans or portion of the Loans to be assigned to it for its own account, for investment purposes and not with a view to the distribution thereof. In the case of an
assignment by Lender under this Section 8.1, the assignee shall have, to the extent of such assignment, the same rights, benefits and obligations as Lender hereunder. The assigning Lender shall be relieved of its obligations hereunder
with respect to the assigned portion of the Loans from and after the date of such assignment. Borrower hereby acknowledges and agrees that any assignment shall give rise to a direct obligation of Borrower to the assignee and that the assignee shall
be considered to be a “Lender.” In the event Investment Manager or Lender assigns or otherwise transfers all or any part of the Obligations, Investment Manager or Lender shall so notify Borrower and Borrower shall, upon the request of
Investment Manager or Lender, execute new notes in exchange for the Note(s) being assigned. Notwithstanding the foregoing provisions of this Section 8.1(a), Lender may at any time pledge the Obligations held by it and Lender’s
rights under this Agreement and the other Loan Documents to a Federal Reserve Bank. 
 (b) Borrower shall assist
Lender as required to enable the assigning Lender to effect any such assignment, including the execution and delivery of any and all agreements, notes and other documents and instruments as shall be requested and the prompt preparation of
informational materials for, and the participation of management in meetings with potential assignees, all on a reasonable timetable established by Investment Manager in its sole discretion. Borrower shall certify the correctness, completeness and
accuracy in all material respects of all written descriptions of Borrower and its affairs contained in any selling materials provided by Borrower or any of its Subsidiaries. 
 (c) Lender may furnish any information concerning Borrower in the possession of Lender from time to time to assignees and
participants (including prospective assignees and participants); provided that Lender shall obtain from assignees or participants confidentiality covenants substantially equivalent to those contained in Section 10.12. 

 

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 ARTICLE 9 
 PROVISIONS RELATED TO INVESTMENT MANAGER 
 9.1 Appointment. Lender hereby designates and
appoints Investment Manager as its agent under this Agreement and the other Loan Documents, and Lender hereby irrevocably authorizes Investment Manager to execute and deliver the Collateral Documents and to take such action or to refrain from taking
such action on its behalf under the provisions of this Agreement and the other Loan Documents and to exercise such powers as are set forth herein or therein, together with such other powers as are reasonably incidental thereto. Investment Manager is
authorized and empowered to amend, modify, or waive any provisions of this Agreement or the other Loan Documents on behalf of Lender subject to the requirement that Lender’s consent be obtained in certain instances as provided in this
Article 9 and Section 10.2. The provisions of this Article 9 are solely for the benefit of Investment Manager and Lender and neither Borrower nor any other Person shall have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under this Agreement, Investment Manager shall act solely as agent of Lender and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or
trust with or for Borrower. Investment Manager may perform any of its duties hereunder, or under the Loan Documents, by or through its agents or employees. 
 9.2 Reliance. Investment Manager shall be entitled to rely, and shall be fully protected in relying, upon any written or oral notices, statements, certificates, orders or other documents or any telephone
message or other communication (including any writing, telex, fax or telegram) believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this
Agreement or any of the Loan Documents and its duties hereunder or thereunder. Investment Manager shall be entitled to rely upon the advice of legal counsel, independent accountants, and other experts selected by Investment Manager in its sole
discretion. 
 9.3 Successor Investment Manager. 
 (a) Resignation. Investment Manager may resign from the performance of all its agency functions and duties hereunder at any
time by giving at least thirty (30) Business Days’ prior written notice to Borrower and Lender. Such resignation shall take effect upon the acceptance by a successor Investment Manager of appointment pursuant to clause (b) below or as
otherwise provided in clause (b) below. 
 (b) Appointment of Successor. Upon any such notice of resignation
pursuant to clause (a) above, Lender shall appoint a successor Investment Manager which, unless an Event of Default has occurred and is continuing, shall be acceptable to Borrower (Borrower’s approval not to be unreasonably conditioned,
delayed or withheld). If a successor Investment Manager shall not have been so appointed within the thirty (30) Business Day period referred to in clause (a) above, the retiring Investment Manager, upon notice to Borrower, shall then
appoint a successor Investment Manager who shall serve as Investment Manager until such time, if any, as Lender appoints a successor Investment Manager as provided above. 
  

 36 

 (c) Successor Investment Manager. Upon the acceptance of any appointment as
Investment Manager under the Loan Documents by a successor Investment Manager, such successor Investment Manager shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Investment Manager, and
the retiring Investment Manager shall be discharged from its duties and obligations under the Loan Documents. After any retiring Investment Manager’s resignation as Investment Manager, the provisions of this Article 9 shall continue to
inure to its benefit as to any actions taken or omitted to be taken by it in its capacity as Investment Manager. 
 9.4 Collateral
Matters. 
 (a) Release of Collateral. Lender hereby irrevocably authorizes Investment Manager, at its
option and in its sole discretion, to release any Lien granted to or held by Investment Manager upon any Collateral (x) upon payment and satisfaction of all Obligations (other than contingent indemnification obligations to the extent no claims
giving rise thereto have been asserted) or (y) constituting property being sold or disposed of if Borrower certifies to Investment Manager that the sale or disposition is made in compliance with the provisions of this Agreement (and Investment
Manager may rely in good faith conclusively on any such certificate, without further inquiry). 
 (b) Confirmation of
Authority; Execution of Releases. Without in any manner limiting Investment Manager’s authority to act without any specific or further authorization or consent by Lender (as set forth in Section 9.4(a)), Lender agrees to confirm
in writing, upon request by Investment Manager or Borrower, the authority to release any Collateral conferred upon Investment Manager under clauses (x) and (y) of Section 9.4(a). Upon receipt by Investment Manager of any
required confirmation from Lender of its authority to release any particular item or types of Collateral, and upon at least ten (10) Business Days’ prior written request by Borrower, Investment Manager shall (and is hereby irrevocably
authorized by Lender to) execute such documents as may be necessary to evidence the release of the Liens granted to Investment Manager upon such Collateral; provided, however, that (x) Investment Manager shall not be required to
execute any such document on terms which, in Investment Manager’s opinion, would expose Investment Manager to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and
(y) such release shall not in any manner discharge, affect or impair the Obligations or any Liens upon, all interests retained by Borrower, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.

 (c) Absence of Duty. Investment Manager shall have no obligation whatsoever to Lender or any other Person to assure
that the property covered by the Collateral Documents exists or is owned by Borrower or is cared for, protected or insured or has been encumbered or that the Liens granted to Investment Manager have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers
granted or available to Investment Manager in this Section 9.4 or in any of the Loan 

  

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Documents, it being understood and agreed that in respect of the property covered by the Collateral Documents or any act, omission or event related thereto,
Investment Manager may act in any manner it may deem appropriate, in its sole discretion, given Investment Manager’s own interest in property covered by the Collateral Documents and that Investment Manager shall have no duty or liability
whatsoever to Lender, provided that Investment Manager shall exercise the same care which it would in dealing with loans for its own account. 
 9.5 Agency for Perfection. Investment Manager and Lender hereby appoint each other Lender as agent for the purpose of perfecting Investment Manager’s security interest in assets which, in accordance with
the Code in any applicable jurisdiction, can be perfected by possession or control. Should Lender obtain possession or control of any such assets, Lender shall notify Investment Manager thereof, and, promptly upon Investment Manager’s request
therefor, shall deliver such assets to Investment Manager or in accordance with Investment Manager’s instructions or transfer control to Investment Manager in accordance with Investment Manager’s instructions. Lender agrees that it will
not have any right individually to enforce or seek to enforce any Collateral Document or to realize upon any collateral security for the Loans unless instructed to do so by Investment Manager in writing, it being understood and agreed that such
rights and remedies may be exercised only by Investment Manager. 
 9.6 Notice of Default. Investment Manager shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default unless Investment Manager shall have received written notice from Lender or Borrower referring to this Agreement, describing such Default or Event of Default and stating
that such notice is a “notice of default”. Investment Manager will use reasonable efforts to notify Lender of its receipt of any such notice, unless such notice is with respect to defaults in the payment of principal, interest and Fees, in
which case Investment Manager will notify Lender of its receipt of such notice. Investment Manager shall take such action with respect to such Default or Event of Default as may be requested by Lender in accordance with Article 7. Unless and
until Investment Manager has received any such request, Investment Manager may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable or in
the best interests of Lender. 
 9.7 Lender Actions Against Collateral. With respect to any action by Investment Manager to enforce
the rights and remedies of Investment Manager and Lender under this Agreement and the other Loan Documents, Lender hereby consents to the jurisdiction of the court in which such action is maintained, and agrees to deliver its Notes to Investment
Manager to the extent necessary to enforce the rights and remedies of Investment Manager for the benefit of Lender under the mortgages or similar Liens or encumbrances in accordance with the provisions hereof. 
 9.8 Payment; Information; Actions in Concert. 
 (a) Return of Payments. 
 (i) If Investment Manager pays an amount to Lender
under this Agreement in the belief or expectation that a related payment has been or will be received by Investment Manager from Borrower and such related payment is not received by Investment Manager, then Investment Manager will be entitled to
recover such amount from Lender on demand without setoff, counterclaim or deduction of any kind. 
  

