Document:

2005 Nonqualified Deferred Compensation Plan

  
 Exhibit 10.4

  
 ONEOK, Inc. 
  
 2005 NONQUALIFIED 
  
 DEFERRED COMPENSATION PLAN 
  
 January 1, 2005 
  

  
 ONEOK, Inc.

 2005 NONQUALIFIED DEFERRED COMPENSATION PLAN 
  
 Table of Contents 
  

					
	 ARTICLE I. PURPOSE
	  	1
			
	 1.1
	  	 Statement of Purpose; Effective Date
	  	1
		
	 ARTICLE II. DEFINITIONS
	  	1
			
	 2.1
	  	 Account
	  	1
			
	 2.2
	  	 Base Salary
	  	1
			
	 2.3
	  	 Beneficiary
	  	2
			
	 2.4
	  	 Board
	  	2
			
	 2.5
	  	 Bonus
	  	2
			
	 2.6
	  	 Change in Ownership or Control
	  	2
			
	 2.7
	  	 Code
	  	2
			
	 2.8
	  	 Committee
	  	2
			
	 2.9
	  	 Compensation
	  	2
			
	 2.10
	  	 Corporation
	  	2
			
	 2.11
	  	 Deferral Account
	  	3
			
	 2.12
	  	 Deferral Benefit
	  	3
			
	 2.13
	  	 Determination Date
	  	3
			
	 2.14
	  	 Disabled
	  	3
			
	 2.15
	  	 Election
	  	3
			
	 2.16
	  	 Employee
	  	3
			
	 2.17
	  	 Eligible Employee
	  	3
			
	 2.18
	  	 Employer
	  	3
			
	 2.19
	  	 ERISA
	  	4
			
	 2.20
	  	 Exchange Act
	  	4
			
	 2.21
	  	 Fiscal Year
	  	4
			
	 2.22
	  	 Fixed Schedule
	  	4
			
	 2.23
	  	 Investment Return Rate
	  	4
			
	 2.24
	  	 Just Cause
	  	4
			
	 2.25
	  	 Key Employee
	  	5
			
	 2.26
	  	 Key Employee Incentive Plan
	  	5
			
	 2.27
	  	 Long-Term Deferral
	  	5
			
	 2.28
	  	 Lump Sum Merit Award
	  	5
			
	 2.29
	  	 Matching Account
	  	5
			
	 2.30
	  	 Matching Amount
	  	5

  

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	 2.31
	  	 Matching Percentage
	  	5
			
	 2.32
	  	 Participant
	  	5
			
	 2.33
	  	 Participation Agreement
	  	5
			
	 2.34
	  	 Person
	  	6
			
	 2.35
	  	 Performance-Based Compensation
	  	6
			
	 2.36
	  	 Plan
	  	6
			
	 2.37
	  	 Plan Year
	  	6
			
	 2.38
	  	 Retirement
	  	6
			
	 2.39
	  	 Retirement Plan
	  	6
			
	 2.40
	  	 Separation from Service
	  	6
			
	 2.41
	  	 Shares
	  	6
			
	 2.42
	  	 Short-Term Deferral
	  	6
			
	 2.43
	  	 Specified Time
	  	7
			
	 2.44
	  	 Subsequent Election
	  	7
			
	 2.45
	  	 Subsidiary
	  	7
			
	 2.46
	  	 Taxable Year
	  	7
			
	 2.47
	  	 Thrift Plan
	  	7
			
	 2.48
	  	 Trust
	  	7
			
	 2.49
	  	 Unforeseeable Emergency
	  	7
		
	 ARTICLE III. ELIGIBILITY AND PARTICIPATION
	  	8
			
	 3.1
	  	 Eligibility
	  	8
			
	 3.2
	  	 Participation
	  	8
			
	 3.3
	  	 Elections to Participate Irrevocable
	  	8
			
	 3.4
	  	 Exclusion from Eligibility
	  	8
		
	 ARTICLE IV. DEFERRAL OF COMPENSATION
	  	9
			
	 4.1
	  	 Amount and Time of Election to Defer
	  	9
			
	 4.2
	  	 Deferral Periods
	  	9
			
	 4.3
	  	 Committee Authority; Deferral of Compensation
	  	9
			
	 4.4
	  	 General Requirements for All Elections
	  	10
			
	 4.5
	  	 Matching Amounts
	  	10
			
	 4.6
	  	 Crediting Deferred Compensation and Matching Amounts
	  	11
		
	 ARTICLE V. BENEFIT ACCOUNTS
	  	11
			
	 5.1
	  	 Determination of Account
	  	11
			
	 5.2
	  	 Crediting of Investment Return; Other Items to Participant Accounts
	  	11
			
	 5.3
	  	 Investment Return Rate; Designated Deemed Investment
	  	12
			
	 5.4
	  	 Statement of Accounts
	  	12
			
	 5.5
	  	 Vesting of Account
	  	12

  

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	 ARTICLE VI. PAYMENT OF BENEFITS
	  	12
			
	 6.1
	  	 Requirements for Distributions and Payments
	  	12
			
	 6.2
	  	 Payment of Long-Term Deferred Benefit; Retirement Eligible Participant
	  	13
			
	 6.3
	  	 Payment of Short-Term Deferral Benefit
	  	14
			
	 6.4
	  	 Payment of Deferral Benefit upon Disability or Death
	  	14
			
	 6.5
	  	 Lump Sum Payment of Deferral Benefit Upon Termination of Employment; Participant Not Eligible for Vested Retirement Plan
Benefits
	  	14
			
	 6.6
	  	 Form of Payment
	  	14
			
	 6.7
	  	 Commencement of Payments
	  	15
			
	 6.8
	  	 Additional Amount As To Certain Retirement Plan Participants
	  	15
			
	 6.9
	  	 Specific Term Deferrals
	  	16
			
	 6.10
	  	 Payment of Deferrals for Unforeseeable Emergency
	  	16
		
	 ARTICLE VII. BENEFICIARY DESIGNATION
	  	16
			
	 7.1
	  	 Beneficiary Designation
	  	16
			
	 7.2
	  	 Amendments
	  	16
			
	 7.3
	  	 No Designation
	  	17
			
	 7.4
	  	 Effect of Payment
	  	17
		
	 ARTICLE VIII. ADMINISTRATION
	  	17
			
	 8.1
	  	 Plan Committee; Duties
	  	17
			
	 8.2
	  	 Agents
	  	18
			
	 8.3
	  	 Binding Effect of Decisions
	  	18
			
	 8.4
	  	 Indemnity of Committee
	  	18
		
	 ARTICLE IX. AMENDMENT AND TERMINATION OF PLAN
	  	18
			
	 9.1
	  	 Amendment
	  	18
			
	 9.2
	  	 Termination
	  	18
		
	 ARTICLE X. PLAN EFFECT, LIMITATIONS, MISCELLANEOUS PROVISIONS
	  	19
			
	 10.1
	  	 Nature of Employer Obligation; Funding
	  	19
			
	 10.2
	  	 Trusts; Transfers of Assets, Property
	  	19
			
	 10.3
	  	 Nonassignability
	  	20
			
	 10.4
	  	 Captions
	  	21
			
	 10.5
	  	 Governing Law
	  	21
			
	 10.6
	  	 Successors
	  	21
			
	 10.7
	  	 No Right to Continued Service
	  	21
		
	 EXHIBIT A
	  	22
		
	 EXHIBIT B
	  	23
		
	 EXHIBIT C
	  	24
		
	 EXHIBIT D
	  	26

  

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 ONEOK, Inc.

 2005 NONQUALIFIED DEFERRED COMPENSATION PLAN 
  
 ARTICLE I. 
 PURPOSE 
  

	1.1	Statement of Purpose; Effective Date 

  
 This 2005 ONEOK, Inc., Employee Nonqualified Deferred Compensation Plan (the “Plan”) and related agreements between the Employer and certain management or
highly compensated employees is an unfunded, nonqualified deferred compensation plan and arrangement. 
  
 The purpose of the Plan is to provide a select group of management and highly compensated employees of the Employer with the option to defer the receipt of portions of their compensation payable for services rendered
to the Employer, and provide nonqualified deferred compensation benefits which are not available to such employees by reason of limitations on employer and employee contributions to qualified pension or profit-sharing plans under the federal tax
laws. 
  
 It is intended that the Plan will assist in attracting and retaining
qualified individuals to serve as officers and managers of the Employer; and the Plan is intended to constitute a plan which is unfunded and maintained by an employer primarily for the purpose of providing deferred compensation for a select group of
management or highly compensated employees within the meaning of, and as described in Section 201(2) and related provisions of ERISA. 
  
 The Plan is intended to meet all requirements of Section 409A of the Code for compensation deferred under the Plan to not be includible in gross income of the Participant
until actually paid or distributed pursuant to the Plan. 
  
 The Plan is generally
effective on January 1, 2005. 
  
 ARTICLE II. 
 DEFINITIONS 
  
 When used in this Plan and initially capitalized, the following words and phrases shall have the meanings indicated: 
  

	2.1	Account. 

  
 “Account” means the sum of a Participant’s Deferral Account and Matching Account under the Plan. 
  

	2.2	Base Salary. 

  
 “Base Salary” means a Participant’s basic wage or salary paid by an Employer to the Participant without regard to any increases or decreases in such basic wage or salary as a result of (i) an Election
to defer basic wage or salary under this Plan or (ii) an Election between benefits or cash 

  

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provided under a plan of an Employer maintained pursuant to Sections 125 or 401(k) of the Code, and as limited in Exhibit B attached hereto. The Base Salary
does not include any Lump Sum Merit Award paid to a Participant, nor any Bonus, as defined in Section 2.5, below. 
  

	2.3	Beneficiary. 

  
 “Beneficiary” means the person or persons designated or deemed to be designated by the Participant pursuant to Article VII to receive benefits payable under the Plan in the event of the Participant’s
death. 
  

	2.4	Board. 

  
 “Board” means the Board of Directors of the Corporation. 
  

	2.5	Bonus. 

  
 “Bonus” means the cash bonus paid by the Employer to a Participant under the Key Employee Incentive Plan without regard to any decreases as a result of (i) an Election to defer all or any portion of such
Bonus under this Plan or (ii) an Election between benefits or cash provided under the Thrift Plan or any other plan of the Employer maintained pursuant to Section 401(k) of the Code. 
  

	2.6	Change in Ownership or Control. 

  
 “Change in Ownership or Control” means to the extent provided by Treasury Regulations issued under Code Section 409A, a change in the ownership or effective
control of the Corporation, or in the ownership of a substantial portion of the assets of the Corporation. 
  

	2.7	Code. 

  
 “Code” means the Internal Revenue Code of 1986, and Treasury regulations thereunder, as amended from time to time. 
  

	2.8	Committee. 

  
 “Committee” means the Executive Compensation Committee of the Board of Directors of the Corporation. 
  

	2.9	Compensation. 

  
 “Compensation” means the Base Salary and Bonus payable with respect to an Eligible Employee for each calendar year. 
  

	2.10	Corporation. 

  
 “Corporation” means ONEOK, Inc., its successors and assigns, or any division or Subsidiary thereof. 
  

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	2.11	Deferral Account. 

  
 “Deferral Account” means the account maintained on the books of the Employer for the purpose of accounting for the amount of Compensation that each Participant
elects to defer under the Plan and for the amount of investment return credited or debited thereto for each Participant in accordance with Article V. 
  

	2.12	Deferral Benefit. 

  
 “Deferral Benefit” means the benefit payable to a Participant or his or her Beneficiary pursuant to Article VI. 
  

	2.13	Determination Date. 

  
 “Determination Date” means a date on which the amount of a Participant’s Account is determined and updated as provided in Article V. Each December 31 of a
calendar year shall be the Determination Date. 
  

	2.14	Disabled. 

  
 “Disabled” means that a Participant is unable to engage in substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than twelve (12) months, or is, by reason of any medically determinable physical or mental impairment which can be expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three (3) months under an accident or health plan covering Employees of the Corporation. 
  

	2.15	Election. 

  
 “Election means the initial Election of a Participant to defer Compensation to the Participant for services performed for a Plan Year or other period pursuant to the Plan. 
  

	2.16	Employee. 

  
 “Employee” means an employee of the Corporation or a Subsidiary. 
  

	2.17	Eligible Employee. 

  
 “Eligible Employee” means a highly compensated or management employee of the Corporation who is designated by the Committee, by individual name, or group or
description, in accordance with Section 3.1, as eligible to participate in the Plan. 
  

	2.18	Employer. 

  
 “Employer” means, with respect to a Participant, the Corporation or the Subsidiary which pays such Participant’s Compensation. 
  

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	2.19	ERISA. 

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

	2.20	Exchange Act. 

  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  

	2.21	Fiscal Year. 

  
 “Fiscal Year” means the fiscal year of the Corporation commencing January 1 and ending the following December 31. 
  

	2.22	Fixed Schedule. 

  
 “Fixed Schedule” means the distribution or payment of Compensation deferred under the Plan in a fixed schedule of distributions or payments that are determined
and fixed at the time the deferral of such Compensation is first elected by the Participant. 
  

	2.23	Investment Return Rate. 

  
 “Investment Return Rate” means the rate of investment return to be credited to a Participant’s Deferral Account and Matching Account pursuant to Section
5.2, which rate shall be specified in Section 5.3 and Exhibit “C” attached hereto. 
  

	2.24	Just Cause. 

  
 “Just Cause” shall mean the Employee’s conviction in a court of law of a felony, or any crime or offense in a court of law of a felony, or any crime or offense involving misuse or misappropriation of
money or property, the Employee’s violation of any covenant, agreement or obligation not to disclose confidential information regarding the business of the Corporation (or a division or Subsidiary); any violation by the Employee of any covenant
not to compete with the Corporation (or a division or Subsidiary); any act of dishonesty by the Employee which adversely affects the business of the Corporation (or a division or Subsidiary); any willful or intentional act of the Employee which
adversely affects the business of, or reflects unfavorably on the reputation of the Corporation (or a division or Subsidiary); the Employee’s use of alcohol or drugs which interferes with the Employee’s performance of duties as an employee
of the Corporation (or a division or Subsidiary); or the Employee’s failure or refusal to perform the specific directives of the Corporation’s Board, or its officers which directives are consistence with the scope and nature of the
Employee’s duties and responsibilities with the existence and occurrence of all of such causes to be determined by the Corporation in its sole discretion; provided, that nothing contained in the foregoing provisions of this paragraph shall be
deemed to interfere in any way with the right of the Corporation (or a division or Subsidiary), which is hereby acknowledged, to terminate the Employee’s employment at any time without cause. 
  

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	2.25	Key Employee. 

  
 “Key Employee” means an Employee who is (i) an officer of the Corporation having annual compensation greater than $130,000 (adjusted for inflation at the same time and in the same manner as is provided for
in Code Section 416(i) and limited to 50 employees of the Corporation, (ii) a 5-percent owner of the Corporation, and (iii) a 1-percent owner of the Corporation having annual compensation from the Corporation greater than $150,000. 
  

	2.26	Key Employee Incentive Plan. 

  
 “Key Employee Incentive Plan” means the Key Employee Annual Incentive Plan of the Corporation. 
  

	2.27	Long-Term Deferral. 

  
 “Long-Term Deferral” means a deferral made by a Participant that is not a Short-Term Deferral. 
  

	2.28	Lump Sum Merit Award. 

  
 “Lump Sum Merit Award” means a Lump Sum Merit Award granted and paid to a Participant pursuant to the merit compensation program of the Corporation and its
Subsidiaries. 
  

	2.29	Matching Account. 

  
 “Matching Account” means the account maintained on the books of the Employer for the purpose of accounting for the Matching Amount and for the amount of
investment return credited thereto for each Participant pursuant to Article V. 
  

	2.30	Matching Amount. 

  
 “Matching Amount” means the amount credited to a Participant’s Matching Account under Section 4.4. 
  

	2.31	Matching Percentage. 

  
 “Matching Percentage” means the matching contribution percentage in effect for a specific Plan Year under the Thrift Plan. 
  

	2.32	Participant. 

  
 “Participant” means any Eligible Employee who elects to participate by filing a Participation Agreement as provided in Section 3.2. 
  

	2.33	Participation Agreement. 

  
 “Participation Agreement” means the agreement filed by a Participant, in the form prescribed by the Committee, pursuant to Section 3.2. 
  

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	2.34	Person. 

  
 “Person” means an individual, a trust, estate, partnership, limited liability company, association, corporation or other entity. 
  

	2.35	Performance-Based Compensation. 

  
 “Performance-Based Compensation” means Compensation, including Bonus (as hereinabove defined), that is conditioned upon or subject to meeting certain
requirements similar to those under Code Section 162(m), as more particularly provided for in Treasury Regulations issued under Code Section 409A. 
  

	2.36	Plan. 

  
 “Plan” means this ONEOK, Inc. Employee Nonqualified Deferred Compensation Plan, as amended from time to time. 
  

	2.37	Plan Year. 

  
 “Plan Year” means a twelve-month period commencing January 1 and ending the following December 31. 
  

	2.38	Retirement. 

  
 “Retirement” means the voluntary termination of employment of a Participant when retirement benefits become payable to the Participant under the Retirement Plan. 
  

	2.39	Retirement Plan. 

  
 “Retirement Plan” means the Retirement Plan for Employees of ONEOK, Inc. and Subsidiaries. 
  

	2.40	Separation from Service. 

  
 “Separation from Service” means the termination of a Participant’s employment with the Corporation. 
  

	2.41	Shares. 

  
 “Shares” means the common stock, par value $0.01 per share, of the Corporation and any other securities into which such shares are changed or for which such shares are exchanged. 
  

	2.42	Short-Term Deferral. 

  
 “Short-Term Deferral” means a deferral elected by a Participant under which payment of the Deferral Benefit shall commence on a date specified by the
Participant, but not less than five (5) years after the Participant’s Election thereof; provided, that the Committee, may, in its sole discretion, determine and direct that a shorter period, of not less than one (1) year, be applied to any
Short-Term Deferral. 
  

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	2.43	Specified Time. 

  
 “Specified Time” means a specified date at which compensation deferred by a Participant pursuant to the Plan is required to be distributed or paid and which is
specified at the time the deferral of such compensation is initially elected by the Participant. 
  

