Document:

Amendment to the Credit Agreement

 Exhibit 10.4 
 FIRST AMENDMENT TO CREDIT AGREEMENT 
 AND WAIVER 
 THIS FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this “Amendment”), dated as of August 11, 2006, is by and among
HEWITT ASSOCIATES L.L.C., an Illinois limited liability company (the “Borrower”), HEWITT ASSOCIATES, INC., a Delaware corporation (“HAI”) and WACHOVIA BANK, NATIONAL ASSOCIATION, as
administrative agent on behalf of the Lenders (defined below) under the Credit Agreement (defined below) (in such capacity, the “Administrative Agent”). Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed thereto in the Credit Agreement, as amended hereby. 
 W I T N E S S E T H 
 WHEREAS, the Borrower, HAI, certain banks and financial institutions from time to time party thereto (the “Lenders”) and the
Administrative Agent are parties to that certain Credit Agreement dated as of May 23, 2005 (as amended, modified, supplemented, or restated from time to time, the “Credit Agreement”); 
 WHEREAS, the Borrower and HAI have several non-cash charges which will be reflected in their financial statements for the fiscal quarter ended
June 30, 2006 (the “Non-Cash Charges”): 
 WHEREAS, due to the Non-Cash Charges, the Borrower and HAI are in
violation of Section 5.7 and Section 5.8 of the Credit Agreement for the fiscal quarter ended June 30, 2006 (the “Acknowledged Events of Default”); 
 WHEREAS, the Borrower and HAI have requested the Required Lenders to waive the Acknowledged Events of Default and amend certain provisions of the
Credit Agreement; and 
 WHEREAS, the Required Lenders are willing to waive the Acknowledged Events of Default and make such
amendments to the Credit Agreement, subject to the terms and conditions set forth herein. 
 NOW, THEREFORE, in consideration of the
agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE I 
 AMENDMENTS TO CREDIT AGREEMENT 
 1.1 Amendment to Definition. The definition of EBITDA set forth in Section 1.1 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows and upon execution of this Amendment shall be considered effective as of June 30, 2006: 

 “EBITDA” means, with reference to any period, Net Income for such period plus all
amounts deducted in arriving at such Net Income amount in respect of (i) Interest Expense for such period, plus (ii) federal, state and local income taxes for such period, plus (Hi) all amounts properly charged for depreciation of fixed
assets and amortization of intangible assets during such period on the books of HAI and its Subsidiaries, but excluding from such amount any gains on sales of assets recognized during such period plus (iv) one-time non-cash charges actually
incurred as of the fiscal quarter ended June 30, 2006 and as more particularly described in estimated form on Schedule 1.1-D, in an aggregate amount not to exceed $263,900,000. 
 1.2 Schedule 1.1-D. A new Schedule 1.1-D is hereby added to the Credit Agreement in the form set forth on Exhibit B attached hereto,
which sets forth the estimated Non-Cash Charges. 
 ARTICLE II 
 WAIVER 
 2.1 Waiver of Acknowledged Events of Default.
Notwithstanding the provisions of the Credit Agreement to the contrary, the Lenders hereby waive, on a one-time basis, the Acknowledged Events of Default; provided that the Borrower and HAI shall be in compliance with Sections 5.7 and 5.8
after taking into account the revised definition of EBITDA set forth herein. 
 2.2 Effectiveness of Waiver. This Waiver shall
be effective only to the extent specifically set forth herein and shall not (a) be construed as a waiver of any breach or default other than as specifically waived herein nor as a waiver of any breach or default of which the Lenders have not
been informed by the Borrower, (b) affect the right of the Lenders to demand compliance by the Borrower with all terms and conditions of the Credit Agreement, except as specifically modified or waived by this Waiver, (c) be deemed a waiver
of any transaction or future action on the part of the Borrower requiring the Lenders’ or the Required Lenders’ consent or approval under the Credit Agreement, or (d) except as waived hereby, be deemed or construed to be a waiver or
release of, or a limitation upon, the Administrative Agent’s or the Lenders’ exercise of any rights or remedies under the Credit Agreement or any other Credit Document, whether arising as a consequence of any Event of Default which may now
exist or otherwise, all such rights and remedies hereby being expressly reserved. 
 ARTICLE III 
 CONDITIONS TO EFFECTIVENESS 
 3.1
Closing Conditions. This Amendment shall become effective as of date hereof (the “First Amendment Effective Date”) upon satisfaction of the following conditions (in form and substance reasonably acceptable to the
Administrative Agent): 
  

 2 

 (a) Executed Amendment. The Administrative Agent shall have received a copy of this Amendment duly
executed by each of each of the Borrower, HAI and the Administrative Agent, on behalf of the Required Lenders. 
 (b) Executed
Consents. The Administrative Agent shall have received executed consents, in the form of Exhibit A attached hereto, from the Required Lenders authorizing the Administrative Agent to enter into this Amendment on their behalf. The delivery
by the Administrative Agent of a signature to this Amendment shall constitute conclusive evidence that the consents from the Required Lenders have been obtained. 
 (c) Miscellaneous. All other documents and legal matters in connection with the transactions contemplated by this Amendment shall be reasonably satisfactory in form and substance to the Administrative Agent and
its counsel. 
 ARTICLE IV 
 MISCELLANEOUS 
 4.1 Amended Terms. On and after the First Amendment Effective Date, all references to the
Credit Agreement in each of the Credit Documents shall hereafter mean the Credit Agreement as amended by this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall
remain in full force and effect according to its terms. 
 4.2 Representations and Warranties of the Borrower and HAI.
Each of the Borrower and HAI represents and warrants as follows: 
 (a) It has taken all necessary action to
authorize the execution, delivery and performance of this Amendment. 
 (b) This Amendment has been duly executed and
delivered by such Person and constitutes such Person’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity). 
 (c) No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or
third party is required in connection with the execution, delivery or performance by such Person of this Amendment. 
 (d) The
representations and warranties set forth in Section 3 of the Credit Agreement are true and correct as of the date hereof (except for those which expressly relate to an earlier date). 
  

 3 

 (e) After giving effect to this Amendment, no event has occurred and is continuing which
constitutes a Default or an Event of Default. 
 (f) Except as specifically provided in this Amendment, the Credit Party
Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims. 
 4.3
Reaffirmation of Credit Party Obligations. Each of the Borrower and HAI hereby ratifies the Credit Agreement and acknowledges and reaffirms (a) that it is bound by all terms of the Credit Agreement applicable to it and (b) that
it is responsible for the observance and full performance of its respective Credit Party Obligations. 
 4.4 Credit
Document. This Amendment shall constitute a Credit Document under the terms of the Credit Agreement. 
 4.5 Further
Assurances. HAI and the Borrower agree to promptly take such action, upon the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment. 
 4.6 Entirety. This Amendment and the other Credit Documents embody the entire agreement between the parties hereto and supersede all prior
agreements and understandings, oral or written, if any, relating to the subject matter hereof. 
 4.7 Counterparts;
Telecopy. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart to
this Amendment by telecopy shall be effective as an original and shall constitute a representation that an original will be delivered. 
 4.8 No Actions, Claims, Etc. As of the date hereof, each of the Borrower and HAI hereby acknowledges and confirms that it has no knowledge of any actions, causes of action, claims, demands, damages and liabilities of whatever
kind or nature, in law or in equity, against the Administrative Agent, the Lenders, or the Administrative Agent’s or the Lenders’ respective officers, employees, representatives, agents, counsel or directors arising from any action by such
Persons, or failure of such Persons to act under this Credit Agreement on or prior to the date hereof. 
 4.9 GOVERNING LAW.
THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW). 
 4.10 Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. 
  

