Document:

Revolving Line of Credit Note

 EXHIBIT 10.2 
 EXECUTION COPY 
 REVOLVING LINE OF CREDIT NOTE

  

			
	$15,000,000.00	 	Palo Alto, California    
		 	November 8, 2006

 FOR VALUE RECEIVED, the undersigned NATUS MEDICAL INCORPORATED (“Borrower”) promises to
pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at 400 Hamilton Avenue, Palo Alto, California, or at such other place as the holder hereof may designate, in lawful money of the United States of America and
in immediately available funds, the principal sum of Fifteen Million Dollars ($15,000,000.00), or so much thereof as may be advanced and be outstanding, with interest thereon, to be computed on each advance from the date of its disbursement as set
forth herein. 
 DEFINITIONS: 
 As used herein, the following terms shall have the meanings set forth after each, and any other term defined in this Note shall have the meaning set forth at the place defined: 
 (a) “Business Day” means any day except a Saturday, Sunday or any other day on which commercial banks in California are authorized or required
by law to close. 
 (b) “Fixed Rate Term” means a period commencing on a Business Day and continuing for one (1) month, two
(2) months or three (3) months, as designated by Borrower, during which all or a portion of the outstanding principal balance of this Note bears interest determined in relation to LIBOR; provided however, that no Fixed Rate Term may be
selected for a principal amount less than One Million Dollars ($1,000,000.00); and provided further, that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof. If any Fixed Rate Term would end on a day which is not a Business
Day, then such Fixed Rate Term shall be extended to the next succeeding Business Day. 
 (c) “LIBOR” means the rate per annum and
determined pursuant to the following formula: 
  

					
	LIBOR =  	  	Base LIBOR	  	
		  	100% - LIBOR Reserve Percentage	  	

 (i) “Base LIBOR” means the rate per annum for United States dollar deposits quoted by
Bank as the Inter-Bank Market Offered Rate, with the understanding that such rate is quoted by Bank for the purpose of calculating effective rates of interest for loans making reference thereto, on the first day of a Fixed Rate Term for delivery of
funds on said date for a period of time approximately equal to the number of days in such Fixed Rate Term and in an amount approximately equal to the principal amount to which such Fixed Rate Term applies. Borrower understands and agrees that Bank
may base its quotation of the Inter-Bank Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Bank in its discretion deems appropriate including, but not limited to, the rate offered for U.S. dollar deposits on
the London Inter-Bank Market. 
  

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 (ii) “LIBOR Reserve Percentage” means the reserve percentage prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for “Eurocurrency Liabilities” (as defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for expected changes in such reserve percentage during the
applicable Fixed Rate Term. 
 (d) “Prime Rate” means at any time the rate of interest most recently announced within Bank at its
principal office as its Prime Rate, with the understanding that the Prime Rate is one of Bank’s base rates and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto, and is evidenced
by the recording thereof after its announcement in such internal publication or publications as Bank may designate. 
 INTEREST: 
 (a) Interest. The outstanding principal balance of this Note shall bear interest (computed on the basis of a
360-day year, actual days elapsed) either (i) at a fluctuating rate per annum one-quarter percent (0.25%) below the Prime Rate in effect from time to time, or (ii) at a fixed rate per annum determined by Bank to be two percent
(2.00%) above LIBOR in effect on the first day of the applicable Fixed Rate Term. When interest is determined in relation to the Prime Rate, each change in the rate of interest hereunder shall become effective on the date each Prime Rate change
is announced within Bank. With respect to each LIBOR selection hereunder, Bank is hereby authorized to note the date, principal amount, interest rate and Fixed Rate Term applicable thereto and any payments made thereon on Bank’s books and
records (either manually or by electronic entry) and/or on any schedule attached to this Note, which notations shall be prima facie evidence of the accuracy of the information noted. 
 (b) Selection of Interest Rate Options. At any time any portion of this Note bears interest determined in relation to LIBOR, it may be continued
by Borrower at the end of the Fixed Rate Term applicable thereto so that all or a portion thereof bears interest determined in relation to the Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion of this
Note bears interest determined in relation to the Prime Rate, Borrower may convert all or a portion thereof so that it bears interest determined in relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as Borrower requests an
advance hereunder or wishes to select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank notice specifying: (i) the interest rate option selected by
Borrower; (ii) the principal amount subject thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed Rate Term. Any such notice may be given by telephone (or such other electronic method as Bank may permit) so long
as, with respect to each LIBOR selection, (A) if requested by Bank, Borrower provides to Bank written confirmation thereof not later than three (3) Business Days after such notice is given, and (B) such notice is given to Bank prior
to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during any Business Day if Bank, at it’s sole option but without obligation to do so, accepts Borrower’s notice and quotes a fixed rate to Borrower. If Borrower does
not immediately accept a fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request from Borrower shall be subject to a redetermination by Bank of the applicable fixed rate. If no specific designation of interest
is made at the time any advance is requested hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate interest selection for such advance or the principal amount to which such Fixed Rate Term applied.

