Document:

Asset Purchase Agreement

 Exhibit 10.2 
  

					
		  	***	  	Portions of this Exhibit (indicated
		  		  	 by asterisks) have been
 Omitted Pursuant to a
Request
 for Confidential Treatment and have
 been separately
filed with
 the Commission.

 ASSET PURCHASE AGREEMENT 
 by and between 
 DIGIRAD CORPORATION 
 DIGIRAD IMAGING SOLUTIONS, INC. 
 DIGIRAD ULTRASCAN SOLUTIONS, INC. 
 and 
 ULTRASCAN, INC. 
 WILLIAM “MICKEY” KING, JR. 
 May 1, 2007 

 TABLE OF CONTENTS 
  

							
	 	 	 	  	 	  	Page
	ARTICLE I. DEFINITIONS	  	2
				
		 	1.1	  	Defined Terms	  	2
		
	ARTICLE II. PURCHASE AND SALE OF ASSETS	  	15
				
		 	2.1	  	Transfer of Assets	  	15
		 	2.2	  	Excluded Assets	  	17
		 	2.3	  	No Assumption of Liabilities	  	17
		 	2.4	  	Purchase Price	  	17
		 	2.5	  	Closing Costs; Transfer Taxes; Fees and Expenses	  	18
		 	2.6	  	Purchase Price Adjustment	  	19
		 	2.7	  	Closing	  	21
		
	ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND PRINCIPAL STOCKHOLDER	  	22
				
		 	3.1	  	Organization of the Seller	  	22
		 	3.2	  	Authorization	  	22
		 	3.3	  	Title to Purchased Assets; Condition of Purchased Assets	  	22
		 	3.4	  	Absence of Certain Changes or Events	  	23
		 	3.5	  	Material Contracts	  	24
		 	3.6	  	Facilities	  	26
		 	3.7	  	Permits	  	27
		 	3.8	  	No Conflict or Violation	  	27
		 	3.9	  	Consents and Approvals	  	28
		 	3.10	  	Financial Information	  	28
		 	3.11	  	Books and Records	  	29
		 	3.12	  	Litigation	  	29
		 	3.13	  	Labor Matters	  	29
		 	3.14	  	Liabilities	  	30
		 	3.15	  	Compliance with Law	  	30
		 	3.16	  	No Brokers	  	31
		 	3.17	  	Intellectual Property	  	31
		 	3.18	  	Employee Plans	  	33
		 	3.19	  	Transactions with Certain Persons	  	35
		 	3.20	  	Tax Matters	  	35
		 	3.21	  	Liabilities from Business Combination	  	36
		 	3.22	  	Insurance	  	36
		 	3.23	  	Compliance With Environmental Laws	  	37
		 	3.24	  	Performance of Services	  	37
		 	3.25	  	Customers and Distributors	  	38

 TABLE OF CONTENTS 
 (Continued) 
  

							
		 	3.26	  	Sufficiency of Purchased Assets	  	38
		 	3.27	  	WARN Act	  	38
		 	3.28	  	Foreign Corrupt Practices Act	  	38
		 	3.29	  	Other Agreements	  	38
		 	3.30	  	Bulk Transfer Laws	  	39
		 	3.31	  	Redemption of Seller Shares by Seller	  	39
		 	3.32	  	Material Misstatements or Omissions	  	39
		
	ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER	  	39
				
		 	4.1	  	Organization	  	39
		 	4.2	  	Authorization	  	39
		 	4.3	  	No Conflict or Violation	  	40
		 	4.4	  	Consents and Approvals	  	40
		 	4.5	  	SEC Filings	  	40
		 	4.6	  	No Brokers	  	40
		
	ARTICLE V. COVENANTS AND AGREEMENTS	  	40
				
		 	5.1	  	Omitted	  	40
		 	5.2	  	Access and Investigation	  	41
		 	5.3	  	Stock Registration	  	41
		 	5.4	  	Filings and Consents	  	42
		 	5.5	  	Reasonable Efforts	  	42
		 	5.6	  	Certain Tax Matters	  	42
		 	5.7	  	Employee Matters	  	43
		 	5.8	  	Cessation of Use of Names and Web Site	  	44
		 	5.9	  	Non-Competition/Non-Solicitation	  	45
		 	5.10	  	Estoppel Certificates	  	45
		 	5.11	  	Delivery of Title Commitment and Survey	  	45
		 	5.12	  	Delivery of Title to Leased Equipment	  	46
		 	5.13	  	*******	  	46
		 	5.14	  	******	  	46
		 	5.15	  	Tax Disclosure Agreement	  	46
		 	5.16	  	Further Assurances	  	46
		
	ARTICLE VI. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER	  	46
				
		 	6.1	  	Conditions	  	46
		
	ARTICLE VII. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER	  	47
				
		 	7.1	  	Conditions	  	48
		
	ARTICLE VIII. CLOSING	  	48
				
		 	8.1	  	Deliveries at Closing	  	48

  

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 TABLE OF CONTENTS 
 (Continued) 
  

							
		
	ARTICLE IX. INDEMNIFICATION	  	49
				
		 	9.1	  	Survival of Representations and Warranties and Indemnification Obligations	  	49
		 	9.2	  	Indemnification	  	50
		 	9.3	  	Notice of Claims	  	51
		 	9.4	  	Resolution of Notice of Claim	  	52
		 	9.5	  	Release of Closing Escrow Fund	  	53
		 	9.6	  	Third-Party Claims	  	54
		 	9.7	  	Limitation on Indemnity; Remedies; Maximum Liability	  	54
		
	ARTICLE X. TERMINATION	  	55
				
		 	10.1	  	Termination	  	55
		
	ARTICLE XI. MISCELLANEOUS	  	56
				
		 	11.1	  	Assignment	  	56
		 	11.2	  	Notices	  	56
		 	11.3	  	Choice of Law	  	57
		 	11.4	  	Entire Agreement; Amendments and Waivers; Interpretation	  	57
		 	11.5	  	Counterparts	  	58
		 	11.6	  	Severability	  	58
		 	11.7	  	Headings	  	58
		 	11.8	  	Expenses	  	58
		 	11.9	  	Schedules	  	58
		 	11.10	  	Publicity	  	58
		 	11.11	  	No Third-Party Beneficiaries	  	58
		 	11.12	  	Remedies Cumulative; Specific Performance	  	58
		 	11.13	  	Further Assurances	  	59

  

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 TABLE OF CONTENTS 
 (Continued) 
  

			
	EXHIBIT A	 	FORM OF PRINCIPAL STOCKHOLDER EMPLOYMENT AGREEMENT
		
	EXHIBIT A-1	 	FORM OF PROTECTIVE COVENANT AGREEMENT
		
	EXHIBIT B	 	FORM OF EMPLOYMENT AGREEMENT
		
	EXHIBIT C	 	ASSIGNMENT AND ASSUMPTION AGREEMENT
		
	EXHIBIT D	 	FORM OF NON-COMPETITION AND NON-SOLICITATION AGREEMENT
		
	EXHIBIT E	 	BILL OF SALE
		
	EXHIBIT F	 	EXCLUDED ASSETS
		
	EXHIBIT G	 	ASSUMED LIABILITIES
		
	EXHIBIT G-1	 	ASSUMED OPERATIONAL LEASE OBLIGATIONS
		
	EXHIBIT H	 	ESCROW AGREEMENT
		
	EXHIBIT I	 	WORKING CAPITAL
		
	EXHIBIT J	 	EBITDA ALLOCATIONS
		
	EXHIBIT K	 	MOLCHAN SETTLEMENT AND RELEASE AGREEMENT
		
	EXHIBIT L	 	CONSENT OF HILIE KING

  

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 ASSET PURCHASE AGREEMENT 
 This Asset Purchase Agreement (this “Agreement”), effective as of May 1, 2007, is entered into by and among Ultrascan, Inc., a
Georgia corporation (the “Seller”) and William “Mickey” King, Jr. (the “Principal Stockholder”), on the one hand, and Digirad Corporation, a Delaware corporation (the “Parent”), Digirad
Imaging Solutions, Inc., a Delaware corporation (“DIS”) and Digirad Ultrascan Solutions, Inc., a newly formed Delaware corporation (the “Purchaser”), on the other hand. 
 RECITALS 
 WHEREAS, the Seller
owns and operates that certain medical imaging services business operating under the trade name, “Ultrascan” located in Suwanee, Georgia, that provides ultrasound and nuclear imaging services and other services to physicians (the
“Business”); 
 WHEREAS, the Purchaser desires to purchase or license from the Seller, and the Seller desires to sell or
license to the Purchaser, all or substantially all of the assets, properties, rights and claims of, or related to, the Business on the terms and conditions set forth herein; 
 WHEREAS, concurrently with the execution and delivery of this Agreement, and as a material inducement to Parent, DIS and Purchaser to enter into this
Agreement, (i) the Principal Stockholder is entering into an Employment Agreement in substantially the form attached hereto as Exhibit A (the “Principal Stockholder Employment Agreement”) and a Protective Covenant
Agreement in substantially the form attached hereto as Exhibit A-1, and (ii) Matthew G. Molchan is entering into an Employment Agreement in substantially the form attached hereto as Exhibit B (the “Employment
Agreement”); and 
 NOW THEREFORE, in consideration of the foregoing recitals and the mutual representations, warranties, covenants
and agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 

 AGREEMENT 
 ARTICLE I. 
 DEFINITIONS 
 1.1 Defined Terms. As used herein, the terms below shall have the following meanings. Any of such terms, unless the context otherwise requires,
may be used in the singular or plural, depending upon the reference. 
 “Accounts Receivable” shall have the meaning set
forth in Section 3.10(b) of this Agreement. 
 “Action” shall mean any action, claim, suit, litigation, proceeding,
labor dispute, arbitral action, governmental audit, inquiry, criminal prosecution, investigation or unfair labor practice charge or complaint. 
 “Adjustment Amount” shall have the meaning set forth in Section 2.6(f) of this Agreement. 
 “Affiliate” shall have the meaning set forth in the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 
 “Agreement” shall have the meaning set forth in the preamble to this Agreement. 
 “Allocation” shall have the meaning set forth in Section 2.4(d) of this Agreement. 
 “Ancillary Agreements” shall mean the Assignment and Assumption Agreement, the Bill of Sale, the Escrow Agreement, the Employment
Agreements, the Protective Covenant Agreement and Non-Competition and Non-Solicitation Agreements. 
 “Arbitration Firm”
shall mean JAMS located in San Diego, California or an American Arbitration Association organization in San Diego, California. 
 “Assignment and Assumption Agreement” shall mean the Assignment and Assumption Agreement dated the Closing Date between the Seller and the Purchaser, substantially in the form of Exhibit C hereto. 
 “Assumed Liabilities” shall have the meaning set forth in Section 2.3 of this Agreement. 
 “Assumed Operational Lease Obligations” shall mean those operational lease obligations of the Seller as set forth on Exhibit G-1
to be assumed by the Purchaser at Closing. 
 “Average Price” shall mean as of any measurement date the average of the
closing bid price of one share of Common Stock for the five business days immediately preceding the 

  

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measurement date, as quoted on the NASDAQ stock exchange, or, in the event the Common Stock is not listed on the NASDAQ stock exchange at the measurement
date, such other exchange or quotation system where the Common Stock is then listed or quoted, as applicable. In the event that the Common Stock is no longer publicly listed at the measurement date, then the Average Price shall mean the fair market
value of one share of Common Stock as determined in good faith by Parent’s Board of Directors. 
 “Backlog” shall have
the meaning set forth in Section 3.10(d) of this Agreement. 
 “Benchmark” shall have the meaning set forth in
Section 2.6(c) of this Agreement. 
 “Bill of Sale” shall have the meaning set forth in Section 2.1 of this
Agreement. 
 “Bulk Transfer Law” shall mean the bulk transfer provisions of the Uniform Commercial Code (or any similar
Regulation). 
 “Business Day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions in
San Diego, California are authorized or obligated by any applicable Regulation to be closed. 
 “Business Employee” shall
mean those employees and officers of the Seller engaged in performing services related to the Business. 
 “Business” shall
have the meaning set forth in the recitals to this Agreement. 
 “Cash Consideration” shall mean the sum of (x) the Closing
Payment, plus (y) the Closing Escrow Amount, plus (z) the ******* Escrow Amount. 
 “Closing” shall have the meaning set
forth in Section 2.7 of this Agreement. 
 “Closing Date” shall have the meaning set forth in Section 2.7 of this
Agreement. 
 “Closing Escrow Amount” shall have the meaning set forth in Section 2.4(b) of this Agreement. 

“Closing Escrow Fund” shall mean the fund established pursuant to Section 2.4(b) into which the Closing Escrow Amount and the *******
Escrow Amount are to be deposited. 
 “Closing Payment” shall have the meaning set forth in Section 2.4(a) of this
Agreement. 
 “Closing” shall have the meaning set forth in Section 2.7 of this Agreement. 
 “COBRA” shall have the meaning set forth in Section 3.18(d) of this Agreement. 
 “Code” shall mean the Internal Revenue Code of 1986, as amended. 
  

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 “Commercial Debt” shall have the meaning set forth in Section 2.3 of this
Agreement. 
 “Common Stock” shall mean restricted common stock, par value $.001 per share, of Parent. 
 “Confidentiality Agreement” shall mean the Mutual Confidential Disclosure Agreement between Parent and Seller dated as of
December 8, 2006. 
 “Consents” shall mean any and all consents, assignments, approvals, authorizations, registrations,
filings with or waivers of any public, governmental or regulatory body or authority or from parties to Contracts that are (a) required for the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements or
(b) necessary or desirable in order that the Purchaser can conduct the Business after the Closing Date substantially in the same manner as the Business was conducted by the Seller before the Closing Date. 
 “Contested Claim” shall have the meaning set forth in Section 9.4(b) of this Agreement. 
 “Contract Rights” shall have the meaning set forth in Section 2.1(b) of this Agreement. 
 “Contract” shall mean any agreement, contract, note, loan, evidence of indebtedness, Lease, purchase order, letter of credit, indenture,
security or pledge agreement, undertaking, practice, covenant not to compete, employment agreement, severance agreement, license, instrument, obligation or commitment related to the Business to which the Seller is a party or is bound, whether oral
or written. 
 “Court Order” shall mean any judgment, decision, consent decree, injunction, ruling or order of any federal,
state or local court or Governmental Body that is binding on any Person or its property under applicable Regulations. 
 “Damages” shall have the meaning set forth in Section 9.2(a) of this Agreement. 
 “Default”
shall mean (a) any actual breach or default, (b) the occurrence of an event that with the passage of time or the giving of notice or both would constitute a breach or default or (c) the occurrence of an event that with or without the
passage of time or the giving of notice or both would give rise to a right of termination, renegotiation or acceleration. 
 “Determination Date” shall have the meaning set forth in Section 2.6(e) of this Agreement. 
 “DIS” shall have the meaning set forth in the preamble of this Agreement. 
  

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 “Disclosure Schedule” shall mean a schedule executed and delivered by the Seller to the
Purchaser as of the date hereof which sets forth the exceptions to the representations and warranties contained in Article III of this Agreement and certain other information called for by this Agreement. 
 “Earnout Payments” means collectively the First Earnout Payment, Second Earnout Payment, Third Earnout Payment, Fourth Earnout Payment
and Fifth Earnout Payment. 
 “Earnout Shares” shall have the meaning set forth in Section 5.3. 
 “EBITDA” shall mean the aggregate net revenues including, but not limited to adjustments and offsets from all sources for the applicable
period minus expenses (excluding taxes, interest, depreciation and amortization) of Purchaser for the applicable period, calculated in accordance with GAAP as then currently applied by Parent using complete calendar months in defining any 12-month
period or three-month period. In calculating Purchaser’s EBITDA for any period, *********. In addition, in calculating Purchaser’s EBITDA for any period, the **********. The allocations will be ********** by the Chief Operating Officer of
the Seller and the Chief Financial Officer of Parent. 
 “*****” shall mean (i) the First Amendment to Leasing
Agreement between *****. and Ultrascan, Inc., amending the Leasing Agreement between these parties dated July 1, 2002, (ii) First Amendment to Leasing Agreement between ***** and Ultrascan, Inc., amending the Leasing Agreement between
these parties dated March 5, 1999, and (iii) The Technology and Clerical Billing Services Agreement between ****** and Ultrascan, Inc. 
 “******* Escrow Amount” shall have the meaning set forth in Section 2.4(b). This one above goes after “*****” shall mean (i) the First Amendment to Leasing Agreement between *****. and Ultrascan, Inc.,
amending the Leasing Agreement between these parties dated July 1, 2002, (ii) First Amendment to Leasing Agreement between ***** and Ultrascan, Inc., amending the Leasing Agreement between these parties dated March 5, 1999, and (iii) The Technology
and Clerical Billing Services Agreement between ****** and Ultrascan, Inc. 
 “********” shall mean a written consent
executed by ***** to permit the Seller to assign the Leasing Agreement between the parties dated July 1, 2002 to the Purchaser. 
 “Employee Loans” shall mean any loans to employees or non-employees with an outstanding balance as of the Closing Date. 
 “Employee Offers” shall have the meaning set forth in Section 5.7 of this Agreement. 
 “Employee
Plan” shall mean any “employee pension benefit plan” as defined in Section 3(2) ERISA, any “employee welfare benefit plan” as defined in Section 3(1) of ERISA, and any other benefit arrangement that is neither
an employee pension benefit plan nor an employee welfare benefit plan, within the meaning of ERISA, including any employment, consulting, severance or other similar contract, arrangement or policy and each plan, arrangement (written or oral),
program, agreement or commitment providing for insurance coverage (including without limitation any self-insured arrangements), workers’ compensation, disability benefits, supplemental unemployment benefits, vacation benefits, fringe benefits,
retirement benefits, life, health, disability or accident benefits or for deferred compensation, profit-sharing bonuses, stock options, stock appreciation rights, stock purchases or other equity compensation benefits or other forms of incentive
compensation, termination allowance or post-retirement insurance sponsored, maintained or contributed to by the Seller or any ERISA Affiliate with respect to the Business. 
  

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 “Encumbrance” shall mean any claim, lien, pledge, option, charge, easement, security
interest, deed of trust, mortgage, right-of-way, encroachment, building or use restriction, conditional sales agreement, encumbrance or other right of third parties, whether voluntarily incurred or arising by operation of law, and includes, without
limitation, any agreement to give any of the foregoing in the future, and any contingent sale or other title retention agreement or lease in the nature thereof. 
 “Environmental Claim” means any claim, action, litigation, notice of violation, cause of action, consent order, consent decree, investigation, written notice, penalties, expenses, losses or damages
(including property damages and natural resource damages) related to any potential Liability arising out of, based on or resulting from (a) the presence or Release (of any Hazardous Substances in, on, from or under any of the Operating Sites;
(b) requirements imposed by any Environmental Law, including costs of investigation or remediation or costs incurred in obtaining applicable Permits or complying with any Environmental Law; or (c) any violation or alleged violation of any
Environmental Law. 
 “Environmental Exposure Claim” means any third party lawsuits, claims, actions, litigation, class
action lawsuits, proceedings or demands asserted or instituted by any Person alleging bodily injury, adverse health effects or death, or seeking medical monitoring, arising out of or related to actual or alleged exposure of any Person to any
Hazardous Substance, radioactive materials, asbestos or asbestos containing materials actually or allegedly (a) present at any Operating Site or (b) contained in any product or part manufactured, sold or distributed by Seller or any of its
predecessors (or Affiliate of the Seller or any of its predecessors) on or prior to the Closing Date. 
 “Environmental Law”
shall mean any and all Regulations relating to occupational safety and health; the protection of the environment or human health; the procurement, handling, use and disposal of any radioactive materials; emissions, discharges or Releases of
Hazardous Substances, including radioactive materials, into the environment, including, without limitation, ambient air, surface water, groundwater or land; or otherwise relating to the handling of Hazardous Substances or the investigation, clean-up
or other remediation or analysis thereof. 
 “ERISA Affiliate” shall mean each other Person that, together with the Seller
as of the relevant measuring date under ERISA, is required to be treated as a single employer under Section 414 of the Code. 
 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, and the rules, regulations and interpretations promulgated thereunder. 
 “Escrow Agent” shall mean LaSalle Bank National Association or another institution reasonably acceptable to Parent and Seller.

 “Escrow Agreement” shall have the meaning set forth in Section 2.4(b). 
  

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 “Estimated Working Capital” shall have the meaning set forth in Section 2.6(a) of
this Agreement. 
 “Excluded Assets” shall have the meaning set forth in Section 2.2 of this Agreement. 
 “Expiration Date” shall have the meaning set forth in Section 9.1(a) of this Agreement. 
 “Facilities” shall mean all offices, manufacturing facilities, stores, warehouses, retail establishments, improvements, administration
buildings, and all other facilities owned, leased or used by the Seller in connection with the Business. 
 “Fifth Earnout
Milestone” refers to Purchaser’s achieving EBITDA of at least $****** during the Fifth Earnout Period, after deducting the aggregate amount (if any) paid to Seller as of December 31, 2011 in respect of the Earnout Payments.

 “Fifth Earnout Payment” shall mean additional consideration in an amount equal to the lesser of (i) $*******, minus
*********, and (ii) the amount by which Purchaser’s EBITDA during the Fifth Earnout Period exceeds $********* after deduction of the aggregate amount (if any) paid to Seller during such period in respect of *******. The Fifth Earnout
Payment shall be payable in cash and Common Stock, as follows: (i) cash in an amount equal to *********; and (ii) a number of shares of Common Stock equal to (x) ***********, divided by (y) the then applicable Average Price.

 “Fifth Earnout Period” shall mean the period commencing on the Closing Date and ending on April 30, 2011.

 “Final Working Capital” shall have the meaning set forth in Section 2.6(d) of this Agreement. 
 “Financial Statements” shall have the meaning set forth in Section 3.10(a) of this Agreement. 
 “First Earnout Milestones” refers collectively to the following: (i) Purchaser’s Total Revenue equals or exceeds $******
during the First Earnout Period; (ii) Purchaser’s EBITDA equals or exceeds $******* during the First Earnout Period; (iii) Purchaser enters into ******** during the First Earnout Period; and (iv) Purchaser *******. 
 “First Earnout Payment” shall mean (i) additional cash consideration of $******, plus (ii) a number of shares of Common Stock
equal to (x) $*******, divided by (y) the then applicable Average Price. 
 “First Earnout Period” shall mean the
12 month period commencing on the Closing Date. 
 “Fourth Earnout Milestone” refers to Purchaser achieving EBITDA of at
least $******* during the Fourth Earnout Period, after deducting the aggregate amount (if any) paid to Seller as of December 31, 2010 in respect of the Earnout Payments. 
  

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 “Fourth Earnout Payment” shall mean additional consideration in an amount equal to the
lesser of (i) $*******, minus the aggregate amount (if any) paid to Seller in respect of the Earnout Payments, and (ii) the amount by which Purchaser’s ******** exceeds $****** after deduction of *****. The Fourth Earnout Payment
shall be payable in cash and Common Stock, as follows: (i) cash in an amount equal to *********; and (ii) a number of shares of Common Stock equal to (x) *******, divided by (y) the then applicable Average Price. 
 “Fourth Earnout Period” shall mean the period commencing on the Closing Date and ending on December 31, 2010. 
 “GAAP” shall mean generally accepted accounting principles as applied in the United States. 
 “Governmental Body” shall mean any: (a) nation, principality, state, commonwealth, province, territory, county, municipality,
district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental division, subdivision, department,
agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or entity and any court or other tribunal); (d) multi-national organization or body; or
(e) individual, entity or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature. 
 “Governmental Order” shall have the meaning ascribed to it in Section 3.15(b) of this Agreement. 
 “Hazardous Substances” means any materials, substances or wastes defined by, or regulated under, any Environmental Law as a hazardous
waste, hazardous material, hazardous substance, extremely hazardous waste, restricted hazardous waste, contaminant, pollutant, toxic waste, or toxic substance, including, without limitation, petroleum, petroleum products, asbestos, urea
formaldehyde, radioactive materials, polychlorinated biphenyls (“PCBs”) and toxic mold. 
 “Healthcare
Laws” shall mean, without limitation, the administrative simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. §§ 1320d-1320d-8), the Medicare Prescription Drug, Improvement
and Modernization Act of 2003, Medicare (Title XVIII of the Social Security Act), Medicaid (Title XIX of the Social Security Act), Medicare rules governing the operation of independent diagnostic testing facilities at 42 C.F.R.
§ 410.33, Medicare rules governing the supervision of diagnostic testing, all Medicare standards for reimbursement of diagnostic tests, the prohibition on the mark-up of purchased diagnostic test, and all other Medicare, Medicaid, and
other governmental program guidance, the regulations promulgated pursuant to such laws, and any other state or federal law, regulation, guidance document, manual provision, program memorandum, opinion letter, or other issuance which regulates
patient or program charges, recordkeeping, referrals, the hiring of employees or acquisition of services or supplies from those who have been excluded from government health care programs, quality, safety, privacy, security, licensure,
accreditation, or provider credentialing, and any governmental orders or authorizations related thereto. 
  

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 “Hired Employees” shall have the meaning set forth in Section 5.7(a) of this
Agreement. 
 “Indemnified Party” shall have the meaning set forth in Section 9.3(a) of this Agreement. 
 “Indemnifying Party” shall have the meaning set forth in Section 9.3(a) of this Agreement. 
 “Intellectual Property Rights” shall mean all (a) United States and foreign patents and patent applications and disclosures
relating thereto (and any patents that issue as a result of those patent applications), and any renewals, reissues, reexaminations, extensions, continuations, continuations-in-part, divisions and substitutions relating to any of the patents and
patent applications, as well as all related foreign patent and patent applications that are counterparts to such patents and patent applications; (b) United States and foreign trademarks, service marks, trade dress, logos, trade names and
corporate names, whether registered or unregistered, and the goodwill associated therewith, together withy any registrations and applications for registration therefore; (c) United States and foreign copyrights and rights under copyrights,
whether registered or unregistered, including moral rights, and any registrations and applications for registration therefore; (d) United States and foreign mask work rights and registrations and applications for registration thereof;
(e) rights in databases and data collections (including knowledge databases, customer lists and customer databases) under the laws of the United States or any other jurisdiction, whether registered or unregistered, and any applications for
registration therefor; (f) trade secrets and other rights in know-how and confidential or proprietary information (including any business plans, designs, technical data, customer data, financial information, pricing and cost information, bills
of material, or other similar information); (g) URL and domain name registrations; (h) inventions (whether or not patentable) and improvements thereto; (i) all claims and causes of action arising out of or related to infringement or
misappropriation of any of the foregoing and (j) other proprietary or intellectual property rights now known or hereafter recognized in any jurisdiction. 
 “Inventory” shall mean all of the Seller’s inventory held for sale or otherwise in connection with the operation of the Business, and all of the Seller’s raw materials, work in process,
finished products, supply and packaging items and similar items, with respect to the Business, in each case wherever the same may be located. 
 “IRS” shall have the meaning set forth in Section 3.18(f) of this Agreement. 
 “Kickback
Laws” shall mean, without limitation, the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)), the Stark Law (42 U.S.C. § 1395nn), the Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)), the civil False
Claims Act (31 U.S.C. § 3729 et seq.), the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), the exclusion laws (42 U.S.C. § 1320a-7), and the civil monetary penalty laws (42 U.S.C. § 1320a-7a), any
state law that regulates kickbacks or physician self-referral and the regulations promulgated pursuant to such laws. 
  

