Exhibit 10.1

 
-

 
 
 
 
 
LOAN, SECURITY AND GUARANTEE AGREEMENT
 
Dated as of March 26, 2020
 
______________________________________________________________________________
 
AUTOWEB, INC.,
 
as Borrower
 
_________________________________________________________________________________
 
AUTOBYTEL, INC.,
AW GUA USA, INC.,
 
and
 
CAR.COM, INC.,
 
as Guarantors
______________________________________________________________________________
 
CERTAIN FINANCIAL INSTITUTIONS,
 
as Lenders
_______________________________________________________________________________
 
CIT NORTHBRIDGE CREDIT LLC,
 
as Agent
______________________________________________________________________________
 
CIT NORTHBRIDGE CREDIT LLC,
 
as Sole Lead Arranger and Sole Bookrunner
 

 

 
TABLE OF CONTENTS
 
SECTION 1.
DEFINITIONS; RULES OF CONSTRUCTION
1
1.1
Definitions
1
1.2
Accounting Terms
21
1.3
Uniform Commercial Code
21
1.4
Certain Matters of Construction
21
1.5
Divisions
22
1.6
Notice to Borrower Agent
22
SECTION 2.
CREDIT FACILITIES
22
2.1
Revolver Commitment.
22
SECTION 3.
INTEREST, FEES AND CHARGES
23
3.1
Interest
23
3.2
Fees
24
3.3
Computation of Interest, Fees, Yield Protection
24
3.4
Reimbursement Obligations
24
3.5
Illegality
24
3.6
Inability to Determine Rates; LIBOR Successor Rate
24
3.7
Increased Costs; Capital Adequacy
25
3.8
Mitigation
26
3.9
[Reserved]
26
3.10
Maximum Interest
27
SECTION 4.
LOAN ADMINISTRATION
27
4.1
Manner of Borrowing and Funding Revolver Loans
27
4.2
Defaulting Lender
28

4.3
Borrower Agent
29

4.4
One Obligation
29

4.5
Effect of Termination
29

SECTION 5.
PAYMENTS
29

5.1
General Payment Provisions
29

5.2
Repayment of Revolver Loans
30
5.3
[Reserved]
30
5.4
Payment of Other Obligations
30
5.5
Marshaling; Payments Set Aside
30
5.6
Application and Allocation of Payments
30
5.7
Dominion Account
31
5.8
Account Stated
31
5.9
Taxes
31
5.10
Lender Tax Information
33
5.11
Nature and Extent of Each Borrower’s Liability
34

 
 
 
-i-

 
 
 
SECTION 6.
CONDITIONS PRECEDENT
35
6.1
Conditions Precedent to Initial Loans
35
6.2
Conditions Precedent to All Credit Extensions
38

SECTION 7.
COLLATERAL
38

7.1
Grant of Security Interest
38

7.2
Lien on Deposit Accounts; Cash Collateral
39

7.3
Real Estate Collateral.
39

7.4
Other Collateral
39

7.5
Limitations
40
7.6
Further Assurances
40
7.7
Foreign Subsidiary Stock
40
SECTION 8.
COLLATERAL ADMINISTRATION
40
8.1
Borrowing Base Reports
40
8.2
Accounts
40
8.3
[Reserved]
41
8.4
Equipment
41
8.5
Deposit Accounts
41
8.6
General Provisions
42
8.7
Power of Attorney
43
SECTION 9.
REPRESENTATIONS AND WARRANTIES
43
9.1
General Representations and Warranties
43
9.2
Complete Disclosure
47

SECTION 10.
COVENANTS AND CONTINUING AGREEMENTS
47

10.1
Affirmative Covenants
47

10.2
Negative Covenants
50
SECTION 11.
EVENTS OF DEFAULT; REMEDIES ON DEFAULT
53
11.1
Events of Default
53
11.2
Remedies upon Default
54

11.3
License
55

11.4
Setoff
56

11.5
Remedies Cumulative; No Waiver
56

SECTION 12.
AGENT
56

12.1
Appointment, Authority and Duties of Agent
56

12.2
Agreements Regarding Collateral; Borrower Materials; Credit Bidding
57

12.3
Reliance By Agent
59

12.4
Action Upon Default
59

12.5
Ratable Sharing
59

12.6
Indemnification
59

12.7
Limitation on Responsibilities of Agent
60
12.8
Successor Agent and Co-Agents
60

 
 
-ii-

 
 
 
12.9
Due Diligence and Non-Reliance
60
12.10
Remittance of Payments and Collections
61
12.11
Individual Capacities
61
12.12
Titles
61
12.13
Bank Product Providers
61
12.14
Flood Laws
61
12.15
No Third Party Beneficiaries
61
12.16
Certain ERISA Matters.
62
SECTION 13.
BENEFIT OF AGREEMENT; ASSIGNMENTS
62
13.1
Successors and Assigns
62
13.2
Participations
63
13.3
Assignments
63

13.4
Replacement of Certain Lenders
64

SECTION 14.
MISCELLANEOUS
64

14.1
Consents, Amendments and Waivers
64

14.2
Indemnity
65

14.3
Notices and Communications
65

14.4
Performance of Obligors’ Obligations
66

14.5
Credit Inquiries
66

14.6
Severability
66

14.7
Cumulative Effect; Conflict of Terms
67

14.8
Counterparts; Execution
67

14.9
Entire Agreement
67

14.10
Relationship with Lenders
67

14.11
No Advisory or Fiduciary Responsibility
67

14.12
Confidentiality
68

14.13
GOVERNING LAW
68

14.14
Consent To Forum
68

14.15
Waivers by Obligors
69

14.16
Patriot Act Notice
69

14.17
NO ORAL AGREEMENT
69

SECTION 15.
GUARANTY
69

15.1
Guaranty of the Obligations
69

15.2
Contribution by Guarantors
70
15.3
Payment by Guarantors
70
15.4
Liability of Guarantors Absolute
70
15.5
Waivers by Guarantors
72
15.6
Guarantors’ Rights of Subrogation, Contribution, etc.
72
15.7
Subordination of Other Obligations
72

15.8
Continuing Guaranty
73

15.9
Authority of Guarantors or Borrowers
73

15.10
Financial Condition of Borrowers
73

15.11
Bankruptcy, etc.
73

 
LIST OF EXHIBITS AND SCHEDULES
 
Exhibit A-1
Assignment
Exhibit A-2
Assignment Notice
Exhibit B
Borrowing Base Report
Exhibit C
Compliance Certificate
Schedule 1.1(a)
Commitments of Lenders
Schedule 8.5
Deposit Accounts
Schedule 8.6.1
Business Locations
Schedule 9.1.4
Names and Capital Structure
Schedule 9.1.5
Owned or Leased Real Estate
Schedule 9.1.11
Patents, Trademarks, Copyrights and Licenses
Schedule 9.1.16
Commercial Tort Claims
Schedule 10.2.2
Existing Liens
Schedule 10.2.17
Existing Affiliate Transactions

 
 
 

-iii-

 

 
LOAN, SECURITY AND GUARANTEE AGREEMENT
 
THIS LOAN, SECURITY AND GUARANTEE AGREEMENT (this “Agreement”) is dated as of
March 26, 2020, among AUTOWEB, INC., a Delaware corporation (“AutoWeb”), and any
other Person from time to time joined hereto as a Borrower (together with
AutoWeb, each, a “Borrower” and, collectively, “Borrowers”), the other Persons
from time to time party to this Agreement as Guarantors, the financial
institutions party to this Agreement from time to time as Lenders, and CIT
NORTHBRIDGE CREDIT LLC, a Delaware limited liability company (“CNC”), as agent
for the Lenders (in such capacity, “Agent”).
 