  

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 (c) Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in addition to
any other amounts due or to become due hereunder, any and all (i) withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or foreign governmental authority and related in
any manner to LIBOR, and (ii) future, supplemental, emergency or other changes in the LIBOR Reserve Percentage (without duplication), assessment rates imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs
imposed by any domestic or foreign governmental authority or resulting from compliance by Bank with any request or directive (whether or not having the force of law) from any central bank or other governmental authority and related in any manner to
LIBOR to the extent they are not included in the calculation of LIBOR. In determining which of the foregoing are attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank among its operations shall be
conclusive and binding upon Borrower. 
 (d) Payment of Interest. Interest accrued on this Note shall be payable on the last day of
each month, commencing November 30, 2006. 
 (e) Default Interest. From and after the maturity date of this Note, or such earlier
date as all principal owing hereunder becomes due and payable by acceleration or otherwise, the outstanding principal balance of this Note shall bear interest until paid in full at an increased rate per annum (computed on the basis of a 360-day
year, actual days elapsed) equal to four percent (4%) above the rate of interest from time to time applicable to this Note. 
 BORROWING AND REPAYMENT: 
 (a) Borrowing and Repayment. Borrower may from time to time during the term of this Note borrow,
partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions of this Note and of any document executed in connection with or governing this Note; provided however, that the total
outstanding borrowings under this Note shall not at any time exceed the principal amount stated above. The unpaid principal balance of this obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the amount of
principal payments made hereon by or for Borrower, which balance may be endorsed hereon from time to time by the holder. The outstanding principal balance of this Note shall be due and payable in full on May 7, 2008. 
 (b) Advances. Advances hereunder, to the total amount of the principal sum stated above, may be made by the holder at the oral or written request
of (i) James B. Hawkins or Steven J. Murphy, any one acting alone, who are authorized to request such advance and direct the disposition of such advance until written notice of the revocation of such authority is received by the holder at the
office designated above, or (ii) any person, with respect to advances deposited to the credit of any deposit account of Borrower, which advances, when so deposited, shall be conclusively presumed to have been made to or for the benefit of
Borrower regardless of the fact that persons other than those authorized to request advances may have authority to draw against such account. The holder shall have no obligation to determine whether any person requesting an advance is or has been
authorized by Borrower. 
  

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 (c) Application of Payments. Each payment made on this Note shall be credited first, to any
interest then due and second, to the outstanding principal balance hereof. All payments credited to principal shall be applied first, to the outstanding principal balance of this Note which bears interest determined in relation to the Prime Rate, if
any, and second, to the outstanding principal balance of this Note which bears interest determined in relation to LIBOR, with such payments applied to the oldest Fixed Rate Term first. 
 PREPAYMENT: 
 (a) Prime
Rate. Borrower may prepay principal on any portion of this Note which bears interest determined in relation to the Prime Rate at any time, in any amount and without penalty. 
 (b) LIBOR. Borrower may prepay principal on any portion of this Note which bears interest determined in relation to LIBOR at any time and in the
minimum amount of One Hundred Thousand Dollars ($100,000.00); provided however, that if the outstanding principal balance of such portion of this Note is less than said amount, the minimum prepayment amount shall be the entire outstanding principal
balance thereof. In consideration of Bank providing this prepayment option to Borrower, or if any such portion of this Note shall become due and payable at any time prior to the last day of the Fixed Rate Term applicable thereto by acceleration or
otherwise, Borrower shall pay to Bank immediately upon demand a fee which is the sum of the discounted monthly differences for each month from the month of prepayment through the month in which such Fixed Rate Term matures, calculated as follows for
each such month: 
  

	 	(i)	Determine the amount of interest which would have accrued each month on the amount prepaid at the interest rate applicable to such amount had it remained outstanding until
the last day of the Fixed Rate Term applicable thereto. 