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 “Knowledge” shall mean, with respect to any party, the actual knowledge of such
party’s officer, director or key employee with respect to any fact, circumstance, event or other matter in question, after reasonable inquiry by such party. 
 “Leased Equipment” means those equipment leases of the Seller currently in effect as of the Closing Date. 
 “Leased Real Property” shall mean all leased property described in the Leases related to Facilities. 
 “Leasehold Estates” shall mean all of the Seller’s rights and obligations under the Leases. 
 “Leasehold Improvements” shall mean all leasehold improvements situated in or on the Leased Real Property and owned by the Seller. 
 “Leases” shall mean all of the existing leases, subleases, occupancy agreements, options, rights, concessions or other agreements or arrangements with respect to the personal or real property of the
Seller related to the Business. 
 “Liens” shall have the meaning as set forth in Section 3.20 of this Agreement.

 “Liabilities” shall mean any direct or indirect liability, indebtedness, obligation, commitment, expense, claim,
deficiency, guaranty or endorsement of or by any Person of any type, known or unknown, and whether accrued, absolute, contingent, matured, unmatured or other. 
 “March Balance Sheet” shall have the meaning set forth in Section 3.10(b) of this Agreement. 
 “March Inventory” shall have the meaning set forth in Section 3.10(c) of this Agreement. 
 “Material
Adverse Effect” or “Material Adverse Change” shall mean any event, change or effect that, when taken individually or together with all other adverse events, changes or effects has had, or reasonably would be expected to
have, a material adverse effect or change on the Seller, the Business, the Purchased Assets or on the ability of the Seller to consummate the transactions contemplated hereby; provided, however, that the terms “Material Adverse
Effect” and “Material Adverse Change” shall not include any such effect resulting from general economic or industry conditions that did not disproportionately affect the Seller, the Business or the Purchased Assets or any occurrence
or condition arising out of the transactions contemplated by this Agreement or the public announcement thereof. 
 “Material
Contracts” shall have the meaning set forth in Section 3.5(b) of this Agreement. 
  

 -10- 

 “Multiemployer Plan” shall have the meaning set forth in Section 3.18(c) of this
Agreement. 
 “Notice of Claim” shall have the meaning set forth in Section 9.1(b) of this Agreement. 
 “Notice of Disagreement” shall have the meaning set forth in Section 2.6(e) of this Agreement. 
 “Operating Site” shall have the meaning set forth in the definition of Pre-Closing Environmental Matters. 
 “Ordinary Course of Business” or “Ordinary Course” or any similar phrase shall mean the ordinary course of the
Business, consistent with the Seller’s past practice. 
 “Parent” shall have the meaning set forth in the preamble of
this Agreement. 
 “PCBs” shall have the meaning set forth in the definition of Hazardous Substances. 
 “Permits” shall mean all licenses, permits, franchises, approvals, authorizations, consents or orders of, or filings with, any
Governmental Body, whether foreign, federal, state or local, or any other Person, necessary or desirable for the past, present or anticipated conduct of, or relating to the operation of, the Business. 
 “Person” shall mean any person or entity, whether an individual, trustee, corporation, partnership, limited partnership, limited
liability company, trust, unincorporated organization, business association, firm, joint venture, or Governmental Body. 
 “Post-Closing Statement” shall have the meaning set forth in Section 2.6(d) of this Agreement. 
 “Pre-Closing Environmental Matters” shall mean (a) the presence as of or prior to the Closing Date of Hazardous Substances in, on or under any Real Property or Facilities conveyed by Seller to Purchaser pursuant to
this Agreement (an “Operating Site”); (b) the production, use, generation, storage, treatment, transportation, recycling, Release or other handling or disposition of any kind at any time on or prior to the Closing Date of any
Hazardous Substances, either in, on, from or under any Operating Site; (c) any Environmental Exposure Claim or other Environmental Claim against the Seller or Purchaser relating to or arising out of any act, omission or occurrence taken by or
on behalf of the Seller or any of its predecessors (or Affiliate of the Seller or any of its predecessors), or otherwise occurring, on or prior to the Closing Date; (d) any failure on or prior to the Closing Date of the Seller or any Operating
Site to be in compliance with any Environmental Law; (e) any Environmental Claim or Liability pursuant to Environmental Law at or otherwise related to any third party location to which the Seller sent, or caused to be sent, Hazardous Materials
or to any real property currently or formerly owned or leased by or used, by the Seller but that is not an Operating Site; and (f) any other act, omission or occurrence of the Seller or any of its 

  

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predecessors (or Affiliate of the Seller or any of its predecessors) prior to the Closing Date that gives rise to Liability or potential Liability to the
Purchaser under any Environmental Law, Environmental Claim or Environmental Exposure Claim. 
 “Pre-Closing Healthcare Regulatory
Matters” shall mean, without limitation: (i) any violation of, or non-compliance with, Healthcare Laws, Kickback Laws and any regulations related thereto; and (ii) any other act, omission or occurrence of the Seller or any of its
predecessors (or Affiliate of the Seller or any of its predecessors), prior to or on the Closing Date that give rise to Liability or potential Liability to the Purchaser under any Healthcare Laws or Kickback Laws. 
 “Pre-Closing Tax Periods” shall mean those periods of taxation prior to the Closing Date. 
 “Preliminary Statement” shall have the meaning set forth in Section 2.6(a) of this Agreement. 
 “Principal Stockholder” shall have the meaning set forth in the preamble of this Agreement. 
 “Protective Covenant Agreement” shall have the meaning ascribed to it as set forth in Section 5.8 of this Agreement. 
 “Purchase Price” shall mean the sum of (x) the Cash Consideration, as adjusted pursuant to the Escrow Agreement and
Sections 2.4 and 2.6 of this Agreement, plus (y) the aggregate Earnout Payments payable to Seller pursuant to this Agreement. 
 “Purchased Assets” shall have the meaning set forth in Section 2.1 of this Agreement. 
 “Purchaser
Indemnified Parties” shall have the meaning set forth in Section 9.2(a) of this Agreement. 
 “Purchaser”
shall have the meaning set forth in the preamble to this Agreement. 
 “Real Property” shall mean all real property owned or
leased by or used, by the Seller in connection with the Business, together with all buildings, improvements, fixtures, easements, licenses, options, insurance proceeds and condemnation awards and all other rights of the Seller in or appurtenant
thereto. 
 “Regulations” shall mean any laws, statutes, ordinances, regulations, rules, notice requirements, court
decisions, agency guidelines, principles of law and orders of any foreign, federal, state or local government and any other Governmental Body, and including without limitation Environmental Laws, Healthcare Laws, Kickback Laws, laws governing
radioactive materials, energy, motor vehicle safety, public utility, zoning, building and health codes, occupational safety and health regulations, medical licensure regulations, ant-kickback regulations, regulations of federal and state healthcare
industry regulatory organizations and laws respecting employment practices, employee documentation, terms and conditions of employment and wages and hours. 
  

 -12- 

 “Release” means any actual or threatened spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing, abandoning or migrating into the environment. 
 “Representative” with respect to any Person shall mean any officer, director, principal, attorney, agent, employee or other representative of such Person. 
 “Requisite Stockholder Approval” shall mean the approval of a majority of the holders of Seller’s capital stock. 
 “Second Earnout Milestone” refers to Purchaser’s achieving EBITDA of at least $***** during the Second Earnout Period, after
deducting the aggregate amount (if any) paid to Seller as of December 31, 2008 in respect of the Earnout Payments. 
 “Second
Earnout Payment” shall mean additional consideration in an amount equal to the lesser of (i) $******, minus the aggregate amount (if any) paid to Seller in respect of the ******, and (ii) the amount by which Purchaser’s
*******after deduction of the aggregate amount (if any) paid to Seller during such period in respect of ******. The Second Earnout Payment shall be payable in cash and Common Stock, as follows: (i) cash in an amount equal to ******; and
(ii) a number of shares of Common Stock equal to (x) ***** of the total dollar value of the *****, divided by (y) the then applicable Average Price. 
 “Second Earnout Period” shall mean the period commencing on the Closing Date and ending on December 31, 2008. 
 “Seller Indemnified Parties” shall have the meaning set forth in Section 9.2(b) of this Agreement. 
 “Seller’s Counsel” shall mean Troutman Sanders LLP. 
 “Seller” shall
have the meaning set forth in the preamble of this Agreement. 
 “Software” shall mean computer software, programs and
databases in any form, including Internet web sites, web content and links, source code, executable code, tools, developers kits, utilities, graphical user interfaces, menus, images, icons and forms, and all versions, updates, corrections,
enhancements and modifications thereof, and all related documentation, developer notes, comments and annotations related thereto. 
 “Straddle Period Tax” shall have the meaning set forth in Section 5.6(c) of this Agreement. 
  

 -13- 

 “Subsidiary” of a Person shall mean any other Person more than 50% of the voting stock
(or of any other form of other voting or controlling equity interest in the case of a Person that is not a corporation) of which is beneficially owned by the Person directly or indirectly through one or more other Persons. 
 “Tax Returns” shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment thereof. 
 “Tax” or “Taxes”
shall mean (i) any and all U.S. federal, state, local and non-U.S. taxes, assessments and other governmental charges, duties, impositions and liabilities, including taxes based upon or measured by gross receipts, income, profits, sales, use and
occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes (including personal and real property taxes), together with all interest, penalties and additions imposed with
respect to such amounts, (ii) any liability for the payment of any amounts of the type described in clause (i) of this definition as a result of being a member of an affiliated, consolidated, combined or unitary group for any period, and
(iii) any liability for the payment of any amounts of the type described in clauses (i) or (ii) of this definition as a result of any express or implied obligation to indemnify any other person or as a result of any obligations under
any agreements or arrangements with any other person with respect to such amounts and including any liability for taxes of a predecessor or transferor entity. 
 “Technology” shall mean tangible embodiments of Intellectual Property Rights, whether in electronic, written or other media, including Software, technical documentation, specifications, “recipe
books,” designs, bills of material, build instructions, test reports, schematics, algorithms, user interfaces, routines, formulae, test vectors, IP cores, net lists, photomasks, databases, lab notebooks, processes, prototypes, samples, studies
or other know-how and other works of authorship. 
 “Third Earnout Milestone” refers to Purchaser’s achieving EBITDA of
at least $******* during the Third Earnout Period, after deducting the aggregate amount (if any) paid to Seller as of December 31, 2009 in respect of the Earnout Payments. 
 “Third Earnout Payment” shall mean additional consideration in an amount equal to the lesser of (i) $*******, minus the aggregate
amount (if any) paid to Seller in respect of the *******, and (ii) the amount by which Purchaser’s ******* after deduction of the aggregate amount (if any) paid to Seller during such period in respect of the *******. The Third Earnout
Payment shall be payable in cash and Common Stock, as follows: (i) cash in an amount equal to **********; and (ii) a number of shares of Common Stock equal to (x) ******** of the total dollar value of the **********, divided by
(y) the then applicable Average Price. 
 “Third Earnout Period” shall mean the period commencing on the Closing Date
and ending on December 31, 2009. 
  

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 “Third Party Claim” shall have the meaning set forth in Section 9.6 of this
Agreement. 
 “Threshold Amount” shall have the meaning set forth in Section 9.7(a) of this Agreement. 
 “Total Revenue” shall mean the aggregate net revenues including, but not limited to adjustments and offsets from all sources for the
applicable period, calculated in accordance with GAAP as then currently applied by Parent. 
 “Transfer Taxes” shall have
the meaning set forth in Section 2.5 of this Agreement. 
 “Treasury Regulations” shall mean the Treasury Regulations
promulgated under the Code. 
 “University Agreement” means an agreement by and between Purchaser and/or DIS on the one hand
and ******* on the other hand, pursuant to which ****** through appropriate affiliated medical personnel and/or facilities agrees to provide to Purchaser’s and/or DIS’s physician customers professional interpretations of nuclear ultrasound
images and reasonable and customary related services. 
 “Unresolved Claims” shall have the meaning set forth in
Section 9.5(a) of this Agreement. 
 “*****” means ********* and affiliated institutions and organizations. 

“Vehicles” means a 2003 Ford Excursion with Vehicle Identification Number of 1FMSU45P73ED20509 and a Chevrolet Express with Vehicle
Identification Number of 1GCGG25V661221583. 
 “Working Capital” shall have the meaning set forth in Section 2.6(b) of
this Agreement. 
 ARTICLE II. 
 PURCHASE AND SALE OF ASSETS 
 2.1 Transfer of Assets. Upon the terms and subject to the conditions
contained in this Agreement, at the Closing, the Seller, pursuant to a Bill of Sale substantially in the form of Exhibit E hereto (the “Bill of Sale”), shall sell, convey, transfer, assign and deliver to the Purchaser,
and the Purchaser shall acquire from the Seller, free and clear of all Encumbrances, all of the Seller’s right, title and interest in and to the properties and assets and rights of any kind, whether tangible or intangible, real or personal,
used in or related to the Business (collectively, the “Purchased Assets”), including, but not limited to: 
 (a) all
accounts and notes receivable (whether current or noncurrent), refunds, deposits, prepayments or prepaid expenses (including without limitation any prepaid insurance premiums) of the Business; 
  

 -15- 

 (b) all of the Seller’s rights under the Contracts (the “Contract Rights”);

 (c) all of the fixed assets related to the Business within the Seller’s Facilities and any services or maintenance Contracts with
Customers of the Business and any Software used to operate equipment used in the Business; 
 (d) the Seller’s rights under the Leases;

 (e) Leasehold Improvements; 
 (f) the Seller’s right to enforce the Settlement and Release Agreement by and between the Seller and Matthew G. Molchan dated as of April 30, 2007 and attached hereto as Exhibit K (the “Molchan Settlement
Agreement”); 
 (g) Inventory; 
 (h) all furniture, fixtures and equipment related to the Business within the Seller’s Facilities; 
 (i) Backlog; 
 (j) books and records related to the Business, the Purchased Assets or the Assumed Liabilities; 
 (k) the supplies, sales literature, catalogues, brochures, promotional literature, customer, supplier and distributor lists, art work, other marketing
materials, telephone and fax numbers and purchasing records related to the Business; 
 (l) all Seller’s right, title and interest in
the name “Ultrascan”, any trade names, trade dress, designs and marketing materials currently in use by the Seller, and the “www.ultrascaninc.com” web site including the image and likeness of Hilie King; 
 (m) the Seller’s insurance policies with respect to the Business, to the extent assignable; 
 (n) all claims, causes of action, choses in action, rights of recovery and rights of set-off of any kind, against any Person, including, without
limitation, any liens, security interests, pledges or other rights to payment or to enforce payment in connection with products or services delivered by the Seller with respect to the Business on or prior to the Closing Date; and 
 (o) any and all instruments and documents relating to any of the foregoing. 
  

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 2.2 Excluded Assets. Notwithstanding the foregoing, there shall be excluded from the
Purchased Assets and not transferred to the Purchaser, and to the extent in existence on the Closing Date, there shall be retained by the Seller, the assets related to the Business set forth on Exhibit F hereto or otherwise specified by
the Purchaser prior to the Closing (the “Excluded Assets”). 
 2.3 No Assumption of Liabilities. Notwithstanding
any provision in this Agreement or any of the other Ancillary Agreements to the contrary, the Purchaser shall not assume any Liabilities of the Seller (or any predecessor owner of all or part of the Seller’s business and assets), including,
without limitation, any Taxes of Seller (including any liability for Taxes arising from or attributable to Seller’s operation of the Business or use or ownership of the Purchased Assets for all Pre-Closing Tax Periods, and including any
Transfer Taxes and Straddle Period Taxes attributable to Seller pursuant to this Agreement), liabilities arising from the merger or other combination of Ultrascan, Inc. and Ultrascan of Macon, Inc., liabilities arising from the failure to pay
employee overtime or any other such employee matter, any such Liabilities related to any Pre-Closing Environmental Matters, Pre Closing Healthcare Regulatory Matters, operating lease obligations, Employee Loans or any Liabilities of any Employee
Plan, except the payment of up to $1,500,000 of any commercial debt of Seller to Gwinnett Community Bank and the lease pay out obligations for the Vehicles (the “Commercial Debt”), and other liabilities of the Seller that have been
agreed to by Purchaser, all as set forth on Exhibit G hereto (the “Assumed Liabilities”). All such non-assumed Liabilities shall be retained by and remain Liabilities of the Seller. Purchaser shall not assume any
operational lease obligations of the Seller except for the Assumed Operational Lease Obligations set forth on Exhibit G-1 hereto. All such non-assumed operational lease obligations shall be retained by and remain liabilities and obligations
of the Seller. 
 2.4 Purchase Price. As consideration for the sale, assignment, transfer, conveyance and delivery of the
Purchased Assets to the Purchaser: 
 (a) Closing Payment. At the Closing, Purchaser shall pay to Seller cash in the amount of
$******, by wire transfer of immediately available funds to account numbers provided to the Purchaser by the Seller prior to the Closing (the “Closing Payment”). 
 (b) Closing Escrow Fund. Effective as of Closing, Parent, DIS, Purchaser, Seller and the Escrow Agent are entering into the Escrow Agreement
substantially in the form attached hereto as Exhibit H (the “Escrow Agreement”). Notwithstanding anything to the contrary set forth in this Agreement, at the Closing, Parent shall deposit with the Escrow Agent
(i) cash in the amount of $***** (the “Closing Escrow Amount”) and (ii) cash in the amount of $******* (the “****** Escrow Amount,”). The Escrow Agent shall hold the Closing Escrow Amount and the ******
Escrow Amount in an account (the “Closing Escrow Fund”). The Escrow Agent shall hold the Closing Escrow Amount as security for Seller’s indemnification obligations under Article IX. All interest earned on the Closing
Escrow Fund shall inure to the benefit of the Seller. If not paid to Parent in connection with the indemnification obligations owed to any Parent Indemnified Party, the failure to execute the *******, the failure to obtain the *******, or to cover
Taxes, any income and gains of the Closing Escrow Fund shall ultimately be distributable to the Seller in accordance with this Agreement and the Escrow Agreement. 
  

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 (c) Earnout Payments. In addition to the Cash Consideration and subject to the terms and
conditions of this Agreement, Purchaser shall pay to Seller the Earnout Payments, as follows: 
 (i) If all of the First Earnout Milestones
are achieved, Purchaser shall deliver the First Earnout Payment to Seller within sixty (60) days after the first anniversary of the Closing Date; provided that Seller shall be entitled to receive no portion of the First Earnout Payment
if any one of the First Earnout Milestones is not achieved, but, in such event, Seller will remain eligible to receive the Second Earnout Payment, Third Earnout Payment, Fourth Earnout Payment and Fifth Earnout Payment, subject in each case to the
terms and conditions contemplated herein. 
 (ii) If the Second Earnout Milestone is achieved, Purchaser shall deliver the Second Earnout
Payment to Seller within sixty (60) days after December 31, 2008. 
 (iii) If the Third Earnout Milestone is achieved, Purchaser
shall deliver the Third Earnout Payment to Seller within sixty (60) days after December 31, 2009. 
 (iv) If the Fourth Earnout
Milestone is achieved, Purchaser shall deliver the Fourth Earnout Payment to Seller within sixty (60) days after December 31, 2010. 
 (v) If the Fifth Earnout Milestone is achieved, Purchaser shall deliver the Fifth Earnout Payment to Seller within sixty (60) days after April 30, 2011. 
 (d) The Purchase Price (plus Assumed Liabilities to the extent properly taken into account under the Code and the applicable Treasury Regulations),
shall be allocated among the Purchased Assets as reasonably agreed to by the Seller and the Purchaser (the “Allocation”) within sixty (60) days of the Closing Date. The Seller and the Purchaser agree to (i) be bound by the
Allocation; (ii) act in accordance with the Allocation in the preparation of financial statements and filing of all Tax Returns (including, without limitation, filing Form 8594 with their United States federal income Tax Return for the taxable
year that includes the date of the Closing) and in the course of any Tax audit, Tax review or Tax litigation relating thereto and (iii) take no position and cause their Affiliates to take no position inconsistent with the Allocation for income
Tax purposes, including United States federal and state income Tax and foreign income Tax. Not later than thirty (30) days prior to the filing of their respective Forms 8594 relating to this transaction, each party shall deliver to the other
party a copy of its Form 8594. 
 2.5 Closing Costs; Transfer Taxes; Fees and Expenses. Notwithstanding any other provision of
this Agreement, the Seller shall be responsible for any documentary and transfer taxes and any sales, use or other taxes imposed by reason of the transfers of Purchased Assets provided hereunder and any deficiency, interest or penalty asserted with
respect thereto (“Transfer Taxes”). The parties hereto shall cooperate, to the extent reasonably requested and permitted by applicable 

  

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law, in minimizing any such Transfer Taxes, including but not limited to the transfer by remote electronic transmission of all Purchased Assets capable of
being so transmitted. The party required by law to file a Tax Return with respect to such Transfer Taxes shall do so within the time period prescribed by law, and Seller shall promptly reimburse the Purchaser for any Transfer Taxes so paid by the
Purchaser upon receipt of notice that such Transfer Taxes have been paid. The Seller shall pay the premium for a leasehold policy of title insurance with regard to each material parcel of Leased Real Property, in an amount and in a form acceptable
to the Purchaser. Except as expressly provided otherwise in this Agreement, each party to this Agreement shall bear its own costs, fees and expenses incurred in connection with the negotiation and preparation of this Agreement and the consummation
of the transactions contemplated by this Agreement and the Ancillary Agreements. 
 2.6 Purchase Price Adjustment 
 (a) Delivery of Preliminary Statement. Not later than three (3) Business Days prior to the Closing Date, the Seller shall deliver to the
Purchaser a certificate (the “Preliminary Statement”) setting forth the Seller’s estimate of the Working Capital as of the close of business on the Closing Date (the “Estimated Working Capital”). The
Preliminary Statement shall be certified and signed by an authorized officer of the Seller and shall be prepared in accordance with the requirements of this Section 2.6. 
 (b) Working Capital. “Working Capital” shall mean those line items comprising the current assets to be acquired by Purchaser,
calculated on a GAAP basis, of the Business minus those line items comprising the current liabilities of the Business to be assumed by Purchaser (excluding the Commercial Debt), in each case, as set forth on Exhibit J hereto. Without
limiting the generality of the foregoing, Working Capital is to be calculated in the same way, using the same methodologies and accounting practices and principles applied on a consistent basis (including with respect to determining estimates and
allowances) as the line items comprising Working Capital as set forth on Exhibit I. 
 (c) Initial Purchase Price
Adjustment. At the Closing, the Purchase Price and the Cash Consideration shall be (i) increased, dollar for dollar, by the amount by which the Estimated Working Capital exceeds the Working Capital (the “Benchmark”) or
(ii) decreased, dollar for dollar, by the amount by which the Estimated Working Capital is less than the Benchmark. 
 (d)
Post-Closing Statement. Within ninety (90) calendar days after the Closing Date, the Purchaser shall prepare and deliver to the Seller a statement (the “Post-Closing Statement”) setting forth its calculation of the
Working Capital as of the close of business on the Closing Date (the “Final Working Capital”). The Post-Closing Statement shall be prepared in accordance with the requirements of this Section 2.6. 
 (e) Disputes. During the thirty- (30)-calendar-day period following receipt of the Post-Closing Statement, the Seller and its Representatives
shall be permitted to review the books, records, working papers and all other information and materials relating to the Post-Closing Statement, and the Purchaser shall cooperate with the Seller to provide it and its Representatives with access to
facilities and personnel (including those responsible for the 

  

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preparation of the Post-Closing Statement) and any other information used in preparing the Post-Closing Statement reasonably requested by them. The
Post-Closing Statement shall become final and binding on the thirtieth (30th) calendar day following the
Seller’s receipt thereof, provided the Purchaser has reasonably cooperated as provided above, unless the Seller gives written notice of its disagreement with the Post-Closing Statement (a “Notice of Disagreement”) to the
Purchaser on or prior to such date. Any Notice of Disagreement shall specify the nature of any disagreement so asserted. If a Notice of Disagreement is received by the Purchaser in a timely manner, then the Post-Closing Statement (as revised in
accordance with this sentence) shall become final and binding on the earlier of (i) the date on which the Purchaser and the Seller resolve in writing any differences they have with respect to the matters specified in the Notice of Disagreement
or (ii) the date on which any disputed matters are finally resolved in writing by the Accounting Firm (as defined below). During the fifteen-(15)-calendar-day period following the delivery of a Notice of Disagreement, the Purchaser and the
Seller shall seek in good faith to resolve in writing any differences that they may have with respect to the matters specified in the Notice of Disagreement. If such dispute has not been resolved by the end of such fifteen-(15)-calendar-day period,
the Purchaser and the Seller shall escalate the dispute to their respective Chief Financial Officers or similar level executives who shall consider the dispute in a mutually agreeable location and shall attempt in good faith to resolve the dispute.
If such officers are unable to resolve such dispute within ten (10) calendar days, the Purchaser and the Seller shall submit for arbitration any and all matters that remain in dispute and were properly included in the Notice of Disagreement to
Ernst & Young, LLP in Atlanta, Georgia (or such other nationally recognized independent firm that is mutually agreed upon by the Purchaser and the Seller) (the “Accounting Firm”) for arbitration by a mutually acceptable
partner of the Accounting Firm (provided that if either party shall reasonably discover a conflict of interest associated with Ernst & Young, LLP, the parties shall retain Deloitte & Touche USA LLP to act as the Accounting
Firm). The Purchaser and the Seller shall retain the Accounting Firm no later than five (5) Business Days following the expiration of such ten-(10)-calendar-day period. In the event of a failure to retain the Accounting Firm during such time
period, either the Purchaser or the Seller, acting individually, shall have the right to retain the Accounting Firm on behalf of both the Purchaser and the Seller. The Purchaser and the Seller shall use their commercially reasonable efforts to cause
the Accounting Firm to render a decision resolving any matters submitted to the Accounting Firm within thirty (30) calendar days following submission thereof. Judgment may be entered upon the determination of the Accounting Firm in any court
having jurisdiction over the party against which such determination is to be enforced. Without limiting the generality of the foregoing, the Purchaser and the Seller shall each promptly provide, or cause to be provided, to the Accounting Firm all
information, and to make available to the Accounting Firm all personnel, as are reasonably necessary to permit the Accounting Firm to resolve any disputes pursuant to this Section 2.6. The fees and expenses of the Accounting Firm and reasonable
attorneys’ fees and expenses of the parties pursuant to this Section 2.6(e) shall be borne by the Purchaser and the Seller proportionately based on which party’s position was closest to the determination of the Accounting Firm. The
scope of the disputes to be resolved by the Accounting Firm, and the scope of the Accounting Firm’s review, shall be limited to disputes concerning whether such calculation was performed in accordance with the guidelines set forth in this
Section 2.6, whether or not there were errors in the Post-Closing Statement and the other matters specifically set forth in this Section 2.6(e), and the Accounting Firm shall not make any other determination. The date on which the Final
Working Capital is finally determined in accordance with this Section 2.6(e) is hereinafter referred to as the “Determination Date.” 
  