 4 

 4.11 General Release. In consideration of the Administrative Agent, on behalf of the
Lenders, entering into this Amendment, each of the Borrower and HAI hereby releases the Administrative Agent, the Lenders, and the Administrative Agent’s and the Lenders’ respective officers, employees, representatives, agents, counsel and
directors from any and all actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, now known or unknown, suspected or unsuspected to the extent that any of the foregoing arises from any
action or failure to act under the Credit Agreement on or prior to the date hereof, except, with respect to any such Person being released hereby, any actions, causes of action, claims, demands, damages and liabilities arising out of such
Person’s gross negligence, bad faith or willful misconduct. 
 4.12 Consent to Jurisdiction; Service of Process; Waiver of Jury
Trial. The jurisdiction, services of process and waiver of jury trial provisions set forth in Sections 8.14 and 8.17 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis. 
 4.13 Fees. The Borrower agrees to pay all reasonable costs, fees and expenses of the Administrative Agent in connection with the
preparation, execution and delivery of this Amendment, including, without limitation, the reasonable fees and expenses of the Administrative Agent’s legal counsel, Moore & Van Allen PLLC. 
  

 5 

 HEWITT ASSOCIATES L.L.C. 
 FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER 
 IN WITNESS WHEREOF the Borrower, HAI and the Administrative
Agent, on behalf of the Required Lenders have caused this Amendment to be duly executed on the date first above written. 
  

					
	BORROWER:	 	HEWITT ASSOCIATES L.L.C.,
		 	an Illinois limited liability company
			
		 	By:	 	 /s/ C. Lawrence Connolly III

		 	Name:	 	C. Lawrence Connolly, III
		 	Title:	 	Secretary
		
		 	 HEWITT ASSOCIATES, INC.,
 a Delaware
corporation

			
		 	By:	 	 /s/ C. Lawrence Connolly III

		 	Name:	 	C. Lawrence Connolly III
		 	Title:	 	Secretary

 HEWITT ASSOCIATES L.L.C. 
 FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER 
  

					
	ADMINISTRATIVE AGENT:	 	WACHOVIA BANK, NATIONAL ASSOCIATION,
		 	as Administrative Agent on behalf of the Required Lenders
			
		 	By:	 	 /s/ Robert Sevin

		 	Name:	 	Robert Sevin
		 	Title:	 	Director

 EXHIBIT A 
 [FORM OF] 
 CONSENT TO FIRST AMENDMENT 
 TO CREDIT AGREEMENT AND WAIVER 
 This Consent is given pursuant to the Credit
Agreement, dated as of May 23, 2005 (as previously amended and modified, the “Credit Agreement”; and as further amended by the Amendment (as defined below), the “Amended Credit Agreement”), by and among Hewitt
Associates L.L.C., an Illinois limited liability company (the “Borrower”), Hewitt Associates, Inc., a Delaware corporation (“HAI”), the lenders and other financial institutions from time to time party thereto (the
“Lenders”) and WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent on behalf of the Lenders (in such capacity, the “Administrative Agent”). Capitalized terms used herein shall have the meanings ascribed
thereto in the Credit Agreement unless otherwise defined herein. 
 The undersigned hereby approves the amendment of the Credit Agreement
effected by the First Amendment to Credit Agreement and Waiver (the “Amendment”), to be dated on or about August 11, 2006, by and among the Borrower, HAI, and the Administrative Agent and hereby authorizes the Administrative
Agent to execute and deliver the Amendment on its behalf and, by its execution below, the undersigned agrees to be bound by the terms and conditions of the Amendment and the Amended Credit Agreement. 
 Delivery of this Consent by telecopy shall be effective as an original. 
 A duly authorized officer of the undersigned has executed this Consent as of the      day of
                    , 2006. 
  

					
	  
	 	,
	as a Lender	 	
			
	 By:
	 	  
	 	
	 Name:
	 		 	
	 Title:
	 		 	

 EXHIBIT B 
 Schedule 1.1-D 
 Estimated One-Time Non-Cash Charges incurred as of the fiscal
quarter ended June 30, 2006 
  

				
	 Goodwill
	  	$	187,000,000
	 Loss Reserves
	  	 	69,800,000
	 Asset Impairments
	  	 	7,100,000
		  	 	 
	 Total
	  	$	263,900,000Loan and Security Agreement

 EXHIBIT 10.1 
 

 
 SILICON VALLEY BANK LOAN AND SECURITY AGREEMENT 
 This LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of August 7, 2006, between SILICON VALLEY BANK, a California
chartered bank, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 (FAX
                                    ) (“Bank”) and
AXESSTEL, INC., a Nevada corporation, with offices at 6815 Flanders Drive, Suite 210, San Diego, CA 92121 (FAX 858-625-2110) (Borrower”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. The parties
agree as follows: 
  

	 	1	ACCOUNTING AND OTHER TERMS 

 Accounting terms
not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. The term “financial statements” includes the notes and schedules. The terms “including” and
“includes” always mean “including (or includes) without limitation,” in this or any Loan Document. Capitalized terms 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 meanings provided by the Code, to the extent such terms are defined therein. 
  

	 	2	LOAN AND TERMS OF PAYMENT 

 2.1 Promise to
Pay. Borrower hereby unconditionally promises to pay Bank the unpaid principal amount of all Advances hereunder with all interest, fees and finance charges due thereon as and when due in accordance with this Agreement. 
  

	 	2.1.1	Financing of Accounts. 

 (a)
Availability. Subject to the terms of this Agreement, Borrower may request that Bank finance specific Eligible Accounts. Bank may, in its sole discretion in each instance finance such Eligible Accounts by extending credit to Borrower in an
amount equal to the result of the Advance Rate multiplied by the face amount of the Eligible Account (the “Advance”). Bank may, in its sole discretion, change the percentage of the Advance Rate for a particular Eligible Account on a case
by case basis. When Bank makes an Advance, the Eligible Account becomes a “Financed Receivable.” 
 (b) Maximum
Advances. The aggregate face amount of all Financed Receivables outstanding at any time may not exceed the Facility Amount. 
 (c) Borrowing Procedure. Borrower will deliver an Invoice Transmittal for each Eligible Account it offers. Bank may rely on information set forth in or provided with the Invoice Transmittal. 
 (d) Confirmations. Bank may, at its option, conduct a check with the Credit Insurer with respect to the Account Debtor for each
Account requested by Borrower for financing hereunder in order to confirm that such Account and Account Debtor are covered by the Credit Insurance. Bank may also verify directly with the respective Account Debtors the validity, amount and other
matters relating to the Accounts (including confirmations of Borrower’s representations in Section 5.3) by means of mail, telephone or otherwise, either in the name of Borrower or Bank from time to time in its sole discretion. 

(e) Accounts Notification/Collection. Bank may notify any Person owing Borrower money of Bank’s security interest in the
funds and verify and/or collect the amount of the Account in accordance with the terms of Sections 2.2.7 and 2.4. 
  

