Document:

Exhibit 10.14

	
 
    

 

TRANSITION SERVICES AGREEMENT

 

dated as of [            ], 2014

 

between

 

[NAVY]

 

And

 

[RED LION]

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I DEFINITIONS
    	
1
    
	
Section 1.01.
    	
Certain   Defined Terms
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II SERVICES, DURATION AND SERVICES   MANAGERS
    	
3
    
	
Section 2.01.
    	
Services
    	
3
    
	
Section 2.02.
    	
Duration   of Services
    	
4
    
	
Section 2.03.
    	
Transition   Services Managers
    	
4
    
	
Section 2.04.
    	
Personnel
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE III OTHER ARRANGEMENTS
    	
6
    
	
Section 3.01.
    	
Third   Party Licenses and Consents
    	
6
    
	
Section 3.02.
    	
Third   Party Providers
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE IV ADDITIONAL AGREEMENTS
    	
6
    
	
Section 4.01.
    	
Co-location   and Facilities Matters
    	
6
    
	
Section 4.02.
    	
Access
    	
8
    
	
Section 4.03.
    	
Cooperation
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE V COSTS AND DISBURSEMENTS
    	
8
    
	
Section 5.01.
    	
Costs   and Disbursements
    	
8
    
	
Section 5.02.
    	
Taxes
    	
9
    
	
Section 5.03.
    	
No   Right to Set-Off
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE VI STANDARD FOR SERVICE
    	
10
    
	
Section 6.01.
    	
Standard   for Service
    	
10
    
	
Section 6.02.
    	
Disclaimer   of Warranties
    	
11
    
	
Section 6.03.
    	
Compliance   with Laws and Regulations
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE VII LIMITED LIABILITY AND   INDEMNIFICATION
    	
12
    
	
Section 7.01.
    	
Personal   Injury
    	
12
    
	
Section 7.02.
    	
Indirect   and Other Damages
    	
12
    
	
Section 7.03.
    	
Limitation   of Liability
    	
12
    
	
Section 7.04.
    	
Obligation   To Re-perform; Liabilities
    	
12
    
	
Section 7.05.
    	
Release   and Recipient Indemnity
    	
13
    
	
Section 7.06.
    	
Provider   Indemnity
    	
13
    
	
Section 7.07.
    	
Indemnification   Procedures
    	
13
    
	
Section 7.08.
    	
Liability   for Payment Obligations
    	
13
    
	
Section 7.09.
    	
Exclusion   of Other Remedies
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII DISPUTE RESOLUTION
    	
14
    
	
Section 8.01.
    	
Dispute   Resolution
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE IX TERM AND TERMINATION
    	
14
    
	
Section 9.01.
    	
Term   and Termination
    	
14
    

 

i

 

	
Section 9.02.
    	
Effect   of Termination
    	
15
    
	
Section 9.03.
    	
Force   Majeure
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE X GENERAL PROVISIONS
    	
16
    
	
Section 10.01.
    	
No   Agency
    	
16
    
	
Section 10.02.
    	
Subcontractors
    	
16
    
	
Section 10.03.
    	
Treatment   of Confidential Information
    	
16
    
	
Section 10.04.
    	
Further   Assurances
    	
17
    
	
Section 10.05.
    	
Notices
    	
17
    
	
Section 10.06.
    	
Severability
    	
18
    
	
Section 10.07.
    	
Entire   Agreement
    	
18
    
	
Section 10.08.
    	
No   Third-Party Beneficiaries
    	
18
    
	
Section 10.09.
    	
Governing   Law
    	
18
    
	
Section 10.10.
    	
Amendment
    	
18
    
	
Section 10.11.
    	
Rules of   Construction
    	
19
    
	
Section 10.12.
    	
Counterparts
    	
19
    
	
Section 10.13.
    	
Assignability
    	
19
    
	
Section 10.14.
    	
Waiver   of Jury Trial
    	
19
    
	
Section 10.15.
    	
Non-Recourse
    	
20
    

 

	
EXHIBIT I
    	
Services   Managers
    	
 
    
	
 
    	
 
    	
 
    
	
SCHEDULE A
    	
Services
    	
 
    
	
SCHEDULE   B
    	
Facilities
    	
 
    

 

ii

 

This Transition Services Agreement, dated as of [            ], 2014 (this “Agreement”), is made by and between [NAVY], a Bermuda exempted company (“Navy”) and [RED LION], a Bermuda exempted company and currently a wholly owned Subsidiary of Navy (“Red Lion”).

 

RECITALS

 

WHEREAS, Navy and Red Lion have entered into a Separation Agreement, dated as of [            ], 2014 (as amended, modified or supplemented from time to time in accordance with its terms, the “Separation Agreement”), pursuant to which Navy will transfer to Red Lion, and Red Lion has agreed to receive and assume, certain assets and liabilities of the Red Lion Business (the “Separation”).

 

WHEREAS, Navy, Red Lion, and [PENNY], a Delaware corporation (“Penny”) have entered into a Merger Agreement, dated as of [            ], 2014 (as amended, modified or supplemented from time to time in accordance with its terms, the “Merger Agreement”), pursuant to which, following the Separation, Penny will merge with a subsidiary of Red Lion and the common stock of Penny will be converted into common shares of Red Lion.

 

WHEREAS, pursuant to the Separation Agreement and the Merger Agreement, the Parties (as defined below) have agreed that Red Lion shall provide or cause to be provided to Navy and/or other members of the Navy Group certain services, the use of facilities and other assistance on a transitional basis and in accordance with the terms and subject to the conditions set forth in this Agreement.

 

WHEREAS, the Separation Agreement and the Merger Agreement require execution and delivery of this Agreement by Navy and Red Lion on or prior to the Separation Date.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained in this Agreement, and intending to be legally bound, the Parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01.                          Certain Defined Terms.  (a)  Unless otherwise defined in this Agreement, all capitalized terms used in this Agreement shall have the same meaning as in the Separation Agreement.

 

(b)                                 The following capitalized terms used in this Agreement shall have the meanings set forth below:

 

“Additional Service” shall have the meaning set forth in Section 2.01(c).

 

“Affiliate” shall have the meaning set forth in the Separation Agreement.

 

 

“Agreement” shall have the meaning set forth in the Preamble.

 

“Ancillary Agreement” shall have the meaning set forth in the Separation Agreement.

 

“Confidential Information” shall have the meaning set forth in Section 10.03(a).

 

“Dispute” shall have the meaning set forth in Section 8.01(a).

 

“Facilities” shall have the meaning set forth in Section 4.01(a).

 

“Force Majeure” means, with respect to a Party, an event beyond the control of such Party (or any Person acting on its behalf), which by its nature could not have been reasonably foreseen by such Party (or such Person), or, if it could have been reasonably foreseen, was unavoidable, and includes acts of God, storms, floods, riots, fires, sabotage, civil commotion or civil unrest, interference by civil or military authorities, acts of war (declared or undeclared) or armed hostilities or other national or international calamity or one or more acts of terrorism, failure of energy sources or facilities, strike, walkout, lockout or other labor trouble or shortage, delays by unaffiliated suppliers or carriers.

 

“Interest Payment” shall have the meaning set forth in Section 5.01(b).

 

“Navy” shall have the meaning set forth in the Preamble.

 

“Navy Group” shall have the meaning set forth in the Separation Agreement.

 

“Navy Services Manager” shall have the meaning set forth in Section 2.03(a).

 

“Party” means Navy and Red Lion individually, and “Parties” means Navy and Red Lion collectively, and, in each case, their permitted successors and assigns.

 

“Provider” means Red Lion or its Subsidiary or Affiliate (as determined at the time any Service is provided) providing a Service under this Agreement.

 

“Provider Indemnified Party” shall have the meaning set forth in Section 7.05.

 

“Recipient” means Navy or its Subsidiary or Affiliate (as determined at the time such Service is provided) to whom a Service under this Agreement is being provided.

 

“Recipient Indemnified Party” shall have the meaning set forth in Section 7.06.

 

“Red Lion” shall have the meaning set forth in the Preamble.

 

“Red Lion Business” shall have the meaning set forth in the Separation Agreement.

 

“Red Lion Employee” shall have the meaning set forth in Section 2.01(b).

 

“Red Lion Entities” shall have the meaning set forth in the Separation Agreement.

 

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“Red Lion Services Manager” shall have the meaning set forth in Section 2.03(b).

 

“Representative” of a Person means any director, officer, employee, agent, consultant, accountant, auditor, attorney or other representative of such person.

 

“Schedule(s)” shall have the meaning set forth in Section 2.02.

 

“Separation Agreement” shall have the meaning set forth in the Recitals.

 

“Separation Date” shall have the meaning shall have the meaning set forth in the Separation Agreement.

 

“Service Charges” shall have the meaning set forth in Section 5.01(a).

 

“Service Taxes” shall have the meaning set forth in Section 5.02(a).

 

“Services” shall have the meaning set forth in Section 2.01(a).

 

“Subsidiary” of any Person shall mean another Person (other than a natural Person), an aggregate amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect at least a majority of the Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.

 

“Termination Charges” shall mean, with respect to the early termination of any Service, (a) with respect to labor costs and other costs that are incurred by the Provider on a monthly basis with respect to such Service, an amount equal to any and all Services Charges payable by the Recipient in connection with such Service for the remainder of the month in which such Service is terminated; and (b) with respect to prepaid license fees, prepaid leases, other prepaid costs, and fees that the Provider has not yet paid but is obligated to pay with respect to any reasonable period after the termination of the applicable Service, in each case to the extent such amounts are incurred in connection with the provision of the terminated Services, all such prepaid and committed fees for all periods prepaid or committed; provided, that the Provider shall use its commercially reasonable efforts to reduce any costs, fees or expenses (and to recover prepaid fees) incurred by the Provider or payable to any unaffiliated third-party provider in connection with the provision of such Service and credit any such reductions against the Termination Charges payable by the Recipient (for the avoidance of doubt, no Termination Charges shall be payable by a Recipient with respect to the early termination of a Service in accordance with Section 9.01(b)).

 

ARTICLE II

 

SERVICES, DURATION AND SERVICES MANAGERS

 

Section 2.01.                          Services.

 

(a)                                 Subject to the terms and conditions of this Agreement, Red Lion shall provide (or cause to be provided) to the Navy Group (i) the services listed on Schedule A to this

 

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Agreement and (ii) access to facilities listed on Schedule B to this Agreement ((i) and (ii) collectively, the “Services”).  All Services shall be solely for the use and benefit of Navy and its Subsidiaries in conducting their ongoing operations after the Separation.

 

(b)                                 At all times during the performance of the Services, all Persons performing such Services (including agents, temporary employees, independent third parties, and consultants), who are collectively referred to herein as the “Red Lion Employees”, shall be construed as being independent from the Navy Group and no Red Lion Employee shall be considered or deemed to be an employee of any member of the Navy Group nor entitled to any employee benefits from any member of the Navy Group as a result of this Agreement.  For the avoidance of doubt, Red Lion acknowledges and agrees that throughout the period that a Red Lion Employee is providing Services hereunder, Red Lion is solely responsible for the payment of wages, providing of benefits and satisfaction of all employment-related obligations (including without limitation all obligations with respect to employee leave, immigration, recordkeeping, employment-related taxes and compliance with all labor and employment laws).  Navy acknowledges and agrees that, except as may be expressly set forth herein as a Service (including such agreed Additional Services to be provided pursuant to Section 2.01(c) below) or otherwise expressly set forth in the Separation Agreement, or other binding definitive agreement, Red Lion shall not be obligated to provide, or cause to be provided, any service or goods to any member of the Navy Group.

 

(c)                                  If, within one hundred and eighty (180) days after the Separation Date, the Parties determine that a service provided by Red Lion to any member of the Navy Group prior to the date hereof was omitted from the Schedules to this Agreement (each, an “Additional Service”), then the Parties shall negotiate in good faith to agree to the terms and conditions upon which such services would be added to this Agreement, it being agreed that the charges for such services should be determined on a basis consistent with the methodology for determining the initial prices provided for in Section 5.01.

 

Section 2.02.                          Duration of Services.  Subject to the terms of this Agreement, Provider shall provide (or cause to be provided) to the Recipients each Service until the earlier to occur of, with respect to each such Service, (i) the expiration of the period of the maximum duration for such Service as set forth on Schedule A or Schedule B (each a “Schedule”, and collectively, the “Schedules”) or (ii) the date on which such Service is terminated under Section 9.01(b); provided, however, that each Recipient shall use its commercially reasonable efforts in good faith to transition itself to a stand-alone entity with respect to each Service during the period for such Service as set forth in the relevant Schedules.

 

Section 2.03.                          Transition Services Managers.  (a) Navy hereby appoints and designates the individual holding the Navy position set forth on Exhibit I to act as its initial services manager (the “Navy Services Manager”), who will be directly responsible for coordinating and managing the delivery of the Services and have authority to act on Navy’s behalf with respect to matters relating to this Agreement.  The Navy Services Manager will work with the personnel of the Navy Group to periodically address issues and matters raised by Red Lion relating to this Agreement.  Notwithstanding the requirements of Section 10.05, all communications from Red Lion to Navy pursuant to this Agreement regarding routine matters involving the Services set forth on the Schedules shall be made through the Navy Services

 

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Manager, or such other individual as specified by the Navy Services Manager in writing and delivered to Red Lion by email or facsimile transmission with receipt confirmed.  In the event the Navy Services Manager is unavailable or intends to be unavailable, the Navy Services Manager shall promptly specify another individual to serve as the Navy Services Manager in the interim. Navy shall notify Red Lion of the appointment of a different Navy Services Manager, if necessary, in accordance with Section 10.05.

 

(b)                                 Red Lion hereby appoints and designates the individual holding the Red Lion position set forth on Exhibit I to act as its initial services manager (the “Red Lion Services Manager”), who will be directly responsible for coordinating and managing the receipt of the Services and have authority to act on Red Lion’s behalf with respect to matters relating to this Agreement.  The Red Lion Services Manager will work with the personnel of Red Lion Entities to periodically address issues and matters raised by Navy relating to this Agreement.  Notwithstanding the requirements of Section 10.05, all communications from Navy to Red Lion pursuant to this Agreement regarding routine matters involving the Services set forth on the Schedules shall be made through the Red Lion Services Manager or such other individual as specified by the Red Lion Services Manager in writing and delivered to Navy by email or facsimile transmission with receipt confirmed.  In the event the Red Lion Services Manager is unavailable or intends to be unavailable, the Red Lion Manager shall promptly specify another individual to serve as the Red Lion Services Manager in the interim.  Red Lion shall notify Navy of the appointment of a different Red Lion Services Manager, if necessary, in accordance with Section 10.05.

 

Section 2.04.                          Personnel.  (a) The Provider will have the right, in its reasonable discretion, to (i) designate which personnel it will assign to perform any Service, and (ii) remove and replace such personnel at any time, so long as there is no resulting increase in costs or decrease in the level of service for the Recipient; provided, however, that each Red Lion Employee shall hold any required licenses and certifications necessary, and shall be fully qualified, to perform the applicable Service and the Provider will use commercially reasonable, good faith efforts to limit the disruption to the Recipient in the transition of the Services to different personnel.  For the avoidance of doubt, no Recipient or other member of the Navy Group shall have the authority to terminate any Red Lion Employee’s employment with Red Lion or any other third party.

 

(b)                                 In the event that the provision of any Service by the Provider requires, as set forth in the Schedules, the cooperation and services of the applicable personnel of the Recipient, the Recipient will make available such personnel as may be reasonably necessary to enable the Provider to provide such Service.  The Recipient will have the right, in its reasonable discretion, to (i) designate which personnel it will make available to the Provider in connection with the foregoing sentence, and (ii) remove and replace such personnel at any time, in each case so long as there is no resulting increase in costs to, or any materially adverse effect to the provision of such Service by, the Provider; provided, however, that the Recipient will use its commercially reasonable efforts to limit the disruption to the Provider in the transition of such personnel.  All personnel of the Recipient made available pursuant to this Section 2.04(b) shall be instructed to comply with the applicable policies and guidelines of the Provider while on Provider premises, including any policies and guidelines relating to enterprise information technology (EIT).

 

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ARTICLE III

 

OTHER ARRANGEMENTS

 

Section 3.01.                          Third Party Licenses and Consents.  The Parties shall use commercially reasonable efforts to obtain, and to keep and maintain in effect, all governmental or third party licenses and consents required for the provision of any Service by a Provider in accordance with the terms of this Agreement; provided, that if a Provider is unable to obtain or maintain any such license or consent, such Provider shall promptly notify the Recipient in writing and shall, and shall cause its Affiliates to, use commercially reasonable efforts to implement an appropriate alternative arrangement.  To the extent such failure to obtain or maintain any such license or consent is not due to Provider’s own negligence or other failure to satisfy Provider’s obligations hereunder, the reasonable costs relating to obtaining any such licenses or consents, to the extent attributable to the Services, shall be borne by the Recipient; provided, that the Provider shall not incur any such costs without the prior written consent of the Recipient.  If any such license, consent or permissible alternative arrangement is not reasonably available despite the commercially reasonable efforts of the Provider and its Affiliates, such Provider shall not be required to provide the affected Services, and in the event the Provider ceases providing such Services, the Recipient shall have no obligation to pay any Service Charges or Termination Charges in respect of periods after the date the Provider ceases providing such Service.  A Provider shall not, without the Recipient’s prior written consent, enter into any contract or agreement, or modify the terms of any existing contract or agreement, if as a result: (a) the provision of any Service would violate the terms of such contract or agreement; (b) costs payable or potentially payable by Recipient would increase; (c) or such Provider could otherwise become unable to provide any Service.

 

Section 3.02.                          Third Party Providers.  If a Provider receives written notice from any third party service provider that such Person intends to terminate a service pursuant to which such Provider provides, or causes to be provided, a Service to the Recipient, then such Provider shall provide a copy of such written notice to the Recipient and shall use commercially reasonable efforts to secure the continued provision of that service from such third party or an alternative service provider.  In any such event, Recipient shall have no obligation to pay any Service Charge or Termination Charge relating to such terminated Services in respect of periods after the date of the termination of such Service that has not been continued or for which alternative arrangements have been made.