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 (f) Final Purchase Price Adjustment. The “Adjustment Amount” shall equal the
Final Working Capital minus the Estimated Working Capital, which may be positive or negative. If the Adjustment Amount is a positive number, then the Purchase Price shall be increased by the absolute value of the Adjustment Amount, and if the
Adjustment Amount is a negative number, then the Purchase Price shall be decreased by the absolute value of the Adjustment Amount. 
 (i) If
the Adjustment Amount is a positive number then, promptly following the Determination Date, and in any event within five (5) Business Days thereafter, the Purchaser shall pay to the Seller the Adjustment Amount, as finally determined, plus
interest on the Adjustment Amount from the Closing Date to the date of payment at the “Prime Rate” of interest published in the “Money Rates” column of The Wall Street Journal (or the average of such rates if more than one
rate is indicated) on the Closing Date. 
 (ii) If the Adjustment Amount is a negative number then, promptly following the Determination
Date, and in any event within five (5) Business Days thereafter, the Seller shall pay to the Purchaser an aggregate amount equal to the absolute value of the Adjustment Amount, as finally determined, plus interest on the absolute value of the
Adjustment Amount from the Closing Date to the date of payment at the “Prime Rate” of interest published in the “Money Rates” column of The Wall Street Journal (or the average of such rates if more than one rate is
indicated) on the Closing Date. 
 (iii) Notwithstanding the foregoing, upon the final determination of Final Working Capital and after the
Closing Date, to the extent that any portion of the Assumed Liabilities constituting payroll liabilities or non-payroll liabilities reflected on the Post-Closing Statement is not transferable to, or able to be assumed by, the Purchaser under
applicable Regulations or otherwise (such Assumed Liabilities, the “Nontransferable Liabilities”), to the extent that such Liabilities remain Liabilities of the Seller after the Closing Date, then the Purchaser shall remit to the
Seller an amount of cash equal to the amount of such Nontransferable Liabilities at such time as the Adjustment Amount is paid by the Seller or the Purchaser, as the case may be. To the extent that an Adjustment Amount is not payable pursuant to
this Section 2.6(f), then the Purchaser shall reimburse the Seller for any Nontransferable Liabilities within five (5) Business Days following the Determination Date. 
 2.7 Closing. Subject to the satisfaction or waiver of the conditions set forth in
Articles VI and VII of this Agreement, the closing of the sale of the Purchased Assets to the Purchaser and the other transactions contemplated by this Agreement and the Ancillary Agreements (the “Closing”) shall take place by the
electronic exchange of signature pages, at a time to be agreed upon by the Purchaser and the Seller, on a date (no later than the fifth (5th) Business Day following the satisfaction or waiver of the last to be satisfied or waived of the conditions set forth in Articles VI and VII of this Agreement) to be agreed upon by the Purchaser and the Seller (the
“Closing Date”). 
  

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 ARTICLE III. 
 REPRESENTATIONS AND WARRANTIES OF THE SELLER AND 
 PRINCIPAL STOCKHOLDER

 As an inducement to Parent, DIS and Purchaser to enter into this Agreement, except as set forth in the appropriate section of the
Disclosure Schedule, the Seller, the Seller’s Subsidiaries and Principal Stockholder hereby represent and warrant to the Purchaser, as of the date hereof and as of the Closing, as follows: 
 3.1 Organization of the Seller. The Seller is a corporation duly organized and validly existing under the laws of the State of Georgia with
full corporate power and corporate authority to conduct its business as it is presently being conducted, to own or lease, as applicable, its Real Property and the Purchased Assets, and to perform all its obligations under the Contracts to which it
is a party. The Seller is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where the character of its properties owned or leased or the nature of its activities make such qualification necessary,
except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. Copies of the Articles of Incorporation and Bylaws of the Seller heretofore delivered to the Purchaser are accurate and complete as of the date
hereof. 
 3.2 Authorization. The Seller has all requisite power and authority to execute, deliver and perform this Agreement,
the Ancillary Agreements and the Molchan Settlement Agreement to which it is a party, to consummate the transactions contemplated hereby and thereby and to perform its obligations hereunder and thereunder. The execution and delivery of this
Agreement, the Ancillary Agreements and the Molchan Settlement Agreement by the Seller, and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly approved by the board of directors of the Seller. This
Agreement has been duly executed and delivered by the Seller and is, and upon execution and delivery of the Ancillary Agreements, this Agreement, the Ancillary Agreements and the Molchan Settlement Agreement to which the Seller is a party will be,
the legal, valid and binding obligations of the Seller, enforceable against the Seller in accordance with their terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting
enforcement of creditor’s rights generally and except insofar as the availability of equitable remedies may be limited by applicable Regulations. 
 3.3 Title to Purchased Assets; Condition of Purchased Assets. The Seller has, and will transfer to the Purchaser, sole ownership of (and, in the case of Real Property, good and marketable title to or valid
leasehold interests in) each of the Purchased Assets and upon the consummation of the transactions contemplated hereby, the Purchaser will acquire sole ownership of (and, in the case of Real Property, good and marketable title to or valid leasehold
interests in) all of the Purchased Assets, free and clear of any Encumbrances. All tangible assets and properties which are part of the Purchased Assets are in good operating condition and repair, normal wear and tear excepted, and are usable in the
Ordinary Course of Business as currently conducted. Section 3.3 of the Disclosure Schedule sets forth a list of all tangible Purchased Assets as of the date of this Agreement. 
  

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 3.4 Absence of Certain Changes or Events. Except as set forth in Section 3.4 of the
Disclosure Schedule, since December 31, 2006, there has not been any: 
 (a) Material Adverse Change; 
 (b) sale, assignment or transfer of any of the assets of the Seller related to the Business, singly or in the aggregate, other than sales, assignments
or transfers from Inventory in the Ordinary Course of Business; 
 (c) waiver of any rights of substantial value to the Seller with respect
to the Business; 
 (d) amendment, cancellation or termination of any Contract or Permit material to the operation of the Business;

 (e) capital expenditure or execution of any lease relating to the Business or any incurring of $***** in the aggregate relating to the
Business; 
 (f) failure to pay any material obligation related to the Business except those contested in good faith and for which proper
reserves have been made; 
 (g) failure to operate the Business in the Ordinary Course so as to use reasonable efforts to preserve the
Purchased Assets and the Business intact and to preserve the goodwill of suppliers, customers, employees and others having business relations with the Seller or its Representatives with respect to the Business, including, without limitation,
continuing to invest in maintenance and ordinary course capital expenditures for the manufacturing Facility and related equipment; 
 (h)
change in accounting methods or practices by the Seller with respect to the Business; 
 (i) revaluation of any of the Purchased Assets,
including without limitation, writing off notes or accounts receivable other than (i) for which reserves have been established or (ii) in the Ordinary Course of Business; 
 (j) damage, destruction or loss (whether or not covered by insurance) adversely affecting the Purchased Assets or the operation of the Business;

 (k) creation of a new Encumbrance against any of the Purchased Assets, singly or in the aggregate; 
 (l) indebtedness incurred by the Seller for borrowed or purchase money or any commitment to borrow money entered into by the Seller, or any loans made
or agreed to be made by the Seller, in each case, with respect to the Business; 
  

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 (m) any Liability incurred by the Seller with respect to the Business except in the Ordinary Course of
Business; 
 (n) any change in any assumptions underlying or methods of calculating any bad debt, contingency or other reserves with respect
to the Business; 
 (o) acquisition of any interest in any other business entity by the Seller that is engaged in the same business as the
Business; 
 (p) except in the Ordinary Course of Business consistent with past practice, increase in, or promise to increase, compensation
or benefits payable to or to become payable to any employees, officers or directors of the Seller relating to the Business, any amendment to any Employee Plans that would materially increase the cost thereof, or establishment of any new Employee
Plans; 
 (q) other event or condition of any character which in any one case or in the aggregate has had or might be reasonably expected to
have a Material Adverse Effect; or 
 (r) agreement by the Seller or any of its Affiliates to do any of the foregoing. 
 3.5 Material Contracts.
 (a)
Section 3.5 of the Disclosure Schedule lists all of the Material Contracts to which the Seller is a party or is bound related to the Business as of the date of this Agreement. 
 (b) “Material Contracts” shall mean: 
 (i) Contracts related to the Business not made in the Ordinary Course of Business; 
 (ii) license
agreements or royalty Contracts related to the Business, whether the Seller is the licensor or licensee thereunder; 
 (iii) confidentiality
and non-disclosure agreements related to the Business, whether the Seller is the beneficiary or the obligated party thereunder; 
 (iv)
Contracts related to the Business involving future expenditures or Liabilities, actual or potential, or future revenues in excess of $***** after the date hereof or otherwise material to the Business or the Purchased Assets; 
 (v) employment contracts, consulting contracts and severance agreements with any director, officer or employee of the Seller engaged in the Business,
including Contracts (A) to employ or terminate executive officers or other personnel and other contracts with present or former officers or directors of the Seller or (B) that will result in the payment by, or the 

  

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creation of any Liability to pay on behalf of the Seller or any of Parent, DIS or Purchaser any severance, termination, “golden parachute,” or
other similar payments to any present or former personnel of the Seller following termination of employment or otherwise as a result of the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements; 
 (vi) indemnification agreements providing for the indemnification by the Seller of any director, officer or employee of the Seller engaged in the
Business; 
 (vii) Contracts to procure key raw materials used in the Business, such as wafers and chemicals; 
 (viii) promissory notes, loans, agreements, indentures, evidences of indebtedness, guarantees, currency or interest rate agreements or other instruments
relating to an obligation to pay money with respect to the Business, whether the Seller shall be the borrower, lender or guarantor thereunder in excess of $***** in the aggregate; 
 (ix) any licenses or Contracts with equipment or Software vendors; 
 (x) Contracts containing covenants limiting the freedom of the Seller or any officer, director, employee, or other Affiliates of the Seller, to engage in any line of business or compete with any Person that relates to
the Business; 
 (xi) Contracts with any Governmental Body that relate to the Business; 
 (xii) Leases; 
 (xiii) distribution
agreements related to the Business; 
 (xiv) letters of credit related to the Business; 
 (xv) Contracts with any customers of the Business; and 
 (xvi) any other Contract material to the operation of the Business. 
 True, correct and complete copies of all of the
Material Contracts which are written, or written summaries of oral Material Contracts, including all amendments and supplements thereto, have been delivered to the Purchaser. Each such Material Contract is in full force and effect, paid currently,
and has not been materially impaired by any acts or omissions of the Seller or any of its Representatives. Except as set forth in Section 3.5 of the Disclosure Schedule, no Material Contract requires the consent of, or notification to, any
other contracting party to the transactions contemplated by this Agreement and the Ancillary Agreements. Each of the Material Contracts is valid, binding and enforceable in accordance with its terms except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws affecting enforcement of creditor’s rights generally and except insofar as the availability of equitable remedies may be 

  

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limited by applicable Regulations. The Seller has fulfilled, or taken all action necessary to enable it to fulfill when due, all of its obligations under
each of such Material Contracts. To the Knowledge of the Seller, all other parties to such Material Contracts have complied with the provisions thereof, no party is in Default thereunder and no notice, whether written or oral, of any claim of
Default has been given to the Seller. The products and services called for by any unfinished Material Contract can be supplied in accordance with the terms of such Material Contract, including time specifications, and, to the Knowledge of the
Seller, as of the date of this Agreement and as of the Closing Date, no unfinished Material Contract will, upon performance by the Seller, result in a loss to the Seller. To the Knowledge of the Seller, no party to any Material Contract intends to
terminate or amend the terms thereof or to refuse to renew any such Material Contract upon expiration of its term. 
 3.6
Facilities.
 (a) Actions. There are no pending or, to the Knowledge of the Seller, threatened condemnation proceedings or
other Actions relating to any Facility. 
 (b) Leases or Other Agreements. There are no Leases or other agreements granting to any
Person the right to purchase, use or occupy any Facility, or any Real Property in connection with the Business or any portion thereof or interest in any such Facility or Real Property. 
 (c) Facility Leases and Leased Real Property. With respect to each Lease listed on Section 3.5 of the Disclosure Schedule, the Seller has an
unencumbered interest in the Leasehold Estate. The Seller enjoys peaceful and undisturbed possession of all the Leased Real Property. The Seller has delivered to the Purchaser a true and correct copy of each of the Leases. Each Lease is valid and in
full force and effect, is unmodified and represents the entire agreement between the Seller and the applicable landlord. There exist no obligations on the part of the Seller to be paid or performed with respect to the Leases other than those set
forth in the Leases. The Seller and, to the Knowledge of the Seller, no other party to such Leases, is in default of its respective obligations under any Lease. 
 (d) Certificate of Occupancy; Compliance with Law. To the Knowledge of the Seller, all Facilities have received all required approvals of Governmental Bodies (including, without limitation, Permits and a
certificate of occupancy or other similar certificate permitting lawful occupancy of the Facilities) required in connection with the operation thereof and have been operated and maintained in accordance with, and the Seller is not in violation of,
any Regulation applicable to any Facility or any parcel of Real Property, including without limitation the Americans with Disabilities Act and the Map Act. 
 (e) Utilities. All Facilities are supplied with utilities (including, without limitation, water, sewage, disposal, electricity, gas and telephone) and other services necessary for the operation of such
Facilities as currently operated, and there is no condition which would reasonably he expected to result in the termination of the present access from any Facility to such utility services. All utilities that service the Facilities are provided via
public roads or via permanent, irrevocable, appurtenant easements benefiting the applicable Facility. 
  

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 (f) Improvements, Fixtures and Equipment. The improvements constructed on the Facilities,
including, without limitation, all Leasehold Improvements, and all fixtures and equipment and other tangible assets owned, leased or used by the Seller at the Facilities are (i) insured to the extent and in a manner customary in the industry;
(ii) structurally sound with no known material defects; (iii) in good operating condition and repair, subject to ordinary wear and tear; (iv) not in need of maintenance, repair or correction except for ordinary routine maintenance and
repair, the cost of which would not be material; (v) sufficient for the operation of the Business as presently conducted and (vi) in conformity with all applicable Regulations. 
 (g) No Special Assessment. The Seller has not received notice of any special assessment relating to any Facility or any portion thereof and there
is no pending or threatened special assessment. 
 (h) Access; Shared Facilities. Each Facility abuts on and has direct vehicular
access to a public road, or has access to a public road via a permanent, irrevocable, appurtenant easement benefiting the parcel, and access to each Facility is provided by paved public right-of-way with adequate curb cuts available. There are no
shared facilities or services at the Facilities which are used in connection with any business or other operations of the Seller or any of its affiliates, other than the Business. 
 3.7 Permits. Section 3.7 of the Disclosure Schedule sets forth a complete list of all Permits, all of which are as of the date hereof,
and all of which will be as of the Closing Date, in full force and effect. The Seller has, and at all times has had, all material Permits required under any Regulation in the operation of the Business or in the ownership of the Purchased Assets,
including all requisite approvals by the United States Department of Commerce with respect to all of the Seller’s products exported or sold outside of the United States, and owns or possesses such Permits free and clear of all Encumbrances. The
Seller is not in Default, nor has it received any notice, whether written or oral, of any claim of Default, with respect to any such Permit. Except as otherwise governed by law, all such Permits are renewable by their terms or in the Ordinary Course
of Business without the need to comply with any special qualification procedures or to pay any amounts other than routine filing fees and will not be adversely affected by the completion of the transactions contemplated by this Agreement and the
Ancillary Agreements. No present or former shareholder, director, officer or employee of the Seller or any Affiliate thereof, or any other Person, owns or has any proprietary, financial or other interest (direct or indirect) in any Permit which the
Seller owns, possesses or uses. 
 3.8 No Conflict or Violation. Except as set forth in Section 3.8 of the Disclosure
Schedule, the execution, delivery or performance of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby or thereby, and compliance by the Seller with any of the provisions hereof or thereof, will
not (a) violate or conflict with any provision of the Articles of Incorporation or Bylaws of the Seller; (b) violate, conflict with, or result in or constitute a Default under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration under, any of the terms, conditions or provisions of any Material Contract or Permit; (c) violate, conflict with, contravene or give any Person the right to exercise any remedy or
obtain any relief under any Regulation or Court Order or (d) impose any Encumbrance on the Purchased Assets or the Business. 
  

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 3.9 Consents and Approvals. Except as set forth in Section 3.9 of the Disclosure
Schedule and the Requisite Stockholder Approval, no Consent is required to be made or obtained by the Seller or any of its Affiliates in connection with the execution, delivery and performance by the Seller of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby and thereby. 
 3.10 Financial Information.
 (a) The Seller has delivered to the Purchaser (i) the unaudited schedule of assets and liabilities of the Business as of December 31, 2006, and
the related unaudited statements of profit and loss and cash flows for the twelve (12) months then ended and (ii) the unaudited schedule of assets and liabilities of the Business as of March 31, 2007 (the “March Balance
Sheet”), and the related unaudited statements of profit and loss and cash flows for the period then ended (collectively, the “Financial Statements”). The Financial Statements (i) are true, accurate and complete,
(ii) are consistent with the Seller’s books and records and (iii) present fairly and accurately the financial position of the Business as of the respective dates thereof and the results of operations of the Business as of and through
such dates. 
 (b) Section 3.10(b) of the Disclosure Schedule sets forth a true, correct and complete itemization of the
accounts receivable (including aging) of the Business as of March 31, 2007 (the “Accounts Receivable”). The Accounts Receivable represent bona fide claims against debtors for sales, services performed or other charges arising
on or before the respective dates of recording thereof, and all of the goods delivered and services performed which gave rise to the Accounts Receivable were delivered or performed in accordance with applicable orders, Contracts or customer
requirements. To the Knowledge of the Seller, all Accounts Receivable are fully collectible in the Ordinary Course of Business within three (3) months except to the extent of an amount not in excess of the reserve for doubtful accounts
reflected on the March Balance Sheet. 
 (c) Section 3.10(c) of the Disclosure Schedule sets forth a true, correct and complete
itemization of the Inventory of the Seller as of March 31, 2007 (the “March Inventory”). Within 30 days following Closing, the Seller will deliver to the Purchaser a true, correct and complete itemization of the Inventory of
the Seller as of April 30, 2007. The March Inventory has been determined in accordance with the normal valuation policy of the Seller, consistently applied and in accordance with GAAP. The March Inventory consists only of items of quality and
quantity commercially usable and salable in the Ordinary Course of Business, except for any items of obsolete material or material below standard quality, all of which have been written down to realizable market value, or for which adequate reserves
have been provided and reflected on the March Balance Sheet, and the present quantity of all March Inventory is reasonable in the present circumstances of the Business. 
 (d) Section 3.10(d) of the Disclosure Schedule sets forth a true, correct and complete itemization of all accepted and unfulfilled orders for services entered into by the Seller 

  

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with respect to the Business as of March 31, 2007 (the “Backlog”). No outstanding purchase commitment of the Seller with respect to the
Business presently is in excess of the normal, ordinary and usual requirements of the Business or was made at any price in excess of the now current market price or contains terms or conditions more onerous than those usual and customary in the
Business. There is no outstanding bid, proposal, contract or unfulfilled order of the Seller which will or would, if accepted, result in a net loss to the Business. 
 3.11 Books and Records. The Seller has made and kept (and given the Purchaser access to) its true, correct and complete books and records and accounts, which, in reasonable detail, accurately and fairly
reflect the activities of the Business. The Seller has not engaged in any transaction, maintained any bank account or used any corporate funds with respect to the Business, except for transactions, bank accounts and funds which have been and are
reflected in the books and records with respect to the Business to which the Seller has given the Purchaser access. 
 3.12
Litigation. There is no Action pending or, to the Knowledge of the Seller, threatened, (i) against, related to or affecting (A) the Business or the Purchased Assets (including with respect to Environmental Laws, Healthcare
Laws, Kickback Laws, Environmental Claim or Environmental Exposure Claim) or (B) any officer, director or employee of the Seller, in such capacity, with respect to the Business; (ii) seeking to delay, limit or enjoin the transactions
contemplated by this Agreement or the Ancillary Agreements; (iii) that involves the risk of criminal liability by the Seller with respect to the Business or (iv) in which the Seller is a plaintiff, including any derivative suits brought by
or on behalf of the Seller, with respect to the Business. The Seller is not in Default with respect to or subject to any Court Order applicable to the Business, and there are no unsatisfied judgments against the Business or the Purchased Assets. To
the Knowledge of the Seller, there is not a reasonable likelihood of an adverse determination of any pending Action related to the Business. There are no Court Orders or agreements with, or liens by, any Person, Governmental Body or
quasi-Governmental Body relating to any Environmental Law which regulate, obligate, bind or in any way affect the Purchased Assets (including any Operating Site) or the Business. 
 3.13 Labor Matters. The Seller is not a party to any labor agreement with respect to its employees relating to the Business with any labor
organization, union, group or association and there are no employee unions (nor any other similar labor or employee organizations) under local statutes, custom or practice, which pertain to any current or former Business Employees. The Seller has
not experienced any attempt by organized labor or its Representatives to make it conform to demands of organized labor relating to its Business Employees or to enter into a binding agreement with organized labor that would cover the Business
Employees. There is no labor strike or labor disturbance pending or, to the Knowledge of the Seller, threatened against the Seller, nor is any grievance currently being asserted, and the Seller has not experienced a work stoppage or other labor
difficulty, and is not and has not engaged in any unfair labor practice relating to the Business. The Seller is in material compliance with all applicable Regulations relating to the employment of labor relating to the Business, including but not
limited to wages, hours, benefits, nondiscrimination, immigration, the payment of Social Security and similar Taxes and collective bargaining with respect to the Business. Without limiting the foregoing, with respect to the Business, the Seller is
in 

  

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compliance with the Immigration Reform and Control Act of 1986 and maintains a current Form I-9, as required by such act, in the personnel file of each
Business Employee hired after November 9, 1986. The Seller has not received any notice of a sex, age, race, disability, gender or religious discrimination claim brought or threatened to be brought against the Seller relating to the Business.
Section 3.13 of the Disclosure Schedule sets forth the names and lists the current annual salary rates or current hourly wages of all Hired Employees, and also sets forth the earnings for each such employee as reflected on Form W2 for the 2006
calendar year, the employment position of each, the location of each and the date of hire and, if applicable, date of rehire of each, with each such individual identified as (i) salaried or hourly; (ii) exempt or nonexempt;
(iii) full-time or part-time; (iv) temporary, permanent or leased and (v) active or inactive (with the reason for such inactive status specified, e.g., leave of absence, Family Medical Leave Act, disability, layoff, etc.). To the
Knowledge of the Seller, no Business Employee is a party to, or is otherwise bound by, any agreement or arrangement, including any confidentiality, non-competition or proprietary rights agreement, between such employee and any other Person that in
any way adversely affects or will affect the performance of his or her duties as an employee of the Seller or DIS or Purchaser. The Seller is not and will not be required to make any filing with or give any notice to, or to obtain any approval,
consent, ratification, waiver or other authorization from, any Governmental Body in relation to any of the Hired Employees in connection with the execution and delivery of this Agreement or the Ancillary Agreements or the consummation or performance
of the transactions contemplated hereby or thereby. 
 3.14 Liabilities. The Seller does not have Liabilities due or to become
due with respect to the Business, except (a) Liabilities arising in the Ordinary Course of Business under Contracts and Permits and (b) Liabilities incurred since December 31, 2006 in the Ordinary Course of Business and in accordance
with this Agreement (none of which relates to any Default under any Contract or Permit, breach of warranty, tort, infringement or violation of any Regulation or Court Order or arose out of any Action) and none of which, individually or in the
aggregate, has had or would be reasonably likely to have a Material Adverse Effect. 
 3.15 Compliance with Law. 
 (a) General. Other than with respect to Healthcare Laws and Kickback Laws, to the Seller’s Knowledge, the Seller’s conduct of the
Business has not materially violated and is in material compliance with all Regulations and Court Orders relating to the Purchased Assets or the Business. The Seller has not received any notice to the effect that, or otherwise been advised that, the
Seller is not in compliance with any such Regulations or Court Orders, and the Seller does not reasonably anticipate that any existing circumstances are likely to result in violations of any of the foregoing. 
 (b) Healthcare and Kickback Laws. To the Seller’s Knowledge, Seller and the Principal Stockholder have complied in all material respects
with all applicable Healthcare Laws, Kickback Laws and any orders related thereto promulgated by any Governmental Body (“Governmental Order”). Seller and the Principal Stockholder are not relying on any exemption from or deferral of
any Healthcare Laws, Kickback Laws, Governmental Order or governmental 

  

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authorization related thereto that would not be available to Purchaser after the Closing. No physicians or other health care professionals with either an
ownership or compensation relationship with the Seller or the Principal Stockholder are provided compensation or paid any ownership remuneration in any manner that, directly or indirectly, takes into account the value or volume of referrals or other
business generated by that physician or other health care professional for Seller or the Principal Stockholder. In addition, none of the physicians or physician groups that perform medical director, professional interpretation, professional
supervision, or other personal services on behalf of the Seller or the Principal Stockholder including, without limitation, ********, either refer patients to Seller or the Principal Stockholder or are in a position to refer patients to them.

 3.16 No Brokers. Neither the Seller nor any of the Seller’s Representatives has entered into or will enter into any contract,
agreement, arrangement or understanding with any broker, finder or similar agent or any Person which will result in the obligation of Parent, DIS, Purchaser, Seller or any of their respective Affiliates to pay any finder’s fee, brokerage fees
or commission or similar payment in connection with the transactions contemplated by this Agreement. 
 3.17 Intellectual
Property.
 (a) General. Section 3.17(a) of the Disclosure Schedule sets forth with respect to the Intellectual
Property Rights owned by the Seller that are applicable to the Business: (i) for each patent and patent application with a claim or potential claim applicable to the Business, the patent number or application serial number for each jurisdiction
in which the patent or application has been filed, the date filed or issued, and the present status thereof; (ii) for each registered trademark, trade name or service mark, the application serial number or registration number, for each country,
province and state, and the class of goods covered; (iii) for any URL or domain name, the registration date, any renewal date and name of registry; (iv) for each mask work, the date of first commercial exploitation and if registered, the
registration number and date of registration, for each among country, province and state; (v) for the likeness and images of Hilie King, the date of consent to use thereof by the Seller; and (vi) for each registered copyrighted work, the
number and date of registration for each by country, province and state in which a copyright application has been registered. In addition, Section 3.17(a) of the Disclosure Schedule includes a list of all Software incorporated in,
provided with or otherwise necessary to use, support and maintain the Business. True and correct copies of all applications filed and registrations (including all pending applications and application related documents) related to the Intellectual
Property Rights listed on Section 3.17(a) of the Disclosure Schedule have been provided or made available to the Purchaser. Finally, Section 3.17(a) of the Disclosure Schedule lists all in-licenses of Technology or
Intellectual Property Rights applicable to the products and services of the Business, other than standard, off-the-shelf Software commercially available on standard terms from third-party vendors. 
 (b) Sufficiency. The Intellectual Property Rights and Technology owned by the Seller, or licensed by the Seller for use in the Business
constitute all Intellectual Property Rights and Technology necessary for the conduct of the Business as presently conducted, including the design, manufacture, license and sale of all products and services currently under development or in
production. 
  