 1 

 (f) Maturity. This Agreement shall terminate and all Obligations outstanding
hereunder shall be immediately due and payable on the Maturity Date. 
 (h) Bank’s Discretion. Notwithstanding
anything to the contrary contained herein, Bank is not obligated to finance any Eligible Accounts. Bank and Borrower hereby acknowledge and agree that Bank’s agreement to finance Eligible Accounts hereunder is discretionary in each instance.
Accordingly, there shall not be any recourse to Bank, nor liability of Bank, on account of any delay in Bank’s making of, and/or any decline by Bank to make, any loan or advance requested hereunder. In addition, this Agreement may be terminated
by Borrower or Bank at any time, provided, however, Bank must provide Borrower with 90 days notice of the proposed termination if and only if no event of Default has occurred and is continuing at the time the Bank notifies Borrower of its intent to
terminate the Agreement and the Maturity Date is more than 90 days after the date of any such notice of intent to terminate. No notice shall be required for this Agreement to terminate automatically on the Maturity Date. 
 2.2 Collections, Finance Charges, Remittances and Fees. The Obligations shall be subject to the following fees and Finance Charges.
Unpaid fees and Finance Charges may, in Bank’s discretion, accrue interest and fees as described in Section 9.2 hereof. 
 2.2.1 Collections. Collections will be credited to the Financed Receivable Balance and the related Advance for such Financed Receivable, but if there is an Event of Default, Bank may apply Collections to the Obligations
in any order it chooses. If Bank receives a payment for both a Financed Receivable and a non-Financed Receivable, the funds will first be applied to the Financed Receivable and, if there is no Event of Default then existing, the excess will be
remitted to Borrower, subject to Section 2.2.7. 
 2.2.2 Facility Fee. A fully earned, non-refundable facility fees
of: (a) for the first year of the term hereof, $150,000, is due upon execution of this Agreement; and (b) for the second year of the term hereof, $112,500 due on the first anniversary of the date of this Agreement. Notwithstanding the
foregoing, so long as no Event of Default has occurred and is continuing, if the Bank terminates this Agreement: (i) on or before August 6, 2007, Bank shall retain as a facility fee with respect to (a) above an amount equal to the
product of: (A) the difference of: (y) 360 minus (z) the actual number of days elapsed between August 7, 2006 and the effective termination date multiplied by (B) $416.67 (the “Adjusted First Fee”) and shall refund
to the Borrower an amount equal to $150,000 minus the Adjusted First Fee and Bank shall not charge for the $112,500 fee set forth in (b) above, and (ii) on and after August 7, 2007, Bank shall retain all of the facility fee with
respect to (a) above and shall retain as a facility fee with respect to (b) above an amount equal to the product of: (A) the difference of: (y) 360 minus (z) the actual number of days elapsed between August 6, 2007 and
the effective termination date multiplied by (B) $312.50 (the “Adjusted Second Fee”) and shall refund to the Borrower an amount equal to $112,500 minus the Adjusted Second Fee. If this Agreement is terminated by Borrower on or before
August 7, 2007 and no Event of Default has occurred or is continuing at such time, Borrower shall not be required to pay the $112,500 facility fee set forth in (b) above. 
 2.2.3 Finance Charges. All Collections received by Bank shall be deemed applied by Bank on account of the Obligations on the day
after the receipt of the Collections. Borrower will pay a finance charge (the “Finance Charge”) on all outstanding Advances with respect to Financed Receivables which is equal to the Applicable Rate. The Finance Charge shall be computed on
the basis of a 360-day year for the actual number of days elapsed. The Finance Charge is payable when the Advance made based on such Financed Receivable is payable in accordance with Section 2.3 hereof. 
 2.2.4 Administrative Fee. Borrower shall pay to Bank an Administrative Fee equal to 0.25% of the amount of Advances with respect to
each Financed Receivable first financed during that Reconciliation Period (the “Administrative Fee”). The Administrative Fee is payable when the Advance made based on such Financed Receivable is payable in accordance with Section 2.3
hereof. After an Event of Default, the Administrative Fee will increase an additional 0.50% effective immediately upon such Event of Default. 
 2.2.5 Accounting. After each Reconciliation Period, Bank will provide an accounting of the transactions for that Reconciliation Period, including the amount of all Financed Receivables, all Collections, Adjustments,
Finance Charges, Administrative Fee and the Facility Fee. If Borrower does not object to the 

  

 2 

 
accounting in writing within thirty (30) days it shall be considered accurate. All Finance Charges and other interest and fees are calculated on the
basis of a 360 day year and actual days elapsed. 
 2.2.6 Deductions. Bank may deduct fees, Finance Charges, Advances
which become due pursuant to Section 2.3, and other amounts due pursuant to this Agreement from any Advances made or Collections received by Bank. 
 2.2.7 Lockbox; Account Collection Services. Prior to the time any Advance hereunder is made, Borrower shall direct each Account Debtor (an “FR Account Debtor”) with respect to any
Financed Receivable (and each depository institution where proceeds of such Accounts are on deposit) to remit payments with respect to the Accounts of such FR Account Debtor to a lockbox account established with Bank or to wire transfer payments to
a cash collateral account that Bank controls (collectively, the “Lockbox”). It will be considered an immediate Event of Default if the Lockbox is not set-up and operational within forty-five (45) days from the date of this Agreement.
Until such Lockbox is established, the proceeds of the Accounts shall be paid by the FR Account Debtors to an address consented to by Bank. Upon receipt by Borrower of such proceeds, the Borrower shall immediately transfer and deliver same to Bank,
along with a detailed cash receipts journal. Provided no Event of Default exists or an event that with notice or lapse of time will be an Event of Default, within one (1) Business Day of receipt of such amounts by Bank, Bank will turn over to
Borrower the proceeds of Accounts other than: (i) Collections with respect to Financed Receivables and (ii) with respect to Collections in excess of the amounts for which Bank has made an Advance to Borrower, an amount of such Collections
equal to any amounts then due to Bank, such as the Finance Charge, the Facility Fee, payments due to Bank, other fees and expenses, payments due under the ARPA, the LC Discounting Agreement or otherwise; provided, however, Bank may hold such excess
amount with respect to Financed Receivables as a reserve until the end of the applicable Reconciliation Period if Bank, in its discretion, determines that other Financed Receivable(s) may no longer qualify as an Eligible Account at any time prior to
the end of the subject Reconciliation Period. This Section does not impose any affirmative duty on Bank to perform any act other than as specifically set forth herein. All Accounts and the proceeds thereof are Collateral and if an Event of Default
occurs, Bank may apply the proceeds of such Accounts to the Obligations. 
  

