Amended and Restated Credit Agreement January 13, 2017

Exhibit 99.7

 

Amended and Restated Credit Agreement
January 13, 2017

among

AUXILIO, INC., a Nevada corporation,
AUXILIO SOLUTIONS, INC., a California corporation,
DELPHIIS, INC., a California corporation,
CYNERGISTEK, INC., a  Texas corporation,
and such other direct or indirect Subsidiaries that may hereafter become parties hereto,
as Borrowers,

AVIDBANK,
a California banking corporation,
as Agent,

and

THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO,

as Lenders

$19,000,000

TABLE OF CONTENTS

Page

ARTICLE I   LOAN FACILITIES

	1.1	Revolving Loans	4
	1.2	Term Loans	4
	1.3	Reserved	5
	1.4	Interest Rates; Payments of Interest	5
	1.5	Notice of Borrowing Requirements; Funding by Lenders; Payments by Borrowers; Presumptions by Agent	6
	1.6	Reserved	7
	1.7	Reserved	7
	1.8	Reserved	7
	1.9	Notes; Statements of Obligations	7
	1.10	Holidays	7
	1.11	Time and Place of Payments	8
	1.12	Mandatory Principal Reductions	8
	1.13	Fees	9
	1.14	Protective Advances	9
	1.15	Settlement	10
	1.16	Notation	10
	1.17	Defaulting Lenders	11
	1.18	Right of Setoff	13
	1.19	Cash Collateral	13
	1.20	Sharing of Payments by Lenders	14
	1.21	Termination and Reduction of Commitments	14
	1.22	Collections From Account Debtors; Credit Card Receivables	15

ARTICLE II   LETTERS OF CREDIT

15

	2.1	Letters of Credit	15
	2.2	Procedure for Issuance of Letters of Credit	16
	2.3	Fees, Commissions and Other Charges	16
	2.4	L/C Participations	17
	2.5	Reimbursement Obligations	18
	2.6	Obligations Absolute	18
	2.7	Letter of Credit Payments	18
	2.8	Outstanding Letters of Credit Following Event of Default or on the Revolving Loans Maturity Date	19
	2.9	Letter of Credit Applications	19

ARTICLE III   CONDITIONS TO CLOSING

19

	3.1	Conditions to Initial Loans or Letter of Credit	19
	3.2	Conditions to all Loans and Letters of Credit	19
	3.3	Conditions Subsequent to all Loans and Letters of Credit	20

 

 

 

ARTICLE IV   REPRESENTATIONS AND WARRANTIES

20

	4.1	Legal Status	20
	4.2	No Violation; Compliance	21
	4.3	Authorization; Enforceability	21
	4.4	Approvals; Consents	21
	4.5	Liens	21
	4.6	Debt	21
	4.7	Litigation	21
	4.8	No Default	21
	4.9	Capitalization	22
	4.10	Taxes	22
	4.11	Correctness of Financial Statements; No Material Adverse Change	22
	4.12	Employee Benefits	23
	4.13	Full Disclosure	23
	4.14	Other Obligations	23
	4.15	Investment Company Act	24
	4.16	Patents, Trademarks, Copyrights, and Intellectual Property, etc.	24
	4.17	Environmental Condition	24
	4.18	Solvency	24
	4.19	Labor Matters	24
	4.20	Brokers	25
	4.21	Customer and Trade Relations	25
	4.22	Material Contracts	25
	4.23	Casualty	25
	4.24	Eligible Accounts	25
	4.25	Reserved	25
	4.26	Compliance with Sanctions and Anti-Terrorism Laws	25
	4.27	OFAC	25
	4.28	Patriot Act	26
	4.29	No Material Adverse Effect	26
	4.30	Purchase Agreement	26

ARTICLE V   AFFIRMATIVE COVENANTS

26

	5.1	Punctual Payments	26
	5.2	Books and Records; Collateral Audits; Appraisals; Account Verification	26
	5.3	Collateral and Financial Reporting	27
	5.4	Existence; Preservation of Licenses; Compliance with Law	29
	5.5	Insurance	29
	5.6	Assets	29
	5.7	Taxes and Other Liabilities	30
	5.8	Notices to Agent and Lenders	30
	5.9	Compliance with ERISA and the IRC	30
	5.10	Further Assurances	31
	5.11	Cash Management Services	31
	5.12	Environment	31
	5.13	Additional Collateral	31
	5.14	Subsidiaries	31

 

 

ARTICLE VI   NEGATIVE COVENANTS

32

	6.1	Use of Funds; Margin Regulation	32
	6.2	Debt	32
	6.3	Liens	32
	6.4	Merger, Consolidation, and Transfer or Acquisition of Assets	32
	6.5	Reserved	33
	6.6	Sales and Leasebacks	33
	6.7	Dispositions	33
	6.8	Investments	33
	6.9	Character of Business	33
	6.10	Restricted Payments	33
	6.11	Guarantee	33
	6.12	Reserved	33
	6.13	Transactions with Affiliates	33
	6.14	Stock Issuance	34
	6.15	Financial Condition	34
	6.16	OFAC	34
	6.17	Fiscal Year	34
	6.18	Reserved	34
	6.19	Burdensome Agreements	34
	6.20	Parent as Holding Company	34
	6.21	Amendments of Certain Documents	35
	6.22	Employee Benefits	35

ARTICLE VII   EVENTS OF DEFAULT AND REMEDIES

35

	7.1	Events of Default	35
	7.2	Remedies	35
	7.3	Application of Proceeds	37
	7.4	Reserved	38
	7.5	Appointment of Receiver or Trustee	39
	7.6	Power of Attorney	39
	7.7	Remedies Cumulative	39

ARTICLE I   LOAN FACILITIES

39

	8.1	Increased Costs	39
	8.2	Taxes	40
	8.3	Reserved	43
	8 .4	Mitigation Obligations; Replacement of Lenders	43

ARTICLE IX   AGENT AND LENDERS

44

	9.1	Appointment and Authority	44
	9.2	Rights as Lender	44
	9.3	Exculpatory Provisions	45
	9.4	Reliance by Agent	45
	9.5	Delegation of Duties	46
	9.6	Resignation of Agent	46
	9.7	Non-Reliance on Agent and Other Lenders	47
	9.8	Reserved	47
	9.9	Agent May File Proofs of Claim	47
	9.10	Collateral and Guaranty Matters	47
	9.11	Several Obligations; No Liability	48
	9.12	Indemnification by Lenders	48

 

 

ARTICLE X   MISCELLANEOUS

49

	10.1	Notices; Effectiveness; Electronic Communication	49
	10.2	No Waivers	50
	10.3	Expenses; Documentary Taxes; Indemnification	50
	10.4	Amendments and Waivers	52
	10.5	Successors and Assigns; Participations; Disclosure; Register	53
	10.6	Confidentiality	56
	10.7	Counterparts; Integration	57
	10.8	Severability	57
	10.9	Knowledge	57
	10.10	Additional Waivers	58
	10.11	Destruction of Borrowers' Documents	58
	10.12	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; CLASS ACTION WAIVER	58
	10.13	Reference Provision	59
	10.14	Revival and Reinstatement of Obligations	61
	10.15	Updating Disclosure Schedules	61
	10.16	Patriot Act Notification	61
	10.17	License to Use Borrowers' Logo	61
	10.18	Reserved	61
	10.19	Bank Product Providers	61
	10.20	Debtor-Creditor Relationship	62
	10.21	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	62
	10.22	No Novation.	63

ARTICLE XI   JOINT AND SEVERAL LIABILITY; SINGLE LOAN ACCOUNT

63

	11.1	Joint and Several Liability	63
	11.2	Primary Obligation; Waiver of Marshaling	63
	11.3	Financial Condition of Borrowers	63
	11.4	Continuing Liability	64
	11.5	Additional Waivers	64
	11.6	Settlements or Releases	65
	11.7	No Election	66
	11.8	Indefeasible Payment	66
	11.9	Single Loan Account	66
	11.10	Apportionment of Proceeds of Loans	66
	11.11	Parent as Agent for Borrowers	66

 

Annexes, Exhibits and Schedules

SUMMARY OF CREDIT TERMS

Credit Agreement Section	Credit Terms
Section 1.1 – Revolving Credit Commitments	See Schedule C
Section 1.1 – Revolving Loans Maturity Date	January 12, 2019
Section 1.2(a) – Term Loan Commitments	See Schedule C
Section 1.2(b) – Term Loans Amortization Payments	Loan Year                                                              Monthly Principal Payment
	1                                                                                    $198,333,.33
	2                                                                                    $198,333,.33
	3                                                                                    $198,333,.33
	4                                                                                    $198,333,.33
	5                                                                                    $373,333,.33
Section 1.2(b) – Term Loans Maturity Date	January 12, 2022

This AMENDED AND RESTATED CREDIT AGREEMENT, dated as of January 13, 2017, is entered into among Auxilio, Inc., a Nevada corporation ("Parent"), Auxilio Solutions, Inc., a California corporation ("Solutions"), Delphiis, Inc., a California corporation ("Delphiis"), and immediately upon the consummation of the Subject Transaction (defined below), CynergisTek, Inc., a  Texas corporation ("CynergisTek"), and one or more additional direct or indirect Subsidiaries hereafter acquired or formed, which become party to this Agreement by executing an Addendum (Parent, Solutions, Delphiis, CynergisTek and such other Subsidiaries are sometimes collectively referred to herein as "Borrowers" and each individually as a "Borrower"), the financial institutions from time to time parties hereto as Lenders, whether by execution hereof or an Assignment and Acceptance in accordance with Section 10.5(b), and Avidbank, a California banking corporation ("Avidbank"), in its capacity as contractual representative for itself and the other Lenders ("Agent").  Initially capitalized terms used in this Agreement have the meanings ascribed to such terms in Annex 1.  In addition, interpretation of UCC terms, accounting terms, and other matters of construction are set forth in Annex 1.