	2.44	Subsequent Election. 

  
 “Subsequent Election” means and Election made by a Participant with respect to the time or form of distribution or payment Compensation deferred under the Plan
that is made at any time after his/her Election with respect to such deferred Compensation. 
  

	2.45	Subsidiary. 

  
 “Subsidiary” means any corporation of which the Corporation owns, directly or indirectly, at least a majority of the shares of stock having voting power in the Election of directors of such corporation.

  

	2.46	Taxable Year. 

  
 “Taxable Year” shall mean the Plan Year commencing January 1 and ending the following December 31. 
  

	2.47	Thrift Plan. 

  
 “Thrift Plan” means the Thrift Plan for Employees of ONEOK, Inc. and Subsidiaries. 
  

	2.48	Trust. 

  
 “Trust” means a trust created and established pursuant to Section 11.2 of the Plan, or otherwise by the Corporation with respect to the Plan. 
  

	2.49	Unforeseeable Emergency. 

  
 “Unforeseeable Emergency” means a sever financial hardship to the Participant resulting from illness or accident of the Participant, the Participant’s
spouse, or a dependent (as defined in Code Section 152(a)) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary circumstances arising as a result of events beyond the control of the Participant,
and it is intended and directed with respect to any such Unforeseeable Emergency that any amounts distributed under the Plan by reason thereof shall not exceed the amounts necessary to satisfy such emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s
assets (to the extent the liquidation of such assets would not itself cause severe financial hardship. 
  

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 ARTICLE III. 
 ELIGIBILITY AND PARTICIPATION 
  

	3.1	Eligibility. 

  
 Eligibility to participate in the Plan shall be granted to those Eligible Employees who are designated by the Committee and approved by the Board. Subject to Section 3.4, below (providing for exclusion of Employees
not qualifying under certain definitional terms of federal law), the Committee shall adopt a complete written list and/or designation of the Eligible Employees, by individual name or by reference to an identifiable group of persons or by
descriptions of the components of compensation of an individual which would qualify the individuals who are eligible to participate, and all of whom shall be a select group of management or highly compensated employees. The written list and/or
designation of Eligible Employees by the Committee, as approved by the Board, from time to time, shall be adopted and maintained as provided in Exhibit A attached hereto. 
  

	3.2	Participation. 

  
 Participation in the Plan shall be limited to Eligible Employees who elect to participate in the Plan by timely filing a Participation Agreement with the Committee. An
Eligible Employee shall commence participation in the Plan upon the first day of the Plan Year or Fiscal Year as the case may be, designated in his or her Participation Agreement filed with the Committee prior to the beginning of such Plan Year. The
Committee, with the Board’s approval, may in its sole discretion, allow individuals who become Eligible Employees after the beginning of a Plan Year to elect to participate in the Plan for the remaining part of such Plan Year; provided, that
any Election by such an Eligible Employee to initially defer Compensation upon becoming a Participant in the Plan shall be made within thirty (30) days after the date he/she becomes a Participant in the Plan. 
  

	3.3	Elections to Participate Irrevocable. 

  
 A Participant may not change a previously elected percentage of deferral of Compensation, or terminate his or her Election to participate in the Plan for a Plan Year.
Except as may otherwise be determined and approved by the Committee, a Participant’s Election to defer Base Salary and Bonus shall only be effective as of the beginning of the next Plan Year following receipt of the Participant’s Election
by the Corporation. Determinations on all Elections and of any effective dates other than as specified above, shall be made by the Committee in accordance with its prevailing administrative procedures. 
  

	3.4	Exclusion from Eligibility. 

  
 Notwithstanding any other provisions of this Plan to the contrary, if the Committee determines that any Participant may not qualify as a “management or highly
compensated employee” within the meaning of ERISA, or regulations thereunder, the Committee may determine, in its sole discretion, that such Participant shall cease to be eligible to participate in this Plan. Upon such determination, the
Employer shall make an immediate lump sum payment to the Participant equal to the vested amount credited to the Participant’s Account. Upon such payment, no benefit shall thereafter be payable under this Plan either to the Participant or any
Beneficiary of the 

  

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Participant, and all of the Participant’s Elections as to the time and manner of payment of his or her Account will be deemed to be canceled.

  
 ARTICLE IV. 
 DEFERRAL OF COMPENSATION 
  

	4.1	Amount and Time of Election to Defer. With respect to each Plan Year, a Participant may elect to defer a specified percentage of his or her Compensation up to the
percentage of Compensation stated, and subject to the terms described in Exhibit B attached hereto; provided, that each Participant must elect a minimum deferral of two percent (2%) of his or her Base Salary for a Plan Year, and elect a minimum
deferral of ten percent (10%) of all or the portion above a specified threshold of a Participant’s Bonus for a Plan Year, and all deferrals elected must be in one percent (1%) increments of Compensation. 

  

	 	(b)	A Participant’s Election to defer that part of Compensation which constitutes Base Salary for services performed during a Plan Year shall be made not later than the close of
the preceding Plan Year, or such other time as provided in Treasury Regulations published under Code Section 409A; provided that in the case of the first Plan Year in which a Participant becomes eligible to participate in the Plan, such Election may
be made with respect to services to be performed subsequent to the Election within thirty (30) days after the Participant becomes eligible to participate in the Plan. A Participant’s Election to defer that part of Compensation which constitutes
Bonus that constitutes Performance-Based Compensation based on services over a period of at least twelve (12) months in and for a Plan Year shall be made no later than six (6) months before the end of that Plan Year. 

  

	 	(c)	Unless otherwise specifically stated in a Participant’s Election to defer Compensation, an Election to defer Compensation of Base Salary shall apply only to the next Plan Year
following such Election, and an Election to defer Bonus shall apply only to the next Plan Year following such Election. Except as otherwise directed by the Committee, Participants in the Plan shall make separate and new Elections to defer Base
Salary and Bonus each Plan Year. 

  

	4.2	Deferral Periods. 

  
 Subject to the requirements of Section 4.4, below, a Participant shall be allowed to defer Compensation under the Plan by making either a Long-Term Deferral or a
Short-Term Deferral. The Participant shall elect and designate his or her deferral period as either a Long-Term Deferral or a Short-Term Deferral in the Participation Agreement filed with the Committee for a Plan Year. 
  

	4.3	Committee Authority; Deferral of Compensation. 

  
 Subject to the requirements of Section 4.4, below, the Committee may, in its sole discretion, determine and direct that the amount of deferral and period of deferral
which may be elected for Compensation, Base Salary or Bonus payable to Participants for any particular Plan Year or 

  

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Fiscal Year, or other period of service, be limited to an amount or amounts, and for a period or periods other than that which is otherwise generally
provided herein; and the Committee may from time to time, in its sole discretion, also determine and direct that all or part of the Bonus payable to Participants for any period of service shall be deferred only for the period or periods of deferral
determined solely by the Committee without any election thereon by Participants. 
  

	4.4	General Requirements for All Elections. 

  
 Notwithstanding anything to the contrary expressed or, implied herein, the following requirements stated in this Section 4.4 shall apply to the Plan and to all Elections
by Participants to defer Compensation and receive distributions or payments under the Plan. 
  

	 	(a)	Elections. 

  

	 	(1)	Compensation for services performed by a Participant may be deferred at the Participant’s Election only if the Election to defer such Compensation is made not later than the
close of the preceding Plan Year or such other time as is provided for in Treasury Regulations issued under Code Section 409A; provided that in the case of the first year in which a Participant is eligible to participate in the Plan, such Election
may be made with respect to services to be performed subsequent to the Election within thirty (30) days after the date the Participant becomes eligible to the participate in the Plan; and in the case of any Performance-Based Compensation based on
services performed over a period of at least twelve (12) months, such Election may be made no later than six (6) months before the end of the period. 

  

	 	(2)	If the Plan, or the Committee acting pursuant to the Plan, permits under any Subsequent Election a delay in a payment or a change in the form of payment of Compensation deferred
under the Plan, such Subsequent Election shall not take effect until at least twelve (12) months after the date on which it is made. In the case of a Subsequent Election related to a payment to be made upon Separation from Service of a Participant,
at a Specified Time or pursuant to a Fixed Schedule, or upon a Change in Ownership or Control, the first payment with respect to which Subsequent Election is made shall be deferred for a period not less than five (5) years from the date such payment
would otherwise have been made; and any such Subsequent Election related to a payment at a Specified Time or pursuant to a Fixed Schedule may not be made less than twelve (12) months prior to the date of the first scheduled payment to which it
relates. 

  

	4.5	Matching Amounts. 

  
 The Employer shall provide and credit a Matching Amount under this Plan with respect to each Participant who is eligible to be allocated matching contributions under the
Thrift Plan; except that the Committee may, prior to any Plan Year, make a determination not to provide for the crediting of Matching Amounts for that Plan Year. The Matching Amount to be credited to a 

  

 -10- 

 
Participant’s Matching Account for a Plan Year shall be an amount equal to the excess of (i) the Participant’s matching contribution percentage
under the Thrift Plan for the Plan Year multiplied by the Participant’s Compensation from the Employer in that Plan Year, over (ii) the amount of Thrift Plan matching contributions made by the Employer that are allocated to the
Participant’s Thrift Plan account for that Plan Year; it being intended that a Participant shall have credited to his or her Matching Account the amount of matching contributions which could not be allocated to the Participant’s Thrift
Plan account for the Plan Year by reason of all limitations on compensation and contributions applicable to Thrift Plan matching contributions under the Code and Treasury regulations thereunder. 
  

	4.6	Crediting Deferred Compensation and Matching Amounts. 

  
 The amount of Compensation that a Participant elects pursuant to an Election to defer from Base Salary under the Plan shall be credited by the Employer to the
Participant’s Deferral Account monthly, provided that the Employer shall reduce the deferral amount credited by the amount of any taxes or other amounts required to be withheld by the Employer from a Participant’s deferred Compensation
pursuant to any state, federal or local law. The Matching Amount under the Plan for each Participant under Section 4.4 shall be credited by the Employer no later than the time that matching contributions are allocated under the Thrift Plan. The
amount of Compensation that a Participant elects pursuant to an Election to defer from Bonus under the Plan shall be credited by the Employer to the Participant’s Deferral Account at the time the Bonus would otherwise be paid or payable to the
Participant under the Key Employee Incentive Plan. 
  
 ARTICLE
V. 
 BENEFIT ACCOUNTS 
  

	5.1	Determination of Account. 

  
 As of each Determination Date, a Participant’s Account shall consist of the balance of the Participant’s Account as of the immediately preceding Determination
Date, plus the Participant’s deferred Compensation and Matching Amount credited pursuant to Section 4.4 since the immediately preceding Determination Date, plus investment return credited as of such Determination Date pursuant to Section 5.2,
minus the aggregate amount of distributions, if any, made from such Account since the immediately preceding Determination Date. 
  

	5.2	Crediting of Investment Return; Other Items to Participant Accounts. 

  
 The Deferral Account and Matching Account of each Participant shall be periodically credited and increased, or debited and reduced, as the
case may be, by the amount of investment return specified under Section 5.3. The Deferral Account and Matching Account of each Participant shall also be debited and credited for any deemed purchases or sales of, or other deemed transactions
involving securities provided for under the Plan. The Deferral Account and Matching Account shall be so credited and debited not less frequently than monthly in the manner established and determined from time to time by the Committee, in its sole
discretion. The manner in which the Committee determines that Participants” accounts shall be so debited or credited shall be described in written rules or procedures which shall be stated from time to time 

  

 -11- 

 
by a written description thereof which shall be attached to this Plan as Exhibit “D,” and furnished to the Participants in the Plan. 
  

	5.3	Investment Return Rate; Designated Deemed Investment. 

  
 The Investment Return Rate shall be determined in the manner specified in Exhibit “C” attached hereto. 
  
 To the extent the Investment Return Rate specified in Exhibit “C” attached hereto,
applied to a Participant’s deferrals includes a rate that is to be determined from deemed investment of such Participant’s Account in investment options specified therein, the Committee shall prescribe the manner and form in which a
Participant may designate the deemed investment of deferrals and other amounts in his or her Account. A Participant will be allowed to change such designation of deemed investment monthly or with such other frequency as specified by the Committee,
in its sole discretion. Provided, that notwithstanding anything to the contrary stated or implied by the Plan, including all Exhibits thereto, the use, reference to or consideration of any such deemed investments made by the Committee or Plan, or
designated by Participants, the Committee and the Corporation shall not be obligated to make or cause to be made any particular type or form of investment with respect to the funding or payment of the Deferral Benefits or Deferral Accounts of
Participants under the Plan, and no Participant shall have the right to direct or in any manner control any actual investments, if any, made by the Employer or any other person for purposes of providing funds for paying liabilities of the Employer
for benefits or otherwise under the Plan. No Participant shall have any ownership or beneficial interest in any such actual investments made by the Employer. 
  

	5.4	Statement of Accounts. 

  
 The Committee shall provide to each Participant in the Short-Term Deferral Plan within 120 days after the close of each Plan Year, a statement setting forth the balance
of such Participant’s Account as of the Determination Date of the preceding Plan Year and showing all adjustments made thereto during such Plan Year. The Committee shall provide to each Participant in the Long-Term Deferral Plan, not less
frequently than quarterly, a statement setting forth the balance of such Participant’s Account as of the last date of the preceding quarter in any Plan Year and showing all adjustments made thereto during such quarter of any Plan Year.

  

	5.5	Vesting of Account. 

  
 Except as provided in Sections 11.1 and 11.2, below, a Participant shall be 100% vested in his or her Deferral Account and Matching Account at all times. 
  
 ARTICLE VI. 
 PAYMENT OF BENEFITS 
  

	6.1	Requirements for Distributions and Payments. 

  
 Notwithstanding anything to the contrary expressed or implied herein, the following requirements stated in this Section 6.1 shall apply to the Plan, to all Elections or
Subsequent 

  

 -12- 

 
Elections made by Participants under the Plan, and to all distributions and payments made pursuant to the Plan. 
  

	 	(a)	Any Compensation deferred under the Plan shall not be distributed earlier than 

  

	 	(1)	separation from Service of the Participant, 

  

	 	(2)	the date the Participant becomes Disabled, 

  

	 	(3)	death of the Participant, 

  

	 	(4)	a Specified Time (or pursuant to a Fixed Schedule) specified under the Plan at the date of deferral of such Compensation, 

  

	 	(5)	a Change in Ownership or Control, or 

  

	 	(6)	the occurrence of an Unforeseeable Emergency. 

  

	 	(b)	Notwithstanding the foregoing, in the case of a Participant who is a Key Employee, no distribution shall be made before the date which is six (6) months after the date of the
Participant’s Separation from Service, or, if earlier, the date of death of such Participant. 

  

	 	(c)	No acceleration of the time or schedule of any distribution or payment under the Plan shall be permitted or allowed, except to the extent provided in Treasury Regulations issued
under Code Section 409A. 

  

	 	(d)	If the Plan, or the Committee acting pursuant to the Plan, permits under any Subsequent Election by a Participant a delay in a payment or a change in the form of payment of
Compensation deferred under the Plan, such Subsequent Election shall not take effect until at least twelve (12) months after the date on which it is made. In the case of a Subsequent Election related to a payment to be made upon Separation from
Service of a Participant, at a Specified Time or pursuant to a Fixed Schedule, or upon a Change in Ownership or Control, the first payment with respect to which such Subsequent Election is made shall be deferred for a period of not less than five
(5) years from the date such payment would otherwise have been made; and any such Subsequent Election related to a payment at a Specified Time or pursuant to a Fixed Schedule may not be made less than twelve (12) months prior to the date of the
first scheduled payment to which it relates. 

  

	6.2	Payment of Long-Term Deferred Benefit; Retirement Eligible Participant. 

  
 Subject to the requirements stated in Section 6.1, above, upon the Separation from Service as an Employee of the Employer by a Participant
who is then entitled to commence receiving payment of a fully vested benefit under the Retirement Plan, the Employer shall pay to the Participant a Deferral Benefit in the form of benefit payment specified in the Participant’s written Election
pursuant to Section 6.6. 
  

 -13- 

	6.3	Payment of Short-Term Deferral Benefit. 

  
 Subject to the requirements stated in Section 6.1, above, a Short-Term Deferral shall be paid to a Participant beginning on the date specified by the Participant in his
or her Participation Agreement, and shall be paid in the form of benefit payment specified in the Participant’s written Election pursuant to Section 6.5; provided, that no part of a Short-Term Deferral may be paid prior to five (5) years
following the Participant’s Election thereof. 
  

	6.4	Payment of Deferral Benefit upon Disability or Death. 

  

	 	(a)	Subject to the requirements stated in Section 6.1, above, if a Participant becomes Disabled, the Employer shall pay to the Participant, or the Participant’s personal
representative, a Deferral Benefit in annual payments for either five (5) or fifteen (15) years, or in a single lump sum equal to the balance of the Participant’s Account determined pursuant to Article V, less any amounts previously paid and
distributed. The Participant who becomes Disabled, or the Disabled Participant’s personal representative, shall elect which term of payment is to be paid. 

  

	 	(b)	Subject to the requirements stated in Section 6.1, above, upon the death of a Participant the Participant’s Account shall be paid to the Participant’s Beneficiary. If the
Participant has elected Long-Term Deferral the Deferral Benefit shall be paid to the Beneficiary over the time period elected by the Participant commencing as soon as practicable after the time of death of the Participant. If the Participant has
elected a Short-Term Deferral the Deferral Benefit shall be paid to the Beneficiary in a single lump sum payment. 

  

	6.5	Lump Sum Payment of Deferral Benefit Upon Termination of Employment; Participant Not Eligible for Vested Retirement Plan Benefits. 

  
 Subject to the requirements stated in Section 6.1, above, upon the separation from Service
of a Participant as an Employee of the Employer prior to the time such Participant is entitled to commence receiving payment of a fully vested benefit under the Retirement Plan, and not by reason of such Participant’s Disability or death, the
Employer shall pay to the Participant a Deferral Benefit equal to the balance of the Participant’s vested Account determined pursuant to Article V. This payment shall be made notwithstanding any other period or time of payment that has been
elected by the Participant. 
  

	6.6	Form of Payment. 

  
 The Deferral Benefit payable to a Participant shall be paid in one of the following forms, as elected by the Participant at the time of his or her Election, and pursuant
to such Election and his or her Participation Agreement. 
  

