Exhibit 10.26

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO CERTAIN PORTIONS OF
THIS AGREEMENT.  CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

MIVA, INC.

 

BRIDGE BANK, NATIONAL ASSOCIATION

 

LOAN AND SECURITY AGREEMENT

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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This LOAN AND SECURITY AGREEMENT is entered into as of November 7, 2008, by and
between Bridge Bank, NATIONAL ASSOCIATION (“Bank”) and MIVA, INC. (“Borrower”).

 

RECITALS

 

Borrower wishes to obtain credit from time to time from Bank, and Bank desires
to extend credit to Borrower.  This Agreement sets forth the terms on which Bank
will advance credit to Borrower, and Borrower will repay the amounts owing to
Bank.

 

AGREEMENT

 

The parties agree as follows:

 

1.                                      DEFINITIONS AND CONSTRUCTION.

 

1.1                               Definitions.  As used in this Agreement, the
following terms shall have the following definitions:

 

“Accounts” means all presently existing and hereafter arising accounts, contract
rights, payment intangibles, and all other forms of obligations owing to
Borrower arising out of the sale or lease of goods (including, without
limitation, the licensing of software and other technology) or the rendering of
services by Borrower, whether or not earned by performance, and any and all
credit insurance, guaranties, and other security therefor, as well as all
merchandise returned to or reclaimed by Borrower and Borrower’s Books relating
to any of the foregoing.

 

“Adjustments” means all discounts, allowances, disputes, offsets, defenses,
rights of recoupment, rights of return, warranty claims, or short payments,
asserted by or on behalf of any account debtor with respect to any Account.

 

“Advance” or “Advances” means a cash advance or cash advances under the
Revolving Facility.

 

“AEBITDA” means earnings before interest, taxes, depreciation and amortization,
one-time restructuring costs and non-cash compensation and expenses, with
restructuring costs not to exceed *** annually and expenses incurred in
connection with litigation matters as disclosed in accordance with Section 5.8
not to exceed *** annually.

 

“Affiliate” means, with respect to any Person, any Person that owns or controls
directly or indirectly such Person, any Person that controls or is controlled by
or is under common control with such Person, and each of such Person’s senior
executive officers, directors, and partners.

 

“Asset Coverage Ratio” means (a) all unrestricted cash and cash equivalents in
which Bank has a perfected security interest plus (b) Eligible Accounts, divided
by (x) all Obligations owed to Bank plus (y) employee-related accruals plus
(z) accounts payable over *** days from invoice date (excluding those accounts
payable that are materially aged resulting from the inability to make such
payment because the account debtor has ceased operations).

 

“Bank Expenses” means all:  reasonable costs or expenses (including reasonable
attorneys’ fees and expenses) incurred in connection with the preparation,
negotiation, administration, and enforcement of the Loan Documents; reasonable
Collateral audit fees; and Bank’s reasonable attorneys’ fees and expenses
incurred in amending, enforcing or defending the Loan Documents (including fees
and expenses of appeal), incurred before, during and after an Insolvency
Proceeding, whether or not suit is brought.

 

“Borrower’s Books” means all of Borrower’s books and records including: 
ledgers; records concerning Borrower’s assets or liabilities, the Collateral,
business operations or financial condition; and all computer programs, or tape
files, and the equipment, containing such information.

 

“Borrowing Base” means an amount equal to (a) eighty percent (80%) of Eligible
Accounts plus (b) UK Eligible Accounts as determined by Bank with reference to
the most recent Borrowing Base Certificate delivered by Borrower.

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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“Business Day” means any day that is not a Saturday, Sunday, or other day on
which banks in the State of California are authorized or required to close.

 

“Cash” means unrestricted cash and cash equivalents.

 

“Capital Stock” means (i) with respect to any Person that is a corporation, any
and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, and (ii) with respect
to any Person that is not a corporation, any and all partnership, membership or
other equity interests of such Person.

 

“Change in Control” shall mean a transaction in which any “person” or “group”
(within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934) becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of a sufficient number
of shares of all classes of stock then outstanding of Borrower ordinarily
entitled to vote in the election of directors, empowering such “person” or
“group” to elect a majority of the Board of Directors of Borrower, who did not
have such power before such transaction.

 

“Closing Date” means the date of this Agreement.

 

“Code” means the California Uniform Commercial Code.

 

“Collateral” means the property described on Exhibit A attached hereto.

 

“Collections” means all payments from or on behalf of an account debtor with
respect to Accounts.

 

“Contingent Obligation” means, as applied to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to (i) any
indebtedness, lease, dividend, letter of credit or other obligation of another;
(ii) any obligations with respect to undrawn letters of credit, corporate credit
cards, or merchant services issued or provided for the account of that Person;
and (iii) all obligations arising under any agreement or arrangement designed to
protect such Person against fluctuation in interest rates, currency exchange
rates or commodity prices; provided, however, that the term “Contingent
Obligation” shall not include endorsements for collection or deposit in the
ordinary course of business.  The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determined amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by Bank in good faith; provided, however, that such amount
shall not in any event exceed the maximum amount of the obligations under the
guarantee or other support arrangement.

 

“Copyrights” means any and all copyright rights, copyright applications,
copyright registrations and like protections in each work or authorship and
derivative work thereof.

 

“Credit Extension” means each Advance, Letter of Credit, use of Cash Management
Services or Foreign Exchange Facility or any other extension of credit by Bank
for the benefit of Borrower hereunder.

 

“Daily Balance” means the amount of the Obligations owed at the end of a given
day.

 

“Domestic Subsidiaries” means the following wholly owned subsidiaries of
Borrower: MIVA Direct, Inc. and B&B Advertising, Inc. (fka B&B
Enterprises, Inc.).

 

“Eligible Accounts” means those Accounts that arise in the ordinary course of
Borrower’s business that comply with all of Borrower’s representations and
warranties to Bank set forth in Section 5.4; provided, that standards of
eligibility may be fixed and revised from time to time by Bank in Bank’s
reasonable judgment and upon discussion with Borrower prior to the effectiveness
of such revisions, in accordance with the provisions hereof.  Unless otherwise
agreed to by Bank, Eligible Accounts shall not include the following:

 

(a)                                  Accounts that the account debtor has failed
to pay within *** days of invoice date;

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

2

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(b)                                  Accounts with respect to an account debtor,
*** percent (***%) of whose Accounts the account debtor has failed to pay within
*** days of invoice date;

 

(c)                                  Accounts with respect to which the account
debtor is an officer, employee, or agent of Borrower;

 

(d)                                  Accounts with respect to which goods are
placed on consignment, guaranteed sale, sale or return, sale on approval, bill
and hold, pre-billed, or other terms by reason of which the payment by the
account debtor may be conditional;

 

(e)                                  Accounts with respect to which the account
debtor is an Affiliate of Borrower;

 

(f)                                    Accounts with respect to which the
account debtor does not have its principal place of business in the United
States, except for Eligible Foreign Accounts and Eligible UK Accounts;

 

(g)                                 Accounts with respect to which the account
debtor is the United States or any department, agency, or instrumentality of the
United States, except for Accounts of the United States if the payee has
assigned its payment rights to Bank and the assignment has been acknowledged
under the Assignment of Claims Act of 1940 (31 U.S.C. 3727);

 

(h)                                 Accounts with respect to which Borrower is
liable to the account debtor for goods sold or services rendered by the account
debtor to Borrower or for deposits or other property of the account debtor held
by Borrower, but only to the extent of any amounts owing to the account debtor
against amounts owed to Borrower;

 

(i)                                    Accounts with respect to an account
debtor, including Subsidiaries and Affiliates, whose total obligations to
Borrower exceed *** percent (***%) of all Accounts (“Concentration Limit”), to
the extent such obligations exceed the aforementioned percentage, except as
approved in writing by Bank; provided, however, the Concentration Limit with
respect to Accounts in which the account debtor is ***shall be *** percent
(***%) ;

 

(j)                                    Accounts with respect to which the
account debtor disputes liability or makes any claim with respect thereto as to
which Bank believes, in its sole discretion, that there may be a basis for
dispute (but only to the extent of the amount subject to such dispute or claim),
or is subject to any Insolvency Proceeding, or becomes insolvent, or goes out of
business; and

 

(k)                                Progress and retention billings; and

 

(l)                                    Accounts the collection of which Bank
reasonably determines to be doubtful.

 

“Eligible Foreign Accounts” means Accounts with respect to which the account
debtor does not have its principal place of business in the United States or
United Kingdom, and that (i) are supported by one or more letters of credit in
an amount and of a tenor, and issued by a financial institution, acceptable to
Bank, or (ii) that Bank reasonably approves on a case-by-case basis.

 

“Eligible UK Accounts” means the lesser of $***or ***percent (***%) of UK
Accounts; provided, that Bank has perfected its first priority security interest
in the assets of MIVA UK, and provided further that the standards of eligibility
may be fixed and revised from time to time by Bank in Bank’s reasonable judgment
and upon notification thereof to Borrower in accordance with the provisions
hereof.  Unless otherwise agreed to by Bank, Eligible UK Accounts shall not
include the following:

 

(a)                                  UK Accounts that the account debtor has
failed to pay within ***days of invoice date;

 

(b)                                  UK Accounts with respect to an account
debtor, ***of whose Accounts the account debtor has failed to pay within ***days
of invoice date;

 

(c)                                  UK Accounts with respect to which the
account debtor is an officer, employee, or agent of

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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Borrower;

 

(d)                                  UK Accounts with respect to which goods are
placed on consignment, guaranteed sale, sale or return, sale on approval, bill
and hold, pre-billed or other terms by reason of which the payment by the
account debtor may be conditional;

 

(e)                                  UK Accounts with respect to which the
account debtor is an Affiliate of Borrower or MIVA UK;

 

(f)                                    UK Accounts with respect to which the
account debtor has its principal place of business in the United States;

 

(g)                                 UK Accounts with respect to which Borrower
is liable to the account debtor for goods sold or services rendered by the
account debtor to Borrower or for deposits or other property of the account
debtor held by Borrower, but only to the extent of any amounts owing to the
account debtor against amounts owed to Borrower;

 

(h)                                 UK Accounts with respect to an account
debtor, including Subsidiaries and Affiliates, whose total obligations to
Borrower exceed ***of all UK Accounts, to the extent such obligations exceed the
aforementioned percentage, except as approved in writing by Bank;

 

(i)                                    UK Accounts with respect to which the
account debtor disputes liability or makes any claim with respect thereto as to
which Bank believes, in its sole discretion, that there may be a basis for
dispute (but only to the extent of the amount subject to such dispute or claim),
or is subject to any Insolvency Proceeding, or becomes insolvent, or goes out of
business; and

 

(j)                                    Progress and retention billings; and

 

(k)                                UK Accounts the collection of which Bank
reasonably determines to be doubtful.