  

	 	(ii)	Subtract from the amount determined in (i) above the amount of interest which would have accrued for the same month on the amount prepaid for the remaining term of such
Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made for such term and in a principal amount equal to the amount prepaid. 

  

	 	(iii)	If the result obtained in (ii) for any month is greater than zero, discount that difference by LIBOR used in (ii) above. 

 Borrower acknowledges that prepayment of such amount may result in Bank incurring additional costs, expenses and/or liabilities, and that it is difficult to ascertain
the full extent of such costs, expenses and/or liabilities. Borrower, therefore, agrees to pay the above-described prepayment fee and agrees that said amount represents a reasonable estimate of the prepayment costs, expenses and/or liabilities of
Bank. If Borrower fails to pay any prepayment fee when due, the amount of such prepayment fee shall thereafter bear interest until paid at a rate per annum four percent (4.00%) above the Prime Rate in effect from time to time (computed on the
basis of a 360-day year, actual days elapsed). Each change in the rate of interest on any such past due prepayment fee shall become effective on the date each Prime Rate change is announced within Bank. 
  

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 EVENTS OF DEFAULT: 
 This Note is made pursuant to and is subject to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of
November 8, 2006, as amended from time to time (the “Credit Agreement”). Any default in the payment or performance of any obligation under this Note, or any defined event of default under the Credit Agreement, shall constitute an
“Event of Default” under this Note. 
 MISCELLANEOUS: 
 (a) Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at the holder’s option, may declare all sums of principal
and interest outstanding hereunder to be immediately due and payable without presentment, demand, notice of nonperformance, notice of protest, protest or notice of dishonor, all of which are expressly waived by Borrower, and the obligation, if any,
of the holder to extend any further credit hereunder shall immediately cease and terminate. Borrower shall pay to the holder immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable
attorneys’ fees (to include outside counsel fees and all allocated costs of the holder’s in-house counsel), expended or incurred by the holder in connection with the enforcement of the holder’s rights and/or the collection of any
amounts which become due to the holder under this Note, and the prosecution or defense of any action in any way related to this Note, including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level,
in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to Borrower or any other person or entity. 
 (b) Obligations Joint and Several. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower shall be joint and several. 
 (c) Governing Law. This Note
shall be governed by and construed in accordance with the laws of the State of California. 
  

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 IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above.

  

			
	NATUS MEDICAL INCORPORATED
		
	By:	 	 /s/ STEVEN J. MURPHY

		 	Steven J. Murphy
		 	Chief Financial Officer

  

 6Security Agreement

 EXHIBIT 10.3 
 EXECUTION COPY 
 SECURITY
AGREEMENT 
 THIS SECURITY AGREEMENT (this “Agreement”) is
entered into as of November 8, 2006, by NATUS MEDICAL INCORPORATED, a Delaware corporation (“Debtor” or the “Company”), in favor of WELLS
FARGO BANK, NATIONAL ASSOCIATION (“Secured Party”). 
 RECITALS: 
 A. The Company has requested that Secured Party provide the Company with certain financial
accommodations as evidenced by one or more promissory notes or other instruments executed and delivered by the Company to Secured Party and other agreements entered into from time to time between the Company and Secured Party, including, without
limitation, that certain Credit Agreement, dated as of the date hereof (the “Loan Agreement”) (together with this Agreement and Revolving Line of Credit Note, in the original amount of U.S. $15,000,000.00, executed by the Company in
favor of Secured Party, and any and all documents or agreements executed by Debtor in connection with any of foregoing, as any of them may be amended, modified or extended from time to time, collectively, the “Loan Documents”).

