Document:

Loan and Security Agreement

 Exhibit 10.1 
 LOAN AND SECURITY AGREEMENT 
 THIS LOAN AND SECURITY AGREEMENT (this
“Agreement”) dated as of May 1, 2009 (the “Effective Date”) between SILICON VALLEY BANK, a California corporation (“Bank”), and ATRICURE, INC., a Delaware corporation
(“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, unless provided otherwise herein. 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. 
 2.1.1 Revolving Advances. 
 (a)
Availability. Subject to the terms and conditions of this Agreement and to deduction of Reserves, Bank shall make Advances not exceeding the Availability Amount. Amounts borrowed hereunder may be repaid and, prior to the Revolving Line
Maturity Date, reborrowed, subject to the applicable terms and conditions precedent herein. 
 (b) Streamline Period. During certain
periods of time (each, a “Streamline Period”), provided that the Streamline Requirements are all met, Borrower’s reporting requirements shall be reduced, and certain proceeds shall be deposited in Borrower’s operating
account instead of being applied to the Advances, as set forth in other provisions of this Agreement. Such a Streamline Period shall be deemed to be in effect as of the Effective Date. If at any time during any Streamline Period the Streamline
Requirements are not met, the Streamline Period shall immediately cease to be effective, and any terms or conditions of this Agreement that are dependent upon the existence of a Streamline Period will immediately revert to the respective terms and
conditions that are to be in force when a Streamline Period is not in effect, without the need for any further action on the part of Bank or Borrower. Further, if following the cessation of a Streamline Period the Streamline Requirements are
thereafter satisfied for 90 consecutive days, Borrower may elect to again put a Streamline Period into effect pursuant to the terms hereof by giving Bank at least 10 days prior written notice, specifying the date the Streamline Period is to begin.
Thus, it is the intention of the parties that Borrower have the opportunity for successive Streamline Periods to apply when and to the extent the conditions thereto are satisfied. 
 (c) Termination; Repayment. The Revolving Line terminates on the Revolving Line Maturity Date, when the principal amount of all Advances, the
unpaid interest thereon, and all other Obligations relating to the Revolving Line shall be immediately due and payable. 
 2.1.2 Letters
of Credit Sublimit. 
 (a) As part of the Revolving Line, 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 (as specified in the
definition of Availability Amount). The aggregate Dollar Equivalent of the face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit) may not exceed the lesser of (A) One Million Dollars ($1,000,000),
minus the sum of all amounts used for Cash Management Services, or (B) the lesser of Net Maximum Dollar Amount or the Borrowing Base, minus the sum of all outstanding principal amounts of any Advances (including any amounts used for Cash
Management Services). 

 (b) If, on the Revolving Line Maturity Date (or the effective date of any termination of this Agreement),
there are any outstanding Letters of Credit, then on such date Borrower shall provide to Bank cash collateral in an amount equal to 105% of the Dollar Equivalent of the face amount of all such Letters of Credit, 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, in good faith, 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) Bank shall not be required to issue any Letter of Credit payable in a Foreign Currency. 
 2.1.3 [Reserved]. 
 2.1.4 Cash
Management Services Sublimit. Borrower may use the Revolving Line for Bank’s cash management services, which may include merchant services, direct deposit of payroll, business credit card, and check cashing services identified in
Bank’s various cash management services agreements (collectively, the “Cash Management Services”), in an aggregate amount not to exceed the lesser of (A) One Million Dollars ($1,000,000), minus the aggregate Dollar
Equivalent of the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit), or (B) the lesser of Net Maximum Dollar Amount or the Borrowing Base, minus (i) the sum of all outstanding principal
amounts of any Advances, and minus (ii) the Dollar Equivalent of the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit). Any amounts Bank pays on behalf of Borrower for any Cash Management
Services will be treated as Advances under the Revolving Line and will accrue interest at the interest rate applicable to Advances. 
 2.1.5 Term Loan. 
 (a) Availability. Bank shall make one (1) term loan (the “Term Loan”)
available to Borrower in the amount of $6,500,000 (the “Term Loan Amount”) within ten (10) days from the Effective Date subject to the satisfaction of the terms and conditions of this Agreement. After repayment, the Term Loan
may not be re-borrowed. 
 (b) Repayment. Borrower shall repay the Term Loan in thirty-six (36) installments of principal equal
to $180,555.56 each, beginning on May 31, 2009 and continuing on the last day of each month thereafter until April 30, 2012 (the “Term Loan Maturity Date”), on which date all outstanding principal and accrued and unpaid
interest under the Term Loan shall be paid in full. 
 (c) Fee and Final Payment Due Upon Acceleration. If all or any portion of the
Term Loan becomes due and payable according to the terms hereof because of the occurrence and continuance of an Event of Default, Borrower shall pay to Bank on the date that it has become due and payable according to the terms hereof, in addition to
any other sums owing, a fee equal to the Make-Whole Premium. Without limitation on the fact that such fee shall be due as set forth in the preceding sentence, such fee shall bear interest until paid at a rate equal to the highest rate applicable to
the Obligations. 
 (d) Permitted Prepayment of Loans. Borrower shall have the option to prepay all, but not less than all, of the
Term Loan (a “Voluntary Term Loan Prepayment”), provided Borrower (i) provides written notice to Bank of its election to prepay the Term Loan at least five (5) days prior to such prepayment, and (ii) pays, on the date
of such prepayment (A) all outstanding principal plus accrued interest, (B) a fee equal to the Make-Whole Premium, plus (C) all other sums, if any, that shall have become due and payable; provided that no Make-Whole Premium fee shall
be charged if the Term Loan is replaced with a new facility from the Bank. Without limitation on the fact that such fee shall be due on the date of the prepayment, such fee shall bear interest until paid at a rate equal to the highest rate
applicable to the Obligations. 
  

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 2.2 Overadvances. If, at any time, the sum of (a) the outstanding principal amount of any
Advances (including any amounts used for Cash Management Services), plus (b) the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit), exceeds the lesser of either the Net Maximum Dollar Amount
or the Borrowing Base (such excess being an “Overadvance”), Borrower shall immediately pay to Bank in cash such Overadvance. Without limiting Borrower’s obligation to repay Bank any amount of the Overadvance, Borrower agrees to
pay Bank interest on the outstanding amount of any Overadvance, on demand, at the Default Rate. 
 2.3 Payment of Interest on the Credit
Extensions.  
 (a) Interest Rate. 
 (i) Advances. Subject to Section 2.3(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate based on Borrower’s Adjusted Quick Ratio (and the
existence or non-existence of an Event of Default) as set forth below, which interest shall be payable monthly in accordance with Section 2.3(f) below. 
  

			
	 Adjusted Quick Ratio as of the end of a month and Event of Default status
	  	 Interest Rate

	Greater than or equal to 2 to 1, and no Event of Default has occurred and is continuing	  	One percentage point (1.0%) above the Base Rate (the “First Tier Rate”)
		
	Greater than or equal to 1.5 to 1 but less than 2 to 1, and no Event of Default has occurred and is continuing	  	One and one-half percentage points (1.5%) above the Base Rate (the “Second Tier Rate”)
		
	Less than 1.5 to 1, or an Event of Default has occurred and is continuing	  	Two percentage points (2.0%) above the Base Rate (the “Regular Rate”)

 The initial interest rate in effect on the date hereof shall be the First Tier Rate. Changes in the interest rate
based on the Borrower’s Adjusted Quick Ratio as provided above shall go into effect as of the first day of the month following the month in which Borrower’s financial statements are received by Bank. If, based on the Adjusted Quick Ratio
as shown in Borrower’s financial statements there is to be an increase in the interest rate, the interest rate increase may be put into effect by Bank as of the first day of the month following the month in which Borrower’s financial
statements were due, even if the delivery of the financial statements is delayed. The Regular Rate shall go into effect immediately upon the occurrence and during the continuance of an Event of Default unless Bank otherwise elects from time to time
in its sole discretion to delay its effect of impose a smaller increase. 
 (ii) Term Loan. Subject to Section 2.3(b), the principal
amount outstanding under the Term Loan shall accrue interest at a per annum rate equal to 10%, which interest shall be payable monthly in accordance with Section 2.3(f) below. 
 (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 three percentage points (3.00%) above the rate that is otherwise applicable thereto (the “Default Rate”) unless Bank otherwise elects from time to time in its sole discretion to impose a smaller increase. Fees
and expenses which are required to be paid by Borrower pursuant to the Loan Documents (including, without limitation, Bank Expenses) but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the
Obligations. Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Bank. 
 (c) Adjustment to Interest Rate. Changes to the interest rate of any Credit Extension based on changes
to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of any such change. 
  

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 (d) Debit of Accounts. Bank may debit any of Borrower’s deposit accounts, including the
Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off. 
 (e) [Reserved]. 
 (f) Payment; Interest Computation; Float Charge. 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 on or before 12:00 p.m. Pacific time on any Business Day shall
be deemed received on such Business Day, (ii) all Payments received after 12:00 p.m. Pacific time on any day shall be deemed received at the opening of business on the next Business Day, and (iii) 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.
In addition, so long as any principal or interest with respect to any Advance is outstanding, Bank shall be entitled to charge Borrower a “float” charge in an amount equal to two (2) Business Days interest, at the interest rate
applicable to the Advances, on all Payments received by Bank other than Payments in the form of electronic wire or ACH transfers in immediately available funds. Such float charge is not included in interest for purposes of computing Minimum Monthly
Interest (if any) under this Agreement. The float charge for each month shall be payable on the last day of the month. Bank shall not, however, be required to credit Borrower’s account for the amount of any item of payment which is
unsatisfactory to Bank in its good faith business judgment, and Bank may charge Borrower’s Designated Deposit Account for the amount of any item of payment which is returned to Bank unpaid. 
 2.4 Fees. Borrower shall pay to Bank: 
 (a) Commitment Fees. (i) A fully earned, non-refundable commitment fee of $50,000, on the Effective Date and on each anniversary of the Effective Date, with respect to the Revolving Line, and (ii) a fully earned,
non-refundable commitment fee of $15,000, on the Effective Date, with respect to the Term Loan; 
 (b) Letter of Credit Fee.
Bank’s customary fees and expenses for the issuance or renewal of Letters of Credit, including, without limitation, a letter of credit fee equal to one and one-half percent (1.50%) per annum of the Dollar Equivalent of the face amount of
each Letter of Credit issued, upon the issuance of such Letter of Credit, each anniversary of the issuance during the term of such Letter of Credit, and upon the renewal of such Letter of Credit by Bank; 
 (c) Termination Fees. The termination fees; 
 (d) Unused Revolving Line Facility Fee. A fee (the “Unused Revolving Line Facility Fee”), payable monthly, in arrears, on a calendar year basis, in an amount equal to .375% per annum of the average unused
portion of the Revolving Line, as reasonably determined by Bank. The used portion of the Revolving Line, for the purposes of this calculation, shall include, without duplication, all outstanding Advances, amounts utilized or reserved in connection
with Letters of Credit and for products provided in connection with Cash Management Services and the amount of the outstanding Term Loan. Borrower shall not be entitled to any credit, rebate or repayment of any Unused Revolving Line Facility Fee
previously earned by Bank pursuant to this Section notwithstanding any termination of the Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder; 
 (e) Collateral Monitoring Fee. A collateral monitoring fee of $1,000 for each month during which the Streamline Period is not in effect for the
entire month and of $500 for each month during which the Streamline Period is in effect for the entire month, payable in arrears on the last day of each month (prorated for any partial month at the beginning and upon termination of this Agreement);
and 
 (f) Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation
of this Agreement) incurred through and after the Effective Date, when due. 
  

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 2.5 Payments; Application of Payments. 
 (a) All payments (including prepayments) to be made by Borrower under any Loan Document shall be made in immediately available funds in U.S. Dollars,
without setoff or counterclaim, before 12:00 p.m. Pacific time on the date when due. Payments of principal and/or interest received after 12:00 p.m. Pacific 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) All payments with respect to Obligations that are due and payable may be applied to such Obligations in such order and manner as Bank shall determine
in its sole discretion. Borrower shall have no right to specify the order or the accounts to which Bank shall allocate or apply any payments required to be made by Borrower to Bank or otherwise received by Bank under this Agreement when any such
allocation or application is not specified elsewhere in this Agreement. 
  

	 	3	CONDITIONS OF LOANS 

 3.1 Conditions
Precedent to Initial Credit Extension. Bank’s obligation to make the initial Credit Extension 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, including without limitation the Lockbox Agreement; 
 (b) duly executed original signatures to the
Warrant; 
 (c) [reserved]; 
 (d) Borrower’s Operating Documents and a good standing certificate of Borrower certified by the Secretary of State of the State of Delaware as of a date no earlier than thirty (30) days prior to the Effective Date; 
 (e) the Borrowing Resolutions for Borrower with an original signature of the officer of Borrower making the certifications therein on behalf of the
Borrower and with the applicable officer specimen signatures; 
 (f) duly executed original signature to a payoff letter from National City
Bank; 
 (g) certified copies, dated as of a recent date, of financing statement searches, as Bank shall request, accompanied by written
evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;

 (h) the Perfection Certificate of Borrower, together with the duly executed original signatures thereto; 
 (i) a landlord’s consent in favor of Bank for each of the following locations by the respective landlord thereof, together with the duly executed
original signatures thereto: 2952 E. Crescentville Road, West Chester, Ohio 45069; 6033 Schumacher Park Drive, West Chester, Ohio 45069; 6209 Centre Park Drive, West Chester, Ohio 45069; 6211 Centre Park Drive, West Chester, Ohio 45069; 6213 Centre
Park Drive, West Chester, Ohio 45069; 6215 Centre Park Drive, West Chester, Ohio 45069; and 6345 Centre Park Drive, West Chester, Ohio 45069; 
 (j) a legal opinion of Borrower’s counsel dated as of the Effective Date together with the duly executed original signature thereto; 
 (k) a copy of Borrower’s Investors’ Rights Agreement and any amendments thereto; 
  

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 (l) the insurance policies and/or endorsements required pursuant to Section 6.7 hereof; and

 (m) payment of the fees and Bank Expenses then due as specified in Section 2.4 hereof. 
 3.2 Conditions Precedent to all Credit Extensions. Bank’s obligations to make each Credit Extension, including the initial Credit Extension,
is subject to the following conditions precedent: 
 (a) except as otherwise provided in Section 3.4(a), timely receipt of an executed
Transaction Report; 
 (b) the representations and warranties in this Agreement shall be true, accurate, and complete in all material
respects on the date of the Transaction Report and 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 Event of Default shall
have occurred and be continuing or result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in this Agreement remain true, accurate, and complete in
all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those
representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and 
 (c) in Bank’s reasonable discretion, there has not been a Material Adverse Change. 
 3.3 Covenant to
Deliver. 
 Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a condition precedent
to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the making of any Credit
Extension in the absence of a required item shall be in Bank’s sole discretion. 
 3.4 Procedures for Borrowing. 
 (a) Advances. Subject to the prior satisfaction of all other applicable conditions to the making of an Advance set forth in this Agreement, to
obtain an Advance (other than Advances under Sections 2.1.2 or 2.1.4), Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 p.m. Pacific time on the Funding Date of the Advance. Together
with such notification, Borrower must promptly deliver to Bank by electronic mail or facsimile a completed Transaction Report executed by a Responsible Officer or his or her designee. Bank shall credit Advances to the Designated Deposit Account.
Bank may make Advances under this Agreement based on instructions from a Responsible Officer or his or her designee or without instructions if the Advances are necessary to meet Obligations which have become due. Bank may rely on any telephone
notice given by a person whom Bank believes is a Responsible Officer or designee. 
 (b) Term Loan. Subject to the prior satisfaction
of all other applicable conditions to the making of the Term Loan set forth in this Agreement, to obtain the Term Loan, Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 p.m. Pacific
time at least two (2) Business Days prior to the date the Term Loan is to be made. Together with any such electronic or facsimile notification, Borrower shall deliver to Bank by electronic mail or facsimile a completed Payment/Advance Form
executed by a Responsible Officer or his or her designee. Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee. 
  