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 (c) Royalties and Licenses. Except pursuant to the licenses listed in Section 3.17(a)
of the Disclosure Schedule, the Seller has no obligation to compensate or account to any Person for the use of any of the Intellectual Property Rights or Technology applicable to the Business. 
 (d) Ownership. The Seller (i) owns all right, title and interest in and to the Intellectual Property Rights and Technology purported to be
owned by the Seller applicable to the Business, including the Intellectual Property Rights and Technology listed on Section 3.17(a) of the Disclosure Schedule, free and clear of any liens, claims or encumbrances and (ii) has a valid
and enforceable right or license to use all other Intellectual Property Rights and Technology used in the conduct of the Business, and all such licensed Intellectual Property Rights and rights to use Technology will not cease to be valid and
enforceable rights on behalf of the Business by reason of the execution, delivery and performance of this Agreement or the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby. Without limiting the foregoing,
the Intellectual Property Rights and Technology owned by the Seller have been: (i) developed by employees of the Seller within the scope of their employment; (ii) developed by independent contractors who have assigned their rights to the
Seller pursuant to enforceable written agreements or (iii) otherwise acquired by the Seller from a third party who has assigned all Intellectual Property Rights and ownership of all Technology it has developed on the Seller’s behalf to the
Seller. 
 (e) Absence of Claims; Non-infringement. No proceedings, claims or actions have been instituted or are pending against the
Seller, or, to the Knowledge of the Seller, are threatened, that challenge the right of the Seller with respect to the use or ownership of the Intellectual Property Rights or Technology of the Seller applicable to the Business. Without limiting the
foregoing, no interference, opposition, reissue, reexamination or other proceeding is or has been pending or, to the Knowledge of the Seller, threatened, in which the scope, validity, or enforceability of any of the Seller’s Intellectual
Property Rights related to the Business is being, has been or could reasonably be expected to be contested or challenged. To the Knowledge of the Seller, neither Seller’s past nor present use of Intellectual Property Rights or Technology owned
by the Seller applicable to the Business infringes upon or misappropriates, breaches or otherwise conflicts with the rights of any other Person. The Seller has not received any notice alleging, and otherwise has no Knowledge of (i) the
invalidity of, or any limitation on Seller’s right to use, any of the Intellectual Property Rights or Technology owned by the Seller applicable to the Business or of (ii) the alleged infringement, misappropriation or breach of any
Intellectual Property Rights of others by the Seller applicable to the Business. The Intellectual Property Rights and Technology owned by the Seller applicable to the Business are not subject to any outstanding judgment, decree, order, writ, award,
injunction or determination of an arbitrator or court or other Governmental Body affecting the rights of the Seller with respect thereto. To the Knowledge of the Seller, no Person has interfered with, infringed upon or misappropriated any of the
Seller’s Intellectual Property Rights, or is currently doing so. 
 (f) Licenses to Third Parties. Section 3.17(f)
of the Disclosure Schedule lists all Contracts pursuant to which any Person has been granted any license under, or otherwise has received or acquired any right (whether or not currently exercisable) or interest in, any Intellectual 

  

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Property Rights or Technology of the Seller applicable to the Business. The Seller is not bound by, and no Intellectual Property Rights owned by the Seller
applicable to the Business is subject to, any Contract containing any covenant or other provision that in any way limits or restricts the ability of the Seller to use, exploit, assert or enforce any of its Intellectual Property Rights anywhere in
the world on behalf of the Business. Without limiting the foregoing, the Seller has not granted any exclusive licenses to the Intellectual Property Rights or Technology owned by the Seller and applicable to the Business. 
 (g) Protection of Intellectual Property Rights. All of the registrations and pending applications to Governmental Bodies with respect to the
Intellectual Property Rights owned by the Seller and applicable to the Business have been timely and duly filed, prosecution for such applications has been attended to, all maintenance and related fees have been paid, and the Seller has taken all
other actions required to maintain their validity and effectiveness. The Seller has taken all steps reasonably necessary or appropriate (including, entering into written confidentiality and nondisclosure agreements with officers, directors,
subcontractors, employees, licensees and customers) to safeguard and maintain the secrecy and confidentiality of trade secrets that are material to the Business. Without limiting the foregoing, (i) there has been no misappropriation of any
trade secrets or other confidential Intellectual Property Rights or Technology used in connection with the Business by any Person; (ii) to the Knowledge of the Seller, no employee, independent contractor or agent of the Seller has
misappropriated any trade secrets of any other Person in the course of performance as an employee, independent contractor or agent of the Business and (iii) to the Knowledge of Seller, no employee, independent contractor or agent of the Seller
is in default or breach of any term of any employment agreement, nondisclosure agreement, assignment of invention agreement or similar agreement or Contract relating in any way to the protection, ownership, development, use or transfer of the
Intellectual Property Rights and Technology applicable to the Business. No funding, facilities, or personnel of any Governmental Body or educational institution were used, directly or indirectly, to develop or create, in whole or in part, any of the
Seller’s Intellectual Property Rights or Technology applicable to the Business. The Seller has not made any submission or suggestion to, and is not subject to any agreement with, any standards bodies or other entities that would obligate the
Seller or any of Parent, DIS or Purchaser to grant licenses to or otherwise impair control of the Intellectual Property Rights applicable to the Business. 
 3.18 Employee Plans.
 (a) Disclosure of Employee Plans. Section 3.18 of the
Disclosure Schedule contains a complete list of all Employee Plans. 
 (b) Pension Plans. Neither the Seller nor any ERISA Affiliate
of the Seller has sponsored, maintained, participated in or contributed to, and does not now sponsor, maintain, participate in or contribute to (i) any plan subject to Title IV of ERISA or (ii) any plan subject to the minimum funding
requirements of Section 412 of the Code. Neither the Seller nor any ERISA Affiliate of the Seller has any unsatisfied liability under Title IV of ERISA or Section 412 of the Code. Each Employee Plan intended to be
“qualified” within the meaning of Section 401(a) of the Code is so qualified, its trust is exempt from taxation under Section 501(a) of the Code and it has received a current and valid determination letter (or opinion letter if
applicable) from the Internal Revenue Service. 
  

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 (c) Multiemployer Plans. No Employee Plan is a “multiemployer plan” as defined in
Sections 3(37) or 4001(a)(3) of ERISA (“Multiemployer Plan”), and neither the Seller nor any of its ERISA Affiliates sponsors or has previously sponsored, maintained, contributed to or incurred an obligation to contribute to
any Multiemployer Plan. 
 (d) Welfare Plans. Each Employee Plan which is a “group health plan,” as defined in
Section 607(1) of ERISA, has been operated in material compliance with provisions of Parts 6 and 7 of Title I, Subtitle B of ERISA and Section 4980B of the Code and any similar applicable state laws (“COBRA”) at all
times. Neither the Seller nor any of its ERISA Affiliates sponsors or has previously sponsored or maintained any plan which provides, or has any liability to provide, life insurance, medical, severance or other employee welfare benefits after
retirement to any former Business Employee, except as required by COBRA. None of the Employee Plans is a “voluntary employees’ beneficiary association,” as defined in Section 501(c)(9) of the Code. 
 (e) No Liability. Neither the execution nor delivery of this Agreement or the Ancillary Agreements by the Seller, nor the consummation of the
transactions contemplated hereby or thereby, will result in any Liability to Parent, DIS or Purchaser under or with respect to any Employee Plan. 
 (f) Compliance with Laws. (i) The Seller has not engaged in a prohibited transaction under Section 406 of ERISA or 4975 of the Code; (ii) neither the Seller, any ERISA Affiliate nor, to the Knowledge of the Seller, any
third-party fiduciary, has breached its fiduciary responsibility under Part 4 of Title I of ERISA with respect to any Employee Plan, which could result in a material liability to the Seller; (iii) each Employee Plan has been
maintained and operated in material compliance with its terms and applicable Regulations, including where applicable ERISA and the Code; (iv) neither the Seller nor its ERISA Affiliates have any material liability for any penalty or Tax under
Sections 4971, 4972, 4975, 4976, 4979 or 4980 of the Code or Section 502 of ERISA; (v) other than claims for benefits in the Ordinary Course, there is no material claim pending, or, to the Knowledge of the Seller, threatened involving
any Employee Plan; and (vi) no Employee Plan is subject to an ongoing audit or other administrative proceeding of the Internal Revenue Service (the “IRS”), the Department of Labor or any other Governmental Body or has applied
for administrative relief under any voluntary compliance program of the IRS, the Department of Labor or any other Governmental Body. 
 (g)
Deductibility of Payments. There is no Contract, agreement, plan or arrangement covering any Business Employee that individually or collectively requires the payment of any amount (i) that is not deductible under Section 162(a)(1)
or 404 of the Code or (ii) that is an “excess parachute payment” pursuant to Section 280G of the Code. Neither the execution and delivery of this Agreement or the Ancillary Agreements by the Seller nor the consummation of the
transactions contemplated hereby or thereby will result in the acceleration, increase or creation of any rights of any Business Employee to benefits, whether or not under any Employee Plan (including, without limitation, the acceleration or creation
of any rights under any severance, parachute or change in control agreement). 
  

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 3.19 Transactions with Certain Persons. No officer, director, employee or other Affiliate of
the Seller or any member of any such Person’s immediate family is presently a party to any transaction relating to the Business, including, without limitation, any Contract (a) providing for the furnishing of services by;
(b) providing for the rental of real or personal property from; or (c) otherwise requiring payments to (other than for services as officers, directors or employees of the Seller) any such Person or corporation, partnership, trust or other
entity in which any such Person has an interest as a shareholder, officer, director, trustee or partner. 
 3.20 Tax
Matters.
 (a) Filing of Tax Returns. The Seller has timely filed (taking into account any extensions of time for such filings
that have been properly and timely requested by the Seller) all Tax Returns that were required to be filed. All such Tax Returns are complete and accurate in all material respects. All Taxes owed by the Seller (whether or not shown on any Tax
Return) have been paid. Except as set forth on Section 3.20 of the Disclosure Schedule, the Seller is not currently the beneficiary of any extension of time within which to file any Tax Return. To the Knowledge of the Seller, no claim
has ever been made by an authority in a jurisdiction in which the Seller does not file Tax Returns that it is or may be subject to taxation by that jurisdiction. 
 (b) Audit History; Liens; etc. No deficiencies for Taxes have been claimed, proposed or assessed by any taxing or other Governmental Body against the Seller. There are no pending or, to the Knowledge of the
Seller, threatened audits, investigations, disputes or claims for or relating to any additional liability for Taxes with respect to the Seller. There are no matters under discussion with any Governmental Body with respect to Taxes that, in the
reasonable judgment of the Seller, are likely to result in an additional liability for Taxes with respect to the Seller. There are no liens, pledges, charges, claims, restrictions on transfer, mortgages, security interests or other encumbrances of
any sort (collectively, “Liens”) on any Purchased Assets for Taxes (other than for current Taxes not yet due and payable). The Seller has not waived any statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency. The Seller has previously delivered to the Purchaser true and correct copies of (i) all Tax Returns for the three previous tax years ending prior to the Closing Date and (ii) any examination
reports and statements of deficiencies assessed against or agreed to by the Seller within the past five years. To the Knowledge of the Seller, there is no basis for the assertion of any claim for any liabilities for unpaid Taxes for which the
Purchaser would become liable as a result of the transactions contemplated by this Agreement or that would result in any Lien on any of the Purchased Assets. 
 (c) Tax Elections. All material elections with respect to Taxes affecting the Business or the Purchased Assets as of the date hereof, to the extent such elections are not shown on or in the Tax Returns of the
Seller that have been delivered to the Purchaser by the Seller prior to the date hereof, are set forth on Section 3.20 of the Disclosure Schedule. No new elections with respect to Taxes, or changes in current elections with respect to
Taxes, affecting the Business or the 

  

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Purchased Assets shall be made after the date of this Agreement without Parent’s prior written consent unless otherwise required by law. The Seller
(i) has not agreed, and is not required, to make any adjustment under Section 481(a) of the Code by reason of a change in accounting method or otherwise; (ii) has not made an election, and is not required, to treat any Purchased Asset
as owned by another Person pursuant to the provisions of former Section 168(f) of the Code or as tax-exempt bond financed property or tax-exempt use property within the meaning of Section 168 of the Code and (iii) has not made any of
the foregoing elections and is not required to apply any of the foregoing rules under any comparable state or local Tax provision. 
 (d)
Prior Affiliated Groups; Taxes of Other Persons. The Seller has never been a member of an affiliated group of corporations within the meaning of Section 1504 of the Code and has no liability for the Taxes of any other Person
(i) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law); (ii) as a transferee or successor; (iii) by contract or (iv) otherwise. 
 (e) Tax Sharing Agreements. There are no, and at the Closing Date there will be no, tax-sharing agreements or similar arrangements with respect
to or involving the Business or the Purchased Assets, and, after the Closing Date, the Seller shall not be bound by any such tax-sharing agreements or similar arrangements or have any liability thereunder for amounts due in respect of periods prior
to the Closing Date. 
 (f) Withholding. The Seller has withheld and paid (and timely paid over any withheld amounts to the
appropriate Taxing authority) all federal and state income taxes, Federal Insurance Contribution Act, Federal Unemployment Tax Act and other Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, shareholder or other third party. 
 3.21 Liabilities from Business Combination. The Seller
does not have Liabilities due or to become due with respect to the Business arising from the merger or other combination of Ultrascan, Inc. and Ultrascan of Macon, Inc. that would have a Material Adverse Effect on the Purchased Assets or the
Business. 
 3.22 Insurance. Section 3.22 of the Disclosure Schedule contains a complete and accurate list of all policies
or binders of fire, liability, title, worker’s compensation, product liability and other forms of insurance maintained since January 1, 2004 by the Seller on the Business, the Purchased Assets or the Seller’s employees that engage in
the Business. All insurance coverage applicable to the Business, the Purchased Assets and the Seller’s employees that engage in the Business is in full force and effect, insures the Seller in reasonably sufficient amounts against all risks
usually insured against by Persons operating similar businesses or properties of similar size in the localities where such businesses or properties are located, provides coverage as may be required by applicable Regulation and by any and all
Contracts to which the Seller is a party and has been issued by insurers of recognized responsibility. There is no Default under any such coverage nor has there been any failure to give notice or present any claim under any such coverage in a due
and timely fashion. There are no outstanding unpaid premiums except in the Ordinary Course of Business and no notice of cancellation or non-renewal of any such coverage has been received. 

  

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There are no provisions in such insurance policies for retroactive or retrospective premium adjustments. Except as set forth on Section 3.22 of the
Disclosure Schedule, all products liability, general liability and workers’ compensation insurance policies maintained by the Seller relating to the Business have been occurrence policies and not claims-made policies. There are no outstanding
performance bonds covering or issued for the benefit of the Seller relating to the Business. There are no facts upon which an insurer might be justified in reducing coverage or increasing premiums on existing policies or binders relating to the
Business. No insurer has advised the Seller that it intends to reduce coverage, increase premiums or fail to renew any existing policy or binder relating to the Business. 
 3.23 Compliance With Environmental Laws. The operations of the Business and each Operating Site comply and have complied in each case in all material respects with applicable Environmental Laws. To the
Knowledge of the Seller, no Hazardous Substances are present on, in or under any Operating Site, regardless of how the substance or Hazardous Substances came to rest there, either in violation of any applicable Environmental Law or of a type or in a
location, concentration or condition that has resulted, or that is reasonably likely to result, in any Liability to the Seller or any of Parent, DIS or Purchaser under any Environmental Law, Environmental Claim or Environmental Exposure Claim,
including any obligation to investigate, clean, remediate or take other similar action pursuant to any Environmental Law. There is no ongoing, and, since January 1, 2000, has not been any, investigation, clean up, remediation or other similar
action pursuant to Environmental Law related to the actual or potential presence of any Hazardous Substances on any Operating Site. To the Knowledge of the Seller, no underground storage tanks, PCBs or asbestos-containing materials are located on,
in or under any Operating Site. The Seller is not subject to any pending, and has no Knowledge of any threatened or any reasonable basis for, Environmental Claims, against the Seller or related to the Business. No Encumbrances have been, or are,
imposed on the Business or any of the Purchased Assets under any Environmental Law. The Seller has obtained all Permits, and has made all reports and notifications, required under any Environmental Law in connection with the Purchased Assets and the
operation of the Business, all such Permits are in good standing and the Seller is in material compliance with the terms and conditions of such Permits, and all such Permits, and any corrective action taken, or citations and notices of violations
related thereto, are listed on Section 3.23 of the Disclosure Schedule. To the Knowledge of the Seller, no products have been manufactured, distributed or sold in relation to the Business (i) in the State of California that requires a
warning mandated by the California Safe Drinking Water and Toxic Enforcement Act of 1986 (“Proposition 65”) or (ii) that contains, or in the past has contained, asbestos or asbestos-containing material. 
 3.24 Performance of Services. All services that have been performed by or on behalf of the Seller that relate to the Business were performed
in conformity with the terms and requirements of all applicable warranties and other Contracts and with all applicable Regulations. Parent, DIS and Purchaser will not incur or otherwise become subject to any Liability arising from any services
performed by or on behalf of the Seller in connection with the Business on or prior to the Closing Date. There is no Action pending or, to the Knowledge of the Seller, being threatened against the Seller relating to any services performed by or on
behalf of the Seller in connection with the Business which will or is reasonably likely to result in a Liability, and, to the Knowledge of the Seller, no event has occurred, and no condition or circumstance exists, that could (with or without notice
or lapse of time) give rise to or serve as a basis for any such Action. 
  

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 3.25 Customers and Distributors. Section 3.25 of the Disclosure Schedule accurately
identifies, and provides an accurate and complete breakdown of the revenue from, all of the customers of the Seller related to the Purchased Assets for the calendar years 2005 and 2006 (up to the date of this Agreement). The Seller has not received
any written notice or other written communication indicating that any customer or other Person identified or required to be identified in Section 3.25 of the Disclosure Schedule intends to cease dealing with the Seller or otherwise reduce the
volume of business transacted by such Person with the Seller below historical levels and, to the Knowledge of the Seller, no such customer or other Person intends to do so. 
 3.26 Sufficiency of Purchased Assets. The Purchased Assets will constitute, as of the Closing Date, substantially all of the properties,
rights, interests and other tangible and intangible assets necessary to enable the Purchaser to (a) own and use the Purchased Assets in the manner in which the Purchased Assets have been used prior to the date hereof, are currently being used
and are planned to be used by the Seller to perform its obligations under a Contract to be assumed by the Purchaser and (b) conduct the Business in the manner in which the Business has been conducted prior to the date hereof, is currently being
conducted and is currently proposed by the Seller to be conducted. Except as set forth in Section 3.26 of the Disclosure Schedule, no licenses or consents from, or payments to, any other Person are or will be necessary for the Purchaser to use
any of the Purchased Assets in substantially the manner in which the Seller has used such Purchased Assets. Except as provided in this Agreement, no restrictions will exist on the Purchaser’s right to sell, resell, license or sublicense any of
the Purchased Assets or engage in the Business, nor will any such restrictions be imposed on the Purchaser as a consequence of the transactions contemplated by this Agreement or the Ancillary Agreements. 
 3.27 WARN Act. The Seller is not planning or contemplating, and has not made or taken, any decisions or actions concerning the Business that
would require the service of notice under the Worker Adjustment and Retraining Act of 1988 or any similar Regulations. 
 3.28 Foreign
Corrupt Practices Act. With respect to the Business, neither the Seller nor any predecessor, nor, to the Knowledge of the Seller, any agent, employee or other Person associated with or acting on behalf of the Seller or any predecessor has,
directly or indirectly, used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity, made any unlawful payment to foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns from corporate funds, violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other similar unlawful
payment. 
 3.29 Other Agreements. The Seller has not entered into any other agreement or arrangement relating to the sale or
other disposition of any of the Purchased Assets other than with respect to sales of Inventory in the Ordinary Course of Business. 
  

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 3.30 Bulk Transfer Laws. The Seller represents (a) that the Purchased Assets represent a
majority if not all of the Seller’s fixed assets and equipment as of the date hereof and (b) that there are no current or past creditors of the Seller to which any Bulk Transfer Law requires the delivery of notice or from whom any form of
consent is required in conjunction with undertaking the transactions contemplated by this Agreement and the Ancillary Agreements other than those notices given or consents that have been obtained. 
 3.31 Redemption of Seller Shares by Seller. None of the information (including information regarding this Agreement, the transactions
contemplated hereby, and information concerning the Parent, DIS and the Purchaser) provided, or the representations or warranties made, by the Seller to the Seller’s shareholders in connection with the redemption of all outstanding shares of
the Seller (other than the Seller’s shares held by the Principal Stockholder) contained any untrue statement of a material fact or omitted to state any material fact. 
 3.32 Material Misstatements or Omissions. No representations or warranties by the Seller in this Agreement, nor any document, exhibit,
statement, certificate or schedule heretofore or hereafter furnished to Parent, DIS or Purchaser pursuant hereto, or in connection with the transactions contemplated hereby, including without limitation the Disclosure Schedule, contains or will
contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make the statements or facts contained therein not misleading. 
 ARTICLE IV. 
 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 As an inducement to each of the Seller and Principal Stockholder to enter into this Agreement, Parent, DIS and Purchaser hereby
severally, and not jointly, represent and warrant to the Seller and the Principal Stockholder, as follows: 
 4.1
Organization. Each of Parent, DIS and Purchaser is duly organized, validly existing and in good standing under the laws of the State of Delaware. 
 4.2 Authorization. Each of Parent, DIS and Purchaser has all requisite power and authority, and has taken or prior to the Closing will have taken all action necessary, to execute and deliver this Agreement
and the Ancillary Agreements to which it is a party, to consummate the transactions contemplated hereby and thereby and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Ancillary Agreements to
which it is a party by Parent, DIS and Purchaser and the consummation by Parent, DIS and Purchaser of the transactions contemplated hereby and thereby have been duly approved. No other proceedings on the part of the Parent, DIS and Purchaser are
necessary to authorize this Agreement and the Ancillary Agreements to which any of them is a party and the transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by each of Parent, DIS and Purchaser and is,
and upon execution and delivery the Ancillary Agreements to which any of them is a party will each be, a legal, valid and binding obligation of Parent, DIS and Purchaser, as applicable, enforceable against them in accordance with its terms, except
as enforcement may be 

  

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limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting enforcement of creditor’s rights generally and except
insofar as the availability of equitable remedies may be limited by applicable Regulations. 
 4.3 No Conflict or
Violation. Neither the execution, delivery or performance of this Agreement or the Ancillary Agreements nor the consummation of the transactions contemplated hereby or thereby, nor compliance by Parent, DIS or Purchaser with any of the
provisions hereof or thereof, will (a) violate or conflict with any provision of their respective Certificates of Incorporation or Bylaws, (b) violate, conflict with, or result in or constitute a Default under, or result in the termination
of, or accelerate the performance required by, or result in a right of termination or acceleration under, any of the terms, conditions or provisions of any agreement, contract, obligation, promise or undertaking that is legally binding on any of
Parent, DIS or Purchaser, or (c) violate, conflict with, contravene or give any Person the right to exercise any remedy or obtain any relief under any Regulation or Court Order. 
 4.4 Consents and Approvals. No Consent is required to be made or obtained by Parent, DIS or Purchaser or any of their respective Affiliates
in connection with the execution, delivery and performance by them of this Agreement and the Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby. 
 4.5 SEC Filings. Parent has timely filed all forms, reports, and documents required to be filed by Parent with the Securities and Exchange
Commission (the “SEC”), and any other federal, state or local securities regulator and NASDAQ (collectively, the “Parent Securities Filings”). The Parent Securities Filings at the time they were filed (or if amended
or superseded by a filing prior to the date of this Agreement, then on the date of such filing) complied in all material respects with the requirements of (i) the Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Parent Securities Filings; and (ii) the rules and regulations of NASDAQ. The Parent Securities Filings did not at the time they were filed (or if amended or superseded by a filing prior to
the date of this Agreement, then on the date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. 
 4.6 No Brokers. Neither Parent, DIS or Purchaser nor any of their
respective Representatives has entered into or will enter into any contract, agreement, arrangement or understanding with any broker, finder or similar agent or any Person which will result in the obligation of Parent, DIS, Purchaser, Seller or any
of their respective Affiliates to pay any finder’s fee, brokerage fees or commission or similar payment in connection with the transactions contemplated by this Agreement. 
  

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 ARTICLE V. 
 COVENANTS AND AGREEMENTS 
 5.1 Omitted. 
 5.2 Access and Investigation. The Seller shall ensure that, at all times after the execution of this Agreement and prior to the Closing:
(a) the Seller and its Representatives provide the Purchaser and its Representatives with reasonable access during normal business hours to the Seller’s Representatives, personnel and assets and to all existing books, records, Tax Returns,
work papers and other documents and information relating to the Business and the Purchased Assets; (b) the Seller and its Representatives provide the Purchaser and its Representatives with such copies of existing books, records, Tax Returns,
work papers and other documents and information relating to the Business and the Purchased Assets as the Purchaser may reasonably request and (c) the Seller and its Representatives compile and provide the Purchaser and its Representatives with
such additional financial, operating and other data and information relating to the Business and the Purchased Assets as the Purchaser may reasonably request. Any such access and availability shall include, without limitation, access for the
Purchaser and its Representatives, at the Purchaser’s sole cost and expense, to conduct any site assessment or inspection in respect of environmental matters at the Operating Site, and physical inspections of the Purchased Assets and each
Facility, as the Purchaser may reasonably request. 
 5.3 Stock Registration.
 (a) Registration upon Offering. If Parent shall determine to register any of its securities either for its own account or the account of a
stockholder, other than a registration relating solely to employee benefit plans, a registration relating to the offer and sale of debt securities, a registration relating to a corporate reorganization or other Rule 145 transaction, or a
registration on any registration form that does not permit secondary sales, Parent will: 
 (i) promptly give written notice of the proposed
registration to the Seller; and 
 (ii) use its commercially reasonable efforts to include in such registration (and any related
qualification under blue sky laws or other compliance), and in any underwriting involved therein, all shares of its Common Stock that may be issued pursuant to the Earnout Payments (“Earnout Shares”) that are not freely tradable
under Rule 144 at such time. 
 (b) Underwriting. If the registration contemplated in Section 5.3(a) above is an underwritten
offering, the Seller (together with the Parent and other holders of securities of the Parent with registration rights to participate therein distributing their securities through such underwriting) shall enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters selected by Parent. 
 Notwithstanding any other provision of this
Section 5.3(b), if the underwriters advise the Parent in writing that marketing factors require a limitation on the number of shares to be underwritten, the underwriters may exclude all Earnout Shares or limit the number of Earnout Shares to be
included in, the registration and underwriting. The number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated, as follows: (i) first, to the Parent for securities being sold for its
own account, (ii) second, to the Seller to include the Earnout Shares and (iii) third, to the other securities holders requesting to include their shares in such registration statement. 
  