NOW THEREFORE, the parties hereto hereby agree as follows:

Borrowers may repay and, subject to the terms and conditions hereof, reborrow Revolving Loans. All such repayments shall be made to Agent for the account of each Revolving Loans Lender without penalty or premium.  Agent shall, promptly following its receipt thereof, distribute to each Revolving Loans Lender its Pro Rata Share (based upon the principal amounts outstanding) of all amounts received by Agent pursuant to this Section 1.1 for each such Revolving Loans Lender's respective account.  On the Revolving Loans Maturity Date, Borrowers shall pay to Agent for the account of each Revolving Loans Lender the entire unpaid principal balance of the Revolving Loans together with all accrued but unpaid interest thereon.

Avidbank
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FIRST, to the payment of any amounts owing by such Defaulting Lender to Agent hereunder;

SECOND, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuer hereunder;

THIRD, to Cash Collateralize Issuers' Fronting Exposure with respect to such Defaulting Lender in accordance with Section 1.19;

FOURTH, as Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by Agent;

FIFTH, if so determined by Agent and Borrowers, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender's potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize Issuers' future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 1.19;

SIXTH, to the payment of any amounts owing to the Lenders or Issuers as a result of any judgment of a court of competent jurisdiction obtained by any Lender or Issuers against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement;

SEVENTH, so long as no Default or Event of Default exists, to the payment of any amounts owing to Borrowers as a result of any judgment of a court of competent jurisdiction obtained by Borrowers against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; and

EIGHTH, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction;

provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 3.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Disbursements owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations are held by the Lenders pro rata in accordance with the applicable Commitment without giving effect to Section 1.17(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 1.17(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

Borrowers consent to the foregoing and agree, to the extent they may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against Borrowers rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of Borrowers in the amount of such participation.

In the event that Borrowers shall fail to fulfill any or all of the conditions subsequent set forth in this Section 3.3 on or before the applicable due date indicated above to the satisfaction of Agent, in its sole and absolute discretion, each such failure shall constitute a separate and independent Event of Default.

In order to induce Lenders and Issuers to enter into this Agreement and to make Loans and/or issue any Letters of Credit, Borrowers represent and warrant to Agent, Lenders and Issuers that on the Closing Date and on the date of each Borrowing or issuance of a Letter of Credit:

Borrowers covenant and agree that from the Closing Date and thereafter until the payment, performance and satisfaction in full, in cash, of the Obligations, all of Agent's and Lenders' obligations hereunder have been terminated and no Letters of Credit are outstanding, Borrowers shall:

Borrowers further covenant and agree that from the Closing Date and thereafter until the payment, performance and satisfaction in full, in cash, of the Obligations, all of Agent's, Lenders' and Issuers' obligations hereunder have been terminated and no Letters of Credit are outstanding, Borrowers shall not:

ARTICLE VIII

YIELD PROTECTION

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Loan or of maintaining its obligation to make any such Loan, or to increase the cost to such Lender, such Issuer or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, Issuer or other Recipient hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, Issuer or other Recipient, Borrowers will pay to such Lender, Issuer or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, Issuer or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

Notwithstanding the above, a Lender will not be entitled to demand compensation under this Section 8.1 at any time if it is not the general practice and policy of such Lender to demand such compensation from similarly situated borrowers in similar circumstances under agreements containing provisions permitting such compensation to be claimed at such time.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify Administrative Borrower and Agent in writing of its legal inability to do so.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling Borrowers to require such assignment and delegation cease to apply.

ARTICLE IX

AGENT AND LENDERS

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuer to make such payments to Agent and, in the event that Agent shall consent to the making of such payments directly to the Lenders and Issuers, to pay to Agent any amount due for the reasonable compensation, expenses, disbursements and advances of Agent and its agents and counsel, and any other amounts due Agent under Sections 1.13, 2.3 and 10.3.

Upon request by Agent at any time, the Majority Lenders will confirm in writing Agent's authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the applicable Facility Guaranty pursuant to this Section 9.10.

Auxilio, Inc.

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Attn: ▇▇▇▇ ▇▇▇▇▇▇▇

Telephone:   (▇▇▇) ▇▇▇-▇▇▇▇

Email:    ▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇

With a copy to:

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Email:    ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇

Avidbank

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Attn: ▇▇▇ ▇▇▇▇▇▇▇▇

Telephone:   (▇▇▇) ▇▇▇-▇▇▇▇

Email:    ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇

With a copy to:

Avidbank
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Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient).  Notices delivered through electronic communications, to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

Unless Agent otherwise prescribes, (i) notices and other communications sent to an email address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the "return receipt requested" function, as available, return email or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its email address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

Any such waiver and any such amendment, supplement or modification shall apply equally to each of the Lenders and shall be binding upon Borrowers, Lenders, Agent and all future holders of the Loans.  In the case of any waiver, Borrowers, Lender and Agent shall be restored to their former positions and rights hereunder and under the Loan Documents, and any Event of Default or Default waived shall be deemed to be cured and not continuing; no such waiver shall extend to any subsequent or other Event of Default or Default or impair any right consequent thereon.

Subject to acceptance and recording thereof by Agent pursuant to paragraph (e) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Section 10.3 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in  Section  10.4, to the extent that such Section requires the consent of all the Lenders directly affected thereby, that affects such Participant.  Borrowers agree that each Participant shall be entitled to the benefits of Article VIII (subject to the requirements and limitations therein) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 8.2 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Article VIII, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.  Each Lender that sells a participation agrees, at Borrowers' request and expense, to use reasonable efforts to cooperate with Borrowers to effectuate the provisions of Section 8.2 with respect to any Participant.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 1.18 as though it were a Lender; provided that such Participant agrees to be subject to Section 1.20 as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as an agent of Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant's interest in the Loans or other obligations under the Loan Documents (the "Participant Register"); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.

ARTICLE XI

JOINT AND SEVERAL LIABILITY; SINGLE LOAN ACCOUNT

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

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[Signatures continue on next page.]

Annex 1
To
Credit Agreement

Definitions and Construction

"Acceptable Letter of Credit" means a standby letter of credit, issued by a bank or financial institution acceptable to Agent in its Permitted Discretion, in form and substance satisfactory to Agent in its Permitted Discretion, in an amount equal to 105% of the Letter of Credit Usage, naming Agent as beneficiary to reimburse payments of drafts drawn under outstanding Letters of Credit.

"Account" and "Account Debtor" have the meanings given to such terms in the UCC.

"Accrued Client Lease Payables" means, the amounts maintained in the accrued lease payable reserve account with respect to the lease payment obligations of any Borrower's Account Debtors for which such Borrower processes payments.

"Accrued Equipment Pool Liability" means, the amount maintained in the accrued equipment pool liability reserve account with respect to any Borrower's Account Debtors in the process of purchasing new equipment through such Borrower.

"ACH Transactions" means the Automated Clearing House processing of electronic fund transfers through the direct Federal Reserve Fedline system provided by a Bank Product Provider for the account of Borrower.

"Administrative Borrower" has the meaning given to such term in Section 11.11.

"Affiliate" means, with respect to any Person, any other Person (i) that, directly or indirectly, controls, is controlled by or is under common control with such Person; (ii) that directly or indirectly beneficially owns or controls 10% or more of any class of Ownership Interests of such Person; or (iii) 10% or more of the voting stock of which is directly or indirectly beneficially owned or held by such Person.  For purposes of the foregoing, control (including controlled by and under common control with) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

"Agent" means Avidbank, in its capacity as contractual representative for itself and other Lenders, or any successor thereto in such capacity appointed pursuant to the terms of Article IX.

 "Agreement" means this Amended and Restated Credit Agreement, as amended or restated from time to time in accordance with its terms.