 

ARTICLE IV

 

ADDITIONAL AGREEMENTS

 

Section 4.01.                          Co-location and Facilities Matters.  (a) Red Lion hereby grants to Navy and its Affiliates a limited license to use and access space at certain facilities and to continue to use certain equipment located at such facilities (including use of office security and badge services), in each case as listed in Schedule B (the “Facilities”), for substantially the same purposes and in substantially the same manner used immediately prior to the date of this Agreement.  For the avoidance of doubt, at each of the Facilities, Red Lion shall, in addition to

 

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providing access and the right to use such facilities, provide to the personnel of Navy and its Affiliates substantially all ancillary services that are provided as of the date of this Agreement to its own personnel at such facility, such as, by way of example and not limitation: [reception, general maintenance (subject to the immediately following sentence), janitorial, security (subject to the immediately following sentence) and telephone services; access to duplication, facsimile, printing and other similar office services; and use of cafeteria, break room, restroom and other similar facilities].  Unless otherwise provided in the Schedules, such ancillary services (i) shall not include [          ] and (ii) shall only include (A) in the case of security, those services provided in connection with shared areas of a Facility, it being understood that the Provider shall not provide security services to Recipient-specific areas of Provider’s facility under the control of Recipient (to the extent that it is reasonably practicable for Recipient to provide such services with respect to any such Recipient-specific area) or security passes that permit entrance to Provider-specific areas of Provider’s facility, except to the extent necessary for Recipient’s personnel to access Recipient-specific areas or common areas of the facility, and (B) in the case of maintenance services, those services historically provided that are general in nature and within the scope of customary maintenance of ordinary wear and tear.

 

(b)                                 Navy shall only permit its authorized Representatives, contractors, invitees or licensees to use the Facilities, except as otherwise permitted by Red Lion in writing.  Navy shall, and shall cause its respective Subsidiaries, Representatives, contractors, invitees or licensees to, vacate Red Lion’s Facilities at or prior to the expiration date relating to each Facility set forth in Schedule B and shall deliver over to Red Lion or its Subsidiaries, as applicable, the Facilities in substantially the same repair and condition at that date as on the date of this Agreement, ordinary wear and tear and any condition caused by Red Lion or its Subsidiaries excepted; provided, however, that in the event that the third-party lease for a Facility specifies otherwise, Navy shall deliver over such Facility in such repair and condition (taking into account the date that the Party began its occupation of such Facility) as set forth in the third-party lease.  In addition to the access rights provided under Section 4.02, Red Lion or its Subsidiaries, or the landlord in respect of any third-party lease, shall have reasonable access to their respective Facilities from time to time as reasonably necessary for the security and maintenance thereof in accordance with past practice, the terms of this Agreement and the terms of any third-party lease agreement, if applicable.  Navy agrees to maintain commercially appropriate and customary levels (in no event less than what is required by the landlord under the applicable lease agreement) of property and liability insurance in respect of the Facilities the Recipients occupy and the activities conducted thereon and to be responsible for, and to indemnify and hold harmless Red Lion and other parties in accordance with Article VII in respect of, the acts and omissions of the Recipients’ Representatives, contractors, invitees and licensees.  Red Lion shall, and shall cause its Subsidiaries, Representatives, contractors, invitees and licensees to, comply in all material respects with (i) all Laws applicable to their use or occupation of any Facility including those relating to environmental and workplace safety matters, (ii) Red Lion’s applicable site rules, regulations, policies and procedures, and (iii) any applicable requirements of any third-party lease governing any Facility.  Navy shall, and shall cause its Subsidiaries, Representatives, contractors, invitees and licensees to, comply in all material respects with (i) all Laws applicable to their use or occupation of any Facility including those relating to environmental and workplace safety matters, (ii) Red Lion’s applicable site rules, regulations, policies and procedures, and (iii) any applicable requirements of any third-party lease governing any Facility.  Navy shall not make, and shall cause its Subsidiaries,

 

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Representatives, contractors, invitees and licensees to refrain from making, any material alterations or improvements to the Facilities except with the prior written approval of the other Red Lion or its Subsidiaries, as applicable, which consent Red Lion may withhold in its sole discretion.  Red Lion shall provide heating, cooling, electricity and other utility services for the Facilities substantially consistent with levels provided prior to the date of this Agreement.  The rights granted pursuant to this Section 4.01 shall be in the nature of a license and shall not create a leasehold or other estate or possessory rights in Navy, or its Subsidiaries, Representatives, contractors, invitees or licensees, with respect to the Facilities.

 

Section 4.02.                          Access.  (a) Navy shall, and shall cause its Subsidiaries to, allow Red Lion and its Representatives reasonable access during normal business hours to the Facilities (and portions thereof) occupied by Navy necessary for Red Lion to fulfill its obligations under this Agreement; provided, however, that Red Lion and each Provider will use its commercially reasonable, good faith efforts to limit the disruption to the Recipient in the fulfillment of its obligations under this Agreement.

 

(b)                                 Notwithstanding the other rights of access of the Parties under this Agreement, Red Lion shall, and shall cause its Subsidiaries to, afford Navy, its Subsidiaries and Representatives, following not less than five (5) business days’ prior written notice from Navy, reasonable access during normal business hours to the facilities, information, systems, infrastructure, and personnel of the Providers as reasonably necessary for Navy to verify the adequacy of internal controls over information technology, reporting of financial data and related processes employed in connection with the Services, including in connection with verifying compliance with Section 404 of the Sarbanes-Oxley Act of 2002; provided, however, such access shall not unreasonably disrupt any of the business or operations of Red Lion or its Subsidiaries.

 

Section 4.03.                          Cooperation.  It is understood that it will require the significant efforts of both Parties to implement this Agreement and to ensure performance of this Agreement by the Parties at the agreed upon levels in accordance with all of the terms and conditions of this Agreement.  The Parties will cooperate, acting in good faith and using commercially reasonable efforts, to effect a smooth and orderly provision and transition of the Services provided under this Agreement from the Provider to the Recipient (including repairs & maintenance Services and the assignment or transfer of the rights and obligations under any third-party contracts relating to the Services); provided, however, that this Section 4.03 shall not require either Party to incur any material out-of-pocket costs or expenses unless and except as expressly provided in this Agreement or otherwise agreed to in writing by the Parties.

 

ARTICLE V

 

COSTS AND DISBURSEMENTS

 

Section 5.01.                          Costs and Disbursements.  (a) Except as otherwise provided in this Agreement or in the Schedules to this Agreement, a Recipient of Services shall pay to the Provider of such Services a monthly fee for the Services based on Provider’s cost of providing such Services (or category of Services, as applicable), including such Provider’s out-of-pocket costs and expenses, and customary allocation of overhead expenses and leveraged assets,

 

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services and resources (including applicable hardware and software maintenance and support charges) (each such fee constituting a “Service Charge” and, collectively, “Service Charges”).  During the term of this Agreement, the amount of a Service Charge for any Services (or category of Services, as applicable) shall not increase, except to the extent (i) appropriate to reflect an increase in the volume of Services received or requested by any Recipient, (ii) any increases described in the Schedules or as otherwise mutually agreed to by the Parties, and (iii) subject to compliance with Section 5.01(b), any increase in the rates or charges imposed by any third-party provider that is providing Services.  The relevant Schedule shall be updated to reflect such increase in Service Charges.  All charges based on a monthly or other time basis will be pro-rated based on actual days elapsed during the period of service.

 

(b)                                 The Provider shall deliver an invoice to the Recipient for all Service Charges (and any taxes due and owing in accordance with Section 5.02) on a monthly basis beginning on the second (2nd) month following the Closing Date, in arrears for the Service Charges due to the Provider under this Agreement.  The Recipient shall pay the undisputed amount of each such invoice by wire transfer to the Provider within fifteen (15) days of the receipt of each such invoice.  If the Recipient fails to pay such amount by such date, the Recipient shall be obligated to pay to the Provider, in addition to the amount due, interest at an annual interest rate of five percent (5%) (the “Interest Payment”), accruing from the date the payment was due through the date of actual payment.  The Provider shall provide the Recipient with data and documentation (including copies of all applicable third-party invoices, other than invoices for repair & maintenance Services) reasonably satisfactory to the Recipient supporting the calculation of any Service Charges that are increased pursuant to Section 5.01(a) or are variable from month to month (as a result of changes to the costs incurred by the Provider from any third-party provider in relation to such Service, any reduction in Services or otherwise) for the purpose of verifying the accuracy of such calculation.

 

(c)                                  Subject to the confidentiality provisions set forth in Section 10.03, Red Lion shall, and shall cause its Affiliates to, provide, upon ten (10) days’ prior written notice from Navy, any information within its or its Affiliates’ possession that Navy reasonably requests in connection with any Services being provided (either by Red Lion or any of its Affiliates or an unaffiliated third-party provider), including any applicable invoices, agreements documenting the arrangements between Affiliate or third-party provider and the Provider and other supporting documentation.

 

Section 5.02.                          Taxes.  (a) Without limiting any provisions of this Agreement, the Recipient shall bear any and all sales, use, transaction, services, gross receipts (to the extent imposed in lieu of sales or transfer taxes) and transfer taxes and other similar charges (and any related interest and penalties) imposed on, or payable with respect to, Services and any fees or charges, including any Service Charges, payable by it pursuant to this Agreement (any such taxes or amounts “Service Taxes”).

 

(b)                                 Notwithstanding anything to the contrary in Section 5.02(a) or elsewhere in this Agreement, the Recipient shall be entitled to withhold from any payments to the Provider any such taxes that Recipient is required by law to withhold and shall pay over such taxes to the applicable taxing authority.  If the Recipient withholds any amounts respecting Service Taxes, the sum payable by the Recipient to the Provider shall be increased as necessary so that after

 

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such withholding has been made (including such withholdings applicable to the additional amounts payable under this Section), the Provider receives an amount equal to the sum it would have received had no such withholding been made.

 

Section 5.03.                          No Right to Set-Off.  The Recipient shall pay the full amount of Service Charges and shall not set-off, counterclaim or otherwise withhold any amount owed to the Provider under this Agreement on account of any obligation owed by the Provider to the Recipient that has not been finally adjudicated, settled or otherwise agreed upon by the Parties in writing.

 

ARTICLE VI

 

STANDARD FOR SERVICE

 

Section 6.01.                          Standard for Service.  (a) Except where the Provider is restricted by an existing contract with a third party or by Law, and unless any Schedule hereto indicates otherwise or the parties shall agree in writing to a different arrangement, Red Lion agrees to, and to cause each Provider (i) to comply with all applicable Laws and perform the Services such that the nature, quality, standard of care and the service levels at which such Services are performed are no less than the nature, quality, standard of care and service levels at which the same or similar services were performed by or on behalf of the Provider during the twelve-month period prior to the Closing Date (or, if not so previously provided, then substantially similar to that which are applicable to similar services provided to the Provider’s Affiliates or other business components); and (ii) upon receipt of written notice from the Recipient identifying any outage, interruption or other failure of any Service, to respond to such outage, interruption or other failure of any Services in a manner that is no less than that which is substantially similar to the manner in which such Provider or its Affiliates responded to any outage, interruption or other failure of the same or similar services during the twelve-month period prior to the Closing Date (the Parties acknowledge that an outage, interruption or other failure of any Service shall not be deemed to be a breach of the provisions of this Section 6.01 so long as the applicable Provider complies with this clause (ii)).  As of or following the date of this Agreement, if the Provider is or becomes aware of any restriction on the Provider by an existing contract with a third-party that would restrict the nature, quality, standard of care or service levels applicable to delivery of the Services to be provided by the Provider to the Recipient, the Provider shall promptly notify the Recipient of any such restriction (which notice shall in any event precede any change to, or reduction in, the nature, quality, standard of care or service levels applicable to delivery of the Services resulting from such restriction) and use good faith efforts to provide such Services in a manner as closely as possible to the standards described in this Section 6.01, and the Parties shall negotiate in good faith an amendment to the applicable Schedule to reflect such change to, or reduction in, the nature, quality, standard of care or service levels of the Service, as applicable.  The Provider shall have no obligation to provide any Services hereunder in respect of any business, assets or properties acquired by the Recipient or any of its Affiliates subsequent to the Closing Date.

 

(b)                                 It is understood and agreed that a Provider may (but is not obligated to) from time to time modify, change or enhance the manner, nature, quality and/or standard of care of any Service provided to the Recipient to the extent such Provider is making a similar change

 

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in the performance of such services for the Provider and its Affiliates.  The Provider shall promptly furnish to Recipient notice with respect to such modifications, changes or enhancements, including a reasonably detailed description thereof. To the extent any such modification or change affects a Service and relates to technology, software or information systems, the Provider shall have no obligation to continue to provide, or cause to be provided, such Service using the prior technology, software or information systems, but shall be required to provide such Service in accordance with this Agreement (or an alternate service that meets the requirements for such Service set out in Schedule A) using its upgraded or changed technology, software or information systems.  Any reasonable incremental expense incurred by the Provider in making any such modification, change or enhancement to the Services performed hereunder or in providing such Services on an ongoing basis shall be taken into account in the calculation of Service Costs to the extent contemplated by Section 5.01(a); provided, no such incremental cost in making any such modification, change or enhancement to the Services performed hereunder or in providing such Services on an ongoing basis shall be taken into account to the extent an alternative service is utilized by Provider. The Provider shall have no obligation to provide, or cause to be provided, Services to the extent any changes are made to the Recipient’s business that materially increase or materially adversely increase the Provider’s burden with respect to the provision of such Services or that make commercially impracticable the provision of such Services, unless and only to the extent the Parties otherwise agree in writing or as expressly set forth herein.

 

(c)                                  The Provider shall have the right to shut down temporarily for maintenance purposes the operation of the Facilities providing any Service whenever, in the Provider’s sole and absolute discretion, such action is necessary; provided, however, that no preplanned temporary shutdown shall occur with less than forty-eight (48) hours’ advance notice to the applicable Recipient. For clarity, the Provider may temporarily close Facilities without advance notice in order to perform emergency or unplanned maintenance.  The Provider shall be relieved of its obligations to provide the Services affected by such shutdown during the period that its Facilities are so shut down, and the Recipient shall be relieved of its obligations to pay the Service Charges and potential Termination Charges related to such Services in respect of periods after the date the applicable Services so shut down.

 

Section 6.02.                          Disclaimer of Warranties.  Except as expressly set forth in this Agreement, the Parties acknowledge and agree that the Services are provided as-is, that the Recipients assume all risks and liability arising from or relating to its use of and reliance upon the Services and each Provider makes no representation or warranty with respect thereto.  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, PROVIDERS HEREBY EXPRESSLY DISCLAIM ALL REPRESENTATIONS AND WARRANTIES REGARDING THE SERVICES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY IN REGARD TO QUALITY, PERFORMANCE, NONINFRINGEMENT, COMMERCIAL UTILITY, MERCHANTABILITY OR FITNESS OF THE TRANSITION SERVICES FOR A PARTICULAR PURPOSE.

 

Section 6.03.                          Compliance with Laws and Regulations.  Each Party shall be responsible for its own compliance with any and all Laws applicable to its performance under this Agreement.  No Party will knowingly take any action in violation of any such applicable Law that results in liability being imposed on the other Party.

 

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ARTICLE VII

 

LIMITED LIABILITY AND INDEMNIFICATION

 

Section 7.01.                          Personal Injury.  EACH PARTY (AS AN INDEMNIFYING PARTY) SHALL ASSUME ALL LIABILITY FOR AND SHALL RELEASE, DEFEND, INDEMNIFY, AND HOLD THE OTHER PARTY, ITS AFFILIATES, AND THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, AND AGENTS (ALL AS INDEMNIFIED PARTIES) FREE AND HARMLESS FROM AND AGAINST ALL LOSSES IN CONNECTION HEREWITH IN RESPECT OF INJURY TO OR DEATH OR SICKNESS OF ANY EMPLOYEE, AGENT, OR REPRESENTATIVE OF THE INDEMNIFYING PARTY, ITS AFFILIATES OR THEIR CONTRACTORS OR SUBCONTRACTORS OF ANY PARTY, HOWSOEVER ARISING AND WHETHER OR NOT CAUSED BY THE NEGLIGENCE (WHETHER SOLE, JOINT, OR CONCURRENT, OR ACTIVE OR PASSIVE) OF THE INDEMNIFIED PARTIES, EXCEPT TO THE EXTENT SUCH LOSS IS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF AN INDEMNIFIED PARTY.

 

Section 7.02.                          Indirect and Other Damages.  Notwithstanding anything to the contrary contained in this Agreement, the Providers shall not be liable to the Recipient or any of its Affiliates or Representatives, whether in contract, tort (including negligence and strict liability) or otherwise, at law or equity, for any punitive, special, indirect, incidental, consequential, or exemplary damages (including any lost profits, lost savings, loss of reputation or loss of opportunity included in such damages), which in any way arise out of, relate to or are a consequence of, the performance or nonperformance by the Providers (including any Affiliates and Representatives of a Provider and any third-party providers, in each case, providing the applicable Services) under this Agreement or the provision of, or failure to provide, any Services under this Agreement; provided, however, that (i) the Provider may be liable to the other Party for any such damages that result directly from the willful misconduct or gross negligence of the Providers, and (ii) to the extent a Party is otherwise determined to be entitled to recover any punitive, special, indirect, incidental, consequential, or exemplary damages, such damages may be recovered only to the extent the Party claiming such damages has actually paid amounts to a third party as part of a judgment or settlement.

 

Section 7.03.                          Limitation of Liability.  Subject to Section 7.04, the liabilities of each Provider and its Affiliates and Representatives, collectively, under this Agreement for any act or failure to act in connection herewith (including the performance or breach of this Agreement), or from the sale, delivery, provision or use of any Services provided under or contemplated by this Agreement, whether in contract, tort (including negligence and strict liability) or otherwise, shall not exceed the total aggregate Service Charges (excluding any third-party costs and expenses included in such Service Charges) actually paid to such Provider by the Recipient pursuant to this Agreement.

 

Section 7.04.                          Obligation To Re-perform; Liabilities.  In the event of any breach of this Agreement by any Provider with respect to the provision of any Services (with respect to which the Provider can reasonably be expected to re-perform in a commercially reasonable manner), the Provider shall (a) promptly correct in all material respects such error, defect or

 

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breach or re-perform in all material respects such Services at the written request of the Recipient and at the sole cost and expense of the Provider and (b)  subject to the limitations set forth in Sections 7.01 and 7.02, reimburse the Recipient and its Affiliates and Representatives for liabilities attributable to such breach by the Provider.  Other than as set forth in Section 7.06, the remedy set forth in this Section 7.04 shall be the sole and exclusive remedy of the Recipient for any such breach of this Agreement.  Any request for re-performance in accordance with this Section 7.04 by the Recipient must be in writing and specify in reasonable detail the particular error, defect or breach, and such request must be made no more than one (1) month from the date such breach occurred.