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 If the Seller does not agree to the terms of any such underwriting, the Seller shall be excluded
therefrom. The Earnout Shares so excluded shall also be withdrawn from such registration. 
 (c) Right to Terminate Registration.
Parent shall have the right to terminate or withdraw any registration initiated by it under this Section 5.3 prior to the effectiveness of such registration. 
 5.4 Filings and Consents. The Seller shall ensure that: (a) the Seller and its Representatives cooperate with the Purchaser and the Purchaser’s Representatives, and comply with the requests of
the Purchaser with respect to, and make, give and obtain on a timely basis, all filings, notices and Consents required to be made, given and obtained in order to consummate the transactions contemplated by this Agreement and the Ancillary
Agreements, including without limitation any such filings, notices or Consents required or otherwise reasonably necessary to transfer or assign all Permits currently held by the Seller related to the Business and (b) at all times after the
execution of this Agreement and prior to the Closing, the Seller and its Representatives cooperate with the Purchaser and with the Purchaser’s Representatives, and prepare and make available such documents and take such other actions as the
Purchaser may request, in connection with any filing, notice or Consent that the Purchaser is required or elects to make, give or obtain. 
 5.5 Reasonable Efforts. At all times following the execution of this Agreement and prior to the Closing, the Seller shall use its commercially reasonable efforts to cause the conditions set forth in Article VI of this Agreement
to be satisfied on a timely basis and the Purchaser shall use its commercially reasonable efforts to cause the conditions set forth in Article VII of this Agreement to be satisfied on a timely basis. 
 5.6 Certain Tax Matters.
 (a) The
Purchaser and the Seller agree to furnish or cause to be furnished to the other, upon request, as promptly as practicable, such information and assistance relating to the Purchased Assets, including, without limitation, access to books and records,
as is reasonably necessary for the filing of all Tax Returns by the Purchaser or the Seller, the making of any election relating to Taxes, the preparation for any audit by any taxing authority, and the prosecution or defense of any claim, suit or
proceeding relating to any Tax. The Purchaser and the Seller shall cooperate with each other in the conduct of any audit or other proceeding relating to Taxes involving the Purchased Assets. 
 (b) Subject to Section 5.6(c) below, Seller will be responsible for the preparation and filing of all Tax Returns of Seller (including Tax
Returns required to be filed after the Closing Date) to the extent such Tax Returns include or relate to Seller’s operation of the Business or Seller’s use or ownership of the Purchased Assets on or prior to the Closing Date. Seller’s
Tax Returns to the extent they relate to the Business or Purchased Assets shall be true, complete and correct and prepared in accordance with applicable law. Seller will be responsible for and make all payments of Taxes shown to be due on such Tax
Returns to the extent they relate to the Purchased Assets or the Business on or prior to the Closing Date. 
  

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 (c) In the case of any real or personal property taxes (or other similar Taxes) attributable to the
Purchased Assets for which Taxes are reported on a Tax Return covering a period commencing before the Closing and ending thereafter (a “Straddle Period Tax”), any such Straddle Period Taxes shall be prorated between the Purchaser
and Seller on a per diem basis. The party required by law to pay any such Straddle Period Tax (the “Paying Party”) shall file the Tax Return related to such Straddle Period Tax within the time period prescribed by law and shall
timely pay such Straddle Period Tax. To the extent any such payment exceeds the obligation of the Paying Party hereunder, the Paying Party shall provide the other party (the “Non-Paying Party”) with notice of payment and a copy of
such return establishing such Straddle Period Tax, and within 10 days of receipt of such notice of payment, the Non-Paying Party shall reimburse the Paying Party for the Non-Paying Party’s share of such Straddle Period Taxes. Either the
Purchaser or he Seller shall promptly notify the other party in writing upon receipt of notice of any pending or threatened United States federal, state, local or foreign Tax audits or assessments relating to the income, properties or operations of
the Seller that reasonably may be expected to relate to the Purchased Assets. 
 (d) Any payments made to any party pursuant to Article IX
shall constitute an adjustment to the Purchase Price for Tax purposes and shall be treated as such by the Seller and Purchaser on their Tax Returns to the extent permitted by applicable Regulations. 
 (e) Seller will be responsible for and make all payments of Taxes related to the merger or other business combination of Ultrascan, Inc. and Ultrascan
of Macon, Inc. 
 5.7 Employee Matters.
 (a) Prior to the Closing Date, the Purchaser will offer to employ all of the Seller’s employees who are engaged in the Business as of the date hereof, except for certain employees to be determined by the
Purchaser following Closing. Such offers of employment (the “Employee Offers”) shall (i) be contingent upon the occurrence of the Closing and such employees satisfying normal employment conditions of Purchaser and
(ii) terminate automatically in the event that the Closing does not occur in accordance with this Agreement. Those Employees who accept employment with the Purchaser are the “Hired Employees.” 
 (b) Except as required by any applicable law or as may be agreed to by the Purchaser and the Seller, as of the Closing Date, the Purchaser shall not
assume any severance obligations or any Employee Plans, including equity compensation plans, for the Hired Employees. For the avoidance of doubt, the Seller shall retain sponsorship of, and all Liabilities under, the Employee Plans. The Purchaser
shall have no Liabilities with respect to the Employee Plans, and shall not be responsible for any Liabilities with respect to such Employee Plans, and the Seller shall cause each Employee Plan to be amended as necessary to ensure that the Purchaser
has no Liabilities with respect to the Employee Plans following the Closing Date. The Seller shall retain sole responsibility for all Liabilities relating to, or in connection with, the employment, or termination of employment, of each Hired
Employee of the Seller on or prior to the Closing Date. 
  

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 (c) On the Closing Date, subject to applicable Regulations, the Seller shall terminate the employment of
each Hired Employee; provided, however, that the Seller shall not be required hereunder to terminate the employment of any employee (i) whom the Purchaser does not intend to hire because such person fails to satisfy any normal employment
conditions of the Purchaser or (ii) for whom the Purchaser has retracted an Employee Offer. For the avoidance of doubt, the Purchaser shall not be obligated to hire or employ any employee of the Seller engaged in the Business who does not
accept an Employee Offer. On or prior to the Closing, the Seller shall pay all amounts accrued for vacation for the Hired Employees to the extent such Hired Employees have not validly elected to have their vacation accruals assumed by Purchaser.

 (d) Seller shall be responsible for any and all liability under the WARN Act or under any state, local or foreign Regulation concerning
layoffs or the closing or relocation of worksites or the like which arises out of or results from any termination of employment by the Seller on or before the Closing Date. 
 (e) The Purchaser and the Seller each covenant and agree, as soon as administratively feasible following the Closing, as follows: (i) to facilitate
a distribution of the account balance of each Hired Employee in the Seller’s 401(k) plan upon the election of such Hired Employee and (ii) to make reasonable efforts to take any and all actions necessary to accomplish the distribution and
rollover to the Purchaser’s 401(k) plan, to the extent allowed by Regulation, of amounts distributed from the Seller’s 401(k) plan with respect to the Hired Employees. The Purchaser agrees to accept rollovers of distributions from the
Seller’s 401(k) plan with respect to the Hired Employees, to the extent allowed by Regulation and the Purchaser’s 401(k) plan. 
 (f) The Purchaser and the Seller acknowledge and agree that all provisions contained in this Section 5.7 with respect to the Business Employees are included for the sole benefit of the Purchaser and the Seller, and that nothing herein,
whether express or implied, shall create any third party beneficiary or other rights (i) in any other Person, including, without limitation, any Business Employees, former Business Employees, any participant in any Employee Plan, or any
dependent or beneficiary thereof, or (ii) to continued employment with the Purchaser or the Seller, or any of their respective Affiliates. 
 (g) The Purchaser shall prepare and furnish to each of the Hired Employees a Form W-2 that shall reflect all wages and compensation paid to such employee for the entire calendar year in which the Closing Date occurs. Seller shall furnish to
the Purchaser the Forms W-4 and W-5 of each such Hired Employee for the portion of the calendar year up to and including the Closing Date. The Purchaser shall send to the appropriate Social Security Administration office a duly completed Form W-3
and accompanying copies of the duly completed Forms W-2. It is the intent of the parties hereunder that the obligations of The Purchaser and Seller under this Section 5.7(g) shall be carried out in accordance with Section 5 of Revenue
Procedure 2004-53. 
 5.8 Cessation of Use of Names and Web Site. After the Closing, the Seller shall cease using the name
“Ultrascan”, any other trade names used by the Business and the “www.ultrascaninc.com” website. 
  

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 5.9 Non-Competition/Non-Solicitation.
 (a) In consideration for the amount paid for the purchase of the goodwill of the Business and the execution of the employment agreements attached hereto
as Exhibit B, from and after the Closing Date until the ***** anniversary of the Closing Date, the Seller shall not, and shall not permit any of its stockholders (including the Principal Stockholder), directors, officers, and
Subsidiaries, directly or indirectly, to (i) offer or provide in ******* any products or services that are substantially similar to the products and services provided as of the Closing by the Business in ******** or (ii) grant any license
to any of the intellectual property listed on Section 3.17(a) of the Disclosure Schedule to any Person that provides products or services that are substantially similar to the products and services provided as of the Closing by the
Business. Purchaser and the Principal Stockholder shall enter into a separate agreement set forth on Exhibit A-1 that further obligates the Principal Stockholder to comply with the covenants set forth in this Section 5.9
regarding his inability to compete with the Purchaser and the Business (the “Protective Covenant Agreement”). Purchaser shall enter into an agreement, attached hereto as Exhibit D, with Seller’s stockholders
(including the Principal Stockholder), directors, and officers, providing that none of them will, directly or indirectly, compete with the Business as described above in exchange for the consideration duly paid. In connection with the termination of
key employee Matthew G. Molchan, the Seller shall deliver at Closing the Molchan Settlement Agreement which is attached hereto as Exhibit K. 
 (b) From and after the Closing Date until the fifth (5th) anniversary of the Closing Date, the Seller shall not, and shall not permit any of its stockholders (including the Principal Stockholder),
directors, officers and Subsidiaries, directly or indirectly, to solicit, encourage or induce any Person employed as of the Closing Date by the Purchaser or any of its Subsidiaries to leave the employment of the Purchaser or any of its Subsidiaries.
From and after the Closing Date until the fifth (5th) anniversary of the Closing Date, the Purchaser shall not,
and shall not permit any of its Subsidiaries, directly or indirectly, to solicit, encourage or induce any Person employed as of the Closing Date by the Seller or any of its Subsidiaries to leave the employment of the Seller or any of its
Subsidiaries. 
 (c) Notwithstanding any other provision of this Agreement, it is understood and agreed that remedies at law would by
themselves be inadequate in the case of any breach of the covenants contained in this Section 5.9, and the parties shall be entitled to equitable relief in respect thereof, including the remedy of specific performance, with respect to any
breach of such covenants, without the need to show any proof of damages. 
 5.10 Estoppel Certificates. The Seller shall deliver from
the landlord under each Lease, a certificate stating: (a) the Lease with such landlord is in full force and effect; (b) to landlord’s knowledge, the Seller is not in default thereunder; (c) annexed to such certificate is a
correct and complete copy of such Lease; and (d) such other matters as the Purchaser shall reasonably require. 
 5.11 Delivery of
Title Commitment and Survey. As soon as reasonably practicable, but in no event later than five (5) days after the date hereof, the Seller shall obtain and 

  

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cause to be delivered to the Purchaser (at the Seller’s expense) with respect to each material Leased Real Property: (a) a current title insurance
commitment (together with copies of all documents referenced therein) issued by a title company acceptable to the Purchaser; and (b) a new or updated ALTA survey to be prepared by a licensed surveyor or engineer acceptable to the Purchaser.

 5.12 Delivery of Title to Leased Equipment. As soon as reasonably practicable, the Seller shall obtain and cause to be
delivered to the Purchaser, with respect to each material Leased Equipment and the Vehicles, any and all documents required to transfer such leases to the Purchaser. 
 5.13 *******. As soon as reasonably practicable and, in any event, no later than *** days from the Closing, the Seller shall enter in to the ***** with ***** or such other ****** affiliated entity.

 5.14 ******. As soon as reasonably practicable and, in any event, no later than **** days from the Closing, the Seller shall
obtain the ****** to assign the July 1, 2002 Leasing Agreement by and between ******* and the Seller to the Purchaser. 
 5.15 Tax
Disclosure Agreement. The Seller shall deliver to Purchaser a voluntary tax disclosure agreement within one hundred and eighty (180) days from the Closing. 
 5.16 Further Assurances. The Purchaser, the Seller, the Seller’s Subsidiaries and the Principal Stockholder shall cooperate reasonably with each other in connection with any steps required to be taken
as part of their respective obligations under this Agreement, and shall (a) furnish upon request to each other such further information, (b) execute and deliver to each other such other documents, and (c) do such other acts and
things, all as the other party may reasonably request for the purpose of carrying out the intent of this Agreement and the transactions contemplated hereby. 
 ARTICLE VI. 
 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER 
 6.1 Conditions. The obligations of the Purchaser to consummate the transactions provided for hereby are subject, in the discretion of the
Purchaser, to the satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by the Purchaser: 
 (a) the representations and warranties in Article III shall be true and correct in all material respects when made and at and as of the Closing Date as if such representations and warranties were made at such time (except that those
representations and warranties which are made as of a specific date shall be true and correct only as of such date); 
 (b) Seller and
Principal Stockholder shall have performed and satisfied in all material respects all agreements and covenants required hereby to be performed or satisfied by them prior to or at the Closing Date; 
 (c) all Consents, filings, registrations and notifications necessary to permit the consummation of the transactions contemplated by this Agreement and
the Ancillary Agreements shall have been obtained or made, including the Requisite Stockholder Approval of such transactions; 
  

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 (d) no Court Order, Action, investigation or proceeding shall have been instituted or threatened which
makes the transactions contemplated by this Agreement or the Ancillary Agreements illegal or otherwise prohibited or that otherwise adversely affects the right or ability of the Purchaser to own, operate or control the Business or the Purchased
Assets or seeks damages in connection therewith; 
 (e) following the date of this Agreement, there shall not have occurred any event,
change or condition that, individually or in the aggregate, has had or would reasonably be expected to have a Material Adverse Effect; 
 (f) Seller and the Principal Stockholder shall have delivered the documents required to be delivered by it pursuant to Section 8.1(a) of this Agreement, in form and content satisfactory to the Purchaser, and the Ancillary Agreements
shall be in full force and effect; 
 (g) no regulatory change shall have been instituted or threatened which makes the transactions
contemplated by this Agreement or the Ancillary Agreements illegal or otherwise prohibited or that otherwise adversely affects the right or ability of the Purchaser to own, operate or control the Business or the Purchased Assets or seeks damages in
connection therewith; 
 (h) Ultrascan, Inc. and Ultrascan of Macon, Inc. shall have been merged or otherwise combined into the Seller as
permitted under Georgia law; 
 (i) no declaration of non-coverage by any third party payor shall have been made or threatened; 

(j) all Consents, approvals and actions of, filings with and notices to any governmental or regulatory authority necessary to permit Seller and the
Principal Stockholder to perform their obligations under this Agreement and the Ancillary Agreements and to consummate the transactions contemplated hereby and thereby shall have been duly obtained, made or given, and all terminations or expirations
of waiting periods imposed by any governmental or regulatory Authority necessary for the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements, shall have occurred; 
 (k) the Seller shall have received the Requisite Stockholder Approval; and 
 (l) the Ancillary Agreements contemplated hereunder, shall have been delivered in form and content satisfactory to the Purchaser. 
  

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 ARTICLE VII. 
 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER 
 7.1 Conditions. The
obligations of the Seller to consummate the transactions provided for hereby are subject, in the discretion of the Seller, to the satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by the
Seller: 
 (a) the representations and warranties in Article IV shall be true and correct in all material respects when made and at and as of
the Closing Date as if such representations and warranties were made at such time (except that those representations and warranties which are made as of a specific date shall be true and correct only as of such date); 
 (b) Parent, DIS and Purchaser shall have performed and satisfied in all material respects all agreements and covenants required hereby to be performed
or satisfied by them prior to or at the Closing Date; 
 (c) the Seller shall have received the Requisite Stockholder Approval; 

(d) no Court Order, Action, investigation or proceeding shall have been instituted or threatened which makes the transactions contemplated by this
Agreement or the Ancillary Agreements illegal or otherwise prohibited; and 
 (e) Parent, DIS and Purchaser shall have delivered the
documents required to be delivered by them pursuant to Section 8.1(b), and the Ancillary Agreements shall be in full force and effect. 
 ARTICLE VIII. 
 CLOSING 
 8.1 Deliveries at Closing. On the Closing Date: 
 (a) Deliveries by the Seller to the
Purchaser. The Seller and Principal Stockholder shall execute (where applicable) and deliver, or cause to be delivered, to the Purchaser: 
 (i) the Ancillary Agreements to which it or he is a party; 
 (ii) a certificate executed by the Secretary of the Seller, dated as
of the Closing Date, certifying the following matters: (A) resolutions adopted by the Seller’s board of directors relating to the transactions contemplated by this Agreement and the Ancillary Agreements; and (B) the resolutions of the
shareholders of the Seller as in effect as of the date thereof; 
 (iii) a certificate executed by a duly authorized officer of the Seller,
dated as of the Closing Date, certifying that each of the conditions set forth in Sections 6.1(a), (b), and (c) has been satisfied or waived in all respects; 
 (iv) the non-competition and non-solicitation agreements contemplated by Section 5.9 of this Agreement and attached hereto; 
 (v) the Consent of Hilie King attached hereto as Exhibit L; 
  

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 (vi) the Molchan Settlement Agreement; 
 (vii) the consent of 1048 Industrial Court LLC to assign the lease for the premises currently occupied by Seller; 
 (viii) such other documents, conveying instruments and items as the Purchaser may reasonably request in connection with the transactions contemplated by
this Agreement and the Ancillary Agreements, including evidence of termination of existing UCC financing statements or pay-off letters related to such UCC financing statements; and 
 (ix) all certificates, agreements and other documents as are customary, or reasonably requested by a title company, in connection with the transfers of
Real Property, including without limitation, owner’s affidavits, non-foreign status certificates and transfer tax declarations. 
 (b)
Deliveries by the Purchaser to the Seller. Parent, DIS and Purchaser shall execute (where applicable) and deliver, or cause to be delivered, to the Seller: 
 (i) the Ancillary Agreements to which it is a party; 
 (ii) a certificate executed by the Secretary of the
Purchaser, dated as of the Closing Date, certifying the following matters: (A) resolutions adopted by the Purchaser’s board of directors relating to the transactions contemplated by this Agreement and the Ancillary Agreements; 

(iii) a certificate executed by an officer of the Purchaser, dated as of the Closing Date, certifying that each of the conditions set forth in
Sections 7.1(a) and (b) has been satisfied or waived in all respects; and 
 (iv) such other documents and items as the Seller may
reasonably request in connection with the transactions contemplated by this Agreement and the Ancillary Agreements. 
 (c) Closing
Payment. The Purchaser shall deliver the Closing Payment and establish the Closing Escrow Fund in accordance with the provisions of Article II of this Agreement. 
 ARTICLE IX. 
 INDEMNIFICATION 
 9.1 Survival of Representations and Warranties and Indemnification Obligations 
 (a) All statements contained in Articles III and IV of this Agreement, the Disclosure Schedule or in any certificate delivered by or on behalf of the
parties pursuant to Section 8.1 of this Agreement shall be deemed to be representations and warranties by the parties 

  

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hereunder. The representations and warranties of the parties contained herein shall survive the Closing Date until the ****** day after the Closing Date;
provided, however, that the representations and warranties of the Seller and the Principal Stockholder contained in Sections 3.1, 3.2, 3.3, 3.12, 3.13, 3.14, 3.15, 3.17, 3.18, 3.20, 3.22, 3.23 and 3.27 of this Agreement and the
representations and warranties of Parent, DIS and Purchaser contained in Sections 4.1 and 4.2 of this Agreement shall survive until sixty (60) days after the expiration of the applicable statutes of limitation (including any extensions
thereof) with respect thereto (each such applicable date, the “Expiration Date”). The right to indemnification or other remedy based on the representations, warranties, covenants and agreements herein will not be affected by any
investigation conducted with respect to, or any Knowledge acquired (or capable of being acquired) at any time, whether before or after the execution and delivery of this Agreement or the Closing, with respect to the accuracy or inaccuracy of or
compliance with, any such representation, warranty, covenant or agreement. Without limiting the foregoing, nothing disclosed on the Disclosure Schedule shall in any way affect the Purchaser’s right to indemnification under
Sections 9.2(a)(ii) through (vii) hereof. If written notice of a claim meeting the requirements of Section 9.3 below has been given prior to the Expiration Date by a party in whose favor such representations and warranties were made,
then the relevant representations and warranties shall survive as to such claim, until the claim has been finally resolved. 
 (b) The
obligations of the Seller and the Principal Stockholder to indemnify the Purchaser Indemnified Parties pursuant to Section 9.2(a)(i) of this Agreement and the obligations of Parent, DIS and Purchaser to indemnify the Seller Indemnified Parties
pursuant to Section 9.2(b)(i) of this Agreement shall terminate on the Expiration Date; provided, however, that the obligations of Parent, DIS and Purchaser, on the one hand, or the Seller and the Principal Stockholder, on the other
hand, as the case may be, to indemnify and hold harmless any Indemnified Party shall not terminate with respect to any claim as to which such Indemnified Party shall have, before the Expiration Date, delivered a written notice to the Purchaser or
the Seller, as the case may be, in accordance with Section 9.3(a) of this Agreement (“Notice of Claim”). 
 9.2
Indemnification.
 (a) Subsequent to the Closing, the Seller and the Principal Stockholder shall jointly and severally indemnify the
Parent, DIS, Purchaser, and each of their respective Affiliates, officers, directors, employees, stockholders, partners and agents, as the case may be (“Purchaser Indemnified Parties”), against, and hold each Purchaser Indemnified
Party harmless from, any damage, claim, loss, cost, liability or expense, including without limitation, interest, penalties, reasonable attorneys’ fees and expenses of investigation, lost profits, damages, diminution in value, response action,
removal action or remedial action (collectively “Damages”) incurred by such Purchaser Indemnified Party, that are incident to, arise out of, in connection with or related to, whether directly or indirectly: (i) any breach of
any representation or warranty of the Seller contained in this Agreement, the Disclosure Schedule or in any certificate delivered by or on behalf of the Seller pursuant to Section 8.1 of this Agreement; (ii) any breach or non-performance
by the Seller of any of its covenants or agreements contained in this Agreement; (iii) the operation of the Business prior to the Closing; (iv) Pre-Closing Environmental Matters; (v) Pre-Closing Healthcare 

  

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Matters; (vi) any noncompliance by Seller with any Bulk Sales Laws or fraudulent transfer law in connection with the transactions contemplated under
this Agreement; (vii) any Liabilities of the Seller, or any member of any consolidated, affiliated, combined or unitary group of corporations of which the Seller is or has been a member, for Taxes and any Liabilities for Taxes attributable to
the Purchased Assets or the operation of the Business for any Pre-Closing Tax Period; (viii) any Liabilities of the Seller other than the Assumed Liabilities or (ix) any Liability to which the Purchaser or any of the other Purchaser
Indemnified Parties may become subject that arises from or relates to any failure to comply with any bulk transfer law or similar Regulations in connection with any of the transactions contemplated by this Agreement and the Ancillary Agreements.

 (b) Subsequent to the Closing, Parent shall indemnify the Seller and its respective Affiliates, officers, directors, employees,
stockholders, partners and agents, as the case may be, including, without limitation, the Principal Stockholder (“Seller Indemnified Parties”), against, and hold each of the Seller Indemnified Parties harmless from, any Damages
incurred by such Seller Indemnified Party that are incident to, arise out of, in connection with or related to, whether directly or indirectly: (i) any breach of any representation or warranty of Parent, DIS or Purchaser contained in this
Agreement or in any certificate delivered by or on behalf of any of them pursuant to Section 8.1 of this Agreement; (ii) any breach or non-performance by the Purchaser of its covenants or agreements contained in this Agreement;
(iii) any Assumed Liability; or (iv) the operation of the Business at and after the Closing. 
 (c) The term
“Damages” as used in this Section 9.2 is not limited to matters asserted by third parties against Seller Indemnified Parties or Purchaser Indemnified Parties, but includes Damages incurred or sustained by such Persons in the
absence of third-party claims, and payments by the Indemnified Party shall not be a condition precedent to recovery. 
 9.3 Notice of
Claims.
 (a) As used herein, the term “Claim” shall mean a claim for indemnification under this Article IX,
“Indemnified Party” shall mean any Parent Indemnified Party or Seller Indemnified Party making a claim for indemnification pursuant to Sections 9.2(a) and 9.2(b) respectively, and “Indemnifying Party” shall
mean the Closing Escrow Fund, in the case of a claim brought pursuant to Sections 9.2(a), or Parent, in the case of a claim brought pursuant to Section 9.2(b). Subject to the terms of this Agreement, the Indemnified Party shall deliver a
Notice of Claim to the Indemnifying Party (with a copy to the Escrow Agent) promptly after such Indemnified Party becomes aware of the existence of any potential claim by such Indemnified Party for indemnification from the Indemnifying Party under
this Article IX; provided, however, no Notice of Claim shall be required in connection with any dispute relating to the determination of Working Capital, which disputes shall be governed by the procedures set forth in Section 2.6.