"Anti-Terrorism Laws" means all Applicable Laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering, or bribery, including, without limitation, all laws, regulations and executive orders expressly referenced in Section 4.26.

"Applicable Laws" means all applicable laws, rules, regulations and orders of any Governmental Authority, including without limitation, regulations issued by the Office of the Comptroller of the Currency, Credit Protection Laws, the Fair Labor Standards Act, and the Americans With Disabilities Act.

"Applicable Period" means the period set forth in the table below opposite the applicable Fiscal Quarter end:

"Approved Fund" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

"Asset" means any interest of a Person in any kind of property or asset, whether real, personal, or mixed real and personal, and whether tangible or intangible.

"Asset Coverage Ratio" means, as of the date of determination, the ratio of (a) the sum of (i) all unrestricted cash and cash equivalents on deposit with Avidbank, and (ii) Eligible Accounts per the latest Borrowing Base Certificate delivered to Agent pursuant to Section 5.3(a), to (b) the sum of (i) the aggregate outstanding principal balance of Revolving Loans, and (ii) the scheduled principal and interest payments on the Term Loans coming due within one year.

"Assignment and Acceptance" means an assignment and assumption entered into by a Lender and a Transferee (with the consent of any party whose consent is required by Section 10.5(b)), and accepted by Agent, in substantially the form of Exhibit A or any other form approved by Agent.

"Attributable Indebtedness" means, on any date, (a) in respect of any Capital Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease, agreement or instrument were accounted for as a capital lease.

"Audit Fee" has the meaning given to such term in Section 5.2(b).

"Authorized Officer" means, with respect to each Borrower, any officer of such Borrower authorized by specific resolution of such Borrower to request Loans as set forth in such Borrower's resolutions delivered to Agent on the Closing Date (and updated from time to time as necessary).

"Availability Reserve" means, as of any date of determination, such amounts (expressed as either a specified amount or as a percentage of a specified category or item) as Agent may from time to time establish and adjust in reducing the Borrowing Base (including but not limited to the Tax Lien Reserve until such time as the condition subsequent set forth in Section 3.3(d) is satisfied) (a) to reflect events, conditions, contingencies or risks which, as reasonably determined by Agent in its Permitted Discretion, do or may affect (i) the Collateral or its value, (ii) the Assets, business or prospects of Borrowers, or (iii) the security interests and other rights of Agent in the Collateral (including the enforceability, perfection and priority thereof), or (b) to reflect Agent's judgment in its Permitted Discretion that any collateral report or financial information furnished by or on behalf of Borrowers to Agent is or may have been incomplete, inaccurate or misleading in any material respect, or (c) in respect of any state of facts that Agent determines in its Permitted Discretion constitutes an Event of Default or Default.

"Avidbank" has the meaning set forth in the Preamble.

"Bail-In Action" means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

"Bail-In Legislation" means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

"Bancontrol Account" means individually and collectively, deposit account number 140015009 maintained with Bank, and any other deposit account maintained by any Borrower with Bank for the purpose of accepting payments from Account Debtors.

"Bank Product" means the following financial accommodation extended to a Loan Party by a Bank Product Provider (other than pursuant to the Agreement):  (a) credit cards, (b) credit card processing services, (c) debit cards, (d) stored value cards, (e) purchase cards (including so-called "procurement cards" or "P-cards"), (f) Cash Management Services, and (g) Swaps.

"Bank Product Agreements" means those agreements entered into from time to time by a Loan Party with a Bank Product Provider in connection with the obtaining of any of the Bank Products.

"Bank Product Obligations" means all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by a Loan Party to a Bank Product Provider pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including, without limiting the generality of the foregoing, all amounts that Agent or any Lender is obligated to pay or reimburse to a Bank Product Provider as a result of Agent or such Lender purchasing participations from, or executing indemnities or reimbursement obligations to, a Bank Product Provider with respect to the Bank Products provided by such Bank Product Provider to a Loan Party.

"Bank Product Provider" means any Lender or any of its Affiliates.

"Bank Product Reserve" means a reserve against the Borrowing Base established by Agent from time to time in its Permitted Discretion in respect of Bank Product Obligations.

"Borrower" is defined in the Preamble.

"Borrowers' Account" means Borrowers' general deposit account number 140014994 maintained with Avidbank.

"Borrowing" means a borrowing of Revolving Loans from Lenders pursuant to the terms and conditions hereof.

"Borrowing Base" means, as of the date of determination, the result of (a) 80% of the Eligible Accounts, minus (b) the sum of (i) the Accrued Client Lease Payables, (ii) the Accrued Equipment Pool Liability and (iii) the Reserves; provided, however, Agent may reduce the advance rate, in its sole and absolute discretion, without declaring an Event of Default if it determines in its Permitted Discretion that there has occurred a Material Adverse Effect.

"Borrowing Base Certificate" means Agent's standard form of Borrowing Base Certificate.

"Business Day" means any day other than a Saturday, a Sunday, or a day on which commercial banks in the City of Palo Alto, California, are authorized or required by law or executive order or decree to close.

"Capital Expenditures" means expenditures made in cash, or financed with long term debt, by any Person for the acquisition of any fixed Assets or improvements, replacements, substitutions, or additions thereto that have a useful life of more than 1 year, including the direct or indirect acquisition of such Assets by way of increased product or service charges, offset items, or otherwise, and the principal portion of payments with respect to Capital Lease Obligations, calculated in accordance with GAAP.

"Capital Lease" means any lease of an Asset by a Person as lessee which would, in conformity with GAAP, be required to be accounted for as an Asset and corresponding liability on the balance sheet of that Person.

"Capital Lease Obligations" of a Person means the amount of the obligations of such Person under all Capital Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with GAAP.

"Cash Collateralize" means the delivery of cash or an Acceptable Letter of Credit to Agent, as security for the payment of Obligations, in an amount equal to (a) with respect to the L/C Obligations, 105% of the L/C Obligations, and (b) with respect to any inchoate, contingent or other Obligations (including Bank Product Obligations), Agent's good faith estimate of the amount due or to become due, including all fees and other amounts relating to such Obligations.  "Cash Collateralization" has a correlative meaning.

"Cash Management Services" means any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement,  merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including ACH Transactions) and other cash management arrangements.

"Change in Law" means the occurrence after the date of the Agreement of:  (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation, judicial ruling, judgment or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation, guideline or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; provided that notwithstanding anything in the Agreement to the contrary, (i) the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇ Street Reform and Consumer Protection Act and Basel III, and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall, in each case, be deemed to be a "Change in Law," regardless of the date enacted, adopted or issued.

"Change of Control" means the time at which:

"Closing Date" means the date when all of the conditions set forth in Section 3.1 have been fulfilled to the satisfaction of Agent and its counsel.

"Collateral" has the meaning given to such term in any Loan Document.

"Collateral Assignment of Purchase Agreement" means that certain Collateral Assignment of Rights Under Purchase Agreement, dated as of even date herewith, between Parent and Agent.

"Collections" means all cash, checks, notes, instruments, and other items of payment (including insurance Proceeds, cash Proceeds of asset sales, rental Proceeds, and tax refunds).

"Commitments" means each Lender's Revolving Credit Commitment and Term Loan Commitment, as the context requires.

"Commodity Exchange Act" means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

"Competitor" means a Person, other than a Loan Party, who directly provides products or services that are the same or substantially similar to the products or services provided by, and that constitute a material part of the business of, the Loan Parties taken as a whole.

"Compliance Certificate" means a certificate of compliance to be delivered in accordance with Section 5.3(d), substantially in the form of Exhibit 5.3(d).

"Confidential Information" has the meaning set forth in Section 10.6.

"Connection Income Taxes" means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

"Consolidated" means the consolidation in accordance with GAAP of the accounts or other items as to which such term applies.  "Consolidating" has a correlative meaning.

"Consolidated Adjusted EBITDA" means, with respect to the rolling 4 Fiscal Quarter period ending on the date of determination, the sum of (without duplication) in each case calculated in accordance with GAAP:

"Consolidated Cash Interest Expense" means, with respect to the rolling 4 Fiscal Quarter period ending on the date of determination, the interest paid in cash during such period on the aggregate amount of Borrowers' and the Subsidiaries' Consolidated Debt, including the interest portion of Borrowers' and the Subsidiaries' Consolidated Capital Lease Obligations.

"Consolidated Interest Expense" means, with respect to the rolling 4 Fiscal Quarter period ending on the date of determination, the current interest accrued during such period in accordance with GAAP on the aggregate amount of Borrowers' and the Subsidiaries' Consolidated Debt, including the interest portion of Borrowers' and the Subsidiaries' Consolidated Capital Lease Obligations.

"Consolidated Net Income" means, with respect to the rolling 4 Fiscal Quarter period ending on the date of determination, the Consolidated net income of Borrowers and the Subsidiaries after all federal, state and local income taxes reflected on Borrowers' Consolidated Financial Statement for such period, calculated in accordance with GAAP.