 

Section 7.05.                          Release and Recipient Indemnity.  Subject to Section 7.01, each Recipient hereby releases the Providers and their Affiliates and Representatives (each, a “Provider Indemnified Party”), and each Recipient hereby agrees to indemnify, defend and hold harmless each such Provider Indemnified Party from and against any and all liabilities arising from, relating to or in connection with the use of any Services by such Recipient or any of its Affiliates, Representatives or other Persons using such Services, except to the extent that such liabilities arise out of, relate to or are a consequence of the applicable Provider Indemnified Party’s bad faith, gross negligence or willful misconduct.

 

Section 7.06.                          Provider Indemnity.  Subject to Section 7.01, each Provider hereby agrees to indemnify, defend and hold harmless the Recipients and their Affiliates and Representatives (each a “Recipient Indemnified Party”), from and against any and all liabilities arising from, relating to or in connection with the use of any Services by such Recipient or any of its Affiliates, Representatives or other Persons using such Services or in connection with the sale, delivery, provision or use of any Services provided under or contemplated by this Agreement to the extent that such liabilities arise out of, relate to or are a consequence of the applicable Provider’s bad faith, gross negligence or willful misconduct.

 

Section 7.07.                          Indemnification Procedures.  The provisions of Article III of the Separation Agreement shall govern claims for indemnification under this Agreement.

 

Section 7.08.                          Liability for Payment Obligations.  Nothing in this Article VII shall be deemed to eliminate or limit, in any respect, Navy’s express obligation in this Agreement to pay Termination Charges or Service Charges for Services rendered in accordance with this Agreement.

 

Section 7.09.                          Exclusion of Other Remedies.  The provisions of Sections 7.04, 7.05 and 7.06 of this Agreement, subject to Section 7.03, shall be the sole and exclusive remedies of the Provider Indemnified Parties and the Recipient Indemnified Parties, as applicable, for any claim, loss, damage, expense or liability, whether arising from statute, principle of common or civil law, principles of strict liability, tort, contract or otherwise under this Agreement.

 

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ARTICLE VIII

 

DISPUTE RESOLUTION

 

Section 8.01.                          Dispute Resolution.  (a) In the event of any dispute, controversy or claim arising out of or relating to the transactions contemplated by this Agreement, or the validity, interpretation, breach or termination of any provision of this Agreement, or calculation or allocation of the costs of any Service, including claims seeking redress or asserting rights under any Law (each, a “Dispute”), Navy and Red Lion agree that the Navy Services Manager and the Red Lion Services Manager (or such other persons as Navy and Red Lion may designate) shall negotiate in good faith in an attempt to resolve such Dispute amicably.  If such Dispute has not been resolved to the mutual satisfaction of Navy and Red Lion within fifteen (15) days after the initial written notice of the Dispute (or such longer period as the Parties may agree), then such Dispute shall be resolved in accordance with the dispute resolution process referred to in Article V of the Separation Agreement; provided, that such dispute resolution process shall not modify or add to the remedies available to the Parties under this Agreement.

 

(b)                                 In any Dispute regarding the amount of a Service Charge, if after such Dispute is finally resolved pursuant to the dispute resolution process set forth or referred to in Section 8.01(a), it is determined that the Service Charge that the Provider has invoiced the Recipient, and that the Recipient has paid to the Provider, is greater or less than the amount that the Service Charge should have been, then (a) if it is determined that the Recipient has overpaid the Service Charge, the Provider shall within five (5) business days after such determination reimburse the Recipient an amount of cash equal to such overpayment, plus the Interest Payment, accruing from the date of payment by the Recipient to the time of reimbursement by the Provider; and (b) if it is determined that the Recipient has underpaid the Service Charge, the Recipient shall within five (5) business days after such determination reimburse the Provider an amount of cash equal to such underpayment, plus the Interest Payment, accruing from the date such payment originally should have been made by the Recipient to the time of payment by the Recipient.

 

ARTICLE IX

 

TERM AND TERMINATION

 

Section 9.01.                          Term and Termination.  (a) This Agreement shall commence immediately upon the Closing Date and shall terminate upon the earlier to occur of:  (i) the last date on which either Party is obligated to provide any Service to the other Party in accordance with the terms of this Agreement or (ii) the mutual written agreement of the Parties to terminate this Agreement in its entirety.

 

(b)                                 (i) Without prejudice to a Recipient’s rights with respect to a Force Majeure, a Recipient may from time to time terminate this Agreement with respect to the entirety of any individual Service or any portion thereof, (A) for any reason or no reason (y) upon providing to the Provider sixty (60) days’ prior written notice, and (z) subject to the obligation to pay any applicable Termination Charges pursuant to Section 9.02, or (B) if the Provider of such Service has failed to perform any of its material obligations under this Agreement with respect to such Service, and such failure shall continue to exist thirty (30) days after receipt by the Provider of written notice of such failure from the Recipient; and (ii) a Provider may terminate this Agreement with respect to one or more Services, in whole but not in part, at any time upon prior written notice to the Recipient if the Recipient has failed to perform any of its material

 

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obligations under this Agreement relating to such Services, including making payment of Service Charges when due, and such failure shall be continued uncured for a period of thirty (30) days after receipt by the Recipient of a written notice of such failure from the Provider.  The relevant Schedule shall be updated to reflect any terminated Service.  In the event that any Service is terminated other than at the end of a month, the Service Charge associated with such Service shall be pro-rated for the remainder of such month appropriately.  The Parties acknowledge that there may be interdependencies among the Services being provided under this Agreement that are not identified on the applicable Schedules, and agree that if the Provider’s ability to provide a particular Service in accordance with this Agreement is materially and adversely impacted by the termination of another Service in accordance with Section 9.01(b)(i)(A) prior to the expiration of the period of the maximum duration for such Service, the Parties shall negotiate in good faith to amend the Schedule relating to such impacted continuing Service, which amendment shall be consistent with the terms of, and the pricing methodology used for, comparable Services.

 

(c)                                  A Recipient may from time to time request a reduction in part of the scope or amount of any Service that is identified on the applicable Schedule as being subject to the provisions of this Section 9.01(c).  If requested to do so by Recipient, the Provider agrees to discuss in good faith appropriate reductions to the relevant Service Charges in light of all relevant factors including the costs and benefits to the Provider of any such reductions.  If, after such discussions, and without prejudice to Recipient’s rights under Section 9.01(b), the Recipient and the Provider do not agree to any requested reduction of the scope or amount of any Service and the relevant Service Charges in connection therewith, then there shall be no change to the scope or amount of any Services or Service Charges under this Agreement.  In the event that a Recipient and a Provider agreed to any reduction of Service and the relevant Service Charges, the relevant Schedule shall be updated to reflect such reduced Service.  In the event that any Service is reduced other than at the end of a month, the Service Charge associated with such Service for the month in which such Service is reduced shall be pro-rated appropriately.

 

Section 9.02.                          Effect of Termination.  Upon termination of any Service pursuant to this Agreement, the Provider of the terminated Service will have no further obligation to provide the terminated Service, and the relevant Recipient will have no obligation to pay any future Service Charges relating to any such Service; provided, that the Recipient shall remain obligated to the relevant Provider for the (i) Service Charges owed and payable in respect of Services provided prior to the effective date of termination and (ii) any applicable Termination Charges.  In connection with termination of any Service, the provisions of this Agreement not relating solely to such terminated Service shall survive any such termination, and in connection with a termination of this Agreement, Article I, Article VII (including liability in respect of any indemnifiable liabilities under this Agreement arising or occurring on or prior to the date of termination), Article VIII, Article IX, Article X, all confidentiality obligations under this Agreement and liability for all due and unpaid Service Charges and any applicable Termination Charges payable pursuant to the early termination of a Service, shall continue to survive indefinitely.

 

Section 9.03.                          Force Majeure.  (a) No Provider (nor any Person acting on its behalf) shall have any liability or responsibility for failure to fulfill any obligation under this Agreement so long as and to the extent to which the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure; provided,

 

15

 

that (i) the Provider (or such Person) shall have exercised commercially reasonable efforts to minimize the effect of Force Majeure on its obligations; and (ii) the nature, quality and standard of care that the Provider shall provide in delivering a Service after a Force Majeure shall be substantially the same as the nature, quality and standard of care that the Provider provides to its Affiliates and its other business components with respect to such Service.  In the event of an occurrence of a Force Majeure, the Provider shall give notice of suspension as soon as reasonably practicable to the other stating the date and extent of such suspension and the cause thereof, and the Provider shall resume the performance of such obligations as soon as reasonably practicable after the removal of such cause. In such event, the Recipient shall be relieved of any and all obligations in respect of the payment of any Service Charge for the applicable suspended Service with respect to the period of time such Service is suspended as a result of the applicable Force Majeure.

 

(b)                                 During the term of this Agreement, including during the period of a Force Majeure, the Recipient shall be entitled to seek an alternative service provider with respect to any Service(s) (at Recipient’s own expense).

 

ARTICLE X

 

GENERAL PROVISIONS

 

Section 10.01.                   No Agency.  Nothing in this Agreement shall be deemed in any way or for any purpose to constitute any party an agent of another unaffiliated party in the conduct of such other party’s business.  Each Provider of any Service under this Agreement shall act as an independent contractor and not as the agent of the Recipient in performing such Service, maintaining control over its employees, its subcontractors and their employees and complying with all withholding of income at source requirements, whether federal, state, local or foreign.

 

Section 10.02.                   Subcontractors.  A Provider may hire or engage one or more subcontractors to perform any or all of its obligations under this Agreement; provided, that (i) such Provider shall use the same degree of care in selecting any such subcontractor as it would if such contractor was being retained to provide similar services to the Provider and (ii) such Provider shall in all cases remain responsible for all of its obligations under this Agreement with respect to the scope of the Services, the standard for services as set forth in Article VI and the content of the Services provided to the Recipient.

 

Section 10.03.                   Treatment of Confidential Information.  (a) The Parties shall not, and shall cause all other persons providing Services or having access to information of the other Party that is known to such Party as confidential or proprietary (“Confidential Information”) not to, disclose to any other person or use, except for purposes of this Agreement, any Confidential Information of the other Party; provided, however, that each Party may disclose Confidential Information of the other Party, to the extent permitted by applicable Law:  (i) to its Representatives on a need-to-know basis in connection with the performance of such Party’s obligations under this Agreement; (ii) in any report, statement, testimony or other submission required to be made to any Governmental Authority having jurisdiction over the disclosing Party; or (iii) in order to comply with applicable Law, or in response to any summons, subpoena

 

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or other legal process or formal or informal investigative demand issued to the disclosing Party in the course of any litigation, investigation or administrative proceeding.  In the event that a Party becomes legally compelled (based on advice of counsel) by deposition, interrogatory, request for documents subpoena, civil investigative demand or similar judicial or administrative process to disclose any Confidential Information of the other Party, such disclosing Party shall provide the other Party with prompt prior written notice of such requirement, and, to the extent reasonably practicable, cooperate with the other Party (at such other Party’s expense) to obtain a protective order or similar remedy to cause such Confidential Information not to be disclosed, including interposing all available objections thereto, such as objections based on settlement privilege.  In the event that such protective order or other similar remedy is not obtained, the disclosing Party shall furnish only that portion of the Confidential Information that has been legally compelled, and shall exercise its commercially reasonable efforts (at such other Party’s expense) to obtain assurance that confidential treatment will be accorded such Confidential Information.

 

(b)                                 Each Party shall, and shall cause its Representatives to protect the Confidential Information of the other Party by using the same degree of care to prevent the unauthorized disclosure of such as the Party uses to protect its own confidential information of a like nature.

 

(c)                                  Each Party shall cause its Representatives to agree to be bound by the same restrictions on use and disclosure of Confidential Information as are binding upon such Party in advance of the disclosure of any such Confidential Information to them.

 

(d)                                 Each Party shall comply with all applicable state, federal and foreign privacy and data protection Laws that are or that may in the future be applicable to the provision of Services under this Agreement.

 

Section 10.04.                   Further Assurances.  Each Party covenants and agrees that, without any additional consideration, it shall execute and deliver any further legal instruments and perform any acts that are or may become necessary to effectuate this Agreement.

 

Section 10.05.                   Notices.  Except with respect to routine communications by the Navy Services Manager and Red Lion Services Manager under Section 2.03, all notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, by facsimile or electronic transmission with receipt confirmed (followed by delivery of an original via overnight courier service) or by registered or certified mail (postage prepaid, return receipt requested) to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.05):

 

(i)                                     if to Navy:

 

[                    ]

 

with a copy to:

 

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[                    ]

 

(ii)                              if to Red Lion:

 

[                    ]

 

with a copy to:

 

[                    ]

 

Section 10.06.                   Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any Law or as a matter of public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any Party.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated by this Agreement be consummated as originally contemplated to the greatest extent possible.

 

Section 10.07.                   Entire Agreement.  Except as otherwise expressly provided in this Agreement, this Agreement, the Separation Agreement, the Merger Agreement and the other Ancillary Agreements, constitute the entire agreement of the Parties with respect to the subject matter of this Agreement and supersede all prior agreements and undertakings, both written and oral, between or on behalf of the Parties with respect to the subject matter of this Agreement.

 

Section 10.08.                   No Third-Party Beneficiaries.  Except as provided in Article VII with respect to Provider Indemnified Parties and Recipient Indemnified Parties, this Agreement is for the sole benefit of the Parties and their permitted successors and assigns and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person, including any union or any employee or former employee of Navy or Red Lion, any legal or equitable right, benefit or remedy of any nature whatsoever, including any rights of employment for any specified period, under or by reason of this Agreement.

 

Section 10.09.                   Governing Law.  This Agreement (and any claims or disputes arising out of or related to this Agreement or to the transactions contemplated by this Agreement or to the inducement of any Party to enter into this Agreement or the transactions contemplated by this Agreement, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall in all respects be governed by, and construed in accordance with, the Laws of the State of New York, including all matters of construction, validity and performance, in each case without reference to any conflict of Law rules that might lead to the application of the Laws of any other jurisdiction.

 

Section 10.10.                   Amendment.  No provision of this Agreement, including any Schedules to this Agreement, may be amended, supplemented or modified except by a written instrument making specific reference to this Agreement or any such Schedules to this Agreement, as applicable, signed by all the Parties.

 

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Section 10.11.                   Rules of Construction.  Interpretation of this Agreement shall be governed by the following rules of construction:  (a) words in the singular shall be held to include the plural and vice versa, and words of one gender shall be held to include the other gender as the context requires; (b) references to the terms Article, Section, paragraph and Schedule are references to the Articles, Sections, paragraphs and Schedules of this Agreement unless otherwise specified; (c) references to “$” shall mean U.S. dollars; (d) the word “including” and words of similar import when used in this Agreement shall mean “including without limitation,” unless otherwise specified; (e) the word “or” shall not be exclusive; (f) references to “written” or “in writing” include in electronic form; (g) provisions shall apply, when appropriate, to successive events and transactions; (h) the headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement; (i) Navy and Red Lion have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or burdening either Party by virtue of the authorship of any of the provisions in this Agreement or any interim drafts of this Agreement; (j) a reference to any Person includes such Person’s successors and permitted assigns; (k) any reference to “days” means calendar days unless business days are expressly specified; and (l) when calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded, if the last day of such period is not a business day, the period shall end on the next succeeding business day.

 

Section 10.12.                   Counterparts.  This Agreement may be executed in one or more counterparts, and by each Party in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (PDF) shall be as effective as delivery of a manually executed counterpart of this Agreement.

 

Section 10.13.                   Assignability.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.  No party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other party hereto; provided, however that either Party may assign its rights hereunder to an Affiliate without the prior written consent of the other Party; provided, further, that such assigning Party shall remain liable for its obligations hereunder notwithstanding such assignment.

 

Section 10.14.                   Waiver of Jury Trial.  EACH PARTY TO THIS AGREEMENT WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.  EACH PARTY (I) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; AND (II) ACKNOWLEDGES THAT IT AND THE OTHER PARTY TO THIS AGREEMENT

 

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HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION AGREEMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.14.

 

Section 10.15.                   Non-Recourse.  No past, present or future director, officer, employee, incorporator, member, partner, shareholder, stockholder, Affiliate, agent, attorney or representative of either Navy or Red Lion or their respective predecessors, successors or Affiliates shall have any liability for any obligations or liabilities of Navy or Red Lion, respectively, under this Agreement or for any claims based on, in respect of, or by reason of, the transactions contemplated by this Agreement.

 

[The remainder of this page is Intentionally left blank.]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the date first written above by their respective duly authorized officers.

 

	
 
    	
[NAVY]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
[RED LION]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    

 

 

Exhibit I

 

Services Managers

 

	
 
    	
 
    	
Position
    
	
Navy   Services Manager
    	
 
    	
 
    
	
Red   Lion Services Manager
    	
 
    	
 
    

 

 

Schedule A
  Services

 

	
Function
    	
 
    	
Service
    	
 
    	
Description
    	
 
    	
Geographic
   Scope
    	
 
    	
Max Term
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
[TO   BE AGREED]
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Schedule B

 

Facilities

 

[TO BE AGREED]Exhibit 10.9

LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of August 22, 2014 (the “Effective Date”) by and among (i) SILICON VALLEY BANK, a California corporation (“Bank”), and (i) WORKIVA LLC, a California limited liability company (“Workiva”) and WORKIVA INTERNATIONAL LLC, a Delaware limited liability company (“International”, and together with Workiva, each and together, jointly and severally,  “Borrower”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank.  The parties agree as follows:
		
	1
	ACCOUNTING AND OTHER TERMS

Accounting terms not defined in this Agreement shall be construed following GAAP.  Calculations and determinations must be made following GAAP.  Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13.  All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein.
		
	2
	LOAN AND TERMS OF PAYMENT

2.1    Promise to Pay.  Borrower hereby unconditionally promises to pay Bank the outstanding principal amount of all Credit Extensions and accrued and unpaid interest thereon as and when due in accordance with this Agreement.
2.2    Credit Extensions.
		
	2.2.1
	Revolving Advances.

(a)    Availability.  Subject to the terms and conditions of this Agreement and to deduction of Reserves, Bank shall make Advances not exceeding the Availability Amount.  Amounts borrowed under the Revolving Line may be repaid and, prior to the Revolving Line Maturity Date, reborrowed, subject to the applicable terms and conditions precedent herein.
(b)    Termination; Repayment.  The Revolving Line terminates on the Revolving Line Maturity Date, when the principal amount of all Advances, the unpaid interest thereon, and all other Obligations relating to the Revolving Line shall be immediately due and payable.
		