 B. In order to induce Secured Party to provide financial accommodations to the Company under the Loan Agreement and to enter into the Loan
Documents to which it is a party, the Debtor wishes and has agreed to secure its obligations to Secured Party under Loan Documents by granting to Secured Party a first priority security interest in the Collateral (as defined below). 
 C. All capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement. 
 NOW, THEREFORE, in consideration of the premises and the mutual covenants and conditions contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby specifically acknowledged, Secured Party and Debtor agree as follows: 
 1.
GRANT OF SECURITY INTEREST. To secure the prompt and complete payment, observance and performance of each covenant, condition or obligation of whatsoever nature to be performed or observed
by the Company under the Loan Documents, including repayment of all future loans extended by and reimbursement obligations owing to Secured Party (the “Secured Obligations”), the Company hereby grants Secured Party a first priority
security interest (except for Permitted Liens that are senior to Bank’s security interest) in and to all assets of the Company whether now existing or hereafter arising or acquired, including without limitation the following (collectively, the
“Collateral”): 
 (a) all accounts, deposit accounts, contract rights, chattel paper, (whether electronic or tangible)
instruments, promissory notes, documents, general intangibles, payment intangibles, software, letter of credit rights, health-care insurance receivables and other rights to payment of every kind now existing or at any time hereafter arising;

 (b) all inventory, goods held for sale or lease or to be furnished under contracts for service, or goods so leased or furnished, raw
materials, component parts, work in process and other materials used or consumed in Debtor’s business, now or at any time hereafter owned or acquired by Debtor, wherever located, and all products thereof, whether in the possession of Debtor,
any warehousemen, any bailee or any other person, or in process of delivery, and whether located at Debtor’s places of business or elsewhere; 

 (c) all warehouse receipts, bills of sale, bills of lading and other documents of every kind (whether or
not negotiable) in which Debtor now has or at any time hereafter acquires any interest, and all additions and accessions thereto, whether in the possession or custody of Debtor, any bailee or any other person for any purpose; 
 (d) all money and property heretofore, now or hereafter delivered to or deposited with Secured Party or otherwise coming into the possession, custody or
control of Secured Party (or any agent or bailee of Secured Party) in any manner or for any purpose whatsoever during the existence of this Agreement and whether held in a general or special account or deposit for safekeeping or otherwise;

 (e) all right, title and interest of Debtor under licenses, guaranties, warranties, management agreements, marketing or sales agreements,
escrow contracts, indemnity agreements, insurance policies, service or maintenance agreements, supporting obligations and other similar contracts of every kind in which Debtor now has or at any time hereafter shall have an interest; 
 (f) all goods, tools, machinery, furnishings, furniture and other equipment and fixtures of every kind now existing or hereafter acquired, and all
improvements, replacements, accessions and additions thereto and embedded software included therein, whether located on any property owned or leased by Debtor or elsewhere, including without limitation, any of the foregoing now or at any time
hereafter located at or installed on the land or in the improvements at any of the real property owned or leased by Debtor, and all such goods after they have been severed and removed from any of said real property; 
 (g) all motor vehicles, trailers, mobile homes, manufactured homes, boats, other rolling stock and related equipment of every kind now existing or
hereafter acquired and all additions and accessories thereto, whether located on any property owned or leased by Debtor or elsewhere; 
 (h)
all of the following (collectively, “Intellectual Property Collateral”): 
 (i) all patents and patent
applications and all patent rights with respect thereto throughout the world, including without limitation all license royalties, foreign filing rights, and rights to extend such patents and patent rights, and all rights in all patentable
inventions, and to file applications for patent under federal patent law or under the laws or regulations of any foreign country (collectively, the “Patents”); 
 (ii) all copyrights (whether or not registered with the United States Copyright Office), and all applications for copyright registration
(including without limitation, applications for copyright registrations of derivative works and compilations), all license royalties, foreign filing rights, and extension rights (collectively, the “Copyrights”); 
 (iii) all trademarks and rights and interests which are capable of being protected as trademarks (including without limitation
trademarks, service marks, designs, logos, indicia, tradenames, corporate names, company names, business names, fictitious business names, trade styles, and other source or business identifiers, and the goodwill related thereto and represented
thereby, and applications pertaining thereto, and all rights to register trademark claims under any state or federal trademark law or regulation of any foreign country, and to apply for, renew, and extend trademark registrations and trademark rights
(collectively, “Trademarks”); 
 (iv) all computer programs, software, source codes, object codes, data
bases, processes and trade secrets and all other intellectual property in which Debtor now has or hereafter creates or acquires any interest; and 
  