 (b) Each Notice of Claim by an Indemnified Party given pursuant to Section 9.3(a) shall contain the following information:
(i) that such Indemnified Party has directly or indirectly incurred, paid or properly accrued, or sustained or, in good faith, believes it is reasonably likely that it shall have to directly or indirectly incur or sustain, Damages in an
aggregate stated amount arising from such Claim (which amount may be the amount of damages claimed by a third 

  

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party in an action brought against such Indemnified Party based on alleged facts, which if true, would give rise to liability for Damages indemnifiable to
such Indemnified Party under this Article IX); and (ii) a brief description, in reasonable detail (to the extent reasonably available to such Indemnified Party), of the facts, circumstances or events giving rise to the alleged Damages based on
such Indemnified Party’s good faith belief thereof, including the identity and address of any third-party claimant (to the extent reasonably available to such Indemnified Party) and copies of any formal demand or complaint, the amount of
Damages, the date each such item was incurred, paid or properly accrued, or sustained, or the basis for such anticipated liability, and the specific nature of the breach to which such item is related. 
 (c) An Indemnified Party may submit a Notice of Claim at any time during the period commencing with the Closing Date and ending on the Expiration Date,
but shall not be permitted to bring a Notice of Claim at any time after the Expiration Date (and any delivery or attempted delivery of a Notice of Claim after such time shall be void and of no force or effect). Notwithstanding anything contained
herein to the contrary, any Claims for Damages specified in any Notice of Claim delivered to an Indemnifying Party prior to expiration of the Expiration Date shall remain outstanding until such Claims for Damages have been resolved or satisfied,
notwithstanding the passage of the Expiration Date. Until the Expiration Date, no delay on the part of an Indemnified Party in giving the Indemnifying Party a Notice of Claim shall relieve the Indemnifying Party from any of its obligations under
this Article IX unless (and then only to the extent that) the Indemnifying Party is materially prejudiced thereby. 
 9.4 Resolution of
Notice of Claim. Each Notice of Claim given by an Indemnified Party shall be resolved as follows: 
 (a) If, within thirty
(30) days after a Notice of Claim is received by the Indemnifying Party, the Indemnifying Party does not contest such Notice of Claim in writing to the Indemnified Party delivering such Notice of Claim, the Indemnifying Party shall be
conclusively deemed to have consented to the recovery by the Indemnified Party of the full amount of Damages specified in the Notice of Claim in accordance with this Article IX. 
 (b) If the Indemnifying Party gives the Indemnified Party delivering a Notice of Claim written notice contesting all or any portion of such Notice of
Claim (a “Contested Claim”) (with a copy to the Escrow Agent) within the thirty (30) day period specified in Section 9.4(a), then such Contested Claim shall be resolved by either (i) a written settlement agreement
executed by Parent and Seller (a copy of which shall be furnished to the Escrow Agent, if applicable) or (ii) in the absence of such a written settlement agreement within thirty (30) days following receipt by the Indemnified Party of the
written notice from the Indemnifying Party, by arbitration between Parent and Seller in accordance with the terms and provisions of Section 9.4. In the event that an Indemnified Party shall prevail in any such arbitration, the Indemnified Party
shall be entitled to recover, in addition to any other rights they may have, the amount of Damages awarded in such arbitration. The prevailing party’s recovery shall be limited to the forfeiture of that portion of the Closing Escrow Fund having
an aggregate value equal to such awarded Damages. In the case of claims brought pursuant to Section 9.2(b), such recovery shall be by payment of additional cash equal to the value of such awarded Damages to Seller. 
  

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 (c) Arbitration. 
 (i) Contested Claims under Section 9.4(b)(ii) shall be submitted for arbitration unless the amount of the Damages is at issue in pending litigation with a third party, in which event arbitration shall not be
commenced until such amount is ascertained or both parties agree to arbitration; and in either such event the matter shall be settled by arbitration conducted by one arbitrator mutually agreeable to Parent and Seller. The arbitrator shall set a
limited time period and establish procedures designed to reduce the cost and time for discovery while allowing the parties an opportunity, adequate in the sole judgment of the arbitrator to discover relevant information from the opposing parties
about the subject matter of the dispute. The arbitrator shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including attorneys’ fees and costs, to the extent as a competent court of law or
equity, should the arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator as to the validity and amount of any
Contested Claim shall be binding and conclusive upon the parties to this Agreement. Such decision shall be written and shall be supported by written findings of fact and conclusions, which shall set forth the award, judgment, decree or order awarded
by the arbitrator. 
 (ii) Judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction. Any such
arbitration shall be held in the County of San Diego, under the rules then in effect of JAMS or the American Arbitration Association. The arbitrator shall determine how all expenses relating to the arbitration shall be paid, including without
limitation, payment of the prevailing party’s expenses, the fees of the arbitrator and the administrative fee of JAMS or the American Arbitration Association. 
 9.5 Release of Closing Escrow Fund.
 (a) Subject to the provisions of Section 9.1, the Closing
Escrow Amount then held by the Escrow Agent shall be released by the Escrow Agent to the Seller at 5:00 p.m., local time at Parent’s headquarters, on the ***** day following the Closing (the “Release Date”); provided,
however, that the escrow period shall not terminate with respect to any amount which, in the reasonable judgment of Parent, is necessary to satisfy any unsatisfied claims specified in any Notice of Claim theretofore delivered to the Escrow Agent
and, in the case of claims made pursuant to Section 9.2(a), the Principal Stockholder, prior to the Release Date with respect to facts and circumstances existing prior to the Release Date and unresolved prior to the Release Date
(“Unresolved Claims”). On the Release Date, the Escrow Agent shall deliver the entire remaining portion of the Closing Escrow Fund (other than amounts set forth in any such pending Notices of Claim to satisfy any Unresolved Claims),
to the Seller; provided, however, that in the event the ******* is not executed within **** days following the Closing, the Escrow Agent shall release $****** from the Closing Escrow Amount to the Purchaser and/or Parent including any
interest thereon minus any unpaid fees due and owing to the Escrow Agent on the Release Date. As soon as any Unresolved Claims have been resolved, the Escrow Agent shall deliver the remaining portion of the Closing Escrow Amount, if any, no longer
required to satisfy such previously Unresolved Claims in the manner set forth in the preceding sentence. 
  

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 (b) The ******* Escrow Amount shall be released by the Escrow Agent to the Seller at 5:00 p.m., local
time at Parent’s headquarters, upon the execution of the ******* by ****** or ****** and the Seller; provided, however, that in the event the ******* are not executed within ***** days following the Closing, the Escrow Agent shall
release the ****** Escrow Amount to the Purchaser and/or Parent including any interest thereon minus any unpaid fees due and owing to the Escrow Agent. 
 9.6 Third-Party Claims. In the event Parent becomes aware of a third party claim (a “Third Party Claim”) which Parent reasonably believes may result in a demand for indemnification
pursuant to this Article IX Parent shall notify Seller of such claim, and Seller shall be entitled on behalf of the Indemnifying Parties, at its expense, to participate in, but not to determine or conduct, the defense of such Third Party Claim.
Parent shall have the right in its sole discretion to conduct the defense of, and to settle, any such Third Party Claim; provided, however, that except with the prior written consent of such settlement by Seller (which consent shall not be
unreasonably withheld or delayed), no settlement of any such Third Party Claim with third party claimants shall be determinative of the amount of Damages relating to such matter. In the event that the Seller has consented to any such settlement, the
Indemnifying Parties shall have no power or authority to object under any provision of this Article IX to the amount of any Third Party Claim by Parent against the Closing Escrow Fund or special Escrow Fund with respect to such settlement.

 9.7 Limitation on Indemnity; Remedies; Maximum Liability.
 (a) Notwithstanding the foregoing, an Indemnifying Party shall not be obligated to indemnify any Indemnified Party under Sections 9.2(a) or 9.2(b)
of this Agreement, as the case may be, unless and until the aggregate of all Damages suffered by Purchaser Indemnified Parties or Seller Indemnified Parties, as the case may be, hereunder exceeds $***** (the “Threshold Amount”),
whereupon, provided the other requirements of this Article IX have been complied with, the amount of all such Damages, and all subsequent Damages, shall become due and payable. 
 (b) Prior to the Release Date, Purchaser Indemnified Parties shall have the right to offset the amount of any claims for indemnification against the
cash held in the Closing Escrow Fund (subject to the terms and conditions of the Escrow Agreement). Subsequent to the Release Date, Purchaser Indemnified Parties shall have the right to demand and receive from the Seller the Purchase Price paid to
the Seller as of the date such Damages are awarded, and to offset the amount of any claims for indemnification against the Earnout Payments (if any) payable to Seller. Claims for indemnification against the Purchase Price, Earnout Payments (if any)
and Closing Escrow Fund shall be the sole and exclusive remedy for the Purchaser Indemnified Parties with respect to claims relating to any of the matters set forth in Section 9.2(a), except in the case of claims of common law fraud,
intentional misrepresentation or criminal activity. 
 (c) Except in the case of common law fraud, intentional misrepresentation or criminal
activity, the aggregate indemnification obligations of the Seller and Principal 

  

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Stockholder pursuant to Section 9.2(a) of this Agreement shall be limited to a maximum amount equal to (x) the aggregate Cash Consideration paid to
Seller, plus (y) the aggregate Earnout Payments (if any) paid to Seller. Except in the case of common law fraud, intentional misrepresentation or criminal activity, the aggregate indemnification obligations of Parent, DIS and Purchaser pursuant
to Section 9.2(b) of this Agreement shall be limited to a maximum amount equal to (x) the Cash Consideration, plus (y) the aggregate principal amount of the Assumed Liabilities. 
 ARTICLE X. 
 TERMINATION 
 10.1 Termination.
 (a) Except as
provided in Section 10.1(b), this Agreement may be terminated at any time prior to the Closing: 
 (i) by mutual agreement of Parent and
Seller; 
 (ii) by Parent or Seller, if the Closing Date shall not have occurred by April 30, 2007; 
 (iii) by Parent or Seller, if the Requisite Stockholder Approval has not been obtained by written consent or at a meeting of Seller’s stockholders
duly called and held in accordance with the Seller’s Articles of Incorporation, or any postponement or adjournment thereof; 
 (iv) by
Parent or Seller, if (i) a court of competent jurisdiction or other Governmental Authority shall have issued a nonappealable final order, decree or ruling or taken any other action, in each case having the effect of permanently restraining,
enjoining or otherwise prohibiting any material transaction contemplated by this Agreement, or (ii) any statute, rule, regulation or order is enacted, promulgated or issued by any Governmental Authority that would make consummation of any
material transaction contemplated by this Agreement illegal; 
 (v) by Parent, if (i) it is not in material breach of its obligations
under this Agreement and (ii) there has been a breach of any representation, warranty, covenant or agreement of Seller or the Principal Stockholder contained in this Agreement such that the conditions set forth in Section 8.1(a) would not
be satisfied at the time of such breach and such breach has not been cured within ten (10) business days after written notice thereof to the Seller or the Principal Stockholder; provided, however, that no cure period shall be required
for a breach which by its nature cannot be cured; 
 (vi) by Parent, if the Board of Directors of Seller shall withhold, withdraw, change or
otherwise modify in a manner adverse to Parent its unanimous recommendation that the stockholders of Seller adopt this Agreement and approve the transactions contemplated herein, or if the Seller shall fail to permit such unanimous recommendation to
be included in any communications to Seller’s stockholders; or 
  

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 (vii) by Seller, if (i) neither Seller nor the Principal Stockholder is in material breach of its
obligations under this Agreement and (ii) there has been a breach of any representation, warranty, covenant or agreement contained in this Agreement such that the conditions set forth in Section 8.1(b) would not be satisfied and such
breach has not been cured within ten (10) business days after written notice thereof to Parent; provided, however, that no cure period shall be required for a breach which by its nature cannot be cured. 
 (b) Notwithstanding the above, a party shall not be allowed to exercise any right of termination pursuant to Section 10.1(a) if the event giving
rise to the termination right shall be due to such party’s breach of one or more of its representations or warranties in this Agreement or the failure of such party to perform or observe in any material respect any of the covenants or
agreements to be performed or observed by such party pursuant to this Agreement. In the event this Agreement is terminated in accordance with Section 10.1(a), no party shall have any further liability hereunder, except for willful breach of
this Agreement. 
 ARTICLE XI. 
 MISCELLANEOUS 
 11.1 Assignment. Neither this Agreement nor any of the rights or obligations hereunder
may be assigned by the Seller without the prior written consent of the Purchaser. Prior to the Closing, the Purchaser may assign its rights hereunder to an Affiliate. After the Closing, the Purchaser may assign its rights hereunder to a successor to
the equity interests of the Purchaser or all or substantially all of the assets of the Purchaser. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors
and assigns, and no other Person shall have any right, benefit or obligation hereunder. 
 11.2 Notices. Unless otherwise
provided herein, any notice, request, instruction or other document to be given hereunder by any party to the other shall be in writing and delivered in person or by courier, telegraphed, telexed or by facsimile transmission, sent by a nationally
recognized overnight delivery service or mailed by registered or certified mail, postage prepaid, return receipt requested (such mailed notice to be effective on the date of such receipt is acknowledged), as follows: 
 If to Parent, DIS or Purchaser: 
 Digirad
Corporation 
 13950 Stowe Drive 
 Poway, California 
 Attention: Chief Executive Officer 
 Fax: (858) 726-1700 
 With a copy (which shall not constitute notice) to: 
 Wilson Sonsini Goodrich & Rosati, Professional Corporation 
 12235 El Camino Real, Suite 200 
  

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 San Diego, California 92130 
 Attention: Martin J. Waters, Esq. 
 Fax: (858) 350-2399 
 If to the Seller or Selling Stockholder: 
 Ultrascan, Inc. 
 1048 Industrial Court, Suite E 
 Suwanee, Georgia 30024 
 Attention: Chief Executive Officer 
 Fax: (770) 813-0326 
 With a copy (which
shall not constitute notice) to Seller’s Counsel: 
 Troutman Sanders LLP. 
 600 Peachtree St., N.E., Suite 5200 
 Atlanta,
Georgia 30308 
 Attention: Thomas W. Baker, Esq. 
 Fax: (404) 962-6505 
 Any party may, from time to time, designate any other address to which any such
notice to it or such party shall be sent. Any such notice shall be deemed to have been delivered upon receipt. 
 11.3 Choice of
Law. This Agreement shall be governed in all respects by the laws of the State of Delaware without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware. 

11.4 Entire Agreement; Amendments and Waivers; Interpretation. This Agreement, the Ancillary Agreements and all exhibits and schedules
hereto and thereto and the Confidentiality Agreement constitute the entire agreement among the parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written,
of the parties. No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided. No failure or delay on the part of any party hereto to exercise any right or remedy under this
Agreement shall operate as a waiver of such right or remedy, and no single or partial exercise of any such right or remedy shall preclude any other or further exercise thereof. No party shall be deemed to have waived any claim arising out of this
Agreement, or any right or remedy under this Agreement, unless the waiver of such claim, right or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such party. The parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden or proof shall arise favoring
or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. For all 

  

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purposes of and under this Agreement, (a) the word “including” shall be deemed to be immediately followed by the words “without
limitation;” (b) words (including defined terms) in the singular shall be deemed to include the plural and vice versa; (c) words of one gender shall be deemed to include the other gender as the context requires and (d) the terms
“hereof,” “herein,” “hereto,” “herewith” and any other words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the schedules and exhibits to
this Agreement) and not to any particular term or provision of this Agreement, unless otherwise specified. 
 11.5
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
 11.6 Severability. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument. 
 11.7 Headings. The headings of the Articles and Sections herein are inserted for convenience of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement. 
 11.8 Expenses. Except as otherwise specifically
provided in this Agreement, each party will pay its own expenses incident to this Agreement and the transactions contemplated hereby, including legal and accounting fees and disbursements. 
 11.9 Schedules. The Schedules and Exhibits referenced in this Agreement are a material part hereof and shall be treated as if fully
incorporated into the body of the Agreement. 
 11.10 Publicity. Except as required by law, neither the Seller nor the Purchaser
shall issue any press release or make any public statement regarding the transactions contemplated hereby without the prior written approval of the other party. 
 11.11 No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto (and their permitted successors and assigns), and nothing herein expressed or implied shall give, or be
construed to give, to any Person, other than the parties hereto and such permitted successors and assigns, any legal or equitable rights hereunder. 
 11.12 Remedies Cumulative; Specific Performance. The rights and remedies of the parties hereto shall be cumulative (and not alternative). Each party acknowledges and agrees that the other party would be damaged irreparably in
the event any of the provisions of this Agreement was not performed in accordance with its specific terms or was otherwise breached. Accordingly, each party agrees that the other party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any action or proceeding in addition to any other remedy to which it may be entitled, at law or in equity. 
  

 -58- 

 11.13 Further Assurances.
 (a) Upon the terms and subject to the conditions contained herein, after the Closing the parties agree (i) to use all reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements; (ii) to execute any
documents, instruments or conveyances of any kind which may be reasonably necessary or advisable to carry out any of the transactions contemplated hereunder and thereunder; and (iii) to cooperate with each other in connection with the
foregoing. 
 (b) After the Closing, each party agrees that it will cooperate with and make available to the other party, during normal
business hours, all books and records, information and employees (without substantial disruption of employment) retained and remaining in existence after the Closing which are necessary or useful in connection with any financial statement audit, tax
inquiry, audit, investigation or dispute, any litigation or investigation or any other matter requiring any such books and records, information or employees for any reasonable business purpose and will take reasonable measures to cause it
Representatives, including its accountants, to do the same. 
 (c) If, for any reason after the Closing, any payment is received by the
Seller, to the extent that any portion of said payment is in satisfaction of an obligation that is, in accordance with the terms of this Agreement, properly payable to the Purchaser, then the Seller shall promptly reimburse the Purchaser for or
promptly remit to the Purchaser, as the case may be, such payment. 
  

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 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their respective
behalf all as of the day and year first above written. 
  

			
	ULTRASCAN, INC.
	a Georgia corporation
	
	 /s/ William “Mickey” King, Jr.

	By:	 	William “Mickey” King, Jr.
	Title:	 	President and CEO
	
	WILLIAM “MICKEY” KING, JR.
	
	 /s/ William “Mickey” King, Jr.

	
	DIGIRAD ULTRASCAN SOLUTIONS, INC.
	a Delaware corporation
	
	 /s/ Todd Clyde

	By:	 	Todd Clyde
	Title:	 	CFO, President
	
	DIGIRAD IMAGING SOLUTIONS, INC.
	a Delaware corporation
	
	 /s/ Todd Clyde

	By:	 	Todd Clyde
	Title:	 	CFO
	
	DIGIRAD CORPORATION
	a Delaware corporation
	
	 /s/ Mark Casner

	By:	 	Mark Casner
	Title:	 	Chief Executive Officer

  

 SIGNATURE PAGE TO ASSET PURCHASE AGREEMENTLoan and Security Agreement

 Exhibit 10.1 
 LOAN AND SECURITY AGREEMENT 
 THIS LOAN AND SECURITY AGREEMENT (this
“Agreement”) dated as of May 2, 2007 (the “Effective Date”) between SILICON VALLEY BANK, a California corporation and with a loan production office located at 230 W. Monroe, Suite 720, Chicago, Illinois
60606 (“Bank”), and SONIC FOUNDRY, INC., a Maryland corporation (“Sonic Foundry”) and SONIC FOUNDRY MEDIA SYSTEMS, INC., a Maryland corporation (“Sonic Systems”) (Sonic Foundry and
Sonic Systems, jointly, severally, and collectively, “Borrower”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. In consideration of the mutual covenants contained herein and benefits to be
derived herefrom, the parties agree as follows: 
 WHEREAS, each Borrower has requested that Bank establish the loan arrangement as set forth
herein; and 
 WHEREAS, each Borrower requests that as a convenience to that Borrower, such loans as may be made hereunder shall be directed
to the Agent which will, in turn, distribute the proceeds thereof to the respective Borrower; 
 NOW THEREFORE, as an additional inducement
for Bank to establish the loan arrangement and to direct such loans as may be made hereunder to the Agent, as described above, each Borrower covenants and agrees as follows: 
 1 ACCOUNTING AND OTHER TERMS 
 1.1 Accounting and Other Terms. Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. Capitalized terms not otherwise defined in this Agreement
shall have the meanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein. 
 1.2 Designation of Agent. Each Borrower hereby designates Sonic Foundry (hereinafter, the “Agent”) as the agent of that Borrower
to discharge the duties and responsibilities of Agent as provided herein. 
 1.3 Operation of Borrowing. Except as otherwise
provided in this Article, loans and advances hereunder shall be requested solely by Agent as agent for each Borrower. Each Borrower shall be directly indebted to Bank for each advance distributed to Agent, together with all accrued interest thereon,
as if that amount had been advanced directly by Bank to such Borrower. Bank shall have no responsibility to inquire as to the distribution of loans and advances made by Bank through Agent as described herein. 
 1.4 Continuation of Authority of Agent. The authority of Agent to request loans on behalf of, and to bind, the Borrowers, shall continue
unless and until Bank actually receives written notice of the termination of such authority. 
 2 LOAN AND TERMS OF PAYMENT

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

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

 2.1.2 Letters of Credit Sublimit. 
 (a) As part of the Revolving Line, Bank shall issue or have issued Letters of Credit for Borrower’s account. The face amount of outstanding Letters
of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed Seven Hundred Fifty Thousand Dollars ($750,000.00), inclusive of Credit Extensions relating to Sections 2.1.3 and 2.1.4. Such aggregate
amounts utilized hereunder shall at all times reduce the amount otherwise available for Advances under the Revolving Line. If, on the Revolving Line Maturity Date, there are any outstanding Letters of Credit, then on such date Borrower shall provide
to Bank cash collateral in an amount equal to 105% of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure
all of the Obligations relating to said Letters of Credit. All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s standard Application and Letter
of Credit Agreement (the “Letter of Credit Application”). Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably request. Borrower further agrees to be bound by the
regulations and interpretations of the issuer of any Letters of Credit guarantied by Bank and opened for Borrower’s account or by Bank’s interpretations of any Letter of Credit issued by Bank for Borrower’s account, and Borrower
understands and agrees that Bank shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments, or
supplements thereto. 
 (b) The obligation of Borrower to immediately reimburse Bank for drawings made under Letters of Credit shall be
absolute, unconditional, and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, such Letters of Credit, and the Letter of Credit Application. 
 (c) Borrower may request that Bank issue a Letter of Credit payable in a Foreign Currency. If a demand for payment is made under any such Letter of
Credit, Bank shall treat such demand as an Advance to Borrower of the equivalent of the amount thereof (plus fees and charges in connection therewith such as wire, cable, SWIFT or similar charges) in Dollars at the then-prevailing rate of exchange
in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign Currency. 
 (d) To guard
against fluctuations in currency exchange rates, upon the issuance of any Letter of Credit payable in a Foreign Currency, Bank shall create a reserve (the “Letter of Credit Reserve”) under the Revolving Line in an amount equal to
ten percent (10%) of the face amount of such Letter of Credit. The amount of the Letter of Credit Reserve may be adjusted by Bank from time to time to account for fluctuations in the exchange rate. The availability of funds under the Revolving
Line shall be reduced by the amount of such Letter of Credit Reserve for as long as such Letter of Credit remains outstanding. 
 2.1.3
Foreign Exchange Sublimit. As part of the Revolving Line, Borrower may enter into foreign exchange contracts with Bank under which Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency (each, a “FX
Forward Contract”) on a specified date (the “Settlement Date”). FX Forward Contracts shall have a Settlement Date of at least one (1) FX Business Day after the contract date and shall be subject to a reserve of ten
percent (10%) of each outstanding FX Forward Contract in a maximum aggregate amount equal to Seventy-Five Thousand Dollars ($75,000.00) (the “FX Reserve”). The aggregate amount of FX Forward Contracts at any one time may not
exceed ten (10) times the amount of the FX Reserve and the aggregate amount of FX Forward Contracts may not exceed Seven Hundred Fifty Thousand Dollars ($750,000.00), inclusive of Credit Extensions relating to Sections 2.1.2 and 2.1.4.

 2.1.4 Cash Management Services Sublimit. Borrower may use up to Seven Hundred Fifty Thousand Dollars ($750,000.00) (the
“Cash Management Services Sublimit”), inclusive of Credit Extensions relating to Sections 2.1.2 and 2.1.4 of the Revolving Line for Bank’s cash management services which may include merchant services, direct deposit of payroll,
business credit card, and check cashing services identified in Bank’s various cash management services agreements (collectively, the “Cash Management Services”). Any amounts Bank pays on behalf of Borrower or any amounts that
are not paid by Borrower for any Cash Management Services will be treated as Advances under the Revolving Line and will accrue interest at the interest rate applicable to Advances. 
  