	 	4	CREATION OF SECURITY 

 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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 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 all the Collateral (subject only to Permitted Liens that, pursuant to the terms hereof, are allowed to have superior priority to
Bank’s Lien), in each case, to the extent that a security interest in such Collateral can be perfected pursuant to Article 9 or 8 of the Code. 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. 
 If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate
indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at Borrower’s sole cost and expense, release its
Liens in the Collateral and all rights therein shall revert to Borrower. 
 4.3 Authorization to File Financing Statements. Borrower
hereby authorizes Bank to file financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of any Collateral which is
not otherwise permitted by the terms hereof, whether by Borrower or any other Person, shall be deemed to violate the rights of Bank under the Code. 
  

	 	5	REPRESENTATIONS AND WARRANTIES 

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

 5.2 Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it
purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any, described in the Perfection Certificate
delivered to Bank in connection herewith, and the deposit accounts with respect to which Borrower is in compliance with the terms of Section 6.8 hereof. 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 or as otherwise permitted pursuant to Section 7.2. 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. 
 Except as otherwise specified in written notice from Borrower to Bank, no material amount of Inventory is
other than, in all material respects, of good and marketable quality, free from material defects. 
 Borrower is the sole owner of the
Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public, and
(c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s business is valid and enforceable, and no part of the
Intellectual Property which Borrower owns or purports to own and which is material to Borrower’s business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any
part of the Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business. 
 Except as noted on the Perfection Certificate and in the Compliance Certificates provided from time to time, Borrower is not a party to, nor is it bound
by, any material Restricted License. 
 5.3 Accounts Receivable; Inventory. 
 (a) For each Account with respect to which Advances are requested, on the date each Advance is requested and made, such Account shall be an Eligible
Account. 
 (b) All statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing the
Eligible Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all respects what they purport to be. If an Event of Default has occurred and is
continuing, Bank may notify any Account Debtor owing Borrower money of Bank’s security interest in such funds. All sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all
applicable laws and governmental rules and regulations. Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in any Transaction Report. To the best of Borrower’s
knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms.

 5.4 Litigation. Except as otherwise specified in the Perfection Certificate or reported pursuant to Section 6.2(k), there are
no actions or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than $50,000, individually, or $250,000 in the aggregate. 
 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 Borrower’s consolidated financial condition and Borrower’s consolidated results of operations. There has not been any material deterioration in Borrower’s consolidated financial condition since
the date of the most recent financial statements submitted to Bank. 
 5.6 Solvency. The fair salable value of Borrower’s assets
(including goodwill minus disposition costs) exceeds the fair value of its liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as
they mature. 
 5.7 Regulatory Compliance. Borrower is not an “investment company” or a company “controlled” by an
“investment company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal 

  

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Reserve Board of Governors). Borrower has complied in all material respects with the Federal Fair Labor Standards Act. Neither Borrower nor any of its
Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company” as each term is defined and used in the Public Utility Holding Company
Act of 2005. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a material adverse effect on its business. None of Borrower’s or any of its Subsidiaries’ properties or
assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower and each of its
Subsidiaries have obtained all consents, approvals and authorizations 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 to the extent the failure to obtain or make any approval or filing could not reasonably be expected to have a material adverse effect on Borrower’s or any Subsidiary’s business. 
 5.8 Subsidiaries; Investments. Borrower does not own any stock, partnership interest or other equity securities except for Permitted Investments.

 5.9 Tax Returns and Payments; Pension Contributions. 
 (a) Except as otherwise permitted by this Section 5.9, Borrower has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments,
deposits and contributions owed by Borrower. Borrower may defer payment of any contested taxes, provided that Borrower (i) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and
conducted, (ii) notifies Bank in writing of the commencement of, and any material development in, the proceedings, (iii) posts bonds or takes any other steps required to prevent the governmental authority levying such contested taxes from
obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien”. Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes becoming due and
payable by Borrower. 
 (b) Except as otherwise described on Schedule 5.9, 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 resulted or could reasonably be expected to result in any liability of Borrower which, when aggregated with all such actual and expected liabilities (including without duplication any liabilities described in
Section 6.5(b) or 7.10(c)) other than the liability described on Schedule 5.9, exceeds $50,000 (including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency). 
 5.10 Use of Proceeds. Borrower shall use the proceeds of the 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 Indebtedness to Officers, Directors or Shareholders. Borrower is not liable to any officer, director or shareholder of
Borrower for any Indebtedness, unless such officer, director or shareholder has subordinated such Indebtedness 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 such officer, director or shareholder), on terms acceptable to Bank. 
 5.12 Definition of “Knowledge.” For purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or
with a similar qualification, knowledge or awareness means the actual knowledge, after reasonable investigation, of the Responsible Officers. 
  

 -9- 

	 	6	AFFIRMATIVE COVENANTS 

 Borrower shall do all
of the following: 
 6.1 Government Compliance. 
 (a) Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify would
reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject, noncompliance with which
could have a material adverse effect on Borrower’s business. 
 (b) Obtain and maintain 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 to Bank copies of any such obtained Governmental
Approvals that Bank shall request. 
 6.2 Financial Statements, Reports, Certificates. Provide Bank with the following: 
 (a) a Transaction Report (and any schedules related thereto) (y) weekly and at the time of each request for an Advance if a Streamline Period is not
in effect or an Event of Default has occurred and is continuing and (z) within fifteen (15) days after the end of each month if a Streamline Period is in effect and no Event of Default has occurred and is continuing; 
 (b) within fifteen (15) days after the end of each month, (A) monthly accounts receivable agings, aged by invoice date, (B) monthly
accounts payable agings, aged by invoice date, and outstanding or held check registers, if any, and (C) monthly reconciliations of accounts receivable agings (aged by invoice date), transaction reports 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 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 (subject to any existing Defaults or Events of Default, which
Borrower shall describe in the Compliance Certificate), and setting forth calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Bank shall reasonably request, including, without
limitation, a statement that at the end of such month there were no held checks; 
 (e) [Reserved]; 
 (f) prior to 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 upcoming fiscal year of Borrower, and (B) annual financial projections for the following fiscal year (on a quarterly basis) as approved by Borrower’s board of directors, together with any related business
forecasts used in the preparation of such annual financial projections; and 
 (g) as soon as available, and in any event within 120 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 acceptable to Bank in its reasonable discretion. 
 (h) [Reserved]; 
  

 -10- 

 (i) within five (5) days of delivery, copies of all statements, reports and notices made available
to Borrower’s security holders or to any holders of Subordinated Debt, except to the extent that the foregoing have been filed with the SEC and are publicly available within such time frame; 
 (j) prompt written notice of (i) any material change in the composition of the Intellectual Property, (ii) the registration of any copyright,
including any subsequent ownership right of Borrower in or to any copyright, patent or trademark not shown in the IP Security Agreement, and (iii) Borrower’s knowledge of an event that could reasonably be expected to materially and
adversely affect the value of the Intellectual Property; 
 (k) prompt report of any legal action 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 more than Fifty Thousand Dollars ($50,000), individually, or more than Two Hundred Fifty Thousand Dollars ($250,000) when aggregated
with all other legal actions pending or threatened in writing against Borrower or any of its Subsidiaries that have not previously been disclosed to Bank pursuant to the Perfection Certificate or other written report; and 
 (l) 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, Borrower shall
furnish Bank with copies (or, at Bank’s request, originals) of all contracts, orders, invoices, and other similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for any goods the
sale or disposition of which gave rise to such Accounts. In addition, Borrower shall deliver to Bank, on its request, the originals of all instruments, chattel paper, security agreements, guarantees and other documents and property evidencing or
securing any Accounts, in the same form as received, with all necessary indorsements, and copies of all credit memos. 
 (b) Disputes.
Borrower shall promptly notify Bank of all disputes or claims involving $50,000 or more that relate 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 Event of Default has occurred and is continuing; and (iii) after taking into account all such discounts, settlements and forgiveness, no Credit Extension(s) will exceed any limit set forth herein. 
 (c) Collection of Accounts. Until payment in full in cash of all Advances and all other Obligations relating to the Revolving Line (other than
inchoate indemnity obligations) and Bank’s obligations to make Advances and any other Credit Extensions relating to the Revolving Line have terminated (provided that Borrower’s obligation under this sentence shall not end at a time when
any Event of Default exists), Borrower shall be a party to a three party agreement (the “Lockbox Agreement”) with Bank and a lockbox provider (the “Lockbox Provider”). The Lockbox Agreement and Lockbox Provider
shall be acceptable to Bank. As soon as reasonably practicable after the Effective Date, Borrower shall use the lockbox address as the payment address on all invoices issued by Borrower and shall direct all its Account Debtors to remit their
payments to the lockbox address. The Lockbox Agreement shall provide that the Lockbox Provider shall remit all collections received in the lockbox to Bank. Upon Bank’s receipt of such collections, Bank shall apply the same as follows:

  

	 	(i)	If a Streamline Period is in effect, Bank shall deposit such proceeds into the operating account of Borrower at Bank that is designated by Borrower; and 

  

	 	(ii)	If a Streamline Period is not in effect, Bank shall apply such proceeds to the outstanding Advances, and if all outstanding Advances have been paid in full, Bank shall deposit the
remainder into the operating account of Borrower at Bank that is designated by Borrower; and 

  

 -11- 

	 	(iii)	If a Default or Event of Default has occurred and is continuing, without limiting Bank’s other rights and remedies, Bank shall have the right to apply such proceeds to the
outstanding Obligations in such order as it shall determine in its discretion. 

 It is understood and agreed by Borrower that this Section
does not impose any affirmative duty on Bank to do any act other than to turn over such amounts. Without limitation on the foregoing, whether or not an Event of Default has occurred and is continuing, Borrower shall hold all payments on, and
proceeds of, Accounts that Borrower receives, in trust for Bank, and Borrower shall immediately deliver all such payments and proceeds to Bank in their original form, duly endorsed, to be applied to the Obligations pursuant to the terms of
Section 9.4 hereof. 
 (d) Returns. Provided no Event of Default has occurred and is continuing, if any Account Debtor
returns any Inventory to Borrower, Borrower shall promptly (i) determine the reason for such return, (ii) issue a credit memorandum to the Account Debtor in the appropriate amount, and (iii) provide a copy of such credit memorandum to
Bank, upon request from Bank. In the event any attempted return occurs after the occurrence and during the continuance of any Event of Default, Borrower shall hold the returned Inventory in trust for Bank, and immediately notify Bank of the
return of the Inventory. 
 (e) Verification. Bank may, from time to time, verify directly with the respective Account Debtors
the validity, amount and other matters relating to the Accounts, either in the name of Bank or Bank’s agent. 
 (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 2.5(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 $25,000 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. Taxes; Pensions. (a) Timely file, and require each of its Subsidiaries to timely file, all required tax returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all
foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each of its Subsidiaries, except for deferred payment of any taxes contested pursuant to the terms of Section 5.9 hereof, and shall deliver to
Bank, on demand, appropriate certificates attesting to such payments, and (b) except as otherwise described on Schedule 5.9, pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in
accordance with their terms, except to the extent that any failure to pay any such amount results in or is reasonably likely to result in any liability of Borrower which, when aggregated with all such actual and expected liabilities (including
without duplication any liabilities described in Section 5.9(b) or 7.10(c)) other than the liability described on Schedule 5.9, does not exceed $50,000. 
 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. Such inspections or audits shall be conducted no more often than twice in each 12-month period unless an Event of Default has occurred
and is continuing. The foregoing inspections and audits shall be at Borrower’s expense, and the charge therefor shall be $750 per person per day (or such higher amount as shall represent Bank’s then-current standard charge for 

  