	 	2.3	Repayment of Obligations; Adjustments. 

 2.3.1 Repayment. Borrower will repay each Advance on the earliest of: (a) the date on which payment is received of the Financed Receivable with respect to which the Advance was made, (b) 3 Business Days after the
date on which the Financed Receivable is no longer an Eligible Account, (c) the date on which any Adjustment which is not covered by the Credit Insurance is asserted to the Financed Receivable (but only to the extent of the Adjustment if the
Financed Receivable remains otherwise an Eligible Account), (d) the date which is 91 days after the date of funding of the Advance, (e) the date on which there is a breach of any warranty or representation set forth in Section 5.3
(other than the representation and warranty set forth in Sections 5.(a) and (d)), or (f) the Maturity Date (including any early termination). Each payment will also include all accrued Finance Charges and Administrative Fees with respect to
such Advance and all other amounts then due and payable hereunder. 
 2.3.2 Repayment on Event of Default. When there is an
Event of Default, Borrower will, if Bank demands (or, upon the occurrence of an Event of Default under Section 8.5, immediately without notice or demand from Bank) repay all of the Advances. The demand may, at Bank’s option, include the
Advance for each Financed Receivable then outstanding and all accrued Finance Charges, Administrative Fee, attorneys and professional fees, court costs and expenses, and any other Obligations. 
 2.3.3 Debit of Accounts. Bank may debit any of Borrower’s deposit accounts for payments or any amounts Borrower owes Bank hereunder.
Bank shall promptly notify Borrower when it debits Borrower’s accounts. These debits shall not constitute a set-off. 
 2.3.4
Adjustments. If at any time during the term of this Agreement any Account Debtor asserts an Adjustment or if Borrower issues a credit memorandum or if any of the representations, warranties or covenants set forth in Section 5.3 are
not longer true in all material respects, Borrower will promptly advise Bank. 
  

 3 

 2.4 Power of Attorney. Borrower irrevocably appoints Bank and its successors and assigns as
attorney-in-fact and authorizes Bank, regardless of whether there has been an Event of Default (unless otherwise noted in the applicable subsection), to: (i) upon the occurrence and during the continuance of an Event of Default, sell, assign,
transfer, pledge, compromise, or discharge all or any part of the Financed Receivables; (ii) upon the occurrence and during the continuance of an Event of Default, demand, collect, sue, and give releases to any Account Debtor for monies due and
compromise, prosecute, or defend any action, claim, case or proceeding about the Financed Receivables, including filing a claim or voting a claim in any bankruptcy case in Bank’s or Borrower’s name, as Bank chooses; (iii) prepare,
file and sign Borrower’s name on any notice, claim, assignment, demand, draft, or notice of or satisfaction of lien or mechanics’ lien or similar document; (iv) notify all Account Debtors at any time with respect to a Financed
Receivable and upon the occurrence and during the continuance of an Event of Default with respect to all Accounts other than Financed Receivables, to pay Bank directly; (v) receive, open, and dispose of mail addressed to Borrower;
(vi) endorse Borrower’s name on checks or other instruments (to the extent necessary to pay amounts owed pursuant to this Agreement); (vii) execute on Borrower’s behalf any instruments, documents, financing statements to perfect
Bank’s interests in the Financed Receivables and Collateral and do all acts and things necessary or expedient, as determined solely and exclusively by Bank, to protect, preserve, and otherwise enforce Bank’s rights and remedies under this
Agreement, as directed by Bank, and (viii) notify and demand that Credit Insurer pay directly to Bank with respect to any Financed Receivable where such payment would be due in accordance with the terms of the Credit Insurance. 
  

	 	3	CONDITIONS OF LOANS 

 3.1
Conditions Precedent to Initial Advance. Bank’s agreement to make the initial Advance is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion
of such other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation, subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, the following: 
 (a) a certificate of the Secretary of Borrower with respect to articles, bylaws, incumbency and resolutions authorizing the execution and
delivery of this Agreement; 
 (b) a certified copy of the policy of Credit Insurance; 
 (c) a loss payable endorsement in favor of Bank with respect to the Credit Insurance; 
 (d) an assignment of proceeds in favor of Bank with respect to the Credit Insurance; 
 (e) insurance certificates; 
 (f) payment of the fees and Bank Expenses then due and payable; 
 (g) Certificate of Good
Standing/Legal Existence; and 
 (h) such other documents, and completion of such other matters, as Bank may reasonably deem
necessary or appropriate. 
 3.2 Conditions Precedent to all Advances. Bank’s agreement to make each Advance,
including the initial Advance, is subject to the following: 
 (a) receipt of the Invoice Transmittal; 
 (b) receipt of copies of all shipping documents, purchase orders and invoices relating to each Account; 
 (c) receipt of a duly executed Compliance Certificate; 
  

 4 

 (d) Bank shall have (at its option) conducted the confirmations and verifications as
described in Section 2.1.1 (d); and 
 (e) each of the representations and warranties in Section 5 shall be true on
the date of the Invoice Transmittal and on the effective date of each Advance and no Event of Default shall have occurred and be continuing, or result from the Advance. Each Advance is Borrower’s representation and warranty on that date that
the representations and warranties in Section 5 remain true. 
  

	 	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 and the performance of each of Borrower’s duties under the Loan Documents, a continuing security
interest in, and pledges and assigns to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. Borrower warrants and represents that the security interest granted herein
shall be a first priority security interest in the Collateral, subject only to Permitted Liens. 
 If the Agreement is terminated,
Bank’s lien and security interest in the Collateral shall continue until Borrower fully satisfies its Obligations. If Borrower shall at any time, acquire a commercial tort claim, Borrower shall promptly notify Bank in a writing signed by
Borrower of the brief 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 satisfactory to Bank. 
 4.2 Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing statements, without notice to
Borrower, with all appropriate jurisdictions in order to perfect or protect Bank’s interest or rights hereunder, which financing statements may indicate the Collateral as “all assets of the Debtor” or words of similar effect, or as
being of an equal or lesser scope, or with greater detail, all in Bank’s discretion. 
  

	 	5	REPRESENTATIONS AND WARRANTIES 

 Borrower
represents and warrants as follows: 
 5.1 Due Organization and Authorization. Borrower and each Subsidiary is duly
existing and in good standing in its state of formation and qualified and licensed to do business in, and in good standing in, any state in which the conduct of its business or its ownership of property requires that it be qualified except where the
failure to do so could not reasonably be expected to cause a Material Adverse Change. Borrower represents and warrants to Bank that: (a) Borrower’s exact legal name is that indicated on the on the signature page hereof; and
(b) Borrower is an organization of the type, and is organized in the jurisdiction, set forth on the signature page hereof; and (c) on the signature page hereof accurately sets forth Borrower’s organizational identification number or
accurately states that Borrower has none. 
 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 or by which it is bound in which the
default could reasonably be expected to cause a Material Adverse Change. 
 5.2 Collateral. Borrower has good title to
the Collateral, free of Liens except Permitted Liens. 
 5.3 Financed Receivables. Borrower represents and warrants for
each Financed Receivable: 
 (a) Each Financed Receivable is an Eligible Account; 
  

 5 

 (b) Borrower is the owner with legal right to sell, transfer, assign and encumber such
Financed Receivable; 
 (c) The correct amount is on the Invoice Transmittal and is payable in U.S. dollars; 
 (d) There are no defenses, offsets, counterclaims or agreements for which the Account Debtor may claim any deduction or discount which are
not covered by the Credit Insurance; 
 (e) Bank has the right to endorse and/ or require Borrower to endorse all payments
received on Financed Receivables and all proceeds of Collateral; and 
 (f) No representation, warranty or other statement of
Borrower in any certificate or written statement given to Bank contains any untrue statement of a material fact or omits to state a material fact necessary to make the statement contained in the certificates or statement not misleading. 