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 (v) all applications for any of the foregoing and all licenses with respect to any of
the foregoing; 
 (i) all commercial tort claims in existence on the date of this Agreement or at any time hereafter arising and identified
by the Debtor to Secured Party; 
 together with whatever is receivable or received when any of the foregoing or the proceeds thereof are sold, leased,
collected, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary, including without limitation, all rights to payment, including returned premiums, with respect to any insurance relating to any of the foregoing,
any infringement claims or causes of action and all rights to payment with respect to any claim or cause of action affecting or relating to any of the foregoing. 
 Notwithstanding the foregoing, the Collateral shall not include: (a) interests as a lessee under real property and personal property leases, (b) more than 65% of the voting securities of any Foreign
Subsidiary of Debtor; or (c) equipment and related software encumbered by a Permitted Lien covered by paragraph (d) of the definition of Permitted Liens, and any rights of Debtor as licensee, to the extent the granting of a security
interest in such equipment or license rights (A) is prohibited by the terms of or would constitute a default under any agreement or document governing such equipment or license right (but only to the extent such prohibition is enforceable under
applicable law), or (B) is contrary to applicable law; provided that, upon the cessation of any such restriction or prohibition, such equipment and/or license rights shall automatically become part of the Collateral; and provided
further that the provisions of this Section 1 shall in no case exclude from the definition of Collateral any accounts receivables, other rights to payment, general intangibles or proceeds of the disposition of any property. Except as
disclosed to Secured Party in writing prior to the date hereof, Debtor represents and warrants to Secured Party that it is not presently a party to, nor is it bound by, any material license, contract or agreement which prohibits Debtor from granting
a security interest therein (to the extent such prohibition is enforceable under applicable law). Debtor shall not, hereafter, without Secured Party’s prior written consent, enter into any material license which prohibits Debtor from granting a
security interest therein to Secured Party (to the extent such prohibition is enforceable under applicable law), unless Debtor uses commercially reasonable efforts to have such prohibition removed, and in the event Debtor is not successful in having
such prohibition removed, Debtor shall give prompt written notice thereof to Secured Party. 
 Debtor agrees that this Agreement shall create
a continuing security interest in the Collateral which shall remain in effect until the payment and performance in full of all of the Secured Obligations. 
 2. DEBTOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS. Debtor represents, warrants and covenants as follows: 

(a) Permitted Liens. Debtor has rights in and good title to all of the Collateral. Other than any of the Intellectual Property
Collateral for which Debtor is a licensee, Debtor is and will continue to be the sole and exclusive owner of the Collateral, free and clear of all security interests, liens or encumbrances or other rights or claims of third parties
(“Liens”), other than Permitted Liens. For any of the Intellectual Property Collateral for which Debtor is a licensee, each such license or licensing agreement is in full force and effect and Debtor is not in default of any of its
material obligations thereunder. 
 (b) Organization. Debtor is a registered organization (as that term is used in
Division 9 of the Uniform Commercial Code (the “UCC”)) under the laws of the State of Delaware. Debtor will notify Secured Party prior to changing either its form or jurisdiction of organization. 
 (c) True and Complete List. Set forth in (i) Exhibit A is a true and complete list of all registered Copyrights and
applications for registrations of Copyrights in which as of the date hereof Debtor holds any interest, (ii) Exhibit B is a true and complete list of all existing patents and letters 
  