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 (ii) If Investment Manager determines at any time that any amount received by
Investment Manager under this Agreement must be returned to Borrower or paid to any other Person pursuant to any insolvency law or otherwise, then, notwithstanding any other term or condition of this Agreement or any other Loan Document, Investment
Manager will not be required to distribute any portion thereof to Lender. In addition, Lender will repay to Investment Manager on demand any portion of such amount that Investment Manager has distributed to Lender, together with interest at such
rate, if any, as Investment Manager is required to pay to Borrower or such other Person, without setoff, counterclaim or deduction of any kind. 
 (b) Dissemination of Information. Investment Manager shall use reasonable efforts to provide Lender with any notice of Default or Event of Default received by Investment Manager from, or delivered by Investment
Manager to, Borrower, with notice of any Event of Default of which Investment Manager has actually become aware and with notice of any action taken by Investment Manager following any Event of Default; provided, that Investment Manager shall
not be liable to Lender for any failure to do so. 
 ARTICLE 10 
 MISCELLANEOUS 
 10.1 Indemnities. Borrower agrees (together with its
Subsidiaries, on a joint and several basis) to indemnify, pay, and hold Investment Manager, Lender and their respective officers, directors, employees, agents, and attorneys (the “Indemnitees”) harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs and expenses (including all reasonable fees and expenses of counsel to such Indemnitees) of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Indemnitee as a result of such Indemnitees being a party to this Agreement or the transactions consummated pursuant to this Agreement; provided, that Borrower shall have no obligation to an Indemnitee hereunder
with respect to liabilities to the extent resulting from the gross negligence or willful misconduct of that Indemnitee as determined by a court of competent jurisdiction. If and to the extent that the foregoing undertaking may be unenforceable for
any reason, Borrower agrees to make the maximum contribution to the payment and satisfaction thereof which is permissible under applicable law. 
 10.2 Amendments and Waivers. Except for actions expressly permitted to be taken by Investment Manager, no amendment, modification, termination or waiver of any provision of this Agreement or any other Loan Document, or any consent to
any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing and 

  

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signed by Borrower, Investment Manager and Lenders owning a majority of the then outstanding principal amounts of the Notes. 
 10.3 Notices. Any notice or other communication required shall be in writing addressed to the respective party as set forth below and may be
personally served, telecopied, sent by overnight courier service or U.S. mail and shall be deemed to have been given: (a) if delivered in person, when delivered; (b) if delivered by fax, on the date of transmission if transmitted on a
Business Day before 4:00 p.m. Eastern Time; (c) if delivered by overnight courier, one (1) Business Day after delivery to the courier properly addressed; or (d) if delivered by U.S. mail, four (4) Business Days after deposit with
postage prepaid and properly addressed. 
 Notices shall be addressed as follows: 
  

			
	 If to Borrower:
	  	 Vertical Communications, Inc.

		  	 One Memorial Drive

		  	 Cambridge, MA 02142

		  	 ATTN: Chief Financial Officer

		  	 Fax: (914) 554-5012

		
	 With a copy to:
	  	 Andrews Kurth LLP

		  	 1717 Main Street, Suite 3700

		  	 Suite 3700

		  	 Dallas, TX 75201

		  	 ATTN: Victor B. Zanetti

		  	 Fax: (214) 659-4890

		
	 If to Investment Manager
 or Lender:
	  	
 Columbia Partners, L.L.C. Investment Management

		  	 1775 Pennsylvania Avenue, NW

		  	 Suite 1000

		  	 Washington, DC 20006

		  	 ATTN: Jason Crist

		  	 Fax: (202) 296-2535

		
	 With a copy to:
	  	 Cooley Godward Kronish LLP

		  	 The Bowen Building

		  	 875 15th
Street NW

		  	 Suite 800

		  	 Washington, DC 20005-2221

		  	 ATTN: Aaron J. Velli, Esq.

		  	 Fax: (202) 842-7899

 10.4 Obligations Absolute; Failure or Indulgence Not Waiver; Remedies Cumulative. The
payment and performance by Borrower of all of the Obligations shall be absolute and unconditional, irrespective of any defense or rights of set-off, recoupment or 

  

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counterclaim Borrower might otherwise have against Investment Manager or Lender, and Borrower shall pay and perform all of the Obligations, free of any
deductions and without abatement, diminution, recoupment, counterclaim or set-off. Until payment in full of all of the Obligations, Borrower shall (a) not suspend or discontinue any payments required pursuant to the Notes, this Agreement or any
other Loan Document; and (b) perform and observe all of the other terms and provisions of this Agreement or any other Loan Documents. No failure or delay on the part of Investment Manager or Lender to exercise, nor any partial exercise of, any
power, right or privilege hereunder or under any other Loan Documents shall impair such power, right, or privilege or be construed to be a waiver of any Default or Event of Default. All rights and remedies existing hereunder or under any other Loan
Document are cumulative to and not exclusive of any rights or remedies otherwise available. 
 10.5 Marshaling; Payments Set Aside.
Neither Investment Manager nor Lender shall be under any obligation to marshal any assets in payment of any or all of the Obligations. To the extent that Borrower makes payment(s) or Investment Manager enforces its Liens or Investment Manager or
Lender exercises its right of set-off, and such payment(s) or the proceeds of such enforcement or set-off is subsequently invalidated, declared to be fraudulent or preferential, set aside, or required to be repaid by anyone, then to the extent of
such recovery, the Obligations or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or set
off had not occurred. 
 10.6 Severability. The invalidity, illegality, or unenforceability in any jurisdiction of any provision under
the Loan Documents shall not affect or impair the remaining provisions in the Loan Documents. Furthermore, in lieu of any such provision, there shall be added automatically as part of the applicable agreement a legal and enforceable provision as
similar in terms to such provision as may be possible. 
 10.7 Headings. Section and subsection headings are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other purposes or be given substantive effect. 
 10.8 Applicable Law. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS WHICH DOES NOT EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES. 
 10.9 Successors and Assigns. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of Borrower, Investment Manager, Lender and their respective successors and assigns (including, in the case of Borrower, a debtor-in-possession on behalf of such Borrower), except as otherwise
provided herein or therein. Borrower may not assign, transfer, hypothecate or otherwise convey its rights, benefits, obligations or duties hereunder or under any of the other Loan Documents without the prior express written consent of Investment
Manager and Lender owning a majority in then outstanding principal amount of the Note(s). Any such purported assignment, transfer, 

  

 41 

 
hypothecation or other conveyance by Borrower without the prior express written consent of Investment Manager and Lender shall be void. The terms and
provisions of this Agreement are for the purpose of defining the relative rights and obligations of Borrower, Investment Manager and Lender with respect to the transactions contemplated hereby and no Person shall be a third party beneficiary of any
of the terms and provisions of this Agreement or any of the other Loan Documents. 
 10.10 No Fiduciary Relationship; Limited
Liability. No provision in the Loan Documents and no course of dealing between the parties shall be deemed to create any fiduciary duty owing to Borrower by Investment Manager or Lender. Borrower agrees that neither Investment Manager nor Lender
shall have liability to Borrower (whether sounding in tort, contract or otherwise) for losses suffered by Borrower in connection with, arising out of, or in any way related to the transactions contemplated and the relationship established by the
Loan Documents, or any act, omission or event occurring in connection therewith, unless and to the extent that it is determined that such losses resulted from the gross negligence or willful misconduct of the party from which recovery is sought as
determined by a final non-appealable order by a court of competent jurisdiction. Neither Investment Manager nor Lender shall have any liability with respect to, and Borrower hereby waives, releases and agrees not to sue for, any special, indirect or
consequential damages suffered by Borrower in connection with, arising out of, or in any way related to the Loan Documents or the transactions contemplated thereby. 
 10.11 Construction. Investment Manager, Lender and Borrower acknowledge that each of them has had the benefit of legal counsel of its own choice and has been afforded an opportunity to review the Loan Documents
with its legal counsel and that the Loan Documents shall be construed as if jointly drafted by Investment Manager, Lender and Borrower. 
 10.12 Confidentiality. Investment Manager and Lender agree to exercise reasonable efforts to keep confidential any non-public information delivered pursuant to the Loan Documents and not to disclose such information to Persons other
than to potential assignees or participants or to Persons employed by or engaged by Investment Manager or Lender or Lender’s assignees or participants including attorneys, auditors, professional consultants, rating agencies; provided
that each of the foregoing has agreed to comply with confidentiality provisions substantially similar to those contained herein. The confidentiality provisions contained in this Section 10.12 shall not apply to disclosures
(i) required to be made by Investment Manager or Lender to any regulatory or governmental agency or pursuant to legal process or (ii) consisting of general portfolio information that does not identify Borrower or separately state
information regarding Borrower. The obligations of Investment Manager and Lender under this Section 10.12 shall supersede and replace the obligations of Investment Manager and Lender under any confidentiality agreement in respect of this
financing executed and delivered by Investment Manager or Lender prior to the date hereof. 
 10.13 CONSENT TO JURISDICTION. BORROWER
HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK AND IRREVOCABLY AGREE THAT, SUBJECT TO 