 -12- 

 
the same), plus reasonable out-of-pocket expenses. In the event Borrower and Bank schedule an audit more than ten (10) days in advance, and Borrower
cancels or seeks to 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 incurred by
Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling. 
 6.7 Insurance. Keep its
business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Bank may reasonably request. Insurance policies shall be in a form, with companies, and in amounts that are
satisfactory to Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as the sole lender loss payee and waive subrogation against Bank. All liability policies shall show, or have endorsements showing, Bank as
an additional insured. All policies (or the loss payable and additional insured endorsements) shall provide that the insurer shall give Bank at least twenty (20) days notice before canceling, amending, or declining to renew its policy. At
Bank’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at Bank’s option, be payable to Bank on account of the Obligations. Notwithstanding the
foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to Fifty Thousand Dollars ($50,000) with respect to any loss, but not exceeding One
Hundred Thousand Dollars ($100,000) in the aggregate for all losses under all casualty policies in any one year, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall
be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Bank has been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of
Default, all proceeds payable under such casualty policy shall, at the option of Bank, be payable to Bank on account of the Obligations. If Borrower fails to obtain insurance as required under this Section 6.7 or to pay any amount or furnish
any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.7, and take any action under the policies Bank deems prudent. 
 6.8 Operating Accounts. 
 (a)
Beginning on the date which is 60 days after the Effective Date, maintain all of its and all of its Subsidiaries’ operating and other deposit accounts, securities accounts, and any other accounts at which Borrower or its Subsidiaries maintain
funds or investments (including without limitation any Collateral Accounts), which are maintained within the United States (including without limitation such accounts which are maintained with United States branches of foreign institutions), with
Bank and Bank’s Affiliates. Notwithstanding the foregoing, Borrower may maintain until December 31, 2009 its account number 0985930850 at National City Bank for purpose of continuing to receive deposits of payment items sent to
Borrower’s pre-existing lockbox, provided that (i) National City Bank and Borrower shall, within 30 days after the Effective Date, agree in writing that the proceeds in such account shall be swept to Bank two times per week and provide
Bank with a Control Agreement to perfect Bank’s Lien against such account, and (ii) Borrower shall still be required to comply with the terms of Section 6.3(c) hereof. 
 (b) Without limitation on subsection “a” above, (i) 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, and (ii) for each Collateral Account that Borrower at any time maintains within the United States (including without limitation any such
account which is maintained with a United States branch of a foreign institution), Borrower shall cause the applicable bank or financial institution (other than Bank) at or with which such 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. The provisions of “ii” of the previous sentence shall
(x) 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, (y) not apply to
accounts which are being moved to Bank or Bank’s Affiliates within the 60 day period provided for in Section 6.8(a) above, and (z) shall be subject to the terms of Section 6.8(a) above with respect to account number 0985930850 at
National City Bank. 
 6.9 Financial Covenants. 
 Maintain at all times, to be tested as of the last day of each month, unless otherwise noted, on a consolidated basis with respect to Borrower and its Subsidiaries: 
 (a) Minimum Adjusted Quick Ratio. An Adjusted Quick Ratio of at least 1.2 to 1.0 provided that Borrower shall only be required to maintain such
minimum Adjusted Quick Ratios with respect to months during which there were any Advances outstanding. 
  

 -13- 

 (b) Maximum Capital Expenditures. Not contract for, purchase or make any expenditure or
commitments for capital expenditures in an aggregate amount in excess of $1,750,000 for Borrower’s fiscal year ending December 31, 2009, $3,400,000 for Borrower’s fiscal year ending December 31, 2010, and an amount for each of
Borrower’s fiscal years ending thereafter as Borrower and Bank shall agree, provided that if Borrower and Bank fail to agree on the amount with respect to any such year, such amount shall be deemed to be $3,400,000 for such year. 
 (c) Minimum Fixed Charge Coverage Ratio. A Fixed Charge Coverage Ratio for the twelve month period ending April 30, 2009, and for each twelve
month period ending on the last day of each month thereafter, of not less than 1.50 to 1.00, provided that Borrower shall only be required to maintain such minimum Fixed Charge Coverage Ratios beginning upon release of the Term Loan-Related Reserve.

 (d) Minimum EBITDA. Maintain, measured as of the end of each month, EBITDA for the three-month period ending as of the end of such
month of at least the following minimum amounts for the months ending during the following periods (amounts in parentheses below represent negative numbers): 
  

					
	 Period
	  	Minimum EBITDA	 
		
	 Effective Date through May 31, 2009
	  	$	(2,280,000	) 
		
	 June 1, 2009 through August 31, 2009
	  	$	(1,060,000	) 
		
	 September 1, 2009 through November 30, 2009
	  	$	(100,000	) 
		
	 December 1, 2009 through February 28, 2010
	  	$	130,000	  
		
	 March 1, 2010 through May 31, 2010
	  	$	(1,600,000	) 
		
	 June 1, 2010 through August 31, 2010
	  	$	(250,000	) 
		
	 September 1, 2010 through November 30, 2010
	  	$	50,000	  
		
	 December 1, 2010 through February 28, 2011
	  	$	60,000	  

			
		
	 March 1, 2011 and thereafter
	  	an amount as Borrower and Bank shall agree

 6.10 Protection and Registration of Intellectual Property Rights. 
 (a) (i) Protect, defend and maintain the validity and enforceability of its Intellectual Property; (ii) promptly advise Bank in writing of
material infringements of its Intellectual Property; and (iii) not allow any Intellectual Property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent. 
 (b) If Borrower (i) obtains any Patent, registered Trademark, registered Copyright, registered mask work, or any pending application for any of the
foregoing, whether as owner, licensee or otherwise, or (ii) applies for any Patent or the registration of any Trademark, then Borrower shall provide written notice thereof to Bank as part of the Compliance Certificate required to be provided to
Bank pursuant to Section 6.2 with respect to the last month of then current fiscal quarter and shall execute such intellectual property security agreements and other documents and take such other actions as Bank shall request in its good faith
business judgment to perfect and maintain a first priority perfected security interest in favor of Bank in such property. If Borrower decides to register any Copyrights or mask works in the United States Copyright Office, Borrower shall:
(x) provide Bank with at least fifteen (15) days prior written notice of Borrower’s intent to register such Copyrights or mask works together with a 

  

 -14- 

 
copy of the application it intends to file with the United States Copyright Office (excluding exhibits thereto); (y) execute an intellectual property
security agreement and such other documents and take such other actions as Bank may request in its good faith business judgment to perfect and maintain a first priority perfected security interest in favor of Bank in the Copyrights or mask works
intended to be registered with the United States Copyright Office; and (z) record such intellectual property security agreement with the United States Copyright Office contemporaneously with filing the Copyright or mask work application(s) with
the United States Copyright Office. 
 (c) Provide written notice to Bank in each Compliance Certificate of any material Restrictive License
that Borrower has entered into or become bound by since the period covered by last Compliance Certificate (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as are commercially
reasonable 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; provided, however, that the failure to obtain any such consent after taking such commercially reasonable steps shall not limit the ability of
Borrower to enter into such license. 
 6.11 Litigation Cooperation. From the date hereof and continuing through the
termination of this Agreement, make available to Bank, without expense to Bank, Borrower and its officers, employees and agents and Borrower’s books and records (subject to (i) any written agreement binding upon Borrower prohibiting
Borrower from disclosing any information of third parties and (ii) attorney-client privilege of Borrower) 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 Pledge of Stock of AtriCure Europe B.V. Within 60
days after the Effective Date, Borrower shall cause Borrower and AtriCure Europe B.V. to enter into a pledge agreement with Bank pledging to Bank shares relating to 65% of the outstanding stock of AtriCure Europe B.V. and cause such agreement to be
notarized in accordance with the laws of the Netherlands. 
 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. 
  

	 	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 (including generators/capital equipment pursuant
to leases by Borrower as lessor) in the ordinary course of business, provided that Borrower shall not lease (as lessor) more than $100,000 book value of Inventory (including generators/capital equipment) per fiscal year and shall not lease any
Inventory (including generators/capital equipment that is leased by Borrower as lessor) which is subject to a Lien other than that of Bank or is leased by Borrower as lessee; (b) of worn-out or obsolete Equipment or Intellectual Property that
is no longer useful or economically practicable to maintain, provided in each case that no Event of Default has occurred and is continuing; and (c) consisting of Permitted Liens and Permitted Investments. 
 7.2 Changes in Business, Management, Control, or Locations of Business or Collateral. (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) permit the existing Chief Executive Officer
or Chief Financial Officer of the Borrower to cease to hold such position unless replaced within thirty (30) days with a person reasonably acceptable to Bank; or (ii) permit or suffer any Change in Control. 
 Borrower shall not, without at least thirty (30) days prior written notice to Bank: (1) add any new offices or business locations, including
warehouses (unless such new offices or business locations contain less than Ten Thousand Dollars ($10,000) in Borrower’s assets or property), (2) change its jurisdiction of organization, (3) change its organizational structure or
type, (4) change its legal name, (5) change any organizational number (if any) assigned by its jurisdiction of organization, or (6) maintain any of the Collateral other than at a location of Borrower, pursuant to leases allowed by
Section 7.1, or as set forth below in this Section 7.2. 
  

 -15- 

 Borrower shall not deliver to any bailee any portion of the Collateral, except that Borrower may deliver
(x) Inventory to a bailee for sterilization in an aggregate amount outstanding at any one time for such bailee not exceeding $500,000 (gross book value), (y) molds to bailees who use the molds to fabricate Inventory for Borrower in an
aggregate amount outstanding at any one time for all such bailees not exceeding $250,000 (gross book value), and (z) other Inventory or Equipment to bailees in an aggregate amount outstanding at any one time for all such bailees not exceeding
$350,000 (gross book value). If Borrower intends to deliver any portion of the Collateral to a bailee in an amount in excess of what is allowed pursuant to the foregoing sentence, Borrower will first receive the written consent of Bank, and such
bailee shall execute and deliver a bailee agreement in form and substance reasonably satisfactory to Bank. Borrower may maintain small amounts of “trunk stock” with Borrower’s sales representatives and may maintain with any customer
of Borrower (y) up to $150,000 (valued at Borrower’s then current standard cost) per customer, at any one time, of Borrower’s generators/capital equipment and (z) up to $50,000 (valued at Borrower’s then current standard
cost) per customer, at any one time, of Borrower’s disposable products on consignment to such customer. 
 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 a Subsidiary). A Subsidiary may merge or consolidate into another Subsidiary. 
 7.4 Indebtedness. Create, incur, assume, or be liable for (a) any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness, or (b) any Indebtedness to any officer, director or shareholder of
Borrower unless such officer, director or shareholder subordinates such Indebtedness 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 such officer, director or shareholder), on terms acceptable to Bank. 
 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, or
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 the definition of “Permitted Liens” herein. 
 7.6 Maintenance of Collateral Accounts.
Maintain any Collateral Account except pursuant to the terms of Section 6.8(b) hereof. 
 7.7 Distributions; Investments.
(a) Pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock provided that (i) Borrower may convert any of its convertible securities into other securities pursuant to the terms of such
convertible securities or otherwise in exchange thereof, (ii) Borrower may pay dividends solely in common stock; (iii) Borrower may repurchase the stock of former employees or consultants pursuant to stock repurchase agreements so long as
an Event of Default does not exist at the time of such repurchase and would not exist after giving effect to such repurchase, provided such repurchase does not exceed in the aggregate of One Hundred Thousand Dollars ($100,000) per fiscal year; and
(iv) Borrower may institute a stock repurchase program pursuant to which it repurchases outstanding shares of Borrower’s common stock so long as an Event of Default does not exist at the time of any such repurchase and would not exist
after giving effect to such repurchase and provided that the aggregate of all such repurchases does not exceed $500,000; or (b) directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do
so. 
 7.8 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any
Affiliate of Borrower, except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a
non-affiliated Person. 
  

 -16- 

 7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except
under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the amount thereof or
the amount of any permitted payments thereunder or adversely affect the subordination thereof to Obligations owed to Bank. 
 7.10
Compliance. (a) 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; (b) 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; (c) fail to meet the minimum funding requirements
of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur, or withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or (except as has already occurred and
is described on Schedule 5.9 hereto) permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which results or could reasonably be expected to result in any liability of Borrower
which, when aggregated with all such actual and expected liabilities (including without duplication any liabilities described in Section 5.9(b) or 6.5(b)) other than the liability described on Schedule 5.9, exceeds $50,000 (including any
liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency). 
 7.11 Schedule 5.9
Liability. Become liable for in an amount greater than $300,000 in connection with the matter described on Schedule 5.9. 
  

	 	8	EVENTS OF DEFAULT 

 Any one of the following
shall constitute an event of default (an “Event of Default”) under this Agreement: 
 8.1 Payment Default. Borrower
fails to (a) make any payment of principal or interest on any Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business
Day cure period shall not apply to payments due on the Revolving Line Maturity Date or the Term Loan Maturity Date). During the cure period, the failure to make or pay any payment specified under clause (a) or (b) hereunder is not an Event
of Default (but no Credit Extension will be made during the cure period); 
 8.2 Covenant Default. 
 (a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10(c) 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. 
  

 -17- 

 (a) (i) The service of process seeking to attach, by trustee or similar process, any funds of
Borrower or of any entity under the control of Borrower (including a Subsidiary) on deposit or otherwise maintained with Bank or any Bank Affiliate, or (ii) a notice of lien or levy is filed against any of Borrower’s assets by any
government agency, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit
Extensions shall be made during any ten (10) day cure period; or 
 (b) (i) any material portion of Borrower’s assets is
attached, seized, levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower from conducting any material part of its business; 
 8.5 Insolvency. (a) Borrower is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent;
(b) Borrower begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower and not dismissed or stayed within forty-five (45) days (but no Credit Extensions shall be made while of any of the conditions
described in clause (a) exist and/or until any Insolvency Proceeding is dismissed); 
 8.6 Other Agreements. There is,
under any agreement to which Borrower or any Guarantor is a party with a third party or parties, (a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an
amount individually or in the aggregate in excess of One Hundred Thousand Dollars ($100,000); (b) any default by Borrower or Guarantor which (without limitation on the generality of Section 8.3) constitutes a Material Adverse Change; or
(c) any default by Guarantor, the result of which could have a material adverse effect on such Guarantor’s business; 
 8.7
Judgments. One or more final judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least One Hundred Thousand Dollars ($100,000) (not covered by independent third-party insurance as to
which liability has been accepted by such insurance carrier) shall be rendered against Borrower and the same are not, within ten (10) days after the entry thereof, discharged or execution thereof stayed or bonded pending appeal, or such
judgments are not discharged prior to the expiration of any such stay (provided that no Credit Extensions will be made prior to the discharge, stay, or bonding of such judgment, order, or decree); 
 8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now or later in
this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made; or

 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; a
default or breach occurs under any agreement between Borrower and any creditor of Borrower that signed a subordination, intercreditor, or other similar agreement with Bank, or any creditor that has signed such an agreement with Bank breaches any
terms of such agreement; or the Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement or any such subordination, intercreditor, or other similar agreement. 
  