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 patent of the U.S. or any other country, all registrations and recordings thereof, and all applications
for letters patent, in which as of the date hereof Debtor holds any interest, (iii) Exhibit C is a true and complete list of all registered trademarks, service marks, trade names, corporate names, company names, business names,
fictitious business names and domain names, in which as of the date hereof Debtor holds any interest, and (iv) Exhibit D is a is a true and complete list of all claims arising in tort in which Debtor is a claimant existing as of the date
hereof. 
 (d) Trade Secrets. Debtor has taken and will continue to take all reasonable steps to protect the secrecy of and
preserve it rights and interests in and to all of its material trade secrets and other material proprietary rights and interests. 
 (e) No Infringement. To the best of Debtor’s knowledge, no material infringement or unauthorized use presently is being made of any of the Intellectual Property Collateral, by any person or entity, and, to the best of Debtor’s
knowledge, Debtor’s use of the Intellectual Property Collateral does not and will not infringe upon the rights or interests of any other person or entity. 
 (f) Authorization. The person signing below on behalf of Debtor is authorized to sign this Agreement on behalf of Debtor and to bind
Debtor to the terms of this Agreement, and all corporate action necessary for the execution of this Agreement has been properly taken by Debtor. 
 (g) Attorney-in-Fact. Debtor appoints Secured Party, and any officer, employee or agent of Secured Party, with full power of substitution, as Debtor’s true and lawful attorney-in-fact, effective as of the date
hereof, with power, in its own name or in the name of Debtor, (i) during the continuance of an Event of Default (as defined below), to endorse any notes, checks, drafts, money orders, or other instruments of payment in respect of the Collateral
that may come into Secured Party’s possession, (ii) during the continuance of an Event of Default, to sign and endorse any drafts against debtors, assignments, verifications and notices in connection with accounts, and other documents
relating to Collateral, (iii) to pay or discharge taxes or liens at any time levied or placed on or threatened against the Collateral, (iv) during the continuance of an Event of Default, to demand, collect, issue receipt for, compromise,
settle and sue for monies due in respect of the Collateral, (v) during the continuance of an Event of Default, to notify parties obligated with respect to the Collateral to make payments directly to Secured Party, and (vi) generally, to
do, at Secured Party’s option and at Debtor’s expense, at any time, or from time to time, all acts and things which Secured Party deems reasonably necessary to protect, preserve and realize upon the Collateral and Secured Party’s
security interest therein, all as fully and effectually as Debtor might or could do; and Debtor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest and
shall be irrevocable as long as any of the Secured Obligations are outstanding. 
 (h) Books and Records; Insurance. Debtor
will at all times keep in a manner reasonably satisfactory to Secured Party accurate and complete records of the Collateral and will keep such Collateral insured to the extent similarly situated companies insure their assets. Secured Party shall be
entitled, at reasonable times and intervals after reasonable notice to Debtor, to enter Debtor’s premises for purposes of inspecting the Collateral and Debtor’s books and records relating thereto. 
  

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 (i) Compliance with Laws. Debtor shall not use the Collateral in any manner that
is or would result in any material violation of any applicable statute, ordinance, law or regulation or in material violation of any insurance policy maintained by Debtor with respect to the Collateral. 
 (j) Financing Statements. Other than financing statements, security agreements, assignments and other agreements or instruments
executed, delivered, filed or recorded for the purpose of granting or perfecting any Lien (collectively, “Financing Statements”) existing as of the date hereof and disclosed to Secured Party on Exhibit E hereto or
arising after the date hereof in connection with any Permitted Lien and Financing Statements in favor of Secured Party, no effective Financing Statement naming Debtor as debtor, assignor, Debtor, mortgagor, pledgor or the like and covering all or
any part of the Collateral is on file in any filing or recording office in any jurisdiction. 
 (k) Notices, Reports and
Information. Debtor will (i) notify Secured Party of any material claim made or asserted against the Collateral by any person or entity and of any change in the composition of the Collateral or other event which could materially adversely
affect the value of the Collateral or Secured Party’s Lien thereon; (ii) furnish to Secured Party such statements and schedules further identifying and describing the Collateral and such other reports and other information in connection
with the Collateral as Secured Party may reasonably request, all in reasonable detail; (iii) upon request of Secured Party make such demands and requests for information and reports as Debtor is entitled to make in respect of the Collateral;
and (iv) at Debtor’s sole expense take such action and cause to be made such filings and recordations as Secured Party may reasonably request in order to perfect and protect the security interest and the first priority of Secured Party in
and to any and all of the Collateral, including such filings and recordations as may be necessary or prudent (as determined by Secured Party) in the United States Copyright Office and the United States Patent and Trademark Office.. 
 (l) Disposition of Collateral. Debtor will not surrender or lose possession of (other than to Secured Party), sell, lease, rent, or
otherwise dispose of or transfer, any of the Collateral or any right or interest therein, except to the extent permitted by the Loan Documents, or dispositions of inventory in the ordinary course of Debtor’s business. Debtor will maintain the
Collateral and will not incur or suffer to exist any Liens against the Collateral other than Permitted Liens. 
 (m)
Commercial Tort Claims. Debtor will promptly notify the Security Party of the existence of and information regarding any commercial tort claim arising hereafter in a document authenticated by Debtor and confirming the grant of the security
interest under this Agreement in such commercial tort claim. 
 3. EVENTS OF DEFAULT. The
failure of Debtor to pay when due any of the Secured Obligations, or to perform any of its other obligations under any of the Loan Documents, in each case after any period of grace as provided in the Loan Documents, or any material misrepresentation
by Debtor in or made in connection with any Loan Document, or the occurrence of any other “Event of Default” as defined in any of the Loan Documents, shall constitute an “Event of Default” hereunder. 
 4. REMEDIES. Upon the occurrence of an Event of Default, Secured Party may declare all of the Secured Obligations to be immediately due
and payable, and Secured Party may exercise any and all rights and remedies hereunder or under applicable law; provided, however, if any Event of Default occurs as a consequence of the commencement of a bankruptcy or other insolvency
proceeding by or against Debtor, all of the 
  