 

“Equipment” means all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.

 

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

 

“Event of Default” has the meaning assigned in Article 8.

 

“GAAP” means generally accepted accounting principles as in effect from time to
time.

 

“Guarantor” means MIVA UK.

 

“Indebtedness” means (a) all indebtedness for borrowed money or the deferred
purchase price of property or services, including without limitation
reimbursement and other obligations with respect to surety bonds and letters of
credit, (b) all obligations evidenced by notes, bonds, debentures or similar
instruments, (c) all capital lease obligations and (d) all Contingent
Obligations.

 

“Insolvency Proceeding” means any proceeding commenced by or against any person
or entity under any provision of the United States Bankruptcy Code, as amended,
or under any other bankruptcy or insolvency law, including assignments for the
benefit of creditors, formal or informal moratoria, compositions, extension
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

 

“Intellectual Property Collateral” means all of Borrower’s right, title, and
interest in and to the following: Copyrights, Trademarks and Patents; all trade
secrets, all design rights, claims for damages by way of past, present and
future infringement of any of the rights included above, all licenses or other
rights to use any of the Copyrights, Patents or Trademarks, and all license fees
and royalties arising from such use to the extent permitted by such license or
rights;

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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all amendments, renewals and extensions of any of the Copyrights, Trademarks or
Patents; and all proceeds and products of the foregoing, including without
limitation all payments under insurance or any indemnity or warranty payable in
respect of any of the foregoing.

 

“Inventory” means all inventory in which Borrower has or acquires any interest,
including work in process and finished products intended for sale or lease or to
be furnished under a contract of service, of every kind and description now or
at any time hereafter owned by or in the custody or possession, actual or
constructive, of Borrower, including such inventory as is temporarily out of its
custody or possession or in transit and including any returns upon any accounts
or other proceeds, including insurance proceeds, resulting from the sale or
disposition of any of the foregoing and any documents of title representing any
of the above, and Borrower’s Books relating to any of the foregoing.

 

“Investment” means any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital
contribution to any Person.

 

“IRC” means the Internal Revenue Code of 1986, as amended, and the regulations
thereunder.

 

“Lien” means any mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

 

“Loan Documents” means, collectively, this Agreement, any note or notes executed
by Borrower, and any other agreement entered into in connection with this
Agreement, all as amended or extended from time to time.

 

“Material Adverse Effect” means a material adverse effect on (i) the business
operations, condition (financial or otherwise) of Borrower and its Subsidiaries
taken as a whole or (ii) the ability of Borrower to repay the Obligations or
otherwise perform its obligations under the Loan Documents or (iii) the value or
priority of Bank’s security interests in the Collateral.

 

“Minimum Cash Ratio” means a ratio of (a) all Cash maintained at Bank plus
(b) ***% of Cash held in an account in the United Kingdom under the name of MIVA
UK in which Bank has a perfected first priority security interest (in any event
not to exceed the lesser of *** of such account’s balance or ***) to all
Obligations owed to Bank.

 

“MIVA UK” means MIVA (UK) Limited., a company incorporated under the laws of
England and Wales.

 

“Negotiable Collateral” means all letters of credit of which Borrower is a
beneficiary, notes, drafts, instruments, securities, documents of title, and
chattel paper, and Borrower’s Books relating to any of the foregoing.

 

“Obligations” means all debt, principal, interest, Bank Expenses and other
amounts owed to Bank by Borrower pursuant to this Agreement or any other
agreement, whether absolute or contingent, due or to become due, now existing or
hereafter arising, including any interest that accrues after the commencement of
an Insolvency Proceeding and including any debt, liability, or obligation owing
from Borrower to others that Bank may have obtained by assignment or otherwise.

 

“Patents” means all patents, patent applications and like protections including
without limitation improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same.

 

“Periodic Payments” means all installments or similar recurring payments that
Borrower may now or hereafter become obligated to pay to Bank pursuant to the
terms and provisions of any instrument, or agreement now or hereafter in
existence between Borrower and Bank.

 

“Permitted Indebtedness” means:

 

(a)                                  Indebtedness of Borrower in favor of Bank
arising under this Agreement or any other Loan Document;

 

(b)                                 Indebtedness existing on the Closing Date
and disclosed in the Schedule;

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

5

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(c)                                  Indebtedness secured by a lien described in
clause (c) of the defined term “Permitted Liens,” provided (i) such Indebtedness
does not exceed the lesser of the cost or fair market value of the equipment
financed with such Indebtedness and (ii) such Indebtedness does not exceed
$***in the aggregate at any given time;

 

(d)                                 Subordinated Debt;

 

(e)                                  Indebtedness to trade creditors, trade
payables, accruals and accounts payable incurred in the ordinary course of
business, and contingent liabilities arising out of endorsements of checks and
other negotiable instruments for deposit or collection in the ordinary course of
business;

 

(f)                                    Guaranties of any Indebtedness permitted
hereunder;

 

(g)                                 Indebtedness in respect of intercompany
loans between Borrower and any Subsidiary of Borrower which Bank has a perfected
first priority security interest in such Subsidiary’s assets;

 

(h)                                 Indebtedness of any Subsidiary to Borrower
or another Subsidiary and Indebtedness of Borrower to any Subsidiary not to
exceed $***in aggregate principal amount at any time (including any amounts
considered as investment into such entities under in clause (i) of Permitted
Investment);

 

(i)                                     Obligations to pay rentals; and

 

(j)                                     Obligations of Borrower under interest
rate swap agreements, interest rate cap agreements and interest rate collar
agreements, or any other agreements or arrangements designed to protect Borrower
against fluctuations in interest rates, currency exchange rates or commodity
prices.

 

“Permitted Investment” means:

 

(a)                                  Investments existing on the Closing Date
disclosed in the Schedule;

 

(b)                                 Property to be used in the ordinary course
of business;

 

(c)                                  Assets arising from the sale of goods and
services in the ordinary course of business of Borrower or any of its
Subsidiaries;

 

(d)                                 Investments in direct obligations of the
United States of America, or any agency thereof or obligations guaranteed by the
United States of America; provided that such obligations mature within one year
from the date of acquisition thereof;

 

(e)                                  Investments in certificates of deposit
maturing within one year from the date of acquisition and fully insured by the
Federal Deposit Insurance Corporation;

 

(f)                                    Investments in commercial paper maturing
not more than 270 days from the date of creation thereof and currently having
rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or
Moody’s Investors Service;

 

(g)                                 Investments in money market, mutual or
similar funds having assets in excess of $100,000,000 and the investments of
which are limited to investment grade securities;

 

(h)                                 Investments by Borrower in any Subsidiary of
Borrower in which Bank has a perfected first priority security interest; and

 

(i)                                     Investments of Subsidiaries in or to
other Subsidiaries or Borrower and Investments by Borrower in Subsidiaries not
to exceed $***in the aggregate at any time (including amounts considered as
indebtedness of entities under clause (h) of Permitted Indebtedness).

 

“Permitted Liens” means the following:

 

(a)                                  Any Liens existing on the Closing Date and
disclosed in the Schedule or arising under this Agreement or the other Loan
Documents;

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

 

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(b)                                 Liens for taxes, fees, assessments or other
governmental charges or levies, either not delinquent or being contested in good
faith by appropriate proceedings, provided the same have no priority over any of
Bank’s security interests;

 

(c)                                  Liens (i) upon or in any equipment which
was not financed by Bank acquired or held by Borrower or any of its Subsidiaries
to secure the purchase price of such equipment or indebtedness incurred solely
for the purpose of financing the acquisition of such equipment, or (ii) existing
on such equipment at the time of its acquisition, provided that the Lien is
confined solely to the property so acquired and improvements thereon, and the
proceeds of such equipment;

 

(d)                                 Liens incurred in connection with the
extension, renewal or refinancing of the indebtedness secured by Liens of the
type described in clauses (a) through (c) above, provided that any extension,
renewal or replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness being extended,
renewed or refinanced does not increase

 

(e)                                  Liens arising in the ordinary course of the
business of Borrower or any of its Subsidiaries by operation of law or
regulation (including without limitation, Liens of mechanics and materialmen),
if payment in respect of any such Lien is not at the time required and such
Liens do not, in the aggregate, materially detract from the value of the
Property of Borrower or any of its Subsidiaries or materially impair the use
thereof in the operation of the business of Borrower or any of its Subsidiaries;

 

(f)                                    Liens securing hedging obligations issued
on terms permitted by this Agreement;

 

(g)                                 Liens incurred or deposits made in the
ordinary course of business in connection with (1) worker’s compensation, social
security, unemployment insurance and other like laws or (2) sales contracts,
leases, statutory obligations, work in progress advances and other similar
obligations not incurred in connection with the borrowing of money or the
payment of the deferred purchase price of property;

 

(h)                                 Reservations, covenants, zoning and other
land use regulations, title exceptions or encumbrances granted in the ordinary
course of business, affecting real property owned or leased by Borrower or one
of its Subsidiaries; provided that such exceptions do not in the aggregate
materially interfere with the use of such property in the ordinary course of
Borrower’s or such Subsidiary’s business;

 

(i)                                     Liens arising from judgments that do not
give rise to an Event of Default, including under Section 8.7; and

 

(j)                                     Liens securing Subordinated Debt.

 

“Person” means any individual, sole proprietorship, partnership, limited
liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or governmental agency.