R E C I T A L S:
 
Borrowers have requested that Lenders provide a credit facility to Borrowers to
finance their mutual and collective business enterprise. Lenders are willing to
provide the credit facility on the terms and conditions set forth in this
Agreement.
 
NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
agree as follows:
 
SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION
 
1.1 Definitions. As used herein, the following terms have the meanings set forth
below:
 
Accounts Formula Amount: up to 85% of the Value of Eligible Accounts, in each
case, subject to Agent’s discretion; provided, however, that such percentage
shall be reduced by 1.0% for each percentage point (or portion thereof) that the
Dilution Percent exceeds 5.0%.
 
Acquisition: a transaction or series of transactions resulting in (a)
acquisition of a business, division or substantially all assets of a Person; (b)
record or beneficial ownership of 50% or more of the Equity Interests of a
Person; or (c) merger, consolidation or combination of an Obligor or Subsidiary
with another Person.
 
Affiliate: with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified. “Control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability
to exercise voting power, by contract or otherwise. “Controlling” and
“Controlled” have correlative meanings.
 
Agent Indemnitees: Agent and its officers, directors, employees, Affiliates,
agents and attorneys.
 
Agent Professionals: attorneys, accountants, appraisers, auditors, business
valuation experts, environmental engineers or consultants, turnaround
consultants, and other professionals and experts retained by Agent.
 
Allocable Amount: as defined in Section 5.11.3.
 
Anti-Terrorism Law: any law relating to terrorism or money laundering, including
the Patriot Act.
 
Applicable Law: all laws, rules, regulations and governmental guidelines
applicable to the Person conduct, transaction, agreement or matter in question,
including statutory law, common law and equitable principles, as well as
provisions of constitutions, treaties, statutes, rules, regulations, orders and
decrees of Governmental Authorities.
 
Applicable Margin: 5.50%; provided, that if Borrower and Subsidiaries deliver to
Agent the audited financial statements of Borrowers and Subsidiaries for the
Fiscal Year ending December 31, 2020, together with a certificate from a Senior
Officer of Borrower demonstrating that the EBITDA of the Borrowers and
Subsidiaries, on a consolidated basis (adjusted in a manner satisfactory to
Agent but without giving effect to the adjustment in clause (h) of the
definition of EBITDA), for such Fiscal Year is greater than $(826,000), then,
within five (5) Business Days after receipt of the foregoing, the Applicable
Margin shall be reduced to 4.50%.
 
Approved Fund: any Person (other than a natural Person) engaged in making,
purchasing, holding or otherwise investing in commercial loans in its ordinary
course of activities.
 
 

-1-

 
 
 
 
Asset Disposition: a sale, lease, license, consignment, transfer or other
disposition of Property of an Obligor, including any disposition in connection
with a sale-leaseback transaction or synthetic lease.
 
Assignment: an assignment and assumption agreement between a Lender and Eligible
Assignee, in the form of Exhibit A-1 or otherwise satisfactory to Agent.
 
Assignment Notice: a notice of an assignment pursuant to an Assignment
Agreement, in the form of Exhibit A-2 or otherwise satisfactory to Agent.
 
Availability: the Borrowing Base minus Revolver Usage.
 
Availability Block: $3,000,000.
 
Availability Reserve: the sum (without duplication) of (a) the Rent and Charges
Reserve; (b) the Bank Product Reserve; (c) the Availability Block; (d) amounts
to reflect (i) impediments to the Agent’s ability to realize upon the Collateral
and (ii) claims and liabilities that the Agent determines will need to be
satisfied in connection with the realization upon the Collateral; and (e) such
additional reserves, in such amounts and with respect to such matters, as Agent
in its Permitted Discretion may elect to impose from time to time.
 
Bank: CIT Bank, N.A.
 
Bank Product: any of the following products or services extended to, or arranged
for, a Borrower or Affiliate of a Borrower by Agent, a Lender or any of their
respective Affiliates: (a) Cash Management Services; (b) products under Hedging
Agreements; (c) commercial credit card and merchant card services; and (d) other
banking products or services.
 
Bank Product Reserve: the aggregate amount of reserves established by Agent from
time to time in its Permitted Discretion with respect to Secured Bank Product
Obligations.
 
Bankruptcy Code: Title 11 of the United States Code.
 
Base Rate: for any day a fluctuating rate per annum equal to the highest of: (a)
the Federal Funds Rate plus 1/2 of 1%; (b) the rate of interest in effect for
such day as publicly announced from time to time by JPMorgan Chase Bank, N.A. as
its “prime rate” in effect for such day; or (c) the most recently available LIBO
Base Rate (as adjusted by any minimum LIBO Rate floor) plus 1%. Any change in
the “prime rate” announced by JPMorgan Chase Bank, N.A. shall take effect
without notice to the Borrowers at the opening of business on the day specified
as the effective date of change in the public announcement or publication of
such change. The Base Rate is not necessarily the lowest rate of interest
charged by Lenders in connection with extensions of credit. If JPMorgan Chase
Bank, N.A. ceases to announce its “prime rate”, Agent may select a reasonably
comparable index or source to use as the basis for the Base Rate. For the
avoidance of doubt, the Base Rate will in no event be less than 0% per annum.
 
Board of Governors: the Board of Governors of the Federal Reserve System.
 
Borrowed Money: with respect to any Obligor, without duplication, its (a) Debt
that (i) arises from the lending of money by any Person to such Obligor, (ii) is
evidenced by notes, drafts, bonds, debentures, credit documents or similar
instruments, (iii) accrues interest or is a type upon which interest charges are
customarily paid (excluding trade payables owing in the Ordinary Course of
Business), or (iv) was issued or assumed as full or partial payment for
Property; (b) Capital Leases; (c) letter of credit reimbursement obligations;
and (d) guaranties of any of the foregoing owing by another Person.
 