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 Secured Obligations shall be automatically and immediately due and payable without further action or demand. Without
limiting the foregoing, Secured Party shall have the right, itself or through any of its agents, with or without notice to Debtor, as to any or all of the Collateral, by any available judicial procedure, or without judicial process (provided,
however, that it is in compliance with applicable law), to exercise any and all rights afforded to a secured party under the UCC or other applicable law, to sell or otherwise dispose of all or any part of the Collateral, either at public or
private sale, in lots or in bulk, for cash or for credit, with or without warranties or representations, and upon such terms and conditions, all as Secured Party, in its sole discretion, may deem advisable, and it shall have the right to purchase at
any such sale. Debtor agrees that a notice sent at least ten (10) days before the time of any intended public sale or of the time after which any private sale or other disposition of the Collateral is to be made shall be reasonable notice of
such sale or other disposition. The proceeds of any such sale, or other Collateral disposition shall be applied first to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like, and to attorneys’
fees and legal expenses of Secured Party, and then to the Secured Obligations and to the payment of any other amounts required by applicable law, after which Secured Party shall account to Debtor for any surplus proceeds. The rights and remedies
with respect to Debtor and the Collateral, whether established hereby or by any other agreements, instruments or documents or by law, shall be cumulative and may be exercised singly or concurrently, and are not exclusive of any other rights or
remedies provided under any other agreement, instrument or document to which Debtor is a party or by which it or any of the Collateral is bound or by law or equity. 
 5. LICENSE. Debtor grants to Secured Party, to the fullest extent permitted under applicable law, a fully paid and royalty free license, exercisable only upon the occurrence and during the continuance
of an Event of Default, to use any and all of the Intellectual Property Collateral as may be reasonably necessary to permit the exercise of any of Secured Party’s rights or remedies with respect to any of the Collateral. 
 6. FURTHER ASSURANCES. Debtor will upon request promptly execute and deliver all further instruments and documents, and
take all further action that Secured Party may reasonably request in order to perfect, protect and maintain the priority of the security interest granted by this Agreement and to enable Secured Party to exercise and enforce its rights and remedies
under this Agreement. 
 7. WAIVERS. Debtor hereby waives (a) the right to require Secured Party to proceed against any
other person or against any other collateral it may hold; (b) presentment, protest and notice of protest, demand and notice of nonpayment, demand of performance, notice of sale, and advertisement of sale, (c) following an Event of Default,
any right to the benefit of or to direct the application of any of the Collateral until the obligations of Debtor shall have been paid in full, and (d) any defenses which may arise by reason of, or be based on, lack of diligence in collection.

 8. ATTORNEYS’ FEES. Debtor agrees to pay the costs and expenses, including reasonable attorneys’
fees, which may be incurred by Secured Party in connection with the negotiation, administration and enforcement of this Agreement and the protection of a Secured Party’s rights hereunder, whether or not legal action is instituted or filed.