	 	(a)	For Participants who elect a Long-Term Deferral, the Deferral Benefit shall be paid in one of the following elected forms: 

  

	 	(1)	 In annual payments of the vested Account balance, on and after the payment commencement date over a period of either five (5) or fifteen 

  

 -14- 

	 	 
(15) years (together, in the case of each annual payment, with investment return thereon credited after the payment commencement date pursuant to Section
5.2), with the amount of each such annual payment to be determined by multiplying the remaining principal amount and undistributed income in the Participant’s Account by a fraction, the numerator of which is one (1) and the denominator of which
shall be the number of remaining annual payments, including the payment then being calculated; or 

  

	 	(2)	A lump sum. 

  

	 	(b)	For Participants who elect a Short-Term Deferral, the Deferral Benefit shall be paid in one of the following elected forms: 

  

	 	(1)	Annual payments of a fixed amount which shall amortize the vested Account balance, on and after the payment commencement date over a period of from one (1) to four (4) years
(together, in the case of each annual payments with investment return thereon credited after the payment commencement to Section 5.2), with the amount of each such annual payment to be determined by multiplying the remaining principal amount and
undistributed income in the Participant’s Account by a fraction, the numerator of which is one (1) and the denominator of which shall be the number of remaining annual payments, including the payment then being calculated; or

  

	 	(2)	A lump sum. 

  

	6.7	Commencement of Payments. 

  
 Subject to the requirements stated in Section 6.1, above, and except as otherwise provided in Section 6.2, the commencement of payments under Sections 6.1 through 6.4,
above, shall begin at the time specified by the Participant in his or her Election and Participation Agreement consistent with the terms and provisions of the Plan. 
  

	6.8	Additional Amount As To Certain Retirement Plan Participants. 

  

Subject to the requirements stated in Section 6.1, above, the Corporation shall pay to a Participant or his or her survivor Beneficiary, as the case may be, an
additional amount equal to the amount by which such Participant’s retirement benefit under the Retirement Plan is reduced by reason of the deferred Compensation elected by the Participant under the Plan not being taken into account in the
calculation of such Participant’s retirement benefit under the Retirement Plan, but only if such deferred Compensation is not taken into account in determining a retirement benefit or payment payable to such Participant under the ONEOK, Inc.
Supplemental Executive Retirement Plan (SERP), the 2005 Supplemental Executive Retirement Plan (2005 SERP), nor under any other plan, arrangement or agreement of the Corporation other than this Plan; and the additional amount payable to a
Participant, or his or her Beneficiary, under this Section 6.8 shall be paid at the same time and in the same form as such Participant’s retirement benefit is paid 

  

 -15- 

 
under the Retirement Plan. A Participant may not elect to have such additional amount paid at any other time or in any other form. 
  

	6.9	Specific Term Deferrals. 

  
 Subject to the requirements stated in Section 6.1, above, the Corporation may, from time to time, offer to Participants the opportunity to otherwise defer specific
amounts of Base Salary or Bonus for a specific duration to a Specified Time and to then be paid out in installments prior to Retirement. These deferrals will be accounted for separately and will be paid out pursuant to an Election that applies only
to that deferral. The specific terms of each offering will be described in a written memorandum that will be attached to this document. Except where specifically provided otherwise in such memorandum, the terms of such deferrals will adhere to all
of the other provisions of the Plan. 
  

	6.10	Payment of Deferrals for Unforeseeable Emergency. 

  
 Subject to the requirements stated in Section 6.1, above, in the case of an Unforeseeable Emergency, a Participant may apply in writing to the Corporation, or its
designated agent, for the immediate distribution of all or part of his or her Deferral Benefit; provided, that such a distribution shall not exceed the amounts necessary to satisfy the emergency involved plus amounts necessary to pay taxes
reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s
assets (to the extent the liquidation of such assets would not itself cause severe financial hardship). In addition, the Participant must continue to defer Compensation subsequent to such distribution in accordance with the Participant’s
Election and will not be permitted to elect to defer Compensation attributable to the calendar year subsequent to the calendar year of the distribution. The Corporation shall have the sole discretion as to whether such distribution shall be made,
and its determination shall be final and conclusive. In making its determinations, the Corporation shall follow a uniform and nondiscriminatory practice. 
  
 ARTICLE VII. 
 BENEFICIARY DESIGNATION

  

	7.1	Beneficiary Designation. 

  
 Each Participant shall have the right, at any time, to designate any person or persons as his or her Beneficiary to whom payment under the Plan shall be made in the event
of the Participant’s death prior to complete distribution to the Participant of his or her Account. Any Beneficiary designation shall be made in a written instrument provided by the Committee. All Beneficiary designations must be filed with the
Corporation and shall be effective only when received in writing by the Corporation. 
  

	7.2	Amendments. 

  
 Any Beneficiary designation may be changed by a Participant by the filing of a new Beneficiary designation, which will cancel all the Participant’s prior Beneficiary designations filed with the Committee.

  

 -16- 

	7.3	No Designation. 

  
 If a Participant fails to designate a Beneficiary as provided above, or if all designated Beneficiaries predecease the Participant, then the Participant’s designated
Beneficiary shall be deemed to be the Participant’s estate. 
  

	7.4	Effect of Payment. 

  
 Payment to a Participant’s Beneficiary (or, upon the death of a primary Beneficiary, to the contingent Beneficiary or, if none, to the Participant’s estate)
shall completely discharge the Employer’s obligations under the Plan. 
  
 ARTICLE VIII. 
 ADMINISTRATION 
  

	8.1	Plan Committee; Duties. 

  
 The administrative committee for the Plan shall be those members of the Committee who are not Participants, as long as there are at least three (3) such members. If there
are not at least three (3) such non-participating persons on the Committee, the Chief Executive Officer of the Corporation shall appoint other non-participating Directors or Corporation officers to serve on the Committee. The Committee shall
supervise the administration and operation of the Plan, may from time to time adopt rules and procedures governing the Plan and shall have authority to give interpretive rulings with respect to the Plan. The Committee shall have such other powers
and duties as are specified in this Plan as the same may from time to time be constituted, and not in limitation but in amplification of the foregoing, the Committee shall have power, to the exclusion of all other persons, to interpret the
provisions of this instrument, to decide any disputes which may arise hereunder; to construe and determine the effect of Participant Agreements, Elections, beneficiary designations, and other actions and documents; to determine all questions that
shall arise under the Plan, including questions as to the rights of Employees to become Participants, as to the rights of Participants, and including questions submitted by the trustee of a Trust created under Section 11.2 on all matters necessary
for it properly to discharge its duties, powers, and obligations; to employ legal counsel, accountants, consultants and agents; to establish and modify such rules, procedures and regulations for carrying out the provisions of the Plan not
inconsistent with the terms and provisions hereof, as the Committee may consider proper and desirable; and in all things and respects whatsoever, without limitation, to direct the administration of the Plan and any such Trust with the trustee being
subject to the direction of the Committee. The Committee may supply any omission or reconcile any inconsistency in this instrument in such manner and to such extent as it shall deem expedient to carry the same into effect and it shall be the sole
and final judge of such expediency. The Committee may adopt such rules and regulations with respect to the signature by an Employee, Participant and/or Beneficiary as to any agreements, Elections or other papers to be signed by Employees or
Participants or Beneficiaries and similar matters as the Committee shall determine in view of the laws of any state or states. Any act which this instrument authorizes or requires the Committee to do may be done by a majority of the then members of
the Committee. The action of such majority of the members expressed either by a vote at a meeting or in writing without a meeting, shall constitute the action of the Committee and shall have the same effect for all purposes as if 

  

 -17- 

 
assented to by all of the members of the Committee at the time in office, provided, however, that the Committee may, in specific instances, authorize one (1)
of its members to act for the Committee when and if it is found desirable and convenient to do so. 
  

	8.2	Agents. 

  
 The Committee may appoint an individual, who may be an employee of the Corporation, to be the Committee’s agent with respect to the day-to-day administration of the
Plan. In addition, the Committee may, from time to time, employ other agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with counsel who may be counsel to the Corporation. 
  

	8.3	Binding Effect of Decisions. 

  
 Any decision or action of the Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan
shall be final and binding upon all persons having any interest in the Plan. 
  

	8.4	Indemnity of Committee. 

  
 The Corporation shall indemnify and hold harmless the members of the Committee and their duly appointed agents under Section 8.2 against any and all claims, loss, damage,
expense or liability arising from any action or failure to act with respect to the Plan, except in the case of gross negligence or willful misconduct by any such member or agent of the Committee. 
  
 ARTICLE IX. 
 AMENDMENT AND TERMINATION OF PLAN 
  

	9.1	Amendment. 

  
 The Corporation, on behalf of itself and of each Subsidiary may at any time amend, modify, suspend or reinstate any or all of the provisions of the Plan, except that no such amendment, modification, suspension or
reinstatement may adversely affect any Participant’s Account, as it existed as of the day before the effective date of such amendment, modification, suspension or reinstatement, without such Participant’s prior written consent. Written
notice of any amendment or other action with respect to the Plan shall be given to each Participant. 
  

	9.2	Termination. 

  
 The Corporation, on behalf of itself and of each Subsidiary, in its sole discretion, may terminate this Plan at any time and for any reason whatsoever. Upon termination of the Plan, the Committee shall take those
actions necessary to administer any Participant Accounts existing prior to the effective date of such termination; provided, however, that a termination of the Plan shall not adversely affect the value of a Participant’s Account, the crediting
of investment return under Section 5.2, or the timing or method of distribution of a Participant’s Account, without the 

  

 -18- 

 
Participant’s prior written consent. Notwithstanding the foregoing, a termination of the Plan shall not give rise to accelerated or automatic vesting of
any Participant’s Matching Account. 
  
 ARTICLE X.

 PLAN EFFECT, LIMITATIONS, 
 MISCELLANEOUS PROVISIONS 
  

	10.1	Nature of Employer Obligation; Funding. 

  
 Participants, their Beneficiaries, and their heirs, successors and assigns, shall have no secured interest or claim in any property or assets of the Employer. The
Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Employer to pay money in the future. 
  

	10.2	Trusts; Transfers of Assets, Property. 

  

	 	(a)	Notwithstanding the foregoing, in the event of a Change in Ownership or Control, the Corporation shall create an irrevocable Trust, or before such time the Corporation may create an
irrevocable or revocable Trust, to hold funds to be used in payment of the obligations of Employers under the Plan. 

  

	 	(b)	Notwithstanding anything otherwise expressed or implied herein, in the case of any assets set aside (directly or indirectly) in a such a Trust (or other arrangement determined by
Treasury Regulations or otherwise pursuant to Code Section 409A) for purposes of paying deferred compensation under the Plan, no such assets (or such a Trust or other arrangement) shall ever be located or transferred outside the United States.

  

	 	(c)	In the event of a Change in Ownership or Control or prior thereto, the Employers shall fund such Trust in an amount equal to not less than the total value of the Participants’
Accounts under the Plan as of the Determination Date immediately preceding the Change in Ownership or Control, provided that any funds contained therein shall remain liable for the claims of the general creditors of the respective Employers.

  

	 	(d)	Pursuant to this Section 10.2, the Corporation may, without further reference to or action by any Employee, Participant, or any Beneficiary from time to time enter into such further
agreements with a trustee or other parties, and make such amendments to said trust agreement or such further agreements, as the Corporation may deem necessary or desirable to carry out the Plan; from time to time designate successor trustees of such
a Trust; and from time to time take such other steps and execute such other instruments as the Corporation may deem necessary or desirable to carry the out the Plan. The Committee shall advise the trustee of any such Trust in writing with respect to
all Deferral Benefits which become payable under the terms of the Plan and shall direct the trustee to pay such Deferral Benefits from the respective Participants’ Accounts, and the Committee shall have authority to otherwise deal with and
direct the trustee of such a Trust in matters pertinent to the Plan. 

  

 -19- 

	 	(e)	It is intended that any Trust created hereunder is to be treated as a “grantor” trust under the Code, and the establishment of such a Trust is not intended to cause a
Participant to realize current income on amounts contributed thereto, such a Trust is not intended to cause the Plan to be “funded” under ERISA and the Code, and any such Trust shall be so interpreted, and such Trust shall be funded in a
manner that assets set aside or transferred to such Trust shall not be treated under Code Section 409A as property transferred in connection with the performance of services by reason of such assets being located or transferred outside the United
States. 

  

	 	(f)	Notwithstanding anything to the contrary expressed or implied herein, no transfer of assets shall be made under or in connection with the Plan or Compensation deferred under the
Plan that would constitute a transfer of property within the meaning of Code Section 83 with respect to such Compensation by reason of such assets becoming restricted to the provision of benefits under the Plan in connection with a change in the
Corporation’s financial health, as provided for under Code Section 409A, and Treasury Regulations issued thereunder. 

  

	10.3	Nonassignability. 

  
 No right or interest under the Plan of a Participant or his or her Beneficiary (or any person claiming through or under any of them), shall be assignable or transferable
in any manner or be subject to alienation, anticipation, sale, pledge, encumbrance or other legal process or in any manner be liable for or subject to the debts or liabilities of any such Participant or Beneficiary. If any Participant or Beneficiary
shall attempt to or shall transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his or her benefits hereunder or any part thereof, or if by reason of his or her bankruptcy or other event happening at any time such benefits would
devolve upon anyone else or would not be enjoyed by him or her, then the Committee, in its discretion, may terminate such Participant’s or Beneficiary’s interest in any such benefit (including the Deferral Account) to the extent the
Committee considers necessary or advisable to prevent or limit the effects of such occurrence. Termination shall be effected by filing a written instrument with the Secretary of the Corporation and making reasonable efforts to deliver a copy to the
Participant or Beneficiary whose interest is adversely affected (the “Terminated Participant”). 
  
 As long as the Terminated Participant is alive, any benefits affected by the termination shall be retained by the Employer and, in the Committee’s sole and absolute judgment, may be paid to or expended for the
benefit of the Terminated Participant, his or her spouse, his or her children or any other person or persons in fact dependent upon him or her in such a manner as the Committee shall deem proper. Upon the death of the Terminated Participant, all
benefits withheld from him or her and not paid to others in accordance with the preceding sentence shall be disposed of according to the provisions of the Plan that would apply if he or she died prior to the time that all benefits to which he or she
was entitled were paid to him or her. 
  

 -20- 

	10.4	Captions. 

  
 The captions contained herein are for convenience only and shall not control or affect the meaning or construction hereof. 
  

	10.5	Governing Law. 

  
 The provisions of the Plan shall be construed and interpreted according to the laws of the State of Oklahoma. 
  

	10.6	Successors. 

  
 The provisions of the Plan shall bind and inure to the benefit of the Corporation, its Subsidiaries, and their respective successors and assigns. The term “successors” as used herein shall include any
corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise, acquire all or substantially all of the business and assets of the Corporation or a Subsidiary and successors of any such corporation or other
business entity. 
  

	10.7	No Right to Continued Service. 

  
 Nothing contained herein shall be construed to confer upon any Eligible Employee the right to continue to serve as an Eligible Employee of the Employer or in any other
capacity. 
  

			
	ONEOK, Inc.
		
	By: 	 	 
	 	 	 David Kyle
 Chairman of the Board,
 Chief Executive Officer and President

  

 -21- 

  
 EXHIBIT A

  
 ONEOK, Inc. 
 2005 NONQUALIFIED DEFERRED COMPENSATION PLAN 
  

	Re:	Section 3.1 – Eligible Employees 

 Effective Date:
January 1, 2005 
  
 Except as otherwise specifically determined by the Committee,
Eligible Employees who may participate in the Plan shall be designated in writing by the Chief Executive Officer, or his designee, each Plan Year during the period after November 1 and prior to the next January 1 (“Designation Period”),
with such designation to indicate the Eligible Employees for the Plan Year next following such Designation Period who shall be each Employee who (i) had Base Salary on November 1 of that Plan Year, which places such Employee in the group of
Employees consisting of the top two percent (2%) of the Employees when ranked on the basis of Base Salary, (ii) is designated on such November 1 to be at least within Pay Grade 12 or its deemed equivalent, as established by the Corporation, and
(iii) is so designated by name in writing in an instrument signed by the Chief Executive Officer of the Corporation, or his designee. The Corporation’s designation of Eligible Employees for a Plan Year shall be reported to and approved by the
Board in accordance with its directions. 
  
 An Employee must be an Eligible
Employee prior to the beginning of a Plan Year in order to participate in the Plan for such Plan Year, unless otherwise determined by the Committee and approved by the Board. 
  
 A list of the Eligible Employees who are so designated and approved for a Plan Year shall be made by the Chief Executive Officer, or his
designee, the Committee, or by a duly authorized representative of the Committee, and be maintained with the Plan in the records of the Corporation. 
  

 -22- 

  
 EXHIBIT B

  
 ONEOK, Inc. 
 2005 NONQUALIFIED DEFERRED COMPENSATION PLAN 
  

	Re:	Section 4.1 – Amount of Deferral 

 Effective Date:
January 1, 2005 
  
 As of the date above, and effective until this Exhibit is
modified by the Committee and Board, the table below indicates the types of Compensation that are eligible for deferral at the designated percentages stated: 
  

					
	 Type of Compensation

	  	 Minimum Percentage
 That Must Be Deferred

	 	Maximum Percentage
That May Be Deferred

	 Base Salary
	  	2%	 	*90%
	 Bonus (or the portion above a specified threshold)
	  	10%	 	*90%

  
 A Participant may defer Compensation
only in 1% increments of Base Salary and/or Bonus. 
  

	*	The Participant’s deferral shall be after deductions and withholding of amounts applicable to deferrals made by the Participant pursuant to other employee benefit plans of the
Employer under Code Sections 125 and 401(k), and after deduction and withholding of all income and employment taxes required, as determined by the Committee and Employer, under uniform rules and procedures. 

  

 -23- 

  
 EXHIBIT C

  
 ONEOK, Inc. 
 2005 NONQUALIFIED DEFERRED COMPENSATION PLAN 
  

	Re:	Section 2.21 – Investment Return Rate 

 Date: January
1, 2005 
  

	A.	Short-Term Deferrals 

  
 For amounts deferred by a Participant as a Short-Term Deferral, the Investment Return Rate will be the Five-Year Treasury Bond Rate as of the first
business day of January of the Plan Year; provided that the Corporation may determine such other Investment Return Rate as it selects from time to time, in its discretion. 
  