 

“Prime Rate” means the greater of ***% or the Prime Rate published in the Money
Rates section of the Western Edition of The Wall Street Journal, or such other
rate of interest publicly announced from time to time by Lender as its Prime
Rate.  Lender may price loans to its customers at, above or below the Prime
Rate.   Any change in the Prime Rate shall take effect at the opening of
business on the day specified in the public announcement of a change in Prime
Rate.

 

“Responsible Officer” means each of the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, the General Counsel, Senior Vice
President of Finance, and the Controller of Borrower.

 

“Revolving Facility” means the facility under which Borrower may request Bank to
issue Advances, as specified in Section 2.1(a) hereof.

 

“Revolving Line” means a credit extension of up to Ten Million Dollars
($10,000,000).

 

“Revolving Maturity Date” means the second anniversary of the Closing Date.

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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“Schedule” means the schedule of exceptions attached hereto and approved by
Bank, if any.

 

“Shares” means securities representing 65% of the aggregate voting power of the
issued and outstanding Capital Stock and ownership interests of MIVA UK. 
Notwithstanding the foregoing, the term “Shares” shall not include securities
representing at any time more than 65% of the aggregate voting power of the
Capital Stock of a “controlled foreign corporation,” as defined in Section 957
of the Code.

 

“Subordinated Debt” means any debt incurred by Borrower that is subordinated to
the debt owing by Borrower to Bank in a manner reasonably acceptable to Bank
(and identified as being such by Borrower and Bank).

 

“Subsidiary” means any corporation, company or partnership in which (i) any
general partnership interest or (ii) more than 50% of the stock or other units
of ownership which by the terms thereof has the ordinary voting power to elect
the Board of Directors, managers or trustees of the entity, at the time as of
which any determination is being made, is owned by Borrower, either directly or
through an Affiliate.

 

 “Trademarks” means any trademark and servicemark rights, whether registered or
not, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of Borrower connected with
and symbolized by such trademarks.

 

“UK Accounts” means those means all presently existing and hereafter arising
accounts, contract rights, payment intangibles, and all other forms of
obligations owing to MIVA UK arising out of the sale or lease of goods
(including, without limitation, the licensing of software and other technology)
or the rendering of services by MIVA UK, whether or not earned by performance,
and any and all credit insurance, guaranties, and other security therefor, as
well as all merchandise returned to or reclaimed by MIVA UK and MIVA UK’s Books
relating to any of the foregoing, that (a) arise in the ordinary course of MIVA
UK’s business, (b) are bona fide existing obligations, (c) the property and
services giving rise to such Accounts has been delivered or rendered to the
account debtor or to the account debtor’s agent for immediate and unconditional
acceptance by the account debtor, and (d) neither Borrower nor MIVA UK has
received notice of actual or imminent Insolvency Proceeding of any account
debtor that is included in any Borrowing Base Certificate as an Eligible UK
Account.

 

1.2                               Accounting Terms.  All accounting terms not
specifically defined herein shall be construed in accordance with GAAP and all
calculations made hereunder shall be made in accordance with GAAP.  When used
herein, the terms “financial statements” shall include the notes and schedules
thereto.

 

2.                                      LOAN AND TERMS OF PAYMENT.

 

2.1                               Credit Extensions.

 

Borrower promises to pay to the order of Bank, in lawful money of the United
States of America, the aggregate unpaid principal amount of all Credit
Extensions made by Bank to Borrower hereunder.  Borrower shall also pay interest
on the unpaid principal amount of such Credit Extensions at rates in accordance
with the terms hereof.

 

(a)                                  Revolving Advances.

 

(i)                                    Subject to and upon the terms and
conditions of this Agreement, Borrower may request Advances in an aggregate
outstanding amount not to exceed the lesser of (i) the Revolving Line or
(ii) the Borrowing Base, less any outstanding Letter of Credit Outstandings,
Cash Management Outstandings, and Foreign Exchange Outstandings (all as defined
below). Subject to the terms and conditions of this Agreement, amounts borrowed
pursuant to this Section 2.1(a) may be repaid and reborrowed at any time prior
to the Revolving Maturity Date, at which time all Advances under this
Section 2.1(a) shall be immediately due and payable.  Borrower may prepay any
Advances without penalty or premium, including in case of overadvances pursuant
to Section 2.2.

 

(ii)                                Whenever Borrower desires an Advance,
Borrower will notify Bank by facsimile transmission or telephone no later than
3:00 p.m. Pacific time, on the Business Day that the Advance is to be made. 
Each such notification shall be promptly confirmed by a Payment/Advance Form in
substantially the form of

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

8

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Exhibit B hereto.  Bank is authorized to make Advances under this Agreement,
based upon instructions received from a Responsible Officer or a designee of a
Responsible Officer, or without instructions if in Bank’s discretion such
Advances are necessary to meet Obligations which have become due and remain
unpaid.  Bank shall be entitled to rely on any telephonic notice given by a
person who Bank reasonably believes to be a Responsible Officer or a designee
thereof, and Borrower shall indemnify and hold Bank harmless for any damages or
loss suffered by Bank as a result of such reliance.  Bank will credit the amount
of Advances made under this Section 2.1(a) to Borrower’s deposit account.

 

(b)                                  Letter of Credit Sublimit.  Subject to the
terms and conditions of this Agreement, at any time prior to the Revolving
Maturity Date, Bank agrees to issue letters of credit for the account of
Borrower (each, a “Letter of Credit” and collectively, the “Letters of Credit”)
in an aggregate outstanding face amount (the “Letter of Credit Outstandings”)
not to exceed the lesser of the Revolving Line or the Borrowing Base minus, in
each case, the aggregate amount of the outstanding Advances, Cash Management
Outstandings and the Foreign Exchange Outstandings at any time, provided that
the Letter of Credit Advances Outstandings shall not exceed $***.  All Letters
of Credit shall be, in form and substance, acceptable to Bank in its sole
discretion and shall be subject to the terms and conditions of Bank’s form of
standard application and letter of credit agreement (the “Application”), which
Borrower hereby agrees to execute, including payment of Bank’s standard fees
based on the face amount of each Letter of Credit.  On any drawn but
unreimbursed Letter of Credit, the unreimbursed amount shall be deemed an
Advance under Section 2.1(a).  Prior to the Revolving Maturity Date, Borrower
shall secure in cash all obligations under any outstanding Letters of Credit on
terms acceptable to Bank.  The obligation of Borrower to reimburse Bank for
drawings made under Letters of Credit shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement, the Application, and such Letters of Credit, under all
circumstances whatsoever.  Borrower shall indemnify, defend, protect, and hold
Bank harmless from any loss, cost, expense or liability, including, without
limitation, reasonable attorneys’ fees, arising out of or in connection with any
Letters of Credit, except for expenses caused by Bank’s gross negligence or
willful misconduct.

 

(c)                                  Cash Management Services.  Subject to the
terms and conditions of this Agreement, Bank agrees to make available to
Borrower up to $***for Bank’s cash management services, which may include
merchant services, direct deposit of payroll, business credit card, and check
cashing services identified in various cash management services agreements
related to such services (the “Cash Management Services”).  All amounts Bank
pays for any Cash Management Services will be treated as Advances under
Section 2.1(a) and the outstanding amount thereof at any time (collectively, the
“Cash Management Outstandings”) shall reduce, on a dollar-for-dollar basis, the
amount available for other Advances.  The Cash Management Services shall be
subject to additional terms set forth in applicable cash management services
agreements.

 

(d)                                  Foreign Exchange Facility.  Subject to the
terms and conditions of this Agreement, Borrower may, at its option from time to
time, enter into foreign exchange forward contracts (collectively, the “Foreign
Exchange Facility”) with Bank, under which Borrower commits to purchase from or
sell to Bank a set amount of foreign currency more than one Business Day after
the contract date (each such contract a “FX Forward Contract”).  Bank will
subtract ***%, or such greater amount as determined by Bank, of each outstanding
FX Forward Contract from a  foreign exchange sublimit of $*** (the “FX
Reserve”). The total FX Forward Contracts at any one time may not exceed ***
times the amount of the FX Reserve.  ***of the amount of each outstanding FX
Forward Contract shall be treated as Advances under Section 2.1(a) and shall
reduce, so long as outstanding, on a dollar-for-dollar basis, the amount
available for other Advances.  Bank may terminate the FX Forward Contracts if an
Event of Default occurs.  Each FX Forward Contract shall be subject to
additional terms set forth in the applicable FX Forward Contract or other
agreements executed in connection with the Foreign Exchange Facility.

 

(e)                                  Total Availability of Letter of Credit
Sublimit, Cash Management Services, and Foreign Exchange Facility. The aggregate
amount of (i) Letter of Credit Outstandings, (ii) Cash Management Outstandings,
and (iii) ten (10) times the amount of Foreign Exchange Outstandings, shall not
exceed the lesser of ***or the Borrowing Base.

 

2.2                               Overadvances.  If the aggregate amount of the
outstanding Advances plus the aggregate face amount of all outstanding Letters
of Credit, outstanding amounts under the Cash Management Services, and
outstsanding amounts under the Foreign Exchange Facility exceeds the lesser of
the Revolving Line or the Borrowing Base at any time, Borrower shall immediately
pay to Bank, in cash, the amount of such excess.

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

9

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2.3                               Interest Rates, Payments, and Calculations.

 

(a)                                  Interest Rates.

 

(i)                                    Advances.  Except as set forth in
Section 2.3(b), the Advances shall bear interest, on the outstanding Daily
Balance thereof, at a rate equal to one and one half of one percent (1.50%)
above the Prime Rate, provided however, in no event shall the rate be less than
6.5%.

 

(b)                                  Late Fee; Default Rate.  If any payment is
not made within ten (10) days after the date such payment is due, Borrower shall
pay Bank a late fee equal to the lesser of (i) five percent (5%) of the amount
of such unpaid amount or (ii) the maximum amount permitted to be charged under
applicable law.  No late fee shall be charged on any payments not timely made to
Bank solely due to Bank’s clerical or administrative error.  All Obligations
shall bear interest, from and after the occurrence and during the continuance of
an Event of Default, at a rate equal to five (5) percentage points above the
interest rate applicable immediately prior to the occurrence of the Event of
Default.