Borrower or Borrowers: as defined in the preamble to this Agreement and
extending to all permitted successors and assigns of such Persons.
 
Borrower Agent: as defined in Section 4.3.
 
 
 

-2-

 
 
 

Borrower Materials: Borrowing Base Reports, Compliance Certificates and other
information, reports, financial statements and other materials delivered by
Borrowers hereunder.
 
Borrowing: a group of Loans that are made together on the same day and have the
same interest option and, if applicable, Interest Period.
 
Borrowing Base: on any date of determination, an amount equal to the sum of (a)
the lesser of (i) the aggregate Revolver Commitments and (ii) the sum of the
Accounts Formula Amount plus the Unbilled Accounts Formula Amount plus the Cash
Formula Amount minus (b) any Availability Reserve.
 
Borrowing Base Report: a report in the form attached hereto as Exhibit B by
which Borrower Agent certifies the Borrowing Base pursuant to Section 8.1.
 
Business Day: any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, New York, and if such day relates to a LIBOR Loan, any such day on
which dealings in Dollar deposits are conducted in the London interbank market.
 
Capital Expenditures: all liabilities incurred or expenditures made by a
Borrower or Subsidiary for the acquisition of fixed assets, or any improvements,
replacements, substitutions or additions thereto with a useful life of more than
one year.
 
Capital Lease: any lease required to be capitalized for financial reporting
purposes in accordance with GAAP.
 
Cash Collateral: cash delivered to Agent to Cash Collateralize any Obligations,
and all interest, dividends, earnings and other proceeds relating thereto.
 
Cash Collateralize: the delivery of cash to Agent, as security for the payment
of Obligations, in an amount equal to, with respect to any contingent or other
Obligations (including Secured Bank Product Obligations), Agent’s good faith
estimate of the amount due or to become due, including fees, expenses and
indemnification hereunder. “Cash Collateralization” has a correlative meaning.
 
Cash Equivalents: (a) marketable obligations issued or unconditionally
guaranteed by, and backed by the full faith and credit of, the U.S. government,
maturing within 12 months of the date of acquisition; (b) certificates of
deposit, time deposits and bankers’ acceptances maturing within 12 months of the
date of acquisition, and overnight bank deposits, in each case which are issued
by a commercial bank organized under the laws of the United States or any state
or district thereof, rated A-1 (or better) by S&P or P-1 (or better) by Moody’s
at the time of acquisition, and (unless issued by a Lender) not subject to
offset rights; (c) repurchase obligations with a term of not more than 30 days
for underlying investments of the types described in clauses (a) and (b) entered
into with any bank described in clause (b); and (d) shares of any money market
fund that has substantially all of its assets invested continuously in the types
of investments referred to above, has net assets of at least $500,000,000 and
has the highest rating obtainable from either Moody’s or S&P.
 
Cash Formula Amount: 97.5% of Qualified Cash held in a segregated Controlled
Deposit Account subject to no Liens other than Agent’s Lien and Liens described
in Sections 10.2.2(c) and (m).
 
Cash Management Services: services relating to operating, collections, payroll,
trust, or other depository or disbursement accounts, including automated
clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled
disbursement, overdraft, depository, information reporting, lockbox and stop
payment services.
 
CERCLA: the Comprehensive Environmental Response Compensation and Liability Act
(42 U.S.C. § 9601 et seq.).
 
Certificate of Beneficial Ownership: for each Borrower means a certification
regarding beneficial ownership required by the Beneficial Ownership Regulation,
31 C.F.R. § 1010.230.
 
 
 

-3-

 
 

 
Change in Law: the occurrence, after the date hereof, of (a) the adoption,
taking effect or phasing in of any law, rule, regulation or treaty; (b) any
change in any law, rule, regulation or treaty or in the administration,
interpretation or application thereof; or (c) the making, issuance or
application of any request, guideline, requirement or directive (whether or not
having the force of law) by any Governmental Authority; provided, however, that
“Change in Law” shall include, regardless of the date enacted, adopted or
issued, all requests, rules, guidelines, requirements or directives (i) under or
relating to the Dodd-Frank Wall Street Reform and Consumer Protection Act, or
(ii) promulgated pursuant to Basel III by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any similar
authority) or any other Governmental Authority.
 
Change of Control: (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the
Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect
on the date hereof), of Equity Interests representing more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of AutoWeb; (b) except in connection with a transaction permitted by
this Agreement, AutoWeb shall cease to own, free and clear of all Liens or other
encumbrances (other than those in favor of Agent), directly or indirectly, 100%
of the outstanding voting Equity Interests of any of its Subsidiaries on a fully
diluted basis and all voting rights and equivalent economic interests with
respect thereto; (c) the sale or transfer of all or substantially all assets of
(i) AutoWeb or (ii) a Borrower (other than AutoWeb) to any Person other than an
Obligor; or (d) a “Change of Control” or any term of similar effect as defined
in any document governing any Subordinated Debt.
 
Claims: all claims, liabilities, obligations, losses, damages, penalties,
judgments, proceedings, interest, costs and expenses of any kind (including
remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses)
at any time (including after Full Payment of the Obligations or replacement of
Agent or any Lender) incurred by any Indemnitee or asserted against any
Indemnitee by any Obligor or other Person, in any way relating to (a) any Loans,
Loan Documents, Borrower Materials, or the use thereof or transactions relating
thereto, (b) any action taken or omitted in connection with any Loan Documents,
(c) the existence or perfection of any Liens, or realization upon any
Collateral, (d) exercise of any rights or remedies under any Loan Documents or
Applicable Law, or (e) failure by any Obligor to perform or observe any terms of
any Loan Document, in each case including all costs and expenses relating to any
investigation, litigation, arbitration or other proceeding (including an
Insolvency Proceeding or appellate proceedings), whether or not the applicable
Indemnitee is a party thereto.
 
Closing Date: as defined in Section 6.1.
 
Closing Date Fee Letter: that certain fee letter dated as of the Closing Date
from Agent and accepted by Borrower Agent.
 
Code: the Internal Revenue Code of 1986.
 
Collateral: all Property described in Section 7.1, all Property described in any
Security Documents as security for any Obligations, and all other Property that
now or hereafter secures (or is intended to secure) any Obligations.
 
Commitment: for any Lender, the aggregate amount of such Lender’s Revolver
Commitment. “Commitments” means the aggregate amount of all Revolver
Commitments.
 
Commitment Termination Date: the earliest to occur of (a) the Revolver
Termination Date; (b) the date on which Borrowers terminate the Revolver
Commitments pursuant to Section 2.1.4; or (c) the date on which the Revolver
Commitments are terminated pursuant to Section 11.2.
 