"Corporate Loan Party" means each Loan Party other than any Loan Party who is an individual (collectively, "Corporate Loan Parties").

"Credit Card Direction Letter" means a letter among Borrowers, Agent and a Credit Card Issuer or Merchant Payment Processor, directing the Credit Card Issuer or Merchant Payment Processor, as applicable, to remit, and such Credit Card Issuer or Merchant Payment Processor, as applicable, agrees to remit, all Credit Card Receivables to the Bancontrol Account, and otherwise in form and substance satisfactory to Agent.

"Credit Card Issuer" means any third party, non-Affiliate of any Borrower, that issues or whose members issue secured or unsecured revolving lines of credit by way of credit cards used by customers of Borrower to purchase goods, including, without limitation, MasterCard or VISA bank credit or debit cards or other bank credit or debit cards, and American Express, Discover, and other non-bank credit or debit cards.

"Credit Card Receivables" means all of the present and future rights of Borrowers to payment by any Credit Card Issuer or Merchant Payment Processor and all information contained on or for use with a credit, charge or debit card issued by a Credit Card Issuer.

"Debt" means, as of the date of determination, the sum, but without duplication, of any and all of a Person's:  (i) indebtedness heretofore or hereafter created, issued, incurred or assumed by such Person (directly or indirectly) for or in respect of money borrowed; (ii) Attributable Indebtedness; (iii) obligations evidenced by bonds, debentures, notes, or other similar instruments; (iv) obligations for the deferred purchase price of property or services (other than trade payables which are not more than 90 days past due incurred in the ordinary course of business); (v) current liabilities in respect of unfunded vested benefits under any Plan; (vi) contingent obligations under letters of credit; (vii) obligations under acceptance facilities; (viii) Guarantees of Debt; (ix) obligations with respect to indebtedness in accordance with GAAP secured by any Lien on any Asset of such Person, whether or not such obligations have been assumed; and (x) the net obligations under Swaps (the net obligation shall be deemed to be the Swap Termination Value of such Swaps); and (xi) obligations to purchase, redeem, retire, defease or otherwise make any payment in respect of any Ownership Interests in such Person or any other Person, or any warrant, right or option to acquire such Ownership Interests, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends.

"Debt Service" means, for the rolling 4 Fiscal Quarter period ending on the date of determination, the sum of (i) the scheduled principal payments of Borrowers' Consolidated Debt for such period (including the Loans, the Subordinate Debt and the principal portion of Borrowers' Capital Lease Obligations but excluding the principal payment of Revolving Loans due on the Revolving Loans Maturity Date) calculated in accordance with GAAP, and (ii) Consolidated Cash Interest Expense.

"Debtor Relief Laws" means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

"Default" means any condition or event which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.

"Defaulting Lender" means, subject to Section 1.20(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies Agent and Administrative Borrower in writing that such failure is the result of such Lender's determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to Agent, any Issuer, or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two Business Days of the date when due, (b) has notified Administrative Borrower, Agent or any Issuer in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender's obligation to fund a Loan hereunder and states that such position is based on such Lender's determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by Agent or Administrative Borrower, to confirm in writing to Agent and Administrative Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by Agent and Administrative Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 1.20(b)) upon delivery of written notice of such determination to Administrative Borrower, each Issuer, and each Lender.

"Defaulting Lender Rate" means (a) for the first 3 days from and after the date the relevant payment is due, the Prime Rate, and (b) thereafter, the Prime Rate plus 300 basis points.

 "Dilution" means, with respect to any period as determined by Agent from time to time in its Permitted Discretion, a percentage that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, deductions, or other dilutive items as determined by Agent in its Permitted Discretion with respect to the Accounts, by (b) Borrowers' ▇▇▇▇▇▇▇▇ with respect to Accounts.

"Dilution Reserve" means, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Accounts by 1 percentage point for each percentage point by which Dilution is in excess of 5%.

"Disposition" means the sale, transfer, license, lease or other disposition (whether in one transaction or in a series of transactions, and including any sale and leaseback transaction and any sale, transfer, license or other disposition) of any property (including, without limitation, any Ownership Interests) by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

"Distributions" means dividends or distributions of earnings made by a Person to its Owners.

"Documentary Letter of Credit Fee" has the meaning given to such term in Section 2.3(b).

"Dollars" or "$" means lawful currency of the United States of America.

"Domestic Subsidiary" means any direct or indirect Subsidiary of Parent organized under the laws of any state of the United States or the District of Columbia.

"Earnout Payment" means, the Earnout Payment, as such term is defined the Purchase Agreement, as in effect as of the Closing Date.

 "ECP" means, with respect to any Swap Obligation, an "eligible contract participant" as defined in the Commodity Exchange Act and the regulations thereunder at the time this Agreement, or any Facility Guaranty of, or the grant of a security interest to secure, becomes effective with respect to such Swap Obligation.

 "EEA Financial Institution" means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

"EEA Member Country" means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

"EEA Resolution Authority" means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

"Eligible Accounts" means those Accounts created by Borrower in the ordinary course of business, that arise out of Borrower's sale of goods or rendition of services, that strictly comply with each and all of the representations and warranties respecting Eligible Accounts made by Borrowers to Agent and Lenders in this Agreement and the Loan Documents; provided, however, that standards of eligibility may be fixed and revised from time to time by Agent in Agent's Permitted Discretion to address the results of any audit or appraisal performed by Agent from time to time after the Closing Date. In determining the amount to be included, Eligible Accounts shall be calculated net of customer deposits and unapplied cash remitted to Borrowers.  Eligible Accounts shall not include the following:

"Employee Benefit Plan" means any employee benefit plan within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA, (a) that is or within the preceding six (6) years has been sponsored, maintained or contributed to by any Loan Party or ERISA Affiliate or (b) to which any Loan Party or ERISA Affiliate has, or has had at any time within the preceding six (6) years, any liability, contingent or otherwise.

"Environmental Action" means any written complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other written communication from any Governmental Authority, or any third party involving violations of Environmental Laws or releases of Hazardous Materials (a) from any assets, properties, or businesses of Borrowers, any Subsidiary of any Borrower, or any of their predecessors in interest, (b) from adjoining properties or businesses, or (c) from or onto any facilities which received Hazardous Materials generated by Borrowers, any Subsidiary of any Borrower, or any of their predecessors in interest.

"Environmental Law" means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, in each case, to the extent binding on Parent or its Subsidiaries, relating to the environment, the effect of the environment on employee health, or Hazardous Materials, in each case as amended from time to time.

"Environmental Liabilities" means all liabilities, monetary obligations, losses, damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants, and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand, or Remedial Action required, by any Governmental Authority or any third party, and which relate to any Environmental Action.

"Environmental Lien" means any Lien in favor of any Governmental Authority for Environmental Liabilities.

"Equipment" has the meaning given to such term in the UCC.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statutes, and all regulations and guidance promulgated thereunder.  Any reference to a specific section of ERISA shall be deemed to be a reference to such section of ERISA and any successor statutes, and all regulations and guidance promulgated thereunder.

"ERISA Affiliate" means each entity, trade or business (whether or not incorporated) that together with a Loan Party or a Subsidiary would be (or has been) treated as a "single employer" within the meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o) of section 414 of the IRC.  ERISA Affiliate shall include any Subsidiary of any Loan Party.

"EU Bail-In Legislation Schedule" means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

"Event of Default" has the meaning set forth in Section 7.1.

"Excluded Swap Obligation" means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of this Agreement (or the Facility Guaranty of such Loan Party of), or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any Facility Guaranty thereof, including pursuant to this Agreement) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party's failure for any reason to constitute an ECP.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which this Agreement or such Facility Guaranty or security interest is or becomes illegal.

"Excluded Taxes" means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of a Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment, or (ii) such Lender changes its lending office, (c) Taxes attributable to such Recipient's failure to comply with Section 8.2,  and (d) any U.S. federal withholding Taxes imposed under FATCA .

"Expenses" means (i) all reasonable out of pocket expenses incurred by Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for Agent, in connection with the syndication of the Commitments, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents, or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out of pocket expenses incurred by Agent in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, and (iii) all out of pocket expenses incurred by Agent (including the fees, charges and disbursements of any counsel for Agent), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under Section 8.3, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

"Extraordinary Receipt" means any cash received by or paid to or for the account of any Person not in the ordinary course of business, including tax refunds, pension plan reversions, proceeds of insurance (other than proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings), condemnation awards (and payments in lieu thereof), indemnity payments and any purchase price adjustments net of any taxes paid or payable in connection with such receipt and any cash expense relating to the collection of such Extraordinary Receipts.

 "Facility Guaranties" and "Facility Guaranty" means, individually or collectively as the context requires, each certain Continuing Guaranty executed by a Guarantor in favor of the Lender Group.