 

(c)                                  Payments.  Interest hereunder shall be due
and payable on the tenth calendar day of each month during the term hereof. 
Bank shall, at its option, charge such interest, all Bank Expenses, and all
Periodic Payments against any of Borrower’s deposit accounts or against the
Revolving Line, in which case those amounts shall thereafter accrue interest at
the rate then applicable hereunder.  Any interest not paid when due shall be
compounded by becoming a part of the Obligations, and such interest shall
thereafter accrue interest at the rate then applicable hereunder.  All payments
shall be free and clear of any taxes, withholdings, duties, impositions or other
charges, to the end that Bank will receive the entire amount of any Obligations
payable hereunder, regardless of source of payment.  Payments will initially be
made via auto debit from the Borrower’s account at Bank.

 

(d)                                  Computation.  In the event the Prime Rate
is changed from time to time hereafter, the applicable rate of interest
hereunder shall be increased or decreased, effective as of the day the Prime
Rate is changed, by an amount equal to such change in the Prime Rate.  All
interest chargeable under the Loan Documents shall be computed on the basis of a
three hundred sixty (360) day year for the actual number of days elapsed.

 

2.4                               Lockbox.  Borrower shall enter into a
remittance processing services agreement (the “Lockbox Agreement”) acceptable to
Bank.  Borrower shall instruct account debtors on all invoices dated or sent 30
days or more after the Closing Date to make payments only to the lockbox
address.  Bank or the lockbox administrator is authorized to collect all
envelopes delivered to the lockbox, and endorse and deposit all checks into a
cash collateral account managed by Borrower.  At any time that the Minimum Cash
Ratio falls below ***, (a) such cash collateral account shall be managed and
controlled solely by Bank and Borrower will not have access to that account;
(b) Bank shall have the exclusive right to receive all Collections on the
Accounts and no Adjustments will be made without the Bank’s consent; (c) Bank
shall have, with respect to any goods related to the Accounts, all the rights
and remedies of an unpaid seller under the California Uniform Commercial Code
and other applicable law, including the rights of replevin, claim and delivery,
reclamation and stoppage in transit; (d) if Borrower receives any payment from
any Person, Borrower will hold that payment in trust for Bank and immediately
deliver it in the form received to Bank; and (e) Bank may request that account
debtors pay (by wire transfer or otherwise) Collections to Bank directly.

 

2.5                               Crediting Payments.  Subject to the foregoing
Section 2.4, prior to the occurrence of an Event of Default, Bank shall credit a
wire transfer of funds, check or other item of payment to such deposit account
or Obligation as Borrower specifies.  After the occurrence of an Event of
Default, the receipt by Bank of any wire transfer of funds, check, or other item
of payment shall be immediately applied to conditionally reduce Obligations, but
shall not be considered a payment on account unless such payment is of
immediately available federal funds or unless and until such check or other item
of payment is honored when presented for payment.  Notwithstanding anything to
the contrary contained herein, any wire transfer or payment received by Bank
after 12:00 noon Pacific time shall be deemed to have been received by Bank as
of the opening of business on the immediately following Business Day.  Whenever
any payment to Bank under the Loan Documents would otherwise be due (except by
reason of acceleration) on a date that is not a Business Day, such payment shall
instead be due on the next Business Day, and additional fees or interest, as the
case may be, shall accrue and be payable for the period of such extension.

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

10

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2.6                               Fees.  Borrower shall pay to Bank the
following:

 

(a)                                  Commitment Fee.  On the Closing Date and
annually thereafter, a Facility Fee equal to ***, which shall be nonrefundable;

 

(b)                                  ***; and

 

(c)                                  Bank Expenses.  On the Closing Date, all
Bank Expenses incurred through the Closing Date, including reasonable attorneys’
fees and expenses; provided, however, that such Bank Expenses shall not exceed
Thirty-Five Thousand and 00/100 Dollars and, after the Closing Date, all Bank
Expenses, including reasonable attorneys’ fees and expenses, as and when they
are incurred by Bank.

 

2.7                               Term.  This Agreement shall become effective
on the Closing Date and, subject to Section 12.7, shall continue in full force
and effect for so long as any Obligations remain outstanding or Bank has any
obligation to make Credit Extensions under this Agreement.  Notwithstanding the
foregoing, Bank shall have the right to terminate its obligation to make Credit
Extensions under this Agreement immediately and without notice upon the
occurrence and during the continuance of an Event of Default.  Notwithstanding
termination, Bank’s Lien on the Collateral shall remain in effect for so long as
any Obligations are outstanding.

 

3.                                      CONDITIONS OF LOANS.

 

3.1                               Conditions Precedent to Initial Credit
Extension.  The obligation of Bank to make the initial Credit Extension is
subject to the condition precedent that Bank shall have received, in form and
substance satisfactory to Bank, the following:

 

(a)                                  this Agreement;

 

(b)                                  a certificate of the Secretary of Borrower
with respect to incumbency and resolutions authorizing the execution and
delivery of this Agreement;

 

(c)                                  UCC National Form Financing Statement;

 

(d)                                  an intellectual property security
agreement;

 

(e)                                  a lockbox agreement;

 

(f)                                    side letter regarding the judgment set
forth in the Memorandum Opinion issued by the Court of Chancery of the State of
Delaware decided on October 22, 2008, as previously provided to Bank;

 

(g)                                 a fee of $***;

 

(h)                                 agreement to provide insurance or
certificate(s) of insurance naming Bank as loss payee and additional insured;

 

(i)                                    executed stock powers and share
certificates representing Borrower’s interest in Guarantor;

 

(j)                                    UCC-3 Financing Statement with respect to
Fifth Third Bank;

 

(k)                                Guaranty, Debenture and Charge Over Shares
executed by Guarantor, perfecting Bank’s security interest in Guarantor’s
assets;

 

(l)                                    payment of the fees and Bank Expenses
then due specified in Section 2.6 hereof;

 

(m)                              current financial statements of Borrower;

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

11

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(n)                                 an audit of the Collateral and UK Accounts,
the results of which have been provided and are satisfactory to Bank; and

 

(o)                                  such other documents, and completion of
such other matters, as Bank may reasonably deem necessary or appropriate.

 

3.2                               Conditions Precedent to all Credit
Extensions.  The obligation of Bank to make each Credit Extension, including the
initial Credit Extension, is further subject to the following conditions:

 

(a)                                  timely receipt by Bank of the
Payment/Advance Form as provided in Section 2.1; and

 

(b)                                  the representations and warranties
contained in Section 5 shall be true and correct in all material respects on and
as of the date of such Payment/Advance Form and on the effective date of each
Credit Extension as though made at and as of each such date, and no Event of
Default shall have occurred and be continuing, or would exist after giving
effect to such Credit Extension.  The making of each Credit Extension shall be
deemed to be a representation and warranty by Borrower on the date of such
Credit Extension as to the accuracy of the facts referred to in this
Section 3.2.

 

4.                                      CREATION OF SECURITY INTEREST.

 

4.1                               Grant of Security Interest.  Borrower grants
and pledges to Bank a continuing security interest in all presently existing and
hereafter acquired or arising Collateral in order to secure prompt repayment of
any and all Obligations and in order to secure prompt performance by Borrower of
each of its covenants and duties under the Loan Documents.  Except as set forth
in the Schedule, such security interest constitutes a valid, first priority
security interest in the presently existing Collateral, and will constitute a
valid, first priority security interest in Collateral acquired after the date
hereof.

 

4.2                               Delivery of Additional Documentation
Required.  Borrower shall from time to time execute and deliver to Bank, at the
request of Bank, all Negotiable Collateral, all financing statements and other
documents that Bank may reasonably request, in form satisfactory to Bank and
Borrower, to perfect and continue the perfection of Bank’s security interests in
the Collateral and in order to fully consummate all of the transactions
contemplated under the Loan Documents.  Borrower from time to time may deposit
with Bank specific time deposit accounts to secure specific Obligations.
Borrower authorizes Bank to hold such balances in pledge and to decline to honor
any drafts thereon or any request by Borrower or any other Person to pay or
otherwise transfer any part of such balances for so long as the Obligations are
outstanding.

 

4.3                               Pledge of Shares.  Borrower pledges, assigns
and grants to Bank a security interest in all the Shares held or owned of record
by Borrower, together with all proceeds and substitutions thereof, all cash,
stock and other moneys and property paid thereon, all rights to subscribe for
securities declared or granted in connection therewith, and all other cash and
noncash proceeds of the foregoing, as security for the performance of the
Obligations.  On the Closing Date, the certificate or certificates for the
Shares will be delivered to Bank, accompanied by an instrument of assignment
duly executed in blank by Borrower.  To the extent required by the terms and
conditions governing the Shares, Borrower shall cause the books of each entity
whose Shares are part of the Collateral and any transfer Bank to reflect the
pledge of the Shares.  Unless an Event of Default shall have occurred and be
continuing, Borrower shall be entitled to receive and exercise any benefits
accruing to the owner of the Shares, including receive any proceeds from the
Shares, exercise any voting rights with respect to the relevant Shares and to
give consents, waivers and ratifications in respect thereof, provided that no
vote shall be cast or consent, waiver or ratification given or action taken
which would be inconsistent with any of the terms of this Agreement or which
would constitute or create any violation of any of such terms.  All such rights
to vote and give consents, waivers and ratifications shall be suspended upon the
occurrence and continuance of an Event of Default.

 

4.4                               Right to Inspect.  Bank (through any of its
officers, employees, or agents) shall have the right, upon reasonable prior
notice, from time to time during Borrower’s usual business hours but no more
than once a year (unless an Event of Default has occurred and is continuing), to
inspect Borrower’s Books and to make copies

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

12

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thereof and to check, test, and appraise the Collateral in order to verify
Borrower’s financial condition or the amount, condition of, or any other matter
relating to, the Collateral.

 

5.                                      REPRESENTATIONS AND WARRANTIES.

 

Borrower represents and warrants as follows:

 

5.1                               Due Organization and Qualification.  Borrower
and each Subsidiary is a corporation duly existing under the laws of its state
of incorporation and qualified and licensed to do business in any state in which
the conduct of its business or its ownership of property requires that it be so
qualified or in which the failure of Borrower or any of its Subsidiaries to be
so qualified could reasonably be expected to have a material adverse effect.