	B.	Long-Term Deferrals 

  
 The Investment Return Rate on a Participant’s Long-Term Deferral shall be the rate determined pursuant to the following: 
  

	 	1.	A Participant electing a Long-Term Deferral Investment Return Rate shall so designate such deemed investment of his/her Deferred Compensation Account in the manner and form, and at
such times as prescribed by the Committee. 

  

	 	2.	A Participant shall be allowed to change such designation at least once each calendar quarter, or more frequently as determined by the Committee, in its sole discretion. Such
Investment Return Rate shall be determined and calculated in the manner determined by the Committee, in its sole discretion, and added to or deducted from the Participant’s Deferred Compensation Account periodically, not less frequently than
annually. Such Investment Return Rate shall be so credited to or deducted from a Participant’s Deferred Compensation Account until all payments with respect thereto have been made to the Participant, or to the Participant’s designated
Beneficiary pursuant to the Plan. The Employer shall not be liable or otherwise responsible for any decrease in a Participant’s Deferred Compensation Account because of the investment performance resulting from application of the foregoing
provisions which make the Investment Return Rate on a Participant’s Long-Term Deferrals under the Plan equivalent to the investment return that is realized by deemed investment of the Participant’s Deferred Compensation Account in Thrift
Plan investment options designated by the Participant. 

  
 Notwithstanding the foregoing, the Employer shall not be required to actually invest amounts deferred by a Participant nor the Account of any Participant in any particular form, type or amount of investment, and no Participant shall have
the right to direct or in any manner control the actual investments, if any, made by the Employer or any other person for purposes of providing funds for paying the liabilities of the Employer for benefits or otherwise under the Plan; and a 

  

 -24- 

 
Participant shall not have any ownership or beneficial interest in any such actual investments that may be made by the Employer. In no event shall any
Participant or Beneficiary have a right to receive an amount under the Plan other than that of a general unsecured creditor of the Employer notwithstanding the foregoing provisions with respect to the measurement and determination of a
Participant’s Investment Return Rate on his/her Long-Term Deferral by reference to the performance of deemed investments in Thrift Plan investment options designated by the Participant. 
  

	 	3.	A Participant shall be entitled to elect to have either the Investment Return Rate credited to and deducted from his or her Long-Term Deferrals under the Plan. A Participant shall
make an Election of such Investment Return Rate at the time and in the manner prescribed by the Committee. 

  

 -25- 

  
 EXHIBIT D

  
 ONEOK, Inc. 
 2005 NONQUALIFIED DEFERRED COMPENSATION PLAN 
 Adopted By Executive Compensation Committee 
  

	Re:	Section 5.2 – Crediting and Debiting of Investment Return, 

 Other Items To Participant Accounts 
 Date: January 1, 2005 
  
 (1) The Deferral Account and Matching Account of each Participant shall be periodically credited and increased, or debited
and reduced, as the case may be, by the amount of investment return specified under Section 5.3 of the Plan. 
  
 (2) Except as otherwise provided herein, the Deferral Account and Matching Account shall be credited and debited with investment return and losses, if
any, not less frequently than on a monthly basis after such Accounts have been adjusted for any deferrals, credits, debits, distributions and payments. 
  
 (3) A Participant’s Accounts will be charged with cost of any deemed purchases of securities and credited with proceeds of any deemed sales of
securities which may be considered as made in respect to the Investment Return Rate specified in Exhibit “C” of the Plan by reason of changes in deemed investments designated by such Participant, in substantially the same manner as would
occur if such securities were being purchased or sold by a Participant under the Thrift Plan. The Committee may, in its sole discretion, allocate, charge and credit other items and amounts to such deemed purchases and sales in a manner comparable to
the administration of such items under the Thrift Plan. 
  
 (4)
All of a Participant’s deferrals of Base Salary in a calendar month shall be deemed to be made as of the date it otherwise would have been paid to the Participant. 
  
 (5) A Participant deferral of Bonus will be credited and debited with investment return from the date of deferral.

  
 (6) Until a Participant or his or her Beneficiary receives his
or her entire account, the unpaid balance thereof shall be credited and debited with investment return as provided in Section 5.2 of the Plan. 
  

 -26-Senior Loan and Security Agreement

 Exhibit 10.57 
  
 SENIOR LOAN AND SECURITY AGREEMENT 
  

THIS SENIOR LOAN AND SECURITY AGREEMENT (this “Agreement”) is made and dated as of December 17, 2004 (the “Closing Date”) and is
entered into by and among OCCAM NETWORKS, INC., a Delaware corporation (“Borrower”), with its chief executive office and principal place of business located at 77 Robin Hill Road, Santa Barbara, CA 93117, the subsidiaries of Borrower party
hereto (each, a “Grantor Subsidiary”), and HERCULES TECHNOLOGY GROWTH CAPITAL, INC., a Maryland corporation (“Lender”), with its principal place of business located at Four Palo Alto Square, 3000 El Camino Real, Suite 200, Palo
Alto, CA 94306. In consideration of the mutual agreements contained herein, the parties hereto agree as follows: 
  
 RECITALS 
  
 WHEREAS, Borrower has requested Lender to make available to Borrower a loan in an aggregate principal amount of up to Three Million and No/100 DOLLARS ($3,000,000.00) (the “Loan”); and 
  
 WHEREAS, Lender is willing to make the Loan on the terms and conditions set
forth in this Agreement. 
  
 AGREEMENT 
  
 NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, Borrower, each Grantor Subsidiary and Lender hereby agree as follows: 
  
 SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION 
  
 1.1. Unless otherwise defined herein, the following capitalized terms shall have the following meanings (such meanings being equally
applicable to both the singular and plural form of the terms defined): 
  
 “Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Account” means any “account,” as such term is defined in the UCC, now owned or hereafter acquired by any Grantor or in which any Grantor now holds or hereafter acquires any interest and, in any
event, shall include all accounts receivable, book debts, rights to payment, and other forms of obligations now owned or hereafter received or acquired by or belonging or owing to any Grantor (including under any trade name, style or division
thereof), whether or not arising out of goods or software sold or services rendered by any Grantor or from any other transaction (including any such obligation that may be characterized as an account or contract right under the UCC), and all of such
Grantor’s rights in, to and under all purchase orders or receipts now owned or hereafter acquired by it for goods or services, and all of such Grantor’s rights to any goods represented by any of the foregoing (including unpaid
seller’s rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), and all monies due or to become due to any Grantor under all purchase orders and contracts for the sale of
goods or the performance of services or both by such Grantor or in connection with any other transaction (whether or not yet earned by performance on the part of such Grantor), now in existence or hereafter occurring, including the right to receive
the proceeds of said purchase orders and contracts, and all collateral security and guarantees of any kind given by any Person with respect to any of the foregoing. 
  
 “Advance” means any funds advanced or loaned by Lender to or for the benefit of Borrower, including the initial
Loan and each subsequent Loan made by Lender to or for the benefit of Borrower pursuant hereto. 
  
 “Advance Date” means the funding date of any Advance. 
  

“Advance Request” means a request for an Advance submitted by Borrower to Lender in substantially the form of Exhibit A. 

 “Agreement” means this Senior Loan and Security Agreement, as the same may from time to time be
amended, modified, supplemented or restated from time to time in accordance with the terms hereof. 
  
 “Borrower” has the meaning given to it in the preamble to this Agreement. 
  
 “Business Day” means any day excluding Saturday, Sunday and any other day which is a legal holiday under the laws
of the State of California or is a day on which banking institutions located in the State of California are authorized or required by law or other governmental action to close. 
  
 “Cash” means all cash, money, currency, and liquid funds, wherever held, in which Borrower now or hereafter
acquires any right, title, or interest. 
  
 “Chattel
Paper” means any “chattel paper,” as such term is defined in the UCC, now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest. 
  
 “Closing Date” has the meaning given to it in the preamble to this
Agreement. 
  
 “Collateral” has the meaning given to it
in Section 3. 
  
 “Commitment Termination Date” means
the first to occur of (i) February 28, 2005 or (ii) the occurrence and continuation of an Event of Default. 
  
 “Control Agreement” means an agreement executed by a Grantor, Lender and each applicable financial institution and /or securities/investment
intermediary in which such financial institution and / or intermediary agrees that Lender has a security interest in any account of a Grantor. 
  
 “Copyrights” means all of the following property, now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter
acquires any interest: (i) all copyrights, whether registered or unregistered, held pursuant to the laws of the United States, any State thereof, or of any other country; (ii) all registrations, applications and recordings in the United States
Copyright Office or in any similar office or agency of the United States, of any State thereof, or of any other country; (iii) all continuations, renewals or extensions thereof; and (iv) all registrations to be issued under any pending applications.

  
 “Copyright License” means any written agreement
granting any right to use any Copyright or Copyright registration, now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest. 
  
 “Default Rate” has the meaning given to it in Section 2.5(c). 
  
 “Deposit Accounts” means any “deposit accounts,” as such
term is defined in the UCC, and includes any checking account, savings account, or certificate of deposit now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest. 
  
 “Disclosure Letter” means the disclosure letter of Borrower to the
Lender in connection with this Agreement dated the Closing Date. 
  
 “Documents” means any “documents,” as such term is defined in the UCC, now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest. 
  
 “Equipment” means any “equipment,” as such term is
defined in the UCC, and any and all additions, upgrades, substitutions, and replacements of the foregoing, together with all attachments, components, parts, accessions, and accessories installed thereon or affixed thereto, now owned or hereafter
acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest. 
  
 “Event of Default” has the meaning given to it in Section 10. 
  
 “Excluded Agreements” means (i) the Warrant Agreements; (ii) any stock purchase agreement, options, or warrants to acquire, or agreements
governing the rights of, any capital stock or other 
  

 2 

 equity security, or any common stock, preferred stock, or equity security of Borrower issued to or purchased by Lender or
its nominee or assignee; and (iii) any guaranty of the Secured Obligations executed by any Person other than Borrower. 
  
 “Facility Fee” means one percent (1%) of the Maximum Loan Amount, which fee is due to Lender on the Closing Date. 
  
 “Financial Statements” has the meaning given to it in Section 7.1.

  
 “Fixtures” means any “fixtures,” as such
term is defined in the UCC, together with all right, title and interest of a Grantor in and to all extensions, improvements, betterments, accessions, renewals, substitutes, and replacements of, and all additions and appurtenances to any of the
foregoing property, and all conversions of the security constituted thereby, immediately upon any acquisition or release thereof or any such conversion, as the case may be, now owned or hereafter acquired by a Grantor or in which a Grantor now holds
or hereafter acquires any interest. 
  
 “GAAP” means
generally accepted accounting principles in the United States of America, as in effect from time to time. 
  
 “General Intangibles” means any “general intangibles,” as such term is defined in the UCC, and, in any event, shall include all right,
title and interest which a Grantor may now or hereafter have in or under any rights to payment; payment intangibles; software; proprietary or confidential information; business records and materials; customer lists; interests in partnerships, joint
ventures, business associations, corporations, and limited liability companies; permits; claims in or under insurance policies (including unearned premiums and retrospective premium adjustments); and rights to receive tax refunds and other payments
and rights of indemnification now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest. 
  
 “Goods” means any “goods,” as such term is defined in the UCC, now owned or hereafter acquired by a Grantor or in which a Grantor now
holds or hereafter acquires any interest. 
  
 “Grantor”
means Borrower and each Grantor Subsidiary. 
  
 “Indebtedness” means, without duplication, (i) all obligations for borrowed money, (ii) all obligations evidenced by bonds, debentures, notes or other similar instruments, (iii) all obligations to pay the deferred purchase price
of property or services (other than accounts payable incurred in the ordinary course of business), (iv) all obligations with respect to capital leases, (v) all obligations created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person, (vi) all reimbursement obligations, contingent or otherwise, in respect of letters of credit, and (vii) all guaranty obligations with respect to the types of Indebtedness listed in clauses
(i) through (vi) above. 
  
 “Instruments” means any
“instruments,” as such term is defined in the UCC, now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest. 
  
 “Intellectual Property” means all Copyrights; Trademarks; Patents; Licenses; source codes developed by a Grantor;
trade secrets; inventions (whether or not patented or patentable); technical information, procedures, processes, designs, knowledge, and know-how; data bases; models; drawings; skill, expertise, and experience; websites, domain names, and
URL’s; and applications therefor and reissues, extensions, or renewals thereof; and goodwill associated with any of the foregoing; together with rights to sue for past, present and future infringement of Intellectual Property and the goodwill
associated therewith. 
  
 “Interest Only Period” means
that period of time, if any, between the Advance Date and June 30, 2005. 
  
 “Inventory” means any “inventory,” as such term is defined in the UCC, now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest, and, in any
event, shall include all Goods and personal property that are held by or on behalf of a Grantor for sale or 
  

 3 

 lease or are furnished or are to be furnished under a contract of service, or that constitute raw materials, work in
process or materials used or consumed or to be used or consumed in such Grantor’s business, or the processing, packaging, promotion, delivery or shipping of the same, and all finished goods, whether or not the same is in transit or in the
constructive, actual or exclusive possession of such Grantor or is held by others for such Grantor’s account, including all property covered by purchase orders and contracts with suppliers and all Goods billed and held by suppliers and all such
property that may be in the possession or custody of any carriers, forwarding agents, truckers, warehousemen, vendors, selling agents or other Persons. 
  
 “Investment Property” means any “investment property,” as such term is defined in the UCC, and includes any certificated or
uncertificated security (including, but not limited to, stock or other interests of any and all subsidiaries and related entities and includes all securities as defined in the United States Securities Laws and Regulations), money market funds,
bonds, mutual funds, and U.S. Treasury bills or notes, now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest. 
  
 “Lender” has the meaning given to it in the preamble to this Agreement. 
  
 “Letter of Credit Rights” means any “letter of credit
rights,” as such term is defined in the UCC, now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest, including any right to payment or performance under any letter of credit. 

 
 “License” means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest and any renewals or extensions thereof. 
  
 “Lien” means any mortgage, deed of trust, pledge, hypothecation,
assignment for security, security interest, encumbrance, levy, lien or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, against any property, any conditional sale or other title retention agreement, any
lease in the nature of a security interest, and the filing of any financing statement (other than a precautionary financing statement with respect to an operating lease) with the consent of a Grantor under the UCC or comparable law of any
jurisdiction. 
  
 “Loan” has the meaning given to it in
the recitals to this Agreement. 
  
 “Loan Documents”
means this Agreement, the Notes, all UCC Financing Statements, and any other documents executed in connection herewith or the transactions contemplated hereby, including those documents described on the Schedule of Documents, as the same may from
time to time be amended, modified, supplemented or restated; provided, that the term “Loan Documents” shall not include any of the Excluded Agreements. 
  
 “Material Adverse Effect” means a material adverse effect upon: (i) the business, properties, assets or condition
(financial or otherwise) of Borrower and its Subsidiaries taken as a whole; or (ii) the ability of Borrower to perform the Secured Obligations in accordance with the terms of the Loan Documents, or the ability of Lender to enforce any of its rights
or remedies with respect to the Secured Obligations or under the Loan Documents; or (iii) the Collateral or Lender’s Liens on the Collateral or the priority of such Liens, subject in each case to permitted Liens. Any determination as to whether
a Material Adverse Effect has occurred pursuant to (i) above shall be limited solely to the failure of Borrower and its Subsidiaries, on a consolidated basis, to maintain any of the following determined as of the last day of a fiscal quarter of
Borrower, (A) revenues of at least $5,000,000 for such fiscal quarter and/or (B) a Tangible Net Worth of $5,000,000 for any fiscal quarter of Borrower ending after the date of this Agreement and prior to or on June 30, 2005 and $7,000,000 for any
fiscal quarter of Borrower ending thereafter, shall be deemed to be a Material Adverse Effect. 
  

 4 

 “Maturity Date” means, with respect to each Advance, December 17, 2007. 
  
 “Maximum Loan Amount” means Three Million and No/100 Dollars
($3,000,000.00). 
  
 “Maximum Rate” shall have the
meaning assigned to such term in Section 2.5(c). 
  
 “Merger” means any (i)(a) reorganization (including the creation of a holding company which after the consummation of the transaction, stockholders of Borrower will hold at least eighty percent (80%) of the voting power of such
holding company), consolidation or merger (or similar transaction or series of related transactions) of Borrower or any Subsidiary of Borrower with or into any other Person, but excluding any consolidation or merger of any Subsidiary of Borrower
with or into any other Subsidiary of Borrower or with Borrower, so long as in any such merger or consolidation involving Borrower, Borrower is the surviving corporation, or (b) sale or exchange of outstanding shares (or similar transaction or series
of related transactions) of Borrower or any Subsidiary in which the holders of Borrower’s or such Subsidiary’s outstanding shares immediately before consummation of such transaction or series of related transactions do not, immediately
after consummation of such transaction or series of related transactions, retain shares representing sixty six and two thirds percent (66.66 %) of the voting power of the surviving entity of such transaction or series of related transactions (or the
parent of such surviving entity if such surviving entity is wholly owned by such parent), in each case without regard to whether Borrower or such Subsidiary is the surviving entity, but excluding any sale of shares by Borrower to investors for
financing purposes and any transfers involving open market purchases of Borrower’s stock, (ii) sale of all or substantially all of the assets of Borrower or (iii) acquisition by Borrower or any of its Subsidiaries of all or substantially all of
the capital stock or assets of another Person. 
  
 “Note” or “Notes” means the Promissory Note or Notes, if there is more than one, prepared by Lender in substantially the form of Exhibit B, which are executed and delivered by Borrower to evidence Advances, as the same
may be amended, restated, modified or supplemented from time to time. 
  
 “Patent License” means any written agreement granting any right with respect to any invention on which a Patent is in existence or a Patent application is pending, in which agreement a Grantor now holds or hereafter acquires any
interest. 
  
 “Patents” means all of the following
property, now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest: (a) all letters patent of, or rights corresponding thereto, in the United States or in any other country, all registrations
and recordings thereof, and all applications for letters patent of, or rights corresponding thereto, in the United States or any other country, including registrations, recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any State thereof or any other country; (b) all reissues, continuations, continuations-in-part or extensions thereof; (c) all petty patents, divisionals, and patents of addition; and (d) all
patents to be issued under any such applications. 
  