5.4 Litigation. There are no actions or proceedings pending or, to the knowledge of Borrower’s Responsible Officers or legal
counsel, threatened by or against Borrower or any Subsidiary in which an adverse decision could reasonably be expected to cause a Material Adverse Change. 
 5.5 No Material Deviation in Financial Statements. All consolidated financial statements for Borrower and any Subsidiary 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. 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 X, 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 cause a Material Adverse Change. None of Borrower’s
or any Subsidiary’s 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 Subsidiary has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP. Borrower and each
Subsidiary has 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, notices or filings would not reasonably be expected to cause a Material Adverse Change. 
 5.8 Subsidiaries. Borrower does not own any stock, partnership interest or other equity securities except for Permitted Investments. 
 5.9 Full Disclosure. No written representation, warranty or other statement of Borrower in any certificate or written statement 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. 
  

 6 

	 	6	AFFIRMATIVE COVENANTS 

 Borrower shall do all
of the following: 
 6.1 Government Compliance. Borrower shall maintain its and all Subsidiaries’ legal existence
and good standing in its jurisdiction of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower
shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject, noncompliance with which could have a material adverse effect on Borrower’s business or operations or would reasonably be expected
to cause a Material Adverse Change. 
 6.2 Financial Statements, Reports, Certificates. 
 (a) Borrower shall deliver to Bank: (i) as soon as available, but no later than 30 days after the last day of each month, 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 filing, copies of
all statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt and all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission (except to the extent such
disclosure would violate securities and other laws); (iii) prompt delivery of conformed copies of all correspondence between Borrower and Credit Insurer, (iv) a prompt report of any legal actions pending or threatened against Borrower or
any Subsidiary that could result in damages or costs to Borrower or any Subsidiary of Five Hundred Thousand Dollars ($500,000.00) or more; and (v) budgets, sales projections, operating plans or other financial information reasonably requested
by Bank, including within 60 days of fiscal year end such budgets, projects and plans as to the next 12 months. 
 (b) Within
30 days after the last day of each month and with each request for an Advance, Borrower shall deliver to Bank with the monthly financial statements a Compliance Certificate signed by a Responsible Officer in the form of Exhibit B.

 (c) Borrower will allow Bank to audit Borrower’s Collateral, including, but not limited to, Borrower’s Accounts
and accounts receivable, at Borrower’s expense, upon reasonable notice to Borrower; provided, however, prior to the occurrence of an Event of Default, Borrower shall be obligated to pay for not more than one (1) audit per year. After the
occurrence of an Event of Default, Bank may audit Borrower’s Collateral, including, but not limited to, Borrower’s Accounts and accounts receivable at Borrower’s expense and at Bank’s sole and exclusive discretion and without
notification and authorization from Borrower. 
 (d) Upon Bank’s request, in addition to the requirement to file a claim
under the Credit Insurance under Section 6.7 hereof, provide a written report respecting any Financed Receivable, if payment of any Financed Receivable does not occur by its due date and include the reasons for the delay. 
 (e) Provide Bank with, as soon as available, but no later than 30 days following each Reconciliation Period, an aged listing of accounts
receivable and accounts payable by invoice date, in form acceptable to Bank together with conformed copies of the monthly shipment and export credit insurance premium payment reports and evidence of payment. 
 6.3 Taxes. Borrower shall make, and cause each Subsidiary to make, timely payment of all material federal, state, and local taxes or
assessments (other than taxes and assessments which Borrower is contesting in good faith, with adequate reserves maintained in accordance with GAAP) and will deliver to Bank, on demand, appropriate certificates attesting to such payments.

 6.4 Insurance. Borrower shall keep its business and the Collateral insured for risks and in amounts, and as Bank may
reasonably request. Borrower shall maintain the Credit Insurance in full force and effect. 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 an additional loss payee and all liability policies shall show Bank as an additional insured and all policies shall provide that the insurer must give Bank at least twenty (20) days notice before canceling
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 and the
Credit Insurance shall be so payable. If Borrower fails to obtain insurance as required under this Section or to pay any amount or furnish any required proof of payment to 

  

 7 

 
third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section and take any action under the
policies Bank deems prudent. 
 6.5 Accounts. 
 (a) Borrower, and all Borrower’s Subsidiaries, shall maintain Borrower’s, and such Subsidiaries, primary depository and
operating accounts with Bank, which accounts shall represent at least 85% of the dollar value of Borrower’s and such Subsidiaries accounts at all financial institutions in the United States. 
 6.6 Financial Covenants. Borrower shall maintain as of the last day of each fiscal quarter: 
 (a) Tangible Net Worth of at least $4,500,000. 
 (b) Revenue of at least 70% of Plan Forecasted Revenue. 
 6.7 Claims on Credit Insurance. Upon the failure of any Account Debtor under a Financed Receivable to make timely payment in full thereon, Borrower shall promptly make a claim for payment with
respect thereto under the Credit Insurance and deliver to Bank copies of such claim and take all such action reasonably requested by Bank with respect to such claim. 
 6.8 Further Assurances. Borrower shall execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s security interest 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 a “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (i) of inventory in the ordinary course of business; (ii) of
non-exclusive licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries in the ordinary course of business; or (iii) of worn-out or obsolete equipment. 
 7.2 Changes in Business, Ownership, Management or Business Locations. Engage in or permit any of its Subsidiaries to engage in any
business other than the businesses currently engaged in by Borrower or reasonably related thereto, or have a material change in its ownership (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 investment), or if any Key Person ceases to hold such offices with Borrower and replacement(s) satisfactory to Bank are not made within 90
days after such Key Person(s) departure from Borrower. Borrower shall not, without at least thirty (30) days prior written notice to Bank: (i) relocate its chief executive office, or (ii) change its jurisdiction of organization, or
(iii) change its organizational structure or type, or (iv) change its legal name, or (v) 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 except where (a) no Event of Default has occurred and is continuing or would exist after giving effect to the
transactions; (b) Borrower is the surviving legal entity, and (c) Borrower has provided Bank with: (i) written confirmation, supported by reasonably detailed calculations, that on a pro forma basis, created by adding the historical
combined financial statements of Borrower to the historical consolidated financial statements of the Person to be acquired pursuant to the proposed acquisition, Borrower would have been in compliance with the financial covenants in
Section 6.6 for the 12 months ending as of the fiscal quarter ended immediately prior to the proposed date of consummation of such proposed acquisition, together with copies of all such historical financial statements of the Person or
assets being acquired; (ii) projections for the Person being 

  

 8 

 
acquired and updated pro forma projections for Borrower evidencing compliance on a pro forma basis with the financial covenants for the 12 months following
the date of such acquisition (on a month by month basis), in each case in form and content reasonably acceptable to Bank. 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 its property, including the intellectual
property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest
granted herein. The Collateral may also be subject to Permitted Liens. 
 7.6 Distributions; Investments.
(i) Directly or indirectly acquire or own any Person, or make any Investment in any Person, other than Permitted Investments, or permit any of its Subsidiaries to do so; or (ii) pay any dividends or make any distribution or payment or
redeem, retire or purchase any capital stock. 
 7.7 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. 
 7.8 Subordinated Debt. Make or permit any
payment on any Subordinated Debt, except under the terms of the Subordinated Debt, or amend any provision in any document relating to the Subordinated Debt, without Bank’s prior written consent. 
 7.9 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, or use the proceeds of any Advance 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 operations or would reasonably be expected to cause a Material Adverse Change, or permit any of its Subsidiaries to do so. 
  