Commodity Exchange Act: the Commodity Exchange Act (7 U.S.C. § 1 et seq.).
 
Compliance Certificate: a certificate in the form attached hereto as Exhibit C
signed by the chief financial officer of Borrower Agent, delivered pursuant to
Section 10.1.2(c).
 
Connection Income Taxes: Other Connection Taxes that are imposed on or measured
by net income (however denominated), or are franchise or branch profits Taxes.
 
 
 

-4-

 
 
 
 
Contingent Obligation: any obligation of a Person arising from a guaranty,
indemnity or other assurance of payment or performance of any Debt, lease,
dividend or other obligation (“primary obligations”) of another obligor
(“primary obligor”) in any manner (but excluding, for the avoidance of doubt,
any indemnification obligations arising pursuant to contracts entered into in
the Ordinary Course of Business), whether directly or indirectly, including any
obligation of such Person under any (a) guaranty, endorsement, co-making or sale
with recourse of an obligation of a primary obligor; (b) obligation to make
take-or-pay or similar payments regardless of nonperformance by any other party
to an agreement; and (c) arrangement (i) to purchase any primary obligation or
security therefor, (ii) to supply funds for the purchase or payment of any
primary obligation, (iii) to maintain or assure working capital, equity capital,
net worth or solvency of the primary obligor, (iv) to purchase Property or
services for the purpose of assuring the ability of the primary obligor to
perform a primary obligation, or (v) otherwise to assure or hold harmless the
holder of any primary obligation against loss in respect thereof. The amount of
any Contingent Obligation shall be deemed to be the stated or determinable
amount of the primary obligation (or, if less, the maximum amount for which such
Person may be liable under the instrument evidencing the Contingent Obligation)
or, if not stated or determinable, the maximum reasonably anticipated liability
with respect thereto.
 
Controlled Deposit Account: a restricted deposit account established by Obligors
at Bank or another bank acceptable to Agent, subject to a Deposit Account
Control Agreement.
 
CWA: the Clean Water Act (33 U.S.C. §§ 1251 et seq.).
 
Debt: as applied to any Person, without duplication, (a) all items that would be
included as liabilities on a balance sheet in accordance with GAAP, including
Capital Leases, but excluding trade payables incurred and being paid in the
Ordinary Course of Business; (b) all Contingent Obligations; (c) all
reimbursement obligations in connection with letters of credit issued for the
account of such Person; and (d) in the case of an Obligor, the Obligations. The
Debt of a Person shall include any recourse Debt of any partnership in which
such Person is a general partner or joint venturer.
 
Default: an event or condition that, with the lapse of time or giving of notice,
would constitute an Event of Default.
 
Default Rate: for any Obligation (other than Secured Bank Product Obligations),
including, to the extent permitted by law, interest not paid when due, 2% plus
the interest rate otherwise applicable thereto.
 
Defaulting Lender: any Lender that, as determined by Agent, (a) has failed to
perform any funding obligations hereunder, and such failure is not cured within
two Business Days; (b) has notified Agent or any Borrower that such Lender does
not intend to comply with its funding obligations hereunder or under any other
credit facility, or has made a public statement to that effect; (c) has failed,
within three Business Days following request by Agent, to confirm in a manner
satisfactory to Agent and Borrowers that such Lender will comply with its
funding obligations hereunder; or (d) has, or has a direct or indirect parent
company that has, become the subject of an Insolvency Proceeding (including
reorganization, liquidation, or appointment of a receiver, custodian,
administrator or similar Person by the Federal Deposit Insurance Corporation or
any other regulatory authority) or Bail-In Action; or taken any action in
furtherance thereof provided, however, that a Lender shall not be a Defaulting
Lender solely by virtue of a Governmental Authority’s ownership of an equity
interest in such Lender or parent company unless the ownership provides immunity
for such Lender from jurisdiction of courts within the United States or from
enforcement of judgments or writs of attachment on its assets, or permits such
Lender or Governmental Authority to repudiate or otherwise to reject such
Lender’s agreements.
 
Deposit Account Control Agreement: control agreement satisfactory to Agent
executed by an institution maintaining a Deposit Account for an Obligor, to
perfect Agent’s Lien on such account.
 
Designated Jurisdiction: a country or territory that is the subject of a
Sanction.
 
Dilution Percent: the percent equal to (a) bad debt write-downs or write-offs,
discounts, returns, promotions, credits, credit memos and other dilutive items
with respect to Accounts, divided by (b) gross sales, as calculated by Agent in
its Permitted Discretion.
 
 
 

-5-

 
 
 
 
Disclosure Schedule: the disclosure schedule delivered by Borrower to Agent on
the Closing Date.
 
Distribution: any declaration or payment of a distribution, interest or dividend
on any Equity Interest (other than payment-in-kind); distribution, advance or
repayment of Debt to a holder of Equity Interests; or purchase, redemption, or
other acquisition or retirement for value of any Equity Interest.
 
Dollars: lawful money of the United States.
 
Dominion Account: a special account established by Borrowers at Bank or another
bank acceptable to Agent, over which Agent has exclusive control for withdrawal
purposes.
 
EBITDA: for any Person for any period of determination, the sum of (a) net
income ( or loss) of such Person for such period (excluding extraordinary gains
and losses), plus (b) all Interest Expense of such Person for such period, plus
(c) all charges against income of such Person for such period for federal, state
and local taxes, plus (d) all depreciation expenses of such Person for such
period, plus (e) all amortization expenses of such Person for such period, plus
(f) non-cash losses for such period, minus (g) non-cash gains for such period,
plus (h) all non-cash stock compensation expense of such Person for such period,
all as determined in accordance with GAAP. Notwithstanding the foregoing, EBITDA
of any Subsidiary that is not a wholly-owned subsidiary and is not an Obligor
shall be (1) included in the foregoing calculation solely to the extent of any
cash dividends or cash distributions received from such Subsidiary in the
applicable measurement period and (2) deducted in the foregoing calculation
solely to the extent of any cash contributions to such Subsidiary in the
applicable measurement period.
 
EEA Financial Institution: (a) any institution established in any EEA Member
Country which is subject to the supervision of an EEA Resolution Authority, (b)
any entity established in an EEA Member Country which is a parent of an
institution described in clause (a) of this definition, or (c) any institution
established in an EEA Member Country which is a subsidiary of an institution
described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent.
 
EEA Member Country: any of the member states of the European Union, Iceland,
Liechtenstein, and Norway.
 
EEA Resolution Authority: any public administrative authority or any Person
entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.
 