 

5.2                               Due Authorization; No Conflict.  The
execution, delivery, and performance of the Loan Documents are within Borrower’s
powers, have been duly authorized, and are not in conflict with nor constitute a
breach of any provision contained in Borrower’s Articles of Incorporation or
Bylaws, nor will they constitute an event of default under any material
agreement to which Borrower is a party or by which Borrower is bound.  Borrower
is not in default under any material agreement to which it is a party or by
which it is bound.

 

5.3                               No Prior Encumbrances.  Borrower has good and
marketable title to its property (excluding Equipment subject to Liens permitted
under subsection (c) of the definition of Permitted Liens), free and clear of
Liens, except for Permitted Liens.

 

5.4                               Bona Fide Eligible Accounts.  The Eligible
Accounts are bona fide existing obligations.  The property and services giving
rise to such Eligible Accounts has been delivered or rendered to the account
debtor or to the account debtor’s agent for immediate and unconditional
acceptance by the account debtor.  Borrower has not received notice of actual or
imminent Insolvency Proceeding of any account debtor that is included in any
Borrowing Base Certificate as an Eligible Account.

 

5.5                               Merchantable Inventory.  All Inventory is in
all material respects of good and marketable quality, free from all material
defects, except for Inventory for which adequate reserves have been made.

 

5.6                               Intellectual Property Collateral.  Borrower is
the sole owner of the Intellectual Property Collateral, except for non-exclusive
licenses granted by Borrower to its customers in the ordinary course of
business.  To the best of Borrower’s knowledge, each of the Patents is valid and
enforceable.  No part of the Intellectual Property Collateral has been judged
invalid or unenforceable, in whole or in part, and no claim has been made that
any part of the Intellectual Property Collateral violates the rights of any
third party.  Except as set forth in the Schedule, Borrower’s rights as a
licensee of intellectual property do not give rise to more than five percent
(5%) of its gross revenue in any given month, including without limitation
revenue derived from the sale, licensing, rendering or disposition of any
product or service.  Except as set forth in the Schedule, Borrower is not a
party to, or bound by, any agreement that restricts the grant by Borrower of a
security interest in Borrower’s rights under such agreement.

 

5.7                               Name; Location of Chief Executive Office. 
Except as disclosed in the Schedule, Borrower has not done business under any
name other than that specified on the signature page hereof.  The chief
executive office of Borrower is located at the address indicated in Section 10
hereof.  All Borrower’s Inventory and Equipment is located only at the locations
set forth in the Schedule.

 

5.8                               Litigation.  Except as set forth in the
Schedule, there are no actions or proceedings pending by or against Borrower or
any Subsidiary before any court or administrative agency in which an adverse
decision could have a Material Adverse Effect, or a material adverse effect on
Borrower’s interest or Bank’s security interest in the Collateral.

 

5.9                               No Material Adverse Change in Financial
Statements.  All consolidated and consolidating financial statements related to
Borrower and any Subsidiary that Bank has received from Borrower fairly present
in all material respects Borrower’s financial condition as of the date thereof
and Borrower’s consolidated and consolidating results of operations for the
period then ended.  There has not been a material adverse change in the
consolidated or the

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

13

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consolidating financial condition of Borrower since the date of the most recent
of such financial statements submitted to Bank.

 

5.10                        Solvency, Payment of Debts.  Borrower is solvent and
able to pay its debts (including trade debts) as they mature.

 

5.11                        Regulatory Compliance.  Borrower and each Subsidiary
have met the minimum funding requirements of ERISA with respect to any employee
benefit plans subject to ERISA, and no event has occurred resulting from
Borrower’s failure to comply with ERISA that could result in Borrower’s
incurring any material liability.  Borrower is not an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940.  Borrower is not engaged principally, or as one
of the important activities, in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulations T and
U of the Board of Governors of the Federal Reserve System).  Borrower has
complied with all the provisions of the Federal Fair Labor Standards Act. 
Borrower has not violated any statutes, laws, ordinances or rules applicable to
it, violation of which could have a Material Adverse Effect.

 

5.12                        Environmental Condition.  Except as disclosed in the
Schedule, none of Borrower’s or any Subsidiary’s properties or assets has ever
been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge,
by previous owners or operators, in the disposal of, or to produce, store,
handle, treat, release, or transport, any hazardous waste or hazardous substance
other than in accordance with applicable law; to the best of Borrower’s
knowledge, none of Borrower’s properties or assets has ever been designated or
identified in any manner pursuant to any environmental protection statute as a
hazardous waste or hazardous substance disposal site, or a candidate for closure
pursuant to any environmental protection statute; no lien arising under any
environmental protection statute has attached to any revenues or to any real or
personal property owned by Borrower or any Subsidiary; and neither Borrower nor
any Subsidiary has received a summons, citation, notice, or directive from the
Environmental Protection Agency or any other federal, state or other
governmental agency concerning any action or omission by Borrower or any
Subsidiary resulting in the releasing, or otherwise disposing of hazardous waste
or hazardous substances into the environment.

 

5.13                        Taxes.  Borrower and each Subsidiary have filed or
caused to be filed all tax returns required to be filed, and have paid, or have
made adequate provision for the payment of, all taxes reflected therein, except
where such failure to file or pay could not have a material adverse effect on
the Company.

 

5.14                        Subsidiaries.  Borrower does not own any stock,
partnership interest or other equity securities of any Person, except for
Permitted Investments.

 

5.15                        Government Consents.  Borrower and each Subsidiary
have obtained all material consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all governmental
authorities that are necessary for the continued operation of Borrower’s
business as currently conducted.

 

5.16                        Accounts.  Except as set forth on the Schedule, none
of Borrower’s nor any domestic Subsidiary’s property is maintained or invested
with a Person other than Bank.

 

5.17                        Shares.  Borrower has full power and authority to
create a first lien on the Shares and no disability or contractual obligation
exists that would prohibit Borrower from pledging the Shares pursuant to this
Agreement.  There are no subscriptions, warrants, rights of first refusal or
other restrictions on transfer relative to, or options exercisable with respect
to the Shares.  The Shares have been and will be duly authorized and validly
issued, and are fully paid and non-assessable.  The Shares are not the subject
of any present or threatened suit, action, arbitration, administrative or other
proceeding, and Borrower knows of no reasonable grounds for the institution of
any such proceedings.

 

5.18                        Full Disclosure.  No representation, warranty or
other statement made by Borrower in any certificate or written statement
furnished to Bank contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained in
such certificates or statements not misleading.

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

14

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6.                                      AFFIRMATIVE COVENANTS.

 

Borrower shall do all of the following:

 

6.1                               Good Standing.  Borrower shall maintain its
and each of its Subsidiaries’ corporate existence and good standing in its
jurisdiction of incorporation and maintain qualification in each jurisdiction in
which it is required under applicable law.  Borrower shall maintain, and shall
cause each of its Subsidiaries to maintain, in force all licenses, approvals and
agreements, the loss of which could have a Material Adverse Effect.

 

6.2                               Government Compliance.  Borrower shall meet,
and shall cause each Subsidiary to meet, the minimum funding requirements of
ERISA with respect to any employee benefit plans subject to ERISA.  Borrower
shall comply, and shall cause each Subsidiary to comply, with all statutes,
laws, ordinances and government rules and regulations to which it is subject,
noncompliance with which could have a Material Adverse Effect.

 

6.3                               Financial Statements, Reports, Certificates. 
Borrower shall deliver the following to Bank:  (a) as soon as available, but in
any event within thirty (30) days after the end of each calendar month, a
company prepared consolidated balance sheet, income, and cash flow statement
covering Borrower’s consolidated operations during such period, prepared in
accordance with GAAP, consistently applied, in a form acceptable to Bank and
certified by a Responsible Officer; (b) as soon as available, but in any event
within one hundred and twenty (120) days after the end of Borrower’s fiscal
year, consolidated financial statements of Borrower prepared in accordance with
GAAP, consistently applied, together with an unqualified opinion on such
financial statements of an independent certified public accounting firm
reasonably acceptable to Bank; (c) copies of all statements, reports and notices
sent or made available generally by Borrower to its security holders or to any
holders of Subordinated Debt and, if applicable, all reports on Forms 10-K and
10-Q filed with the Securities and Exchange Commission; (d) promptly upon
receipt of notice thereof, a report of any legal actions pending or threatened
against Borrower or any Subsidiary that could result in damages or costs to
Borrower or any Subsidiary of ***or more; (e) within fifteen (15) days prior to
Borrower’s fiscal year end, an annual operating budget for the upcoming fiscal
year approved by Borrower’s board of directors, and in a form acceptable to
Bank, and (f) such budgets, sales projections, operating plans or other
financial information as Bank may reasonably request from time to time.

 

(g)                                 Within thirty (30) days after the last day
of each month, Borrower shall deliver to Bank a Borrowing Base Certificate
signed by a Responsible Officer in substantially the form of Exhibit C-1 and
Exhibit C-2 hereto, together with aged listings of accounts receivable and
accounts payable; provided however, that at all times when the Minimum Cash
Ratio falls below ***, Borrower shall deliver the Borrowing Base Certificate and
aged listings of accounts receivable and accounts payable twice per month, no
later than five days following the 1st and the 15th of each month.

 

(h)                                 Borrower shall deliver to Bank with the
monthly financial statements a Compliance Certificate signed by a Responsible
Officer in substantially the form of Exhibit D hereto.

 

(i)                                     Bank shall have a right from time to
time hereafter to audit Borrower’s Accounts and appraise Collateral at
Borrower’s expense, provided that such audits will be conducted at least every
twelve (12) months (and no more than once per year) unless an Event of Default
has occurred and is continuing. Notwithstanding the foregoing, at all times that
the Minimum Cash Ratio falls below ***, Bank shall have a right to (i) audit and
appraise Borrower’s Collateral at Borrower’s expense twice per year and
(ii) independently verify Borrower’s Accounts as Bank deems reasonably
necessary, including the review of any and all records pertaining to the
Accounts, contacting account debtors and other persons obligated or
knowledgeable in respect of Accounts to confirm the receivable amount of such
Accounts, to determine whether Accounts constitute Eligible Accounts, and for
any other purpose in connection with this Agreement.