	 	8	EVENTS OF DEFAULT 

 Any one of the following
is an Event of Default: 
 8.1 Payment Default. Borrower fails to pay any of the Obligations when due; 
 8.2 Covenant Default. Borrower fails or neglects to perform any obligation in Section 6 or violates any covenant in
Section 7 or fails or neglects to perform, keep, or observe any other material term, provision, condition, covenant or agreement contained in this Agreement, any Loan Document, or in any present or future agreement between Borrower and Bank
including the ARPA and the same is not cured within the applicable cure or grace period; 
 8.3 Material Adverse Change.
A Material Adverse Change occurs; 
 8.4 Attachment. (i) 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; (ii) the service of process upon Borrower seeking to attach, by trustee or similar process,
any funds of Borrower on deposit with Bank, or any entity under the control of Bank (including a subsidiary); (iii) Borrower is enjoined, restrained, or prevented by court order from conducting any part of its business; (iv) a judgment or
other claim in excess of $250,000 becomes a Lien on any portion of Borrower’s assets (except for Permitted Liens); or (v) a notice 

  

 9 

 
of lien, levy, or assessment is filed against any of Borrower’s assets by any government agency and not paid or released 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 Advances shall be made during the cure period); 
 8.5 Insolvency. (i) Borrower is unable to pay its debts (including trade debts) as they become due or otherwise becomes
insolvent; (ii) Borrower begins an Insolvency Proceeding; or (iii) an Insolvency Proceeding is begun against Borrower and not dismissed or stayed within thirty (30) days (but no Advances shall be made before any Insolvency Proceeding
is dismissed); 
 8.6 Other Agreements. If 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) or that could result in a Material
Adverse Change; 
 8.7 Judgments. If 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) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of ten (10) days (provided that no Advances will be made prior to the satisfaction or
stay of such judgment). This is not an Event of Default if stayed or if a bond is posted pending contest by Borrower (but no Advances shall be made during the cure period); 
 8.8 Misrepresentations. If Borrower or any Person acting for Borrower makes any material misrepresentation or material misstatement
now or later in any warranty or representation in this Agreement or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document; 
 8.9 Subordinated Debt. A default or breach occurs under any agreement between Borrower and any creditor of Borrower that signed a subordination agreement with Bank, or any creditor that has signed
a subordination agreement with Bank breaches any terms of the subordination agreement. 
 8.10 Credit Insurance. The Credit
Insurance shall not be in full force and effect for any reason. 
  

	 	9	BANK’S RIGHTS AND REMEDIES 

 9.1
Rights and Remedies. When 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) Settle or adjust disputes and claims directly with Account Debtors for amounts, on terms and in any
order that Bank considers advisable and notify any Person owing Borrower money of Bank’s security interest in such funds and verify the amount of such account. Borrower shall collect all payments in trust for Bank and, if requested by Bank,
immediately deliver the payments to Bank in the form received from the Account Debtor, with proper endorsements for deposit; 
 (d) Make any payments and do any acts it considers necessary or reasonable to protect 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; 
  

 10 

 (e) 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; 
 (f) 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; 
 (g) 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; and 
 (h) Exercise all rights and remedies and dispose of the Collateral according to the Code. 
 9.2 Bank Expenses; Unpaid
Fees. Any amounts paid by Bank as provided herein shall constitute Bank Expenses and are immediately due and payable, and shall bear interest at the Default Rate and be secured by the Collateral. No payments by Bank shall be deemed an
agreement to make similar payments in the future or Bank’s waiver of any Event of Default. In addition, any amounts advanced hereunder which are not based on Financed Receivables (including, without limitation, unpaid fees and Finance Charges
as described in Section 2.2) shall accrue interest at the Default Rate and be secured by the Collateral. 
 9.3 Bank’s
Liability for Collateral. So long as Bank complies with reasonable banking practices regarding the safekeeping of collateral, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or
damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral.

 9.4 Remedies Cumulative. Bank’s rights and remedies under this Agreement, the Loan Documents, and all other
agreements 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 is not a waiver, election, or acquiescence. No waiver hereunder shall be effective unless signed by Bank and then is only effective for the specific instance and purpose for which it was given. 
 9.5 Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable. 
 9.6 Default Rate. After the occurrence of an Event of Default, all Obligations shall accrue interest at the Applicable Rate plus
five percent (5.0%) per annum (the “Default Rate”). 
  

	 	10	Notices. All notices shall be given to Borrower and Bank at the addresses or faxes set forth on the first page of this Agreement and shall be deemed to have been
delivered and received: (a) if mailed, three (3) calendar days after deposited in the United States mail, first class, postage pre-paid, (b) one (1) calendar day after deposit with an overnight mail or messenger service; or
(c) on the same date of confirmed transmission if sent by hand delivery, telecopy, telefax or telex. 

  

	 	11	CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER 

 California law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in California and Borrower accepts jurisdiction of the
courts and venue in Santa Clara County, California. NOTWITHSTANDING THE FOREGOING, 

  

 11 

 
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. 
 BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A
TRIAL BY JURY, if the above waiver of the right to a trial by jury is not enforceable, the parties hereto agree that any and all disputes or controversies of any nature between them arising at any time shall be decided by a reference to a private
judge, mutually selected by the parties (or, if they cannot agree, by the Presiding Judge of the Santa Clara County Superior Court) appointed in accordance with California Code of Civil Procedure Section 638 (or pursuant to comparable
provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts), sitting without a jury, in Santa Clara County, California; and the parties hereby submit to the jurisdiction of such court. The reference
proceedings shall be conducted pursuant to and in accordance with the provisions of California Code of Civil Procedure §§ 638 through 645.1, inclusive. The private judge shall have the power, among others, to grant provisional relief,
including without limitation, entering temporary restraining orders, issuing preliminary and permanent injunctions and appointing receivers. All such proceedings shall be closed to the public and confidential and all records relating thereto shall
be permanently sealed. If during the course of any dispute, a party desires to seek provisional relief, but a judge has not been appointed at that point pursuant to the judicial reference procedures, then such party may apply to the Santa Clara
County Superior Court for such relief. 
  

	 	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, the Loan Documents or any related agreement. 
 12.2
Indemnification. Borrower hereby indemnifies, defends and holds Bank and its officers, employees, directors and agents harmless against: (a) all obligations, demands, claims, and liabilities 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 consequential to transactions between Bank and Borrower (including reasonable attorneys’
fees and expenses), except for losses caused by Bank’s or such indemnitees’ gross negligence or willful misconduct. 
 12.3
Right of Set-Off. Borrower hereby grants to Bank, a lien, security interest and right of setoff as security for all Obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under the control of Bank (including a 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. 
 12.4 Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement.

 12.5 Severability of Provision. Each provision of this Agreement is severable from every other provision in
determining the enforceability of any provision. 
  

 12 

 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. 
 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 while any Obligations remain outstanding. 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: (i) to Bank’s subsidiaries or affiliates in connection with their business with Borrower; (ii) to prospective transferees or purchasers of
any interest in the Advances (provided, however, Bank shall use commercially reasonable efforts in obtaining such prospective transferee’s or purchaser’s agreement to the terms of this provision); (iii) as required by law, regulation,
subpoena, or other order, (iv) as required in connection with Bank’s examination or audit; and (v) as Bank considers appropriate in exercising remedies under this Agreement. Confidential information does not include information that
either: (a) 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; or (b) 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 Attorneys’ Fees, Costs and Expenses. In any action or
proceeding between Borrower and Bank arising out of the Loan Documents, the prevailing party will be entitled to recover its reasonable attorneys’ fees and other reasonable costs and expenses incurred, in addition to any other relief to which
it may be entitled. 
  