	2.2.2
	Letters of Credit.

(a)    Bank shall issue or have issued Letters of Credit denominated in Dollars or a Foreign Currency for Borrower’s account.  The aggregate Dollar Equivalent amount utilized for the issuance of Letters of Credit shall at all times reduce the amount otherwise available for Advances under the Revolving Line.  The aggregate Dollar Equivalent of the face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed (i) the lesser of (A) the Revolving Line or (B) the Borrowing Base, minus (ii) the sum of all outstanding principal amounts of any Advances (including any amounts used for cash management services and the aggregate Dollar Equivalent of the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) and minus (iii) an amount equal to ten percent (10.0%) of each outstanding FX Contract.

(b)    If, on the Revolving Line Maturity Date (or the effective date of any termination of this Agreement), there are any outstanding Letters of Credit, then on such date Borrower shall provide to Bank cash collateral in an amount equal to at least 105% of the aggregate Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or estimated by Bank to become due in connection therewith, to secure all of the Obligations relating to such Letters of Credit.  All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s standard Application and Letter of Credit Agreement (the “Letter of Credit Application”).  Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably request.  Borrower further agrees to be bound by the regulations and interpretations of the issuer of any Letters of Credit guarantied by Bank and opened for Borrower’s account or by Bank’s interpretations of any Letter of Credit issued by Bank for Borrower’s account, and Borrower understands and agrees that Bank shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments, or supplements thereto.
(c)    The obligation of Borrower to immediately reimburse Bank for drawings made under Letters of Credit shall be absolute, unconditional, and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, such Letters of Credit, and the Letter of Credit Application.  
(d)    Borrower may request that Bank issue a Letter of Credit payable in a Foreign Currency.  If a demand for payment is made under any such Letter of Credit, Bank shall treat such demand as an Advance to Borrower of the Dollar Equivalent of the amount thereof (plus fees and charges in connection therewith such as wire, cable, SWIFT or similar charges).
(e)    To guard against fluctuations in currency exchange rates, upon the issuance of any Letter of Credit payable in a Foreign Currency, Bank shall create a reserve (the “Letter of Credit Reserve”) under the Revolving Line in an amount equal to ten percent (10%) of the face amount of such Letter of Credit.  The amount of the Letter of Credit Reserve may be adjusted by Bank from time to time to account for fluctuations in the exchange rate.  The availability of funds under the Revolving Line shall be reduced by the amount of such Letter of Credit Reserve for as long as such Letter of Credit remains outstanding.
2.3    Overadvances.  If, at any time, the outstanding principal amount of any Advances exceeds the lesser of either the Revolving Line or the Borrowing Base, Borrower shall immediately pay to Bank in cash the amount of such excess (such excess, the “Overadvance”). Without limiting Borrower’s obligation to repay Bank any Overadvance, Borrower agrees to pay Bank interest on the outstanding amount of any Overadvance, within two (2) days of written request therefor.
2.4    Payment of Interest on the Credit Extensions.
(a)    Advances.  Subject to Section 2.4(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to one percentage point (1.00%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.4(d) below.

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(b)    Default Rate.  Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear interest at a rate per annum which is five percentage points (5.0%) above the rate that is otherwise applicable thereto (the “Default Rate”).  Fees and expenses which are required to be paid by Borrower pursuant to the Loan Documents (including, without limitation, Bank Expenses) but are not paid within two (2) days of written request therefor shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations.  Payment or acceptance of the increased interest rate provided in this Section 2.4(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank.
(c)    Adjustment to Interest Rate.  Changes to the interest rate of any Credit Extension based on changes to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of any such change. 
(d)    Payment; Interest Computation.  Interest is payable monthly on the last calendar day of each month and shall be computed on the basis of a 360-day year for the actual number of days elapsed.  In computing interest, (i) all payments received after 2:00 p.m. Eastern time on any day shall be deemed received at the opening of business on the next Business Day, and (ii) the date of the making of any Credit Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit Extension is repaid on the same day on which it is made, such day shall be included in computing interest on such Credit Extension.
2.5    Fees.  Borrower shall pay to Bank: 
(a)    Commitment Fee.  A fully earned, non‐refundable commitment fee of Seventy Five Thousand Dollars ($75,000), payable as follows: (i) Thirty Seven Thousand Five Hundred Dollars ($37,500) on the Effective Date and (ii) Thirty Seven Thousand Five Hundred Dollars ($37,500) on the first anniversary date of the Effective Date; 
(b)    Termination Fee.  Upon termination of this Agreement for any reason prior to the Revolving Line Maturity Date, in addition to the payment of any other amounts then-owing, a termination fee in an amount equal to one percent (1.00%) of the Revolving Line if such termination occurs prior to the first anniversary of the Effective Date, provided that no termination fee shall be charged if the credit facility hereunder is replaced with a new facility from Bank; 
(c)    Unused Revolving Line Facility Fee.  Payable quarterly in arrears on September 30, 2014, on the last day of each calendar quarter occurring thereafter prior to the Revolving Line Maturity Date, and on the Revolving Line Maturity Date, a fee (the “Unused Revolving Line Facility Fee”) in an amount equal to one-quarter of one percent (0.25%) per annum of the average unused portion of the Revolving Line, as determined by Bank.  The unused portion of the Revolving Line, for purposes of this calculation, shall be calculated on a calendar year basis and shall equal the difference between (i) the Revolving Line, and (ii) the average for the period of the daily closing balance of the Revolving Line outstanding;
(d)    Bank Expenses.  All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation of this Agreement) incurred through and after the Effective Date, within two (2) days of written request therefor.

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(e)    Fees Fully Earned.  Unless otherwise provided in this Agreement or in a separate writing by Bank, Borrower shall not be entitled to any credit, rebate, or repayment of any fees earned by Bank pursuant to this Agreement notwithstanding any termination of this Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder.  Bank may deduct amounts owing by Borrower under the clauses of this Section 2.5 pursuant to the terms of Section 2.6(c).  Bank shall provide Borrower written notice of deductions made from the Designated Deposit Account pursuant to the terms of the clauses of this Section 2.5.
2.6    Payments; Application of Payments; Debit of Accounts.  
(a)    All payments to be made by Borrower under any Loan Document shall be made in immediately available funds in Dollars, without setoff or counterclaim, before 2:00 p.m. Eastern time on the date when due.  Payments of principal and/or interest received after 2:00 p.m. Eastern time are considered received at the opening of business on the next Business Day.  When a payment is due on a day that is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall continue to accrue until paid.  
(b)    Bank has the exclusive right to determine the order and manner in which all payments with respect to the Obligations may be applied.  Borrower shall have no right to specify the order or the accounts to which Bank shall allocate or apply any payments required to be made by Borrower to Bank or otherwise received by Bank under this Agreement when any such allocation or application is not specified elsewhere in this Agreement.
(c)    Bank may debit any of Borrower’s deposit accounts, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes Bank when due.  These debits shall not constitute a set-off.  The provisions of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes, and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such.
		
	3
	CONDITIONS OF LOANS

3.1    Conditions Precedent to Initial Advance.  Bank’s obligation to make the initial Advance is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation:
(a)    duly executed original signatures to the Loan Documents;
(b)    duly executed original signatures to the Control Agreements with Bankers Trust and Morgan Stanley;
(c)    the Operating Documents and long-form good standing certificates of Borrower certified by the Secretary of State (or equivalent agency) of Borrower’s and of each U.S. Subsidiaries’ jurisdiction of organization or formation and each jurisdiction in which Borrower and each Subsidiary is qualified to conduct business, each as of a date no earlier than thirty (30) days prior to the Effective Date; 

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(d)    duly executed original signatures to the completed Borrowing Resolutions for Borrower;
(e)    the Subordination Agreement by Bluestem Capital in favor of Bank, together with the duly executed original signatures thereto;
(f)    certified copies, dated as of a recent date, of financing statement searches, as Bank may request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;
(g)    the Perfection Certificate of Borrower, together with the duly executed original signature thereto;
(h)    a landlord’s consent in favor of Bank for 2900 University Boulevard, Ames, Iowa 50010 by the landlord thereof, together with the duly executed original signatures thereto;
(i)    a bailee’s waiver in favor of Bank for each location where Borrower maintains property with a third party, by each such third party, together with the duly executed original signatures thereto;
(j)    a legal opinion of Borrower’s counsel dated as of the Effective Date together with the duly executed original signature thereto; and
(k)    payment of the fees and Bank Expenses then due as specified in Section 2.5 hereof.
3.1.1    Credit Extensions on the Effective Date.  Bank will make Credit Extensions on the Effective Date in the form of two (2) Letters of Credit subject to Borrower’s compliance with Section 3.1 other than clause (b) thereof.  Borrower acknowledges that no Advances or further Credit Extensions shall be made until all conditions precedent set forth in Section 3.1 are satisfied.  
3.2    Conditions Precedent to all Credit Extensions.  Bank’s obligations to make each Credit Extension, including the initial Credit Extension, is subject to the following conditions precedent:
(a)    timely receipt of an executed Transaction Report;  
(b)    the representations and warranties in this Agreement shall be true, accurate, and complete in all material respects on the date of the Transaction Report and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Default or Event of Default shall have occurred and be continuing or result from the Credit Extension.  Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in this Agreement remain true, accurate, and complete in all material respects; 

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provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and
(c)    Bank determines to its satisfaction that there has not been any material impairment in the general affairs, management, results of operation, financial condition or the prospect of repayment of the Obligations.
3.3    Covenant to Deliver.  Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a condition precedent to any Credit Extension.  Borrower expressly agrees that a Credit Extension made prior to the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the making of any Credit Extension in the absence of a required item shall be in Bank’s sole discretion.
3.4    Procedures for Borrowing.  Subject to the prior satisfaction of all other applicable conditions to the making of an Advance set forth in this Agreement, to obtain an Advance, Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail by 2:00 p.m. Eastern time on the Funding Date of the Advance.  In connection with such notification, Borrower must promptly deliver to Bank by electronic mail a completed Transaction Report executed by an Authorized Signer, together with such other reports and information as Bank may request in its sole discretion.  Bank shall credit proceeds of an Advance to the Designated Deposit Account.  Bank may make Advances under this Agreement based on instructions from an Authorized Signer or without instructions if the Advances are necessary to meet Obligations which have become due.
3.5    Post-Closing Conditions.  Bank shall have received the following, in form and substance satisfactory to Bank:
(a)    Within ten (10) days after the Effective Date, evidence satisfactory to Bank that the insurance policies and endorsements required by Section 6.7 hereof are in full force and effect, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor of Bank; 
(b)    Within sixty (60) days after the Effective Date, the Initial Audit with results satisfactory to Bank in its sole discretion; and
(c)    Within one hundred twenty (120) days after the Effective Date, evidence that all deposit and securities accounts of Borrower have been transferred to Bank.
		
	4
	CREATION OF SECURITY INTEREST  

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

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

If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash.  Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations) and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower.  In the event (x) all Obligations (other than inchoate indemnity obligations), except for Bank Services, are satisfied in full, and (y) this Agreement is terminated, Bank shall terminate the security interest granted herein upon Borrower providing cash collateral acceptable to Bank in its good faith business judgment for Bank Services, if any.  In the event such Bank Services consist of outstanding Letters of Credit, Borrower shall provide to Bank cash collateral in an amount equal to (x) if such Letters of Credit are denominated in Dollars, then at least one hundred five percent (105.0%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then at least one hundred ten percent (110.0%), of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its business judgment), to secure all of the Obligations relating  to such  Letters of Credit.
4.2    Priority of Security Interest.  Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have superior priority to Bank’s Lien under this Agreement).  If Borrower shall acquire a commercial tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Bank.
4.3    Authorization to File Financing Statements.  Borrower hereby authorizes Bank to file financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Bank under the Code.   Such financing statements may indicate the Collateral as set forth on Exhibit A attached hereto, or as being of an equal or lesser scope, or with greater detail, all in Bank’s reasonable discretion.
		
	5
	REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants as follows: 

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5.1    Due Organization, Authorization; Power and Authority.  Borrower is duly existing and in good standing as a Registered Organization in its jurisdiction of formation and is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its business or its ownership of property requires that it be qualified except where the failure to do so could not reasonably be expected to have a material adverse effect on Borrower’s business.  In connection with this Agreement, Borrower has delivered to Bank a completed certificate signed by Borrower, entitled “Perfection Certificate”.  Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete (it being understood and agreed that Borrower may from time to time update certain information in the Perfection Certificate after the Effective Date to the extent permitted by one or more specific provisions in this Agreement).  If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s organizational identification number.
The execution, delivery and performance by Borrower of the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) other than filings required by the Code, require any action by, filing, registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect), or (v) conflict with, contravene, constitute a default or breach under, or result in or permit the termination or acceleration of, any material agreement by which Borrower is bound.  Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to have a material adverse effect on Borrower’s business.  
5.2    Collateral.  Borrower has good title to, rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens.  Borrower has no Collateral Accounts at or with any bank or financial institution other than Bank or Bank’s Affiliates except for the Collateral Accounts described in the Perfection Certificate delivered to Bank in connection herewith and which Borrower has taken such actions as are necessary to give Bank a perfected security interest therein, pursuant to the term of Section 6.8(b).  The Accounts are bona fide, existing obligations of the Account Debtors.  

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The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate.  None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as permitted pursuant to Section 7.2.
All Inventory is in all material respects of good and marketable quality, free from material defects.
Borrower is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business and licenses permitted hereunder, (b) over-the-counter software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate.  Each Patent which it owns or purports to own and which is material to Borrower’s business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in part.  To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business.
Except as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.
5.3    Customer Accounts.  For any customer Account that generates Recurring Revenue, all statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing such customer Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower's Books are genuine and in all respects what they purport to be.  Borrower has no knowledge of any actual Insolvency Proceeding of any Account Debtor whose accounts are customer Accounts that generate Recurring Revenue.  To the best of Borrower’s knowledge, (i) all signatures and endorsements on all documents, instruments, and agreements relating to all customer Accounts are genuine, (ii) all such documents, instruments and agreements are legally enforceable in accordance with their terms, and (iii) there are no defenses, offsets, counterclaims or agreements for which the Account Debtor may claim any deduction or discount.  Borrower is the owner of and has the legal right to sell, transfer, assign and encumber each customer Account
5.4    Litigation.  There are no actions or proceedings pending or, to the knowledge of any Responsible Officer, threatened in writing by or against Borrower or any of its Subsidiaries involving more than, individually or in the aggregate, Two Hundred Fifty Thousand Dollars ($250,000) and which are not covered by or assumed by Borrower’s insurance carriers except as set forth in the Perfection Certificate delivered on the Effective Date (provided, that to the extent Borrower learns of the potential exposure with respect to such litigation matter described in the Perfection Certificate delivered on the Effective Date, Borrower shall comply in all respects with Section 6.2(i) hereof).
5.5    Financial Statements; Financial Condition.  All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects 

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Borrower’s consolidated financial condition and Borrower’s consolidated results of operations.  There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements submitted to Bank.
5.6    Solvency.  The fair salable value of Borrower’s consolidated assets (including goodwill minus disposition costs) exceeds the fair value of Borrower’s liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.
5.7    Regulatory Compliance.  Borrower is not an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act of 1940, as amended.  Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors).  Borrower (a) has complied in all material respects with all Requirements of Law, and (b) has not violated any Requirements of Law the violation of which could reasonably be expected to have a material adverse effect on its business.  None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary in disposing, producing, storing, treating, or transporting any hazardous substance other than legally.  Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all Government Authorities that are necessary to continue their respective businesses as currently conducted except for those, the lack of which, would not have a material adverse effect on Borrower’s business.
5.8    Subsidiaries; Investments.  Borrower does not own any stock, partnership, or other ownership interest or other equity securities except for Permitted Investments.  
5.9    Tax Returns and Payments; Pension Contributions.  Borrower has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except to the extent such taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor.  
To the extent Borrower defers payment of any contested taxes, Borrower shall (i) notify Bank in writing of the commencement of, and any material development in, the proceedings, and (ii) post bonds or take any other steps required to prevent the governmental authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien.”  To its knowledge, Borrower is unaware of any claims or adjustments proposed for any of Borrower's prior tax years which could result in additional taxes becoming due and payable by Borrower.  To the extent applicable to Borrower, Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

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5.10    Use of Proceeds.  Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business requirements and not for personal, family, household or agricultural purposes.
5.11    Full Disclosure.  No written representation, warranty or other statement of Borrower in any certificate or written statement given to Bank, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Bank, contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results).
5.12    Definition of “Knowledge.”  For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of any Responsible Officer.
		