  

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INVESTMENT MANAGER’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN
SUCH COURTS. BORROWER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO BORROWER, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.
IN ANY LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ALL DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF BORROWER SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS
OF BORROWER FOR PURPOSES OF ALL APPLICABLE LAW OR COURT RULES REGARDING THE PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN A DEPOSITION, AT TRIAL OR OTHERWISE). BORROWER AGREES THAT INVESTMENT MANAGER’S OR LENDER’S COUNSEL IN
ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF THESE INDIVIDUALS AS IF UNDER CROSS-EXAMINATION AND THAT ANY DISCOVERY DEPOSITION OF ANY OF THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN EVIDENCE DEPOSITION. BORROWER IN ANY EVENT
WILL USE ALL COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED BY INVESTMENT MANAGER OR ANY LENDER, ALL PERSONS, DOCUMENTS (WHETHER IN TANGIBLE, ELECTRONIC OR OTHER FORM) OR
OTHER THINGS UNDER THEIR CONTROL AND RELATING TO THE DISPUTE. 
 10.14 WAIVER OF JURY TRIAL. BORROWER, INVESTMENT MANAGER AND LENDER
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. BORROWER, INVESTMENT MANAGER AND LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS. BORROWER,
INVESTMENT MANAGER AND LENDER WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS. 
 10.15 Survival of Warranties and Certain Agreements. All agreements, representations and warranties made herein shall survive the execution and
delivery of this Agreement, the making of the Loans and the execution and delivery of the Notes. 

  

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Notwithstanding anything in this Agreement or implied by law to the contrary, the agreements of Borrower set forth in Sections 1.6 and 10.1 shall
survive the repayment of the Obligations and the termination of this Agreement. 
 10.16 Entire Agreement. This Agreement, the Notes
and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior commitments, agreements, representations, and understandings, whether oral or written, relating to the subject matter hereof, and may not be
contradicted or varied by evidence of prior, contemporaneous, or subsequent oral agreements or discussions of the parties hereto. All Exhibits, Schedules and Annexes referred to herein are incorporated in this Agreement by reference and constitute a
part of this Agreement. 
 10.17 Counterparts; Effectiveness. This Agreement and any amendments, waivers, consents or supplements may
be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which counterparts together shall constitute but one in the same
instrument. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto. 
 10.18
Delivery of Termination Statements and Mortgage Releases. Upon payment in full in cash and performance of all of the Obligations (other than indemnification Obligations), and a release of all claims against Investment Manager and Lender, and so
long as no suits, actions proceedings, or claims are pending or threatened against any Indemnitee asserting any damages, losses or liabilities that are indemnified liabilities hereunder, the Investment Manager shall deliver to Borrower termination
statements, mortgage releases and other documents necessary or appropriate to evidence the termination of the Liens securing payment of the Obligations. 
 10.19 Suretyship Waivers. Each Person that is defined as a Borrower in this Agreement shall be jointly and severally liable for all obligations hereunder. Each such Person hereby expressly waives
(a) diligence, presentment, demand for payment, protest, benefit of any statute of limitations affecting such Person’s liability under the Loan Documents; (b) discharge due to any disability of any Borrower; (c) any defenses of
any Borrower to obligations under the Loan Documents not arising under the express terms of the Loan Documents or from a material breach thereof by Lender which under applicable law has the effect of discharging any Borrower from the Obligations as
to which this Agreement or any other Loan Document is sought to be enforced; (d) the benefit of any act or omission by Lender which directly or indirectly results in or aids the discharge of any Borrower from any of the Obligations by operation
of law or otherwise; (e) except as expressly provided herein, all notices whatsoever, including notice of acceptance of the incurring of the Obligations; (f) any right it may have to require Lender to disclose to it any information that
Lender may now or hereafter acquire concerning the financial condition or any circumstances that bears on the risk of nonpayment by any other Borrower, including the release of such other Borrower from its Obligations hereunder; and (g) any
requirement that Lender exhaust any right, power or remedy or proceed against any other Borrower or any other security for, or any guarantor of, or any other party liable for, any of the Obligations, or any portion thereof. Each Borrower 

  

 44 

 
specifically agrees that it shall not be necessary or required, and Borrower shall not be entitled to require, that Lender (i) file suit or proceed to assert
or obtain a claim for personal judgment against any other Borrower for all or any part of the Obligations; (ii) make any effort at collection or enforcement of all or any part of the Obligations from any Borrower; (iii) foreclose against or seek to
realize upon the Collateral or any other security now or hereafter existing for all or any part of the Obligations; (iv) file suit or proceed to obtain or assert a claim for personal judgment against any Borrower or any guarantor or other party
liable for all or any part of the Obligations; (v) exercise or assert any other right or remedy to which Lender is or may be entitled in connection with the Obligations or any security or guaranty relating thereto to assert; or (vi) file any claim
against assets of one Borrower before or as a condition of enforcing the liability of any other Borrower under this Agreement. WITHOUT LIMITING THE FOREGOING IN ANY WAY, EACH PERSON THAT IS DEFINED AS A BORROWER IN THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES AND RELEASES: 
 (i) Any and all rights it may have at any time (whether arising directly or indirectly, by
operation of law, contract or otherwise) to require the marshaling of any assets of any Borrower, which right of marshaling might otherwise arise from any such payments made or obligations performed; 
 (ii) Any and all rights that would result in such Person being deemed a “creditor” under the United States Code of any
other Borrower or any other Person, on account of payments made or obligations performed by such Person; and 
 Until such time as the
Obligations have been satisfied in full, any claim, right or remedy which it may now have or hereafter acquire against any other Borrower that arises hereunder and/or from the performance by it hereunder including any claim, remedy or right of
subrogation, reimbursement, exoneration, contribution, indemnification, or participation in any claim, right or remedy of Lender against any Borrower or any collateral security which Lender now has or may hereafter acquire, whether or not such
claim, right or remedy arises in equity, under contract, by statute, under common law or otherwise. 
  

 45 

 IN WITNESS WHEREOF, the undersigned parties to this Credit Agreement have hereunto set their hands
as of the day and year first above written. 
  

			
	VERTICAL COMMUNICATIONS, INC.
		
	By:	 	/s/ WILLIAM Y. TAUSCHER
	Name: William Y. Tauscher
	Title: President
	
	VERTICAL COMMUNICATIONS ACQUISITION CORP.
		
	By:	 	/s/ WILLIAM Y. TAUSCHER
	Name: William Y. Tauscher
	Title: President
	
	Solely for purposes of Sections 3.4(c) and 5.16 herein:
	
	VERTICAL COMMUNICATIONS GMBH
		
	By:	 	/s/ KEN CLINEBELL
	Name: Ken Clinebell
	Title:
	
	Solely for purposes of Sections 3.4(c) and 5.16 herein:
	
	TRITON TECHNOLOGIES, INC.
		
	By:	 	/s/ KEN CLINEBELL
	Name: Ken Clinebell
	Title:
	
	Solely for purposes of Sections 3.4(c) and 5.16 herein:
	
	ARTISOFT “FSC”, LTD.
		