Eligible Account: an Account owing to a Borrower that arises in the Ordinary
Course of Business from the sale of goods or rendition of services, is payable
in Dollars and is deemed by Agent, in its Permitted Discretion, to be an
Eligible Account. Without limiting the foregoing, no Account shall be an
Eligible Account if:
 
(a) it is unpaid for more than (i) 60 days after the original due date or (ii)
(A) with respect to the Specified Extended Term Accounts, to the extent approved
by Agent in its discretion, 120 days after the original invoice date and (B)
with respect to all other Accounts, 90 days after the original invoice date;
 
(b) it is owing by an Account Debtor or its Affiliates for which more than 35%
of the Accounts owing by such Account Debtor or its Affiliates are not Eligible
Accounts under the foregoing clause (a);
 
(c) when aggregated with other Accounts owing by the applicable Account Debtor,
it exceeds 25% of the aggregate Eligible Accounts (or such higher percentage as
Agent may establish for the Account Debtor from time to time);
 
(d) it does not conform with a covenant or representation herein;
 
(e) it is owing by a creditor or supplier, or is otherwise subject to a
potential offset, counterclaim, dispute, deduction, discount, recoupment,
reserve, defense, chargeback, credit or allowance (but ineligibility shall be
limited to the amount thereof);
 
 
 

-6-

 
 
 
 
(f) an Insolvency Proceeding has been commenced by or against the Account
Debtor; or the Account Debtor has failed, has suspended or ceased doing
business, is liquidating, dissolving or winding up its affairs, is not Solvent,
or is subject to any Sanction or on any specially designated nationals list
maintained by OFAC; or the Borrower is not able to bring suit or enforce
remedies against the Account Debtor through judicial process;
 
(g) the Account Debtor is organized or has its principal offices or assets
outside the United States or Canada, unless the Account is supported by a letter
of credit (delivered to and directly drawable by Agent) or credit insurance
satisfactory in all respects to Agent;
 
(h) it is owing by a Governmental Authority, unless the Account Debtor is the
United States or any department, agency or instrumentality thereof and the
Account has been assigned to Agent in compliance with the federal Assignment of
Claims Act;
 
(i) it is not subject to a duly perfected, first priority Lien in favor of
Agent, or is subject to any other Lien which is, or may become, senior to, or
pari passu with, the Agent’s Lien on such Account;
 
(j) the goods giving rise to it have not been delivered to the Account Debtor,
the services giving rise to it have not been accepted by the Account Debtor, or
it otherwise does not represent a final sale;
 
(k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been
reduced to judgment;
 
(l) its payment has been extended or the Account Debtor has made a partial
payment;
 
(m) it arises from a sale to an Affiliate, from a sale on a cash-on-delivery,
bill-and-hold, sale-or-return, sale-on-approval, consignment, or other
repurchase or return basis, or from a sale for personal, family or household
purposes;
 
(n) it represents a progress billing or retainage, or relates to services for
which a performance, surety or completion bond or similar assurance has been
issued; or
 
(o) it includes a billing for interest, fees or late charges, but ineligibility
shall be limited to the extent thereof.
 
In calculating delinquent portions of Accounts under clauses (a) and (b), credit
balances more than 90 days old will be excluded.
 
Eligible Assignee: (a) a Lender, Affiliate of a Lender or Approved Fund; (b) an
assignee approved by Borrower Agent (which approval shall not be unreasonably
withheld or delayed, and shall be deemed given if no objection is made within
five Business Days after notice of the proposed assignment) and Agent; or (c)
during an Event of Default, any Person acceptable to Agent in its discretion.
 
Eligible Unbilled Account: at any time of determination, an Account owned by
Borrower which (a) arises out of the sale of goods that have been delivered by a
Borrower to and accepted by the Account Debtor, or the performance of services
that have been performed by a Borrower and accepted by the Account Debtor, in
each case, in the Ordinary Course of Business for which invoices have been (or
will be) created and submitted to the Account Debtor within 15 days after the
last day of the calendar month in which goods or services giving rise to such
accounts were delivered or performed, (b) is acceptable to Agent in its
Permitted Discretion for inclusion as an Eligible Unbilled Account, and (c)
satisfies all of the eligibility criteria set forth in the definition of
Eligible Account (except for Borrower’s delivery of an invoice with respect to
such Account to the Account Debtor).
 
Enforcement Action: any action to enforce any Obligations (other than Secured
Bank Product Obligations) or Loan Documents or to exercise any rights or
remedies relating to any Collateral, whether by judicial action, self-help,
notification of Account Debtors, setoff or recoupment, credit bid, deed in lieu
of foreclosure, action in an Insolvency Proceeding or otherwise.
 
 
 

-7-

 
 
 
 
Environmental Agreement: an agreement of an Obligor to indemnify Agent and
Lenders from liability under Environmental Laws with respect to Real Estate
subject to a Mortgage.
 
Environmental Laws: Applicable Laws (including programs, permits and guidance
promulgated by regulators) relating to public health (other than occupational
safety and health regulated by OSHA) or the protection or pollution of the
environment, including CERCLA, RCRA and CWA.
 
Environmental Notice: a notice (whether written or oral) from any Governmental
Authority or other Person of any possible noncompliance with, investigation of a
possible violation of, litigation relating to, or potential fine or liability
under any Environmental Law, or with respect to any Environmental Release,
environmental pollution or hazardous materials, including any complaint,
summons, citation, order, claim, demand or request for correction, remediation
or otherwise.
 
Environmental Release: a release as defined in CERCLA or under any other
Environmental Law.
 
Equity Interest: the interest of any (a) shareholder in a corporation; (b)
partner in a partnership (whether general, limited, limited liability or joint
venture); (c) member in a limited liability company; or (d) other Person having
any other form of equity security or ownership interest.
 
ERISA: the Employee Retirement Income Security Act of 1974.
 
ERISA Affiliate: any trade or business (whether or not incorporated) under
common control with an Obligor within the meaning of Section 414(b) or (c) of
the Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).
 
ERISA Event: (a) a Reportable Event with respect to a Pension Plan; (b)
withdrawal of an Obligor or ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) complete or
partial withdrawal of an Obligor or ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) filing of a
notice of intent to terminate, treatment of a Pension Plan amendment as a
termination under Section 4041 or 4041A of ERISA, or institution of proceedings
by the PBGC to terminate a Pension Plan; (e) determination that a Pension Plan
is considered an at-risk plan or a plan in critical or endangered status under
the Code or ERISA; (f) an event or condition that constitutes grounds under
Section 4042 of ERISA for termination of, or appointment of a trustee to
administer, any Pension Plan; (g) imposition of any liability on an Obligor or
ERISA Affiliate under Title IV of ERISA, other than for PBGC premiums due but
not delinquent under Section 4007 of ERISA; or (h) failure by an Obligor or
ERISA Affiliate to meet all applicable requirements under the Pension Funding
Rules in respect of a Pension Plan, whether or not waived, or to make a required
contribution to a Multiemployer Plan.
 