 

6.4                               Inventory; Returns.  Borrower shall keep all
Inventory in good and marketable condition, free from all material defects
except for Inventory for which adequate reserves have been made.  Returns and
allowances, if any, as between Borrower and its account debtors shall be on the
same basis and in accordance with the usual customary practices of Borrower, as
they exist at the time of the execution and delivery of this Agreement. 
Borrower shall promptly notify Bank of all returns and recoveries and of all
disputes and claims, where the return, recovery, dispute or claim involves more
than ***.

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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6.5                               Taxes.  Borrower shall make, and shall cause
each Subsidiary to make, due and timely payment or deposit of all material
federal, state, and local taxes, assessments, or contributions required of it by
law, and will execute and deliver to Bank, on demand, appropriate certificates
attesting to the payment or deposit thereof; and Borrower will make, and will
cause each Subsidiary to make, timely payment or deposit of all material tax
payments and withholding taxes required of it by applicable laws, including, but
not limited to, those laws concerning F.I.C.A., F.U.T.A., state disability, and
local, state, and federal income taxes, and will, upon request, furnish Bank
with proof satisfactory to Bank indicating that Borrower or a Subsidiary has
made such payments or deposits; provided that Borrower or a Subsidiary need not
make any payment if the amount or validity of such payment is contested in good
faith by appropriate proceedings and is reserved against (to the extent required
by GAAP) by Borrower.

 

6.6                               Insurance.

 

(a)                                  Borrower, at its expense, shall keep the
Collateral insured against loss or damage by fire, theft, explosion, sprinklers,
and all other hazards and risks, and in such amounts, as ordinarily insured
against by other owners in similar businesses conducted in the locations where
Borrower’s business is conducted on the date hereof.  Borrower shall also
maintain insurance relating to Borrower’s business, ownership and use of the
Collateral in amounts and of a type that are customary to businesses similar to
Borrower’s.

 

(b)                                  All such policies of insurance shall be in
such form, with such companies, and in such amounts as are reasonably
satisfactory to Bank.  All such policies of property insurance shall contain a
lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank
as an additional loss payee thereof, and all liability insurance policies shall
show the Bank as an additional insured and shall specify that the insurer must
give at least twenty (20) days notice to Bank before canceling its policy for
any reason.  Upon Bank’s request, Borrower shall deliver to Bank certificates
evidencing such policies of insurance and evidence of the payments of all
premiums therefor.  All proceeds payable under any such policy shall, at the
option of Bank, be payable to Bank to be applied on account of the Obligations.

 

6.7                               Accounts.  Within 60 days of the Closing Date,
Borrower shall transfer and maintain, and shall cause each of its domestic
Subsidiaries to transfer and maintain, all of its primary depository and
investment accounts with Bank.  Any deposit, operating or short-term investment
accounts not held at Bank or Bank’s affiliates shall be subject to an account
control agreement or other appropriate instrument satisfactory to Bank to
perfect Bank’s Lien in such account in accordance with the terms hereunder.

 

6.8                               Asset Coverage Ratio.  Borrower shall maintain
at all times an Asset Coverage Ratio of at least ***, to be measured on a
monthly basis.

 

6.9                               AEBITDA.  Borrower shall maintain a maximum
AEBITDA loss of ***for the quarter ending March 31, 2009, and for each quarter
thereafter, a minimum AEBITDA of ***.

 

6.10                        Intellectual Property Rights.

 

(a)                                  Borrower shall promptly give Bank written
notice of any applications or registrations of intellectual property rights
filed with the United States Patent and Trademark Office, including the date of
such filing and the registration or application numbers, if any.  Borrower shall
(i) give Bank not less than 30 days prior written notice of the filing of any
applications or registrations with the United States Copyright Office, including
the title of such intellectual property rights to be registered, as such title
will appear on such applications or registrations, and the date such
applications or registrations will be filed, and (ii) prior to the filing of any
such applications or registrations, shall execute such documents as Bank may
reasonably request for Bank to maintain its perfection in such intellectual
property rights to be registered by Borrower, and upon the request of Bank,
shall file such documents simultaneously with the filing of any such
applications or registrations.  Upon filing any such applications or
registrations with the United States Copyright Office, Borrower shall promptly
provide Bank with (i) a copy of such applications or registrations, without the
exhibits, if any, thereto, (ii) evidence of the filing of any documents
requested by Bank to be filed for Bank to maintain the perfection and priority
of its security interest in such intellectual property rights, and (iii) the
date of such filing.

 

(b)                                  Bank may audit Borrower’s Intellectual
Property Collateral to confirm compliance

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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with this Section, provided such audit may not occur more often than twice per
year, unless an Event of Default has occurred and is continuing.  Bank shall
have the right, but not the obligation, to take, at Borrower’s sole expense, any
actions that Borrower is required under this Section to take but which Borrower
fails to take, after 15 days’ notice to Borrower.  Borrower shall reimburse and
indemnify Bank for all reasonable costs and reasonable expenses incurred in the
reasonable exercise of its rights under this Section.

 

6.11                        Domestic Subsidiary Guarantees.  Within thirty (30)
days of the Closing Date, Borrower shall cause its Domestic Subsidiaries to
enter into secured guarantees for the benefit of Bank, in form and substance
previously provided to Borrower and acceptable to Bank.

 

6.12                        Further Assurances.  At any time and from time to
time Borrower shall execute and deliver such further instruments and take such
further action as may reasonably be requested by Bank to effect the purposes of
this Agreement.

 

7.                                      NEGATIVE COVENANTS.

 

Borrower will not do any of the following:

 

7.1                               Dispositions.  Convey, sell, lease, transfer
or otherwise dispose of (collectively, a “Transfer”), or permit any of its
Subsidiaries to Transfer, all or any part of its business or property, other
than:  (i) Transfers of Inventory in the ordinary course of business;
(ii) Transfers between Borrower and its Subsidiaries, provided that Bank
maintains a perfected security interest in such Subsidiary’s assets;
(iii) Transfers of web properties or domain names in the ordinary course of
business not in excess of ***, provided that Bank maintains its perfected
security interest in the proceeds of such Transfers; (iv) Transfers of
non-exclusive licenses and similar arrangements for the use of the property of
Borrower or its Subsidiaries in the ordinary course of business; or
(v) Transfers of worn-out or obsolete Equipment which was not financed by Bank.

 

7.2                               Change in Business; Change in Control or
Executive Office.  Engage in any business, or permit any of its Subsidiaries to
engage in any business, other than the businesses currently engaged in by
Borrower and any business substantially similar or related thereto (or
incidental thereto); or cease to conduct business in the manner conducted by
Borrower as of the Closing Date; or suffer or permit a Change in Control; or
without thirty (30) days prior written notification to Bank, relocate its chief
executive office or state of incorporation or change its legal name; or without
Bank’s prior written consent, change the date on which its fiscal year ends.

 

7.3                               Mergers or Acquisitions.  Merge or
consolidate, or permit any of its Subsidiaries to merge or consolidate, with or
into any other business organization, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person, except mergers of any Subsidiary of Borrower into
another wholly-owned Subsidiary of Borrower.

 

7.4                               Indebtedness.  Create, incur, assume or be or
remain liable with respect to any Indebtedness, or permit any Subsidiary so to
do, other than Permitted Indebtedness.

 

7.5                               Encumbrances.  Create, incur, assume or suffer
to exist any Lien with respect to any of its property, or assign or otherwise
convey any right to receive income, including the sale of any Accounts, or
permit any of its Subsidiaries so to do, except for Permitted Liens, or agree
with any Person other than Bank not to grant a security interest in, or
otherwise encumber, any of its property, including intellectual property, or
permit any Subsidiary to do so.

 

7.6                               Distributions.  Pay any dividends or make any
other distribution or payment on account of or in redemption, retirement or
purchase of any capital stock, or permit any of its Subsidiaries to do so,
except that (i) Borrower may repurchase the stock of former employees pursuant
to stock repurchase agreements, (ii) Borrower may repurchase the stock of
employees or directors upon vesting of restricted stock, restricted stock units
or other stock-based awards or upon exercise of stock options granted under
equity compensation plans maintained by the Borrower in the ordinary course of
business, as long as an Event of Default does not exist prior to such repurchase
or would not exist after giving effect to such repurchase.

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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7.7                               Investments.  Directly or indirectly acquire
or own, or make any Investment in or to any Person, or permit any of its
Subsidiaries so to do, other than Permitted Investments; or maintain or invest
any of its property with a Person other than Bank or permit any of its
Subsidiaries to do so unless such Person has entered into an account control
agreement with Bank in form and substance satisfactory to Bank; or suffer or
permit any Subsidiary to be a party to, or be bound by, an agreement that
restricts such Subsidiary from paying dividends or otherwise distributing
property to Borrower.

 

7.8                               Transactions with Affiliates.  Directly or
indirectly enter into or permit to exist any material transaction with any
Affiliate of Borrower except for transactions that are in the ordinary course of
Borrower’s business, upon fair and reasonable terms that are no less favorable
to Borrower than would be obtained in an arm’s length transaction with a
non-affiliated Person.  Anything to the contrary in the foregoing
notwithstanding, Borrower and Bank acknowledge that Borrower has entered into
and will continue to enter into certain transactions with Steakmedia and
Racepoint Group, entities in which certain members of Borrower’s Board of
Directors act as owners or executives; such transactions are in the ordinary
course of Borrower’s business, and are upon fair and reasonable terms no less
favorable to Borrower than would be obtained in an arm’s length transaction with
a non-affiliated Person.

 

7.9                               Subordinated Debt.  Make any payment in
respect of any Subordinated Debt, or permit any of its Subsidiaries to make any
such payment, except in compliance with the terms of such Subordinated Debt, or
amend any provision contained in any documentation relating to the Subordinated
Debt without Bank’s prior written consent, not to be unreasonably withheld or
delayed.

 

7.10                        Inventory and Equipment. Store the Inventory or the
Equipment with a bailee, warehouseman, or other third party unless the third
party has been notified of Bank’s security interest and Bank (a) has received an
acknowledgment from the third party that it is holding or will hold the
Inventory or Equipment for Bank’s benefit or (b) is in pledge possession of the
warehouse receipt, where negotiable, covering such Inventory or Equipment. Store
or maintain any Equipment or Inventory at a location other than the location set
forth in Section 10 of this Agreement.