	 	13	DEFINITIONS 

 13.1
Definitions. In this Agreement: 
 “Accounts” are all existing and later arising accounts, contract rights,
and other obligations owed Borrower in connection with its sale or lease of goods (including licensing software and other technology) or provision of services, all credit insurance, guaranties, other security and all merchandise returned or
reclaimed by Borrower and Borrower’s Books relating to any of the foregoing. 
 “Account Debtor” is as defined in the
Code and shall include, without limitation, any person liable on any Financed Receivable, such as, a guarantor of the Financed Receivable and any issuer of a letter of credit or banker’s acceptance. 
 “Adjustments” are all discounts, allowances, returns, disputes, counterclaims, offsets, defenses, rights of recoupment, rights of
return, warranty claims, or short payments, asserted by or on behalf of any Account Debtor for any Financed Receivable. 
 “Administrative Fee” shall have the meaning as set forth in Section 2.2.4 hereof. 
 “Advance” is defined in Section 2.1.1. 
 “Advance Rate” 70%, net of any offsets related to
each specific Account Debtor, or such other percentage as Bank establishes under Section 2.1.1. 
  

 13 

 “Affiliate” 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. 
 “Applicable Rate” is a per annum rate equal to the Prime Rate plus 2.5 percentage points. 
 “ARPA” is the Second Amended and Restated Accounts Receivable Purchase Agreement between Borrower and Bank. 
 “Bank Expenses” are all audit fees and expenses and reasonable costs or expenses (including reasonable attorneys’ fees and
expenses) for preparing, negotiating, administering, defending and enforcing the Loan Documents (including appeals or Insolvency Proceedings). 
 “Borrower’s Books” are all Borrower’s books and records including ledgers, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition and all computer
programs or discs or any equipment containing the information. 
 “Business Day” is any day that is not a Saturday, Sunday
or a day on which Bank is closed. 
 “Closing Date” is the date of this Agreement. 
 “Code” is the Uniform Commercial Code as adopted in California, as amended and as may be amended and in effect from time to time.

 “Collateral” is any and all properties, rights and assets of Borrower granted by Borrower to Bank or arising under the
Code, now, or in the future, in which Borrower obtains an interest, or the power to transfer rights, as described on Exhibit A. 
 “Collections” are all funds received by Bank from or on behalf of an Account Debtor for Financed Receivables. 
 “Compliance Certificate” is attached as Exhibit B. 
 “Contingent Obligation” is,
for any Person, any direct or indirect liability, contingent or not, of that Person for (i) 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; (ii) any obligations for undrawn letters of credit for the account of that Person; and (iii) 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 the guarantee or other support arrangement. 
 “Credit Insurance” is the Credit Insurance Policy Number GMB-120090, issued by Credit Insurer, or such other policy of credit insurance
as is acceptable to Bank. 
 “Credit Insurer” is Great American Insurance/FCIA or such other insurer as is acceptable to
Bank. 
 “Default Rate” is defined in Section 9.6. 
 “Eligible Accounts” are billed Accounts in the ordinary course of Borrower’s business that meet all Borrower’s representations
and warranties in Section 5.3, have been, at the option of Bank, confirmed in accordance 

  

 14 

 
with Section 2.1.1(d), and are due and owing from Account Debtors and are covered by the Credit Insurance, and each Account Debtor thereunder and the
Account are duly approved by the Credit Insurer and within the Special Buyer Credit Limit applicable under the Credit Insurance and within the Bank’s credit limit for such Account Debtor. 
 “ERISA” is the Employment Retirement Income Security Act of 1974, and its regulations. 
 “Events of Default” are set forth in Article 8. 
 “Facility Amount” is $5,000,000; provided that, from and after January 1, 2007, Bank will consider increasing the Facility Amount to $10,000,000 if the Credit Insurance total policy limit
has been increased to $10,000,000, provided, however that such increase shall be subject to approval by Bank’s credit committee. 
 “Facility Fee” is defined in Section 2.2.2. 
 “Finance Charges” is defined in
Section 2.2.3. 
 “Financed Receivables” are all those Eligible Accounts, including their proceeds, which Bank finances
and makes an Advance, as set forth in Section 2.1.1. A Financed Receivable stops being a Financed Receivable (but remains Collateral) when the Advance made for the Financed Receivable has been fully paid. 
 “Financed Receivable Balance” is the total outstanding gross face amount, at any time, of any Financed Receivable. 
 “GAAP” is generally accepted accounting principles. 
 “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. 
 “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. 
 “Investment” is any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any loan, advance or capital contribution to any Person. 
 “Invoice Transmittal” shows Eligible Accounts which Bank may finance and, for each such Account, includes the Account Debtor’s,
name, address, invoice amount, invoice date and invoice number. 
 “Key Person” means any of the following officers of
Borrower: (i) Chief Executive Officer, (ii) Chief Operating Officer, and (iii) Senior Vice President of Finance. 
 “LC Discounting Agreement” is the Letter of Credit Discounting Agreement between Borrower and Bank, as may be amended, renewed or refinanced from time to time. 
 “Lien” is a mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance. 
 “Loan Documents” are, collectively, this Agreement, the ARPA, the LC Discounting Agreement, any note, or notes or guaranties executed by
Borrower, and any other present or future agreement between Borrower and/or for the benefit of Bank in connection with this Agreement, all as amended, extended or restated. 
 “Lockbox” is defined in Section 2.2.7. 
  

 15 

 “Material Adverse Change” is: (i) A material impairment in the perfection or
priority of Bank’s security interest in the Collateral or in the value of such Collateral; (ii) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; (iii) a material impairment of
the prospect of repayment of any portion of the Obligations or (iv) 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”
is the date two years from the date of this Agreement. 
 “Obligations” are all advances, liabilities, obligations,
covenants and duties owing, arising, due or payable by Borrower to Bank now or later under this Agreement or any other document, instrument or agreement, account (including those acquired by assignment) primary or secondary, such as all Advances,
Finance Charges, Facility Fee, Administrative Fee, interest, fees, expenses, professional fees and attorneys’ fees, or other amounts now or hereafter owing by Borrower to Bank. 
 “Permitted Indebtedness” is: 
 (a) Borrower’s indebtedness to Bank under this Agreement or the Loan Documents; 
 (b)
Subordinated Debt; 
 (c) Indebtedness to trade creditors incurred in the ordinary course of business; 
 (d) Indebtedness secured by Permitted Liens; and 
 (e) Indebtedness arising of from the financing of Credit Insurance policies in the ordinary course of business and consistent with past
practice. 
 “Permitted Investments” are: (i) marketable direct obligations issued or unconditionally guaranteed by the United
States or its agency or any state maturing within 1 year from its acquisition, (ii) commercial paper maturing no more than 1 year after its creation and having the highest rating from either Standard & Poor’s Corporation or
Moody’s Investors Service, Inc., (iii) Bank’s certificates of deposit issued maturing no more than 1 year after issue, (iv) any other investments administered through Bank. 
 “Permitted Liens” are: 
 (a) Liens arising under this Agreement or 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 security interests;