Eurodollar Reserve Percentage: for any day during any Interest Period, the
reserve percentage (expressed as a decimal, carried out to five decimal places)
in effect on such day, whether or not applicable to any Lender, under
regulations issued from time to time by the FRB for determining the maximum
reserve requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently referred to
as “Eurocurrency liabilities”). The LIBO Rate for each outstanding LIBOR Loan
shall be adjusted automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.
 
Event of Default: as defined in Section 11.1.
 
Excluded Accounts: (a) Deposit Accounts exclusively used for payroll, payroll
taxes or employee benefits, (b) any other Deposit Accounts with respect to which
other Deposit Accounts the aggregate amount on deposit therein or credited
thereto is not greater than $10,000, or (c) the Pledged PNC Account.
 
 
 

-8-

 
 
 
 
Excluded Property: (a) any lease, license, contract, property rights or
agreement to which an Obligor is a party (or to any of its rights or interests
thereunder) if the grant of the security interest granted pursuant to Section
7.1 would constitute or result in any of (i) the abandonment, invalidation or
unenforceability of any right, title or interest of such Obligor therein, (ii) a
breach or termination pursuant to the terms of, or a default under, any such
lease, license, contract, property rights or agreement (other than to the extent
that any such term would be rendered ineffective by Section 9-406, 9-407, 9-408
or 9-409 of the Uniform Commercial Code as in effect in the relevant
jurisdiction) or (iii) a breach of Applicable Law, regulation or order of any
court or any other governmental authority having jurisdiction over the
applicable Obligor, (b) any intent-to-use trademark application prior to the
filing of a “Statement of Use” or “Amendment to Allege Use” with respect
thereto, to the extent, if any, that and solely during the period, if any, in
which the grant of a security interest therein would impair the validity or
enforceability of such intent-to-use trademark application under applicable
federal law (after such period, such interest in such trademark or service mark
applications will become part of the Collateral); provided that at the time any
such intent-to-use trademark application matures into an actual use application
by such Grantor's receipt of written notification from the United States Patent
and Trademark Office of its acceptance of either a “Statement Of Use” or
“Amendment to Allege Use”, the Collateral shall include, and such Grantor shall
be deemed to have granted a security interest in, such actual use application;
and (c) assets owned by any Obligor on the date hereof or hereafter acquired and
any proceeds thereof that are subject to a Lien securing a purchase money
obligation or capital lease obligation permitted to be incurred pursuant to the
provisions of this Agreement to the extent and for so long as the contract or
other agreement in which such Lien is granted (or the documentation providing
for such purchase money obligation or capital lease obligation) validly
prohibits the creation of any other Lien on such assets and proceeds.
Notwithstanding anything to the contrary, Excluded Property shall not include
(x) any cash proceeds of any Excluded Property referred to above, or (y) any
noncash proceeds, substitutions or replacements of any Excluded Property
referred to above.
 
Excluded Swap Obligation: with respect to an Obligor, each Swap Obligation as to
which, and only to the extent that, such Obligor’s guaranty of or grant of a
Lien as security for such Swap Obligation is or becomes illegal under the
Commodity Exchange Act because the Obligor does not constitute an “eligible
contract participant” as defined in the Commodity Exchange Act (determined after
giving effect to any keepwell, support or other agreement for the benefit of
such Obligor and all guarantees of Swap Obligations by other Obligors) when such
guaranty or grant of Lien becomes effective with respect to the Swap Obligation.
If a Hedging Agreement governs more than one Swap Obligation, only the Swap
Obligation(s) or portions thereof described in the foregoing sentence shall be
Excluded Swap Obligation(s) for the applicable Obligor.
 
Excluded Taxes: (a) Taxes imposed on or measured by a Recipient’s net income
(however denominated), franchise Taxes and branch profits Taxes (i) as a result
of such Recipient being organized under the laws of, or having its principal
office or applicable Lending Office located in, the jurisdiction imposing such
Tax, or (ii) constituting Other Connection Taxes; (b) U.S. federal withholding
Taxes imposed on amounts payable to or for the account of a Lender with respect
to its interest in a Loan or Commitment pursuant to a law in effect when the
Lender acquires such interest (except pursuant to an assignment request by
Borrower Agent under Section 13.4) or changes its Lending Office, unless the
Taxes were payable to its assignor immediately prior to such assignment or to
the Lender immediately prior to its change in Lending Office; (c) Taxes
attributable to a Recipient’s failure to comply with Section 5.10; and (d) U.S.
federal withholding Taxes imposed pursuant to FATCA. In no event shall “Excluded
Taxes” include any withholding Tax imposed on amounts paid by or on behalf of a
foreign Obligor to a Recipient that has complied with Section 5.10.2.
 
Existing Lender: PNC Bank, National Association.
 
Existing Lender Documentation: all loan, collateral and related documentation
among Borrowers and Existing Lender as to Debt of Borrowers to Existing Lender.
 
Extraordinary Expenses: all costs, expenses or advances that Agent may incur in
connection with the transactions contemplated under the Loan Documents during a
Default or Event of Default, or during the pendency of an Insolvency Proceeding
of an Obligor, including those relating to (a) any audit, inspection,
repossession, storage, repair, appraisal, insurance, manufacture, preparation or
advertising for sale, sale, collection, or other preservation of or realization
upon any Collateral; (b) any action, arbitration or other proceeding (whether
instituted by or against Agent, any Lender, any Obligor, any representative of
creditors of an Obligor or any other Person) in any way relating to any
Collateral (including the validity, perfection, priority or avoidability of
Agent’s Liens with respect to any Collateral), Loan Documents or Obligations,
including any lender liability or other Claims; (c) the exercise, protection or
enforcement of any rights or remedies of Agent in, or the monitoring of, any
Insolvency Proceeding; (d) settlement or satisfaction of taxes, charges or Liens
with respect to any Collateral; (e) any Enforcement Action; (f) negotiation and
documentation of any modification, waiver, workout, restructuring or forbearance
with respect to any Loan Documents or Obligations; and (g) Protective Advances.
Such costs, expenses and advances include transfer fees, Other Taxes, storage
fees, insurance costs, permit fees, utility reservation and standby fees, legal
fees, appraisal fees, brokers’ fees and commissions and auctioneers’ fees and
commissions, accountants’ fees, environmental study fees, wages and salaries
paid to employees of any Obligor or independent contractors in liquidating any
Collateral, and travel expenses.
 
 
 

-9-

 
 
 
 
FATCA: Sections 1471 through 1474 of the Code (including any amended or
successor version if substantively comparable and not materially more onerous to
comply with), and any agreements entered into pursuant to Section 1471(b)(1) of
the Code.
 