 “Payment Date” has the meaning given to it in Section 2.2. 
  
 “Permitted Distributions” means (i) purchases of capital stock from former employees, consultants and directors pursuant to stock repurchase agreements or other similar agreements; (ii) distributions or
dividends consisting solely of Borrower’s capital stock; (iii) purchases for value of any rights distributed in connection with any stockholder rights plan; (iv) other distributions, dividends, redemptions, retirements or purchases of
Borrower’s capital stock in an aggregate amount not exceeding $50,000 and (v) conversion by Borrower of any of its convertible securities into other securities pursuant to the terms thereof and payment of cash in lieu of fractional shares upon
such conversion. 
  
 “Permitted Indebtedness” means (i)
Indebtedness to Lender, (ii) Subordinated Indebtedness, (iii) capital leases and purchase money Indebtedness in an aggregate principal amount not to exceed $200,000 at any time outstanding, (iv) Indebtedness existing on the date hereof, (v) subject
to 
  

 5 

 Section 7.6, Indebtedness not to exceed $3,000,000 secured by Accounts and the Proceeds thereof provided Borrower and its
Subsidiaries, on a consolidated basis, have as of the end of the fiscal quarter of Borrower immediately preceeding the entry by Borrower into the agreement providing for such indebtedness, a Tangible Net Worth of at least fourteen million
($14,000,000) dollars and quarterly revenues of at least fifteen million ($15,000,000) dollars; (vi) performance bonds or letters of credit obtained in the ordinary course of business pursuant to the requirements of the Rural Utilities Service of
the Department of Agriculture not to exceed $3,000,000 in the aggregate and (vii) letters of credit having a face amount not in excess of $250,000 at any time outstanding. 
  
 “Permitted Liens” means any and all of the following: (i) Liens in favor of Lender; (ii) Liens for taxes, fees,
assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings; provided, that such Liens do not have priority over any of Lender’s Liens and Borrower and its
Subsidiaries maintains adequate reserves therefore in accordance with GAAP; (iii) Liens securing claims or demands of materialmen, artisans, mechanics, carriers, warehousemen, landlords and other like Persons arising in the ordinary course of
Borrower’s business; provided, that such claims or demands are not overdue for a period of more than 30 days or if are overdue, are being contested in good faith and by appropriate proceedings for which adequate reserves with respect
thereto are maintained on the books of Borrower and its Subsidiaries, as applicable; (iv) the following deposits and pledges, to the extent made in the ordinary course of business: deposits and pledges under worker’s compensation, unemployment
insurance, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money), surety and appeal bonds, performance bonds (including the bonds referred to in clause
(vi) of the definition of Permitted Indebtedness); (vi) Liens with respect to indebtedness arising under the Loan and Security Agreement, dated June 16, 2003, between Borrower and Silicon Valley Bank (the “SVB Agreement”); provided
that the outstanding principal amount of loans under such agreement does not exceed $300,000.00, and such Lien shall exist only to end of the termination of such loan which shall be July 1, 2005; (vii) Liens existing on the date hereof; (viii)
licenses or sublicenses granted in the ordinary course of Borrower’s or any of its Subsidiary’s business and any interest or title of a licensor or under any license or sublicense; (ix) leases or subleases granted in the ordinary course of
Borrower or any of its Subsidiary’s business provided any such Liens shall be limited to the property subject to such lease; (x) easements, rights-of-way, restrictions and other similar encumbrances affecting real property which do not
materially detract from the value of the property subject thereto or materially interfere with the ordinary course of business of Borrower or any of its Subsidiaries, as applicable; (xi) statutory, common law or contractual Liens of depository
institutions or institutions holding securities accounts (including rights of set-off); (xii) Liens in favor of customs or revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of
goods; (xiii) Liens on insurance proceeds in favor of insurance companies granted solely to secure financed insurance premiums not in excess of $25,000 at any time; (xiv) Liens securing judgments or arbitration awards not constituting an Event of
Default under Section 10.8; (xv) Liens securing Subordinated Debt; (xvi) Liens not otherwise permitted so long as the amount secured by all such Liens does not exceed $25,000 at any time; (xvii) Liens securing Indebtedness described in clause (iii)
of the definition of Permitted Indebtedness; provided that such Lien shall encumber only the assets acquired with the proceeds of such Indebtedness and any additions, accessions, parts, replacements, fixtures, improvements and attachments thereto,
and the proceeds thereof; (xviii) customary Liens granted in favor of a trustee to secure fees and other amounts owing to a trustee under an indenture or other agreement pursuant to which Indebtedness permitted hereunder is issued, (xix) Liens
securing Indebtedness permitted by clause (v) of the definition of Permitted Indebtedness provided any such Liens shall be limited to the accounts receivables and proceeds therefrom subject to such loan or loans, and (xx) pledges to secure
reimbursement obligations under letters of credit not to exceed $250,000 in the aggregate. 
  

 6 

 “Permitted Transfers” means (i) the granting of Permitted Liens, (ii) dispositions of cash in
the ordinary course of business in a manner not prohibited by this Agreement, (iii) the licensing of Intellectual Property in the ordinary course of business, (iv) the surrender or waiver of litigation rights or settlement, release or surrender of
tort or other litigation claims of any kind not involving a Grantor’s officer or director, (v) disposals of worn out, obsolete or surplus Equipment and (vi) other dispositions of assets having a book value not in excess of $250,000 in any
fiscal year. 
  
 “Person” means any individual, sole
proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, public benefit corporation, other entity or government (whether federal, state, county, city,
municipal, local, foreign, or otherwise, including any instrumentality, division, agency, body or department thereof). 
  
 “Proceeds” means “proceeds,” as such term is defined in the UCC and, in any event, shall include (a) any and all Accounts, Chattel
Paper, Instruments, Cash, proceeds of letters of credit, Letter of Credit Rights, Supporting Obligations, or other proceeds payable to a Grantor from time to time in respect of the Collateral, (b) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to a Grantor from time to time with respect to any of the Collateral, (c) any and all payments (in any form whatsoever) made or due and payable to a Grantor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any Person acting under color of governmental authority), (d) the proceeds, damages, or recovery based on any claim of a Grantor
against third parties (i) for past, present or future infringement of any Copyright, Copyright License, Patent or Patent License or (ii) for past, present or future infringement or dilution of any Trademark or Trademark License or for injury to the
goodwill associated with any Trademark, Trademark registration or Trademark licensed under any Trademark License, and (e) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral. 
  
 “Receivables” means (i) all of a Grantor’s Accounts,
Instruments, Documents, Chattel Paper, Supporting Obligations, letters of credit, proceeds of any letter of credit, and Letter of Credit Rights, and (ii) all customer lists, software, and business records related thereto. 
  
 “Schedule of Documents” means the Schedule of Documents attached
hereto as Schedule 1 or such other Schedule of Documents as Lender shall deliver to Borrower as of the Closing Date which is reasonably satisfactory to Borrower. 
  
 “Secured Obligations” means Borrower’s obligation to repay to Lender the Loan and all Advances (whether or
not evidenced by any Note), together with all principal, interest, fees, late payment fees, costs, professional fees and expenses, or other liabilities or obligations for monetary amounts owed by Borrower to Lender under this Agreement or any other
Loan Document, including the indemnity and insurance obligations in Section 6 and including such amounts as may accrue or be incurred before or after default or workout or the commencement of any liquidation, dissolution, bankruptcy, receivership or
reorganization by or against Borrower, whether due or to become due, matured or unmatured, liquidated or unliquidated, contingent or non-contingent, and all covenants and duties of any kind or nature, present or future, arising under this Agreement,
the Notes, or any of the other Loan Documents, as the same may from time to time be amended, modified, supplemented or restated, whether or not such obligations are partially or fully secured by the value of Collateral. 
  
 “Subordinated Indebtedness” means Indebtedness that is subject to
and subordinate to Lender’s security interest in any and all Borrower’s assets and such lender enters into a subordination agreement, for the benefit of Lender, in a form acceptable to Lender. 
  
 “Subsidiary” means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other business entity of which more than 50% of the total voting power of the shares of stock or other ownership interests entitled to vote in the election of the Persons or
Persons (whether directors, managers, trustees or other Persons performing similar functions) having the 
  

 7 

 power to direct or cause the direction of the management or policies thereof is at the time owned or controlled, directly
or indirectly, by that Person or one or more other Subsidiaries of that Person or a combination thereof. 
  
 “Supporting Obligations” means any “supporting obligations,” as such term is defined in the UCC, now owned or hereafter acquired by a
Grantor or in which a Grantor now holds or hereafter acquires any interest. 
  
 “Tangible Net Worth” means, as of any date of determination, the consolidated total assets of Borrower and its Subsidiaries minus, without duplication, (a) any amounts attributable to (i) goodwill, (ii)
intangible items such as unamortized debt discount and expense, patents, trade and service marks and names, copyrights and research and development expenses except prepaid expenses, and (iii) reserves not already deducted from total assets and (b)
total liabilities of Borrower and its Subsidiaries, in each case determined in accordance with GAAP, it being understood by the parties that in any case preferred stock shall not be included in the total liabilities of Borrower. 
  
 “Trademark License” means any written agreement granting any right
to use any Trademark or Trademark registration, now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter acquires any interest. 
  

“Trademarks” means all of the following property, now owned or hereafter acquired by a Grantor or in which a Grantor now holds or hereafter
acquires any interest: (a) all trademarks, tradenames, corporate names, business names, trade styles, service marks, logos, other source or business identifiers (and all goodwill associated therewith), prints and labels on which any of the foregoing
have appeared or appear, and designs of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and any applications in connection therewith, including registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, and (b) all reissues, extensions or renewals thereof. 
  
 “UCC” means the Uniform Commercial Code as the same is, from time
to time, in effect in the State of California; provided, 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, Lender’s Lien on any
Collateral is governed by the Uniform Commercial Code as the same is, from time to time, in effect in a jurisdiction other than the State of California, then the term “UCC” shall mean the Uniform Commercial Code as in effect, from time to
time, in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions. Unless otherwise defined herein or in the other
Loan Documents, terms that are defined in the UCC and used herein or in the other Loan Documents shall, unless the context indicates otherwise, have the meanings given to them in the UCC. 
  
 “Warrant Agreements” means the Warrant Agreements entered into in connection with the Loan, pursuant to which
Borrower grants Lender the right to purchase that number of shares of Series A-2 Preferred and Common Stock of Borrower as more particularly set forth therein. 
  

1.2. Unless otherwise specified, all references in this Agreement or any Annex or Schedule hereto to a “Section,”
“subsection,” “Exhibit,” “Annex,” or “Schedule” shall refer to the corresponding Section, subsection, Exhibit, Annex, or Schedule in or to this Agreement. The terms “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Agreement as a whole, including all Exhibits, Annexes and Schedules, and not to any particular Section, subsection or other subdivision. 
  
 1.3. Wherever from the context it appears appropriate, each
term stated in either the singular or plural shall include the singular and the plural, and pronouns stated in the masculine, feminine or neuter gender shall include the masculine, feminine and neuter genders. The words 
  

 8 

 “including,” “includes” and “include” shall be deemed to be followed by the
words “without limitation,” the word “or” is not exclusive; references to Persons include their respective successors and assigns (to the extent and only to the extent permitted by this Agreement and the Loan Documents) or, in
the case of governmental Persons, Persons succeeding to the relevant functions of such Persons; and all references to statutes and related regulations shall include any amendments of the same and any successor statutes and regulations. Unless
otherwise specifically provided herein, any accounting term used in this Agreement or the other Loan Documents shall have the meaning customarily given such term in accordance with GAAP, and all financial computations hereunder shall be computed in
accordance with GAAP, consistently applied. 
  
 SECTION 2. THE LOAN

  
 2.1. From the Closing Date through the
Commitment Termination Date, Lender agrees to make Advances to Borrower in an aggregate amount not to exceed the Maximum Loan Amount, for the purposes and upon the terms and subject to the conditions contained in this Agreement, the Notes, and the
other Loan Documents. Notwithstanding anything to the contrary in this Agreement or the Loan Documents, Lender’s obligation to fund the Loan and make advances shall automatically expire on the Commitment Termination Date. 
  
 2.2. The Loan shall be available in minimum incremental
Advances of One Million and No/100 Dollars ($1,000,000.00) and shall be drawn only one time per month. Borrower promises to execute and deliver to Lender, prior to funding, a Note in the original principal amount of each Advance. The principal
balance of each Advance shall bear interest thereon from the Advance Date, precomputed at the rate of eleven and ninety five hundredths percent (11.95%) per annum, and based upon a year consisting of twelve (12) months of thirty (30) days each. Each
Advance shall be due and payable in monthly installments of accrued interest only on the first day of the month following the Advance Date, from the date of the Advance Date through June 30, 2005 (the “Interest Only Payment Date(s)”),
followed by equal monthly installments of principal and interest computed on the basis of a thirty (30) month amortization schedule through December 1, 2007, with all accrued and unpaid interest and the balance of the entire unpaid principal
outstanding being due and payable on the Maturity Date. Each such monthly installment shall be due and payable on the respective dates (each, a “Payment Date”) which shall be the first day of August, 2005 and the first day of each
of the following months through December 1, 2007, followed by a final payment of any unpaid principal and accrued and unpaid interest (“Maturity Date Payment”) being due and payable on the Maturity Date. If any payment for an Advance shall
be payable on a day other than a Business Day, then such payment shall be due and payable on the next succeeding Business Day. Each Advance shall be repaid in full, together with all interest accrued thereon, on the Maturity Date for said Advance,
whether or not the Advance is evidenced by a Note. Amounts repaid on any Loan shall not be reborrowed. All of the Advances, Loan, and other Secured Obligations arising under this Agreement and the other Loan Documents shall constitute one general
obligation of Borrower secured by all of the Collateral. 
  
 2.3. In order to obtain an Advance, Borrower shall complete, sign and deliver an Advance Request to Lender. Each Advance Request shall identify an Advance Date that is at least three (3) Business Days after the date
such Advance Request is received by Lender. Upon receipt of an Advance Request, Lender shall have the right to review whether, in Lender’s opinion, each of the conditions precedent to such Advance has been or will be satisfied as of the
requested Advance Date, and if Lender determines such conditions precedent have been or will be satisfied and to fund such Advance, Lender shall deliver to Borrower for signature a Note dated as of the Advance Date to evidence such Advance. Upon
receipt by Lender of such Note duly executed and delivered by Borrower, Lender shall fund the Advance in the manner requested by the Advance Request provided that each of the conditions precedent to such Advance is satisfied 
  

 9 

 as of the requested Advance Date. All the terms, conditions, and covenants of this Agreement shall apply
to all Advances whether or not each Advance is evidenced by a Note. Borrower agrees that Lender may rely on any notice or Advance Request given by any Person it reasonably believes to be the chief executive officer or chief financial officer of
Borrower without the necessity of independent investigation. 
  
 2.4. Borrower shall have the option at any time, upon at least seven (7) Business Days prior written notice, to prepay the Advances in whole or in part, without premium or penalty, by paying the relevant principal
amount together with all interest, fees and expenses accrued and unpaid as of the date of such prepayment. 
  
 2.5. 
  
 (a) Notwithstanding any provision in this Agreement, the Notes, or any other Loan Document, it is the parties’ intent not to contract
for, charge or receive interest at a rate that is greater than the maximum rate permissible by law that a court of competent jurisdiction shall deem applicable hereto (which under the laws of the State of California shall be deemed to be the laws
relating to permissible rates of interest on commercial loans) (the “Maximum Rate”). If a court of competent jurisdiction shall finally determine that Borrower has actually paid to Lender an amount of interest in excess of the amount that
would have been payable if all of the Secured Obligations had at all times borne interest at the Maximum Rate, then such excess interest actually paid by Borrower shall be applied as follows: first, to the payment of principal outstanding on
the Notes; second, after all principal is repaid, to the payment of Lender’s accrued interest, costs, expenses, professional fees and any other Secured Obligations; and third, after all Secured Obligations are repaid, the excess
(if any) shall be refunded to Borrower. 
  
 (b)
In the event any payment is not paid on the scheduled Payment Date, an amount equal to two percent (2%) of the past due amount shall be payable on demand. In addition, upon the occurrence and during the continuation of an Event of Default hereunder,
all Secured Obligations, including principal, interest, compounded interest, and professional fees, shall bear interest at a rate per annum equal to the rate set forth in Section 2.2 plus five percent (5%) per annum (“Default Rate”).

  
 SECTION 3. SECURITY INTEREST 
  
 3.1. As security for the prompt, complete and indefeasible
payment when due (whether on the Payment Dates or otherwise) of all the Secured Obligations and in order to induce Lender to make the Loan upon the terms and subject to the conditions of this Agreement, the Notes, and the other Loan Documents, each
Grantor hereby grants to Lender a security interest in and Lien upon all of such Grantor’s right, title and interest in, to and under each of the following, whether now owned or hereafter acquired and wherever located (collectively, the
“Collateral”): 
  

	 	(a)	All Receivables; 

  

	 	(b)	All Equipment; 

  

	 	(c)	All Fixtures; 

  

	 	(d)	All General Intangibles; 

  

	 	(e)	All Intellectual Property; 

  

	 	(f)	All Inventory; 

  

	 	(g)	All Investment Property; 

  

	 	(h)	All Deposit Accounts; 

  

 10 

	 	(i)	All Cash; 

  

	 	(j)	All other Goods and tangible and intangible personal property of such Grantor whether now or hereafter owned or existing, leased, consigned by or to, or acquired by, such Grantor
and wherever located; and 

  

	 	(k)	To the extent not otherwise included, all Proceeds of each of the foregoing and all accessions to, substitutions and replacements for, and rents, profits and products of each of the
foregoing. 

  
 Notwithstanding the foregoing, in no event shall the
term Collateral include (i) any Equipment or accessions, additions or improvements thereto, any replacement thereof or Proceeds thereof to the extent prohibited by the agreement (for as long as the agreement or prohibition is in effect) pursuant to
which such Equipment was acquired or financed, (ii) any pledges or deposits constituting Permitted Liens to the extent prohibited by the agreement (for as long as the agreement or prohibition is in effect) under which the pledge or deposit is made
and (iii) any of the outstanding capital stock of a controlled foreign corporation (as defined in the Internal Revenue Code of 1986, as amended) in excess of 65% of the voting power of all classes of capital stock of such controlled foreign
corporation entitled to vote. 
  