"FATCA" means Sections 1471 through 1474 of the IRC, as of the date of this Agreement (or any amended or successor version) and any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the IRC.

"Fees" means the Revolving Credit Commitment Fee, the Term Loan Commitment Fee, the Late Payment Fee, the Late Delivery Fee, Standby Letter of Credit Fees, the Documentary Letter of Credit Fees, the Fronting Fees, and the Audit Fees.

"Financial Statement(s)" means, with respect to any accounting period of any Person, statements of income and statements of cash flows of such Person for such period, and balance sheets of such Person as of the end of such period, setting forth in each case in comparative form figures for the corresponding period in the preceding Fiscal Year or, if such period is a full Fiscal Year, corresponding figures from the preceding annual audit, all prepared in reasonable detail and in accordance with GAAP, subject to year-end adjustments and the absence of footnotes in the case of monthly and quarterly Financial Statements.  Financial Statement(s) shall include the schedules thereto and annual Financial Statements shall also include the footnotes thereto.

"Fiscal Month" means any of the monthly accounting periods of Parent.

"Fiscal Quarter" means any of the quarterly accounting periods of Parent.

"Fiscal Year" means the 12-Fiscal Month period of Parent ending December 31 of each year.  Subsequent changes of the Fiscal Year of Borrowers shall not change the term "Fiscal Year" unless Agent shall consent in writing to such change.

"Fixed Charge Coverage Ratio" means for the rolling 4 Fiscal Quarter period ended on the date of determination, the ratio of: (a) Consolidated Adjusted EBITDA , to (b) the sum of the following (i) Non-Financed Capital Expenditures , (ii) taxes paid in cash, (iii) Distributions paid in cash; provided that in accordance with Section 6.10, Borrower shall not pay any Distributions (other than Permitted Restricted Payments) unless the prior written consent of Agent and Majority Lenders has first been obtained, which Agent and Majority Lenders may withhold in their sole and absolute discretion, (iv) any Earnout Payment paid in cash, and (v) Debt Service, all as determined in accordance with GAAP.

"Flow of Funds Agreement" means that certain Flow of Funds Agreement, dated as of even date herewith, among Agent, Lenders, and Loan Parties.

"Foreign Lender" means (a) if Borrowers are U.S. Persons, a Lender that is not a U.S. Person, and (b) if Borrowers are not U.S. Persons, a Lender that is resident or organized under the laws of a jurisdiction other than that in which Borrower is resident for tax purposes.

"Foreign Subsidiary" means a direct or indirect Subsidiary of Parent that is not a Domestic Subsidiary.

"Fronting Exposure" means, at any time there is a Defaulting Lender, with respect to any Issuer, such Defaulting Lender's Revolving Credit Commitment Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuer other than L/C Obligations as to which such Defaulting Lender's participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

"Fronting Fee" has the meaning given to such term in Section 2.3(c).

"Fund" means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

"GAAP" means generally accepted accounting principles in the United States of America, consistently applied, which are in effect as of the date of this Agreement.  If any changes in accounting principles from those in effect on the date hereof are hereafter occasioned by promulgation of rules, regulations, pronouncements or opinions by or are otherwise required by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or successors thereto or agencies with similar functions), and any of such changes results in a change in the method of calculation of, or affects the results of such calculation of, any of the financial covenants, standards or terms found herein, then the parties hereto agree to enter into and diligently pursue negotiations in order to amend such financial covenants, standards or terms so as to equitably reflect such changes, with the desired result that the criteria for evaluating financial condition and results of operations of Borrowers and the Subsidiaries shall be the same after such changes as if such changes had not been made.

 "Governing Documents" means the certificate or articles or certificate of incorporation, by-laws, articles or certificate of organization, operating agreement, or other organizational or governing documents of any Person.

"Governmental Authority" means any federal, state, local or other governmental department, commission, board, bureau, agency, central bank, court, tribunal or other instrumentality or authority or subdivision thereof, domestic or foreign, exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

"Guarantee" means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Debt or other obligation payable or performable by another Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Debt or other obligation of the payment or performance of such Debt or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Debt or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Debt or other obligation of any other Person (or any right, contingent or otherwise, of any holder of such Debt to obtain any such Lien).  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term "Guarantee" as a verb has a corresponding meaning.

"Guarantor(s)" means, individually or collectively as the context requires, all Domestic Subsidiaries, and every other Person who now or hereafter executes a Facility Guaranty in favor of Agent and Lenders with respect to the Obligations, including without limitation, the Swap Obligations under the Swap Documents, but excluding all Excluded Swap Obligations.

"Hazardous Materials" means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as "hazardous substances," "hazardous materials," "hazardous wastes," "toxic substances," or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million.

"Indemnitee(s)" has the meaning given to such term in Section 10.3(b).

"Indemnified Taxes" means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.

"Insolvency Proceeding" means any proceeding commenced by or against any Person, under any provision of Debtor Relief Laws, or under any other bankruptcy or insolvency law, including, but not limited to, assignments for the benefit of creditors, formal or informal moratoriums, compositions, or extensions with some or all creditors.

"Intellectual Property" means all present and future:  trade secrets, know-how and other proprietary information; trademarks, trademark applications, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world; copyrights and copyright applications; (including copyrights for computer programs) and all tangible and intangible property embodying the copyrights, unpatented inventions (whether or not patentable); patents and patent applications; industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or disks, flow diagrams, specification sheets, computer software, source codes, object codes, executable code, data, databases and other physical manifestations, embodiments or incorporations of any of the foregoing; all other intellectual property; and all common law and other rights throughout the world in and to all of the foregoing.

"Intellectual Property Security Agreement" means each certain Copyright Security Agreement, Patent Security Agreement, and Trademark Security Agreement (as each of such terms are defined in the Security Agreement).

"Intercompany Subordination Agreement" means that certain Intercompany Subordination Agreement, dated as of even date herewith, among Corporate Loan Parties and Agent for the benefit of Lenders.

"Interest Payment Date" means the 1st day of each and every month, commencing on February 1, 2017, the Revolving Loans Maturity Date and the Term Loans Maturity Date, as applicable.

"Inventory" has the meaning given to such term in the UCC.

"Investment" means, with respect to any Person, any investment by such Person in any other Person (including Affiliates) in the form of loans, Guarantees, advances, capital contributions, and any other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP, and any purchase or acquisition of any Ownership Interests, or any obligations or other securities of, any Person, including the establishment or creation of a Subsidiary.

"IRC" means the IRC of 1986, as amended from time to time, or any successor statute, and any and all regulations thereunder.  Any reference to a specific section of the IRC shall be deemed to be a reference to such section of the IRC and any successor statutes, and all regulations and guidance promulgated thereunder.

"ISP" means the International Standby Practices (1998 version), and any subsequent versions or revisions approved by a Congress of the International Chamber of Commerce Publication 590 and adhered to by the applicable Issuer.

"Issuer(s)" means Avidbank, and/or any other Lender that, at the request of Administrative Borrower and with the consent of Agent, agrees, in such Lender's sole discretion, to become an Issuer for the purpose of issuing Letters of Credit pursuant to the terms and conditions hereof.

"Knowledge" has the meaning given to such term in Section 10.9.

"Late Payment Fee" has the meaning given to such term in Section 1.13(c).

"L/C Disbursement" means a payment made by Issuer pursuant to a Letter of Credit.

"L/C Obligations" means the sum (without duplication) of (a) all Reimbursement Obligations; and (b) the Letter of Credit Usage.

"L/C Participants" means, with respect to a Letter of Credit, all of the Revolving Loans Lenders other than the applicable Issuer.

"Lender Group" means each of the Lenders (including each Issuer) and Agent, or any one or more of them.

"Lender Representatives" has the meaning set forth in Section 10.6.

"Lenders" means the Persons listed on Schedule L and any other Person that shall have become party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance.

"Lending Office" means each Lender's office located at its address set forth on the signature pages hereof, or such other office of such Lender as it may hereafter designate as its Lending Office by notice to Administrative Borrower and Agent.

"Letter(s) of Credit" means any standby or documentary letter(s) of credit issued by an Issuer, pursuant to Section 2.1(a).

"Letter of Credit Application" means the applicable Issuer's standard form of Letter of Credit Application.

"Letter of Credit Sublimit" has the meaning given to such term in Section 2.1(a) of the Summary of Credit Terms.

"Letter of Credit Usage" means, on any date of determination, the aggregate maximum amounts available to be drawn under all outstanding Letters of Credit, without regard to whether any conditions to drawing could then be met.

"Lien" means any mortgage, deed of trust, pledge, security interest, hypothecation, assignment, deposit arrangement or other preferential arrangement, charge or encumbrance (including, any conditional sale or other title retention agreement, or finance lease) of any kind.