	 	9	BANK’S RIGHTS AND REMEDIES 

 9.1
Rights and Remedies. If an Event of Default has occurred and is continuing, Bank may, without notice or demand, do any or all of the following: 
 (a) declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank); 
 (b) stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between Borrower and Bank;

  

 -18- 

 (c) demand that Borrower (i) deposit cash with Bank in an amount equal to 105% 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) [Reserved]; 
 (e) verify the amounts of, demand payment of and performance under, and collect any Accounts and General Intangibles, and 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; 
 (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. 
  

 -19- 

 9.3 Protective Payments. If Borrower fails to obtain the insurance called for by
Section 6.7 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document, Bank may obtain such insurance or make such payment, and all amounts so paid by
Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest rate applicable to the Obligations, and secured by the Collateral. Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such
insurance at the time it is obtained or within a reasonable time thereafter. No payments by Bank are deemed an agreement to make similar payments in the future or Bank’s waiver of any Event of Default. 
 9.4 Application of Payments and Proceeds. If an Event of Default has occurred and is continuing, Bank may apply any funds in its
possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations in such order as Bank shall determine in its sole
discretion. Any surplus shall be paid to Borrower 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, in its good faith business judgment,
directly or indirectly enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the
purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor. 
 9.5 Bank’s
Liability for Collateral. So long as Bank complies with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the
safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of
loss, damage or destruction of the Collateral. 
 9.6 No Waiver; Remedies Cumulative. Bank’s failure, at any time or
times, to require strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith. No
waiver hereunder shall be effective unless signed by the party granting the waiver and then is only effective for the specific instance and purpose for which it is given. Bank’s rights and remedies under this Agreement and the other Loan
Documents are cumulative. Bank has all rights and remedies provided under the Code, by law, or in equity. Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy under this
Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence. 
 9.7 Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable. 
  

	 	10	NOTICES 

 All notices, consents, requests,
approvals, demands, or other communication 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.

  

 -20- 

			
	 If to Borrower:
	 	 AtriCure, Inc.
 6033 Schumacher Park Drive

West Chester, Ohio 45069
 Attn: Julie A. Piton
 Fax: (513) 644-1315
 Email: jpiton@atricure.com

		
	 If to Bank:
	 	 Silicon Valley Bank
 230 West Monroe, Suite
720
 Chicago, IL 60606
 Attn: Janice Galbavy
 Fax: (312) 704-1532
 Email: Jgalbavy@svb.com

  

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

 California 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 Santa Clara County,
California; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the
Obligations, or to enforce a judgment or other court order in favor of Bank. Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any objection that it
may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Borrower hereby waives personal service of the
summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth in, or
subsequently provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or 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. 
 WITHOUT INTENDING IN ANY WAY TO LIMIT
THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them
arising at any time shall be decided by a reference to a private judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County, California Superior Court) appointed in accordance with California
Code of Civil Procedure Section 638 (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties
hereby submit to the jurisdiction of such court. The reference proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall
have the power, among others, to grant provisional relief, including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the
public and confidential and all records relating thereto shall be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial
reference procedures, then such party may apply to the Santa Clara County, California Superior Court for such relief. The proceeding before the private judge shall be conducted in the same manner as it would be before a court under the rules of
evidence applicable to judicial proceedings. The parties shall be entitled to discovery which shall be conducted in the same manner as it would be before a court under the rules of discovery applicable to judicial proceedings. The private judge
shall oversee discovery and may enforce all discovery rules and orders applicable to judicial proceedings in the same manner as a trial court judge. The parties agree that the selected or appointed private judge shall have the power to decide all
issues in the action 

  

 -21- 

 
or proceeding, whether of fact or of law, and shall report a statement of decision thereon pursuant to California Code of Civil Procedure § 644(a).
Nothing in this paragraph shall limit the right of any party at any time to exercise self-help remedies, foreclose against collateral, or obtain provisional remedies. The private judge shall also determine all issues relating to the applicability,
interpretation, and enforceability of this paragraph. 
  

	 	12	GENERAL PROVISIONS 

 12.1
Termination Prior to Revolving Line Maturity Date. This Agreement may be terminated prior to the Revolving Line Maturity Date by Borrower, effective three (3) Business Days after written notice of termination is given to Bank.
Notwithstanding any such termination, Bank’s lien and security interest in the Collateral and all of Bank’s rights and remedies under this Agreement shall continue until Borrower fully satisfies its Obligations. If such termination is at
Borrower’s election or at Bank’s election due to the occurrence and continuance of an Event of Default or if any of the Obligations become due and payable as a result of an Event of Default (including without limitation becoming due and
payable as a result of an Insolvency Proceeding), Borrower shall pay to Bank, in addition to the payment of any other expenses or fees then-owing, a termination fee in an amount equal to 3.0% of the Net Maximum Dollar Amount if termination occurs on
or before the first anniversary of the Effective Date, and 2.0% of the Net Maximum Dollar Amount if termination occurs after the first anniversary of the Effective Date and on or before the second anniversary of the Effective Date, and 1.0% of the
Net Maximum Dollar Amount if termination occurs after the second anniversary of the Effective Date and before the Revolving Line Maturity Date; provided that no termination fee shall be charged if the credit facility hereunder is replaced with a new
facility from another division of Bank. 
 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.
Notwithstanding the foregoing, prior to the occurrence of an Event of Default, Bank shall not assign any interest in the Loan Documents to an operating company which is a direct competitor of Borrower. 
 12.3 Indemnification. Borrower agrees to indemnify, defend and hold Bank and its directors, officers, employees, agents, attorneys, or any
other Person affiliated with or representing Bank (each, an “Indemnified Person”) harmless against: (a) all obligations, demands, claims, and liabilities (collectively, “Claims”) claimed or asserted by any
other party in connection with the transactions contemplated by the Loan Documents; and (b) all losses or expenses (including Bank Expenses) in any way suffered, incurred, or paid by such Indemnified Person as a result of, following from,
consequential to, or arising from transactions between Bank and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by such Indemnified Person’s gross negligence or willful
misconduct. 
 12.4 Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement.

 12.5 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 so long as Bank provides Borrower with written notice of such correction and allows Borrower at least ten (10) days to object to such correction. In the event of such objection,
such correction shall not be made except by an amendment signed by both Bank and Borrower. 
 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 

  

 -22- 

 
grant any further waiver. The Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All
prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of the Loan Documents merge into the Loan Documents. 
 12.8 Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, is an original, and all taken together, constitute one Agreement. 
 12.9 Survival. All
covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and any other obligations which, by
their terms, are to survive the termination of this Agreement) have been satisfied. The obligation of Borrower in Section 12.3 to indemnify Bank shall survive until the statutes of limitation with respect to all Claims, losses and expenses for
which such indemnity is given shall have run. 
 12.10 Confidentiality. In handling any confidential information, Bank shall
exercise the same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates; (b) to prospective transferees or purchasers of any interest
in the Credit Extensions (provided, however, Bank shall use its best 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 that is either: (i) in the
public domain (other than as a result of a disclosure by Bank) or in Bank’s possession when disclosed to Bank, or becomes part of the public domain after disclosure to Bank; or (ii) disclosed to Bank by a third party, if Bank does not know
that the third party is prohibited from disclosing the information. 
 Bank may use confidential information for the development of
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 this Section 12.10
shall survive the termination of this Agreement. 
 12.11 Attorneys’ Fees, Costs and Expenses. In any action or proceeding
between Borrower and Bank arising out of or relating to the Loan Documents, the prevailing party 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. 
 12.12 Electronic Execution of Documents. The words “execution,” “signed,”
“signature” and words of like import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and enforceability as a
manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions
Act. 
 12.13 Captions. The headings used in this Agreement are for convenience only and shall not affect the interpretation of
this Agreement. 
 12.14 Construction of Agreement. The parties mutually acknowledge that they and their attorneys have
participated in the preparation and negotiation of this Agreement. In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the uncertainty to exist. 
 12.15 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. 
 12.16 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. 
  

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	 	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, the singular
includes the plural, and numbers denoting amounts that are set off in brackets are negative. As used in this Agreement, the following capitalized terms have the following meanings: 
 “Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes,
without limitation, all accounts receivable and other sums owing to Borrower. 
 “Account Debtor” is any “account
debtor” as defined in the Code with such additions to such term as may hereafter be made. 
 “Adjusted Quick
Ratio” is the ratio of (a) Borrower’s unrestricted cash and unrestricted Cash Equivalents held with Bank and Bank’s Affiliates plus Borrower’s Eligible Accounts, divided by (b) Borrower’s Current Liabilities
(including any amounts used for Cash Management Services and the face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit)) minus the current portion of Deferred Revenue. (For purposes of clarity, the parties
acknowledge that Borrower’s cash or Cash Equivalents shall not be considered to be restricted by reason of the fact that they are subject to Bank’s Lien.) 
 “Advance” or “Advances” means an advance (or advances) under the Revolving Line. 
 “Affiliate” is, with respect to any Person, each other Person that owns or controls directly or indirectly the Person, any Person that
controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s managers and members.

 “Agreement” is defined in the preamble hereof. 
 “Availability Amount” is (a) the lesser of (i) the Net Maximum Dollar Amount or (ii) the amount available under the
Borrowing Base, minus, without duplication, (b) the aggregate Dollar Equivalent amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit), minus, without duplication, (c) any amounts being used for
Cash Management Services, and minus, without duplication, (d) the outstanding principal balance of any Advances. 
 “Bank” is defined in the preamble hereof. 
 “Bank Expenses” are all audit fees and expenses,
costs, and expenses (including reasonable attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or
Insolvency Proceedings) or otherwise incurred with respect to Borrower or any Guarantor. 
 “Base Rate” is the greater of
the Prime Rate or 4.0% per annum. 
 “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 Base” is 80% of Eligible Accounts, as determined by Bank from Borrower’s most recent Transaction Report, less the Term
Loan-Related Reserve; provided, however, that Bank may decrease the foregoing percentage in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect Collateral.

  

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 “Borrowing Resolutions” are the Bank’s form of Corporate Borrowing Certificate
(with such revisions thereto as Bank and Borrower shall agree), completed and signed by the applicable officers of Borrower. 
 “Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed. 
 “Cash
Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition;
(b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) Bank’s certificates
of deposit issued maturing no more than one (1) year after issue; and (d) money market funds at least ninety-five percent (95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through
(c) of this definition. 
 “Cash Management Services” is defined in Section 2.1.4. 
 “Change in Control” means any event, transaction, or occurrence as a result of which (a) any “person” (as such term is
defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of Borrower, is or becomes a beneficial owner (within the meaning Rule 13d-3 promulgated under
the Exchange Act), directly or indirectly, of securities of Borrower, representing twenty-five percent (25%) or more of the combined voting power of Borrower’s then outstanding securities. 
 “Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of California;
provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in Article or Division 9
shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral is governed by the Uniform
Commercial Code in effect in a jurisdiction other than the State of California, 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. 
  

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 “Copyrights” are any and all copyright rights, copyright applications, copyright
registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret. 
 “Credit Extension” is any Advance, Letter of Credit, amount utilized for Cash Management Services, Term Loan, or any other extension of
credit by Bank for Borrower’s benefit. 
 “Current Assets” are amounts that under GAAP should be included on that date
as current assets on Borrower’s consolidated balance sheet. 
 “Current Liabilities” are all obligations and
liabilities of Borrower to Bank (regardless of when they mature), plus, without duplication, the aggregate amount of Borrower’s Total Liabilities that mature within one (1) year. 
 “Default” means any event which with notice or passage of time or both, would constitute an Event of Default. 
 “Default Rate” is defined in Section 2.3(b). 
 “Deferred Revenue” is all amounts received or invoiced in advance of performance under contracts and not yet recognized as revenue. 
 “Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may hereafter be made.

 “Designated Deposit Account” is Borrower’s deposit account, account number 3300640389, maintained with Bank.

 “Dollars,” “dollars” or use of the sign “$” means only lawful
money of the United States and not any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United States. 
 “Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect
to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for
transfer to the country issuing such Foreign Currency. 
 “Domestic Subsidiary” means a Subsidiary organized under
the laws of the United States or any state or territory thereof or the District of Columbia. 
 “EBITDA” shall mean
(a) Net Income, plus (b) Interest Expense, plus (c) to the extent deducted in the calculation of Net Income, depreciation expense and amortization expense, plus (d) to the extent deducted in the calculation of Net Income, income
tax expense, plus (e) to the extent deducted in the calculation of Net Income, non-cash charges including non-cash equity compensation. 
 “Effective Date” is defined in the preamble hereof. 
 “Eligible Accounts” means Accounts which
arise in the ordinary course of Borrower’s business that meet all Borrower’s representations and warranties in Section 5.3. Bank reserves the right upon prior written notice to Borrower at any time after the Effective Date to adjust
any of the criteria set forth below and to establish new criteria in its good faith business judgment. Unless Bank otherwise agrees in writing, Eligible Accounts shall not include: 
 (a) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date regardless of invoice payment period terms; 
  

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 (b) Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have not
been paid within ninety (90) days of invoice date; 
 (c) Accounts owing from an Account Debtor which does not have its principal place
of business in the United States or Canada; 
 (d) Accounts billed and/or payable outside of the United States; 
 (e) Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to the Account Debtor (as creditor, lessor,
supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the
ordinary course of its business; 
 (f) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or agent;

 (g) Accounts with credit balances over ninety (90) days from invoice date; 
 (h) Accounts owing from an Account Debtor, including Affiliates, whose total obligations to Borrower exceed twenty-five percent (25%) of all
Accounts, for the amounts that exceed that percentage, unless Bank approves in writing; 
 (i) Accounts owing from an Account Debtor which is
a United States government entity or any department, agency, or instrumentality thereof unless Borrower has assigned its payment rights to Bank and the assignment has been acknowledged under the Federal Assignment of Claims Act of 1940, as amended;

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

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 (s) Accounts for which Borrower has permitted Account Debtor’s payment to extend beyond 90 days;

 (t) Accounts subject to chargebacks or others payment deductions taken by an Account Debtor (but only to the extent of the chargebacks or
deductions); 
 (u) Accounts in which the Account Debtor disputes liability or makes any claim (but only up to the disputed or claimed
amount), or if the Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or goes out of business; and 
 (v) Accounts
for which Bank in its good faith business judgment determines collection to be doubtful. 
 “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. 
 “Fixed
Charge Coverage Ratio” means a ratio of (a) EBITDA, minus cash income taxes paid, and minus unfinanced capital expenditures, to (b) current portion of long term debt, plus cash Interest Expense paid. 
 “Foreign Currency” means lawful money of a country other than the United States. 
 “Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary. 
 “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. 
 “GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant
segment of the accounting profession, which are applicable to the circumstances as of the date of determination. 
 “General
Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims, income
and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise),
insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind. 
 “Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act
by or in respect of, any Governmental Authority. 
 “Governmental Authority” is any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory organization. 
 “Guarantor” is any present or future guarantor of the
Obligations. 
  