Federal Funds Rate: for any day, the rate per annum equal to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank on the Business Day next succeeding such
day, provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, or (b) if no
such rate is published on such next succeeding Business Day, the Federal Funds
Rate for such day shall be the average rate (rounded upward, if necessary, to a
whole multiple of 1/100 of 1%) charged to the Agent or such day on such
transactions, as determined by Agent, in its sole discretion; provided, that in
no event shall such rate be less than zero.
 
Fiscal Quarter: each period of three months, commencing on the first day of a
Fiscal Year.
 
Fiscal Year: the fiscal year of Borrowers and Subsidiaries for accounting and
tax purposes, ending on December 31 of each year.
 
Fixed Charge Coverage Ratio: the ratio, determined on a consolidated basis for
Borrowers and Subsidiaries for the most recent 12 months, of (a) EBITDA minus
Capital Expenditures (except those financed with Borrowed Money other than
Revolver Loans) and cash taxes paid, to (b) Fixed Charges.
 
Fixed Charges: the sum of (without duplication) cash interest expense, scheduled
principal payments made on Borrowed Money, Distributions made, minimum required
contributions and other cash payments to Pension Plans required to be paid by
Applicable Law and which were paid in the Ordinary Course of Business and other
cash payments required to be paid by Applicable Law and which were paid in the
Ordinary Course of Business.
 
Flood Laws: all Applicable Laws relating to policies and procedures that address
requirements placed on federally regulated lenders under the National Flood
Insurance Reform Act of 1994 and other Applicable Laws related thereto.
 
FLSA: the Fair Labor Standards Act of 1938.
 
Foreign Lender: any Lender that is not a U.S. Person.
 
Foreign Plan: any employee benefit plan or arrangement (a) maintained or
contributed to by any Obligor or Subsidiary that is not subject to the laws of
the United States; or (b) mandated by a government other than the United States
for employees of any Obligor or Subsidiary.
 
Foreign Subsidiary: a Subsidiary that is a “controlled foreign corporation”
under Section 957 of the Code, such that a guaranty by such Subsidiary of the
Obligations or a Lien on the assets of such Subsidiary to secure the Obligations
would result in material tax liability to Borrowers.
 
FRB: the Board of Governors of the Federal Reserve System of the United States.
 
Fronting Exposure: a Defaulting Lender’s interest in Swingline Loans and
Protective Advances, except to the extent Cash Collateralized by the Defaulting
Lender or allocated to other Lenders hereunder.
 
Full Payment or Paid In Full: with respect to the Obligations or Guaranteed
Obligations, (a) with respect to the Obligations other than the Secured Bank
Product Obligations, the full cash payment thereof, including any interest, fees
and other charges accruing during an Insolvency Proceeding (whether or not
allowed in the proceeding) and (b) with respect to the Secured Bank Product
Obligations, either (i) the full cash payment thereof, including any interest,
fees and other charges accruing during an Insolvency Proceeding (whether or not
allowed in the proceeding), (ii) the termination or cancelation thereof in a
manner reasonably acceptable to the applicable Secured Bank Product Provider or
(iii) the Cash Collateralization thereof (or delivery of a standby letter of
credit acceptable to the applicable Secured Bank Product Provider in its
discretion in the amount of required Cash Collateral), to the extent required by
the applicable Secured Bank Product Provider. The Obligations (other than
Secured Bank Product Obligations) shall not be deemed to have been Paid in Full
unless all Commitments are terminated.
 
 
 

-10-

 
 
 
 
GAAP: generally accepted accounting principles in effect in the United States
from time to time.
 
Governmental Approvals: all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, and required reports to, all
Governmental Authorities.
 
Governmental Authority: any federal, state, local, foreign or other agency,
authority, body, commission, court, instrumentality, political subdivision,
central bank, or other entity or officer exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions for any
governmental, judicial, investigative, regulatory or self-regulatory authority
(including the Financial Conduct Authority, the Prudential Regulation Authority
and any supra-national bodies such as the European Union or European Central
Bank).
 
Guaranteed Obligations: as defined in Section 15.1.
 
Guarantor Payment: as defined in Section 5.11.3.
 
Guarantors: Autobytel, Inc., a Delaware corporation, AW GUA USA, Inc., a
Delaware corporation, Car.com, Inc., a Delaware corporation, and each other
Subsidiary that guarantees payment or performance of any portion of or all
Obligations.
 
Guaranty: the guaranty provided by each Guarantor hereunder and each other
guaranty agreement executed by a Guarantor in favor of Agent.
 
Hedging Agreement: a “swap agreement” as defined in Bankruptcy Code Section
101(53B)(A).
 
Indemnified Taxes: (a) Taxes, other than Excluded Taxes, imposed on or relating
to any payment of an Obligation; and (b) to the extent not otherwise described
in clause (a), Other Taxes.
 
Indemnitees: Agent Indemnitees and Lender Indemnitees.
 
Insolvency Proceeding: any case or proceeding commenced by or against a Person
under any state, federal or foreign law for, or any agreement of such Person to,
(a) the entry of an order for relief under the Bankruptcy Code, or any other
insolvency, debtor relief or debt adjustment law; (b) the appointment of a
receiver, trustee, liquidator, administrator, conservator or other custodian for
such Person or any part of its Property; or (c) an assignment or trust mortgage
for the benefit of creditors.
 
Intellectual Property: all intellectual and similar Property of a Person,
including inventions, designs, patents, copyrights, trademarks, service marks,
trade names, trade secrets, confidential or proprietary information, customer
lists, know-how, software and databases; all embodiments or fixations thereof
and all related documentation, applications, registrations and franchises; all
licenses or other rights to use any of the foregoing; and all books and records
relating to the foregoing.
 
Intellectual Property Claim: any claim or assertion (whether in writing, by suit
or otherwise) that an Obligor’s or Subsidiary’s ownership, use, marketing, sale
or distribution of any Inventory, Equipment, Intellectual Property or other
Property violates another Person’s Intellectual Property.
 
Interest Expense: with reference to any period, the cash interest expense (net
of cash interest income) of Borrowers and Subsidiaries calculated on a
consolidated basis for such period in accordance with GAAP.
 
Interest Income: for any period, the cash interest income of Borrowers and
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP.
 
Interest Period: a period that commences on (and includes) the first day of any
calendar month (or in the case of the calendar month in which the Closing Date
occurs, such period shall commence on the Closing Date) and ends on (and
includes) the last day of such calendar month.
 
 
 

-11-

 
 
 
 
Inventory: as defined in the UCC, including all goods intended for sale, lease,
display or demonstration; all work in process; and all raw materials, and other
materials and supplies of any kind that are or could be used in connection with
the manufacture, printing, packing, shipping, advertising, sale, lease or
furnishing of such goods, or otherwise used or consumed in an Obligor’s business
(but excluding Equipment).
 