 

7.11                        Compliance.  Become an “investment company” or be
controlled by an “investment company,” within the meaning of the Investment
Company Act of 1940, or become principally engaged in, or undertake as one of
its important activities, the business of extending credit for the purpose of
purchasing or carrying margin stock, or use the proceeds of any Credit Extension
for such purpose.  Fail to meet the minimum funding requirements of ERISA,
permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to
occur, fail to comply with the Federal Fair Labor Standards Act or violate any
law or regulation, which violation could have a Material Adverse Effect, or a
material adverse effect on the Collateral or the priority of Bank’s Lien on the
Collateral, or permit any of its Subsidiaries to do any of the foregoing.

 

8.                                      EVENTS OF DEFAULT.

 

Any one or more of the following events shall constitute an Event of Default by
Borrower under this Agreement:

 

8.1                               Payment Default.  If Borrower fails to pay,
when due, any of the Obligations; provided however, Borrower’s failure to pay
due solely to Bank’s clerical or administrative error in executing the
auto-debit from Borrower’s account in a timely manner shall not be considered an
Event of Default under this Section 8.1;

 

8.2                               Covenant Default.

 

(a)                                  If Borrower fails to perform any obligation
under Article 6 or violates any of the covenants contained in Article 7 of this
Agreement; or

 

(b)                                  If Borrower fails or neglects to perform or
observe any other material term, provision, condition, covenant contained in
this Agreement, in any of the Loan Documents, or in any other present or future
agreement between Borrower and Bank and as to any default under such other term,
provision, condition or covenant that can be cured, has failed to cure such
default within twenty days after Borrower receives notice thereof or

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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any officer of Borrower becomes aware thereof; provided, however, that if the
default cannot by its nature be cured within the ten day period or cannot after
diligent attempts by Borrower be cured within such ten day period, and such
default is likely to be cured within a reasonable time, then Borrower shall have
an additional reasonable period (which shall not in any case exceed 40 days) to
attempt to cure such default, and within such reasonable time period the failure
to have cured such default shall not be deemed an Event of Default but no Credit
Extensions will be made.

 

8.3                               Material Adverse Effect.  If there occurs any
circumstance or circumstances that could reasonably be expected to have a
Material Adverse Effect;

 

8.4                               Attachment.  If any portion of Borrower’s
assets is attached, seized, subjected to a writ or distress warrant, or is
levied upon, or comes into the possession of any trustee, receiver or person
acting in a similar capacity and such attachment, seizure, writ or distress
warrant or levy has not been removed, discharged or rescinded within ten
(10) days, or if Borrower is enjoined, restrained, or in any way prevented by
court order from continuing to conduct all or any material part of its business
affairs, or if a judgment or other claim becomes a lien or encumbrance upon any
material portion of Borrower’s assets, or if a notice of lien, levy, or
assessment is filed of record with respect to any of Borrower’s assets by the
United States Government, or any department, agency, or instrumentality thereof,
or by any state, county, municipal, or governmental agency, and the same is not
paid within ten (10) days after Borrower receives notice thereof, provided that
none of the foregoing shall constitute an Event of Default where such action or
event is stayed or an adequate bond has been posted pending a good faith contest
by Borrower (provided that no Credit Extensions will be required to be made
during such cure period);

 

8.5                               Insolvency.  If Borrower becomes insolvent, or
if an Insolvency Proceeding is commenced by Borrower, or if an Insolvency
Proceeding is commenced against Borrower and is not dismissed or stayed within
thirty (30) days (provided that no Credit Extensions will be made prior to the
dismissal of such Insolvency Proceeding);

 

8.6                               Other Agreements.  If there is a default or
other failure to perform in any agreement to which Borrower is a party or by
which it is bound resulting in a right by a third party or parties, whether or
not exercised, to accelerate the maturity of any Indebtedness in an amount in
excess of ***or which could have a Material Adverse Effect;

 

8.7                               Judgments.  If a judgment or judgments for the
payment of money in an amount, individually or in the aggregate, of at least
***shall be rendered against Borrower and shall remain unsatisfied and unstayed
for a period of thirty (30) days (provided that no Credit Extensions will be
made prior to the satisfaction or stay of such judgment);

 

8.8                               Misrepresentations.  If any material
misrepresentation or material misstatement exists now or hereafter in any
warranty or representation set forth herein or in any certificate delivered to
Bank by any Responsible Officer pursuant to this Agreement or to induce Bank to
enter into this Agreement or any other Loan Document; or

 

8.9                               Guaranty.  If any guaranty of all or a portion
of the Obligations (a “Guaranty”) ceases for any reason to be in full force and
effect, or any guarantor fails to perform any obligation under any Guaranty or a
security agreement securing any Guaranty (collectively, the “Guaranty
Documents”), or any event of default occurs under any Guaranty Document or any
guarantor revokes or purports to revoke a Guaranty, or any material
misrepresentation or material misstatement exists now or hereafter in any
warranty or representation set forth in any Guaranty Document or in any
certificate delivered to Bank in connection with any Guaranty Document, or if
any of the circumstances described in Sections 8.3 through 8.8 occur with
respect to any guarantor or any guarantor dies or becomes subject to any
criminal prosecution, or any circumstances arise causing Bank, in good faith, to
become insecure as to the satisfaction of any of any guarantor’s obligations
under the Guaranty Documents.

 

9.                                      BANK’S RIGHTS AND REMEDIES.

 

9.1                               Rights and Remedies.  Upon the occurrence and
during the continuance of an Event of Default, Bank may, at its election,
without notice of its election and without demand, do any one or more of the
following, all of which are authorized by Borrower:

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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(a)                                  Declare all Obligations, whether evidenced
by this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable (provided that upon the occurrence of an Event of Default
described in Section 8.5, all Obligations shall become immediately due and
payable without any action by Bank);

 

(b)                                  Demand that Borrower  (i) deposit cash with
Bank in an amount equal to the amount of any Letters of Credit remaining
undrawn, as collateral security for the repayment of any future drawings under
such Letters of Credit, and (ii) pay in advance all Letter of Credit fees
scheduled to be paid or payable over the remaining term of the Letters of
Credit, and Borrower shall promptly deposit and pay such amounts;

 

(c)                                  Cease advancing money or extending credit
to or for the benefit of Borrower under this Agreement or under any other
agreement between Borrower and Bank;

 

(d)                                  Settle or adjust disputes and claims
directly with account debtors for amounts, upon terms and in whatever order that
Bank reasonably considers advisable;

 

(e)                                  Make such payments and do such acts as Bank
considers necessary or reasonable to protect its security interest in the
Collateral.  Borrower agrees to assemble the Collateral if Bank so requires, and
to make the Collateral available to Bank as Bank may designate.  Borrower
authorizes Bank to enter the premises where the Collateral is located, to take
and maintain possession of the Collateral, or any part of it, and to pay,
purchase, contest, or compromise any encumbrance, charge, or lien which in
Bank’s determination appears to be prior or superior to its security interest
and to pay all expenses incurred in connection therewith.  With respect to any
of Borrower’s owned premises, Borrower hereby grants Bank a license to enter
into possession of such premises and to occupy the same, without charge, in
order to exercise any of Bank’s rights or remedies provided herein, at law, in
equity, or otherwise;

 

(f)                                    Set off and apply to the Obligations any
and all (i) balances and deposits of Borrower held by Bank, or (ii) indebtedness
at any time owing to or for the credit or the account of Borrower held by Bank;

 

(g)                                 Ship, reclaim, recover, store, finish,
maintain, repair, prepare for sale, advertise for sale, and sell (in the manner
provided for herein) the Collateral.  Bank is hereby granted a license or other
right, solely pursuant to the provisions of this Section 9.1, to use, without
charge, Borrower’s labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks, service marks, and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank’s exercise of its rights under this Section 9.1, Borrower’s
rights under all licenses and all franchise agreements shall inure to Bank’s
benefit;

 

(h)                                 Dispose of the Collateral by way of one or
more contracts or transactions, for cash or on terms, in such manner and at such
places (including Borrower’s premises) as Bank determines is commercially
reasonable, and apply any proceeds to the Obligations in whatever manner or
order Bank deems appropriate;

 

(i)                                    Bank may credit bid and purchase at any
public sale; and

 

(j)                                    Any deficiency that exists after
disposition of the Collateral as provided above will be paid immediately by
Borrower.

 

9.2                               Power of Attorney.  Borrower irrevocably
appoints Bank and its successors and assigns as Borrower’s true and lawful
attorney in fact, and authorizes Bank, at Borrower’s sole expense, whether or
not there has been an Event of Default and at any time the Minimum Cash Ratio is
below ***, to (a) receive and open all mail addressed to Borrower for the
purpose of collecting the Accounts; (b) endorse Borrower’s name on any checks or
other forms of payment on the Accounts; (c) sign Borrower’s name on any invoice
or bill of lading relating to any Account, drafts against account debtors,
schedules and assignments of Accounts, verifications of Accounts, and notices to
account debtors; (d) execute on behalf of Borrower any and all instruments,
documents, financing statements and the like to perfect Bank’s interests in the
Accounts and Collections; (e) to notify all account debtors with respect to the
Accounts to pay Bank directly; (f) demand, collect, receive, sue, and give
releases to any account debtor for the monies due or which may become due upon
or with respect to the Accounts and to compromise, prosecute, or defend any
action, claim, case or proceeding relating to the Accounts; and (g) do all acts
and things necessary or expedient, in furtherance of any such

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

20

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purposes.  Furthermore, effective only upon the occurrence and during the
continuance of an Event of Default, Borrower hereby irrevocably appoints Bank
(and any of Bank’s designated officers, or employees) as Borrower’s true and
lawful attorney to:  (h) endorse Borrower’s name on any checks or other forms of
payment or security that may come into Bank’s possession; (i) sell, assign,
transfer, pledge, compromise, discharge or otherwise dispose the whole or any
part of the Collateral; (j) make, settle, and adjust all claims under and
decisions with respect to Borrower’s policies of insurance; (k) settle and
adjust disputes and claims respecting the accounts directly with account
debtors, for amounts and upon terms which Bank determines to be reasonable; and
(l) to file, in its sole discretion, one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral.  The
appointment of Bank as Borrower’s attorney in fact, and each and every one of
Bank’s rights and powers, being coupled with an interest, is irrevocable until
all of the Obligations have been fully repaid and performed and Bank’s
obligation to provide Credit Extensions hereunder is terminated.