	6
	AFFIRMATIVE COVENANTS

Borrower shall do all of the following:
6.1    Government Compliance.  
(a)    Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations.  Borrower shall comply, and have each Subsidiary comply, in all material respects, with all material laws, ordinances and regulations to which it is subject.
(b)    Obtain all of the Governmental Approvals necessary for the performance by Borrower of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Bank in all of its property.  Borrower shall promptly provide copies of any such obtained Governmental Approvals to Bank.
6.2    Financial Statements, Reports, Certificates.  Provide Bank with the following:
(a)    a Transaction Report which includes, among other things, Annualized Customer Retention Rate, Borrowing Base, Quarterly Churn and Recurring Revenue (and any schedules related thereto) (i) with each request for an Advance, and (ii) within thirty (30) days after the end of each month;
(b)    within thirty (30) days after the end of each month, (A) monthly accounts receivable agings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice date, and outstanding or held check registers, if any, and (C) monthly reconciliations of accounts 

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receivable agings (aged by invoice date), transaction reports, Deferred Revenue report, and general ledger;
(c)    as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated and consolidating balance sheet, cash flow and income statement covering Borrower’s and each of its Subsidiary’s operations for such month certified by a Responsible Officer and in a form acceptable to Bank (the “Monthly Financial Statements”);
(d)    within thirty (30) days after the last day of each month and together with the Monthly Financial Statements, a duly completed Compliance Certificate signed by a Responsible Officer, certifying that as of the end of such month, Borrower was in full compliance with all of the terms and conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Bank may reasonably request, including, without limitation, a statement that at the end of such month there were no held checks; 
(e)    within sixty (60) days after the end of each fiscal year of Borrower, (A) annual operating budgets (including income statements, balance sheets and cash flow statements, by month) for the then current fiscal year of Borrower, and (B) annual financial projections for the following fiscal year (on a quarterly basis) as approved by Borrower’s board of directors, together with any related business forecasts used in the preparation of such annual financial projections; 
(f)    as soon as available, and in any event within one hundred fifty (150) days following the end of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm reasonably acceptable to Bank;
(g)    in the event that Borrower becomes subject to the reporting requirements under the Exchange Act within five (5) days of filing, copies of all periodic and other reports, proxy statements and other materials filed by Borrower with the SEC, any Governmental Authority succeeding to any or all of the functions of the SEC or with any national securities exchange, or distributed to its shareholders, as the case may be.  Documents required to be delivered pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the Internet at Borrower’s website address; provided, however, Borrower shall promptly notify Bank in writing (which may be by electronic mail) of the posting of any such documents;
(h)    within five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s equity security holders or to any holders of Subordinated Debt;
(i)    prompt report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, Two Hundred Fifty Thousand Dollars ($250,000) 

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or more and which are not covered by Borrower’s insurance policies or the defense of which is assumed by Borrower’s insurance carriers; and
(j)    other financial information reasonably requested by Bank.
6.3    Accounts Receivable.
(a)    Schedules and Documents Relating to Accounts.  Borrower shall deliver to Bank transaction reports and schedules of collections, as provided in Section 6.2, on Bank’s standard forms; provided, however, that Borrower’s failure to execute and deliver the same shall not affect or limit Bank’s Lien and other rights in all of Borrower’s Accounts, nor shall Bank’s failure to advance or lend against a specific Account affect or limit Bank’s Lien and other rights therein.  If requested by Bank in writing and without causing extraordinary expense and interference with Borrower’s daily operations and business, Borrower shall furnish Bank with copies of all contracts, orders, invoices, and other similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for any goods the sale or disposition of which gave rise to such Accounts.  In addition, Borrower shall deliver to Bank, on its written request, the originals of all instruments, chattel paper, security agreements, guarantees and other documents and property evidencing or securing any Accounts, in the same form as received, with all necessary indorsements, and copies of all credit memos. 
(b)    Disputes.  Borrower shall promptly notify Bank of all disputes or claims, equal to or greater than $50,000 in any one instance or $100,000 in the aggregate for all such disputes or claims, relating to Accounts.  Borrower may forgive (completely or partially), compromise, or settle any Account for less than payment in full, or agree to do any of the foregoing so long as (i) Borrower does so in good faith, in a commercially reasonable manner, in the ordinary course of business, in arm’s-length transactions, and reports the same to Bank in the regular reports provided to Bank; (ii) no Default or Event of Default has occurred and is continuing; and (iii) after taking into account all such discounts, settlements and forgiveness, the total outstanding Advances will not exceed the lesser of the Revolving Line or the Borrowing Base.  
(c)    Collection of Accounts.  Borrower shall have the right to collect all Accounts, unless and until a Default or an Event of Default has occurred and is continuing.  Bank shall require that Borrower direct Account Debtors to deliver or transmit all proceeds of Accounts into a lockbox account, or such other “blocked account” as specified by Bank (either such account, the “Cash Collateral Account”), pursuant to a blocked account agreement in form and substance satisfactory to Bank.  Whether or not an Event of Default has occurred and is continuing, Borrower shall immediately deliver all payments on and proceeds of Accounts to the Cash Collateral Account.  Such payments and proceeds shall be (X) prior to the occurrence and continuance of an Event of Default, (i) transferred to an account of Borrower at Bank or (ii) at Borrower’s discretion, applied to reduce the Obligations, or (Y) following the occurrence and continuance of an Event of Default, applied pursuant to Section 9.4. 
(d)    Returns.  Provided no Event of Default has occurred and is continuing, if any Account Debtor returns any Inventory to Borrower, Borrower shall promptly (i) determine the reason for such return, (ii) issue a credit memorandum to the Account Debtor in the appropriate 

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amount, and (iii) provide a copy of such credit memorandum to Bank, upon request from Bank.  In the event any attempted return occurs after the occurrence and during the continuance of any Event of Default, Borrower shall hold the returned Inventory in trust for Bank, and immediately notify Bank of the return of the Inventory.  
(e)    Verification.  So long as no Event of Default has occurred and is continuing, Bank may verify directly with the respective Account Debtors the validity, amount and other matters relating to the Accounts, either in the name of Borrower or Bank or such other name as Bank may choose, and upon the occurrence and during the continuance of an Event of Default, notify any Account Debtor of Bank’s security interest in such Account.
(f)    No Liability.  Bank shall not be responsible or liable for any shortage or discrepancy in, damage to, or loss or destruction of, any goods, the sale or other disposition of which gives rise to an Account, or for any error, act, omission, or delay of any kind occurring in the settlement, failure to settle, collection or failure to collect any Account, or for settling any Account in good faith for less than the full amount thereof, nor shall Bank be deemed to be responsible for any of Borrower's obligations under any contract or agreement giving rise to an Account.  Nothing herein shall, however, relieve Bank from liability for its own gross negligence or willful misconduct.
6.4    Remittance of Proceeds.  Except as otherwise provided in Section 6.3(c), deliver, in kind, all proceeds arising from the disposition of any Collateral to Bank in the original form in which received by Borrower not later than the following Business Day after receipt by Borrower, to be applied to the Obligations (a) prior to an Event of Default, pursuant to the terms of Section 2.6(b) hereof, and (b) after the occurrence and during the continuance of an Event of Default, pursuant to the terms of Section 9.4 hereof; provided that, if no Event of Default has occurred and is continuing, Borrower shall not be obligated to remit to Bank the proceeds of the sale of worn out or obsolete Equipment disposed of by Borrower in good faith in an arm’s length transaction for an aggregate purchase price of Two Hundred Fifty Thousand Dollars ($250,000) or less (for all such transactions in any fiscal year).  Borrower agrees that it will not commingle proceeds of Collateral with any of Borrower’s other funds or property, but will hold such proceeds separate and apart from such other funds and property and in an express trust for Bank.  Nothing in this Section limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement.
6.5    Taxes; Pensions.  Timely file, and require each of its Subsidiaries to timely file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each of its Subsidiaries, except for deferred payment of any taxes contested pursuant to the terms of Section 5.9 hereof, and shall deliver to Bank, on written demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms.
6.6    Access to Collateral; Books and Records.  At reasonable times, on three (3) Business Days’ notice (provided no notice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right to inspect the Collateral and the right to audit and copy Borrower’s Books.  The foregoing inspections and audits shall be conducted at Borrower’s expense and no more often than once every twelve (12) months unless an Event of Default has 

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occurred and is continuing in which case such inspections and audits shall occur as often as Bank shall determine is necessary.  The charge therefor shall be $850 per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses actually incurred.  In the event Borrower and Bank schedule an audit more than ten (10) days in advance, and Borrower cancels or reschedules the audit with less than ten (10) days written notice to Bank, then (without limiting any of Bank’s rights or remedies) Borrower shall pay Bank a fee of $1,000 plus any out-of-pocket expenses actually incurred by Bank to compensate Bank for the costs and expenses of the cancellation or rescheduling.
6.7    Insurance.  
(a)    Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Bank may reasonably request.  Insurance policies shall be in a form, with financially sound and reputable insurance companies that are not Affiliates of Borrower, and in amounts that are satisfactory to Bank.  All property policies shall have a lender’s loss payable endorsement showing Bank as the sole lender loss payee.  All liability policies shall show, or have endorsements showing, Bank as an additional insured.  Bank shall be named as lender loss payee and/or additional insured with respect to any such insurance providing coverage in respect of any Collateral. 
(b)    Ensure that proceeds payable under any property policy are, at Bank’s option, payable to Bank on account of the Obligations.  
(c)    At Bank’s request, Borrower shall deliver certified copies of insurance policies and evidence of all premium payments.  Each provider of any such insurance required under this Section 6.7 shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to Bank, that it will give Bank thirty (30) days prior written notice before any such policy or policies shall be materially altered or canceled.  If Borrower fails to obtain insurance as required under this Section 6.7 or to pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.7, and take any action under the policies Bank deems prudent.
6.8    Operating Accounts.
(a)    Maintain all of its operating and other deposit accounts and securities accounts with Bank and Bank’s Affiliates.  Notwithstanding the foregoing, Borrower shall have one hundred twenty (120) days after the Effective Date to transition to Bank all of its accounts at other financial institutions.   
(b)    Provide Bank five (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution other than Bank or Bank’s Affiliates. For each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution (other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder which Control Agreement may not be terminated without the prior written consent of 

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Bank.  The provisions of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes, and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such.
6.9    Financial Covenants.  Maintain at all times, subject to periodic reporting, with respect to Borrower:
(a)    Liquidity.  Liquidity of not less than Five Million Dollars ($5,000,000), tested monthly on the last day of each month.
(b)    Minimum Recurring Revenue.  As of the last day of each quarter on a trailing three (3) month basis, Borrower’s Recurring Revenue for such quarter shall not be less than the greater of (i) eighty percent (80%) of Borrower’s Recurring Revenue for such quarter as outlined in Borrower’s business plan approved by its board of directors or (ii) Borrower’s Recurring Revenue for the prior quarter.
6.10    Protection of Intellectual Property Rights.  

(a)    (i) Protect, defend and maintain the validity and enforceability of its Intellectual Property; (ii) promptly advise Bank in writing of material infringements or any other event that could reasonably be expected to materially and adversely affect the value of its Intellectual Property; and (iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent.  
(b)    Provide written notice to Bank within ten (10) days of entering or becoming bound by any Restricted License (other than over-the-counter software that is commercially available to the public).  Borrower shall take such steps as Bank requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.
6.11    Litigation Cooperation.  From the date hereof and continuing through the termination of this Agreement, make available to Bank, without expense to Bank, Borrower and its officers and employees and Borrower's books and records, to the extent that Bank may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower.
6.12    Formation or Acquisition of Subsidiaries.  Notwithstanding and without limiting the negative covenants contained in Sections 7.3 and 7.7 hereof, at the time that Borrower forms any direct or indirect Subsidiary or acquires any direct or indirect Subsidiary after the Effective Date, Borrower shall (a) cause such new Subsidiary to provide to Bank a joinder to the Loan Agreement to cause such Subsidiary to become a co-borrower hereunder, together with such appropriate financing statements and/or Control Agreements, all in form and substance satisfactory 

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to Bank (including being sufficient to grant Bank a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary), (b) provide to Bank appropriate certificates and powers and financing statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary, in form and substance satisfactory to Bank; and (c) provide to Bank all other documentation in form and substance satisfactory to Bank, including one or more opinions of counsel satisfactory to Bank, which in its opinion is appropriate with respect to the execution and delivery of the applicable documentation referred to above.  Any document, agreement, or instrument executed or issued pursuant to this Section 6.12 shall be a Loan Document.
6.13    Further Assurances.  Execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s Lien in the Collateral or to effect the purposes of this Agreement.  Deliver to Bank, within five (5) days after the same are sent or received, copies of all correspondence, reports, documents and other filings with any Governmental Authority (i) regarding compliance with or maintenance of Governmental Approvals or Requirements of Law material to the Borrower’s business or (ii) that could reasonably be expected to have a material adverse effect on the operations of Borrower or any of its Subsidiaries.
		
	7
	NEGATIVE COVENANTS

Borrower shall not do any of the following without Bank’s prior written consent:
7.1    Dispositions.  Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment that is, in the reasonable judgment of Borrower, no longer economically practicable to maintain or useful in the ordinary course of business of Borrower; (c) consisting of Permitted Liens and Permitted Investments; (d) consisting of the sale or issuance of any stock of Borrower permitted under Section 7.2 of this Agreement; and (e) consisting of Borrower’s use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents.
7.2    Changes in Business, Management, Ownership, or Business Locations.  (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) fail to provide notice to Bank of any Key Person departing from or ceasing to be employed by Borrower within five (5) days after such Key Person’s departure from Borrower; or (ii) enter into any transaction or series of related transactions in which the stockholders of Borrower who were not stockholders immediately prior to the first such transaction own more than forty percent (40%) of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions, including, without limitation, in connection with the sale of Borrower’s equity securities in a public offering (other than by the sale of Borrower’s equity securities to venture capital or private equity investors so long as Borrower identifies to Bank the venture capital or private equity investors at least seven (7) Business Days prior to the consummation of any such transaction and provides to Bank a description of the material terms of the transaction. 

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Except as set forth in the last sentence of this paragraph, Borrower shall not, without at least thirty (30) days prior written notice to Bank: (1) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than One Hundred Thousand Dollars ($100,000) in Borrower’s assets or property) or deliver any portion of the Collateral valued, individually or in the aggregate, in excess of One Hundred Thousand Dollars ($100,000) to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificate, (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization.  If Borrower intends to deliver any portion of the Collateral valued, individually or in the aggregate, in excess of One Hundred Thousand Dollars ($100,000) to a bailee, and Bank and such bailee are not already parties to a bailee agreement governing both the Collateral and the location to which Borrower intends to deliver the Collateral, then Borrower will first receive the written consent of Bank, and such bailee shall execute and deliver a bailee agreement in form and substance satisfactory to Bank.  Notwithstanding the requirements of this section to give at least thirty (30) days prior written notice to Bank with respect to (i) a change in jurisdiction of organization, (ii) change in organizational structure or type, or (iii) change in any organizational number (if any) assigned by its jurisdiction of organization, Workiva shall provide Bank at least five (5) days prior written notice with respect to all changes stated in (i), (ii) or (iii) of this sentence in connection with Workiva’s change in its jurisdiction of organization from California to Delaware and any subsequent change in Workiva’s organizational type from a limited liability company to a corporation, and promptly thereafter provide Bank with copies of any revised or amended Operating Documents of Workiva.
7.3    Mergers or Acquisitions.  Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person (including, without limitation, by the formation of any Subsidiary).  A Subsidiary may merge or consolidate into another Subsidiary or into Borrower.
7.4    Indebtedness.  Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.
7.5    Encumbrance.  Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the first priority security interest granted herein, or enter into any agreement, document, instrument or other arrangement (except with or in favor of Bank) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or any Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein.
7.6    Maintenance of Collateral Accounts.  Maintain any Collateral Account except pursuant to the terms of Section 6.8(b) hereof.

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7.7    Distributions; Investments.  (a) Pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock provided that (i) Borrower may pay dividends solely in common stock, (ii) any Subsidiary (foreign or domestic) may make dividends or distributions to Borrower, and (iii) Borrower may make advances to each of its shareholders or members (collectively, the “Shareholder Advances”) in an amount sufficient to cover that shareholder’s actual tax liability due and payable as a result of income of Borrower attributed to the shareholder or member during any period that Borrower is eligible for taxation as a corporation under Subchapter S of the Internal Revenue Code; provided, however, that no Shareholder Advances may be made if, at the time or as a result thereof, an Event of Default could occur; or (b) directly or indirectly make any Investment (including, without limitation, by the formation of any Subsidiary) other than Permitted Investments, or permit any of its Subsidiaries to do so.
7.8    Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower, except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person.
7.9    Subordinated Debt.  (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof, provide for earlier or greater principal, interest, or other payments thereon, or adversely affect the subordination thereof to Obligations owed to Bank.
7.10    Compliance.  Become an “investment company” or a company controlled by an “investment company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.
		
	8
	EVENTS OF DEFAULT

Any one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:
8.1    Payment Default.  Borrower fails to (a) make any payment of principal or interest on any Credit Extension when due, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day cure period shall not 

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apply to payments due on the Revolving Line Maturity Date).  During the cure period, the failure to make or pay any payment specified under clause (b) hereunder is not an Event of Default (but no Credit Extension will be made during the cure period);
8.2    Covenant Default.  
(a)    Borrower fails or neglects to perform any obligation in Sections 6.2, 6.5, 6.7, 6.8, 6.9, 6.10(b), 6.12, 6.13 or violates any covenant in Section 7; or
(b)    Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period).  Cure periods provided under this section shall not apply, among other things, to financial covenants or any other covenants set forth in clause (a) above;
8.3    Material Adverse Change.  A Material Adverse Change occurs;
8.4    Attachment; Levy; Restraint on Business.  
(a) (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any entity under the control of Borrower (including a Subsidiary), or (ii) a notice of lien or levy is filed against any of Borrower’s assets by any Governmental Authority, and the same under subclauses (i) and (ii) hereof are not, within thirty (30) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any thirty (30) day cure period; or 
(b) (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver and Borrower has not vacated, discharged, stayed or bonded such action within ten (10) days, or (ii) any court order enjoins, restrains, or prevents Borrower from conducting all or any material part of its business and such court order is not dismissed or stayed within ten (10) days;
8.5    Insolvency.  (a) If Bank determines in good faith based on objective information that Borrower or any of its Subsidiaries is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower or any of its Subsidiaries and is not dismissed or stayed within thirty (30) days (but no Credit Extensions shall be made while any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed);

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8.6    Other Agreements.  There is, under any agreement to which Borrower is a party with a third party or parties, (a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount individually or in the aggregate in excess of Two Hundred Fifty Thousand Dollars ($250,000); or (b) any breach or default by Borrower, the result of which could result in a Material Adverse Change; 
8.7    Judgments; Penalties.  One or more fines, penalties or final judgments, orders or decrees for the payment of money in an amount, individually or in the aggregate, of at least Two Hundred Fifty Thousand Dollars ($250,000) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower by any Governmental Authority, and the same are not, within forty-five (45) days after the entry, assessment or issuance thereof, discharged, satisfied, or paid, or after execution thereof, stayed or bonded pending appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that no Credit Extensions will be made prior to the satisfaction, payment, discharge, stay, or bonding of such fine, penalty, judgment, order or decree);
8.8    Misrepresentations.  Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such representation, warranty, or other statement proves to have been false or misleading in any material respect on or as of the date made or deemed made;
8.9    Subordinated Debt.  Any document, instrument, or agreement evidencing any Subordinated Debt shall for any reason be revoked or invalidated or otherwise cease to be in full force and effect, any Person shall be in breach thereof or contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement; or
8.10    Governmental Approvals.  Any material Governmental Approval shall have been (a) revoked, rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Authority that designates a hearing with respect to any applications for renewal of any of such Governmental Approval or that could result in the Governmental Authority taking any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension, modification or non-renewal (i) cause, or could reasonably be expected to cause, a Material Adverse Change, or (ii) adversely affects the legal qualifications of Borrower or any of its Subsidiaries to hold such Governmental Approval in any applicable jurisdiction and such revocation, rescission, suspension, modification or non-renewal could reasonably be expected to affect the status of or legal qualifications of Borrower or any of its Subsidiaries to hold any Governmental Approval in any other jurisdiction and such change in status or legal qualification could reasonably be expected to cause a Material Adverse Change.
		