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 “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 other 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 all of Borrower’s right, title, and interest in and to the following:

 (a) its Copyrights, Trademarks and Patents; 
 (b) any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions, know-how, operating manuals; 
 (c) any and all source code; 
 (d) any and
all design rights which may be available to a Borrower; 
 (e) any and all claims for damages by way of past, present and future infringement
of any of the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and 
 (f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents. 
 “Interest Expense” means for any fiscal period, interest expense (whether cash or non-cash) determined in accordance with GAAP for the
relevant period ending on such date, including, in any event, interest expense with respect to any Credit Extension and other Indebtedness of Borrower and its Subsidiaries, including, without limitation or duplication, all commissions, discounts, or
related amortization and other fees and charges with respect to letters of credit and bankers’ acceptance financing and the net costs associated with interest rate swap, cap, and similar arrangements, and the interest portion of any deferred
payment obligation (including leases of all types). 
 “Inventory” is all “inventory” as defined in the Code in
effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including
without limitation such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above. 
 “Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any
loan, advance or capital contribution to any Person. 
 “IP Agreement” is that certain Intellectual Property Security
Agreement executed and delivered by Borrower to Bank entered into on or about the date hereof. 
 “Letter of Credit” means a
standby letter of credit issued by Bank or another institution based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set forth in Section 2.1.2. 
 “Letter of Credit Application” is defined in Section 2.1.2(b). 
 “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. 
  

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 “Loan Documents” are, collectively, this Agreement, the Warrant, the Perfection
Certificate, the IP Agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement between Borrower any Guarantor and/or for the benefit of Bank in connection with this Agreement, all as
amended, restated, or otherwise modified. 
 “Make-Whole Event Date” shall mean (a) in the case of a Voluntary Term
Loan Prepayment, the date of such prepayment, and (b) in the case of all or a portion of the Term Loan becoming due and payable according to the terms hereof because of the occurrence and continuance of an Event of Default, the date such amount
of the Term Loan has become due and payable according to the terms hereof. 
 “Make-Whole Premium” is an amount equal to 3%
of the Term Loan Amount if the Make-Whole Event Date occurs on or before the first anniversary of the Effective Date; 2% of the Term Loan Amount if the Make-Whole Event Date occurs after the first anniversary of the Effective Date but on or before
the second anniversary of the Effective Date; 1% of Term Loan Amount if the Make-Whole Event Date occurs after the second anniversary of the Effective Date but before the Term Loan Maturity Date. 
 “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; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.
 
 “Maximum Dollar Amount” is $10,000,000. 
 “Minimum Cash Condition” is the condition that, as of the date on which it is tested, Borrower have an aggregate of unrestricted cash
and Cash Equivalents held at Bank and Bank’s Affiliates of greater than the sum of (a) the outstanding principal amount of any Advances (including any amounts used for Cash Management Services), plus (b) the face amount of any
outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit), plus (c) the amount outstanding under the Term Loan. 
 “Monthly Financial Statements” is defined in Section 6.2(c). 
 “Net Income” means, as
calculated on a consolidated basis for Borrower and its Subsidiaries for any period as at any date of determination, the net profit (or loss), after provision for taxes, of Borrower and its Subsidiaries for such period taken as a single accounting
period. 
 “Net Maximum Dollar Amount” is, as of any date, the Maximum Dollar Amount less the amount outstanding under the
Term Loan on such date. 
 “Obligations” are Borrower’s obligations to pay when due any debts, principal, interest,
Bank Expenses and other amounts Borrower owes Bank now or later, whether under this Agreement, the Loan Documents, or otherwise, including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for
drawn and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and to
perform Borrower’s duties under the Loan Documents. 
 “Operating Documents” are, for any Person, such Person’s
formation documents, as certified with the Secretary of State of such Person’s state of formation on a date that is no earlier than 30 days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form,
(b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement (or similar agreement), each of the foregoing with all
current amendments or modifications thereto. 
 “Overadvance” is defined in Section 2.2. 
 “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. 
  

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 “Payment” means all checks, wire transfers and other items of payment received by Bank
(including proceeds of Accounts and payment of the Obligations in full) for credit to Borrower’s outstanding Credit Extensions or, if the balance of the Credit Extensions has been reduced to zero, for credit to its deposit accounts. 

“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 to any Subsidiary, and Contingent Obligations of any Subsidiary with respect to obligations of Borrower (provided that
the primary obligations are not prohibited hereby), and Indebtedness of Subsidiaries to Borrower that, when aggregated with Investments of Borrower in Subsidiaries that are permitted pursuant to the definition of “Permitted Investments”
hereunder, does not exceed Seven Million Dollars ($7,000,000) in the aggregate for all Subsidiaries (net of repayments by the Subsidiaries to Borrower), and Indebtedness of any Subsidiary to any other Subsidiary, and Contingent Obligations of any
Subsidiary with respect to obligations of any other Subsidiary (provided that the primary obligations are not prohibited hereby); 
 (h)
Indebtedness under hedging obligations with respect to interest rates, foreign currency exchange rates or commodity prices, in each case not entered into for speculative purposes, and in an aggregate notational value at any time outstanding not
exceeding an amount equal to one-half (1/2) of the then outstanding principal balance of the Term Loan; 
 (i) other Indebtedness of
Foreign Subsidiaries not otherwise permitted under this definition in an aggregate amount not exceeding $250,000 at any time outstanding (for purposes of clarity, the parties acknowledge that this is Permitted Indebtedness of Foreign Subsidiaries
and not Permitted Indebtedness of Borrower); 
 (j) other Indebtedness not otherwise permitted by Section 7.4 not exceeding $250,000 in
the aggregate outstanding at any time; 
 (k) Contingent Obligations of Borrower relating to, and not exceeding the amount of, the
Indebtedness of any Subsidiary allowed pursuant to clause (i) above; and 
 (l) extensions, refinancings, modifications, amendments and
restatements of any items of Permitted Indebtedness (a) and (b) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as
the case may be. 
 “Permitted Investments” are: 
 (a) Investments (including, without limitation, Subsidiaries) existing on the Effective Date and shown on the Perfection Certificate; 
 (b) (i) Investments consisting of Cash Equivalents, and (ii) Investments approved by Borrower’s Board of Directors or otherwise pursuant to a
Board-approved investment policy; 
  

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 (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 (i) by Borrower in Subsidiaries that, when aggregated with Indebtedness of Subsidiaries to Borrower that is permitted pursuant to
the definition of “Permitted Indebtedness” hereunder, do not exceed Seven Million Dollars ($7,000,000) (or the Dollar equivalent thereof) in the aggregate for all Subsidiaries (net of repayments by the Subsidiaries to Borrower) and
(ii) by Subsidiaries in Borrower; 
 (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; 
 (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; 
 (j) Investments consisting of hedging obligations permitted by clause (h) of the definition of “Permitted Indebtedness” hereunder; and 
 (k) other Investments not otherwise permitted by Section 7.7 not exceeding $100,000 in the aggregate outstanding at any time. 
 “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
under the Internal Revenue Code of 1986, as amended, and the Treasury Regulations adopted thereunder; 
 (c) purchase money Liens or capital
leases (for which Borrower is the lessee) (i) on Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment securing no more than $500,000 in the aggregate amount outstanding, or (ii) existing on
Equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the Equipment; 
 (d) Liens of
carriers, warehousemen, suppliers, or other Persons that are possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the aggregate amount not to exceed Fifty Thousand
Dollars ($50,000) and which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject
thereto; 
 (e) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like
obligations incurred in the ordinary course of business (other than Liens imposed by ERISA); 
  

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 (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; 
 (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;

 (j) Liens in favor of other financial institutions arising in connection with (i) Borrower’s foreign deposit and/or foreign
securities accounts held at such institutions outside of the United States, and (ii) any Collateral Account of Borrower that is allowed to be maintained with such institution under the terms of this Agreement provided that the Lien only secures
Borrower’s obligations to the institution for fees and expenses related to the maintenance of the account or for standard banking charges to the account (e.g. for bounced checks) and that the Bank has a perfected security interest in the
amounts held in the Collateral Account; 
 (k) easements, rights-of-way, restrictions (including zoning restrictions), covenants, licenses,
encroachments, protrusions and other similar charges or encumbrances, and minor title deficiencies, on or with respect to any real property, in each case whether now or hereafter in existence; and 
 (l) Liens securing Indebtedness permitted under clause (i) of the definition of “Permitted Indebtedness” hereunder, provided that none of
the property subject to such Liens constitutes Collateral. 
 “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. 
 “Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest rate. 
 “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 good faith belief that any collateral report or financial information furnished by or on behalf of Borrower or any Guarantor to Bank is or may have been incomplete, inaccurate or misleading in any material respect; or (c) in
respect of any state of facts which Bank determines in good faith constitutes an Event of Default or may, with notice or passage of time or both, constitute an Event of Default. 
  

 -33- 

 “Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial
Officer and Director of Finance. 
 “Restricted License” is any material license or other agreement with respect to which
Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under or termination
of could interfere with the Bank’s right to sell any Collateral. 
 “Revolving Line” is an Advance or Advances in an
aggregate amount equal to the Net Maximum Dollar Amount. 
 “Revolving Line Maturity Date” is April 30, 2012.

 “SEC” shall mean the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.

 “Securities Account” is any “securities account” as defined in the Code with such additions to such term as may
hereafter be made. 
 “Streamline Period” is defined in Section 2.1.1(b). 
 “Streamline Requirements” are all of the following: (a) no Default or Event of Default exists and (b) Borrower meets the
Minimum Cash Condition. 
 “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. 
 “Term Loan” is defined in
Section 2.1.5(a). 
 “Term Loan Amount” is defined in Section 2.1.5(a). 
 “Term Loan Maturity Date” is defined in Section 2.1.5(b). 
 “Term Loan-Related Reserve” is, as of any date, an amount equal to one-half (1/2) of the amount outstanding under the Term Loan on
such date; provided that the Term Loan-Related Reserve will be deemed to be zero on and after the date that Borrower has maintained a Fixed Charge Coverage Ratio of at least 1.5 to 1.0 for at least four consecutive fiscal quarters.

 “Total Liabilities” is on any day, obligations that should, under GAAP, be classified as liabilities on
Borrower’s consolidated balance sheet, including all Indebtedness and current portion of Subordinated Debt permitted by Bank to be paid by Borrower, but excluding all other Subordinated Debt. 
 “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 in the form provided by Bank to Borrower prior to the date hereof. 
  

 -34- 

 “Transfer” is defined in Section 7.1. 
 “Unused Revolving Line Facility Fee” is defined in Section 2.4(d). 
 “Voluntary Term Loan Prepayment” is defined in Section 2.1.5(d). 
 “Warrant” is that certain Warrant to Purchase Stock of substantially even date executed by Borrower in favor of Bank. 
 [Signature page follows.] 
  

 -35- 

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

									
	BORROWER:	 		 	BANK:
			
	ATRICURE, INC.	 		 	SILICON VALLEY BANK
					
	By	 	 /s/ Julie A. Piton
	 		 	By	 	 /s/ Janice Galbavy

	Name:	 	 Julie A. Piton
	 		 	Name:	 	 Janice Galbavy

	Title:	 	Vice President, Finance and Administration and	 		 	Title:	 	 Relationship Manager

		 	 Chief Financial Officer
	 		 	Effective Date: May 1, 2009

 EXHIBIT A 
 Collateral Description 
 The Collateral consists of all of Borrower’s right, title and interest in and to the following
personal property: 
 All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of
money, leases, license agreements, franchise agreements, General Intangibles, commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, 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 more than 65% of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by Borrower of any Foreign Subsidiary
which shares entitle the holder thereof to vote for directors or any other matter. 
  

 36 

 EXHIBIT B 
 COMPLIANCE CERTIFICATE 
  

									
	 TO:
	 	SILICON VALLEY BANK	 		 	Date:	 	  

	 FROM:
	 	ATRICURE, INC.	 		 		 	

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

					
	 Reporting Covenant
	  	 Required
	  	 Complies

	Transaction Reports	  	Non-Streamline=Weekly; Streamline= monthly within 15 days	  	Yes    No
			
	Monthly payable & receivable items, check registers, general ledger, & reconciliations	  	Monthly within 15 days	  	Yes    No
			
	Monthly financial statements with Compliance Certificate	  	Monthly within 30 days	  	Yes    No
			
	Annual financial statement (CPA Audited)	  	FYE within 120 days	  	Yes    No
			
	Annual budgets and projections	  	Prior to FYE	  	Yes    No

  

								
	 Financial Covenants
	  	Required	  	Actual	  	 Complies

	 Maintain on a Monthly Basis:
	  		  			  	
	 Minimum Adjusted Quick Ratio (when required)
	  	1.2:1.0	  	 	            :1.0	  	Yes    No
	 Maximum Capital Expenditures
	  	*	  	$	            	  	Yes    No
	 Minimum Fixed Charge Coverage Ratio (when required)
	  	1.5:1.0	  	 	            :1.0	  	Yes    No
	 Minimum EBITDA
	  	*	  	$	            	  	Yes    No

  

	*	See Loan Agreement 

  

 37 

					
	 	 	 Performance Pricing
	  	 Applies

	 Adjusted Quick Ratio:
	 		  	
	 greater or equal to 2 to 1
	 	First Tier Rate	  	Yes    No
	 greater or equal to 1.5 to 1, but less than 2 to 1
	 	Second Tier Rate	  	Yes    No
	 Less than 1.5 to 1, or Event of Default exists
	 	Regular Rate	  	Yes    No
			
	 	 	 Streamline Requirement
	  	 
	 Minimum Cash Condition
	 	See Loan Agreement	  	Yes    No

 Borrower is party to, or bound by, the following material Restricted Licenses that were not
previously noted in the Perfection Certificate or a prior Compliance Certificate:
                                        
. 
 Borrower intends to register the following copyrights or mask works with the United States Copyright Office that were not previously
noted in a prior Compliance Certificate:
                                        
. 
 Borrower has (i) obtained the following Patents, registered Trademarks, registered Copyrights, registered mask work, or any
pending application for any of the foregoing, whether as owner, licensee or otherwise, and (ii) applied for the following Patents and the registration of the following Trademarks; in each case, that were not previously noted in the Perfection
Certificate or a prior Compliance Certificate (to be reported on as part of the Compliance Certificate due following the last month of each fiscal quarter):
                                        
. 
 The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the
date of this Certificate. 
 The following are the exceptions with respect to the certification above: (If no exceptions exist, state
“No exceptions to note.”) 
  