	By:	 	/s/ Ken Clinebell
	Name: Ken Clinebell
	Title:

 [signatures follow on following page] 
 Credit Agreement Signature Page 

			
	 COLUMBIA PARTNERS, L.L.C. INVESTMENT MANAGEMENT, 
 as Investment Manager

		
	By:	 	/s/ JASON A. CRIST
	Name: Jason A, Crist
	Title: Managing Director
	Address:	 	        1775 Pennsylvania Avenue, NW
		 	        Suite 1000
		 	        Washington, DC 20006
		 	ATTN: Jason Crist
		 	 Fax: (202) 296-2535

	
	NEIPF, L.P., as Lender
	
	By: Columbia Partners, L.L.C. Investment Management, its Authorized Signatory
		
	By:	 	/s/ JASON A. CRIST
	Name: Jason A. Crist, Managing Director
	Address:	 	        1775 Pennsylvania Avenue, NW
		 	        Suite 1000
		 	        Washington, DC 20006
		 	ATTN: Jason Crist
		 	 Fax: (202) 296-2535

			
		
	ABA No.:	 	  
	Account No.:	 	
	Bank:	 	  
	Bank Address:	 	  

 Credit Agreement Signature Page 
  

 47 

 INDEX OF APPENDICES 
  

					
	Annexes	  		  	
			
	 Annex A
	  	-        	  	Definitions
			
	Exhibits	  		  	
			
	 Exhibit 1.1(a)
	  	-        	  	Form of Bridge Note
	 Exhibit 1.1(b)
	  	-        	  	Form of Term Note
	 Exhibit 1.2(a)
	  	-        	  	Form of Initial Warrant
	 Exhibit 1.2(b)
	  	-        	  	Form of Additional Warrant
	 Exhibit 1.4
	  	-        	  	Payment Premium Example
	 Exhibit 2.1(e)
	  	-        	  	Opinion of Andrews Kurth LLP
	 Exhibit 2.1(m)
	  	-        	  	Form of Securities Purchase Agreement
	 Exhibit 2.2(i)
	  	-        	  	Form of Agreement and Plan of Merger with Vodavi
	 Exhibit 4.13
	  	-        	  	Form of Joinder Agreement for New Subsidiaries
	 Exhibit 6.1(m)
	  	-        	  	Form of Financial Statement Compliance Certificate
	 Exhibit 6.3(e)
	  	-        	  	Example of Financial Covenant Calculation
			
	Schedules	  		  	
			
	 Schedule 3.4(a)
	  	-        	  	Jurisdictions of Organization and Qualifications
	 Schedule 3.4(b)
	  	-        	  	Capitalization
	 Schedule 3.4(c)
	  	-        	  	Activities of Inactive Subsidiaries (if any)
	 Schedule 3.6
	  	-        	  	Intellectual Property
	 Schedule 3.7
	  	-        	  	Investigations and Audits
	 Schedule 3.8
	  	-        	  	Employee Matters
	 Schedule 3.10
	  	-        	  	Litigation
	 Schedule 3.12
	  	-        	  	Real Estate
	 Schedule 3.14
	  	-        	  	ERISA
	 Schedule 3.16
	  	-        	  	Deposit and Disbursement Accounts
	 Schedule 3.17(a)
	  	-        	  	Material Agreements
	 Schedule 3.18
	  	-        	  	Insurance
	 Schedule 5.2
	  	-        	  	Liens
	 Schedule 5.12
	  	-        	  	Business Description

  

 -xx- 

 ANNEX A 
 to 
 CREDIT AGREEMENT 
 DEFINITIONS 
 Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective meanings and all references to Sections, Exhibits, Schedules or Annexes in the following definitions shall refer to Sections, Exhibits, Schedules or Annexes of or to the
Agreement: 
 “Accounting Changes” means: (a) changes in accounting principles required by GAAP and implemented by
Borrower; and (b) changes in accounting principles recommended by Borrower’s certified public accountants and implemented by Borrower. 
 “Additional Warrant” has the meaning ascribed to it in Section 1.2 
 “Affiliate” means,
with respect to any Person, (a) each Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, 5% or more of the Stock having ordinary voting power in the election of directors of
such Person, (b) each Person that controls, is controlled by or is under common control with such Person, (c) each of such Person’s officers, directors, joint venturers and partners and (d) in the case of Borrower, the immediate
family members, spouses and lineal descendants of individuals who are Affiliates of Borrower. For the purposes of this definition, “control” of a Person shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise; provided, however, that the term “Affiliate” shall specifically exclude the Investment
Manager and Lender. 
 “Agreement” means this Credit Agreement (including all schedules, subschedules, annexes and exhibits
hereto), as the same may be amended, supplemented, restated or otherwise modified from time to time. 
 “Applicable Federal
Rate” means the “applicable federal rate” for the term of the applicable Note issued hereunder as most recently published in the IRC. 
 “Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. or any other applicable bankruptcy, insolvency or similar laws. 
 “Borrower” has the meaning ascribed to it in the Preamble. 
 “Bridge Fee” has the meaning ascribed to it in Section 1.5(a). 
 “Bridge Notes” has the meaning ascribed to it in Section 1.1(b). 
 “Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the
State of New York. 
  

 A-1 

 “Capital Lease” means, with respect to any Person, any lease of any property (whether
real, personal or mixed) by such Person as lessee that, in accordance with GAAP, would be required to be classified and accounted for as a capital lease on a balance sheet of such Person. 
 “Capital Lease Obligation” means, with respect to any Capital Lease of any Person, the amount of the obligation of the lessee thereunder
that, in accordance with GAAP, would appear on a balance sheet of such lessee in respect of such Capital Lease. 
 “Cash
Equivalents” means: (i) marketable securities (A) issued or directly and unconditionally guaranteed as to interest and principal by the United States government or (B) issued by any agency of the United States government the
obligations of which are backed by the full faith and credit of the United States, in each case maturing within one year after acquisition thereof; (ii) marketable direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof, in each case maturing within one year after acquisition thereof and having, at the time of acquisition, a rating of at least A-1 from S&P or at least P 1 from
Moody’s; (iii) commercial paper maturing no more than one year from the date of acquisition and, at the time of acquisition, having a rating of at least A 1 from S&P or at least P 1 from Moody’s; (iv) certificates of deposit
or bankers’ acceptances issued or accepted by Lender or by any commercial bank organized under the laws of the United States of America or any state thereof or the District of Columbia that is at least (A) “adequately
capitalized” (as defined in the regulations of its primary Federal banking regulator) and (B) has Tier 1 capital (as defined in such regulations) of not less than $250,000,000, in each case maturing within one year after issuance or
acceptance thereof; and (v) shares of any money market mutual or similar funds that (A) has substantially all of its assets invested continuously in the types of investments referred to in clauses (i) through (iv) above,
(B) has net assets of not less than $500,000,000 and (C) has the highest rating obtainable from either S&P or Moody’s. 
 “Change of Control” means (i) a sale, lease, license or other disposition of all or substantially all of the assets of Borrower, (ii) any consolidation or merger of Borrower with or into any other corporation or
other entity or Person, or any other corporate reorganization, in which the holders of the capital stock of Borrower immediately prior to such consolidation, merger or reorganization, hold less than 50% of the voting power of the surviving entity
(or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such consolidation, merger or reorganization; or (iii) any transaction or series of related transactions to which Borrower is a party in which in excess of
fifty percent (50%) of Borrower’s voting power is transferred to any Person other than M/C Venture Partners and their Affiliates; provided that a Change of Control shall not include (x) any consolidation or merger effected
exclusively to change the domicile of Borrower, or (y) any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by Borrower or any successor or indebtedness of Borrower is cancelled
or converted or a combination thereof. 
 “Charges” means all federal, state, county, city, municipal, local, foreign or
other governmental taxes (including premiums and other amounts owed to the PBGC at the time due and payable), levies, assessments, charges, liens, claims or encumbrances upon or relating to (a) the Collateral, (b) the Obligations,
(c) the employees, payroll, income or gross receipts of 

  

 A-2 

 
Borrower, (d) Borrower’s ownership or use of any properties or other assets, or (e) any other aspect of Borrower’s business. 

“Closing” means each of the Initial Closing and the Subsequent Closing. 
 “Closing Date” means each of the Initial Closing Date and the Subsequent Closing Date. 
 “Code” means the Uniform Commercial Code as the same may, from time to time, be enacted and in effect in the State of New York;
provided, that to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or
Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Investment Manager’s or Lender’s Lien
on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions. 
 “Collateral” means the “Collateral” as defined in the Security Agreement and the other Collateral Documents and any other
property, real or personal, tangible or intangible, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of, or for the benefit of, Investment Manager or Lender, to secure the
Obligations or any portion thereof. 
 “Collateral Documents” means the Security Agreement, the Pledge Agreements, the
Intellectual Property Security Agreement and all similar agreements entered into guaranteeing payment of, or granting a Lien upon property as security for payment of, the Obligations or any portion thereof. 
 “Contingent Obligation” means, as applied to any Person, means any direct or indirect liability of that Person: (i) with respect to
Guaranteed Indebtedness and with respect to any Indebtedness, lease, dividend or other obligation of another Person if the purpose or intent of the Person incurring such liability, or the effect thereof, is to provide assurance to the obligee of
such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto;
(ii) any agreement, contract or transaction involving commodity options or future contracts, (iii) to make take-or-pay or similar payments if required regardless of nonperformance by any other party or parties to an agreement, or
(iv) pursuant to any agreement to purchase, repurchase or otherwise acquire any obligation or any property constituting security therefor, to provide funds for the payment or discharge of such obligation or to maintain the solvency, financial
condition or any balance sheet item or level of income of another. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if not a fixed and determined amount, the maximum
amount so guaranteed. 
  