 -2- 

 2.1.5 Term Loan. 
 (a) Availability. Bank shall make one (1) term loan available to Borrower in an amount up to the Term Loan on or after five (5) days from the Effective Date subject to the satisfaction of the terms
and conditions of this Agreement. 
 (b) Repayment. Commencing on the first Payment Date following the month in which the Funding Date
occurs, the Borrower shall repay the Term Loan in (i) thirty-six (36) equal installments of principal, plus (ii) monthly payments of accrued interest (the “Term Loan Payment”). Amounts prepaid under the Term Loan may
not be reborrowed. Borrower’s final Term Loan Payment, due on the Term Loan Maturity Date, shall include all outstanding principal and accrued and unpaid interest under the Term Loan. 
 2.2 Overadvances. If, at any time, the Credit Extensions under Sections 2.1.1, 2.1.2, 2.1.3 and 2.1.4 exceed the lesser of either (a) the
Revolving Line or (b) the Borrowing Base, Borrower shall immediately pay to Bank in cash such excess. 
 2.3 Payment of Interest on
the Credit Extensions. 
 (a) Interest Rate. 
 (i) Advances. Subject to Section 2.3(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to the greater of: (i) one-quarter of one
percentage point (0.25%) above the Prime Rate, or (ii) eight percent (8.0%), which interest shall be payable monthly in accordance with Section 2.3(f) below. 
 (ii) Term Loan. Subject to Section 2.3(b), the principal amount outstanding under the Term Loan shall accrue interest at a floating per annum rate equal to the greater of: (i) one percentage point
(1.0%) above the Prime Rate, or (ii) eight and three-quarters of one percent (8.75%), which interest shall be payable monthly. 
 (b) Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear interest at a rate per annum which is five percentage points above the rate effective immediately before the
Event of Default (the “Default Rate”). Payment or acceptance of the increased interest rate provided in this Section 2.3(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of Bank. 
 (c) Adjustment to Interest Rate. Changes to the interest
rate of any Credit Extension based on changes to the Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of any such change. 
 (d) 360-Day Year. Interest shall be computed on the basis of a 360-day year for the actual number of days elapsed. 
 (e) Debit of Accounts. Bank may debit any of Borrower’s deposit accounts, including the Designated Deposit Account, for principal and
interest payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off. 
 (f) Payments.
Unless otherwise provided, interest is payable monthly on the Payment Date of each month. Payments of principal and/or interest received after 12:00 noon Eastern time are considered received at the opening of business on the next Business Day. When
a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or interest, as applicable, shall continue to accrue. 
 2.4 Fees. Borrower shall pay to Bank: 
 (a) Term Loan Commitment Fee. A fully earned,
non-refundable commitment fee of Five Thousand Dollars ($5,000.00), on the Effective Date; 
 (b) Unused Revolving Line Facility Fee.
A fee (the “Unused Revolving Line Facility Fee”), payable quarterly, in arrears, on a calendar year basis, in an amount equal to one-half of one percent (0.50%) 

  

 -3- 

 
per annum of the average unused portion of the Revolving Line, as determined by Bank. Borrower shall not be entitled to any credit, rebate or repayment of
any Unused Revolving Line Facility Fee previously earned by Bank pursuant to this Section notwithstanding any termination of the Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder; 

(c) Prepayment Fee. The Prepayment Fee, when due hereunder; and 
 (d) Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and expenses, plus expenses, for documentation and negotiation of this Agreement) incurred through and after the Effective Date,
when due. 
 3 CONDITIONS OF LOANS 
 3.1 Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance
satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation: 
 (a) Duly executed original signatures to the Loan Documents to which it is a party; 
 (b) Duly executed
original signatures to the Control Agreement[s]; 
 (c) Borrower shall have delivered its Operating Documents and a good standing certificate
of Borrower certified by the Secretary of State of the State of                      as of a date no earlier than thirty (30) days prior
to the Effective Date; 
 (d) Duly executed original signatures to the completed Borrowing Resolutions for Borrower; 
 (e) Bank shall have received certified copies, dated as of a recent date, of financing statement searches, as Bank shall request, accompanied by written
evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;

 (f) Borrower shall have delivered a landlord’s consent executed in favor of Bank; 
 (g) Borrower shall have delivered a legal opinion of Borrower’s counsel dated as of the Effective Date together with the duly executed original
signatures thereto; 
 (h) Borrower shall have delivered evidence satisfactory to Bank that the insurance policies required by
Section 6.5 hereof are in full force and effect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements in favor of Bank; and 
 (i) Borrower shall have paid the fees and Bank Expenses then due as specified in Section 2.4 hereof. 
 3.2 Conditions Precedent to all Credit Extensions. Bank’s obligations to make each Credit Extension, including the initial Credit Extension,
is subject to the following: 
 (a) except as otherwise provided in Section 3.4, timely receipt of an executed Payment/Advance Form;

 (b) the representations and warranties in Section 5 shall be true in all material respects on the date of the Payment/Advance Form
and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Default or Event of Default shall have occurred and be
continuing or result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in Section 5 remain true in all material respects; provided, however, that
such materiality qualifier shall not be applicable to any 

  

 -4- 

 
representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations
and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and 
 (c) in Bank’s sole discretion, there has not been any material impairment in the general affairs, management, results of operation, financial condition or the prospect of repayment of the Obligations, or there has not been any material
adverse deviation by Borrower from the most recent business plan of Borrower presented to and accepted by Bank. 
 3.3 Covenant to
Deliver. Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as a condition to any Credit Extension. Borrower expressly agrees that the extension of a Credit Extension prior to the receipt by Bank
of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and any such extension in the absence of a required item shall be in Bank’s sole discretion. 
 3.4 Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of an Advance set forth in this
Agreement, to obtain an Advance (other than Advances under Sections 2.1.2 or 2.1.4), Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time on the Funding Date of the
Advance. Together with any such electronic or facsimile notification, Borrower shall deliver to Bank by electronic mail or facsimile a completed Payment/Advance Form executed by a Responsible Officer or his or her designee. Bank may rely on any
telephone notice given by a person whom Bank believes is a Responsible Officer or designee. Bank shall credit Advances to the Designated Deposit Account. Bank may make Advances under this Agreement based on instructions from a Responsible Officer or
his or her designee or without instructions if the Advances are necessary to meet Obligations which have become due. 
 4 CREATION OF
SECURITY INTEREST 
 4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure the payment and performance in full
of all of the Obligations, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. Borrower represents, warrants, and
covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that may have superior priority to Bank’s Lien under
this Agreement). If Borrower shall acquire a commercial tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Bank. 
 If this
Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations and at such time as Bank’s
obligation to make Credit Extensions has terminated, Bank shall, at Borrower’s sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower. 
 4.2 Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing statements, without notice to Borrower, with all
appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Bank under the
Code. 
 5 REPRESENTATIONS AND WARRANTIES 
 Borrower represents and warrants as follows: 
 5.1 Due Organization and Authorization. Borrower and
each of its Subsidiaries are duly existing and in good standing, as Registered Organizations in their respective jurisdictions of formation and are qualified and licensed to do business and are in good standing in any jurisdiction in which the
conduct of their business or their ownership of property requires that they be qualified except where the failure to do so could not reasonably be expected to have a material adverse effect on Borrower’s business. In connection with this
Agreement, Borrower has delivered to Bank a completed perfection certificate signed by Borrower (the “Perfection Certificate”). Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is that indicated on
the Perfection 

  

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Certificate and on the signature page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the
Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth
Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) Borrower (and each of its predecessors) has not, in the past five
(5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction; and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and
each of its Subsidiaries is accurate and complete. If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s organizational identification
number. 
 The execution, delivery and performance of the Loan Documents have been duly authorized, and do not conflict with Borrower’s
organizational documents, nor constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default could reasonably
be expected to have a material adverse effect on Borrower’s business. 
 5.2 Collateral. Borrower has good title to, has rights
in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the
deposit accounts, if any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The
Accounts are bona fide, existing obligations of the Account Debtors. 
 The Collateral is not in the possession of any third party bailee
(such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as Borrower has given Bank notice
pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee, then Borrower will first receive the written consent of Bank and such bailee must
execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. 
 All Inventory is in all material
respects of good and marketable quality, free from material defects. 
 Borrower is the sole owner of its intellectual property, except for
non-exclusive licenses granted to its customers in the ordinary course of business. Each patent is valid and enforceable, and no part of the intellectual property has been judged invalid or unenforceable, in whole or in part, and to the best of
Borrower’s knowledge, no claim has been made that any part of the intellectual property violates the rights of any third party except to the extent such claim could not reasonably be expected to have a material adverse effect on Borrower’s
business. Except as noted on the Perfection Certificate, Borrower is not a party to, nor is bound by, any material license or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting
a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten (10) days of entering or becoming bound by any such license or agreement which is
reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent
of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or
by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now
existing or entered into in the future.  
 5.3 Accounts Receivable. For any Eligible Account in any Borrowing Base
Certificate, all statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing such Eligible Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all
of Borrower’s Books are genuine and in all respects what they purport to be. All sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all applicable laws and governmental
rules and regulations. Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are an Eligible Account in any Borrowing Base Certificate. To the best of Borrower’s knowledge, all signatures
and endorsements on all documents, instruments, and agreements relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms. 
  

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 5.4 Litigation. There are no actions or proceedings pending or, to the knowledge of the
Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than One Hundred Thousand Dollars ($100,000.00). 
 5.5 No Material Deviation in Financial Statements. All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects Borrower’s
consolidated financial condition and Borrower’s consolidated results of operations. There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements
submitted to Bank. 
 5.6 Solvency. The fair salable value of Borrower’s assets (including goodwill minus disposition costs)
exceeds the fair value of its liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature. 
 5.7 Regulatory Compliance. Borrower is not an “investment company” or a company “controlled” by an “investment
company” under the Investment Company Act. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations T and U of the Federal Reserve Board of Governors). Borrower has complied in all
material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to have a material adverse effect on its business. None of Borrower’s or
any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance
other than legally. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices to, all government authorities that are necessary to continue its
business as currently conducted, except where the failure to obtain or make such consents, declarations or filings would not be expected to cause a Material Adverse Change. 
 5.8 Subsidiaries; Investments. Borrower does not own any stock, partnership interest or other equity securities except for Permitted Investments.

 5.9 Tax Returns and Payments; Pension Contributions. Borrower timely filed all required tax returns and reports, and Borrower and
its Subsidiaries have timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower. Borrower may defer payment of any contested taxes, provided that Borrower (a) in good faith contests its
obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Bank in writing of the commencement of, and any material development in, the proceedings, (c) posts bonds or takes any
other steps required to prevent the governmental authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien”. Borrower is unaware of any claims or adjustments proposed for
any of Borrower’s prior tax years which could result in additional taxes becoming due and payable by Borrower. Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance
with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to
result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency. 
 5.10 Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general business requirements and not for personal, family, household or agricultural
purposes. 
 5.11 Full Disclosure. No written representation, warranty or other statement of Borrower in any certificate or written
statement given to Bank, as of the date such representations, warranties, or other statements were made, taken together with all such written certificates and written statements given to Bank, contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized by Bank that the projections and forecasts provided by Borrower in good faith and based upon reasonable
assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results). 
  

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 6 AFFIRMATIVE COVENANTS 
 Borrower shall do all of the following: 
 6.1 Government Compliance. Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so
qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject, the
noncompliance with which could have a material adverse effect on Borrower’s business. 
 6.2 Financial Statements, Reports,
Certificates. 
 (a) Deliver to Bank: (i) as soon as available, but no later than thirty (30) days after the last day of each
month (except for the last month of the calendar quarter), a company prepared consolidated balance sheet and income statement covering Borrower’s consolidated operations during the period certified by a Responsible Officer and in a form
acceptable to Bank; (ii) within five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt; (iii) within five (5) days of
filing, all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission or a link thereto on Borrower’s or another website on the Internet; (iv) a prompt report of any legal actions pending or threatened against
Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of One Hundred Thousand Dollars ($100,000.00) or more; (v) prompt notice of an event that materially and adversely affects the
value of the intellectual property; (vi) Board approved projections, on or before September 30th for each year; and (vii) other financial information reasonably requested by Bank. 
 (b) Within thirty (30) days after the last day of each month, deliver to Bank a duly completed Borrowing Base Certificate signed by a Responsible
Officer, with aged listings of accounts receivable and accounts payable (by invoice date). 
 (c) Within thirty (30) days after the last
day of each month, deliver to Bank with the monthly financial statements, a duly completed Compliance Certificate signed by a Responsible Officer setting forth calculations showing compliance with the financial covenants set forth in this Agreement.

 (d) Allow Bank to audit Borrower’s Collateral at Borrower’s expense. Such audits shall be conducted no more often than once
every twelve (12) months unless a Default or an Event of Default has occurred and is continuing. Notwithstanding the foregoing, no Advances in excess of One Million Dollars ($1,000,000.00) may be requested prior to the Initial Audit.

 6.3 Inventory; Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances
between Borrower and its Account Debtors shall follow Borrower’s customary practices as they exist at the Effective Date. Borrower must promptly notify Bank of all returns, recoveries, disputes and claims that involve more than One Hundred
Thousand Dollars ($100,000.00). 
 6.4 Taxes; Pensions. Make, and cause each of its Subsidiaries to make, timely payment of all
foreign, federal, state, and local taxes or assessments (other than taxes and assessments which Borrower is contesting pursuant to the terms of Section 5.9 hereof) and shall deliver to Bank, on demand, appropriate certificates attesting to such
payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms. 
 6.5 Insurance. Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Bank may reasonably request. Insurance policies shall be in a form, with
companies, and in amounts that are satisfactory to Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as lender loss payee and waive subrogation against Bank, and all liability policies shall show, or have
endorsements showing, Bank as an additional insured. All policies (or the loss payable and additional insured endorsements) shall provide that the insurer must give Bank at least twenty (20) days notice before canceling, amending, or declining
to renew its policy. At Bank’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at Bank’s option, be payable to Bank on account of the Obligations.
Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to $100,000, in the aggregate, toward the replacement or repair
of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Bank has been granted a first
priority security interest, and 

  

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(b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Bank, be
payable to Bank on account of the Obligations. If Borrower fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make all or part of such
payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Bank deems prudent. 
 6.6 Operating Accounts. 
 (a) Maintain its and its Subsidiaries’ depository, operating, and securities accounts with
Bank and Bank’s affiliates, with the exception of a bank account maintained with US Bank for the purpose of current ordinary and necessary operating expenses. 
 (b) Provide Bank five (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution other than Bank or its Affiliates. In addition, for each Collateral
Account that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution (other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate
instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder. The provisions of the previous sentence shall not apply to deposit accounts exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such. 
 6.7 Financial Covenants. 
 Borrower shall maintain at all times, to be tested as of the last day of
each month, unless otherwise noted: 
 (a) Adjusted Quick Ratio. A ratio of Quick Assets to Current Liabilities minus Deferred Revenue
of at least (x) 1.25 to 1.0 for the months ending January 31, February 28, April 30, May 31, July 31, August 31, October 31, and November 30, and (y) 1.50 to 1.0 for the
months ending December 31, March 31, June 30, and September 30. 
 (b) Tangible Net Worth. Beginning
with the quarter ending March 31, 2007, and as of the last day of each quarter thereafter, a Tangible Net Worth of at least (a) Eight Million Dollars ($8,000,000.00), plus (b) fifty percent (50.0%) of Borrower’s Net Income
or new equity or Subordinated Debt, on a quarterly basis. 
 6.8 Protection and Registration of Intellectual Property Rights. Borrower
shall: (a) protect, defend and maintain the validity and enforceability of its intellectual property; (b) promptly advise Bank in writing of material infringements of its intellectual property; and (c) not allow any intellectual
property material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent. If Borrower decides to register any copyrights or mask works in the United States Copyright Office, Borrower
shall: (x) provide Bank with at least fifteen (15) days prior written notice of its intent to register such copyrights or mask works together with a copy of the application it intends to file with the United States Copyright Office
(excluding exhibits thereto); (y) execute an intellectual property security agreement or such other documents as Bank may reasonably request to maintain the perfection and priority of Bank’s security interest in the copyrights or mask
works intended to be registered with the United States Copyright Office; and (z) record such intellectual property security agreement with the United States Copyright Office contemporaneously with filing the copyright or mask work
application(s) with the United States Copyright Office. Borrower shall promptly provide to Bank a copy of the application(s) filed with the United States Copyright Office together with evidence of the recording of the intellectual property security
agreement necessary for Bank to maintain the perfection and priority of its security interest in such copyrights or mask works. Borrower shall provide written notice to Bank of any application filed by Borrower in the United States Patent and
Trademark Office for a patent or to register a trademark or service mark within 30 days after any such filing. 
 6.9 Litigation
Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to Bank, without expense to Bank, Borrower and its officers, employees and agents and Borrower’s books and records, to the extent
that Bank may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower. 
  

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 6.10 Further Assurances. Borrower shall execute any further instruments and take further action as
Bank reasonably requests to perfect or continue Bank’s Lien in the Collateral or to effect the purposes of this Agreement. 
 7
NEGATIVE COVENANTS 
 Borrower shall not do any of the following without Bank’s prior written consent: 
 7.1 Dispositions. Convey, sell, lease, transfer or otherwise dispose of (collectively, “Transfer”), or permit any of its
Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment; (c) in connection with Permitted Liens and
Permitted Investments; and (d) of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries in the ordinary course of business. 
 7.2 Changes in Business, Management, Ownership, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower
and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve; or (c) (i) have a material change in management or (ii) enter into any transaction or series of related transactions in which the
stockholders of Borrower immediately prior to the first such transaction own less than 60% of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions (other than by the sale of
Borrower’s equity securities in a public offering or to venture capital investors so long as Borrower identifies to Bank the venture capital investors prior to the closing of the transaction). Borrower shall not, without at least thirty
(30) days prior written notice to Bank: (1) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Fifty Thousand Dollars ($[50,000]) in Borrower’s assets or
property), (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization.

 7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other
Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person. A Subsidiary may merge or consolidate into another Subsidiary or into Borrower. 
 7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness.

 7.5 Encumbrance. Create, incur, or allow any Lien on any of the Collateral, or assign or convey any right to receive income,
including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted herein. 
 7.6 Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 6.6.(b) hereof. 

7.7 Distributions; Investments. Borrower shall not, without Bank’s prior written consent, which consent shall not be unreasonably withheld
or delayed: (a) Directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do so; or (b) pay any cash dividends or make any cash distribution or payment or redeem, retire or purchase
any capital stock, provided that (i) Borrower may convert any of its convertible securities into other securities pursuant to the terms of such convertible securities or otherwise in exchange thereof, (ii) Borrower may pay dividends solely
in common stock; and (iii) Borrower may repurchase the stock of former employees or consultants pursuant to stock repurchase agreements so long as an Event of Default does not exist at the time of such repurchase and would not exist after
giving effect to such repurchase, provided such repurchase does not exceed in the aggregate of $100,000 per fiscal year. 
 7.8
Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower, except for transactions that are in the ordinary course of Borrower’s business, upon fair and
reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person. 
 7.9 Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend
any provision in any document relating to the Subordinated Debt which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed to Bank. 
  

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 7.10 Compliance. Become an “investment company” or a company controlled by an
“investment company”, under the Investment Company Act of 1940 or undertake as one of its important activities extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve
System), or use the proceeds of any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair
Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to
withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result
in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency. 
 8 EVENTS OF DEFAULT 
 Any one of the following shall constitute an event of default (an
“Event of Default”) under this Agreement: 
 8.1 Payment Default. Borrower fails to make any payment of principal or
interest on any Credit Extension on its due date, or pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) day grace period will not apply to payments due on the Maturity
Date). During the cure period, the failure to cure the payment default is not an Event of Default (but no Credit Extension will be made during the cure period); 
 8.2 Covenant Default. 
 (a) Borrower fails or neglects to perform any obligation in Sections 6.2, 6.6,
6.7 or violates any covenant in Section 7; or 
 (b) Borrower fails or neglects to perform, keep, or observe any other term, provision,
condition, covenant or agreement contained in this Agreement, any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or agreement that can be cured, has
failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within
such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such
reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period). Grace periods provided under this section shall not apply, among other things, to
financial covenants or any other covenants set forth in subsection (a) above; 
 8.3 Material Adverse Change. A Material Adverse
Change occurs; 
 8.4 Attachment. (a) Any material portion of Borrower’s assets is attached, seized, levied on, or comes
into possession of a trustee or receiver and the attachment, seizure or levy is not removed in ten (10) days; (b) the service of process seeking to attach, by trustee or similar process, any funds of, or of any entity under control of
Borrower (including a Subsidiary) on deposit with Bank or Bank’s Affiliate; (c) Borrower is enjoined, restrained, or prevented by court order from conducting a material part of its business; (d) a judgment or other claim in excess of
One Hundred Thousand Dollars ($100,000.00) becomes a Lien on any of Borrower’s assets; or (e) a notice of lien, levy, or assessment is filed against any of Borrower’s assets by any government agency and not paid within ten
(10) days after Borrower receives notice. These are not Events of Default if stayed or if a bond is posted pending contest by Borrower (but no Credit Extensions shall be made during the cure period); 
 8.5 Insolvency (a) Borrower is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent;
(b) Borrower begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower and not dismissed or stayed within forty-five (45) days (but no Credit Extensions shall be made while of any of the conditions
described in clause (a) exist and/or until any Insolvency Proceeding is dismissed); 
  

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 8.6 Other Agreements. There is a default in any agreement to which Borrower is a party with a
third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of One Hundred Thousand Dollars ($100,000.00) or that could have a material
adverse effect on Borrower’s business; 
 8.7 Judgments. A judgment or judgments for the payment of money in an amount,
individually or in the aggregate, of at least One Hundred Thousand Dollars ($100,000.00) (not covered by independent third-party insurance) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of ten
(10) days after the entry thereof (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment); 
 8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to
enter this Agreement or any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made; and 
 8.9 Subordinated Debt. A default or breach occurs under any agreement between Borrower and any creditor of Borrower that signed a subordination, intercreditor, or other similar agreement with Bank, or any
creditor that has signed such an agreement with Bank breaches any terms of such agreement. 
 9 BANK’S RIGHTS AND REMEDIES

 9.1 Rights and Remedies. While an Event of Default occurs and continues Bank may, without notice or demand, do any or all of the
following: 
 (a) declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all
Obligations are immediately due and payable without any action by Bank); 
 (b) stop advancing money or extending credit for Borrower’s
benefit under this Agreement or under any other agreement between Borrower and Bank; 
 (c) demand that Borrower (i) deposits cash with
Bank in an amount equal to the aggregate amount of any Letters of Credit remaining undrawn, as collateral security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such amounts, and
(ii) pay in advance all Letter of Credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit; 
 (d)
terminate any FX Forward Contracts; 
 (e) settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any
order that Bank considers advisable, notify any Person owing Borrower money of Bank’s security interest in such funds, and verify the amount of such account; 
 (f) make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest in the Collateral. Borrower shall assemble the Collateral if Bank requests and make it
available as Bank designates. Bank may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its
security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies; 
 (g) apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) any amount held by Bank owing to or for the credit or
the account of Borrower; 
 (h) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the
Collateral. Bank is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, patents, copyrights, mask works, rights of use of any name, trade secrets, trade names, trademarks, service
marks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its rights under this Section,
Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit; 
  

 -12- 

 (i) place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive
control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral; 
 (j) demand and receive possession of Borrower’s Books; and 
 (k) exercise all rights and remedies
available to Bank under the Loan Documents or at law or equity, including all remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof). 
 9.2 Power of Attorney. Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact, exercisable upon the occurrence and during the
continuance of an Event of Default, to: (a) endorse Borrower’s name on any checks or other forms of payment or security; (b) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors;
(c) settle and adjust disputes and claims about the Accounts directly with Account Debtors, for amounts and on terms Bank determines reasonable; (d) make, settle, and adjust all claims under Borrower’s insurance policies;
(e) pay, contest or settle any Lien, charge, encumbrance, security interest, and adverse claim in or to the Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the
Collateral into the name of Bank or a third party as the Code permits. Borrower hereby appoints Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security
interest in the Collateral regardless of whether an Event of Default has occurred until all Obligations have been satisfied in full and Bank is under no further obligation to make Credit Extensions hereunder. Bank’s foregoing appointment as
Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an interest, are irrevocable until all Obligations have been fully repaid and performed and Bank’s obligation to provide Credit Extensions terminates.

 9.3 Accounts Verification; Collection. Whether or not an Event of Default has occurred and is continuing, Bank may notify any
Person owing Borrower money of Bank’s security interest in such funds and verify the amount of such account. After the occurrence of an Event of Default, any amounts received by Borrower shall be held in trust by Borrower for Bank, and, if
requested by Bank, Borrower shall immediately deliver such receipts to Bank in the form received from the Account Debtor, with proper endorsements for deposit. 
 9.4 Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under
this Agreement or any other Loan Document, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest applicable rate, and secured by
the Collateral. Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No payments by Bank are deemed an agreement to make similar
payments in the future or Bank’s waiver of any Event of Default. 
 9.5 Application of Payments and Proceeds. Unless an Event of
Default has occurred and is continuing, Bank shall apply any funds in its possession, whether from Borrower account balances, payments, or proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, first,
to Bank Expenses, including without limitation, the reasonable costs, expenses, liabilities, obligations and attorneys’ fees incurred by Bank in the exercise of its rights under this Agreement; second, to the interest due upon any of the
Obligations; and third, to the principal of the Obligations and any applicable fees and other charges, in such order as Bank shall determine in its sole discretion. Any surplus shall be paid to Borrower or other Persons legally entitled thereto;
Borrower shall remain liable to Bank for any deficiency. If an Event of Default has occurred and is continuing, Bank may apply any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any
collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations in such order as Bank shall determine in its sole discretion. Any surplus shall be paid to Borrower or other Persons legally entitled thereto; Borrower
shall remain liable to Bank for any deficiency. If Bank, in its good faith business judgment, directly or indirectly enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have the option,
exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor. 
 9.6 Bank’s Liability for Collateral. So long as Bank complies with reasonable banking practices regarding the safekeeping of the Collateral
in the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or
(d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral. 
  

 -13- 

 9.7 No Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to require strict
performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be
effective unless signed by Bank and then is only effective for the specific instance and purpose for which it is given. Bank’s rights and remedies under this Agreement and the other Loan Documents are cumulative. Bank has all rights and
remedies provided under the Code, by law, or in equity. Bank’s exercise of one right or remedy is not an election, and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not a
waiver, election, or acquiescence. 
 9.8 Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment and
nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable. 
 10 NOTICES 
 All
notices, consents, requests, approvals, demands, or other communication (collectively, “Communication”) by any party to this Agreement or any other Loan Document must be in writing and shall be deemed to have been validly served,
given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested, with proper postage prepaid; (b) upon
transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of
which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Bank or Borrower may change its address or facsimile number by giving the other party written notice thereof in
accordance with the terms of this Section 10. 
  

							
		 	If to Borrower:            	  	Sonic Foundry, Inc.
		 		  	Sonic Foundry Media Systems, Inc.
		 		  	222 W. Washington Avenue, Suite 775
		 		  	Madison, Wisconsin 53703
		 		  	Attn: __________________________________________
		 		  	Fax: __________________________________________
		 		  	Email: __________________________________________
			
		 	If to Bank:	  	Silicon Valley Bank
		 		  	230 W. Monroe, Suite 720
		 		  	Chicago, Illinois 60606
		 		  	Attn: Ms. Janice Galbavy
		 		  	Fax: (312) 704-1530
		 		  	Email: JGalbavy@svb.com
			
		 	with a copy to:	  	Riemer & Braunstein LLP
		 		  	Three Center Plaza
		 		  	Boston, Massachusetts 02108
		 		  	Attn: David A. Ephraim, Esquire
		 		  	Fax: (617) 880-3456
		 		  	Email: DEphraim@riemerlaw.com

  

 -14- 

 11 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER AND JUDICIAL REFERENCE 
 Massachusetts law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction
of the State and Federal courts in Massachusetts; provided, however, that if for any reason Bank cannot avail itself of such courts in the Commonwealth of Massachusetts, Borrower accepts jurisdiction of the courts and venue in Santa Clara County,
California. NOTWITHSTANDING THE FOREGOING, BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE
COLLATERAL OR TO OTHERWISE ENFORCE BANK’S RIGHTS AGAINST BORROWER OR ITS PROPERTY. 
 TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK
EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A
MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.. 
 12
GENERAL PROVISIONS 
 12.1 Successors and Assigns. This Agreement binds and is for the benefit of the successors and
permitted assigns of each party. Borrower may not assign this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be granted or withheld in Bank’s discretion). Bank has the right, without the
consent of or notice to Borrower, to sell, transfer, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents. 
 12.2 Indemnification. Borrower agrees to indemnify, defend and hold Bank and its directors, officers, employees, agents, attorneys, or any other
Person affiliated with or representing Bank harmless against: (a) all obligations, demands, claims, and liabilities (collectively, “Claims”) asserted by any other party in connection with the transactions contemplated by the Loan
Documents; and (b) all losses or Bank Expenses incurred, or paid by Bank from, following, or arising from transactions between Bank and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly
caused by Bank’s gross negligence or willful misconduct. 
 12.3 Limitation of Actions. Any claim or cause of action by
Borrower against Bank, its directors, officers, employees, agents, accountants, attorneys, or any other Person affiliated with or representing Bank based upon, arising from, or relating to this Loan Agreement or any other Loan Document, or any other
transaction contemplated hereby or thereby or relating hereto or thereto, or any other matter, cause or thing whatsoever, occurred, done, omitted or suffered to be done by Bank, its directors, officers, employees, agents, accountants or attorneys,
shall be barred unless asserted by Borrower by the commencement of an action or proceeding in a court of competent jurisdiction by (a) the filing of a complaint within one year from the earlier of (i) the date any of Borrower’s
officer or directors had knowledge of the first act, the occurrence or omission upon which such claim or cause of action, or any part thereof, is based, or (ii) the date this Agreement is terminated, and (b) the service of a summons and
complaint on an officer of Bank, or on any other person authorized to accept service on behalf of Bank, within thirty (30) days thereafter. Borrower agrees that such one-year period is a reasonable and sufficient time for Borrower to
investigate and act upon any such claim or cause of action. The one-year period provided herein shall not be waived, tolled, or extended except by the written consent of Bank in its sole discretion. This provision shall survive any termination of
this Loan Agreement or any other Loan Document. 
 12.4 Time of Essence. Time is of the essence for the performance of all Obligations
in this Agreement. 
 12.5 Severability of Provisions. Each provision of this Agreement is severable from every other provision in
determining the enforceability of any provision. 
 12.6 Amendments in Writing; Integration. All amendments to this Agreement must be
in writing signed by both Bank and Borrower. This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations,
warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents. 
  