  
  
  
  
  
  
  

									
	ATRICURE, INC.	 		 	BANK USE ONLY
				
		 		 	Received by:	 	  

	 By:
	 	  
	 		 		 	AUTHORIZED SIGNER
	 Name:
	 	  
	 		 		 	
	 Title:
	 	  
	 		 	Date:	 	  

					
		 		 		 	Verified:	 	  

		 		 		 		 	AUTHORIZED SIGNER
					
		 		 		 	Date:	 	  

				
		 		 		 	Compliance Status:        Yes    No

  

 38 

 Schedule 1 to Compliance Certificate 
 Financial Covenants of Borrower 
 In the event
of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern. 
 Dated:
                             
  

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

 Required:        at least 1.20:1.00 (required with respect to months during which Advances were outstanding) 
 Actual: 
  

						
	 A.
	  	Borrower’s unrestricted cash (and Cash Equivalents) held with Bank and its Affiliates	  	$	            
			
	 B.
	  	Borrower’s Eligible Accounts	  	$	            
			
	 C.
	  	Line A plus line B	  	$	            
			
	 D.
	  	Borrower’s Current Liabilities (including any amounts used for Cash Management Services and the face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of
Credit))	  	$	            
			
	 E.
	  	The current portion of Deferred Revenue	  		
			
	 F.
	  	Line D minus line E	  		
			
	 G.
	  	Adjusted Quick Ratio (line C divided by line F)	  	 	      :      

 Is line G greater than or equal to 1.20:1.00? 
  

			
	              No, not in compliance
	 	             Yes, in compliance

  

	II.	Maximum Capital Expenditures (Section 6.9(b)) 

 Required:        not to exceed per fiscal year the limits provided for in Section 6.9(b) of the Loan Agreement 
 Actual: 
  

						
	 A.
	  	Capital expenditure limit provided for in Section 6.9(b)	  	$	            
			
	 B.
	  	Capital expenditures for fiscal year	  	$	            
			
	 C.
	  	Line A minus line B	  	$	            

 Is line C greater than or equal to zero? 
  

			
	              No, not in compliance
	 	             Yes, in compliance

  

 39 

	III.	Minimum Fixed Charge Coverage Ratio (Section 6.9(c)) 

 Required:        not less than 1.50:1.00 (required upon release of the Term Loan-Related Reserve) 
 Actual:

  

						
	 A.
	  	EBITDA (as defined in the Loan Agreement)	  	$	            
			
	 B.
	  	Cash income taxes paid	  	$	            
			
	 C.
	  	Unfinanced capital expenditures	  	$	            
			
	 D.
	  	Line A minus line B minus line C	  	$	            
			
	 E.
	  	Current portion of long term debt	  	$	            
			
	 F.
	  	Cash interest expense	  	$	            
			
	 G
	  	Line E plus line F	  	$	            
			
	 H.
	  	Fixed Charge Coverage Ratio (line D divided by line G)	  	 	      :      

 Is line H greater than or equal to 1.50:1.00? 
  

			
	              No, not in compliance
	 	             Yes, in compliance

  

	IV.	Minimum EBITDA (Section 6.9(d)) 

 Required:        equal to or greater than the amounts set forth in Section 6.9(d) of the Loan Agreement 
 Actual: 
  

						
	 A.
	  	EBITDA (as defined in the Loan Agreement)	  	$	            
			
	 B.
	  	Minimum required per Section 6.9(d)	  	$	            
			
	 C.
	  	Line A minus line B	  	$	            

 Is line C greater than or equal to zero? 
  

			
	              No, not in compliance
	 	             Yes, in compliance

  

 40 

 SCHEDULE 5.9 
 Pension Plans 
 The Borrower has prepared and submitted to the Internal Revenue Service a report for the period
January 31, 2002 through December 31, 2008 detailing certain non-compliance under Borrower’s 401(k) plan, including as a result of improper calculations of compensation under the plan documents, errors in properly calculating required
“matching” contributions to be made by the Borrower and improper exclusion of certain employees from participation in the plan. The Borrower has also submitted an amendment to the plan which is effective January 1. 2009. 

 

 41Supplemental Indenture

 Exhibit 4.1 
 7.500% NOTES DUE 2021 
 SUPPLEMENTAL INDENTURE 
 between 
 INTERNATIONAL PAPER COMPANY 
 and 
 THE BANK OF NEW YORK MELLON 

(FORMERLY KNOWN AS THE BANK OF NEW YORK) 
 Dated as of August 10, 2009 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	PAGE
	 ARTICLE 1
 DEFINITIONS

			
	 Section 1.01.
	  	Definition of Terms	  	1
	
	 ARTICLE 2
 TERMS AND CONDITIONS OF THE NOTES

			
	 Section 2.01.
	  	Designation and Principal Amount	  	3
	 Section 2.02.
	  	Maturity	  	3
	 Section 2.03.
	  	Depository	  	3
	 Section 2.04.
	  	Form; Denomination	  	3
	 Section 2.05.
	  	Legend	  	3
	 Section 2.06.
	  	Special Transfer Provisions	  	4
	 Section 2.07.
	  	Interest	  	5
	 Section 2.08.
	  	Consolidation, Merger and Sale of Assets	  	8
	 Section 2.09.
	  	Place of Payment	  	8
	 Section 2.10.
	  	Defeasance; Discharge	  	8
	
	 ARTICLE 3
 REDEMPTION OF THE NOTES

			
	 Section 3.01.
	  	Optional Redemption by Company	  	8
	 Section 3.02.
	  	[RESERVED]	  	10
	 Section 3.03.
	  	Change of Control Triggering Event	  	10
	 Section 3.04.
	  	No Sinking Fund	  	12
	
	 ARTICLE 4
 MODIFICATION

			
	 Section 4.01.
	  	Modification of Indenture and Supplemental Indenture	  	12
	
	 ARTICLE 5
 FORMS OF NOTES

			
	 Section 5.01.
	  	Forms of Notes	  	12
	
	 ARTICLE 6
 ORIGINAL ISSUE OF NOTES

			
	 Section 6.01.
	  	Original Issue of Notes; Further Issuances	  	12
	
	 ARTICLE 7
 MISCELLANEOUS

			
	 Section 7.01.
	  	Ratification of Indenture	  	13
	 Section 7.02.
	  	Trustee Not Responsible for Recitals	  	13
	 Section 7.03.
	  	Governing Law	  	13
	 Section 7.04.
	  	Separability	  	13

  

 -i- 

					
	 Section 7.05.
	  	Counterparts	  	13

  

 -ii- 

 SUPPLEMENTAL INDENTURE, dated as of August 10, 2009 (the “Supplemental Indenture”),
between International Paper Company, a New York corporation (the “Company”), and The Bank of New York Mellon (formerly known as The Bank of New York), as trustee (the “Trustee”), under the Indenture, dated as of
April 12, 1999, between the Company and the Trustee (the “Indenture”). 
 WHEREAS, the Company executed and delivered
the Indenture to the Trustee to provide, among other things, for the future issuance of the Company’s unsecured Securities to be issued from time to time in one or more series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as provided in the Indenture; 
 WHEREAS, Section 9.1 of
the Indenture provides for various matters with respect to any series of Securities issued under the Indenture to be established in an indenture supplemental to the Indenture; 
 WHEREAS, Section 9.1(7) of the Indenture provides for the Company and the Trustee to enter into an indenture supplemental to the Indenture to
establish the form or terms of Securities of any series as provided by Sections 2.1 and 3.1 of the Indenture; 
 WHEREAS, the Board of
Directors of the Company has duly adopted resolutions authorizing the Company to execute and deliver this Supplemental Indenture; 
 WHEREAS,
pursuant to the terms of the Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its 7.500% Notes due 2021 (the “Notes”), the form and substance of such Notes and the
terms, provisions and conditions thereof to be set forth as provided in the Indenture and this Supplemental Indenture; 
 WHEREAS, the
Company has requested that the Trustee execute and deliver this Supplemental Indenture and all requirements necessary to make (i) this Supplemental Indenture a valid instrument in accordance with its terms, and (ii) the Notes, when
executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been performed, and the execution and delivery of this Supplemental Indenture have been duly authorized in all respects; 

NOW THEREFORE, in consideration of the purchase and acceptance of the Notes by the Holders thereof, and for the purpose of setting forth, as provided
in the Indenture, the form and substance of the Notes and the terms, provisions and conditions thereof, the Company covenants and agrees with the Trustee as follows: 
 ARTICLE 1 
 DEFINITIONS 
 Section 1.01. Definition of Terms. Unless the context otherwise requires: 
 (a) a term
defined in the Indenture has the same meaning when used in this Supplemental Indenture unless the definition of such term is amended and supplemented pursuant to this Supplemental Indenture; 
 (b) a term defined anywhere in this Supplemental Indenture has the same meaning throughout; 
 (c) the singular includes the plural and vice versa; 

 (d) a reference to a Section or Article is to a Section or Article in this Supplemental
Indenture; 
 (e) headings are for convenience of reference only and do not affect interpretation; 
 (f) the following terms have the meanings given to them in this Section 1.01(f): 
 “Business Day” shall have the meaning set forth in Section 3.01(c). 
 “Change of Control” shall have the meaning set forth in Section 3.03(e). 
 “Change of Control Offer” shall have the meaning set forth in Section 3.03(a). 
 “Change of Control Payment” shall have the meaning set forth in Section 3.03(a). 
 “Change of Control Payment Date” shall have the meaning set forth in Section 3.03(b). 
 “Change of Control Triggering Event” shall have the meaning set forth in Section 3.03(e). 
 “Comparable Treasury Issue” shall have the meaning set forth in Section 3.01(c). 
 “Comparable Treasury Price” shall have the meaning set forth in Section 3.01(c). 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 “Global Note” shall have the meaning set forth in Section 2.04(a). 
 “Independent Investment Banker” shall have the meaning set forth in Section 3.01(c). 
 “Interest Payment Date” shall have the meaning set forth in Section 2.07(a). 
 “Investment Grade” shall have the meaning set forth in Section 3.03(e). 
 “Issue Date” means August 10, 2009, the date of initial issuance of the Notes. 
 “Moody’s” means Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation, and its successors. 
 “Notes” shall have the meaning set forth in the recitals above. 
 “Optional Redemption Price” shall have the meaning set forth in Section 3.01(a). 
 “Person” means any individual, corporation, partnership, limited liability company, business trust, association, joint-stock company,
joint venture, trust, incorporated or unincorporated organization or government or any agency or political subdivision thereof. 
 “Rating Agency” shall have the meaning set forth in Section 3.03(e). 
 “Reference Treasury
Dealer” shall have the meaning set forth in Section 3.01(c). 
  

 -2- 

 “Reference Treasury Dealer Quotations” shall have the meaning set forth in
Section 3.01(c). 
 “Remaining Life” shall have the meaning set forth in Section 3.01(c). 
 “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

 “Substitute Rating Agency” shall have the meaning set forth in Section 2.07(c)(ix). 
 “Supplemental Indenture” shall have the meaning set forth in the recitals above. 
 “Treasury Rate” shall have the meaning set forth in Section 3.01(c). 
 “Voting Stock” shall have the meaning set forth in Section 3.03(e). 
 ARTICLE 2 
 TERMS AND CONDITIONS OF THE NOTES 
 Section 2.01. Designation and Principal Amount. There is hereby authorized a series of Securities designated the “7.500% Notes due
2021” initially issued in the aggregate principal amount of $1,000,000,000, which amount shall be as set forth in a Company Order for the authentication and delivery of such Notes pursuant to Section 3.3 of the Indenture. 

Section 2.02. Maturity. The Notes will mature on August 15, 2021. 
 Section 2.03. Depository. The Depository Trust Company shall be the initial Depository for the Notes, until a successor shall have been appointed
and become such pursuant to the applicable provisions of this Indenture, and thereafter, “Depository” shall mean or include such successor. 
 Section 2.04. Form; Denomination 
 (a) The Notes shall be issued initially in the form of one or more
permanent Global Notes in registered form, without coupons, substantially in the form herein below recited (each, a “Global Note” and collectively, the “Global Notes”), deposited with the Trustee, as custodian for
the Depository, duly executed by the Company and authenticated by the Trustee as herein provided. 
 The aggregate principal amount of each
Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depository or its nominee, as provided in Section 2.3 of the Indenture. 
 (b) The Notes shall be issuable only in registered form, without coupons, in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
The Notes shall be numbered, lettered, or otherwise distinguished in such manner or in accordance with such plans as the officers of the Company executing the same may determine with the approval of the Trustee. 
 Section 2.05. Legend. Each Global Note shall bear the following legend on the face thereof: 
 UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK 

  

 -3- 

 
CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. 
 Section 2.06. Special Transfer Provisions. 
 (a) A Global Note may be transferred, in whole but not in part, only to the Depository, to a nominee of the Depository, or to a successor Depository selected or approved by the Company or to a nominee of such successor Depository.

 (b) If at any time the Depository for the Notes notifies the Company that it is unwilling or unable to continue as Depository or if at any
time the Depository for the Notes shall no longer be registered or in good standing under the Exchange Act or other applicable statute or regulation, and a successor Depository for the Notes is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such condition, as the case may be, the Company will execute, and, subject to Article 3 of the Indenture, the Trustee, upon written notice from the Company, will authenticate and make available for
delivery the Notes in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Note in exchange for the Global Note. In addition, the Company may
(subject to the procedures of the Depository) at any time determine that the Notes shall no longer be represented by a Global Note. In such event the Company will execute, and subject to Section 3.5 of the Indenture, the Trustee, upon receipt
of an Officers’ Certificate evidencing such determination by the Company, will authenticate and deliver, the Notes in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Note in exchange for the Global Note. Upon the exchange of the Global Note for the Notes in definitive registered form without coupons, in authorized denominations, the Global Note shall be cancelled by the Trustee.
Such Notes in definitive registered form issued in exchange for the Global Note shall be registered in such names and in such authorized denominations as the Depository, pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Notes to the Depository for delivery to the Persons in whose names such Notes are so registered. Notes represented by Global Notes will be exchangeable for Notes in definitive registered
form if an Event of Default shall have occurred and be continuing. 
  