 A-3 

 “Contractual Obligations” means, as applied to any Person, any indenture, mortgage, deed
of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject. 
 “Copyright License” means any and all rights now owned or hereafter acquired by Borrower under any written agreement granting any right
to use any Copyright or Copyright registration. 
 “Copyrights” means all of the following now owned or hereafter adopted or
acquired by Borrower: (a) all copyrights and General Intangibles of like nature (whether registered or unregistered), all registrations and recordings thereof, and all applications in connection therewith, including all registrations,
recordings and applications in the United States Copyright Office or in any similar office or agency of the United States, any state or territory thereof, or any other country or any political subdivision thereof; and (b) all reissues,
extensions or renewals thereof. 
 “Default” means any event that, with the passage of time or notice or both, would, unless
cured or waived, become an Event of Default. 
 “Disclosure Schedules” means the Schedules prepared by Borrower and
denominated as Schedules 3.4(a) through 5.12 in the index to the Agreement. 
 “Dollars” or “$”
means lawful currency of the United States of America. 
 “EBITDA” means, consistent with the Borrower’s internal
management reporting system as of the date of this Agreement, for any given period for Borrower, earnings before interest, taxes, depreciation and amortization determined on a pro forma basis that excludes the effect of non-cash stock options
compensation expense, accrued but not paid liquidated damages referred to in clause (ii) of the definition of “Restricted Payment,” and certain other extraordinary profit and loss items agreed upon among Borrower, Investment Manager
and Lender; provided that if such items are not agreed upon by Investment Manager and Lender in their sole discretion they shall not be excluded from EBITDA. 
 “Environmental Laws” means all applicable federal, state, local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and any applicable judicial or administrative interpretation thereof, including any applicable judicial or administrative order, consent decree, order or judgment, imposing liability or standards of conduct
for or relating to the regulation and protection of human health, safety, the environment and natural resources (including ambient air, surface water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species and
vegetation). Environmental Laws include the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq.) (“CERCLA”); the Hazardous Materials Transportation Authorization Act of
1994 (49 U.S.C. §§ 5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.); the Solid Waste Disposal Act (42 U.S.C. §§ 6901 et seq.); the Toxic Substance Control Act (15 U.S.C.
§§ 2601 et seq.); the Clean Air Act (42 U.S.C. §§ 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.); and the
Safe Drinking Water Act (42 U.S.C. 

  

 A-4 

 
§§ 300(f) et seq.), and any and all regulations promulgated thereunder, and all analogous state, local and foreign counterparts or equivalents and
any transfer of ownership notification or approval statutes. 
 “Environmental Liabilities” means, with respect to any
Person, all liabilities, obligations, responsibilities, response, remedial and removal costs, investigation and feasibility study costs, capital costs, operation and maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts and consultants), fines, penalties, sanctions and interest incurred as a result of or related
to any claim, suit, action, investigation, proceeding or demand by any Person, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law, including any arising under or related to any
Environmental Laws, Environmental Permits, or in connection with any Release or threatened Release or presence of a Hazardous Material whether on, at, in, under, from or about or in the vicinity of any real or personal property. 
 “Environmental Permits” means all permits, licenses, authorizations, certificates, approvals or registrations required by any
Governmental Authority under any Environmental Laws. 
 “Equipment” means all “equipment,” as such term is defined
in the Code, now owned or hereafter acquired by Borrower, wherever located and, in any event, including all Borrower’s machinery and equipment, including processing equipment, conveyors, machine tools, data processing and computer equipment,
including embedded software and peripheral equipment and all engineering, processing and manufacturing equipment, office machinery, furniture, materials handling equipment, tools, attachments, accessories, automotive equipment, trailers, trucks,
forklifts, molds, dies, stamps, motor vehicles, rolling stock and other equipment of every kind and nature, trade fixtures and fixtures not forming a part of real property, together with all additions and accessions thereto, replacements therefor,
all parts therefor, all substitutes for any of the foregoing, fuel therefor, and all manuals, drawings, instructions, warranties and rights with respect thereto, and all products and proceeds thereof and condemnation awards and insurance proceeds
with respect thereto. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time,
and any regulations promulgated thereunder. 
 “ERISA Affiliate” means, with respect to Borrower, any trade or business
(whether or not incorporated) that, together with Borrower, are treated as a single employer within the meaning of Sections 414(b), (c), (m) or (o) of the IRC. 
 “ERISA Event” means, with respect to any Borrower or any ERISA Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a Title IV Plan; (b) the withdrawal of any
Borrower or ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal of any
Borrower or any ERISA Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to terminate a Title IV Plan or the treatment of a plan amendment as a termination under Section 4041 of ERISA; (e) the institution

  

 A-5 

 
of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Borrower or ERISA Affiliate to make when due
required contributions to a Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days; (g) any other event or condition that might reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the termination of a Multiemployer Plan under
Section 4041A of ERISA or the reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245 of ERISA; or (i) the final determination that a Qualified Plan’s qualification or tax exempt status should be revoked;
or (j) the termination of a Plan described in Section 4064 of ERISA. 
 “ESOP” means a Plan that is intended to
satisfy the requirements of Section 4975(e)(7) of the IRC. 
 “Event of Default” has the meaning ascribed to it in
Section 7.1. 
 “Facility Fees” has the meaning ascribed to it in Section 1.5(b). 
 “Fair Labor Standards Act” means the Fair Labor Standards Act, 29 U.S.C. §201 et seq. 
 “Fees” means any and all fees payable to Investment Manager or Lender pursuant to the Agreement or any of the other Loan Documents,
including without limitation, the Facility Fees. 
 “Financial Statements” means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Borrower delivered in accordance with Section 6.1. 
 “Fiscal
Quarter” means any of the three month periods of Borrower ending on March 31, June 30, September 30 and December 31 of each year. 
 “Fiscal Year” means any of the annual accounting periods of Borrower ending on June 30 of each year. 
 “Fixtures” means all “fixtures” as such term is defined in the Code, now owned or hereafter acquired by Borrower. 
 “GAAP” means generally accepted accounting principles in the United States of America, consistently applied. 
 “General Intangibles” means “general intangibles,” as such term is defined in the Code, now owned or hereafter acquired by
Borrower, including all right, title and interest that Borrower may now or hereafter have in or under any Contractual Obligation, all payment intangibles, customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor and
reissues, extensions or renewals thereof, rights in Intellectual Property, interests in partnerships, joint ventures and other business associations, licenses, permits, copyrights, trade secrets, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures, designs, knowledge, know how, software, data bases, data, 

  

 A-6 

 
skill, expertise, experience, processes, models, drawings, materials and records, goodwill (including the goodwill associated with any Trademark or Trademark
License), all rights and claims in or under insurance policies (including insurance for fire, damage, loss and casualty, whether covering personal property, real property, tangible rights or intangible rights, all liability, life, key man and
business interruption insurance, and all unearned premiums), uncertificated securities, chooses in action, deposit, checking and other bank accounts, rights to receive tax refunds and other payments, rights to receive dividends, distributions, cash,
instruments and other property in respect of or in exchange for pledged Stock and Investment Property, rights of indemnification, all books and records, correspondence, credit files, invoices and other papers, including all tapes, cards, computer
runs and other papers and documents in the possession or under the control of Borrower or any computer bureau or service company from time to time acting for Borrower. 
 “Governmental Authority” means any nation or government, any state or other political subdivision thereof, and any agency, department or other entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government. 
 “Guaranteed Indebtedness” means, as to any Person,
any obligation of such Person guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease, dividend, or other obligation (“primary obligation”) of any other Person (the “primary obligor”) in any
manner, including any obligation or arrangement of such Person to (a) purchase or repurchase any such primary obligation, (b) advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet condition of the primary obligor, (c) purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, (d) protect the beneficiary of such arrangement from loss (other than product warranties given in the
ordinary course of business) or (e) indemnify the owner of such primary obligation against loss in respect thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed to be an amount equal to the lesser at such time of
(x) the stated or determinable amount of the primary obligation in respect of which such Guaranteed Indebtedness is incurred and (y) the maximum amount for which such Person may be liable pursuant to the terms of the instrument embodying
such Guaranteed Indebtedness, or, if not stated or determinable, the maximum reasonably anticipated liability (assuming full performance) in respect thereof. 
 “Hazardous Material” means any substance, material or waste that is regulated by, or forms the basis of liability now or hereafter under, any Environmental Laws, including any material or substance
that is (a) defined as a “solid waste,” “hazardous waste,” “hazardous material,” “hazardous substance,” “extremely hazardous waste,” “restricted hazardous waste,”
“pollutant,” “contaminant,” “hazardous constituent,” “special waste,” “toxic substance” or other similar term or phrase under any Environmental Laws, or (b) petroleum or any fraction or by
product thereof, asbestos, polychlorinated biphenyls (PCB’s), or any radioactive substance. 
 “Indebtedness” means,
with respect to any Person, without duplication (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property payment for which is deferred six (6) months or more, but excluding obligations to trade

  