 9. No Waiver. Any acceptance of partial or delinquent payments or failure of Secured Party to exercise any right shall not waive any
obligation of Debtor or right of Secured Party or modify this Agreement or waive any similar default. 
  

 6 

 10. ASSIGNABILITY. Secured Party may assign its rights under this Agreement and in the
Collateral to anyone at any time. This Agreement shall be binding on Debtor and its successors and assigns, and shall benefit Secured Party and its successors and assigns. 
 11. ENTIRE AGREEMENT. This Agreement and the other agreements referenced herein and therein contain the entire security
agreement between Secured Party and Debtor. This Agreement may only be amended, waived, discharged or terminated by a written instrument signed by the Company and Secured Party. 
 12. CHOICE OF LAW. This Agreement shall be governed by and construed in accordance with the laws of the
State of California, without giving effect to conflicts of law principles. 
 13. NOTICES. Except as otherwise provided, all
notices and other communications required or permitted hereunder shall be in writing, shall be effective when given, and shall in any event be deemed to be given upon receipt or, if earlier, (i) five (5) days after deposit with the U.S.
postal service or other applicable postal service, if delivered by first class mail, postage prepaid, (ii) upon delivery, if delivered by hand, (iii) one (1) business day after the day of deposit with Federal Express or similar
overnight courier, freight prepaid, if delivered by overnight courier or (iv) one (1) business day after the day of facsimile transmission, if delivered by facsimile transmission with copy by first class mail, postage prepaid, and shall be
addressed, (a) if to Secured Party, at Secured Party’s address set forth below its signature, or (b) if to Debtor, at its address as set forth below, or at such other address of Debtor or Secured Party as such party shall have
furnished the other in writing: 
 14. INDEMNITY. Debtor hereby indemnifies Secured Party, its principals and agents (the
“Indemnified Parties”) for, and agrees to protect and hold each of them harmless from and against, any and all liabilities, obligations, losses, damages, costs and expenses (including, without limitation, reasonable attorneys’
fees), causes of action, suits, claims, demands and judgments of any nature or description whatsoever, which may at any time be imposed upon, incurred by or awarded against any Indemnified Party (other than as a result of such Indemnified
Party’s own gross negligence or willful misconduct) as a result of the occurrence of any one or more of the following: (a) the grant to Secured Party of any interest in or to any of the Collateral, and (b) any infringement or claim of
infringement by any person or entity with respect to any of the Intellectual Property Collateral, or any claim that any of the Intellectual Property Collateral misappropriates any patent, copyright, trade secret, trademark or other intellectual
property right of any third party, or breaches any agreement of Debtor with any third party. 
 15. SEVERABILITY. If any
provision or provisions of this Agreement shall be deemed to be contrary to public policy or shall for any reason be held to be invalid, then such provision or provisions shall be deemed to be separable from the remaining provisions of this
Agreement, and shall in no way affect the validity of any of the remaining provisions of this Agreement. 
 16. HEADINGS.
Captions and headings in this Agreement are for convenience only and are not to be deemed part of this Agreement. 
 17.
COUNTERPARTS. This Agreement may be executed in counterparts, which when taken together shall constitute one document. 
 [Remainder of Page Intentionally Left Blank] 
  

 7 

 IN WITNESS WHEREOF, Debtor has executed and delivered this
Agreement in favor of Secured Party as of the day and year first above written. 
  

			
	DEBTOR
	
	NATUS MEDICAL INCORPORATED
		
	By:	 	 /s/ STEVEN J. MURPHY

		 	Steven J. Murphy
	Its:	 	Chief Financial Officer
	Address: 1501 Industrial Road
	               San Carlos, CA 94070

  

 8 

 EXHIBIT A 
 Copyrights 
 None 

 EXHIBIT B 
 Patents 
  

											
	 BI
 Docket #
	  	 U.S.
 Serial #
	  	 U.S. Filing
 Date
	  	Type*	  	U.S. Status	  	 Description

 EXHIBIT C 
 Trademarks 
  

							
	 Mark
	  	 Registered Owner
	  	 Registration/
 Application
 Number
	  	 Registration/
 Application
 Date

 EXHIBIT D 
 Commercial Tort Claims 
 None 

 EXHIBIT E 
 Existing Financing Statements 
 None 
  

 13

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