 -4- 

 Section 2.07. Interest. 
 (a) The Notes will bear interest at the rate of 7.500% per annum, subject to adjustment as set forth in Section 2.07(c), from the most recent
Interest Payment Date to which interest has been paid or duly provided for or, if no interest has been paid, from the Issue Date until the principal thereof becomes due and payable, payable semi-annually in arrears on February 15 and
August 15 of each year (each, an “Interest Payment Date”), commencing on February 15, 2010, to the Person in whose name such Note or any Predecessor Security is registered, at the close of business on the Regular Record
Date for such interest installment, which shall be the close of business on the February 1 or August 1 (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date, and at the foregoing respective
rates on overdue principal. 
 (b) The amount of interest payable for any period less than a full interest period will be computed on the
basis of a 360-day year of twelve 30-day months and the actual days elapsed in a partial month in such period. In the event that any date on which interest is payable on the Notes is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) with the same force and effect as if made on the date such payment was originally payable. 
 (c) The interest rate payable on the Notes shall be subject to adjustment from time to time if either Moody’s or S&P (or, in either case, any
Substitute Rating Agency thereof) downgrades (or subsequently upgrades) the debt rating assigned to the Notes in the manner described below: 
 (i) If the rating from Moody’s (or any Substitute Rating Agency thereof) of the Notes is decreased to a rating set forth in the immediately following table, the interest rate payable on the Notes will increase
from the interest rate payable on the Notes on the Issue Date by the percentage points set forth opposite that rating: 
  

			
	 Moody’s Ratingsa
	  	Percentage Points
	 Ba1
	  	0.25
	 Ba2
	  	0.50
	 Ba3
	  	0.75
	 B1 or below
	  	1.00

 (ii) If the rating from S&P (or any Substitute Rating Agency thereof) of the
Notes is decreased to a rating set forth in the immediately following table, the interest rate payable on the Notes will increase from the interest rate payable on the Notes on the Issue Date by the percentage points set forth opposite that rating:

  

 -5- 

			
	 S&P Ratingsa
	  	Percentage Points
	 BB+
	  	0.25
	 BB
	  	0.50
	 BB-
	  	0.75
	 B+ or below
	  	1.00

  

	a
	 Including the equivalent ratings of any Substitute Rating Agency. 

 (iii) If at any time the interest rate on the Notes has been adjusted upward and either Moody’s or S&P (or, in either case, a
Substitute Rating Agency thereof), as the case may be, subsequently increases its rating of the Notes to any of the threshold ratings set forth above, the interest rate on the Notes will be decreased such that the interest rate for the Notes equals
the interest rate payable on the Notes on the Issue Date plus the percentage points set forth opposite the ratings from the tables above in effect immediately following the rating increase. If Moody’s (or any Substitute Rating Agency thereof)
subsequently increases its rating of the Notes to Baa3 (or its equivalent, in the case of a Substitute Rating Agency) or higher and S&P (or any Substitute Rating Agency thereof) increases its rating to BBB- (or its equivalent, in the case of a
Substitute Rating Agency) or higher, the interest rate on the Notes will be decreased to the interest rate payable on the Notes on the Issue Date. In addition, the interest rates on the Notes will permanently cease to be subject to any adjustment
pursuant to this Section 2.07(c) (notwithstanding any subsequent decrease in the ratings by either or both such rating agencies) if the Notes become rated A3 (stable or better) and A- (stable or better) (or the equivalent of either such
rating, in the case of a Substitute Rating Agency) or higher by Moody’s and S&P (or, in either case, any Substitute Rating Agency thereof), respectively (or one of these ratings if the Notes are only rated by one such rating agency).

 (iv) Each adjustment required by any decrease or increase in a rating set forth above, whether occasioned by the action of
Moody’s or S&P (or, in either case, any Substitute Rating Agency thereof), shall be made independent of any and all other adjustments. In no event shall (1) the interest rate on the Notes be reduced to below the interest rate payable
on the Notes on the Issue Date or (2) the total increase in the interest rate on the Notes exceed 2.00 percentage points above the interest rate payable on the Notes on the Issue Date. 
 (v) No adjustments in the interest rate of the Notes shall be made solely as a result of a rating agency ceasing to provide a rating of
the Notes. If at any time less than two rating agencies provide a rating of the Notes for a reason beyond the Company’s control, the Company will use its commercially reasonable efforts to obtain a rating of the Notes from a Substitute Rating
Agency, to the extent one exists, and if a Substitute Rating Agency exists, for purposes of determining any increase or decrease in the interest rate on the Notes pursuant to the tables above, (a) such Substitute Rating Agency will be
substituted for the last rating agency to provide a rating of the Notes but which has since ceased to provide such rating, (b) the relative ratings scale used by such Substitute Rating Agency to assign ratings to senior unsecured debt will be
determined in good faith by an independent investment banking institution of national standing appointed by the Company and, for purposes of determining the applicable ratings included in the applicable table above with respect to such Substitute
Rating Agency, such ratings will be deemed to be the 
  
  

	a
	 Including the equivalent ratings of any Substitute Rating Agency. 

  

 -6- 

 
equivalent ratings used by Moody’s or S&P, as applicable, in such table and (c) the interest rate on the Notes will increase or decrease, as
the case may be, such that the interest rate equals the interest rate payable on the Notes on the Issue Date plus the appropriate percentage points, if any, set forth opposite the rating from such Substitute Rating Agency in the applicable table
above (taking into account the provisions of clause (b) above) (plus any applicable percentage points resulting from a decreased rating by the other rating agency). For so long as only one rating agency provides a rating of the Notes, any
subsequent increase or decrease in the interest rate of the Notes necessitated by a reduction or increase in the rating by the agency providing the rating shall be twice the percentage points set forth in the applicable table above. For so long as
none of Moody’s, S&P or a Substitute Rating Agency provides a rating of the Notes, the interest rate on the Notes will increase to, or remain at, as the case may be, 2.00 percentage points above the interest rate payable on the Notes on the
Issue Date. 
 (vi) Any interest rate increase or decrease described above will take effect from the Interest Payment Date
immediately preceding a rating change which requires an adjustment in the interest rate. 
 (vii) Promptly after any change in
the interest rate borne by the Notes as provided above, the Company shall give the Trustee an Officers’ Certificate to the effect that the interest rate borne by the Notes has changed in accordance with this Section 2.07(c) and setting
forth the amount of the related increase or decrease and the new interest rate borne by the Notes. 
 (viii) If the interest
rate payable on the Notes is increased pursuant to this Section 2.07(c), the term “interest,” as used in the Indenture with respect to the Notes, as supplemented by this Supplemental Indenture, will be deemed to include any such
additional interest unless the context otherwise requires. If the Company defeases or discharges the Indenture in accordance with Section 4.1 of the Indenture, or the Notes or certain obligations related thereto in accordance with Sections 4.3
and 10.11 of the Indenture and Section 2.10 hereof, there will be no further adjustment in the interest rate on the Notes after such defeasance or discharge. 
 (ix) The following term has the meaning given to it in this Section 2.07(c)(ix): 
 “Substitute Rating Agency” means a “nationally recognized statistical rating organization” within the meaning of Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by the Company (as certified by a resolution of the board of directors of the Company and delivered to the Trustee) as a replacement agency for Moody’s, S&P or another Substitute Rating
Agency, or all of them, as the case may be. 
  

 -7- 

 Section 2.08. Consolidation, Merger and Sale of Assets. For purposes of the Notes,
Section 8.1 of the Indenture is amended to add “limited liability company,” immediately after “corporation,” and immediately before “partnership or trust” in clause (1) thereof. 
 Section 2.09. Place of Payment. The Place of Payment where Notes may be presented or surrendered for payment, where Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Notes and the Indenture may be served initially is the Corporate Trust Office of the Trustee. 
 Section 2.10. Defeasance; Discharge. The provisions of Section 4.3 and Section 10.11 of the Indenture will apply to the Notes.

 ARTICLE 3 
 REDEMPTION OF THE
NOTES 
 Section 3.01. Optional Redemption by Company. 
 (a) Subject to Article XI of the Indenture, the Company shall have the right to redeem the Notes, in whole or in part, at any time or from time to time, at a redemption price (the “Optional Redemption
Price”) equal to the greater of: 
 (i) 100% of the principal amount of the Notes being redeemed, plus accrued and
unpaid interest to the Redemption Date; or 
 (ii) the sum of the present values of the remaining scheduled payments of
principal and interest in respect of the Notes being redeemed (exclusive of interest accrued to the Redemption Date of the Notes to be redeemed) discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate plus 50 basis points, plus accrued interest on the principal amount being redeemed to the Redemption Date. 
 Any redemption pursuant to the preceding paragraph will be made upon not less than 30 nor more than 60 days’ prior notice before the Redemption Date to each Holder of the Notes to be redeemed, at the Optional Redemption Price. If Notes
are only partially redeemed pursuant to this Section 3.01(a), the Notes to be redeemed will be selected by the Trustee in accordance with Section 11.3 of the Indenture; provided that if at the time of redemption the Notes to be
redeemed are registered as a Global Note, the Depository shall determine, in accordance with its procedures, the principal amount of the Notes to be redeemed held by each Holder of such Notes to be redeemed. The Optional Redemption Price shall be
paid prior to 12:00 noon, New York time, on the date of such redemption or at such earlier time as the Company determines, provided that the Company shall deposit with the Trustee an amount sufficient to pay the Optional Redemption Price by
10:00 a.m., New York time, on the date such Optional Redemption Price is to be paid. 
  

 -8- 

 (b) Notice of any redemption pursuant to this Section 3.01 shall be given as provided in
Section 11.4 of the Indenture except that any notice of such redemption shall not specify the related Optional Redemption Price but only the manner of calculation thereof. The Trustee shall not be responsible for the calculation of such
Optional Redemption Price. The Company shall calculate such Optional Redemption Price and promptly notify the Trustee thereof. 
 (c) The
following terms have the meanings given to them in this Section 3.01(c): 
 “Business Day” means any
calendar day that is not a Saturday, Sunday or legal holiday in New York, New York and on which commercial banks are open for business in New York, New York. 
 “Comparable Treasury Issue” means the United States Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the remaining term (“Remaining Life”) of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term of the Notes. 
 “Comparable Treasury
Price” means, with respect to any Redemption Date, (i) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if
the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such Quotations. 
 “Independent Investment Banker” means an independent investment banking institution of national standing appointed by the Company. 
 “Reference Treasury Dealer” means (i) each of Banc of America Securities LLC, J.P. Morgan Securities Inc., BNP
Paribas Securities Corp. and UBS Securities LLC and their respective successors, provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in the United States (a “Primary Treasury
Dealer”), the Company will substitute therefor another Primary Treasury Dealer and (ii) any other Primary Treasury Dealer selected by the Company. 
 “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Redemption Date, the
average, as determined by the Independent Investment Banker, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by
such Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding such Redemption Date. 
 “Treasury
Rate” means, with respect to any Redemption Date, (i) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated
“H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity
under the caption “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after the Remaining Life, yields for the two published maturities most
closely corresponding to the Comparable 
  

 -9- 

 Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from such
yields on a straight line basis, rounding to the nearest month) or (ii) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the
semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption
Date. The Treasury Rate shall be calculated on the third Business Day preceding such Redemption Date. 
 Section 3.02. [RESERVED]

 Section 3.03. Change of Control Triggering Event. 
 (a) Upon the occurrence of a Change of Control Triggering Event, unless the Company has exercised the right to redeem the Notes pursuant to Section 3.01 by giving irrevocable notice to the Trustee in accordance
with the Indenture, each Holder of Notes will have the right to require the Company to purchase all or a portion of such Holder’s Notes pursuant to the offer described below (the “Change of Control Offer”), at a purchase price
equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase (the “Change of Control Payment”), subject to the rights of Holders of the Notes on the relevant record date to receive
interest due on the relevant Interest Payment Date. 
 (b) Within 30 days following the date upon which the Change of Control Triggering
Event occurred, or at the Company’s option, prior to any Change of Control but after the public announcement of the pending Change of Control, the Company shall send, by first class mail, a notice to each Holder of Notes, with a copy to the
Trustee, which notice will govern the terms of the Change of Control Offer. Such notice shall state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than
as may be required by law (the “Change of Control Payment Date”). The notice, if mailed prior to the date of consummation of the Change of Control, shall state that the Change of Control Offer is conditioned on the Change of Control
being consummated on or prior to the Change of Control Payment Date. 
 (c) On the Change of Control Payment Date, the Company shall, to the
extent lawful: 
 (i) accept or cause a third party to accept for payment all Notes or portions of Notes properly tendered
pursuant to the Change of Control Offer; 
 (ii) deposit or cause a third party to deposit with the Paying Agent an amount
equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and 
 (iii) deliver or
cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased and that all conditions precedent in this
Section 3.03 to the Change of Control Offer and to the repurchase by the Company of Notes pursuant to the Change of Control Offer have been complied with. 
 The Company will not be required to make a Change of Control Offer if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for such an offer 

  

 -10- 

 
made by the Company and such third party purchases all the Notes properly tendered and not withdrawn under its offer. 
 (d) The Company shall comply in all material respects with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any such securities laws or
regulations conflict with this Section 3.03, the Company shall comply with those securities laws and regulations and shall not be deemed to have breached its obligations under this Section 3.03 by virtue of any such conflict. 