 -15- 

 12.7 Counterparts. This Agreement may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and delivered, are an original, and all taken together, constitute one Agreement. 
 12.8 Survival. All covenants, representations and warranties made in this Agreement continue in full force until this Agreement has terminated pursuant to its terms and all Obligations (other than inchoate indemnity obligations and
any other obligations which, by their terms, are to survive the termination of this Agreement) have been satisfied. The obligation of Borrower in Section 12.2 to indemnify Bank shall survive until the statute of limitations with respect to such
claim or cause of action shall have run. 
 12.9 Confidentiality. In handling any confidential information, Bank shall exercise the
same degree of care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or Affiliates (provided, however, Bank shall use commercially reasonable efforts to obtain
such Subsidiary’s or Affiliate’s agreement to the terms of this provision); (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall use commercially reasonable efforts to
obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection
with Bank’s examination or audit; and (e) as Bank considers appropriate in exercising remedies under this Agreement. Confidential information does not include information that either: (i) is in the public domain or in Bank’s
possession when disclosed to Bank, or becomes part of the public domain after disclosure to Bank through no fault of Bank; or (ii) is disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing
the information. 
 12.10 Borrower Liability. Each Borrower hereunder shall be obligated to repay all Credit Extensions made
hereunder, regardless of which Borrower actually receives said Credit Extensions, as if each Borrower hereunder directly received all Credit Extensions. Each Borrower waives any suretyship defenses available to it under the Code or any other
applicable law. Each Borrower waives any right to require Bank to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy. Bank may exercise or not exercise
any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower’s liability. Notwithstanding any other provision of this Agreement or
other related document, each Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Bank under this Agreement) to seek contribution, indemnification
or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by Borrower with respect to the Obligations in connection with this
Agreement or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection with this Agreement or
otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void. If any payment is made to a Borrower in contravention of this Section, such Borrower shall hold such
payment in trust for Bank and such payment shall be promptly delivered to Bank for application to the Obligations, whether matured or unmatured. 
 12.11 Right of Set Off. Borrower hereby grants to Bank, a lien, security interest and right of set off as security for all Obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits,
collateral and property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under the control of Bank (including a Bank subsidiary) or in transit to any of them. At any time after the occurrence and during the
continuance of an Event of Default, without demand or notice, Bank may set off the same or any part thereof and apply the same to any liability or obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral
securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR
OTHER PROPERTY OF BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. 
  

 -16- 

 13 DEFINITIONS 
 13.1 Definitions. As used in this Agreement, the following terms have the following meanings: 
 “Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes,
without limitation, all accounts receivable and other sums owing to Borrower. 
 “Account Debtor” is any “account
debtor” as defined in the Code with such additions to such term as may hereafter be made. 
 “Advance” or
“Advances” means an advance (or advances) under the Revolving Line. 
 “Affiliate” of any Person is a
Person that owns or controls directly or indirectly the Person, any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any
Person that is a limited liability company, that Person’s managers and members. 
 “Agreement” is defined in the
preamble hereof. 
 “Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the Borrowing
Base minus (b) the amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit) plus an amount equal to the Letter of Credit Reserves, minus (c) the FX Reserve, and minus (d) the outstanding
principal balance of any Advances (including any amounts used for Cash Management Services). 
 “Bank” is defined in the
preamble hereof. 
 “Bank Expenses” are all audit fees and expenses, costs, and reasonable expenses (including reasonable
attorneys’ fees and expenses) for preparing, negotiating, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to
Borrower. 
 “Borrower” is defined in the preamble hereof 
 “Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state tax returns, records regarding
Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information. 
 “Borrowing Base” is eighty percent (80.0%) of Eligible Accounts, as determined by Bank from Borrower’s most recent Borrowing
Base Certificate; provided, however, that Bank may decrease the foregoing percentages in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect Collateral. 

“Borrowing Base Certificate” is that certain certificate in the form attached hereto as Exhibit C. 
 “Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such Person’s Board of Directors and
delivered by such Person to Bank approving the Loan Documents to which such Person is a party and the transactions contemplated thereby, together with a certificate executed by its secretary on behalf of such Person certifying that (a) such
Person has the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party, (b) that attached as Exhibit A to such certificate is a true, correct, and complete copy of the resolutions then
in full force and effect authorizing and ratifying the execution, delivery, and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents on behalf of such
Person, together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such Person shall have delivered to Bank a further certificate canceling or amending such
prior certificate. 
 “Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed. 

“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any
agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either
Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc., and (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue. 
  

 -17- 

 “Cash Management Services” is defined in Section 2.1.4. 
 “Cash Management Services Sublimit” is defined in Section 2.1.4. 
 “Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the Commonwealth of
Massachusetts; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in
Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral is
governed by the Uniform Commercial Code in effect in a jurisdiction other than the Commonwealth of Massachusetts, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for
purposes on the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions. 
 “Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A. 
 “Collateral Account” is any Deposit Account, Securities Account, or Commodity Account. 
 “Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter be made. 
 “Communication” is defined in Section 10. 
 “Compliance Certificate”
is that certain certificate in the form attached hereto as Exhibit [F]. 
 “Contingent Obligation” is, for any
Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation directly or indirectly guaranteed, endorsed, co-made,
discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate,
currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent
Obligation” does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement. 
 “Control Agreement” is any control agreement entered into among the depository institution at which Borrower maintains a Deposit Account
or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account,
Securities Account, or Commodity Account. 
 “Credit Extension” is any Advance, Letter of Credit, Term Loan, FX Forward
Contract, amount utilized for Cash Management Services, or any other extension of credit by Bank for Borrower’s benefit. 
 “Current Liabilities” are all obligations and liabilities of Borrower to Bank, plus, without duplication, the aggregate amount of Borrower’s Total Liabilities that mature within one (1) year. 
 “Default” means any event which with notice or passage of time or both, would constitute an Event of Default. 
 “Default Rate” is defined in Section 2.3(b). 
 “Deferred Revenue” is all amounts received or invoiced in advance of performance under contracts and not yet recognized as revenue. 
  

 -18- 

 “Deposit Account” is any “deposit account” as defined in the Code with such
additions to such term as may hereafter be made. 
 “Designated Deposit Account” is Borrower’s deposit account, account
number                         , maintained with Bank. 
 “Dollars,” “dollars” and “$” each mean lawful money of the United States. 
 “Effective Date” is defined in the preamble of this Agreement. 
 “Eligible Accounts” are Accounts which arise in the ordinary course of Borrower’s business that meet all Borrower’s
representations and warranties in Section 5.3. Bank reserves the right, at any time and from time to time after the Effective Date, to adjust any of the criteria set forth below and to establish new criteria in its good faith business judgment.
Unless Bank agrees otherwise in writing, Eligible Accounts shall not include: 
 (a) Accounts for which the Account Debtor has not been
invoiced; 
 (b) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date; 
 (c) Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have not been paid within ninety (90) days of invoice
date; 
 (d) Credit balances over ninety (90) days from invoice date; 
 (e) Accounts owing from an Account Debtor, including Affiliates, whose total obligations to Borrower exceed twenty-five (25%) of all Accounts, for
the amounts that exceed that percentage, unless Bank approves in writing; 
 (f) Accounts owing from an Account Debtor which does not have
its principal place of business in the United States; 
 (g) Accounts owing from an Account Debtor which is a federal, state or local
government entity or any department, agency, or instrumentality thereof; 
 (h) Accounts owing from an Account Debtor to the extent that
Borrower is indebted or obligated in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of
customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the ordinary course of its business; 
 (i)
Accounts for demonstration or promotional equipment, or in which goods are consigned, or sold on a “sale guaranteed”, “sale or return”, “sale on approval”, “bill and hold”, or other terms if Account
Debtor’s payment may be conditional; 
 (j) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent; 
 (k) Accounts in which the Account Debtor disputes liability or makes any claim (but only up to the disputed or claimed amount), or
if the Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or goes out of business; 
 (l) Accounts owing from an
Account Debtor with respect to which Borrower has received deferred revenue (but only to the extent of such deferred revenue); 
 (m)
Accounts for which Bank in its good faith business judgment determines collection to be doubtful; and 
 (n) other Accounts Bank deems
ineligible in the exercise of its good faith business judgment. 
  

 -19- 

 “Equipment” is all “equipment” as defined in the Code with such additions to
such term as may hereafter be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing. 
 “ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations. 
 “Event of Default” is defined in Section 8. 
 “Foreign Currency” means lawful money of a country other than the United States. 
 “Funding Date” is any date on which a Credit Extension is made to or on account of Borrower which shall be a Business Day. 
 “FX Business Day” is any day when (a) Bank’s Foreign Exchange Department is conducting its normal business and (b) the Foreign Currency being purchased or sold by Borrower is available
to Bank from the entity from which Bank shall buy or sell such Foreign Currency. 
 “FX Forward Contract” is defined in
Section 2.1.3. 
 “FX Reserve” is defined in Section 2.1.3. 
 “GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of determination. 
 “General Intangibles” is all
“general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work, whether published or unpublished, any patents, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, any
trade secret rights, including any rights to unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income and
other tax refunds, security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation
key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind. 
 “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by
notes, bonds, debentures or similar instruments, (c) capital lease obligations, and (d) Contingent Obligations. 
 “Initial
Audit” shall be the receipt by Bank of the results of a complete audit of Borrower’s Accounts, with results satisfactory to Bank in its sole and absolute discretion. 
 “Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or
insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement, or other relief. 
 “Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as may
hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily out of
Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above. 
 “Investment” is any beneficial ownership interest in any Person (including stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person. 
  

 -20- 

 “IP Agreement” is that certain Intellectual Property Security Agreement executed and
delivered by Borrower to Bank dated as of the Effective Date. 
 “Letter of Credit” means a standby letter of credit issued
by Bank or another institution based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set forth in Section 2.1.2. 
 “Letter of Credit Application” is defined in Section 2.1.2(a). 
 “Letter of
Credit Reserve” has the meaning set forth in Section 2.1.2(d). 
 “Lien” is a mortgage, lien, deed of trust,
charge, pledge, security interest or other encumbrance. 
 “Loan Documents” are, collectively, this Agreement, the
Perfection Certificate, the IP Agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement between Borrower any Guarantor and/or for the benefit of Bank in connection with this
Agreement, all as amended, restated, or otherwise modified. 
 “Material Adverse Change” is (a) a material impairment
in the perfection or priority of Bank’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; (c) a material impairment
of the prospect of repayment of any portion of the Obligations; or (d) Bank determines, based upon information available to it and in its reasonable judgment, that there is a reasonable likelihood that Borrower shall fail to comply with one or
more of the financial covenants in Section 6 during the next succeeding financial reporting period. 
 “Maturity
Date” means, as applicable, the Revolving Line Maturity Date and the Term Loan Maturity Date. 
 “Net Income”
means, as calculated for Borrower for any period as at any date of determination, the net profit (or loss), excluding non-cash expenses relating to stock compensation expenses, after provision for taxes, of Borrower for such period taken as a single
accounting period. 
 “Obligations” are Borrower’s obligation to pay when due any debts, principal, interest, Bank
Expenses and other amounts Borrower owes Bank now or later, whether under this Agreement, the Loan Documents, or otherwise, including, without limitation, all obligations relating to letters of credit (including reimbursement obligations for drawn
and undrawn letters of credit), cash management services, and foreign exchange contracts, if any, and including interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and the
performance of Borrower’s duties under the Loan Documents. 
 “Operating Documents” are, for any Person, such
Person’s formation documents, as certified with the Secretary of State of such Person’s state of formation on a date that is no earlier than 30 days prior to the Effective Date, and its bylaws in current form, each of the foregoing with
all current amendments or modifications thereto. 
 “Payment/Advance Form” is that certain form attached hereto as
Exhibit B. 
 “Payment Date” is first day of each calendar month. 
 “Perfection Certificate” is defined in Section 5.1. 
 “Permitted Indebtedness” is: 
 (a) Borrower’s Indebtedness to Bank under this Agreement
and the other Loan Documents; 
 (b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate; 
 (c) Subordinated Debt; 
 (d) unsecured
Indebtedness to trade creditors incurred in the ordinary course of business; 
 (e) secured by Permitted Liens; and 
  

 -21- 

 (f) extensions, refinancings, modifications, amendments and restatements of any items of Permitted
Indebtedness (a) through (e) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be. 
 “Permitted Investments” are: 
 (a) Investments shown on the Perfection Certificate and existing on the Effective Date; and 
 (b) Cash Equivalents. 
 “Permitted Liens” are: 
 (a)
Liens existing on the Effective Date and shown on the Perfection Certificate or arising under this Agreement and the other Loan Documents; 
 (b) Liens for taxes, fees, assessments or other government charges or levies, either not delinquent or being contested in good faith and for which Borrower maintains adequate reserves on its Books, if they have no priority over any
of Bank’s Liens; 
 (c) purchase money Liens or capital leases (i) on Equipment acquired or held by Borrower incurred for financing
the acquisition of the Equipment securing no more than Four Hundred Thousand Dollars ($400,000.00) in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Lien is confined to the property and improvements
and the proceeds of the Equipment; 
 (d) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens
described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase; 
 (e) leases or subleases of real property granted in the ordinary course of business, and leases, subleases, non-exclusive licenses or sublicenses of
property (other than real property or intellectual property) granted in the ordinary course of Borrower’s business, if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security interest; 
 (f) non-exclusive license of intellectual property granted to third parties in the ordinary course of business; 
 (g) statutory Liens securing claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other Persons imposed without action of
such parties, provided, they have no priority over any of Bank’s Lien and the aggregate amount of such Liens does not at any time exceed Fifty Thousand Dollars ($50,000); 
 (h) Liens to secure payment of workers’ compensation, employment insurance, old-age pensions, social security and other like obligations incurred in
the ordinary course of business, provided, they have no priority over any of Bank’s Liens and the aggregate amount of the Indebtedness secured by such Liens does not at any time exceed Fifty Thousand Dollars ($50,000); and 
 (i) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 8.4 or 8.7. 

“Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust,
unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency. 
 “Prepayment Fee” shall be an amount equal to: 
 (i) for a prepayment made on or before one
year from the Effective Date, one percent (1.0%) of the principal amount of the Term Loan prepaid; 
 (ii) for a prepayment made after
one year, but on or before two years from the Effective Date, one-half of one percent (0.50%) of the principal amount of the Term Loan prepaid; and 
  

 -22- 

 (iii) for a prepayment made after two years from the Effective Date, zero percent (0.0%). 
 “Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest rate. 
 “Quick Assets” is, on any date, Borrower’s unrestricted cash and Cash Equivalents, plus net billed accounts receivable. 

“Registered Organization” is any “registered organization” as defined in the Code with such additions to such term as may
hereafter be made 
 “Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial Officer and
Controller of Borrower. 
 “Revolving Line” is an Advance or Advances in an aggregate amount of up to Three Million Dollars
($3,000,000.00) outstanding at any time. Notwithstanding the foregoing, the Borrower may only request Credit Extensions under the Revolving Line in an aggregate amount of up to One Million Dollars ($1,000,000.00) prior to the occurrence of the
Initial Audit. 
 “Revolving Line Maturity Date” is April 30, 2009. 
 “Securities Account” is any “securities account” as defined in the Code with such additions to such term as may hereafter be
made. 
 “Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter
indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and the other creditor), on terms acceptable to Bank. 
 “Subsidiary” means, with respect to any Person, any Person of which more than 50% of the voting stock or other equity interests (in the
case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person or one or more Affiliates of such Person. 
 “Tangible Net Worth” is, on any date, the total assets of Borrower minus (a) any amounts attributable to (i) goodwill, (ii) intangible items including unamortized debt discount and expense, patents,
trade and service marks and names, copyrights and research and development expenses except prepaid expenses, (iii) notes, accounts receivable and other obligations owing to Borrower from its officers or other Affiliates, and (iv) reserves
not already deducted from assets, minus (b) Total Liabilities, plus (c) Subordinated Debt. 
 “Term
Loan” is a loan made by Bank to Borrower in an aggregate amount equal to One Million Dollars ($1,000,000.00). 
 “Term Loan
Maturity Date” is May 1, 2010. 
 “Term Loan Payment” is defined in Section 2.1.5(b). 
 “Total Liabilities” is on any day, obligations that should, under GAAP, be classified as liabilities on Borrower’s consolidated
balance sheet, including all Indebtedness, and current portion of Subordinated Debt permitted by Bank to be paid by Borrower, but excluding all other Subordinated Debt. 
 “Transfer” is defined in Section 7.1. 
 “Unused Revolving Line Facility
Fee” is defined in Section 2.4(b). 
 Signature page follows. 
  

 -23- 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as a sealed
instrument under the laws of the Commonwealth of Massachusetts as of the Effective Date. 
  

			
	BORROWER:
	
	SONIC FOUNDRY, INC.
		
	By	 	  

	Name:	 	  

	Title:	 	  

	
	SONIC FOUNDRY MEDIA SYSTEMS, INC.
		
	By	 	  

	Name:	 	  

	Title:	 	  

	
	BANK:
	
	SILICON VALLEY BANK
		
	By	 	  

	Name:	 	  

	Title:	 	  

 [Signature page to Loan and Security Agreement] 

 EXHIBIT A 
 The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property: 
 All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles, commercial tort
claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by
a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and 
 all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and
replacements, products, proceeds and insurance proceeds of any or all of the foregoing. 
  

 1 

 EXHIBIT B 
 Loan Payment/Advance Request Form 
 DEADLINE FOR
SAME DAY PROCESSING IS NOON E.S.T.* 
  

			
	 Fax To:
	  	Date:
                                

 LOAN PAYMENT: 
 SONIC FOUNDRY, INC. AND SONIC FOUNDRY MEDIA SYSTEMS, INC. 
  

							
	From Account #	  	  
	    	To Account #	  	  

		  	(Deposit Account #)	    		  	(Loan Account #)
	Principal $	  	  
	    	and/or Interest $	  	  

				
	Authorized Signature:	  	  
	    	Phone Number:	  	  

	Print Name/Title:	  	  
	    		  	

 LOAN ADVANCE: 
 Complete Outgoing Wire Request section below if all or a portion of the funds from this loan advance are for an outgoing wire. 
  

							
	From Account #	  	  
	    	To Account #	  	  

		  	(Loan Account #)	    		  	(Deposit Account #)

  

			
	 Amount of Advance
	  	$                    

 All Borrower’s representations and warranties in the Loan and Security Agreement are true, correct and
complete in all material respects on the date of the request for an advance; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in
the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date: 
  

							
	Authorized Signature:	  	  
	    	Phone Number:	  	  

	Print Name/Title:	  	  
	    		  	

 OUTGOING WIRE REQUEST: 
 Complete only if all or a portion of funds from the loan advance above is to be wired. 
 Deadline for same day processing is noon, E.S.T. 
  

							
	Beneficiary Name:	 	  
	  	Amount of Wire: $	  	  

	Beneficiary Bank:	 	  
	  	Account Number:	  	  

	City and State:	 	  
	  		  	

  

									
	Beneficiary Bank Transit (ABA) #:	 	  
	 		 	Beneficiary Bank Code (Swift, Sort, Chip, etc.):	 	  

		 		 		 	(For International Wire Only)

  

							
	Intermediary Bank:	 	  
	  	Transit (ABA) #:	  	  

	For Further Credit to:	 	  

  

			
	Special Instruction:	  	  

 By signing below, I (we) acknowledge and agree that my (our) funds transfer request shall be processed in
accordance with and subject to the terms and conditions set forth in the agreements(s) covering funds transfer service(s), which agreements(s) were previously received and executed by me (us). 
  

							
	Authorized Signature:	 	  
	  	2nd Signature (if required):	  	  

	Print Name/Title:	 	  
	  	Print Name/Title:	  	  

	Telephone #:	 	  
	  	Telephone #:	  	  

	*	Unless otherwise provided for an Advance bearing interest at LIBOR. 

  

 1 

 EXHIBIT C 
 BORROWING BASE CERTIFICATE 
  

			
	Borrower:	 	  

 Lender: Silicon Valley Bank 

			
	Commitment Amount:	  	$                        

  

			
	ACCOUNTS RECEIVABLE	  	
	 1.      Accounts Receivable Book Value as of
                                    
	  	$                        
	 2.      Additions (please explain on reverse)
	  	$                        
	 3.      TOTAL ACCOUNTS RECEIVABLE
	  	$                        
		
	ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)	  	
	 4.      Amounts over 90 days due
	  	$                        
	 5.      Balance of 50% over 90 day accounts
	  	$                        
	 6.      Credit balances over 90 days
	  	$                        
	 7.      Concentration Limits
	  	$                        
	 8.      Foreign Accounts
	  	$                        
	 9.      Governmental Accounts
	  	$                        
	 10.    Contra Accounts
	  	$                        
	 11.    Promotion or Demo Accounts
	  	$                        
	 12.    Intercompany/Employee Accounts
	  	$                        
	 13.    Disputed Accounts
	  	$                        
	 14.    Deferred Revenue
	  	$                        
	 15.    Other (please explain on reverse)
	  	$                        
	 16.    TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS
	  	$                        
	 17.    Eligible Accounts (#3 minus #16)
	  	$                        
	 18.    ELIGIBLE AMOUNT OF ACCOUNTS ( 80.0% of #17)
	  	$                        
		
	BALANCES	  	
	 19.    Maximum Loan Amount
	  	$                        
	 20.    Total Funds Available (Lesser of #19 and #18)
	  	$                        
	 21.    Present balance owing on Line of Credit
	  	$                        
	 22.    Outstanding under Sublimits (L/C, Cash Mgt, Fx)
	  	$                        
	 23.    RESERVE POSITION (#20 minus #21 and #22)
	  	$                        

 The undersigned represents and warrants that this is true, complete and correct, and that the information in
this Borrowing Base Certificate complies with the representations and warranties in the Loan and Security Agreement between the undersigned and Silicon Valley Bank. 
  

									
		 		 		 	 BANK USE ONLY
  

	COMMENTS:	 		 	Received by:	 	  

		 		 		 		 	AUTHORIZED SIGNER
		 		 		 	Date:	 	  

	By:	 	  
	 		 	Verified:	 	  

		 	        Authorized Signer	 		 		 	AUTHORIZED SIGNER
	Date:	 	  
	 		 	Date:	 	  

		 		 		 	Compliance Status:             Yes         No

  

 1 

 EXHIBIT D 
 COMPLIANCE CERTIFICATE 
  

					
	TO:	  	SILICON VALLEY BANK	  	Date:                             
	FROM:	  	SONIC FOUNDRY, INC. AND SONIC FOUNDRY MEDIA SYSTEMS, INC.	  	

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

							
	 Reporting Covenant
	  	 Required
	  	Complies
	Monthly financial statements with Compliance Certificate	  	Monthly within 30 days	  		  	Yes  No
	Board approved Projections	  	Annually, by 12/31 of each year	  		  	Yes No
	10-Q, 10-K and 8-K	  	Within 5 days after filing with SEC	  		  	Yes No
	Borrowing Base Certificate A/R & A/P Agings	  	Monthly within 30 days	  		  	Yes No
	Audit	  	Annually	  		  	Yes No
		
	 The following Intellectual Property was registered after the Effective Date (if no registrations, state
“None”)
	  	

					
	  
	  		  	

  

										
	 Financial Covenant
	  	Required	 	 	Actual	  	Complies
	 Maintain on a Monthly Basis:
	  				 			  	
	 Minimum Adjusted Quick Ratio
	  	 	            :1.0	*	 	 	            :1.0	  	Yes  No
	 Maintain on a Quarterly Basis:
	  				 			  	
	 Minimum Tangible Net Worth
	  	$	                	**	 	$	                	  	Yes No

	*	As set forth in Section 6.7(a) of the Loan Agreement 

	**	As set forth in Section 6.7(b) of the Loan Agreement 

  

 1 

 The following financial covenant analyses and information set forth in Schedule 1 attached hereto are
true and accurate as of the date of this Certificate. 
 The following are the exceptions with respect to the certification above: (If no
exceptions exist, state “No exceptions to note.”) 
  

	
	 
	
	 
	
	 

  

									
	SONIC FOUNDRY, INC.	 		 	BANK USE ONLY
					
		 		 		 	Received by:	 	  

	By:	 	  
	 		 		 	AUTHORIZED SIGNER
	Name:	 	  
	 		 	Date:	 	  

	Title:	 	  
	 		 		 	
		 		 		 	Verified:	 	  

	SONIC FOUNDRY MEDIA SYSTEMS, INC.	 		 	AUTHORIZED SIGNER
		 		 		 	Date:	 	  

	By:	 	  
	 		 		 	
	Name:	 	  
	 		 	Compliance Status:             Yes         No
	Title:	 	  
	 		 	

  

 2 

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

	I.	Adjusted Quick Ratio (Section 6.7(a)) 

  

			
	Required:	  	.75 : 1.00 (for months ending October 31, 2006, and November 30, 2006)
		  	 1.25 : 1.0 (for months ending January 31, February 28, April 30, May 31, July 31, and
August 31)
 1.50 : 1.0 (for months ending December 31, March 31, June 30, and September 30)

	 Actual:
	  	______________

  

					
	A.	  	Aggregate value of the unrestricted cash and cash equivalents of Borrower	  	$            
			
	B.	  	Aggregate value of the net billed accounts receivable of Borrower	  	
			
	C.	  	Quick Assets (the sum of lines A and B)	  	
			
	D.	  	Aggregate value of Obligations to Bank	  	
			
	E	  	Aggregate value of long term and short term Obligations to Bank	  	
			
	F.	  	Aggregate value of all amounts received or invoiced by Borrower in advance of performance under contracts and not yet recognized as revenue	  	$            
			
	G.	  	Quick Liabilities (the sum of lines D, E minus F)	  	$            
			
	E.	  	Adjusted Quick Ratio (line C divided by line G)	  	______

  

			
	             No, not in compliance	  	             Yes, in
compliance                        

  

	II.	Tangible Net Worth (Section 6.7(b)) 

  

			
	Required:	  	$2,500,0000.00, plus fifty percent (50.0%) of Borrower’s Net Income, on a quarterly basis
	Actual:	  	$                     

  

						
	A.	  	Tangible Net Worth	  	$	            

  

			
	                      No, not in compliance	  	             Yes, in
compliance                        

  

 3

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