"Loan Document(s)" means this Agreement and each of the following documents, instruments, and agreements individually or collectively, as the context requires:

"Loan Parties" means individually and collectively, Borrowers and Guarantors (each a "Loan Party").

"Loans" means the Revolving Loans and the Term Loans (each, a "Loan").

"Loan Year" means each 365 day period (or 366 day period in the case of any period that includes February 29) commencing on the Closing Date and each anniversary thereof.

"Lockbox" means "Lockbox" as such term (or similar term) is defined in one or more lockbox or similar  agreements between any Borrower and Bank.

"Majority Lenders" means, at any time, Lenders whose aggregate Pro Rata Shares (calculated under the last clause of the definition of Pro Rata Shares) exceed 50%, provided, that at any time there are two or more Lenders that are not Defaulting Lenders, "Majority Lenders" must include at least two Lenders that are not Affiliates and "Majority Lenders" must always include Avidbank.  The Pro Rata Share of any Defaulting Lender shall be disregarded in determining Majority Lenders at any time.

"Material Adverse Effect" means a material adverse effect on (i) the business, Assets, condition (financial or otherwise), results of operations, or prospects of any Loan Party; (ii) the ability of any Loan Party to perform its obligations under the Loan Documents to which it is a party, (iii) the validity or enforceability of the Loan Documents, or the rights or remedies of Agent and Lenders hereunder and thereunder, (iv) the value of the Collateral, or (v) the priority of Agent's Liens with respect to the Collateral.

"Material Contract" means, with respect to Borrowers, each contract or agreement to which Borrower is a party having an economic value in excess of $125,000.

"Merchant Payment Processor" means any servicing or processing agent or any factor or financial intermediary who facilitates, services, processes or manages the authorization, billing, transfer, payment and/or other procedure from a Credit Card Issuer, bank, consumer payment facilitator or other Person with respect to any sales transactions of Borrower involving credit, charge or debit card purchases, check purchases or cashing, or other method of consumer payment.

"Minimum Collateral Amount" means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 105% of the Fronting Exposure of all Issuers with respect to Letters of Credit issued and outstanding at such time and (ii) otherwise, an amount determined by Agent and Issuers in their sole discretion.

"Multiemployer Plan" means any multiemployer plan within the meaning of Section 3(37) or 4001(a)(3) of ERISA with respect to which any Loan Party or ERISA Affiliate has an obligation to contribute or has any liability, contingent or otherwise or could be assessed withdrawal liability assuming a complete withdrawal from any such multiemployer plan.

"Net Proceeds" means (a) with respect to any Disposition by any Loan Party or any of its Subsidiaries, or any Extraordinary Receipt received or paid to the account of any Loan Party or any of its Subsidiaries, the excess, if any, of (i) the sum of cash and cash equivalents received in connection with such transaction (including any cash or cash equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of (A) the principal amount of any Debt that is secured by a Lien permitted hereunder on the applicable Asset which is senior to Agent's Lien on such Asset and that is required to be repaid (or to establish an escrow for the future repayment thereof) in connection with such transaction (other than Debt under the Loan Documents), and (B) the reasonable and customary out-of-pocket expenses incurred by such Loan Party or such Subsidiary in connection with such transaction (including, without limitation, appraisals, and brokerage, legal, title and recording or transfer tax expenses, other taxes paid or payable in cash in connection with the consummation of such transaction, and commissions) paid by any Loan Party to third parties (other than Affiliates); and (b) with respect to the sale or issuance of any Ownership Interests by any Loan Party or any of its Subsidiaries, or the incurrence or issuance of any Debt by any Loan Party or any of its Subsidiaries, the excess of (i) the sum of the cash and cash equivalents received in connection with such transaction over (ii) the underwriting discounts and commissions, and other reasonable and customary out-of-pocket expenses, incurred by such Loan Party or such Subsidiary in connection therewith.

"Non-Consenting Lender" means any Lender that does not approve any consent, waiver or amendment that (i) requires the approval of all affected Lenders in accordance with the terms of Section 10.4 and (ii) has been approved by the Majority Lenders.

"Non-Defaulting Lender" means, at any time, each Lender that is not a Defaulting Lender at such time.

"Non-Financed Capital Expenditures" means, for any period, (a) Capital Expenditures minus (b) the portion of Capital Expenditures financed under Capital Leases or other Debt (excluding Revolving Loans).

"Notes" means, collectively, the Revolving Loans Notes and the Term Loan Notes (each, a "Note").

"Notice of Borrowing" means an irrevocable notice from Administrative Borrower to Agent of Borrowers' request for a Borrowing pursuant to the terms of Section 1.5, substantially in the form of Exhibit 1.5(b).

"Notification Event" means (a) the occurrence of a "reportable event" described in Section 4043 of ERISA for which the 30-day notice requirement has not been waived by applicable regulations issued by the PBGC, (b) the withdrawal of any Loan Party or ERISA Affiliate from a Pension Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination, under Section 4041 of ERISA, if the plan assets are not sufficient to pay all plan liabilities, (d) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC or any Pension Plan or Multiemployer Plan administrator, (e) any other event or condition that would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan, (f) the imposition of a Lien pursuant to the IRC or ERISA in connection with any Employee Benefit Plan or the existence of any facts or circumstances that could reasonably be expected to result in the imposition of a Lien, (g) the partial or complete withdrawal of any Loan Party or ERISA Affiliate from a Multiemployer Plan (other than any withdrawal that would not constitute an Event of Default under Section 8.12), (h) any event or condition that results in the reorganization or insolvency of a Multiemployer Plan under Sections of ERISA, (i) any event or condition that results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC of proceedings to terminate or to appoint a trustee to administer a Multiemployer Plan under ERISA, (j) any Pension Plan being in "at risk status" within the meaning of IRC Section 430(i), (k) any Multiemployer Plan being in "endangered status" or "critical status" within the meaning of IRC Section 432(b) or the determination that any Multiemployer Plan is or is expected to be insolvent or in reorganization within the meaning of Title IV of ERISA, (l) with respect to any Pension Plan, any Loan Party or ERISA Affiliate incurring a substantial cessation of operations within the meaning of ERISA Section 4062(e), (m) an "accumulated funding deficiency" within the meaning of the IRC or ERISA (including Section 412 of the IRC or Section 302 of ERISA) or the failure of any Pension Plan or Multiemployer Plan to meet the minimum funding standards within the meaning of the IRC or ERISA (including Section 412 of the IRC or Section 302 of ERISA), in each case, whether or not waived, (n) the filing of an application for a waiver of the minimum funding standards within the meaning of the IRC or ERISA (including Section 412 of the IRC or Section 302 of ERISA) with respect to any Pension Plan or Multiemployer Plan, (o) the failure to make by its due date a required payment or contribution with respect to any Pension Plan or Multiemployer Plan, (p) any event that results in or could reasonably be expected to result in a liability by a Loan Party pursuant to Title I of ERISA or the excise tax provisions of the IRC relating to Employee Benefit Plans or any event that results in or could reasonably be expected to result in a liability to any Loan Party or ERISA Affiliate pursuant to Title IV of ERISA or Section 401(a)(29) of the IRC, or (q) any of the foregoing is reasonably likely to occur in the following 30 days.

"Obligations" means (i) any and all obligations of Borrowers (or any of them) to Agent and Lenders (or any of them) with respect to the Loans, including without limitation all principal, interest, and other amounts, costs and Fees and Expenses payable under this Agreement and the Loan Documents; excluding, however, all Excluded Swap Obligations; (ii) any and all obligations of Borrowers (or any of them) to any Bank Product Provider arising under or in connection with any transaction now existing or hereafter entered into between Borrower and such Bank Product Provider which is a Swap; excluding, however, all Excluded Swap Obligations; and (iii) all other indebtedness, liabilities, and obligations of Borrowers (or any of them) owing to Agent and Lenders and/or the Bank Product Providers, and to their successors and assigns, previously, now, or hereafter incurred, and howsoever evidenced, whether direct or indirect, absolute or contingent, joint or several, liquidated or unliquidated, voluntary or involuntary, due or not due, legal or equitable, whether incurred before, during, or after any Insolvency Proceeding and whether recovery thereof is or becomes barred by a statute of limitations or is or becomes otherwise unenforceable or unallowable as claims in any Insolvency Proceeding, together with all interest thereupon (including interest under Section 1.4(b) and including any interest that, but for the provisions of Debtor Relief Laws, would have accrued during the pendency of an Insolvency Proceeding).  The Obligations shall include, without limiting the generality of the foregoing, all principal and interest and other payment obligations owing under the Loans, all Reimbursement Obligations, all Bank Product Obligations, all Expenses, the Fees, any other fees and expenses due hereunder and under the Loan Documents (including any fees or expenses that, but for the provisions of Debtor Relief Laws, would have accrued during the pendency of an Insolvency Proceeding), and all other indebtedness evidenced by this Agreement, the Loan Documents, and/or the Bank Product Agreements; excluding, however, all Excluded Swap Obligations.