 SECTION 4. CONDITIONS PRECEDENT TO LOAN

  
 The obligations of Lender to make the Loan hereunder are
subject to the satisfaction by Borrower of the following conditions: 
  
 4.1. The Advance Date for any installment shall occur on or before the Commitment Termination Date. No Advance Requests shall be accepted after the Commitment Termination Date. 
  
 4.2. Borrower, on or prior to the Closing Date, shall have
delivered to Lender the following: 
  
 (a)
executed originals of this Agreement, the Loan Documents, and all other documents (including the Control Agreements) and instruments reasonably required by Lender to effectuate the transactions contemplated hereby or to create and perfect the Liens
of Lender with respect to all Collateral wherever located, including those documents listed on the Schedule of Documents, in all cases in form and substance reasonably acceptable to Lender; 
  
 (b) certified copy of resolutions of Borrower’s board
of directors evidencing approval of (i) the Loans and other transactions evidenced by the Loan Documents; and (ii) the Warrant Agreements and transactions evidenced thereby; 
  
 (c) certified copies of resolutions of each Grantor’s (other than Borrower) board of directors
evidencing approval of the transactions evidenced by the Loan Documents; 
  
 (d) certified copies of the Articles or Certificate of Incorporation and the Bylaws of each Grantor, as amended through the Closing Date; 
  
 (e) a certificate of good standing for each Grantor from its state of incorporation and similar certificates
from all other jurisdictions in which it does business and where the failure to be qualified would have a Material Adverse Effect; 
  
 (f) payment of the Facility Fee that is due on the Closing Date; and 
  
 (g) such other documents as Lender may reasonably request. 
  

 11 

 4.3. On each Advance Date: 
  
 (a) Lender shall have received (i) an Advance Request for the relevant Advance as required by Section 2.3,
duly executed by Borrower’s Chief Executive Officer or Chief Financial Officer, (ii) the duly executed Note evidencing such Advance, and (iii) any other documents Lender may reasonably request. 
  
 (b) The representations and warranties set forth in this
Section 4 and in Section 5 shall be true and correct in all material respects on and as of the Advance Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an
earlier date. 
  
 (c) Borrower shall be in
compliance with all the terms and provisions set forth herein and in each other Loan Document on its part to be observed or performed, and at the time of and immediately after such Advance no Event of Default shall have occurred and be continuing.

  
 (d) Each Advance Request shall be deemed to
constitute a representation and warranty by Borrower on the relevant Advance Date as to the matters specified in paragraphs (b) and (c) of this Section 4.3 and in Sections 4.4, 4.5 and 4.6, and as to the matters set forth in the Advance Request.

  
 4.4. At the Closing Date and each Advance
Date, each Grantor shall have taken or caused to be taken such actions requested by Lender to grant Lender a first priority (and when the requisite financing statements are properly filed) perfected Lien in the Collateral, subject only to Permitted
Liens. Such actions shall include the delivery to Lender of all appropriate financing statements, assignments, notices, and control agreements, executed by each Grantor, as to the Collateral granted by such Grantor for all jurisdictions as may be
necessary or desirable to perfect or obtain the priority of Lender’s Lien in such Collateral. 
  
 4.5. As of the Closing Date and each Advance Date, no fact or condition exists that would (or would, with the passage of time, the giving
of notice, or both) constitute an Event of Default under this Agreement. 
  
 4.6. As of the Closing Date and each Advance Date, no event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing. 
  
 SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE GRANTORS 
  
 Each Grantor represents warrants and agrees that: 
  
 5.1. Borrower and each other Grantor own all right, title
and interest in and to the Collateral, free of all Liens whatsoever, except for Permitted Liens. 
  
 5.2. Each Grantor has the full power and authority to grant and convey to Lender a Lien in the Collateral as security for the Secured
Obligations, free of all Liens other than Permitted Liens, and shall execute such notices, assignments, Control Agreements, or other documents, in connection herewith as Lender may reasonably request to perfect and obtain the priority (subject to
Permitted Liens) of Lender’s Lien on the Collateral. Except for Permitted Liens, as of the Closing Date, no other Lien has been created by any Grantor or is known by any Grantor to exist with respect to any Collateral. 
  
 5.3. Each Grantor is a corporation duly organized, legally
existing and in good standing under the laws of its jurisdiction of formation, and is duly qualified as a foreign corporation in all jurisdictions in which the nature of its business or location of its properties require such qualifications and
where the failure to be qualified could reasonably be expected to have a Material Adverse Effect. 
  

 12 

 5.4. Each Grantor’s execution, delivery and performance of the Notes, this Agreement
and all other Loan Documents to which it is a party, and Borrower’s execution of the Warrant Agreements, (i) have been duly authorized by all necessary corporate action of such Grantor, (ii) will not result in the creation or imposition of any
Lien upon the Collateral, other than Permitted Liens and the Liens created by this Agreement and the other Loan Documents and (iii) subject to the exceptions set forth in Section 3.1, upon the proper filing of the security interests granted pursuant
to Section 3.1, Lender shall have a first priority perfected security interest (subject to Permitted Liens) in and Lien upon all of Grantors right, title and interest in, and to the Collateral to the extent the security interest can be perfected by
such filing. The individual or individuals executing the Loan Documents are duly authorized to do so, and the Loan Documents to which it is a party constitute legal, valid and binding obligations of each Grantor, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization or other similar laws generally affecting the enforcement of the rights of creditors and general principles of equity (regardless of whether enforcement is sought in
equity or at law. 
  
 5.5. The execution,
delivery and performance by each Grantor of this Agreement and the other Loan Documents to which it is a party do not violate any provisions of such Grantor’s Articles or Certificate of Incorporation, bylaws or any material contract or
agreement to which such Grantor is a party, or any law, regulation, order, injunction, judgment, decree or writ to which such Grantor is subject. 
  
 5.6. The execution, delivery and performance by each Grantor of this Agreement and the other Loan Documents to which it is a party do not
require the consent or approval of any other Person, including any regulatory authority or governmental body of the United States or any State thereof or any political subdivision of the United States or any State thereof. 
  
 5.7. Since December 31, 2003, no event has had or could
reasonably be expected to have a Material Adverse Effect has occurred and is continuing; except that Borrower and its Subsidiaries have not met the revenue and Tangible Net Worth requirements set forth in clause (i) of the definition of Material
Adverse Effect prior to the date hereof. 
  
 5.8.

  
 (a) There are no actions, suits or
proceedings at law or in equity or by or before any governmental authority now pending or, to the knowledge of Borrower, threatened against Borrower or any of its Subsidiaries or any business, property or rights of Borrower or any of its
Subsidiaries (i) which involve any Loan Document or (ii) as to which there is a reasonable possibility of an adverse determination and which, if adversely determined, could, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect. 
  
 (b) Borrower is not
in violation of any law, rule or regulation, or in default with respect to any judgment, writ, injunction or decree of any governmental authority, where such violation or default could reasonably be expected to result in a Material Adverse Effect.

  
 5.9. 
  
 (a) Neither Borrower nor any of its Subsidiaries is in
default in any manner under any provision of any indenture or other agreement, contract or instrument evidencing indebtedness, or any other material agreement, contract or instrument to which it is a party or by which it or any of its properties or
assets are or may be bound and in each case for which such default could reasonably be expected to result in a Material Adverse Effect. 
  
 5.10. No information, report, Advance Request, financial statement, exhibit or schedule furnished by or on behalf of Borrower to Lender in
connection with the negotiation of any Loan 
  

 13 

 Document or included therein or delivered pursuant thereto, when taken together with Borrower’s
filings with the Securities and Exchange Commission, contained, contains or will contain any material misstatement of fact or omitted, omits or will omit to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading. Any projections or pro forma financial information contained in such materials are based upon good faith estimates and assumptions believed by Borrower to be reasonable at the
time made, it being recognized by Lender that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results (it being
understood that forecasts and projections by their nature involve approximations and uncertainties). 
  
 5.11. Borrower has filed and will file all federal, state and local tax returns that it is required to file. Subject to Section 7.11,
Borrower has duly paid or fully reserved for all taxes or installments thereof (including any interest or penalties) as and when due, which have or may become due pursuant to such returns. Borrower has paid or fully reserved for any tax assessment
received by Borrower for the three (3) years preceding the Closing Date, if any (including any taxes being contested in good faith and by appropriate proceedings). 
  
 5.12. As of the Closing Date, each Grantor’s present name, former names within the past five years (if
any), location of its chief executive office, principal place of business and Collateral, and other information are correctly set forth in Section 5.12 of the Disclosure Letter. 
  
 5.13. Section 5.13 of the Disclosure Letter sets forth a true, correct and complete list of each of each
Grantor’s Patents, Trademarks and Copyrights registered with the U.S. Copyright Office, U.S. Patent and Trademark Office or any similar office of another country, together with application or registration numbers, as applicable. 
  
 5.14. Section 5.14 of the Disclosure Letter sets forth a
true, correct and complete list of (a) all banks and other financial institutions at which any Grantor maintains Deposit Accounts and (b) institutions at which any Grantor maintains accounts holding Investment Property owned by such Grantor, and
such exhibit correctly identifies the name, address and telephone number of each bank or other institution, the name in which the account is held, and a description of the purpose of the account. 
  
 5.15. Neither Borrower nor any of its Subsidiaries has any
outstanding loans to any employee, officer or director of the Borrower nor has Borrower guaranteed the payment of any loan made to an employee, officer or director of the Borrower by a third party. 
  
 SECTION 6. INSURANCE; INDEMNIFICATION 
  
 6.1. So long as there are any Secured Obligations
outstanding, Borrower shall cause to be carried and maintained commercial general liability insurance, on an occurrence form, against risks customarily insured against in Borrower’s line of business. Such risks shall include the risks of bodily
injury, including death, property damage, personal injury, and advertising injury. Borrower must maintain a minimum of Two Million Dollars ($2,000,000.00) of commercial general liability insurance for each occurrence. So long as there are any
Secured Obligations outstanding, Borrower shall also cause to be carried and maintained insurance upon the Collateral, insuring against all risks of physical loss or damage from such causes that Borrower in its reasonable business judgment maintains
insurance for, including the perils of theft, fire, and windstorm, in an amount not less than the full replacement cost of the Collateral. 
  
 6.2. Borrower shall deliver to Lender certificates of insurance, which evidence Borrower’s compliance with its insurance obligations
in Section 6.1 and the obligations contained 
  

 14 

 in this Section 6.2. Borrower’s insurance certificate shall state Lender is an additional insured
for commercial general liability and an additional insured and a loss payee for all risk property damage insurance. Attached to the certificates of insurance will be additional insured endorsements for liability and lender’s loss payable
endorsements for all risk property damage insurance. 
  
 6.3. The certificates of insurance will state that the coverage evidenced is primary and non-contributory to any insurance or self-insurance of Lender, and will further state that a waiver of subrogation in favor of Lender has been agreed
to. All certificates of insurance will provide for a minimum of thirty (30) days advance written notice to Lender of cancellation or any other change adverse to Lender’s interests. Any failure of Lender to scrutinize such insurance certificates
for compliance is not a waiver of any of Lender’s rights, all of which are reserved. 
  
 6.4. Borrower shall and does hereby indemnify and hold Lender, its officers, directors, employees, agents, attorneys, representatives and
shareholders harmless from and against any and all claims, costs, expenses, damages and liabilities (including such claims, costs, expenses, damages and liabilities based on liability in tort, including strict liability in tort), including
reasonable attorneys’ fees and disbursements and other costs of investigation or defense (including those incurred upon any appeal), that may be instituted or asserted against or incurred by Lender or any such Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other Loan Documents or the administration of such credit, or in connection with or arising out of the transactions contemplated hereunder and thereunder, or any actions or
failures to act in connection therewith, or arising out of the disposition or utilization of the Collateral, excluding in all cases claims, costs, expenses, damages and liabilities resulting solely from Lender’s gross negligence or willful
misconduct. 
  
 SECTION 7. COVENANTS OF BORROWER 
  
 Borrower covenants and agrees as follows at all times while any of the
Secured Obligations remain outstanding: 
  
 7.1.
Borrower shall furnish to Lender the Compliance Certificate monthly (in the form attached as Exhibit C) within 30 days of the end of each month and financial statements listed in clauses (a), (b) and (c) below, each prepared in accordance with GAAP,
subject to the absence of footnotes and to year-end adjustments in the case of interim period financial statements (the “Financial Statements”): 
  
 (a) as soon as practicable (and in any event within thirty (30) days) after the end of each calendar month, unaudited financial statements
as of the end of such calendar month (prepared on a consolidated basis), including, to the extent prepared by Borrower for its Board of Directors, balance sheet and related statements of income and cash flows accompanied by a report detailing any
material contingencies (including the commencement of any material litigation by or against Borrower) or any other occurrence that could reasonably be expected to have a Material Adverse Effect, all certified by Borrower’s Chief Executive
Officer or Chief Financial Officer to present fairly in all material respects the financial condition and results of operations of Borrower and its consolidated Subsidiaries for the period then ended; 
  
 (b) as soon as practicable (and in any event within forty
five (45) days or such shorter period as required by Section 15(d) of the Act) after the end of each calendar quarter, unaudited interim financial statements as of the end of such calendar quarter (prepared on a consolidated basis), including, to
the extent prepared by Borrower for its Board of Directors, balance sheet and related statements of income and cash flows accompanied by a report detailing any material contingencies (including the commencement of any material litigation by or
against Borrower) or 
  

 15 

 any other occurrence that could reasonably be expected to have a Material Adverse Effect, all certified
by Borrower’s Chief Executive Officer or Chief Financial Officer to present fairly in all material respects the financial condition and results of operations of Borrower and its consolidated Subsidiaries for the period then ended; 

 
 (c) as soon as practicable (and in any event within
ninety (90) days or such shorter period as required by Section 15(d) of the Act) after the end of each fiscal year, (i) unqualified audited financial statements as of the end of such year (prepared on a consolidated basis), including, to the extent
prepared by Borrower for its Board of Directors, balance sheet and related statements of income and cash flows, and setting forth in comparative form the corresponding figures for the preceding fiscal year, along with a one-year (prepared on a
monthly basis) forecast of Borrower on a consolidated basis and (ii) budgets, operating plans and other financial information prepared by Borrower and reasonably requested by Lender; 
  
 (d) promptly after the filing thereof, proxy statements and financial statements not otherwise provided for
hereunder, or registration statements that Borrower files with the Securities and Exchange Commission or any governmental authority that may be substituted therefore, or any national securities exchange; and 
  
 (e) promptly any additional information or materials
provided to Holders of the Series A-2 Preferred Stock, and all other financial information or otherwise (including tax returns and names of principal creditors), requested by Lender as Lender reasonably believes necessary to evaluate the Collateral
or Borrower’s continuing ability to meet its financial obligations. 
  
 The
executed Compliance Certificate may be sent via facsimile to Lender at (650) 813-6211. All Financial Statements required to be delivered pursuant to clauses (a), (b), (c) and (d) shall be sent via e-mail to ghoward@herculestech.com;
provided, that if e-mail is not available or sending such Financial Statements via e-mail is not possible, they shall be sent via facsimile to Lender at: (650) 813-6211, attention Chief Credit Officer, referenced Occam Networks, Inc.

  
 7.2. Intentionally omitted. 
  
 7.3. Borrower shall permit any authorized representative of
Lender and its attorneys and accountants on reasonable notice to inspect, examine and make copies and abstracts of the books of account and records of Borrower upon reasonable prior notice and at reasonable times during normal business hours. In
addition, such representative of Lender and its attorneys and accountants shall have the right to meet with management and officers of Borrower to discuss such books of account and records upon reasonable prior notice and at reasonable times during
normal business hours. In addition, Lender shall be entitled at reasonable times and intervals to consult with and advise the management and officers of Borrower concerning significant business issues affecting Borrower upon reasonable prior notice
and at reasonable times during normal business hours. Such consultations shall not unreasonably interfere with Borrower’s business operations. The parties intend that the rights granted Lender shall constitute “management rights”
within the meaning of 29 C.F.R Section 2510.3-101(d)(3)(ii), but that any advice, recommendations or participation by Lender with respect to any business issues shall not be deemed to give Lender, nor be deemed an exercise by Lender of, control over
Borrower’s management or policies. Notwithstanding anything to the contrary in this Section 7.3, Borrower shall not be required to disclose, permit the inspection, examination, copying or discussion of, any document, information or other matter
that (a) constitutes non-financial trade secrets or non-financial proprietary information, (ii) in respect of which disclosure to Lender or its representative is then prohibited by law or any agreement binding on Borrower or any of its Subsidiaries,
or (iii) is subject to attorney-client or similar privilege or constitutes attorney work product. 
  

 16 

 7.4. Borrower shall from time to time execute, deliver and file, alone or with Lender,
any financing statements, security agreements, assignments, notices, control agreements, or other documents reasonably requested by Lender to perfect or give priority (subject to Permitted Liens) to Lender’s Lien on the Collateral. Borrower
shall from time to time procure any instruments or documents as may be reasonably requested by Lender, and take all further action that may be necessary or desirable, or that Lender may reasonably request, to carry out more effectively the
provisions and purposes of this Agreement or any other Loan Document or to confirm, perfect, preserve and protect the Liens granted hereby and thereby. In addition, and for such purposes only, Borrower hereby authorizes Lender to execute and deliver
on behalf of Borrower and to file such financing statements, notices, control agreements, security agreements and other documents without the signature of Borrower either in Lender’s name or in the name of Lender as agent and attorney-in-fact
for Borrower. The parties agree that a carbon, facsimile, photographic or other reproduction of this Agreement shall be sufficient as a financing statement and may be filed in any appropriate office in lieu thereof. 
  
 7.5. Borrower shall protect and defend Borrower’s title
to the Collateral and Lender’s Lien thereon against all Persons claiming any interest adverse to Borrower or Lender, subject to Permitted Liens. Borrower shall at all times keep the Collateral and all other property and assets used in
Borrower’s business or in which Borrower now or hereafter holds any interest free and clear from any legal process or Liens whatsoever (except for Permitted Liens), and shall give Lender prompt written notice of any legal process affecting the
Collateral or any Liens thereon (except for Permitted Liens) that could reasonably be expected to have a Material Adverse Effect. 
  