	9
	BANK’S RIGHTS AND REMEDIES

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

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(a)    declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank);
(b)    stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Bank;
(c)    demand that Borrower (i) deposit cash with Bank in an amount equal to at least 105% (110% for Letters of Credit denominated in a Foreign Currency) of the Dollar Equivalent of the aggregate face amount of all Letters of Credit remaining undrawn (plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment)), to secure all of the Obligations relating to such Letters of Credit, as collateral security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit;
(d)    terminate any FX Contracts;
(e)    verify the amount of, demand payment of and performance under, and collect any Accounts and General Intangibles, settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Bank considers advisable, and notify any Person owing Borrower money of Bank’s security interest in such funds;  
(f)    make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral.  Borrower shall assemble the Collateral if Bank requests and make it available as Bank designates.  Bank may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies;
(g)    apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or for the credit or the account of Borrower;
(h)    ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral.  Bank is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, Patents, Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit;
(i)    place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;

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(j)    demand and receive possession of Borrower’s Books; and
(k)    exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof).
9.2    Power of Attorney.  Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact, exercisable upon the occurrence and during the continuance of an Event of Default, to:  (a) endorse Borrower’s name on any checks or other forms of payment or security; (b) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Bank determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Bank or a third party as the Code permits.  Borrower hereby appoints Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations have been satisfied in full and Bank is under no further obligation to make Credit Extensions hereunder.  Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an interest, are irrevocable until all Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions terminates.
9.3    Protective Payments.  If Borrower fails to obtain the insurance called for by Section 6.7 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document or which may be required to preserve the Collateral, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest rate applicable to the Obligations, and secured by the Collateral.  Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter.  No payments by Bank are deemed an agreement to make similar payments in the future or Bank’s waiver of any Event of Default.
9.4    Application of Payments and Proceeds.  If an Event of Default has occurred and is continuing, Bank shall have the right to apply in any order any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations.  Bank shall pay any surplus to Borrower by credit to the Designated Deposit Account or to other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency.  If Bank, directly or indirectly, enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor.
9.5    Bank’s Liability for Collateral.  So long as Bank complies with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Bank, 

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Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person.  Borrower bears all risk of loss, damage or destruction of the Collateral.
9.6    No Waiver; Remedies Cumulative.  Bank’s failure, at any time or times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith.  No waiver hereunder shall be effective unless signed by the party granting the waiver and then is only effective for the specific instance and purpose for which it is given.  Bank’s rights and remedies under this Agreement and the other Loan Documents are cumulative.  Bank has all rights and remedies provided under the Code, by law, or in equity.  Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy under this Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event of Default is not a continuing waiver.  Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence.  
9.7    Demand Waiver.  Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable.
9.8    Borrower Liability.  Either Borrower may, acting singly, request Advances hereunder.  Each Borrower hereby appoints the other as agent for the other for all purposes hereunder, including with respect to requesting Advances hereunder.  Each Borrower hereunder shall be jointly and severally obligated to repay all Advances made hereunder, regardless of which Borrower actually receives said Advance, as if each Borrower hereunder directly received all Advances.  Each Borrower waives (a) any suretyship defenses available to it under the Code or any other applicable law, and (b) any right to require Bank to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy.  Bank may exercise or not exercise any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower’s liability.  Notwithstanding any other provision of this Agreement or other related document, each Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Bank under this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise.  Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void.  If any payment is made to a Borrower in contravention of this Section, such Borrower shall hold such payment in trust for Bank and such payment shall be promptly delivered to Bank for application to the Obligations, whether matured or unmatured.

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	10
	NOTICES

All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below.  Bank or Borrower may change its mailing or electronic mail address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10. 
	
			
	If to Borrower:
	 
	Workiva LLC    
55 West Monroe Street, Suite 3490    
Chicago, Illinois 60603
Attn:  Stuart Miller, Chief Financial Officer    
Email: stuart.miller@workiva.com

	 
	 
	 

	with a copy to:
	 
	Workiva LLC 
2900 University Boulevard 
Ames, Iowa 50010 
Attn:  Jill Klindt 
Email: jill.klindt@workiva.com 

	 
	 
	 

	If to Bank:
	 
	Silicon Valley Bank  
380 Interlocken Crescent, Suite             
Broomfield, Colorado 80021 
Attn:  Jay Wefel 
Fax:  (303) 469-4934 
Email: jwefel@svb.com       

	 
	 
	 

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

		
	11
	CHOICE OF LAW, VENUE, JURY TRIAL WAIVER

Except as otherwise expressly provided in any of the Loan Documents, New York law governs the Loan Documents without regard to principles of conflicts of law.  Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in New York; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other 

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security for the Obligations, or to enforce a judgment or other court order in favor of Bank.  Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court.  Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth in Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
This Section 11 shall survive the termination of this Agreement.
		
	12
	GENERAL PROVISIONS

12.1    Termination Prior to Revolving Line Maturity Date; Survival.  All covenants, representations and warranties made in this Agreement shall continue in full force until this Agreement has terminated pursuant to its terms and all Obligations have been satisfied.  So long as Borrower has satisfied the Obligations (other than inchoate indemnity obligations, any other obligations which, by their terms, are to survive the termination of this Agreement, and any Obligations under Bank Services Agreements that are cash collateralized in accordance with Section 4.1 of this Agreement), this Agreement may be terminated prior to the Revolving Line Maturity Date by Borrower, effective three (3) Business Days after written notice of termination is given to Bank.  Those obligations that are expressly specified in this Agreement as surviving this Agreement’s termination shall continue to survive notwithstanding this Agreement’s termination. 
12.2    Successors and Assigns.  This Agreement binds and is for the benefit of the successors and permitted assigns of each party.  Borrower may not assign this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be granted or withheld in Bank’s discretion).  Bank has the right, without the consent of or notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents. 
12.3    Indemnification.  Borrower agrees to indemnify, defend and hold Bank and its directors, officers, employees, agents, attorneys, or any other Person affiliated with or representing Bank (each, an “Indemnified Person”) harmless against:  (i) all obligations, demands, claims, and liabilities (collectively, “Claims”) claimed or asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (ii) all losses or expenses (including Bank 

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Expenses) in any way suffered, incurred, or paid by such Indemnified Person as a result of, following from, consequential to, or arising from transactions between Bank and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful misconduct.
This Section 12.3 shall survive until all statutes of limitation with respect to the Claims, losses, and expenses for which indemnity is given shall have run.
12.4    Time of Essence.  Time is of the essence for the performance of all Obligations in this Agreement.
12.5    Severability of Provisions.  Each provision of this Agreement is severable from every other provision in determining the enforceability of any provision.
12.6    Correction of Loan Documents.  Bank may correct patent errors and fill in any blanks in the Loan Documents consistent with the agreement of the parties.
12.7    Amendments in Writing; Waiver; Integration.  No purported amendment or modification of any Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, shall be enforceable or admissible unless, and only to the extent, expressly set forth in a writing signed by the party against which enforcement or admission is sought.  Without limiting the generality of the foregoing, no oral promise or statement, nor any action, inaction, delay, failure to require performance or course of conduct shall operate as, or evidence, an amendment, supplement or waiver or have any other effect on any Loan Document.  Any waiver granted shall be limited to the specific circumstance expressly described in it, and shall not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or evidence, any obligation or commitment to grant any further waiver.  The Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of the Loan Documents merge into the Loan Documents.
12.8    Counterparts.  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement.
12.9    Confidentiality.  In handling any confidential information, Bank shall exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates (such Subsidiaries and Affiliates, together with Bank, collectively, “Bank Entities”); (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall use commercially reasonable efforts to obtain any prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection with Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies under the Loan Documents; and (f) to third-party service providers of Bank so long as such service providers have executed a confidentiality agreement with Bank with terms no less restrictive than those contained herein.  Confidential information does not include information 

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that is either: (i) in the public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public domain (other than as a result of its disclosure by Bank in violation of this Agreement) after disclosure to Bank; or (ii) disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information.
Bank Entities may use confidential information for the development of secure databases, reporting purposes, and market analysis so long as such confidential information is aggregated and anonymized prior to distribution unless otherwise expressly permitted by Borrower.  The provisions of the immediately preceding sentence shall survive the termination of this Agreement.
12.10    Attorneys’ Fees, Costs and Expenses.  In any action or proceeding between Borrower and Bank arising out of or relating to the Loan Documents, the Bank shall be entitled to recover its reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which it may be entitled.
12.11    Electronic Execution of Documents.  The words “execution,” “signed,” “signature” and words of like import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act.
(a)    Right of Setoff.   Borrower hereby grants to Bank a Lien and a right of setoff as security for all Obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under the control of Bank (including a subsidiary of Bank) or in transit to any of them.  The provisions of the previous sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes, and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such.  At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Bank may setoff the same or any part thereof and apply the same to any liability or Obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations.  ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
12.12    Captions.  The headings used in this Agreement are for convenience only and shall not affect the interpretation of this Agreement.
12.13    Construction of Agreement.  The parties mutually acknowledge that they and their attorneys have participated in the preparation and negotiation of this Agreement.  In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the uncertainty to exist.

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12.14    Relationship.  The relationship of the parties to this Agreement is determined solely by the provisions of this Agreement.  The parties do not intend to create any agency, partnership, joint venture, trust, fiduciary or other relationship with duties or incidents different from those of parties to an arm’s-length contract.
12.15    Third Parties.  Nothing in this Agreement, whether express or implied, is intended to: (a) confer any benefits, rights or remedies under or by reason of this Agreement on any persons other than the express parties to it and their respective permitted successors and assigns; (b) relieve or discharge the obligation or liability of any person not an express party to this Agreement; or (c) give any person not an express party to this Agreement any right of subrogation or action against any party to this Agreement.
		
	13
	DEFINITIONS

13.1    Definitions.  As used in the Loan Documents, the word “shall” is mandatory, the word “may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting, and the singular includes the plural.  As used in this Agreement, the following capitalized terms have the following meanings:
“Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to Borrower.
“Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter be made.
“Advance” or “Advances” means a revolving credit loan (or revolving credit loans) under the Revolving Line.
“Affiliate” is, with respect to any Person, each other Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.
“Agreement” is defined in the preamble hereof.
“Authorized Signer” is any individual listed in Borrower’s Borrowing Resolution who is authorized to execute the Loan Documents, including any Advance request, on behalf of Borrower.
“Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base minus (b) the outstanding principal balance of any Advances minus (c) the aggregate Dollar Equivalent amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit) plus an amount equal to the Letter of Credit Reserve.
The following definitions are utilized in calculating and determining the Availability Amount:

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“Advance Rate” is four hundred percent (400%); provided, that Bank may reduce the foregoing Advance Rate in consultation with Borrower based on events or conditions as determined by Bank, in its reasonable discretion.
“Annualized Customer Retention Rate” is a percentage equal to the sum of (a) one hundred percent (100%) minus (b) the product of (i) Quarterly Churn multiplied by (ii) four (4).
“Borrowing Base” is the product of (i) Advance Rate, multiplied by (ii) Annualized Customer Retention Rate, multiplied by (iii) the most recent month’s Recurring Revenue.
“Quarterly Churn” is the number of Recurring Revenue clients lost in the most recent quarter due to customer attrition divided by the number of Recurring Revenue from the last day of the prior quarter.  The Quarterly Churn shall be calculated by Bank based on information provided by Borrower and acceptable to Bank, in its reasonable discretion. 
“Recurring Revenue” is, for any calendar month, the software license and subscription rental revenue of Borrower received from customer contracts in the ordinary course of Borrower’s business, in each case determined in accordance with GAAP and specifically excluding revenue or accounts receivable based on (i) sales of inventory, goods or equipment, (ii) transaction revenue not received in the ordinary course of business, (iii) sales of services not in the ordinary course of business, (iv) revenue received due to one-time, non-recurring transactions, (v) add-on purchases by Borrower’s existing clients not resulting in a continuing stream of revenue, (vi) non-recurring, non-continuous or irregular sources of revenue (including, without limitation, non-recurring set-up fees, etc.) and (vii) such other exclusions as Bank shall determine, in its reasonable discretion and after consultation with Borrower.
For example, if the Borrower ends the first quarter with 1,000 Recurring Revenue clients and then lost 20 Recurring Revenue clients in the second quarter, Quarterly Churn would equal 2%.  As such, the Annualized Customer Retention Rate would be 92% (100% minus (2% multiplied by 4)).  The Availability Amount for the next quarter would be the lesser of the Revolving Line or (400% multiplied by .92 multiplied by the most recent month’s Recurring Revenue), less all outstanding Advances. 
“Bank” is defined in the preamble hereof.
“Bank Entities” is defined in Section 12.9. 
“Bank Expenses” are all reasonable and actually incurred audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower.

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“Bank Services”  are any products, credit services, and/or financial accommodations previously, now, or hereafter provided to Borrower or any of its Subsidiaries by Bank or any Bank Affiliate, including, without limitation, any letters of credit, cash management services (including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s various agreements related thereto (each, a “Bank Services Agreement”).
“Borrower” is defined in the preamble hereof.
“Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information.
“Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such Person’s board of directors (and, if required under the terms of such Person’s Operating Documents, members) and delivered by such Person to Bank approving the Loan Documents to which such Person is a party and the transactions contemplated thereby, together with a certificate executed by its secretary on behalf of such Person certifying (a) such Person has the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party, (b) that set forth as a part of or attached as an exhibit to such certificate is a true, correct, and complete copy of the resolutions then in full force and effect authorizing and ratifying the execution, delivery, and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents, including any Advance request, on behalf of such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such Person shall have delivered to Bank a further certificate canceling or amending such prior certificate.
“Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.
“Cash Collateral Account” is defined in Section 6.3(c).
“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue; and (d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition.
“Claims” is defined in Section 12.3.
“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of New York; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9 

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shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A.
“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.
“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made.
“Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit B.
“Contingent Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation, in each case, directly or indirectly guaranteed, endorsed, co‐made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the ordinary course of business.  The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement.
“Control Agreement” is any control agreement entered into among the depository institution at which Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity Account.
“Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.
“Credit Extension” is any Advance, any Overadvance, Letter of Credit, FX Contract, amount utilized for cash management services, or any other extension of credit by Bank for Borrower’s benefit.

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“Currency” is coined money and such other banknotes or other paper money as are authorized by law and circulate as a medium of exchange.
“Default” means any event which with notice or passage of time or both, would constitute an Event of Default.
“Default Rate” is defined in Section 2.4(b).
“Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.
“Designated Deposit Account” is the multicurrency account denominated in Dollars, account number _____________, maintained by Borrower with Bank.
“Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and not any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United States.
“Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign Currency.
“Effective Date” is defined in the preamble hereof.
“Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing.
“ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations.
“Event of Default” is defined in Section 8.
“Exchange Act” is the Securities Exchange Act of 1934, as amended.
“Foreign Currency” means lawful money of a country other than the United States.
“Funding Date” is any date on which a Credit Extension is made to or for the account of Borrower which shall be a Business Day.
“FX Contract” is any foreign exchange contract by and between Borrower and Bank under which Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency on a specified date.
“GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination.
“General Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without 

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limitation, all Intellectual Property, claims, income and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.
“Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.
“Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.
“Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations.
“Indemnified Person” is defined in Section 12.3.
“Initial Audit” is Bank’s inspection of Borrower’s Accounts, the Collateral, and Borrower’s Books, with results satisfactory to Bank in its sole and absolute discretion.
“Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief.
“Intellectual Property” means, with respect to any Person, means all of such Person’s right, title, and interest in and to the following:

(a)its Copyrights, Trademarks and Patents; 
(b)any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how and operating manuals;
(c)any and all source code;
(d)any and all design rights which may be available to such Person;
(e)any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and
(f)all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.

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“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.
“Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person.
“Key Person” is each of Borrower’s (a) Chief Executive Officer, who is Matthew Rizai as of the Effective Date, (b) Chief Financial Officer, who is Stuart Miller as of the Effective Date, and (c) Chief Operating Officer, who is Martin Vanderploeg as of the Effective Date.
“Letter of Credit” means a standby letter of credit issued by Bank or another institution based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set forth in Section 2.2.2.
“Letter of Credit Application” is defined in Section 2.2.2(b).
“Letter of Credit Reserve” has the meaning set forth in Section 2.2.2(e).
 “Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against any property.
“Liquidity” is, at any time, the sum of (a) (i) from the Effective Date through the date that is one hundred twenty (120) days after the Effective Date, the aggregate amount of unrestricted cash and Cash Equivalents held at such time by Borrower and (ii) thereafter, the aggregate amount of unrestricted cash and Cash Equivalents held at such time by Borrower in Deposit Accounts or Securities Accounts maintained with Bank or its Affiliates or in Deposit Accounts or Securities Accounts subject to Control Agreements in favor of Bank, and (b) the Availability Amount.  
“Loan Documents” are, collectively, this Agreement and any schedules, exhibits, certificates, notices, and any other documents related to this Agreement, any Bank Services Agreement, any subordination agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement by Borrower and/or any Guarantor with or for the benefit of Bank in connection with this Agreement or Bank Services, all as amended, restated, or otherwise modified.
“Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; (c) a material impairment of the prospect of repayment of any portion of the Obligations; or (d) Bank determines, based upon information available to it and in its reasonable judgment, that there is a reasonable likelihood that Borrower shall fail to comply with one or more of the financial covenants in Section 6 during the next succeeding financial reporting period.
“Monthly Financial Statements” is defined in Section 6.2(c).

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“Obligations” are Borrower’s obligations to pay when due any debts, principal, interest, fees, Bank Expenses, and other amounts Borrower owes Bank now or later, whether under this Agreement, the other Loan Documents, or otherwise, including, without limitation, all obligations relating to Letters of Credit (including reimbursement obligations for drawn and undrawn Letters of Credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and to perform Borrower’s duties under the Loan Documents.
“Operating Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.
“Overadvance” is defined in Section 2.3.
“Patents” means all patents, patent applications and like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.
“Perfection Certificate” is defined in Section 5.1.
“Permitted Indebtedness” is:
(a)Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents;
(b)Indebtedness existing on the Effective Date and shown on the Perfection Certificate;
(c)Subordinated Debt;
(d)unsecured Indebtedness to trade creditors incurred in the ordinary course of business; 
(e)Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;
(f)Indebtedness secured by Liens permitted under clauses (a) and (c) of the definition of “Permitted Liens” hereunder; 
(g)Indebtedness of Borrower owed to Bankers Trust and Morgan Stanley under letters of credit existing as of the Effective Date issued by such financial institutions in an aggregate amount not to exceed Four Hundred Twenty Six Thousand Dollars ($426,000); 
(h)extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (g) above, provided that the principal 

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amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.
“Permitted Investments” are:
(a)Investments (including, without limitation, Subsidiaries) existing on the Effective Date and shown on the Perfection Certificate;
(b)Investments consisting of Cash Equivalents;
(c)Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of Borrower;
(d)Investments consisting of deposit accounts in which Bank has a perfected security interest; 
(e)Investments accepted in connection with Transfers permitted by Section 7.1;
(f)Investments consisting of the creation of a Subsidiary for the purpose of consummating a merger transaction permitted by Section 7.3 of this Agreement, which is otherwise a Permitted Investment;
(g)Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors;
(h)Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business; and
(i)Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (i) shall not apply to Investments of Borrower in any Subsidiary.
“Permitted Liens” are:
(a)Liens existing on the Effective Date and shown on the Perfection Certificate or arising under this Agreement and the other Loan Documents;
(b)Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii) being contested in good faith and for which Borrower maintains adequate reserves on its Books, provided that no notice of any such Lien has been filed or recorded 

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under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder;
(c)purchase money Liens (i) on Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment securing no more than Four Million Dollars ($4,000,000) in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the Equipment;
(d)Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto; 
(e)Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA);
(f)Liens incurred in the extension, renewal or refinancing of the Indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase;
(g)leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business), if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest therein;
(h)non-exclusive license of Intellectual Property granted to third parties in the ordinary course of business, and licenses of Intellectual Property that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than territory and that may be exclusive as to territory only as to discrete geographical areas outside of the United States;
(i)Liens arising from attachments or judgments, orders, or decrees in circumstances not constituting an Event of Default under Sections 8.4 and 8.7; and
(j)Liens in favor of Bankers Trust and Morgan Stanley securing Indebtedness described in clause (g) of the definition of Permitted Indebtedness.  
“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency.