 A-7 

 
creditors incurred in the ordinary course of business that are unsecured and not overdue by more than six (6) months unless being contested in good
faith, (b) all reimbursement and other obligations with respect to letters of credit, bankers’ acceptances and surety bonds, whether or not matured, (c) all obligations evidenced by notes, bonds, debentures or similar instruments,
(d) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), (e) all Capital Lease Obligations, (f) all obligations of such Person under commodity purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured, (g) all obligations of such Person under any foreign exchange contract, currency swap agreement, interest rate swap, cap or collar agreement or other similar agreement or arrangement designed to alter
the risks of that Person arising from fluctuations in currency values or interest rates, in each case whether contingent or matured, (h) all Indebtedness referred to above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in property or other assets (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such
Indebtedness, (i) earnouts” and similar payment obligations, except for such obligations which are payable solely in Stock, (j) Contingent Obligations and (k) the Obligations. 
 “Indemnitees” has the meaning ascribed to it in Section 10.1. 
 “Initial Bridge Note” has the meaning ascribed to it in Section 1.1(a). 
 “Initial Closing” has the meaning ascribed to it in Section 1.1(a). 
 “Initial Closing Date” has the meaning ascribed to it in Section 1.1(a). 
 “Initial Public Offering” means the closing of a firmly underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of a Borrower. 
 “Initial
Warrant” has the meaning ascribed to it in Section 1.2 
 “Intellectual Property” means any and all
Licenses, Patents, Copyrights, Trademarks, and the goodwill associated with such Trademarks. 
 “Intellectual Property Security
Agreement” means the Intellectual Property Security Agreement made in favor of Investment Manager, for the benefit of itself and Lender, by Borrower. 
 “Inventory” means any “inventory,” as such term is defined in the Code, now owned or hereafter acquired by Borrower, wherever located, including inventory, merchandise, goods and other
personal property that are held by or on behalf of Borrower for sale or lease or are furnished or are to be furnished under a contract of service, or that constitute raw materials, work in process, finished goods, returned goods, supplies or
materials of any kind, nature or description used or consumed or to be used or consumed in Borrower’s business or in the 

  

 A-8 

 
processing, production, packaging, promotion, delivery or shipping of the same, including all supplies and embedded software. 
 “Investment” means (i) any direct or indirect purchase or other acquisition by Borrower of any Stock, or other ownership interest
in, any other Person, and (ii) any direct or indirect loan, advance or capital contribution by Borrower to any other Person, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business. 
 “Investment Manager” means Columbia Partners, L.L.C.
Investment Management in its capacity as Investment Manager for Lender or its successor appointed pursuant to Section 9.3. 
 “Investment Property” means all “investment property,” as such term is defined in the Code, now owned or hereafter acquired by Borrower, wherever located, including: (i) all securities, whether certificated
or uncertificated, including stocks, bonds, interests in limited liability companies, partnership interests, treasuries, certificates of deposit, and mutual fund shares; (ii) all securities entitlements of Borrower, including the rights of
Borrower to any securities account and the financial assets held by a securities intermediary in such securities account and any free credit balance or other money owing by any securities intermediary with respect to that account; (iii) all
securities accounts of Borrower; (iv) all commodity contracts of Borrower; and (v) all commodity accounts held by Borrower. 
 “IRC” means the Internal Revenue Code of 1986, as amended, and all regulations promulgated thereunder. 
 “IRR” means, with respect to the calculation of a Payment Premium then due or owing pursuant to the terms of this Agreement, a referenced interest rate that, when used as a discount rate, causes (a) the net present
value (as of the Subsequent Closing Date) of the aggregate payments made by Borrower relating to the Term Note of principal, accrued interest and the applicable Payment Premium from the Subsequent Closing Date through the payment date to which the
applicable Payment Premium relates (excluding, for avoidance of doubt, all other payments, including the Facility Fees and other fees and expenses), to equal (b) the net present value (as of the Subsequent Closing Date) of principal
loaned by Lender in connection with the Term Note from the Subsequent Closing Date through the payment date to which the applicable Payment Premium relates. 
 “IRS” means the Internal Revenue Service. 
 “Lender” means NEIPF, L.P.,
and if Lender shall decide to assign all or any portion of the Obligations, such term shall include any assignee of Lender. 
 “License” means any Copyright License, Patent License, Trademark License or other license of rights or interests now held or hereafter acquired by Borrower. 
 “Lien” means any mortgage or deed of trust, pledge, hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including any lease or title retention agreement, any financing lease having substantially the

  

 A-9 

 
same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement perfecting a security interest under the Code
or comparable law of any jurisdiction). 
 “Liquidity Event” means a Change of Control or an Initial Public Offering with
respect to any Borrower. 
 “Litigation” has the meaning ascribed to it in Section 6.1(j). 
 “Loan Documents” means the Agreement, the Notes, the Collateral Documents and all other agreements, instruments, documents and
certificates executed and delivered to, or in favor of, Investment Manager or Lender and including all other pledges, powers of attorney, consents, assignments, contracts, notices, and all other written matter whether heretofore, now or hereafter
executed by or on behalf of Borrower, or any employee of Borrower, and delivered to Investment Manager or Lender in connection with the Agreement or the transactions contemplated thereby. Any reference in the Agreement or any other Loan Document to
a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to the Agreement or such Loan Document as the same may be in effect at any and
all times such reference becomes operative. 
 “Loans” means, collectively, all of the loans made by Lender hereunder in
exchange for Notes. 
 “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, or financial condition of Borrower, (b) Borrower’s ability to pay any of the Loans or any other payment Obligations, or perform any of the other material non-payment Obligations in accordance with the terms of the Agreement and
the other Loan Documents, (c) the Collateral (taken as a whole) or Investment Manager’s Liens, on behalf of itself and Lender, on the Collateral or the priority of such Liens, or (d) Investment Manager’s or Lender’s rights
and remedies under the Agreement and the other Loan Documents. 
 “Material Agreement” means any written contract,
agreement, instrument, commitment or other written arrangement to which Borrower is a party, the absence of which would reasonably be expected to have a Material Adverse Effect (other than the Loan Documents). 
 “Maturity Date” has the meaning ascribed to it in Section 1.3(b). 
 “Moody’s” means Moody’s Investor’s Services, Inc. 
 “Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, and to which Borrower or any
ERISA Affiliate is making, is obligated to make or has made or been obligated to make, contributions on behalf of participants who are or were employed by any of them. 
 “Notes” means, collectively, the Bridge Notes and the Term Note. 
  

 A-10 

 “Obligations” means all loans, advances, debts, liabilities and obligations, for the
performance of covenants, tasks or duties or for payment of monetary amounts (whether or not such performance is then required or contingent, or such amounts are liquidated or determinable), owing by Borrower to Investment Manager or Lender, and all
covenants and duties regarding such amounts, of any kind or nature, present or future, whether or not evidenced by any note, agreement or other instrument, in each case, arising under the Agreement or any of the other Loan Documents. This term
includes all principal, interest (including all interest that accrues after the commencement of any case or proceeding by or against Borrower in bankruptcy, whether or not allowed in such case or proceeding), Fees, Charges, expenses, attorneys’
fees and any other sum chargeable to Borrower under the Agreement or any of the other Loan Documents, but expressly excludes the obligations of the Borrower under the Warrants. 
 “Partial Liquidity Event” means the issuance after the Initial Closing Date by Borrower of indebtedness for borrowed money (other than
the issuance of the Subsequent Bridge Note and the Term Note) or the sale by Borrower of equity securities in a public offering or in a private sale to a Person for cash in which such Borrower receives aggregate net proceeds in excess of Thirty
Million Dollars ($30,000,000); provided that none of the following events shall constitute a Partial Liquidity Event: (i) the issuance of VCI’s Series E Preferred Stock and warrants to purchase VCI’s Common Stock in connection
therewith prior to or concurrent with the Subsequent Closing Date (including the issuance of Common Stock of VCI upon conversion of such Series E Preferred Stock, the payment of “in kind” dividends, the issuance of shares of VCI’s
Common Stock upon the exercise of such warrants or the operation of anti-dilution provisions with respect thereto); (ii) the issuance, vesting or exercise of board, employee, management and consultant equity incentives; (iii) the
incurrence by Borrower of the (A) Permitted Working Capital Facility (as defined in the definition of Senior Indebtedness below); (B) permitted loans or leases for the purchase of Equipment or software up to an aggregate amount not to
exceed Two Million Dollars ($2,000,000); (C) the Obligations, or (D) short term inventory, receivables or vendor financing; (iv) the issuance and sale of the Warrants; (v) the issuance of acquisition consideration and related
earn-outs, notes and similar payments to Vodavi Technology, Inc. or Affiliates of Vodavi Technology, Inc.; or (vi) the issuance of securities upon the exercise of the Warrants or any warrant issued by VCI and outstanding as of the Initial
Closing Date. 
 “Patent License” means rights under any written agreement now owned or hereafter acquired by Borrower
granting any right with respect to any invention on which a Patent is in existence. 
 “Patents” means all of the following
in which Borrower now holds or hereafter acquires any interest: (a) all letters patent of the United States or any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or of any
other country, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State or any other country, and (b) all reissues, continuations,
continuations in part or extensions thereof. 
 “Payment Premium” has the meaning ascribed to it in Section 1.4.