 7.6. Borrower shall not incur any secured Indebtedness other than Permitted Indebtedness for a period of twenty four (24) months from the
date of this Agreement. If at the end of such period, Borrower elects to obtain secured Indebtedness (other than Permitted Indebtedness), Lender shall have the right of first refusal (but shall not be obligated) to provide such Indebtedness,
including providing up to Four Million ($4,000,000) in a line of credit, subject to availability, based on accounts receivables, with an advance rate of 90% of eligible accounts receivable and other terms and conditions as may be agreed to by the
parties; provided that Lender’s right of first refusal shall terminate upon the payment in full of the Loan hereunder. In addition, without Lender’s prior written consent, Borrower shall not (a) extend, modify or amend
Borrower’s SVB Agreement; (b) incur any Indebtedness other than Permitted Indebtedness which involves the grant of a security interest in any of the Borrower’s assets (including but not limited to hereinafter acquired assets); (c) except
in the ordinary course of business, (i) grant any material extension of the time of payment of any of the Accounts, (ii) to any material extent, compromise, compound or settle the same for less than the full amount thereof, (iii) release, wholly or
partly, any Person liable for the payment thereof, or (d) allow any credit or discount whatsoever thereon other than trade discounts granted by Borrower in the ordinary course of business of Borrower. 
  
 7.7. Borrower shall maintain and protect its properties,
assets and facilities, including its Equipment and Fixtures, in good order and working repair and condition (taking into consideration ordinary wear and tear) and from time to time make or cause to be made all proper repairs, renewals and
replacements thereto Borrower deems necessary in its reasonable business judgment. 
  
 7.8. Borrower or its Subsidiaries shall not consummate any Merger (pursuant to a merger agreement which is not subject to Lender’s
consent) without the prior written consent of Lender provided such consent shall not be required if Borrower elects to pay off the entire balance of the Note(s) prior to the consummation of such Merger. So long as no Event of Default has occurred
and is continuing, Lender agrees not to unreasonably withhold its consent to any Merger to the extent the same does not, in Lender’s reasonable discretion, adversely affect Lender’s interests under the Loan Documents or increase the risk
of non-payment or late payment of the Secured Obligations. Lender may, at its sole option, require, as a condition of any such consent, that (a) the Note(s) be paid off in their entirety prior to or simultaneously with the Merger being consummated,
(b) the assets acquired in 
  

 17 

 such Merger (i) subject to the limitations on Collateral set forth in Section 3.1, be provided as
Collateral (including assets of any Subsidiary of Borrower) and (ii) be free and clear of Liens (other than Permitted Liens), (c) any party to the Merger, or parent, Subsidiary or affiliate of Borrower guarantee the Secured Obligations, or (d)
documents be delivered, including certificates, lien search results, financing statements and opinions, or other actions be taken so as to give Lender reasonable confidence in the ability of Borrower to satisfy the Secured Obligations on a timely
basis. 
  
 7.9. Borrower shall not, without the
prior written consent of Lender, (a) declare or pay any cash dividend or make a distribution on, or repurchase or redeem, any class of stock, other than Permitted Distributions, or (b) transfer, sell, lease, or in any other manner convey any
equitable, beneficial or legal interest in any material portion of the assets of Borrower (except Inventory sold in the normal course of business and Permitted Transfers). 
  
 7.10. Upon the request of Lender, Borrower shall, during normal business hours and upon reasonable prior
notice, make the Inventory, Equipment, other Collateral, and books and records concerning Collateral (including software used in Borrower’s business) available to Lender for inspection at the place where it is normally located and shall make
Borrower’s log and maintenance records pertaining to the Inventory and Equipment available to Lender for inspection. Borrower shall take all action necessary to maintain such books, records, logs, and maintenance records such in a materially
correct and complete fashion. 
  
 7.11. Borrower
shall pay when due all taxes, fees or other charges of any nature whatsoever (together with any related interest or penalties) now or hereafter imposed or assessed against Borrower or the Collateral or upon Borrower’s ownership, possession,
use, operation or disposition thereof or upon Borrower’s rents, receipts or earnings arising therefrom. Borrower shall file on or before the due date therefore all personal property tax returns in respect of the Collateral. Notwithstanding the
foregoing, no tax, fee or other charge need be paid if it is being contested by Borrower in good faith and by appropriate proceedings and Borrower maintains adequate reserves therefor in accordance with GAAP. 
  
 7.12. Without 30 days prior written notice to Lender,
Borrower shall not relocate its chief executive office or its principal place of business. Without 30 days prior written notice to Lender, Borrower shall not maintain any item of the Collateral (other than sale of Inventory in the ordinary course of
business) at any location other than those specified in Section 5.12 of the Disclosure Letter; provided that, if such new location is outside the continental United States, Borrower shall obtain the written consent of Lender, which consent
shall not be unreasonably withheld. If permitted to relocate Collateral pursuant to the foregoing sentence, unless otherwise agreed in writing by Lender, Borrower shall first (a) cause to be filed and/or delivered to Lender all UCC financing
statements, certificates or other documents or instruments necessary to continue in effect the perfected Lien of Lender in the Collateral, and (b) have given Lender no less than thirty (30) days prior written notice of such relocation. 

 
 7.13. Borrower shall not change its corporate name or
jurisdiction of formation without thirty (30) days’ prior written notice to Lender. 
  
 7.14. Borrower shall arrange for automatic debit and corresponding payment to Lender on each Payment Date of all periodic obligations
payable to Lender under each Note or Advance. All payments to Lender shall be wired to Lender’s bank account at the following address: 
  

			
	 	  	Hercules Technology Growth Capital, Inc.
	 	  	C/O Union Bank of California
	 	  	400 California Street
	 	  	2nd Floor

  

 18 

			
	 	  	San Francisco, CA 94104
	 	  	Acct.# 4720023747
	 	  	ABA# 122000496

  
 7.16.
Borrower shall not maintain any Deposit Accounts or accounts holding Investment Property owned by Borrower except (i) accounts identified in the Disclosure Letter and (ii) other accounts with respect to which Lender has a perfected security interest
in each such account. 
  
 SECTION 8. NO SHORT SALES BY LENDER 

 
 8.1 Lender warrants and agrees that it will not engage in
short sales of the Borrower’s common stock nor has it, as of the date of this Agreement, engaged in short sales of the Borrower’s common stock. 
  
 SECTION 9. LOANS TO EMPLOYEES, OFFICERS, DIRECTORS 
  
 9.1. Borrower shall not loan money to any employee, officer or director or guarantee the payment of any such loan granted by a third party
during the period in which any amount of principal under any Loan is outstanding. 
  
 SECTION 10. EVENTS OF DEFAULT 
  
 The occurrence
of any one or more of the following events (herein called “Events of Default”) shall constitute a breach and default under this Loan Agreement, the Notes, and the other Loan Documents: 
  
 10.1. Borrower defaults in the payment of any principal,
interest or other Secured Obligation involving the payment of money under this Agreement, the Notes or any of the other Loan Documents, and such default continues for more than three (3) Business Days after the due date thereof; or 
  
 10.2. Borrower breaches or defaults in the performance of
any covenant or Secured Obligation under this Agreement, the Notes or any of the other Loan Documents, and (a) with respect to a default under any covenant under this Agreement (other than under Section 6 or Sections 7.6,7.8, and 7.9) such default
continues for more than twenty five (25) business days after the earlier of the date on which (i) Lender has given notice of such default to Borrower, or (ii) Borrower’s actual knowledge of such default or (b) with respect to a default under
Section 6 or Sections 7.6,7.8, and 7.9 of this Agreement, upon the earlier of the date on which (i) Lender has given notice of such default to Borrower or (ii) Borrower’s actual knowledge of such default; or 
  
 10.3. Any representation or warranty made by Borrower in any
Loan Document or in the Warrant Agreements shall have been false or misleading in any material respect when made; or a Material Adverse Effect has occurred; or 
  

10.4. Borrower (a) shall make an assignment for the benefit of creditors; or (b) shall admit in writing its inability to pay its debts
as they become due, or its inability to pay or perform under the Loan Documents; or (c) shall file a voluntary petition in bankruptcy; or (d) shall file any petition, answer, or document seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation pertinent to such circumstances; or (e) shall seek or consent to or acquiesce in the appointment of any trustee, receiver,
or liquidator of Borrower or of all or any substantial part of the assets or property of Borrower; 
  

 19 

 or (f) shall cease operations of substantially all of its business as its business has normally been conducted, or
terminate substantially all of its employees; or (g) Borrower or its directors or majority shareholders shall take any action initiating any of the foregoing actions described in clauses (a) through (f); or 
  
 10.5. Either (a) sixty (60) days shall have expired after
the commencement of an involuntary action against Borrower seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, without such action being
dismissed or all orders or proceedings thereunder affecting the operations or the business of Borrower being stayed; or (b) a stay of any such order or proceedings shall thereafter be set aside and the action setting it aside shall not be timely
appealed; or (c) Borrower shall file any answer admitting or not contesting the material allegations of a petition filed against Borrower in any such proceedings; or (d) the court in which such proceedings are pending shall enter a decree or order
granting the relief sought in any such proceedings; or 
  
 10.6. Thirty (30) days shall have expired after the appointment, without the consent or acquiescence of Borrower, of any trustee, receiver or liquidator of Borrower or of all or any substantial part of the properties of Borrower without
such appointment being vacated; or 
  
 10.7. The
occurrence of any default beyond any applicable grace period under (i) any Excluded Agreement or (ii) any note or agreement for borrowed money or any other agreement between Borrower and Lender (other than any default embodied in or covered by any
other clause of this Section 10), and in each case such default continues for more than three (3) days after the earlier of (a) Lender has given notice of such default to Borrower, or (b) Borrower has actual knowledge of such default; or 

 
 10.8. Either (a) the occurrence of any default (other
than any default embodied in or covered by any other clause of this Section 10) beyond any applicable grace period under any lease, loan, or other agreement or obligation of Borrower involving any obligation which aggregates more than two hundred
thousand dollars ($200,000.00), if the effect of such default is to cause, or permit the holder of such obligation to cause, such obligation to become or be declared due and payable prior to its stated maturity, or (b) the entry of any judgment or
arbitration award against Borrower involving an award in excess of two hundred thousand dollars ($200,000.00) (to the extent not covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage), that has not
been bonded or stayed on appeal within thirty (30) days, or if any material portion of Borrower’s assets is attached, seized or levied upon and any such levy is not removed within ten (10) days. 
  
 SECTION 11. REMEDIES 
  
 11.1. Upon the occurrence and during the continuance of any one or more Events of Default, (i) Lender’s
commitment to make any Advances shall automatically expire, (ii) Lender’s obligation to permit the Loan and Secured Obligations to remain outstanding shall automatically expire, and (iii) Lender may, at its option, accelerate and demand payment
of all or any part of the Secured Obligations and declare them to be immediately due and payable (provided, that upon the occurrence of an Event of Default of the type described in Sections 10.4 or 10.5, the Notes and all of the Secured
Obligations shall automatically be accelerated and made due and payable, in each case without any further notice or act). Upon the occurrence and during the continuance of an Event of Default, the unpaid principal of and accrued interest on the
Notes and Advances and all outstanding Secured Obligations, including all professional fees and expenses, shall thereafter bear interest at the Default Rate. Lender may exercise all rights and remedies with respect to the Collateral under the Loan
Documents or otherwise available to it under the UCC and other applicable law, including the right to release, hold, sell, lease, liquidate, collect, realize upon, or otherwise dispose of all or any part of the Collateral and the right to occupy,
utilize, process and commingle the Collateral. All Lender’s rights and remedies shall be cumulative and not exclusive. 
  

 20 

 11.2. Upon the occurrence and during the continuance of any Event of Default, Lender may,
at any time or from time to time, apply, collect, liquidate, sell in one or more sales, lease or otherwise dispose of, any or all of the Collateral, in its then condition or following any commercially reasonable preparation or processing, in such
order as Lender may elect. Any such sale may be made either at public or private sale at its place of business or elsewhere. Borrower agrees that any such public or private sale may occur upon ten (10) calendar days’ prior written notice to
Borrower. Lender may require Borrower to assemble the Collateral and make it available to Lender at a place designated by Lender that is reasonably convenient to Lender and Borrower. The proceeds of any sale, disposition or other realization upon
all or any part of the Collateral shall be applied by Lender in the following order of priorities: 
  
 First, to Lender in an amount sufficient to pay in full Lender’s costs and professionals’ and advisors’ fees and
expenses as described in Section 12.15; 
  
 Second, to Lender in an amount equal to the then unpaid amount of the Secured Obligations (including principal, interest, and the Default Rate interest), in such order and priority as Lender may choose in its sole discretion; and

  
 Finally, after the full, final, and
indefeasible payment in Cash of all of the Secured Obligations, to any creditor holding a junior Lien on the Collateral, or to Borrower or its representatives or as a court of competent jurisdiction may direct. 
  
 Lender shall be deemed to have acted reasonably in the
custody, preservation and disposition of any of the Collateral if it complies with the obligations of a secured party under the UCC. 
  
 SECTION 12. MISCELLANEOUS 
  
 12.1. Continuation of Security Interest. This is a continuing Agreement and the grant of a Lien hereunder shall remain in full force and
effect and all of the rights, powers and remedies of Lender hereunder shall continue to exist until the Secured Obligations are fully, finally, and indefeasibly paid in Cash and until Lender has executed a written termination statement. Lender shall
execute a termination statement within a reasonable time after the full, final, and indefeasible payment in Cash of the Secured Obligations hereunder, releasing to Borrower, without recourse, its security interest in the Collateral and all rights
conveyed hereby and returning possession of the Collateral to Borrower. The rights, powers and remedies of Lender hereunder shall be in addition to all rights, powers and remedies given by statute or rule of law and are cumulative. The exercise of
any one or more of the rights, powers and remedies provided herein shall not be construed as a waiver of or election of remedies with respect to any other rights, powers and remedies of Lender. 
  
 12.2. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective only to the extent and
duration of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 
  
 12.3. Notice. Except as otherwise provided herein, any notice, demand, request, consent, approval, declaration, service of process or
other communication (including the delivery of Financial Statements) that is required, contemplated, or permitted under the Loan Documents or with respect to the subject matter hereof shall be in writing, and shall be deemed to have been validly
served, given, delivered, and received upon the earlier of: (i) upon receipt if transmitted 
  

 21 

 by facsimile or hand delivery or on the first business day after deposit with an overnight express
service or overnight mail delivery service; or (ii) the third calendar day after deposit in the United States mails, with proper first class postage prepaid (provided, that any Advance Request shall not be deemed received until Lender’s
actual receipt thereof), and shall be addressed to the party to be notified as follows: 
  
 (a) If to Lender: 
  
 HERCULES TECHNOLOGY GROWTH CAPITAL, INC. 
 Legal
Department 
 Attention: Chief Legal Officer 
 Four Palo Alto Square 
 3000 El Camino Real, Suite 200 
 Palo Alto, CA 94306 
 Facsimile: 650-813-6211 
 Telephone: 650-813-6200 
  
 With a copy to: 
  
 HERCULES TECHNOLOGY GROWTH CAPITAL, INC. 
 Attention: Manuel Henriquez 
 Four Palo Alto Square 
 3000 El Camino Real, Suite 200 
 Palo Alto, CA 94306 
 Facsimile: 650-81306211 
 Telephone: 650-813-6200 
  
 (b) If to Borrower: 
  
 Occam Networks, Inc. 
 Attention: Chief Financial Officer 
 77 Robin Hill Road 
 Santa Barbara, CA 93117 
 Facsimile:
805-692-2999 
 Telephone: 805-692-2900 
  
 or to such other address as each party may designate for itself by like notice. 
  

12.4. Entire Agreement; Amendments. This Agreement, the Notes, and the other Loan Documents constitute the entire agreement and
understanding of the parties hereto in respect of the subject matter hereof and thereof, and supersede and replace in their entirety any prior proposals, term sheets, letters, negotiations or other documents or agreements, whether written or oral,
with respect to the subject matter hereof or thereof (including Lender’s Term Sheet dated October 27, 2004) all of which are merged herein and therein. None of the terms of this Agreement, the Notes or any of the other Loan Documents may be
amended except by an instrument executed by each of the parties hereto. 
  
 12.5. Headings. The various headings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provisions hereof. 
  

 22 

 12.6. Advice of Counsel. Each of the parties represents to each other party hereto that
it has discussed (or had an opportunity to discuss) with its counsel this Agreement. 
  
 12.7. No Waiver. The powers conferred upon Lender by this Agreement are solely to protect its rights hereunder and under the other Loan
Documents and its interest in the Collateral and shall not impose any duty upon Lender to exercise any such powers. No omission or delay by Lender at any time to enforce any right or remedy reserved to it, or to require performance of any of the
terms, covenants or provisions hereof by Borrower at any time designated, shall be a waiver of any such right or remedy to which Lender is entitled, nor shall it in any way affect the right of Lender to enforce such provisions thereafter.

  
 12.8. Survival. All agreements,
representations and warranties contained in this Agreement, the Notes and the other Loan Documents or in any document delivered pursuant hereto or thereto shall be for the benefit of Lender and shall survive the execution and delivery of this
Agreement and the expiration or other termination of this Agreement. 
  
 12.9. Successors and Assigns. The provisions of this Agreement and the other Loan Documents shall inure to the benefit of and be binding on Borrower and its permitted assigns (if any). Borrower shall not assign its
obligations under this Agreement, the Notes or any of the other Loan Documents without Lender’s express prior written consent, and any such attempted assignment shall be void and of no effect. Lender may assign, transfer, or endorse its rights
hereunder and under the other Loan Documents as set forth in Section 12.17 without prior notice to Borrower, and all of such rights shall inure to the benefit of Lender’s successors and assigns. 
  
 12.10. Tax Indemnification. Borrower agrees to pay, and to
save Lender harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all excise, sales or other similar taxes (excluding taxes imposed on or measured by the net income of Lender) that may be payable or
determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. 
  