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“Prime Rate” is the rate of interest per annum from time to time published in the money rates section of The Wall Street Journal or any successor publication thereto as the “prime rate” then in effect; provided that if such rate of interest, as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable for any reason as determined by Bank, the “Prime Rate” shall mean the rate of interest per annum announced by Bank as its prime rate in effect at its principal office in the State of California (such Bank announced Prime Rate not being intended to be the lowest rate of interest charged by Bank in connection with extensions of credit to debtors).
“Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may hereafter be made.
“Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Reserves” means, as of any date of determination, such amounts as Bank may from time to time establish and revise in its good faith business judgment, reducing the amount of Advances and other financial accommodations which would otherwise be available to Borrower (a) to reflect events, conditions, contingencies or risks which, as determined by Bank in its good faith business judgment, do or may adversely affect (i) the Collateral or any other property which is security for the Obligations or its value (including without limitation any increase in delinquencies of Accounts), (ii) the assets, business or prospects of Borrower or any Guarantor, or (iii) the security interests and other rights of Bank in the Collateral (including the enforceability, perfection and priority thereof); or (b) to reflect Bank's reasonable belief that any collateral report or financial information furnished by or on behalf of Borrower or any Guarantor to Bank is or may have been incomplete, inaccurate or misleading in any material respect; or (c) in respect of any state of facts which Bank determines constitutes an Event of Default or may, with notice or passage of time or both, constitute an Event of Default.
“Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial Officer and Chief Accounting Officer of Borrower.   
“Restricted License” is any material license or other agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination of could interfere with the Bank’s right to sell any Collateral.
“Revolving Line” is an aggregate principal amount not to exceed Fifteen Million Dollars ($15,000,000) outstanding at any time.
“Revolving Line Maturity Date” is August 22, 2016. [two years after Effective Date]
“SEC” shall mean the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.

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“Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be made.
“Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and the other creditor), on terms acceptable to Bank.
“Subsidiary” is, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.  Unless the context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of Borrower.
“Trademarks” means any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks.
“Transaction Report” is that certain report of transactions and schedule of collections on the Bank’s standard form.
“Transfer” is defined in Section 7.1. 
“Unused Revolving Line Facility Fee” is defined in Section 2.5(c).
[Signature page follows.]

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

BORROWER:
WORKIVA LLC
By /s/ Matthew M. Rizai______________________ 
Name: Matthew M. Rizai_____________________
Title: Chief Executive Officer__________________
WORKIVA INTERNATIONAL LLC
By /s/ Matthew M. Rizai______________________ 
Name: Matthew M. Rizai_____________________ 
Title: President______________________________ 
BANK:
SILICON VALLEY BANK
By /s/ Jay Wefel_____________________________ 
Name: Jay Wefel ____________________________ 
Title: Director_______________________________

1

EXHIBIT A – COLLATERAL DESCRIPTION
The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:
All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as provided below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and
all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.
Notwithstanding the foregoing, the Collateral does not include any Intellectual Property; provided, however, the Collateral shall include all Accounts and all proceeds of Intellectual Property.  If a judicial authority (including a U.S. Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit perfection of Bank’s security interest in such Accounts and such other property of Borrower that are proceeds of the Intellectual Property.
Pursuant to the terms of a certain negative pledge arrangement with Bank, Borrower has agreed not to encumber any of its Intellectual Property without Bank’s prior written consent.

2

EXHIBIT B

COMPLIANCE CERTIFICATE

		
	TO:
	SILICON VALLEY BANK                    Date: 

		
	FROM:  
	WORKIVA LLC

WORKIVA INTERNATIONAL LLC

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

1

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

	 

	Reporting Covenant
	Required
	Complies

	 
	 
	 

	Monthly financial statements with  Compliance Certificate
	Monthly within 30 days
	Yes   No

	Annual financial statement (CPA Audited) + CC
	FYE within 150 days
	Yes   No

	10‐Q, 10‐K and 8-K
	Within 5 days after filing with SEC
	Yes   No

	A/R & A/P Agings & Deferred Revenue
	Monthly within 30 days
	Yes   No

	Transaction Reports
	Monthly within 30 days
	Yes   No

	Projections
	FYE within 60 days
	Yes   No

	 

	

The following Intellectual Property was registered after the Effective Date (if no registrations, state “None”)
____________________________________________________________________________

	
				
	Financial Covenant
	Required
	Actual
	Complies

	 
	 
	 
	 

	Maintain as indicated:
	 
	 
	 

	Minimum Liquidity
	$5,000,000
	$
	Yes   No

	Minimum Recurring Revenue
	See Sec 6.9(b)
	$
	Yes   No

The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

	
		
	WORKIVA LLC
WORKIVA INTERNATIONAL LLC

By: _______________
Name: _____________
Title: ______________    

	BANK USE ONLY

Received by: _____________________
AUTHORIZED SIGNER
Date:    _________________________

Verified: ________________________
AUTHORIZED SIGNER
Date:    _________________________

Compliance Status:   Yes     No

2

Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern.

I.    Liquidity (Section 6.9(a))
Required:    $5,000,000

	
			
	A.
	Unrestricted cash and Cash Equivalents at Bank or in Deposit Accounts or Securities Accounts subject to a Control Agreement in favor of Bank
	$   

	B.
	Availability Amount
	$   

	C.
	Liquidity (line A plus line B)
	$   

Is line C equal to or greater than $5,000,000?
	
					
	 
	No, not in compliance
	 
	 
	Yes, in compliance

            

1

II.    Minimum Recurring Revenue to Plan (Section 6.9 (b))

		
	Required:
	As of the last day of each quarter on a trailing three (3) month basis, Borrower’s Recurring Revenue for such quarter shall not be less than the greater of (i) eighty percent (80%) of Borrower’s Recurring Revenue for such quarter as outlined in Borrower’s business plan approved by its board of directors or (ii) Borrower’s Recurring Revenue for the prior quarter.

Actual:

	
			
	A.
	Recurring Revenue
	$   

Is the value of lines A at least equal to the greater of (i) 80% of the value projected for Recurring Revenue in Borrower’s business plan or (ii) Borrower’s Recurring Revenue for the prior quarter?	
					
	 
	No, not in compliance
	 
	 
	Yes, in compliance

1

FIRST AMENDMENT
TO 
LOAN AND SECURITY AGREEMENT

This First Amendment to Loan and Security Agreement (this “Amendment”) is entered into this 16th day of October, 2014, effective as of September 30, 2014, by and between (i) SILICON VALLEY BANK (“Bank”) and (i) WORKIVA LLC, a Delaware limited liability company (“Workiva”) and WORKIVA INTERNATIONAL LLC, a Delaware limited liability company (“International”, and together with Workiva, each and together, jointly and severally,  “Borrower”) whose address is 55 West Monroe Street, Suite 3490, Chicago, Illinois 60603. 
RECITALS
A.    Bank and Borrower have entered into that certain Loan and Security Agreement dated as of August 22, 2014 (as the same may from time to time be further amended, modified, supplemented or restated, the “Loan Agreement”).  
B.    Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.  
C.    Borrower has requested that Bank amend the Loan Agreement to (i) revise the Collateral description, and (ii) make certain other revisions to the Loan Agreement as more fully set forth herein.
D.    Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
1.    Definitions.  Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.
2.    Amendments to Loan Agreement.
2.1    Section 2.2.2(a) (Letters of Credit).  Section 2.2.2(a) is amended in its entirety and replaced with the following:
“(a)    Bank shall issue or have issued Letters of Credit denominated in Dollars or a Foreign Currency for Borrower’s account.  The aggregate Dollar Equivalent amount utilized for the issuance of Letters of Credit (other than the amount utilized for the issuance of the IEDA Letters of Credit) shall at all times reduce the amount otherwise available for Advances under the Revolving Line.  The aggregate Dollar Equivalent of the face amount of outstanding Letters of Credit other than the IEDA Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve, but excluding the IEDA Letters of Credit) may not exceed (i) the lesser of (A) the Revolving Line or (B) the Borrowing Base, minus (ii) the sum of all outstanding principal amounts of any Advances 

2

(including any amounts used for cash management services and the aggregate Dollar Equivalent of the face amount of any outstanding Letters of Credit other than the IEDA Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve, but excluding the IEDA Letters of Credit) and minus (iii) an amount equal to ten percent (10.0%) of each outstanding FX Contract.”

2.2    Section 6.4 (Remittance of Proceeds).  Section 6.4 is amended in its entirety and replaced with the following:
“6.4    Remittance of Proceeds.  Except as otherwise provided in Section 6.3(c), deliver, in kind, all proceeds arising from the disposition of any Collateral to Bank in the original form in which received by Borrower not later than the following Business Day after receipt by Borrower, to be applied to the Obligations (a) prior to an Event of Default, pursuant to the terms of Section 2.6(b) hereof, and (b) after the occurrence and during the continuance of an Event of Default, pursuant to the terms of Section 9.4 hereof; provided that, if no Event of Default has occurred and is continuing, Borrower shall not be obligated to remit to Bank (i) the proceeds of the sale of worn out or obsolete Equipment disposed of by Borrower in good faith in an arm’s length transaction for an aggregate purchase price of Two Hundred Fifty Thousand Dollars ($250,000) or less (for all such transactions in any fiscal year), or (ii) the proceeds from the granting of a license to third parties with respect to any Collateral consisting of Intellectual Property, including, without limitation, the proceeds from the licensing of software.  Borrower agrees that it will not commingle proceeds of Collateral with any of Borrower’s other funds or property, but will hold such proceeds separate and apart from such other funds and property and in an express trust for Bank.  Nothing in this Section limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement.”

2.3    Section 6.10 (Protection of Intellectual Property Rights).  Section 6.10 is amended in its entirety and replaced with the following:
“6.10    Protection and Registration of Intellectual Property Rights.

(a)    (i) Protect, defend and maintain the validity and enforceability of its Intellectual Property material to the operation of its business; (ii) promptly advise Bank in writing of material infringements or any other event that could reasonably be expected to materially and adversely affect the value of its Intellectual Property material to the operation of its business; and (iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent, except that Bank’s written consent is not required with respect to Borrower’s decision in the ordinary course of its business consistent with past practices to abandon, forfeit or otherwise dispose of Intellectual Property where such Intellectual Property is not material to the operation of its business.  

(b)    Provide written notice to Bank within ten (10) days of entering or becoming bound by any Restricted License (other than over-the-counter software that is commercially available to the public) that is material to the operation of its business.  Borrower shall take such commercially reasonable steps as Bank requests in writing to request the consent of, or waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral” and for Bank to have a security interest 

3

in it that might otherwise be restricted or prohibited by law or by the terms of any such Restricted License, whether now existing or entered into in the future, and (ii) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the other Loan Documents.

(c)    To the extent not already disclosed in writing to Bank, if Borrower (i) obtains any Patent, registered Trademark, registered Copyright, registered mask work, or any pending application for any of the foregoing, whether as owner, licensee or otherwise, or (ii) applies for any Patent or the registration of any Trademark, then Borrower shall provide written notice thereof to Bank in the next Compliance Certificate delivered to Bank and shall execute such intellectual property security agreements and other documents and take such other actions as Bank may request in its good faith business judgment to perfect and maintain a first priority perfected security interest in favor of Bank in such Intellectual Property.  If Borrower decides to register any Copyrights or mask works in the United States Copyright Office, Borrower shall: (x) provide Bank with written notice in the next Compliance Certificate delivered to Bank of Borrower’s intent to register such Copyrights or mask works together with a copy of the application it intends to file with the United States Copyright Office (excluding exhibits thereto); (y) execute an intellectual property security agreement and such other documents and take such other actions as Bank may request in its good faith business judgment to perfect and maintain a first priority perfected security interest in favor of Bank in the Copyrights or mask works intended to be registered with the United States Copyright Office; and (z) authorize Bank to record such intellectual property security agreement with the United States Copyright Office.”

2.4    Section 7.1 (Dispositions).  Section 7.1 is amended in its entirety and replaced with the following:
“7.1    Dispositions.  Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment that is, in the reasonable judgment of Borrower, no longer economically practicable to maintain or useful in the ordinary course of business of Borrower; (c) consisting of Permitted Liens and Permitted Investments; (d) consisting of the sale or issuance of any stock of Borrower permitted under Section 7.2 of this Agreement; (e) consisting of Borrower’s use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents; and (f) of Intellectual Property in the ordinary course of business consistent with past practices where such Intellectual Property is not material to the operation of its business.”

2.5    Section 13 (Definitions).  The following new terms and their respective definitions are inserted in Section 13.1 in their applicable alphabetical order:
“First Amendment Effective Date” means September 30, 2014.

“IEDA Letters of Credit” means, collectively, (i) Letter of Credit No. SVBSF009273 in the face amount of $1,983,333 issued by Bank for the benefit of the Iowa Economic Development Authority and (ii) Letter of Credit No. SVBSF009270 in the face 

4

amount of $2,259,000 issued by Bank for the benefit of the Iowa Economic Development Authority.

“IP Agreement” is that certain Intellectual Property Security Agreement executed and delivered by Borrower to Bank dated as of October ___, 2014, effective as of the First Amendment Effective Date.

2.6    Section 13 (Definitions).  The following terms and their respective definitions set forth in Section 13.1 are amended in their entirety and replaced with the following: 
“Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base minus (b) the outstanding principal balance of any Advances minus (c) the aggregate Dollar Equivalent amount of all outstanding Letters of Credit other than the IEDA Letters of Credit (including drawn but unreimbursed Letters of Credit, but excluding the IEDA Letters of Credit) plus an amount equal to the Letter of Credit Reserve.
“Loan Documents” are, collectively, this Agreement and any schedules, exhibits, certificates, notices, and any other documents related to this Agreement, the IP Agreement, any Bank Services Agreement, any subordination agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement by Borrower and/or any Guarantor with or for the benefit of Bank in connection with this Agreement or Bank Services, all as amended, restated, or otherwise modified.
2.7    Exhibit A (Collateral Description).  The description of Collateral is amended in its entirety and replaced with the description of Collateral in the form of Exhibit A attached hereto.
3.    Limitation of Amendments.
3.1    The amendments set forth in Section 2, above, are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.
3.2    This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.
4.    Representations and Warranties.  To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:
4.1    Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

5

4.2    Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;
4.3    Except for the Certificate of Conversion and Certificate of Formation of Workiva filed with the Secretary of State of Delaware on September 17, 2014, the organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;
4.4    The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized; 
4.5    The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower; 
4.6    The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on either Borrower, except as already has been obtained or made; and
4.7    This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.
5.    Ratification of Perfection Certificate.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated as of the Effective Date between Borrower and Bank, and acknowledges, confirms and agrees, except as noted in Section 4.3 above, the disclosures and information above Borrower provided to Bank in said Perfection Certificate have not changed, as of the date hereof.
6.    No Defenses of Borrower.  Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.
7.    Integration.  This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about 

6

the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.
8.    Counterparts.  This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
9.    Effectiveness.  This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, (b) Borrower’s payment of Bank’s legal fees and expenses incurred in connection with this Amendment, (c) Bank’s receipt of the IP Agreement in form and substance acceptable to Bank, duly executed and delivered by each Borrower, (d) a UCC3 amendment for each Borrower indicating the Collateral as set forth on Exhibit A attached hereto, and (e) such other documents as Bank may reasonably request.
[Signature page follows.]