  

 A-11 

 “PBGC” means the Pension Benefit Guaranty Corporation. 
 “Pension Plan” means a Plan described in Section 3(2) of ERISA. 
 “Permitted Acquisition” shall mean (a) an acquisition by merger of Vertical Acquisition Sub Inc., a Delaware corporation and wholly
owned subsidiary of VCI into Vodavi Technology, Inc. pursuant to the terms set forth in that certain Agreement and Plan of Merger in substantially the form set forth on Exhibit 2.2(i) hereto, and (b) any other acquisition by Borrower or
any of its Subsidiaries of any Person or all or a substantial part of such Person’s capital stock or other equity interests or assets as is approved in advance by Investment Manager and Lender in their sole discretion. 
 “Permitted Distributions” shall mean (a) dividends and other distributions and advances declared and paid in cash by any Subsidiary
of a Borrower to such Borrower; and (b) purchases, acquisitions, redemptions, retirements and dividends payable solely in Stock. 
 “Permitted Encumbrances” means the following encumbrances: (a) all Liens existing on the Initial Closing Date on specific items of Equipment and Real Estate and described on Schedule 5.2 attached hereto;
(b) Purchase Money Liens; (c) statutory Liens of landlords and Liens of carriers, warehousemen, bailees, mechanics, materialmen and other like Liens imposed by law, created in the ordinary course of business and securing amounts not yet
due (or which are being contested in good faith, by appropriate proceedings or other appropriate actions which are sufficient to prevent imminent foreclosure of such Liens), and with respect to which adequate reserves or other appropriate provisions
are being maintained by the applicable Borrower in accordance with GAAP; (d) deposits made (and the Liens thereon) in the ordinary course of business of the applicable Borrower (including, without limitation, security deposits for leases,
indemnity bonds, surety bonds and appeal bonds) in connection with workers’ compensation, unemployment insurance and other types of social security benefits or to secure the performance of tenders, bids, contracts (other than for the repayment
or guarantee of borrowed money or purchase money obligations), statutory obligations and other similar obligations arising as a result of progress payments under government contracts; (e) Liens granted to Investment Manager, for the benefit of
Lender, by each Borrower; (f) Liens of judgment creditors, provided that such Liens do not exceed $100,000 in the aggregate at any time (other than Liens bonded or insured to the reasonable satisfaction of the Investment Manager);
(g) Permitted Tax Liens; (h) easements (including, without limitation, reciprocal easement agreements and utility agreements), encroachments, minor defects or irregularities in title, variation and other restrictions, charges or
encumbrances (whether or not recorded) affecting the Real Estate, if applicable, and which in the aggregate (i) do not materially interfere with the occupation, use or enjoyment by any Borrower of its business or property so encumbered and
(ii) in the reasonable business judgment of Investment Manager, do not materially and adversely affect the value of such Real Estate; (i) Liens granted by Borrower on personal and/or real property to secure the payment and performance of
Senior Indebtedness; provided that in the case of Senior Indebtedness that is working capital Indebtedness, such Liens are granted only on Borrower’s accounts receivable and/or Inventory and proceeds thereof; (j) bid and performance
bonds and Liens in respect thereof in the ordinary course of business and in an aggregate amount not to exceed $5,000,000 outstanding at any time, on reasonable and customary terms, (k) a security interest in favor of Silicon Valley Bank in an
account of Borrower maintained at Silicon Valley 

  

 A-12 

 
Bank to secure the obligations with respect to the SVB L/Cs and ongoing cash management services related to credit card servicing not exceeding $1,100,000 in
the aggregate; provided, for avoidance of doubt, that the SVB L/Cs shall not be secured by any assets of Borrower other than the account referenced above. 
 “Permitted Indebtedness” means (a) current Indebtedness maturing in less than one year and incurred in the ordinary course of business for raw materials, supplies, equipment, services, Taxes or
labor; (b) Indebtedness secured by Purchase Money Liens; (c) Indebtedness arising under this Agreement; (d) deferred Taxes and other expenses incurred in the ordinary course of business; (e) Subordinated Debt; (f) Senior
Indebtedness; (g) other Indebtedness existing on the Initial Closing Date and listed on Schedule 5.2 attached hereto; (h) guarantees of Capital Leases; (i) unsecured guarantees by any Borrower of any Indebtedness or other
obligation of any other Borrower permitted hereunder or of obligations under any real property lease for premises occupied by any Borrower; (j) employee, management and consultant equity incentives, (k) Indebtedness for the purchase of
Equipment or software by Borrower up to an aggregate amount not to exceed Two Million Dollars ($2,000,000), (l) short term inventory, receivables or vendor financing; (m) all reimbursement and other obligations with respect to letters of
credit, bankers’ acceptances and surety bonds, whether or not matured; (n) Permitted Acquisition Indebtedness; and (o) obligations to Silicon Valley Bank with respect to the SVB L/Cs. 
 “Permitted Tax Liens” means liens for Taxes not due and payable and liens for Taxes that the applicable Borrower is contesting in good
faith, by appropriate proceedings which are sufficient to prevent imminent foreclosure of such liens, and with respect to which adequate reserves are being maintained by such Borrower in accordance with GAAP; provided that in either case,
such liens (a) are not filed of record in any public office, (b) other than with respect to Real Estate, are not senior in priority to the liens granted by such Borrower to Investment Manager, for the benefit of Lender, or (c) do not
secure taxes owed to the United States of America (or any department or agency thereof) or any State or State authority, if applicable State law provides for the priority of tax liens in a manner similar to the laws of the United States of America.

 “Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization,
association, corporation, limited liability company, institution, public benefit corporation, other entity or government (whether federal, state, county, city, municipal, local, foreign, or otherwise, including any instrumentality, division, agency,
body or department thereof). 
 “Plan” means, at any time, an “employee benefit plan,” as defined in
Section 3(3) of ERISA (other than a Title IV Plan), that any Borrower or any ERISA Affiliate maintains, contributes to or has an obligation to contribute to on behalf of participants who are or were employed by such Borrower. 
 “Pledge Agreements” means any pledge agreement in favor of Investment Manager or Lender. 
  

 A-13 

 “Projections” means Borrower’s forecasted consolidated and consolidating:
(a) balance sheets; (b) profit and loss statements; (c) cash flow statements; and (d) capitalization statements, all prepared on a Subsidiary by Subsidiary or division-by-division basis, if applicable, and otherwise consistent
with the historical Financial Statements of Borrower, together with appropriate supporting details and a statement of underlying assumptions. 
 “Purchase Money Liens” shall mean (i) liens on any item of Equipment acquired by the applicable Borrower after the date of this Agreement, provided that (a) each such lien shall attach only to the Equipment
acquired, (b) a description of the Equipment so acquired is furnished by such Borrower to Investment Manager, and (ii) liens on any item of Equipment acquired by the applicable Borrower after the date of this Agreement arising in
connection with a Capital Lease of such Equipment, provided, that each such lien shall attach only to the Equipment leased. 
 “Qualified Assignee” means (a) Lender and any other similar investment fund that invests in commercial loans and that is managed or advised by Investment Manager, and (b) any commercial bank, savings and loan
association, savings bank, commercial finance lender or other financial institution which is an “accredited investor” (as defined in Regulation D under the Securities Act) which extends credit or buys loans as one of its businesses,
including insurance companies, mutual funds, lease financing companies and commercial finance companies, in each case, which has a rating of BBB or higher from S&P and a rating of Baa2 or higher from Moody’s at the date that it becomes a
Lender and which, through its applicable lending office, is capable of lending to Borrower without the imposition of any withholding or similar taxes. 
 “Qualified Plan” means a Pension Plan that is intended to be tax-qualified under Section 401(a) of the IRC. 
 “Quarterly Interest Payment Date” means March 31, June 30, September 30 and December 31 of each year during the term hereof. 
 “Real Estate” has the meaning ascribed to it in Section 3.12. 
 “Release” means any release, threatened release, spill, emission, leaking, pumping, pouring, emitting, emptying, escape, injection,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Material in the indoor or outdoor environment, including the movement of Hazardous Material through or in the air, soil, surface water, ground water or property.