(e) The following terms have the meanings given to them in this Section 3.03(e): 
 “Change of Control” means the occurrence of any of the following after the Issue Date: (1) the direct or indirect sale, lease,
transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole to any
“person” or “group” (as those terms are used in Section 13(d)(3) of the Exchange Act) other than to the Company or one of its Subsidiaries; (2) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any “person” or “group” (as those terms are used in Section13(d)(3) of the Exchange Act, it being agreed that an employee of the Company or any of its Subsidiaries for whom
shares are held under an employee stock ownership, employee retirement, employee savings or similar plan and whose shares are voted in accordance with the instructions of such employee shall not be a member of a “group” (as that term is
used in Section 13(d)(3) of the Exchange Act) solely because such employee’s shares are held by a trustee under said plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of the Company’s Voting Stock representing more than 50% of the voting power of the Company’s outstanding Voting Stock; (3) the Company consolidates with, or merges with or into, any Person, or any Person consolidates
with, or merges with or into, the Company, in any such event pursuant to a transaction in which any of the Company’s outstanding Voting Stock or Voting Stock of such other Person is converted into or exchanged for cash, securities or other
property, other than any such transaction where the Company’s Voting Stock outstanding immediately prior to such transaction constitutes, or is converted into or exchanged for, Voting Stock representing more than 50% of the voting power of the
Voting Stock of the surviving Person immediately after giving effect to such transaction; (4) during any period of 24 consecutive calendar months, the majority of the members of the board of directors of the Company shall no longer be composed
of individuals (a) who were members of the board of directors of the Company on the first day of such period or (b) whose election or nomination to the board of directors of the Company was approved by individuals referred to in clause
(a) above constituting, at the time of such election or nomination, at least a majority of the board of directors of the Company; or (5) the adoption of a plan relating to the liquidation or dissolution of the Company. 
 “Change of Control Triggering Event” means the Notes cease to be rated Investment Grade by each of the Rating Agencies on any date
during the period (the “Trigger Period”) commencing 60 days prior to the first public announcement by the Company of any Change of Control (or pending Change of Control) and ending 60 days following consummation of such Change of
Control (which Trigger Period will be extended following consummation of a Change of Control for so long as any of the Rating Agencies has publicly announced that it is considering a possible ratings change). If a Rating Agency is not providing a
rating for the Notes at the commencement of any Trigger Period, the Notes will be deemed to have ceased to be rated Investment Grade by such Rating Agency during that Trigger Period. Notwithstanding the foregoing, no Change of Control Triggering
Event will be deemed to have occurred 

  

 -11- 

 
in connection with any particular Change of Control unless and until such Change of Control has actually been consummated. 
 “Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating category of
Moody’s) and a rating of BBB- or better by S&P (or its equivalent under any successor rating category of S&P), and the equivalent investment grade credit rating from any replacement rating agency or rating agencies selected by the
Company under the circumstances permitting it to select a replacement agency and in the manner for selecting a replacement agency, in each case as set forth in the definition of “Rating Agency.” 
 “Rating Agency” means each of Moody’s and S&P; provided that if any of Moody’s or S&P ceases to provide rating
services to issuers or investors, the Company may appoint another “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act as a replacement for such Rating Agency;
provided that the Company shall give notice of such appointment to the Trustee. 
 “Voting Stock” of any specified
Person as of any date means the capital stock of such Person that is at the time entitled to vote generally in the election of the board of directors of such Person. 
 Section 3.04. No Sinking Fund. The Notes are not entitled to the benefit of any sinking fund. 
 ARTICLE 4 
 MODIFICATION 
 Section 4.01. Modification of Indenture and Supplemental Indenture. Section 9.2 of the Indenture, as it relates to the Notes, is hereby modified so that the reference to “not less than 66-2/3%” shall read “not
less than a majority”, except that in the case of increasing (or reopening) the principal amount, no consent of Holders will be required. 
 ARTICLE 5 
 FORMS OF NOTES 
 Section 5.01. Forms of Notes. The Notes and the Trustee’s Certificate of Authentication to be endorsed thereon are to be substantially in the form of Exhibit A hereto. 
 ARTICLE 6 
 ORIGINAL ISSUE OF NOTES 

Section 6.01. Original Issue of Notes; Further Issuances. 
 (a) Notes having an aggregate principal amount of $1,000,000,000 may, upon execution of this Supplemental Indenture, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Notes to or upon a Company Order, signed by its Chairman, its Vice Chairman, its President, or any Vice President and by its Treasurer, an Assistant Treasurer, its Secretary or any Assistant Secretary, without
any further action by the Company, except as otherwise required by the Indenture. 
 (b) The Company may, without notice to or the consent of
the Holders of the Notes, issue additional Notes having identical terms and conditions as the Notes issued on the Issue Date, except for 
  

 -12- 

 
issue date, issue price and first Interest Payment Date, in an unlimited aggregate principal amount. Any such additional Notes will be part of the same
series as the Notes issued on the Issue Date and will be treated as one class with such Notes, including, without limitation, for purposes of voting and redemptions. 
 ARTICLE 7 
 MISCELLANEOUS 
 Section 7.01. Ratification of Indenture. The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed, and this Supplemental Indenture shall be deemed part of the
Indenture in the manner and to the extent herein and therein provided. 
 Section 7.02. Trustee Not Responsible for Recitals. The
recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture.

 Section 7.03. Governing Law. This Supplemental Indenture and the Notes shall be governed by and construed in accordance with the
laws of the State of New York without regard to conflicts of laws. 
 Section 7.04. Separability. In case any one or more of the
provisions contained in this Supplemental Indenture or in the Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this
Supplemental Indenture or of the Notes, but this Supplemental Indenture and the Notes shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. 
 Section 7.05. Counterparts. This Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument. 
  

 -13- 

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and,
in the case of the Company, attested as of the day and year first above written. 
  

			
	INTERNATIONAL PAPER COMPANY
		
	By:	 	 /s/ Errol A. Harris

		 	 Name: Errol A. Harris

		 	 Title: Vice President and Treasurer

 Attest: 
  

			
		
	By:	 	 /s/ Jekka Pinckney

		 	 Name: M.J.A. “Jekka” Pinckney

		 	 Title: Assistant Secretary

  

			
	THE BANK OF NEW YORK MELLON, as Trustee
		
	By:	 	 /s/ Laurence J. O’Brien

		 	 Name: Laurence J. O’Brien

		 	 Title: Vice President

  

 -14- 

 Exhibit A 
 (FORM OF FACE OF NOTE) 
 [UNLESS THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]a 
  

			
	No. [    ]	  	CUSIP No. [            ]

 INTERNATIONAL PAPER COMPANY 
 7.500% NOTE DUE 2021 
 INTERNATIONAL PAPER COMPANY, a New York
corporation (the “Company,” which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to [X] or registered assigns, the principal sum of [X] ($[X]) [or
such other sum as is set forth in the Schedule of Increases or Decreases of Global Note attached hereto]b on August 15, 2021, and to pay interest on said principal sum semi-annually in arrears on February 15 and August 15 of each year (each such date, an “Interest Payment Date”) commencing
February 15, 2010, at the rate of 7.500% per annum (subject to adjustment as described below) from the most recent Interest Payment Date to which interest has been paid or duly provided for or, if no interest has been paid, from the Issue
Date until the principal hereof shall have become due and payable, and at such rate on any overdue principal. The amount of interest payable for any period less than a full interest period will be computed on the basis of a 360-day year of twelve
30-day months and the actual days elapsed in a partial month in such period. In the event that any date on which interest is payable on the Notes of this series is not a Business Day, then payment of the interest payable on such date will be made on
the next succeeding day which is a Business 

  

 A-1 

 
Day (and without any interest or other payment in respect of any such delay) with the same force and effect as if made on the date such payment was
originally payable. 
  
  

	a
	 Insert in Global Notes only 

	b
	 Insert in Global Notes only 

 The
interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Securities, as defined in said
Indenture) is registered at the close of business on the Regular Record Date for such interest installment, which shall be the close of business on the February 1 or August 1 (whether or not a Business Day), as the case may be, immediately
preceding such Interest Payment Date. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered Holders on such Regular Record Date and may be paid to the Person in whose name this
Note (or one or more Predecessor Securities) is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered Holders of the Notes
of this series not less than 10 days prior to such special record date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes of this series may be listed, and upon
such notice as may be required by such exchange, all as more fully provided in the Indenture. The principal of (and premium, if any) and the interest on this Note shall be payable at the office or agency of the Trustee maintained for that purpose in
any coin or currency of the United States of America that at the time of payment is legal tender for payment of public and private debts. 
 This Note shall not be entitled to any benefit under the Indenture hereinafter referred to or be valid or become obligatory for any purpose until the Certificate of Authentication hereon shall have been signed by or on behalf of the
Trustee. 
 The provisions of this Note are continued on the reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place. 
  

 A-2 

 IN WITNESS WHEREOF, the Company has caused this instrument to be executed on this
     day of                             ,
                . 
  

			
	INTERNATIONAL PAPER COMPANY
		
	By:	 	  

		 	 Name:

		 	 Title:

 Attest: 
  

			
	By:	 	  

		 	 Name:

		 	 Title:

  

 A-3 

 (FORM OF CERTIFICATE OF AUTHENTICATION) 
 CERTIFICATE OF AUTHENTICATION 
 This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture. 
  

			
	 Dated:
	 	  

  

			
	 The Bank of New York Mellon, as Trustee

		
	 By:
	 	  

		 	Authorized Signatory

  

 A-4 

 (FORM OF REVERSE OF NOTE) 
 This Note is one of a duly authorized series of Notes of the Company (herein sometimes referred to as the “Notes”), specified in the Indenture, all issued or to be issued in one or more series under
and pursuant to an Indenture, dated as of April 12, 1999, duly executed and delivered between the Company and The Bank of New York Mellon (formerly known as The Bank of New York), as Trustee (the “Trustee”), as supplemented by
the 7.500% Notes due 2021 Supplemental Indenture dated as of August 10, 2009 (the “Supplemental Indenture”), between the Company and the Trustee (the Indenture, as so supplemented, the “Indenture”), to which
Indenture and all Indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes. The Notes of
this series shall have the designation and are initially issued in aggregate principal amount as specified in said Supplemental Indenture. 
 The interest rate payable on this Note will be subject to adjustment from time to time, on the terms set forth in the Supplemental Indenture, if either Moody’s or S&P (or, in either case, any Substitute Rating Agency thereof)
downgrades (or subsequently upgrades) the debt rating assigned to the Notes of this series. If the interest rate payable on this Note is increased in accordance with the terms hereof and the Supplemental Indenture, then the term
“interest,” as used in this Note and the Supplemental Indenture, will be deemed to include any such additional interest unless the context requires otherwise. 
 This Note shall be subject to redemption as provided in Section 3.01 of the Supplemental Indenture and Article XI of the Indenture. 
 Upon the occurrence of a Change of Control Triggering Event with respect to the Notes of this series, the Company shall be required to make an offer to repurchase the Notes of this series on the terms set forth in
Section 3.03 of the Supplemental Indenture. 
 In case an Event of Default, as defined in the Indenture, with respect to the Notes of
this series shall have occurred and be continuing, the principal of all of the Notes of this series may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in
the Indenture. 
 The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than
a majority in principal amount of the Notes of each series affected at the time outstanding, as defined in the Indenture, to execute supplemental indentures for the purpose of adding any provisions to or changing in any manner or eliminating any of
the provisions of the indenture or of any supplemental indenture or of modifying in any manner the rights of the Holders of the Notes, subject to Section 9.2 of the Indenture. The Indenture also contains provisions permitting the Holders of not
less than a majority in principal amount of the Notes of any series at the time outstanding, on behalf of all of the Holders of the Notes of such series, to waive any past default under the Indenture or Supplemental Indenture and its consequences,
subject to Section 5.13 and Article IX of the Indenture. Any such consent or waiver by the registered Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders
and owners of this Note and of any Note issued in exchange therefor or in place hereof (whether by registration of transfer or otherwise), irrespective of whether or not any notation of such consent or waiver is made upon this Note. 
 No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and 

  

 A-5 

 
premium, if any, and interest on this Note at the time and place and at the rate and in the money herein prescribed. 
 As provided in the Indenture and subject to certain limitations therein set forth, this Note is transferable by the registered Holder hereof on the
Security Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Trustee in The City and State of New York accompanied by a written instrument or instruments of transfer in form satisfactory
to the Company or the Trustee duly executed by the registered Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in relation thereto. 

Prior to due presentment for registration of transfer of this Note, the Company, the Trustee, any Paying Agent and the Security Registrar may deem and
treat the registered Holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal hereof and premium, if any, and (subject to Sections 3.5 and 3.7 of the Indenture) interest due hereon and for all other purposes, and neither the Company nor the Trustee nor any Paying Agent nor any
Security Registrar shall be affected by any notice to the contrary. 
 No recourse shall be had for the payment of the principal of, premium,
if any, or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, stockholder, officer or director, past, present or future, as such, of the
Company or of any predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of
the consideration for the issuance hereof, expressly waived and released. 
 The Notes of this series are issuable only
in registered form, without coupons, in denominations of $2,000 and integral multiples of $1,000 in excess thereof. [This Global Note is exchangeable for Notes in definitive form only under certain limited circumstances set forth in the Indenture.]
a As provided in the Indenture and subject to certain limitations herein and therein
set forth, Notes of this series so issued are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same. 
 All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 
 THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS.

  
  

	a
	 Insert in Global Notes only 

  

 A-6 

 [FORM OF TRANSFER NOTICE] 
 FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s) and transfer(s) unto 
 Insert Taxpayer
Identification No. 
 _____________________________________________________________________________________________________________ 
 Please print or typewrite name and address including zip code of assignee 
 _____________________________________________________________________________________________________________ 
 the within Note and all rights
thereunder, hereby irrevocably constituting and appointing              attorney to transfer said Note on the books of the Company with full power of substitution in the premises.

  

			
	 Your Signature:

		
	 By:
	 	  

		
	 Date:
	 	  

  

			
	 Signature Guarantee:

		
	 By:
	 	  

		 	(Participant in a Recognized Signature
		 	 Guaranty Medallion Program)

		
	 Date:
	 	  

  

 A-7 

 SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTEa 
 The
following increases or decreases in this Global Note have been made: 
  

									
	 Date of Exchange
	 	 Amount of decrease
in Principal Amount of
this
Global Note
	 	 Amount of increase
in Principal Amount of
this
Global Note
	 	 Principal Amount of this
Global Note
following
such decrease or increase
	 	 Signature of
authorized signatory of
Trustee or
Securities
Custodian

  
  

	a
	 Insert in Global Notes only 

  

 A-8

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