"OFAC" means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

"Other Connection Taxes" means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

"Other Taxes" means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.

"Overadvance" has the meaning set forth in Section 1.1(d).

"Owner" means, with respect to any Person, any other Person owning Ownership Interests of such Person.

"Ownership Interests" means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing.

"Parent" has the meaning set forth in the Preamble.

"Participant" has the meaning set forth in Section 10.5(c).

"Participant Register" has the meaning specified in Section 10.5(c).

"Patriot Act" means the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001.

"PBGC" means the Pension Benefit Guaranty Corporation or any successor agency.

"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV or Section 302 of ERISA or Sections 412 or 430 of the Code sponsored, maintained, or contributed to by any Loan Party or ERISA Affiliate or to which any Loan Party or ERISA Affiliate has any liability, contingent or otherwise.

"Permitted Debt" means:

"Permitted Discretion" means a determination made in the exercise of reasonable (from the perspective of a secured commercial lender) business judgment.

"Permitted Dispositions" means:

"Permitted Investments" means:

"Permitted Issuances" means (a) issuances of Ownership Interests of Parent that would not create a Change of Control or otherwise result in a Default or Event of Default, and (b) issuances of a Ownership Interests of a Subsidiary to a Loan Party that is its Owner, subject to Section 3.1 of the Security Agreement.

"Permitted Liens" means:

"Permitted Restricted Payments" means:

"Person" means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

"Pledged Company" means each Borrower and any other Person the Ownership Interests of which has been pledged to Agent to secure the Obligations pursuant to the terms and conditions hereof or any Loan Document.

"Prepayment Fee" has the meaning given to such term in Section 1.13(e).

"Prime Lending Rate" (a) with respect to the Revolving Loans, has the meaning given to such term in Section 1.4(a)(i) of the Summary of Credit Terms, and (b) with respect to the Term Loans, has the meaning given to such term in Section 1.4(a)(ii) of the Summary of Credit Terms,.

"Prime Rate" means that variable interest rate which is subject to change from time to time based upon changes in the independent index which is the Prime Rate as published in the Money Rates Section of the Western Edition of the Wall Street Journal (the "Index"). The Index is not necessarily the lowest rate charged by Agent on its commercial loans. If the Index becomes unavailable during the term of this loan, Agent may designate a substitute index after notice to Administrative Borrower. Agent will advise Administrative Borrower of the current Index rate upon request. Interest changes shall not occur more often than daily. Adjustment shall become effective the next Business Day after publication or announcement of the Index change. Borrowers understand that Agent may make loans based upon other rates and indexes as well.

"Pro Rata Share" means, as of any date of determination:

"Protective Advances" has the meaning given to such term in Section 1.14.

"Purchase Agreement" is defined in Recital B.

"Purchase Documents" means the Purchase Agreement together with any and all bills of sale, assignments and any and all other agreements, instruments and documents evidencing or executed in connection with the Subject Transaction.

"Purchase Money Lien" means a Lien on any item of equipment of Borrowers securing a purchase-money obligation; provided that (i) such Lien attaches only to that item of equipment, and (ii) such purchase-money obligation does not exceed 100% of the purchase price of such item of equipment.

"▇▇▇▇▇▇▇▇▇" ▇▇▇▇▇ (▇) ▇▇▇▇▇, (▇) any Lender and (c) any Issuer, as applicable.

"Register" has the meaning given to such term in Section 10.5(e).

 "Reimbursement Obligations" means the obligations of Borrowers to reimburse Issuer pursuant to Section 2.5 amounts drawn under Letters of Credit.

"Related Parties" means, with respect to any Person, such Person's Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person's Affiliates.

"Remedial Action" means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment, (d) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (e) conduct any other actions with respect to Hazardous Materials required by Environmental Laws.

"Reserves" means the Availability Reserve, the Bank Product Reserve, and the Dilution Reserve.  Agent shall have the right, at any time and from time to time after the Closing Date in its Permitted Discretion to establish, modify or eliminate Reserves.

"Restricted Payment" means (a) any payment of principal or interest or any purchase, redemption, retirement, acquisition or defeasance with respect to any Subordinate Debt, (b) any Distribution on account of any Ownership Interests of any Loan Party, now or hereafter outstanding, (c) any purchase, redemption, retirement, sinking fund, or other direct or indirect acquisition for value of any Ownership Interests of any Loan Party now or hereafter outstanding, (d) any distribution of Assets to any Owners of any Loan Party, whether in cash, Assets, or in obligations of such Loan Party, (e) any allocation or other set apart of any sum for the payment of any Distribution on, or for the purchase, redemption or retirement of, any Ownership Interests of any Loan Party, or (f) any other distribution by reduction of capital or otherwise in respect of any Ownership Interests of any Loan Party.

 "Revolving Credit Availability" means, as of the date of determination, the difference of (a) the lesser of (i) the Borrowing Base, or (ii) the aggregate Revolving Credit Commitments, minus (b) the sum of (i) the aggregate outstanding Revolving Loans, plus (ii) the L/C Obligations.

"Revolving Credit Commitment" means, with respect to any Revolving Loans Lender, the amount indicated under such Lender's name on Schedule C under the heading Revolving Credit Commitment or, in the case of any Lender that is an assignee Lender pursuant to Section 10.5(b), the amount of the assigning Lender's Revolving Credit Commitment assigned to such assignee Lender (collectively, the "Revolving Credit Commitments").

"Revolving Credit Commitment Fee" has the meaning set forth in Section 1.13(a)(i).

"Revolving Credit Commitment Percentage" means with respect to any Revolving Lender, the percentage of the total Revolving Commitments represented by such Revolving Lender's Revolving Commitment.  If the Revolving Commitments have terminated or expired, the Revolving Credit Commitment Percentages shall be determined based upon the Revolving Commitments most recently in effect, giving effect to any assignments.

"Revolving Credit Exposure" means, as to any Revolving Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Loans and such Revolving Lender's Pro Rata Share of Letter of Credit Usage.

"Revolving Loans" has the meaning given to such term in Section 1.1.

"Revolving Loans Lender" means each of the Lenders indicated on Schedule C under the heading Revolving Loans Lenders, and also means any assignee of such Lender pursuant to Section 10.5(b).

"Revolving Loans Maturity Date" has the meaning given to such term in Section 1.1 of the Summary of Credit Terms.

"Revolving Loans Note" means a Secured Promissory Note (Revolving Loans), executed by Borrowers to the order of a Revolving Loans Lender, in the principal amount of the Revolving Credit Commitment of such Revolving Loans Lender.

"Sanctioned Country" has the meaning set forth in Section 4.26.

"Sanctioned Person" has the meaning set forth in Section 4.26.

"Sanctions Program" has the meaning set forth in Section 4.26.

"Secured Parties" shall mean, collectively, (a) the Lenders, (b) Agent, (c) the beneficiaries of each indemnification obligation undertaken by any Loan Party under the Loan Documents, (d) all Bank Product Providers, (e) each Issuer, (f) any successors, endorsees, transferees and assigns of each of the foregoing, and (g) any other holder of any Secured Obligation (as defined in the Security Agreement).

"Security Agreement" means that certain Security Agreement, dated as of even date herewith, among Corporate Loan Parties and Agent, for the ratable benefit of Lenders.

"Sellers" is defined in Recital B.

"Seller Subordination Agreement" means that certain Subordination Agreement, dated as of even date herewith, among Sellers, Parent, and Agent.

"Senior Debt to Consolidated Adjusted EBITDA Ratio" means, as of the date of determination, the ratio of (a) the sum of (i) the Obligations, plus (ii) Borrowers' Capital Lease Obligations that are secured by a first priority Lien, to (b) Consolidated Adjusted EBITDA for the rolling 4 Fiscal Quarter period ended on the date of determination.

"Settlement" has the meaning given to such term in Section 1.15(a).

"Settlement Date" means (a) the Closing Date, (b) every day after the Closing Date or, if such day is not a Business Day, the next succeeding Business Day, and (c) any other Business Day designated as a "Settlement Date" by Agent in its discretion upon not less than 1 Business Days' notice to each Lender.

"Solvent" means, with respect to any Person on the date any determination thereof is to be made, that on such date:  (a) the present fair valuation of the Assets of such Person is greater than such Person's probable liability in respect of existing debts; (b) such Person does not intend to, and does not believe that it will, incur debts beyond such Person's ability to pay as such debts mature; and (c) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, which would leave such Person with Assets remaining which would constitute unreasonably small capital after giving effect to the nature of the particular business or transaction.  For purposes of this definition (i) the fair valuation of any property or assets means the amount realizable within a reasonable time, either through collection or sale of such Assets at their regular market value, which is the amount obtainable by a capable and diligent Person from an interested buyer willing to purchase such property or assets within a reasonable time under ordinary circumstances; and (ii) the term debts includes any payment obligation, whether or not reduced to judgment, equitable or legal, matured or unmatured, liquidated or unliquidated, disputed or undisputed, secured or unsecured, absolute, fixed or contingent.