 “Restricted Payment” means, with respect to any Person (a) the declaration or payment of any dividend or the
incurrence of any liability to make any other payment or distribution of cash or other property or assets in respect of Stock of such Person; (b) any payment on account of the purchase, redemption, defeasance, sinking fund or other retirement
of such Person’s Stock or any other payment or distribution made in respect thereof, either directly or indirectly; (c) any payment or prepayment of principal or premium, if any, or interest, fees or other charges on or with respect to,
and any redemption, purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect to any Subordinated Debt; (d) any payment made to redeem, purchase, repurchase or retire, or to obtain the surrender
of, any outstanding warrants, options or other rights to acquire Stock of such Person now or hereafter outstanding; 

  

 A-14 

 
(e) any payment of a claim for the rescission of the purchase or sale of, or for material damages arising from the purchase or sale of, any shares of such
Person’s Stock or of a claim for reimbursement, indemnification or contribution arising out of or related to any such claim for damages or rescission; (f) except for Allowed Payments (as defined below), any payment, loan, contribution, or
other transfer of funds or other property to any Stockholder of such Person other than payment of compensation in the ordinary course of business to Stockholders who are employees of such Person; and (g) any payment of management fees (or other
fees of a similar nature) or out-of-pocket expenses in connection therewith by such Person to any Stockholder of such Person or its Affiliates. As used in this paragraph, “Allowed Payments” means: 
 (i) ordinary course of business payments to any vendor, supplier or customer of such Person who is also a Stockholder of such Person; provided such
arrangements are upon standard terms and conditions and fair and reasonable terms, no less favorable to Borrower than it could obtain in a comparable arms length transaction with an unrelated third party; and 
 (ii) payments of accounts payable generated from liquidated damages owed as a result of prior financing documents to a Stockholder of such Person;
provided that payments made under this subclause (ii) shall only be considered Allowed Payments if such payment does not cause a Default or Event of Default to occur and/or no Default or Event of Default is then continuing, and either
(A) after giving effect to such payment, Borrower’s (for such purpose including Borrower and each of its Subsidiaries on a consolidated basis as of the date of calculation) EBITDA for the trailing twelve month period measured as of the end
of the month immediately preceding such payment (as further reduced to take into account the contemplated payment notwithstanding that the payment may take place after the subject twelve month measurement period) shall not be less than One Dollar
($1) or (B) the payment is in the form of Stock or warrants to acquire Stock. 
 “Retiree Welfare Plan” means, at any
time, a Welfare Plan that provides for continuing coverage or benefits for any participant or any beneficiary of a participant after such participant’s termination of employment, other than continuation coverage provided pursuant to
Section 4980B of the IRC and at the sole expense of the participant or the beneficiary of the participant. 
 “Revenue”
means, consistent with Borrower’s internal management reporting system as of the date of this Agreement, the pro forma sales of products and services, which is equal to revenue determined in accordance with GAAP, plus current period
invoiced amounts that are deferred under GAAP for systems sales associated with long term customer Contractual Obligations, minus the current period revenue recognition of prior period systems sales. 
 “S&P” means Standard & Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc. 
 “Security Agreement” means the Security Agreement of even date herewith entered into by and among Investment Manager, on behalf of
itself and Lender, and Borrower. 
  

 A-15 

 “Senior Indebtedness” means (a) working capital Indebtedness secured only by
Borrower’s accounts receivable and/or Inventory and proceeds thereof after the date of this Agreement with such lender or lenders and on such terms as are reasonably acceptable to Investment Manager and Lender (the “Permitted Working
Capital Facility”); and (b) such other Indebtedness which is senior in right of payment and priority to the Obligations in favor of a financial institution or financial institutions acceptable to, and consented to, by Investment
Manager and Lender in their sole discretion. 
 “Solvent” means, with respect to any Person on a particular date, that on
such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including subordinated and contingent liabilities, of such Person; (b) the present fair saleable value of the assets of such
Person is not less than the amount that will be required to pay the probable liability of such Person on its debts and liabilities, including subordinated and contingent liabilities as they become absolute and matured; (c) such Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (d) such Person is not engaged in a business or transaction, and is not about to engage
in a business or transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities (such as Litigation, guaranties and pension plan liabilities) at any time shall be computed as
the amount that, in light of all the facts and circumstances existing at the time, represents the amount that can be reasonably be expected to become an actual or matured liability. 
 “Stock” means all shares, options, warrants, general or limited partnership interests, membership interests or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited liability company or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other “equity security” (as such term is defined
in Rule 3a11 1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934). 
 “Stockholder” means, with respect to any Person, each holder of Stock of such Person. 
 “Subordinated Debt” means any Indebtedness of Borrower subordinated to the Obligations in a manner and form satisfactory to Investment Manager and Lender in their sole discretion. 
 “Subsequent Bridge Note” has the meaning ascribed to it in Section 1.1(b). 
 “Subsequent Closing” has the meaning ascribed to it in Section 1.1(b). 
 “Subsequent Closing Date” has the meaning ascribed to it in Section 1.1(b). 
 “Subsidiary” means, with respect to any Person, (a) any corporation of which an aggregate of more than 50% of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, Stock of any other class or classes of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned legally or beneficially by such Person or one or more Subsidiaries of such Person, or with respect to which any such Person has the right to vote or designate the vote of
more than 50% of such Stock 

  

 A-16 

 
whether by proxy, agreement, operation of law or otherwise, and (b) any partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of voting or participation in profits or capital contribution) of more than 50% or of which any such Person is a general partner or may exercise the powers of a general partner.
Unless the context otherwise requires, each reference to a Subsidiary shall be a reference to a Subsidiary of Borrower. 
 “SVB
L/Cs” shall mean (a) that certain $700,000 letter of credit issued by Silicon Valley Bank for the benefit of Tecom Co. Ltd; (b) that certain $140,000 letter of credit issued by Silicon Valley Bank for the benefit of SRI Mission
Towers II LLC; and (c) that certain $99,076.74 letter of credit issued by Silicon Valley Bank for the benefit of One Memorial drive Sublease LLC, in each case including renewals, extensions and replacements of such letters of credit provided
the amount of each such letter of credit is not increased. 
 “Taxes” shall mean all federal, state, municipal and other
governmental taxes, levies, charges, claims and assessments which are or may be owed or collected by each Borrower with respect to its business, operations, Collateral or otherwise. 
 “Term Fee” has the meaning ascribed to it in Section 1.5(b). 
 “Term Note” has the meaning ascribed to it in Section 1.1(b). 
 “Termination Date” means the date on which (a) the Loans have been indefeasibly repaid in full, (b) all other Obligations
under the Agreement and the other Loan Documents have been completely discharged, and (c) Borrower shall not have any further right to borrow any monies under the Agreement. 
 “Title IV Plan” means a Pension Plan (other than a Multiemployer Plan), that is covered by Title IV of ERISA. 
 “Trademark License” means rights under any written agreement now owned or hereafter acquired by Borrower granting any right to use any
Trademark. 
 “Trademarks” means all of the following now owned or hereafter adopted or acquired by Borrower: (a) all
trademarks, trade names, corporate names, business names, trade styles, service marks, logos, internet domain names, other source or business identifiers, prints and labels on which any of the foregoing have appeared or appear, designs and general
intangibles of like nature (whether registered or unregistered), all registrations and recordings thereof, and all applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any state or territory thereof, or any other country or any political subdivision thereof; (b) all reissues, extensions or renewals thereof; and (c) all goodwill associated
with or symbolized by any of the foregoing. 
 “Unfunded Pension Liability” means, at any time, the aggregate amount, if
any, of the sum of (a) the amount by which the present value of all accrued benefits under each Title IV Plan exceeds the fair market value of all assets of such Title IV Plan allocable to such benefits in accordance with Title IV of ERISA, all
determined as of the most recent valuation date for each 

  

 A-17 

 
such Title IV Plan using the actuarial assumptions for funding purposes in effect under such Title IV Plan, and (b) for a period of 5 years following a
transaction which might reasonably be expected to be covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that could be avoided by Borrower or any ERISA Affiliate as a result of such transaction. 
 “Warrants” has the meaning ascribed to it in Section 1.2. 
 “Welfare Plan” means a Plan described in Section 3(1) of ERISA. 
 Rules of construction with respect to accounting terms used in the Agreement or the other Loan Documents shall be as set forth or referred to in this
Annex A. All other undefined terms contained in any of the Loan Documents which are defined in Article 9 of the Code shall, unless the context indicates otherwise, have the meanings provided in Article 9 of the Code. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section, subsection or clause refer to such Section, subsection or clause as contained in the Agreement. The words “herein,” “hereof” and “hereunder”
and other words of similar import refer to the Agreement as a whole, including all Annexes, Exhibits and Schedules, as the same may from time to time be amended, restated, modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule. 
 Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, feminine and neuter genders. The words “including”,
“includes” and “include” shall be deemed to be followed by the words “without limitation”; the word “or” is not exclusive; references to Persons include their respective successors and assigns (to the extent
and only to the extent permitted by the Loan Documents) or, in the case of governmental Persons, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations shall include any amendments of the
same and any successor statutes and regulations. Whenever any provision in any Loan Document refers to the knowledge (or an analogous phrase) of the Borrower, such words are intended to signify that Borrower has actual knowledge or awareness of a
particular fact or circumstance or that Borrower, if it had exercised reasonable diligence, would have known or been aware of such fact or circumstance. 
  

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