7

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

	
		
	BANK
	BORROWER

	

Silicon Valley Bank

By:    /s/ Jay Wefel   
Name:   Jay Wefel
Title:   Director
	

Workiva LLC

By:       /s/ Matthew M. Rizai   
Name:   Matthew M. Rizai
Title:   Chief Executive Officer

	 
	

Workiva International LLC

By:       /s/ Matthew M. Rizai   
Name:   Matthew M. Rizai
Title:   President

8

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

	
		
	BANK
	BORROWER

	

Silicon Valley Bank

By:    /s/ Jay Wefel   
Name:   Jay Wefel
Title:   Director
	

Workiva LLC

By:       /s/ Matthew M. Rizai   
Name:   Matthew M. Rizai
Title:   Chief Executive Officer

	 
	

Workiva International LLC

By:       /s/ Matthew M. Rizai   
Name:   Matthew M. Rizai
Title:   President

9

INTELLECTUAL PROPERTY SECURITY AGREEMENT

This Intellectual Property Security Agreement (“Agreement”) is entered into as of October 16, 2014, effective as of September 30, 2014, by and between (i) SILICON VALLEY BANK (“Bank”) and (ii) WORKIVA LLC, a Delaware limited liability company, and WORKIVA INTERNATIONAL LLC, a Delaware limited liability company (each and together, jointly and severally, “Grantor”).
RECITALS

A.    Bank has agreed to make certain advances of money and to extend certain financial accommodation to Grantor (the “Loans”) in the amounts and manner set forth in that certain Loan and Security Agreement by and between Bank and Grantor dated as of the date hereof (as the same may be amended, modified or supplemented from time to time, the “Loan Agreement”; capitalized terms used herein are used as defined in the Loan Agreement).  Bank is willing to make the Loans to Grantor, but only upon the condition, among others, that Grantor shall grant to Bank a security interest in certain Copyrights, Trademarks, Patents, and Mask Works (as each term is described below) to secure the obligations of Grantor under the Loan Agreement.
B.    Pursuant to the terms of the Loan Agreement, Grantor has granted to Bank a security interest in all of Grantor's right, title and interest, whether presently existing or hereafter acquired, in, to and under all of the Collateral.
NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, and intending to be legally bound, as collateral security for the prompt and complete payment when due of its obligations under the Loan Agreement, Grantor hereby represents, warrants, covenants and agrees as follows:

AGREEMENT

1.Grant of Security Interest.  To secure its obligations under the Loan Agreement, Grantor grants and pledges to Bank a security interest in all of Grantor's right, title and interest in, to and under its intellectual property (all of which shall collectively be called the “Intellectual Property Collateral”), including, without limitation, the following:
(a)    Any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held, including without limitation those set forth on Exhibit A attached hereto (collectively, the “Copyrights”);
(b)    Any and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, acquired or held;
(c)    Any and all design rights that may be available to Grantor now or hereafter existing, created, acquired or held;

(d)    All patents, patent applications and like protections including, without limitation, improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same, including without limitation the patents and patent applications set forth on Exhibit B attached hereto (collectively, the “Patents”);
(e)    Any trademark and servicemark rights, whether registered or not, applications to register and registrations of the same and like protections, and the entire goodwill of the business of Grantor connected with and symbolized by such trademarks, including without limitation those set forth on Exhibit C attached hereto (collectively, the “Trademarks”);
(f)    All mask works or similar rights available for the protection of semiconductor chips, now owned or hereafter acquired, including, without limitation those set forth on Exhibit D attached hereto (collectively, the  “Mask Works”);
(g)    Any and all claims for damages by way of past, present and future infringements of any of the rights included above, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the intellectual property rights identified above;
(h)    All licenses or other rights to use any of the Copyrights, Patents, Trademarks, or Mask Works and all license fees and royalties arising from such use to the extent permitted by such license or rights;
(i)    All amendments, extensions, renewals and extensions of any of the Copyrights, Trademarks, Patents, or Mask Works; and
(j)    All proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty payable in respect of any of the foregoing.
2.    Recordation.  Grantor authorizes the Commissioner for Patents, the Commissioner for Trademarks and the Register of Copyrights and any other government officials to record and register this Agreement upon request by Bank.
3.    Loan Documents.  This Agreement has been entered into pursuant to and in conjunction with the Loan Agreement, which is hereby incorporated by reference.  The provisions of the Loan Agreement shall supersede and control over any conflicting or inconsistent provision herein.  The rights and remedies of Bank with respect to the Intellectual Property Collateral are as provided by the Loan Agreement and related documents, and nothing in this Agreement shall be deemed to limit such rights and remedies.
4.    Execution in Counterparts.  This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile or in electronic (i.e., "pdf" or "tif" format) shall be effective as delivery of a manually executed counterpart of this Agreement.
5.    Successors and Assigns.  This Agreement will be binding on and shall inure to the benefit of the parties hereto and their respective successors and assigns.

6.    Governing Law.  This Agreement and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the laws of the United States and the State of New York, without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction).

[Signature page follows]

IN WITNESS WHEREOF, the parties have caused this Intellectual Property Security Agreement to be duly executed by its officers thereunto duly authorized as of the first date written above. 

GRANTOR:

WORKIVA LLC

By:       /s/ Matthew M. Rizai    
Name:    Matthew M. Rizai
Title:    Chief Executive Officer

WORKIVA INTERNATIONAL LLC

By:       /s/ Matthew M. Rizai    
Name:    Matthew M. Rizai
Title:    President

BANK:

SILICON VALLEY BANK

By:    /s/ Jay Wefel    
Name:    Jay Wefel
Title:    Director

EXHIBIT A

Copyrights

None

EXHIBIT B

Patents

	
							
	Owner
	Workiva Ref/
DBR Ref.
	Country
	Title
	Inventors
	Application No./  
Filing Date
	Patent Number/ Issue Date

	Workiva LLC
	P4054US
	US
	Systems and Methods for Navigating to Errors in an XBRL Document Using Metadata
	David Haila
Jason Jones
Jeffrey Hilleman

	13/829,442
03/14/2013

	8,739,025
05/27/2014

	Workiva LLC
	P4054CON
	US
	Systems and Methods for Navigating to Errors in an XBRL Document Using Metadata
	David Haila 
Jason Jones
Jeffrey Hilleman
	14/286,634
05/23/2014
	 

	Workiva LLC
	P4064US
	US
	Systems and Methods for Automated Taxonomy Migration in an XBRL Document
	David Haila

	13/834,846
03/15/2013

	8,825,614
09/02/2014

	Workiva LLC
	P4064CON
	US
	Systems and Methods for Automated Taxonomy Migration in an XBRL Document
	David Haila

	14/469,286
08/26/2014

	 

	Workiva LLC
	P4064CIP
	US
	Systems and Methods for Automated Taxonomy Concept Replacement in an XBRL Document
	Bradley Benjamin
Susan Yount
David Haila

	14/473,391
08/29/2014

	 

	Workiva LLC
	BL3
P4125US
	US
	System and Method for Performing Distributed Asynchronous Calculations in a Networked Environment

	Robert Kluin
Beau Lyddon
	13/780,725
02/28/2013
	8,856,234
10/07/2014

	Workiva LLC

	BL3
P4125CON
	US
	System and Method for Performing Distributed Asynchronous Calculations in a Networked Environment

	Robert Kluin
Beau Lyddon
	(continuation of 13/780,725)
	 

	Workiva LLC
	BL3
P4125CON2
	US
	System and Method for Performing Distributed Asynchronous Calculations in a Networked Environment

	Robert Kluin
Beau Lyddon
	(continuation of 13/780,725)
	 

	Webfilings LLC
	BL3
P4125PCT
	PCT
	System and Method for Performing Distributed Asynchronous Calculations in a Networked Environment

	Robert Kluin
Beau Lyddon
	US2014/019473
02/28/2014
	 

	Workiva LLC
	XB09A
P4160US

	US
	Systems and Methods for Generating Filing Documents in a Visual Presentation Context with XBRL Barcode Authentication

	Dean Ritz
	13/768,655
02/15/2013
	8,601,367
12/03/2013

	Workiva LLC
	XB15
P4165US

	US
	Document Server and Client Device Document Viewer and Editor
	Shane Sizer
Graham Cumming
Bert Lutzenberger
Gary Orser
Benjamin Echols
Jeffrey Trom

	13/779,023
02/27/2013
	8,504,827 
08/06/2013

	
							
	Owner
	Workiva Ref/
DBR Ref.
	Country
	Title
	Inventors
	Application No./  
Filing Date
	Patent Number/ Issue Date

	Workiva LLC
	XB15
P4165CON

	US
	Document Server and Client Device Document Viewer and Editor
	Shane Sizer
Graham Cumming
Bert Lutzenberger
Gary Orser
Benjamin Echols
Jeffrey Trom

	13/945,655
07/18/2013
	 

	Webfilings LLC
	XB15
P4165PCT

	PCT
	Document Server and Client Device Document Viewer and Editor
	Shane Sizer
Graham Cumming
Bert Lutzenberger
Gary Orser
Benjamin Echols
Jeffrey Trom

	US2013/054198
08/08/2013
	 

	Workiva LLC
	P4303US
	US
	System and Method for Comparing Objects in Document Revisions and Displaying Comparison Objects

	John Bonk
Ryan Oskvarek
Scott Bacon
Chris Lo Coco
Jeff Lutzenberger

	14/285,341
05/22/2014
	 

	 
	P4303PCT
	PCT
	System and Method for Comparing Objects in Document Revisions and Displaying Comparison Objects

	John Bonk
Ryan Oskvarek
Scott Bacon
Chris Lo Coco
Jeff Lutzenberger

	PCT/US14/58473
09/30/2014
	 

	Workiva LLC
	P4345US
	US
	Method and System for Generating and Utilizing Persistent Electronic Tick Marks
	Joseph Howell
Jerome Behar
Anna Kwok
	12/614,217
11/06/2009
	8,375,291
02/12/2013

	Workiva LLC
	P4345CON
	US
	Method and System for Generating and Utilizing Persistent Electronic Tick Marks
	Joseph Howell
Jerome Behar
Anna Kwok
	13/748,971
01/24/2013
	 

	Workiva LLC
	P4374PRO
	US
	Method and Appparatus for Selective Visual Formatting of an Electronic Document
	Joel Marks
Winston Chappell
Edward Ly
Edward Cupps
Alan Streit
John Ryan

	61/924,948
01/08/2014
	 

	Workiva LLC
	P4374US
	US
	Method and Appparatus for Selective Visual Formatting of an Electronic Document
	Joel Marks
Winston Chappell
Edward Ly
Edward Cupps
Alan Streit
John Ryan

	14/451,173
08/04/2014
	 

	Workiva LLC
	P4449US
	US
	Method and Computing Device for Facilitating Review of a Document

	Stephen M. Siegel
	14/305,172
06/16/2014
	 

	Workiva LLC
	P4505US
	US
	Method and System for Electronic Document Publication Preview 

	Daniel L. DeGeest
Jeffrey Thieleke
	14/500,878
09/29/2014
	 

	Workiva LLC
	P4536US
	US
	Font Loading System and Method in a Client-Server Architecture
	Bovard Tiberi
	14/332,376
07/15/2014
	 

EXHIBIT C

Trademarks

	
					
	Trademark
	Owner
	Country
	Serial Number/ 
Filing Date
	Registration Number/ Reg. Date

	ADAPTIVE DATA CLOUD
	Workiva LLC
	US
	86/040,003 
08/16/2013
	 

	BUSINESS REPORTING IN REAL TIME
	Wokiva LLC
	US
	86/030,964 
08/07/2013
	 

	NO MORE PENCILS DOWN
	Wokiva LLC
	US
	85/441,749 
10/07/2011
	4,153,722 
06/05/2012

	  Logo
	Wokiva LLC
	US
	77/933,267 
02/11/2010
	3,849,894 
09/21/2010

	W logo

	Wokiva LLC
	US
	85/788,616 
11/27/2012
	4,442,566 
12/03/2013

	W logo

	 
	Brazil
	 
	 

	W logo

	 
	Canada
	1,686,701 
07/24/2014

	 

	W logo

	 
	CTM (Europe)
	013039656 
06/30/2014
	 

	W logo

	 
	Norway
	2014 07492 
06/30/2014
	 

	W logo

	 
	Switzerland
	57639/2014 
06/30/2014
	 

	WDATA
	Wokiva LLC
	US
	86/322,060 
June 26, 2014
	 

	
					
	WDATA
	 
	Brazil
	 
	 

	WDATA
	 
	Canada
	1,686,717 
07/24/2014
	 

	WDATA
	 
	CTM (Europe)
	013039757 
06/30/2014
	 

	WDATA
	 
	Norway
	2014 07482 
06/30/2014
	 

	WDATA
	 
	Switzerland
	57638/2014 
06/30/2014
	 

	WDATA  Logo

	Wokiva LLC
	US
	86/322,068 
06/26/2014
	 

	WDATA  Logo

	 
	Brazil
	 
	 

	WDATA  Logo

	 
	Canada
	1,686,716 
07/24/2014
	 

	WDATA  Logo

	 
	CTM (Europe)
	013039888 
06/30/2014
	 

	WDATA  Logo

	 
	Norway
	2014 07483 
06/30/2014
	 

	WDATA  Logo

	 
	Switzerland
	57637/2014 
06/30/2014
	 

	WDESK
	Wokiva LLC
	US
	86/322,065 
06/26/2014
	 

	WDESK
	 
	Benelux, Denmark, Ireland, Sweden, U.K. (Madrid Protocol)
	07/22/2014
	 

	WDESK
	 
	Brazil

	 
	 

	WDESK
	 
	Canada
	1,686,700 
07/24/2014
	 

	WDESK
	 
	Norway
	2014 07478 
06/30/2014
	 

	WDESK
	 
	Switzerland
	57636/2014 
06/30/2014
	 

	
					
	WDESK logo

	Wokiva LLC
	US
	85/956,656 
06/11/2013
	4,582,845 
08/12/2014

	WDESK logo

	 
	Benelux, Denmark, Ireland, Sweden, U.K. (Madrid Protocol)
	07/22/2014
	 

	WDESK logo

	 
	Brazil
	 
	 

	WDESK logo

	 
	Canada
	1,686,699 
07/24/2014
	 

	WDESK logo

	 
	Norway
	2014 07493 
06/30/2014
	 

	WDESK logo

	 
	Switzerland
	57634/2014 
06/30/2014
	 

	WEBFILINGS

	Wokiva LLC
	US
	77/929,518 
02/05/2010
	3,826,687 
07/27/2010

	WEBFILINGS
	 
	Canada
	1,485,387 
06/16/2010
	807136 
09/21/2011

	WEBFILINGS logo 
	Wokiva LLC
	US
	85/956,531 
06/11/2013
	 

	WEBFILINGS logo (color)

	Wokiva LLC
	US
	77/929,536 
02/05/2010
	3,915,279 
02/01/2011

	WEBFILINGS logo (color)

	 
	CTM (Europe)
	10467851 
12/05/2011
	10467851 
12/05/2011

	WORKIVA
	Wokiva LLC
	US
	86/309,129 
06/13/2014
	 

	WORKIVA
	 
	Brazil
	 
	 

	WORKIVA
	 
	Canada
	1,686,698 
07/24/2014
	 

	WORKIVA
	 
	CTM (Europe)
	013039946 
06/30/2014
	 

	WORKIVA
	 
	Norway
	2014 07477 
06/30/2014
	 

	WORKIVA
	 
	Switzerland
	57633/2014 
06/30/2014
	 

	WORKIVA Logo

	Wokiva LLC
	US
	86/309,150 
06/13/2014
	 

	
					
	WORKIVA Logo

	 
	Brazil
	 
	 

	WORKIVA Logo

	 
	Canada

	1,686,697 
07/24/2014
	 

	WORKIVA Logo

	 
	CTM (Europe)
	013040001 
06/30/2014
	 

	WORKIVA Logo

	 
	Norway
	2014 07481 
06/30/2014
	 

	WORKIVA Logo

	 
	Switzerland
	57632/2014 
06/30/2014
	 

EXHIBIT D

Mask Works

None

SECOND AMENDMENT
TO 
LOAN AND SECURITY AGREEMENT

This Second Amendment to Loan and Security Agreement (this “Amendment”) is entered into this 25th day of November, 2014, by and between (i) SILICON VALLEY BANK (“Bank”) and (i) WORKIVA LLC, a Delaware limited liability company (“Workiva”) and WORKIVA INTERNATIONAL LLC, a Delaware limited liability company (“International”, and together with Workiva, each and together, jointly and severally,  “Borrower”) whose address is 55 West Monroe Street, Suite 3490, Chicago, Illinois 60603.
RECITALS
A.    Bank and Borrower have entered into that certain Loan and Security Agreement dated as of August 22, 2014, as affected by a First Amendment to Loan and Security Agreement, dated as of October 16, 2014 (as the same may from time to time be further amended, modified, supplemented or restated, the “Loan Agreement”).  
B.    Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.  
C.    Borrower has requested that Bank amend the Loan Agreement to (i) amend certain post-closing conditions, and (ii) make certain other revisions to the Loan Agreement as more fully set forth herein.
D.    Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the extent, in accordance with the terms, subject to the conditions and in reliance upon the representations and warranties set forth below.
AGREEMENT
Now, Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
1.Definitions.  Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.
2.Amendments to Loan Agreement.
2.1Section 3.5(c) (Post-Closing Conditions).  Section 3.5(c) is amended in its entirety and replaced with the following:
“(c)    On or before February 28, 2015, evidence that all deposit and securities accounts of Borrower have been transferred to Bank.”

2.2Section 6.8(a) (Operating Accounts).  Section 6.8(a) is amended in its entirety and replaced with the following:
“(a)    Maintain all of its operating and other deposit accounts and securities accounts with Bank and Bank’s Affiliates.  Notwithstanding the foregoing, Borrower shall 

have until February 28, 2015 to transition to Bank all of its accounts at other financial institutions.”

3.Acknowledgement of Default; Waiver.  Borrower acknowledges that a default has occurred under the Loan Agreement by virtue of Borrower’s failure to provide Control Agreements from Bankers Trust and Morgan Stanley as required pursuant to Section 3.1(b) of the Loan Agreement (the “Existing Default”).  Subject to the requirements of Section 10 of this Agreement, Bank hereby waives the Existing Default.  As a result of such waiver, subject to the terms and conditions of the Loan Agreement, Borrower may request, and Bank may make, Credit Extensions.  Bank’s waiver of the Existing Default shall apply only to the foregoing specific Event of Default.  The Borrower hereby acknowledges and agrees that, except as specifically provided herein, nothing in this Section or anywhere in this Agreement shall be deemed or otherwise construed as a waiver by Bank of any of its rights and remedies pursuant to the Loan Agreement, applicable law or otherwise.
4.Limitation of Amendments.
4.1The amendments set forth in Section 2, above, are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.
4.2This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.
5.Representations and Warranties.  To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:
5.1Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;
5.2Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;
5.3Except for the Certificate of Conversion and Certificate of Formation of Workiva filed with the Secretary of State of Delaware on September 17, 2014, the organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;
5.4The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized; 

5.5The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower; 
5.6The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on either Borrower, except as already has been obtained or made; and
5.7This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.
6.Ratification of Perfection Certificate.  Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated as of the Effective Date between Borrower and Bank, and acknowledges, confirms and agrees, except as noted in Section 4.3 above, the disclosures and information above Borrower provided to Bank in said Perfection Certificate have not changed, as of the date hereof.
7.No Defenses of Borrower.  Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.
8.Integration.  This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements.  All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.
9.Counterparts.  This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.
10.Effectiveness.  This Amendment shall be deemed effective upon the following:
10.1the due execution and delivery to Bank of this Amendment by each party hereto;
10.2Borrower’s payment of Bank’s legal fees and expenses incurred in connection with this Amendment;

10.3Bank’s receipt of duly executed signatures to a Control Agreement, in form and substance acceptable to Bank, from Bankers Trust; and
10.4such other documents as Bank may reasonably request.
11.Post-Closing Conditions.  On or before December 31, 2014, Borrower shall deliver to Bank duly executed signatures to a Control Agreement in form and substance acceptable to Bank from Morgan Stanley.  The failure by Borrower to comply with the foregoing requirement shall constitute an immediate Event of Default for which no grace or cure period shall apply. 
[Signature page follows.]

In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.

	
		
	BANK
	BORROWER

	

Silicon Valley Bank

By:  /s/ Matt Kelty
Name: Matt Kelty
Title:  VP
	

Workiva LLC

By:  /s/ Martin Vanderploeg
Name: Martin Vanderploeg
Title:  COO and Managing Director

	 
	

Workiva International LLC

By:  /s/ Martin Vanderploeg
Name: Martin Vanderploeg
Title:  Vice President

[Signature Page to Second Amendment to Loan and Security Agreement]

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