 

9.3                               Accounts Collection.  At any time that the
Minimum Cash Ratio is below ***, Bank may notify any Person owing funds to
Borrower of Bank’s security interest in such funds and verify the amount of such
Account.  Borrower shall collect all amounts owing to Borrower for Bank, receive
in trust all payments as Bank’s trustee, and immediately deliver such payments
to Bank in their original form as received from the account debtor, with proper
endorsements for deposit.

 

9.4                               Bank Expenses.  If Borrower fails to pay any
amounts or furnish any required proof of payment due to third persons or
entities, as required under the terms of this Agreement, then Bank may do any or
all of the following after reasonable notice to Borrower:  (a) make payment of
the same or any part thereof; (b) set up such reserves under a loan facility in
Section 2.1 as Bank deems necessary to protect Bank from the exposure created by
such failure; or (c) obtain and maintain insurance policies of the type
discussed in Section 6.6 of this Agreement, and take any action with respect to
such policies as Bank deems prudent.  Any amounts so paid or deposited by Bank
shall constitute Bank Expenses, shall be immediately due and payable, and shall
bear interest at the then applicable rate hereinabove provided, and shall be
secured by the Collateral.  Any payments made by Bank shall not constitute an
agreement by Bank to make similar payments in the future or a waiver by Bank of
any Event of Default under this Agreement.

 

9.5                               Bank’s Liability for Collateral.  So long as
Bank complies with reasonable banking practices, Bank shall not in any way or
manner be liable or responsible for:  (a) the safekeeping of the Collateral;
(b) any loss or damage thereto occurring or arising in any manner or fashion
from any cause; (c) any diminution in the value thereof; or (d) any act or
default of any carrier, warehouseman, bailee, forwarding agency, or other person
whomsoever.  All risk of loss, damage or destruction of the Collateral shall be
borne by Borrower.

 

9.6                               Shares.  Borrower recognizes that Bank may be
unable to effect a public sale of any or all the Shares, by reason of certain
prohibitions contained in federal securities laws and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. 
Borrower acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner.  Bank shall be
under no obligation to delay a sale of any of the Shares for the period of time
necessary to permit the issuer thereof to register such securities for public
sale under federal securities laws or under applicable state securities laws,
even if such issuer would agree to do so.  Upon the occurrence of an Event of
Default which continues, Bank shall have the right to exercise all such rights
as a secured party under the California Uniform Commercial Code as it, in its
sole judgment, shall deem necessary or appropriate, including without limitation
the right to liquidate the Shares and apply the proceeds thereof to reduce the
Obligations.  Effective only upon the occurrence and during the continuance of
an Event of Default, Borrower hereby irrevocably appoints Bank (and any of
Bank’s designated officers, or employees) as Borrower’s true and lawful attorney
to enforce Borrower’s rights against any Subsidiary, including the right to
compel any Subsidiary to make payments or distributions owing to Borrower.

 

9.7                               Remedies Cumulative.  Bank’s rights and
remedies under this Agreement, the Loan Documents, and all other agreements
shall be cumulative.  Bank shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity.  No
exercise by Bank of one right or remedy shall be deemed an election, and no
waiver by Bank of any Event of Default on Borrower’s part shall be deemed a
continuing waiver.  No delay by Bank shall constitute a waiver, election, or
acquiescence by it.  No waiver by Bank shall be effective unless

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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made in a written document signed on behalf of Bank and then shall be effective
only in the specific instance and for the specific purpose for which it was
given.

 

9.8                               Demand; Protest.  Borrower waives demand,
protest, notice of protest, notice of default or dishonor, notice of payment and
nonpayment, notice of any default, nonpayment at maturity, release, compromise,
settlement, extension, or renewal of accounts, documents, instruments, chattel
paper, and guarantees at any time held by Bank on which Borrower may in any way
be liable.

 

10.                               NOTICES.

 

Unless otherwise provided in this Agreement, all notices or demands by any party
relating to this Agreement or any other agreement entered into in connection
herewith shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by a recognized overnight delivery
service, certified mail, postage prepaid, return receipt requested, or by
telefacsimile to Borrower or to Bank, as the case may be, at its addresses set
forth below:

 

If to Borrower:

 

MIVA, INC.

 

 

5220 Summerlin Commons Blvd., Suite 500

 

 

Fort Myers, FL 33907

 

 

Attn: John Pisaris

 

 

FAX: (239) 790-9556

 

 

 

with a copy to:

 

Baker & McKenzie LLP

 

 

One Prudential Plaza

 

 

130 East Randolph, Suite 3500

 

 

Chicago, Illinois 60601

 

 

Attn: Matthew C. Alshouse

 

 

FAX: (312) 698-2985

 

 

 

If to Bank:

 

Bridge Bank, National Association

 

 

55 Almaden Boulevard

 

 

San Jose, California 95113

 

 

Attn: Technology Division

 

 

FAX: (408) 282-1681

 

The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other.

 

11.                               CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

 

This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of California, without regard to principles of
conflicts of law.  Each of Borrower and Bank hereby submits to the exclusive
jurisdiction of the state and Federal courts located in the County of Santa
Clara, State of California.  BORROWER AND BANK EACH HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT.  EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

 

If the jury waiver set forth in Section is not enforceable, then any dispute,
controversy or claim arising out of or relating to this Agreement, the Loan
Documents or any of the transactions contemplated therein shall be settled by
judicial reference pursuant to Code of Civil Procedure Section 638 et seq.
before a referee sitting without a jury, such

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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referee to be mutually acceptable to the parties or, if no agreement is reached,
by a referee appointed by the Presiding Judge of the California Superior Court
for Santa Clara County.  This Section shall not restrict a party from exercising
remedies under the Code or from exercising pre-judgment remedies under
applicable law.

 

12.                               GENERAL PROVISIONS.

 

12.1                        Successors and Assigns.  This Agreement shall bind
and inure to the benefit of the respective successors and permitted assigns of
each of the parties; provided, however, that neither this Agreement nor any
rights hereunder may be assigned by Borrower without Bank’s prior written
consent, which consent may be granted or withheld in Bank’s sole discretion. 
Bank shall have the right without the consent of or notice to Borrower to sell,
transfer, negotiate, or grant participation in all or any part of, or any
interest in, Bank’s obligations, rights and benefits hereunder.

 

12.2                        Indemnification.  Borrower shall defend, indemnify
and hold harmless Bank and its officers, employees, and agents against:  (a) 
all obligations, demands, claims, losses, Bank Expenses and liabilities claimed
or asserted by any other party in connection with the transactions contemplated
in this Agreement (including without limitation reasonable attorneys’ fees and
expenses)except to the extent caused by Bank’s gross negligence or willful
misconduct.

 

12.3                        Time of Essence.  Time is of the essence for the
performance of all obligations set forth in this Agreement.

 

12.4                        Severability of Provisions.  Each provision of this
Agreement shall be severable from every other provision of this Agreement for
the purpose of determining the legal enforceability of any specific provision.

 

12.5                        Amendments in Writing, Integration.  Neither this
Agreement nor the Loan Documents can be amended or terminated orally.  All prior
agreements, understandings, representations, warranties, and negotiations
between the parties hereto with respect to the subject matter of this Agreement
and the Loan Documents, if any, are merged into this Agreement and the Loan
Documents.

 

12.6                        Counterparts.  This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each
of which, when executed and delivered, shall be deemed to be an original, and
all of which, when taken together, shall constitute but one and the same
Agreement.

 

12.7                        Survival.  All covenants, representations and
warranties made in this Agreement shall continue in full force and effect so
long as any Obligations remain outstanding or Bank has any obligation to make
Credit Extensions to Borrower.  The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities described
in Section 12.2 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Bank have run.

 

12.8                        Confidentiality.  In handling any confidential
information Bank and all employees and agents of Bank, including but not limited
to accountants and attorneys, shall exercise the same degree of care that it
exercises with respect to its own proprietary information of the same types to
maintain the confidentiality of any non-public information thereby received or
received pursuant to this Agreement except that disclosure of such information
may be made (i) to the subsidiaries or affiliates of Bank in connection with
their present or prospective business relations with Borrower, (ii) to
prospective transferees or purchasers of any interest in the Loans, provided
that they have entered into a comparable confidentiality agreement in favor of
Borrower and have delivered a copy to Borrower, (iii) as required by law,
regulations, rule or order, subpoena, judicial order or similar order, (iv) as
may be required in connection with the examination, audit or similar
investigation of Bank and (v) as Bank may determine in connection with the
enforcement of any remedies hereunder.  Confidential information hereunder shall
not include information that either:  (a) is in the public domain or in the
knowledge or possession of Bank when disclosed to Bank, or becomes part of the
public domain after disclosure to Bank through no fault of Bank; or (b) is
disclosed to Bank by a third party, provided Bank does not have actual knowledge
that such third party is prohibited from disclosing such information.

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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12.9                        Patriot Act.  To help the government fight the
funding of terrorism and money laundering activities, Federal law requires all
financial institutions to obtain, verify, and record information that identifies
each person who opens an account.  WHAT THIS MEANS FOR YOU:  when you open an
account, we will ask your name, address, date of birth, and other information
that will allow us to identify you.  We may also ask to see your driver’s
license or other identifying documents.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

[***] = Confidential treatment requested for redacted portion; redacted portion
has been filed separately with the Securities and Exchange Commission.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.

 

 

MIVA, INC.

 

 

 

By:

 

 

 

 

 

Title:

 

 

 

 

 

 

By:

 

 

 

 

 

Title:

 

 

 

 

 

 

BRIDGE BANK, NATIONAL ASSOCIATION

 

 

 

By:

 

 

 

 

 

Title:

 

 

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