 (c) Purchase money Liens securing no more than $150,000 in the aggregate amount outstanding (i) on equipment,
furniture and fixtures acquired or held by Borrower incurred for financing the acquisition of such equipment, furniture, and fixtures or (ii) existing on equipment, furniture and fixtures when acquired, if the Lien is confined to the
property and improvements and the proceeds of such equipment, furniture, and fixtures; 
 (d) Leases or subleases and
non-exclusive licenses or sublicenses granted in the ordinary course of Borrower’s business, if the leases, subleases, licenses and sublicenses permit granting Bank a security interest; 
  

 16 

 (e) Liens incurred in the extension, renewal or refinancing of the indebtedness secured
by Liens described in (a) through (d), 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; 
 (f) 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 $250,000; and 
 (g) Liens to secure Borrower’s performance of its duties under leases or with respect to obligations owing to utility companies
pledged in the ordinary course of business, provided, the aggregate amount of the Indebtedness secured by such Liens does not at any time exceed $100,000; 
 “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. 
 “Plan Forecasted Revenue” is the
forecasted revenue level in Borrower’s financial forecasts delivered to Bank in August of 2006, subject to such revision as may be made by Borrower’s Board of Directors and as may be deemed accepted to Bank in its discretion. 

“Prime Rate” is Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest rate. 
 “Reconciliation Day” is the last calendar day of each month. 
 “Reconciliation Period” is each calendar month. 
 “Responsible Officer” is each of the Chief Executive Officer, President, Chief Financial Officer and Controller of Borrower. 
 “Subordinated Debt” is debt incurred by Borrower subordinated to Borrower’s debt to Bank (pursuant to a subordination agreement
entered into between Bank, Borrower and the subordinated creditor), on terms acceptable to Bank. 
 “Subsidiary” is any
Person, corporation, partnership, limited liability company, joint venture, or any other business entity of which more than 50% of the voting stock or other equity interests is owned or controlled, directly or indirectly, by the Person or one or
more Affiliates of the Person. 
 “Tangible Net Worth” is, on any date, the consolidated total assets of Borrower and its
Subsidiaries minus (i) any amounts attributable to (a) goodwill, (b) intangible items including unamortized debt discount and expense, patents, trade and service marks and names, copyrights and research and development expenses
except prepaid expenses, and (c) reserves not already deducted from assets, minus (ii) Total Liabilities. 
 “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. 
 [Remainder of Page Intentionally Blank] 
  

 17 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as a sealed instrument
under the laws of the State of California as of the date first above written. 
  

			
	BORROWER:
	
	AXESSTEL, INC., a Nevada corporation, organizational number
                                
		
	 By
	 	/s/ Patrick Gray
	 Name:
	 	Patrick Gray
	 Title:
	 	SVP, Finance
	
	BANK:
	
	SILICON VALLEY BANK
		
	 By
	 	/s/ Robert C. Lake
	 Name:
	 	Robert C. Lake
	 Title:
	 	Relationship Manager

  

 S-1 
 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, Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles, Accounts (including health-care receivables), documents,
instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above
and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing. 
 Notwithstanding the foregoing, the Collateral shall not be deemed to include any of the following, now owned or hereafter arising or acquired: copyrights (including computer programs, blueprints and drawings),
copyright applications, copyright registration and like protection in each work of authorship and derivative work thereof, whether published or unpublished, now owned or hereafter acquired; any design rights; any patents, patent applications and
like protections including without limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same; any trademarks, service marks and applications therefor, whether registered or not, any
rights or interest in any license or license agreement covering personal property of Borrower if under the terms of such license or license agreement, or applicable law with respect thereto, the valid grant of a security interest or lien therein to
Bank is prohibited as a matter of law or under the terms of such license or license agreement (including where the violation of any such prohibition would result in the termination of the applicable license or license agreement), license or license
agreement and such prohibition has not been or is not waived or the consent of the other party to such license or license agreement has not been or is not otherwise obtained (the foregoing exclusions, collectively, the “Excluded
Property”); provided, that, the foregoing exclusion shall in no way be construed to apply if any described prohibition is unenforceable under Section 9-406, 9-407, or 9-408 of the Code or other applicable law and except that the Collateral
shall include all Accounts, license and royalty fees and other revenues, proceeds (other than proceeds constituting Excluded Property), or income arising out of or relating to any of the foregoing. 
  

 Exhibit A 

 EXHIBIT B 
 

 
 SILICON VALLEY BANK 
 SPECIALTY FINANCE DIVISION 
 Compliance Certificate 
 I, as authorized officer of Axesstel, Inc. (“Borrower”), certify under the Loan and Security Agreement (the “Agreement”) between
Borrower and Silicon Valley Bank (“Bank”) as follows (all capitalized terms used herein shall have the meaning set forth in the Agreement): 
 Borrower represents and warrants for each Financed Receivable: 
 Each Financed Receivable is an Eligible
Account. 
 Borrower is the owner with legal right to sell, transfer, assign and encumber such Financed Receivable; 
 The correct amount is on the Invoice Transmittal and is not disputed; 
 Payment is not contingent on any obligation or contract and Borrower has fulfilled all its obligations as of the Invoice Transmittal date; 
 Each
Financed Receivable is covered by the Credit Insurance, is based on an actual sale and delivery of goods and/or services rendered, is due to Borrower, is not past due or in default, has not been previously sold, assigned, transferred, or pledged and
is free of any liens, security interests and encumbrances other than Permitted Liens; 
 There are no defenses, offsets, counterclaims or agreements for
which the Account Debtor may claim any deduction or discount which are not covered by the Credit Insurance; 
 Bank has the right to endorse and/ or require
Borrower to endorse all payments received on Financed Receivables and all proceeds of Collateral. 
 No representation, warranty or other statement of
Borrower in any certificate or written statement given to Bank contains any untrue statement of a material fact or omits to state a material fact necessary to make the statement contained in the certificates or statement not misleading. 

Additionally, Borrower represents and warrants as follows: 
 Borrower and each Subsidiary is duly existing and in good standing in its state of formation and qualified and licensed to do business in, and in good standing in, any state in which the conduct of its business or its ownership of property
requires that it be qualified except where the failure to do so could not reasonably be expected to cause a Material Adverse Change. 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 or by which it is bound in which the default could
reasonably be expected to cause a Material Adverse Change. 
  

 1 

 Borrower has good title to the Collateral, free of Liens except Permitted Liens. All inventory is in all material
respects of good and marketable quality, free from material defects. 
 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 X, 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 cause a Material Adverse Change. None of Borrower’s
or any Subsidiary’s 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 Subsidiary has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP. Borrower and each
Subsidiary has 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, notices or filings would not reasonably be expected to cause a Material Adverse Change. 
 Borrower is
in compliance with the Financial Covenant(s) set forth in Section 6.6 of the Agreement. 
 All representations and warranties in the Agreement are true
and correct in all material respects on this date, and the Borrower represents that there is no existing Event of Default. 
  

			
	Sincerely,
		
	Signature	 	/s/ Patrick Gray
	 Title
	 	SVP, Finance
	 Date
	 	8/8/06

  

 Exhibit B-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]