"Standby Letter of Credit Fee" has the meaning given to such term in the Section 2.3(a).

"Subject Transaction" is defined in Recital B.

"Subordinate Debt" has the meaning given to such term in the Subordination Agreement and also means any other Debt that is subordinated to the Obligations pursuant to a Subordination Agreement in form and substance satisfactory to Agent.

"Subordination Agreements" means (a) the Seller Subordination Agreement, and (b) any other subordination agreement accepted by Agent from time to time in its sole discretion (each, a "Subordination Agreement").

"Subsidiary" means, with respect to any Person, any corporation, limited liability company, partnership, trust or other entity (whether now existing or hereafter organized or acquired) of which such Person or one or more Subsidiaries of such Person at the time owns or controls directly or indirectly more than 50% of the shares of stock or partnership or other ownership interest having general voting power under ordinary circumstances to elect a majority of the board of directors, managers or trustees or otherwise exercising control of such corporation, limited liability company, partnership, trust or other entity (irrespective of whether at the time stock or any other form of ownership of any other class or classes shall have or might have voting power by reason of the happening of any contingency).

"Summary of Credit Terms" means the Summary of Credit Terms at the head of this Agreement.

"Swap" means and includes any transaction now existing or hereafter entered into between a Borrower and a Bank Product Provider which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures, including without limitation the interest rate swap transaction entered into pursuant to the Swap Documents.

"Swap Documents" means and includes the ISDA Master Agreement and Schedule thereto between a Borrower and a Bank Product Provider, and all Confirmations (as such term is defined in such ISDA Master Agreement) between such Borrower and a Bank Product Provider executed in connection with any Swaps.

"Swap Obligation" means, with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the meaning of section 1a(47) of the Commodity Exchange Act.

"Swap Termination Value" means, with respect to any Swap, at any time, after taking into account the effect of any legally enforceable netting or master agreement relating to such Swap and the effect of all Swaps outstanding under such netting or master agreement, (a) for any date on or after the date that such Swaps have been closed out pursuant to an early termination date, the net close-out, settlement or termination value derived thereby, and (b) for any other date, the net close-out, settlement or termination value that would be determined as of such date under the relevant netting or master agreement, if any, as if such Swaps were subject to early termination due to default of any Borrower or its Affiliates.

"Synthetic Lease Obligation" means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

"Tax Lien Reserve" means a reserve in the amount of $40,000 to address the risk relating to the tax Liens filed against one or more of the Borrowers as of the date hereof.

"Taxes" means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

"Term Loans" has the meaning given to such term in Section 1.2(a).

"Term Loan Commitment" means, with respect to any Term Loan Lender, the amount indicated under such Lender's name on Schedule C under the heading Term Loan Commitment or, in the case of any Lender that is an assignee Lender pursuant to Section 10.5(b), the amount of the assigning Lender's Term Loan Commitment assigned to such assignee Lender (collectively, the "Term Loan Commitments").

"Term Loan Commitment Fee" has the meaning set forth in Section 1.13(a)(ii).

"Term Loan Lender" means each of the Lenders indicated on Schedule C under the heading Term Loan Lenders, and also means any assignee of such Lender pursuant to Section 10.5(b).

"Term Loans Maturity Date" has the meaning given to such term in Section 1.2(b) of the Summary of Credit Terms.

"Term Loan Note" means a Secured Promissory Note (Term Loan), executed by Borrowers to the order of a Term Loan Lender, in the original principal amount equal to the Term Loan Commitment of such Term Loan Lender.

"Total Credit Exposure" means, as to any Lender at any time, the unused Commitments, Revolving Credit Exposure, and outstanding Term Loan of such Lender at such time.

"Transferee" has the meaning set forth in Section 10.5(d).

"UCC" means the California Uniform Commercial Code, as amended or supplemented from time to time.

"Uniform Customs" means the Uniform Customs and Practice for Documentary Credits (2007 Revision), International Chamber of Commerce Publication No. 600, as the same may be amended from time to time.

"U.S. Person" means any Person that is a "United States Person" as defined in Section 7701(a)(30) of the IRC.

"U.S. Tax Compliance Certificate" has the meaning given to such term in Section 8.2(g).

"Withdrawal Liability" means liability with respect to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

"Withholding Agent" means any Loan Party and Agent.

"Write-Down and Conversion Powers" means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

Annex 2
To
Credit Agreement

Closing Conditions

Agent, each Lender and each Issuer must receive each of the following prior to January 13, 2017, each in form and substance satisfactory to Agent and Majority Lenders.

1.	Each of the Loan Documents (other than such Loan Documents to be delivered pursuant to Section 3.3), all duly executed by Borrowers and/or the other Persons party thereto, and acknowledged where required;

2.

A Certificate of the Secretary of each Corporate Loan Party, dated as of the Closing Date, certifying (i) the incumbency and signatures of the Authorized Officers who are executing the Loan Documents on behalf of such Corporate Loan Party; (ii) the Bylaws or Operating Agreement, as applicable, of such Corporate Loan Party and all amendments thereto as being true and correct and in full force and effect; and (iii) the resolutions of the Owners and boards of directors (or similar governing bodies), as applicable, of such Corporate Loan Party as being true and correct and in full force and effect, authorizing the execution and delivery of the Loan Documents and the Purchase Documents, and authorizing the transactions contemplated hereunder and thereunder, and authorizing the Authorized Officers to execute the same on behalf of such Corporate Loan Party;

3.	Each Corporate Loan Party's Articles of Incorporation or Certificate of Formation, as applicable, and all amendments thereto, certified by the applicable Secretary of State and dated a recent date prior to the Closing Date;

4.	A certificate of status and good standing for each Corporate Loan Party, dated a recent date prior to the Closing Date, showing that such Corporate Loan Party is in good standing under the laws of the state indicated in Schedule 4.1;

5.	Certificates of foreign qualification and good standing for each Corporate Loan Party, dated a recent date prior to the Closing Date, showing that such Corporate Loan Party is in good standing under the laws of the states indicated in Schedule 4.1;

6.

A certificate signed by the President and Chief Executive Officer of each Corporate Loan Party, dated as of the Closing Date, certifying that (i) both immediately before and immediately after giving effect to the transactions contemplated by the Loan Documents and the Purchase Documents, such Corporate Loan Party is and will be Solvent; (ii) to their Knowledge, the representations and warranties of such Corporate Loan Party contained in the Loan Documents are true and correct in all material respects, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects, and (iii) to their Knowledge, both immediately before and immediately after giving effect to the transactions contemplated by the Loan Documents and the Purchase Documents, no Event of Default, Default or Material Adverse Effect is continuing or shall occur;

7.	Opinions of counsel for the Loan Parties in connection with the Loan Documents and the transactions contemplated thereby;

8.	The original certificates evidencing 100% of the issued and outstanding Ownership Interests of Borrowers (other than Parent) and each Domestic Subsidiary, and undated stock powers with respect thereto, duly executed in blank;

9.	Due diligence with respect to Corporate Loan Parties (including background checks on management and Owners), and Sellers, including audits, financial and legal survey;

10.	UCC and other public record searches with respect to Corporate Loan Parties,  CynergisTek, and Sellers;

11.

An audit report for CynergisTek prepared by a certified public accountant approved by Agent, concerning the Fiscal Years ended December 31, 2014, December 31, 2015 and the 9 Fiscal Month period ended September 30, 2016; provided, that the audit report for the 9 Fiscal Month period ended September 30, 2016 shall be prepared in such a manner that Agent is able to examine the adjusted pro forma EBITDA (in accordance with GAAP) for CynergisTek for the trailing 12 Fiscal Month period ended September 30, 2016;

 

 

 

12.	The Revolving Credit Commitment Fee, the Term Loan Commitment Fee, and all Expenses owing on the Closing Date;

13.	True and correct executed copies of the Purchase Agreement and all Purchase Documents with respect thereto;

14.

Satisfactory evidence that the Subject Transaction has been duly consummated or shall be duly consummated immediately upon the funding of the initial Loans in material compliance with Applicable Law and on terms and conditions acceptable to Agent in accordance with the Purchase Documents without waiver of any term or condition thereof which has not been consented to by Agent and the Majority Lenders;

15.	Evidence that no Material Adverse Effect shall have occurred;

16.	Copies of insurance binders or insurance certificates evidencing Borrowers having caused to be obtained insurance in accordance with Section 5.5, including the endorsements required by such Section;

17.	Such other documents, instruments and agreements as Agent may reasonably request in connection with the transactions contemplated hereunder or to perfect or protect the Liens granted to Agent.