 12.11. Governing Law. This Agreement, the Notes and the other Loan Documents have been negotiated and delivered to Lender in the State of
California, and shall have been accepted by Lender in the State of California. Payment to Lender by Borrower of the Secured Obligations is due in the State of California. This Agreement, the Notes and the other Loan Documents shall be governed by,
and construed and enforced in accordance with, the laws of the State of California, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction. 
  
 12.12. Consent to Jurisdiction and Venue. All judicial
proceedings arising in or under or related to this Agreement, the Notes or any of the other Loan Documents may be brought in any state or federal court of competent jurisdiction located in the State of California. By execution and delivery of this
Agreement, each party hereto generally and unconditionally: (a) consents to personal jurisdiction in San Mateo County, State of California; (b) waives any objection as to jurisdiction or venue in San Mateo County, State of California; (c) agrees not
to assert any defense based on lack of jurisdiction or venue in the aforesaid courts; and (d) irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement, the Notes or the other Loan Documents. Service of
process on any party hereto in any action arising out of or relating to this Agreement shall be effective if given in accordance with the requirements for notice set forth in Section 12.3, and shall be deemed effective and received as set forth in
Section 12.3. Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of either party to bring proceedings in the courts of any other jurisdiction. 
  

 23 

 12.13. Mutual Waiver of Jury Trial. Because disputes arising in connection with complex
financial transactions are most quickly and economically resolved by an experienced and expert person and the parties wish applicable state and federal laws to apply (rather than arbitration rules), the parties desire that their disputes be resolved
by a judge applying such applicable laws. EACH OF BORROWER AND LENDER SPECIFICALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY,
“CLAIMS”) ASSERTED BY BORROWER AGAINST LENDER OR ITS ASSIGNEE OR BY LENDER OR ITS ASSIGNEE AGAINST BORROWER. This waiver extends to all such Claims, including Claims that involve Persons other than Borrower and Lender; Claims that arise
out of or are in any way connected to the relationship between Borrower and Lender; and any Claims for damages, breach of contract, specific performance, or any equitable or legal relief of any kind, arising out of this Agreement, any other Loan
Document or any of the Excluded Agreements. 
  
 12.14. Professional Fees. Borrower promises to pay Lender’s fees and expenses necessary to finalize the loan documentation including but not limited to attorneys fees, UCC searches, filing costs, and other miscellaneous expenses. In
addition, Borrower promises to pay any and all reasonable attorneys’ and other professionals’ fees and expenses incurred by Lender after the Closing Date in connection with or related to: (a) the Loan; (b) the administration, collection,
or enforcement of the Loan; (c) the amendment or modification of the Loan Agreement; (d) any waiver, consent, release, or termination under the Loan Agreement; (e) the protection, preservation, sale, lease, liquidation, or disposition of Collateral
or the exercise of remedies with respect to the Collateral; (f) any legal, litigation, administrative, arbitration, or out of court proceeding in connection with or related to Borrower or the Collateral, and any appeal or review thereof; and (g) any
bankruptcy, restructuring, reorganization, assignment for the benefit of creditors, workout, foreclosure, or other action related to Borrower, the Collateral, the Loan Documents, or the Excluded Agreements, including representing Lender in any
adversary proceeding or contested matter commenced or continued by or on behalf of Borrower’s estate, and any appeal or review thereof. Lender’s professional fees and expenses shall include fees or expenses for Lender’s attorneys,
accountants, auctioneers, liquidators, appraisers, investment advisors, environmental and management consultants, or experts engaged by Lender in connection with the foregoing. Borrower’s promise to pay all of Lender’s reasonable
professional fees and expenses is part of the Secured Obligations under this Agreement. For the purposes of this Section 12.14, attorneys’ fees shall include, without limitation, fees incurred in connection with the following: (i) contempt
proceedings; (ii) discovery; (iii) any motion, proceeding or other activity of any kind in connection with an insolvency proceeding; (iv) garnishment, levy, and debtor and third party examinations; and (v) post-judgment motions and proceedings of
any kind, including without limitation any activity taken to collect or enforce any judgment. All of the foregoing costs and expenses shall be payable upon demand by Lender, and if not paid within thirty (30) days of presentation of invoices shall
bear interest at the highest applicable Default Rate. 
  
 12.15. Revival of Secured Obligations. This Agreement and the Loan Documents shall remain in full force and effect and continue to be effective if any petition is filed by or against Borrower for liquidation or reorganization, if Borrower
becomes insolvent or makes an assignment for the benefit of creditors, if a receiver or trustee is appointed for all or any significant part of Borrower’s assets, or if any payment or transfer of Collateral is recovered from Lender. The Loan
Documents and the Secured Obligations and Collateral security shall continue to be effective, or shall be revived or reinstated, as the case may be, if at any time payment and performance of the Secured Obligations or any transfer of Collateral to
Lender, or any part thereof is rescinded, avoided or avoidable, reduced in amount, or must otherwise be restored or 
  

 24 

 returned by, or is recovered from, Lender or by any obligee of the Secured Obligations, whether as a
“voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment, performance, or transfer of Collateral had not been made. In the event that any payment, or any part thereof, is rescinded, reduced,
avoided, avoidable, restored, returned, or recovered, the Loan Documents and the Secured Obligations shall be deemed, without any further action or documentation, to have been revived and reinstated except to the extent of the full, final, and
indefeasible payment to Lender in Cash. 
  
 12.16. Confidentiality. Lender shall hold all non-public information regarding Borrower and its business obtained by Lender pursuant to the requirements of the Loan Documents in accordance with Lender’s customary procedures for
handling confidential information of a like nature, it being understood and agreed by Borrower that Lender may make (a) disclosures of such information on a need to know basis to its agents and advisors, (b) disclosure of such information reasonably
required by any bona fide or potential assignee, transferee or participant in connection with the contemplated transfer, assignment, transfer or participation by Lender of any Advances; provided that prior to such disclosure, such
assignee, transferee or participant agrees to be bound by the provisions of this Section 12.16; and (c) disclosures required by any governmental agency or representative thereof or pursuant to legal or judicial process; provided that,
unless specifically prohibited by applicable law or court order, Lender shall make reasonable efforts to notify Borrower of any request by any governmental agency or representative thereof (other than any such request in connection with the
examination of the financial condition of Lender or other routine examination of Lender by such governmental agency) for disclosure of any such non-public information prior to the disclosure of such information. 
  
 12.17. Assignments. Borrower acknowledges and understands
that Lender may sell and assign all or part of its interest hereunder and under the Note(s) and Loan Documents to any person or entity (an “Assignee”). After such assignment the term “Lender” as used in the Loan Documents shall
mean and include such Assignee, and such Assignee shall be vested with all rights, powers and remedies of Lender hereunder with respect to the interest so assigned; but with respect to any such interest not so transferred, Lender shall retain all
rights, powers and remedies hereby given. No such assignment by Lender shall relieve Borrower of any of its obligations hereunder. Lender agrees that in the event of any transfer by it of the Note(s), it will endorse thereon a notation as to the
portion of the principal of the Note(s), which shall have been paid at the time of such transfer and as to the date to which interest shall have been last paid thereon. 
  
 12.18. Agreement not to Trade. For so long as any historical or projected financial information provided by
Borrower to Lender remains Undisclosed Financial Information, Lender agrees not to purchase, sell, or make any short sale of any shares of Borrower’s Common Stock, to grant, purchase, or sell any options for the purchase or sale of
Borrower’s Common Stock, or otherwise to engage in any transactions in shares of Borrower’s Common Stock (whether directly or through transactions in derivative securities) that would result in any violation of the Act or any rule or
regulation promulgated thereunder. “Undisclosed Financial Information” means such financial projections and any other historical or projected financial information relating to Borrower that has not been publicly disclosed by Borrower but
that is disclosed, whether orally or in writing, to Lender. Undisclosed Financial Information shall cease to be Undisclosed Financial Information at such time as Borrower has publicly disclosed such information or with respect to projected financial
information that is not publicly disclosed, at such time as the time periods to which such projected financial information relates have expired. 
  

 25 

 12.19. Releases of Collateral. Upon the payment in full of all Secured Obligations, the
security interest granted hereby shall terminate hereunder and of record and all rights to the Collateral shall revert to Grantors. Upon any such termination Lender shall, at Grantors’ expense, execute and deliver to Grantors such documents as
Grantors shall reasonably request to evidence such termination. 
  
 12.20. Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which
when so delivered shall be deemed an original, but all of which counterparts shall constitute but one and the same instrument. 
  
 (SIGNATURES TO FOLLOW) 
  

 26 

 IN WITNESS WHEREOF, Borrower and Lender have duly executed and delivered this Senior Loan and Security
Agreement as of this      day of December, 2004. 
  

					
	 BORROWER:
	 	Occam Networks, Inc.
			
	 	 	Signature:	 	  

			
	 	 	Print Name:	 	  

			
	 	 	Title:	 	  

		
	 GRANTOR SUBSIDIARY:
	 	Occam Networks (California), Inc.
			
	 	 	Signature:	 	  

			
	 	 	Print Name:	 	  

			
	 	 	Title:	 	  

			
	Accepted in Palo Alto, California:	 	 	 	 
		
	 LENDER:
	 	HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
			
	 	 	Signature:	 	  

			
	 	 	Print Name:	 	  

			
	 	 	Title:	 	  

  

 27 

 Table of Exhibits and Schedules 
  

			
		
	Exhibit A:	 	Advance Request
	 	 	Attachment to Advance Request
		
	Exhibit B:	 	Promissory Note
		
	Exhibit C:	 	Compliance Certificate
		
	Schedule 1:	 	Schedule of Documents

  

 28 

 EXHIBIT A 
  
 ADVANCE REQUEST 
  

							
	To:	  	Lender:	  	Date:	  	_______                    
	 	  	Hercules Technology Growth Capital, Inc.	  	 	  	 
	 	  	Four Palo Alto Square	  	 	  	 
	 	  	3000 El Camino Real, Suite 200	  	 	  	 
	 	  	Palo Alto, CA 94306	  	 	  	 
	 	  	Attention: Chief Financial Officer	  	 	  	 
	 	  	(650) 813-6211 facsimile	  	 	  	 

  
 Occam Networks, Inc.
(“Borrower”) hereby requests from Hercules Technology Growth Capital, Inc. (“Lender”) an Advance in the amount of
                     Dollars
($                    .00) on
                    ,
                     (the “Advance Date”) pursuant to the Senior Loan and Security Agreement between Borrower and Lender (the
“Agreement”). Capitalized words and other terms used but not otherwise defined herein are used with the same meanings as defined in the Agreement. 
  
 Please: 
  

					
	 (a)    Issue a check payable to Borrower
	  	_______                    
		
	 or
	  	 
		
	 (b)    Wire Funds to Borrower’s account
	  	_______
		
	 Bank:
	  	_________________________________________________________
	 Address:
	  	_________________________________________________________
	 ABA Number:
	  	_________________________________________________________
	 Account Number:
	  	_________________________________________________________
	 Account Name:
	  	_________________________________________________________

  
 Borrower hereby
represents that the conditions precedent to Advances set forth in the Agreement are satisfied and shall be satisfied upon the making of such Advance, including but not limited to: (i) that the representations and warranties set forth in the
Agreement are and shall be true and correct in all material respects on and as of the Advance Date with the same effect as though made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier
date; (ii) that Borrower is in compliance with all the terms and provisions set forth in each Loan Document on its part to be observed or performed; (iii) that as of the Advance Date, no fact or condition exists that would (or would, with the
passage of time, the giving of notice, or both) constitute an Event of Default under the Loan Documents. Borrower understands and acknowledges that Lender has the right to review the financial information supporting this representation and, based
upon such review in its sole discretion, Lender may decline to fund the requested Advance. 
  

 29 

 Borrower hereby represents that Borrower’s jurisdiction of incorporation and location of its chief
executive office, principal place of business and locations of collateral have not changed since the              day of     , 2004, except as set forth on
the attachment to this Advance Request. 
  
 Borrower agrees to
notify Lender promptly before the funding of the Loan if any of the matters which have been represented above shall not be true and correct on the Borrowing Date and if Lender has received no such notice before the Advance Date then the statements
set forth above shall be deemed to have been made and shall be deemed to be true and correct as of the Advance Date. 
  
 Executed this                  day of
                            ,
                . 
  

			
	 BORROWER:
	 	 Occam Networks, Inc.

		
	 SIGNATURE:
	 	  

		
	 TITLE:
	 	 Chief Executive Officer or Chief Financial Officer

		
	 PRINT NAME:
	 	  

  

 30 

 ATTACHMENT TO ADVANCE REQUEST 
  
 Dated:
                                        
     
  
 Borrower hereby represents and warrants to Lender
that Borrower’s current name and organizational status is as follows: 
  

			
	 Name:
	  	  

		
	 Type of organization:
	  	  

	 (Corporation, limited partnership, or limited liability company)

		
	 State of organization:
	  	  

  
 Borrower hereby represents and
warrants to Lender that the street addresses, cities, states and postal codes of its current locations are as follows: 
  

			
		
	 Chief Executive Office:
	  	  

		
	 	  	  

		
	 	  	  

		
	 Principal Place of Business:
	  	  

		
	 	  	  

		
	 	  	  

		
	 Locations of Collateral:
	  	  

		
	 	  	  

		
	 	  	  

  

 31 

 EXHIBIT B 
  
 PROMISSORY NOTE 
  

					
	$__________________	  	Advance Date:	 	  

	 	  	 	 	 
	 	  	Maturity Date:	 	December         , 2007

  
 FOR VALUE RECEIVED, Occam Networks,
Inc., a Delaware corporation (the “Borrower”) hereby promises to pay to the order of Hercules Technology Growth Capital, Inc., a Maryland corporation or the holder of this Note (the “Lender”), at Four Palo Alto Square, 3000 El
Camino Real, Suite 200, Palo Alto, CA. 94306 or such other place of payment as the holder of this Promissory Note (this “Note”) may specify from time to time in writing, in lawful money of the United States of America, the principal amount
of              and 00/100 Dollars ($            .00) together with interest at eleven and ninety five hundredths
percent (11.95%) per annum, from the date of this Note to maturity of each installment on the principal hereof remaining from time to time unpaid, such principal and interest shall be due and payable in monthly installments of accrued interest only
on the first day of the month following the date of this Note through June 30, 2005 (the “Interest Only Payment Date(s)”), followed by equal monthly installments of principal and interest computed on the basis of a thirty (30) month
amortization schedule through December 1, 2007, on which date all accrued and unpaid interest and the balance of the entire unpaid principal outstanding as of the Maturity Date. Each such monthly installment shall be due and payable on the
respective dates (each, a “Payment Date”) which shall be the first day of August, 2005 and the first day of each of the following months through December 1, 2007, followed by a final payment of any unpaid principal and accrued and
unpaid interest (“Maturity Date Payment”) being due and payable on the Maturity Date. If any payment for this Note shall be payable on a day other than a Business Day, then such payment shall be due and payable on the next succeeding
Business Day. Interest shall be computed on the basis of a year consisting of twelve months of thirty days each. Any payments made under this Note shall not be available for reborrowing. 
  
 This Promissory Note is the Note referred to in, and is executed and delivered in connection with, that certain Senior Loan and Security
Agreement dated December     , 2004, by and between Borrower and Lender (as the same may from time to time be amended, modified or supplemented in accordance with its terms, the “Loan Agreement”), and is entitled
to the benefit and security of the Loan Agreement and the other Loan Documents (as defined in the Loan Agreement), to which reference is made for a statement of all of the terms and conditions thereof. All terms defined in the Loan Agreement shall
have the same definitions when used herein, unless otherwise defined herein. 
  
 Borrower waives presentment and demand for payment, notice of dishonor, protest and notice of protest under the UCC or any applicable law. 
  
 This Note has been negotiated and delivered to Lender and is payable in the State of California. This Note shall be governed by and construed and enforced in accordance
with, the laws of the State of California, excluding any conflicts of law rules or principles that would cause the application of the laws of any other jurisdiction. 
  

			
	BORROWER:	 	Occam Networks, Inc.
		
	Signature:	 	  

	Print Name:	 	  

	Title:	 	  

  

 32 

 EXHIBIT C 
  
 COMPLIANCE CERTIFICATE 
  
 Hercules Technology Growth Capital, Inc. 
 Four Palo Alto Square 

3000 El Camino Real, Suite 200, 
 Palo Alto, CA 94306 
  
 Re: Reference is made to that certain Loan and Security Agreement dated
December     , 2004 and all ancillary documents entered into in connection with such Loan and Security Agreement all as may be amended from time to time (hereinafter referred to collectively as the “Loan
Agreement”) between Hercules Technology Growth Capital, Inc. (“Hercules”) as Lender and Occam Networks, Inc. (the “Company”) as Borrower. All capitalized terms not defined herein shall have the same meaning as defined in the
Loan Agreement. 
  
 Ladies and Gentlemen: 
  
 The undersigned is an Officer of the Company, knowledgeable of all Company
financial matters, and is authorized to provided certification of information regarding the Company; hereby certifies that in accordance with the terms and conditions of the Loan Agreement, the Company is in complete compliance for the period ending
             of all required conditions and terms except as noted below. Attached are the required documents supporting the above certification. The undersigned further certifies
that these are prepared in accordance with Generally Accepted Accounting Principles and are consistent from one period to the next except as explained below. 
  
 Indicate compliance status by circling Yes/No under “Complies” 
  

					
	 REPORTING REQUIREMENT COMPLIES

	 	 REQUIRED

	 	 
	 Interim Financial Statements
	 	Monthly within 30 days	 	YES / NO
			
	 Interim Financial Statements
	 	Quarterly within 45 days	 	YES / NO
			
	 Audited Financial Statements
	 	FYE within 90 days	 	YES / NO
			
	 All OTHER COVENANTS COMPLIES

	 	 REQUIRED

	 	 
	 	 	 	 	YES/ NO

  
 REQUIRED EXPLANATIONS FOR
NONCOMPLIANCE OF ANY OF THE ABOVE: 
  

	
	 ______________________________________________________________________________________________________________________________

	
	 ______________________________________________________________________________________________________________________________

  

 33 

			
	 Very Truly Yours,

		
	 By:
	 	  

	 Name:
	 	  

	 Its:
	 	  

  

 34 

 SCHEDULE 1 
  

 35

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