Investment: an Acquisition, an acquisition of record or beneficial ownership of
any Equity Interests of a Person, or an advance or capital contribution to or
other investment in a Person.
 
IP Assignment: a collateral assignment or security agreement pursuant to which
an Obligor grants a Lien on its Intellectual Property to Agent, as security for
the Obligations.
 
IRS: the United States Internal Revenue Service.
 
Lender Indemnitees: Lenders and Secured Bank Product Providers, and their
officers, directors, employees, Affiliates, agents and attorneys.
 
Lenders: lenders party to this Agreement (including Agent in its capacity as
provider of Swingline Loans) and any Person who hereafter becomes a “Lender”
pursuant to an Assignment, including any Lending Office of the foregoing.
 
Lending Office: the office (including any domestic or foreign Affiliate or
branch) designated as such by a Lender by notice to Agent and Borrower Agent.
 
LIBOR: the London Interbank Offered Rate.
 
LIBO Base Rate:
 
(a) the rate per annum determined by Agent to be the offered rate that appears
on the applicable Bloomberg page (or on any successor or substitute page or
service providing quotations of interest rates applicable for deposits in
Dollars, determined as of approximately 11:45 a.m. (London time)) two (2)
Business Days prior to the first day of such Interest Period, or
 
(b) if the rate referenced in the preceding clause (a) does not appear through
such page or service or such page or service shall not be available, the rate
per annum equal to the rate determined by Agent to be the offered rate on the
applicable Bloomberg page (or on any successor or substitute page or service
providing quotations of interest rates applicable to dollar deposits in the
London interbank market comparable to those currently provided on such page, as
determined by the Agent from time to time), determined as of approximately 11:45
a.m. (London time) two (2) Business Days prior to the first day of such Interest
Period, or
 
(c) if the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum determined by Agent as the rate of interest at
which deposits in Dollars for delivery on the first day of such Interest Period
in same day funds in the approximate amount of the LIBOR Loan being made by
JPMorgan Chase Bank, N.A. and would be offered by JP Morgan Chase Bank, N.A.’s
London Branch (or such other major bank as is acceptable to Agent if JPMorgan
Chase Bank, N.A. is no longer offering to acquire or allow deposits in the
London interbank eurodollar market) to major banks in the London interbank
eurodollar market at their request at approximately 11:45 a.m. (London time) two
(2) Business Days prior to the first day of such Interest Period.
 
LIBO Rate: the greater of: (a) 1.75%; and (b) a rate per annum determined by
Agent to be equal to the quotient obtained by dividing (i) the LIBO Base Rate
for such LIBOR Loan for such Interest Period by (ii) one minus the Eurodollar
Reserve Percentage for such LIBOR Loan for such Interest Period; provided, that
at any time such rate has not been determined or agreed in accordance with
clause (a), (b) or (c) in the definition of LIBO Base Rate, the Loans shall bear
interest in reference to the Base Rate plus the Applicable Margin and the LIBO
Rate option shall not be available. The LIBO Rate shall be determined monthly,
two (2) Business Days prior to the commencement of each Interest Period and
shall be increased or decreased, as applicable, automatically and without notice
to any Person on the date of each such determination.
 
 
 

-12-

 
 
 
 
LIBOR Loan: means any Loan which accrues interest solely by reference to the
LIBO Rate plus the Applicable Margin, in accordance with the terms of this
Agreement.
 
LIBOR Screen Rate: the LIBOR quote on the applicable screen page Agent
designates to determine LIBOR (or such other commercially available source
providing such quotations as may be designated by Agent from time to time).
 
LIBOR Successor Rate: as defined in Section 3.6.2.
 
LIBOR Successor Rate Conforming Changes: with respect to any proposed LIBOR
Successor Rate, any conforming changes to the definition of Base Rate, LIBO Base
Rate, Interest Period, timing and frequency of determining rates and making
payments of interest and other administrative matters as may be appropriate, in
the discretion of Agent, to reflect the adoption of such LIBOR Successor Rate
and to permit the administration thereof by Agent in a manner substantially
consistent with market practice (or, if Agent determines that adoption of any
portion of such market practice is not administratively feasible or that no
market practice for the administration of such LIBOR Successor Rate exists, in
such other manner of administration as Agent determines in consultation with
Borrower Agent).
 
License: any license or agreement under which an Obligor is authorized to use
Intellectual Property in connection with any manufacture, marketing,
distribution or disposition of Collateral, any use of Property or any other
conduct of its business.
 
Licensor: any Person from whom an Obligor obtains the right to use any
Intellectual Property.
 
Lien: a Person’s interest in Property securing an obligation owed to, or a claim
by, such Person, including any lien, security interest, pledge, hypothecation,
assignment, trust, reservation, encroachment, easement, right-of-way, covenant,
condition, restriction, lease, or other title exception or encumbrance.
 
Lien Waiver: an agreement, in form and substance satisfactory to Agent, by which
(a) for any material Collateral located on leased premises, the lessor waives or
subordinates any Lien it may have on the Collateral, and agrees to permit Agent
to enter upon the premises and remove the Collateral or to use the premises to
store or dispose of the Collateral; (b) for any material Collateral held by a
warehouseman, processor, shipper, customs broker or freight forwarder, such
Person waives or subordinates any Lien it may have on the Collateral, agrees to
hold any Documents in its possession relating to the Collateral as agent for
Agent, and agrees to deliver the Collateral to Agent upon request; (c) for any
material Collateral held by a repairman, mechanic or bailee, such Person
acknowledges Agent’s Lien, waives or subordinates any Lien it may have on the
Collateral, and agrees to deliver the Collateral to Agent upon request; and (d)
for any material Collateral subject to a Licensor’s Intellectual Property
rights, the Licensor grants to Agent the right, vis-à-vis such Licensor, to
enforce Agent’s Liens with respect to the Collateral, including the right to
dispose of it with the benefit of the Intellectual Property, whether or not a
default exists under any applicable License.
 
Loan: a Revolver Loan or any other loan made under the terms of this Agreement.
 
Loan Documents: this Agreement, Other Agreements and Security Documents.
 
Loan Year: each 12 month period commencing on the Closing Date or an anniversary
thereof.
 
Margin Stock: as defined in Regulation U of the Board of Governors.
 
Material Adverse Effect: the effect of any event or circumstance that, taken
alone or in conjunction with other events or circumstances, (a) has or would be
reasonably expected to have a material adverse effect on the business,
operations, Properties or condition (financial or otherwise) of the Obligors,
taken as a whole, on the enforceability of any Loan Documents, or on the
validity or priority of Agent’s Liens on any Collateral; (b) impairs the ability
of an Obligor to perform its obligations under the Loan Documents, including
repayment of any Obligations; or (c) otherwise impairs the ability of Agent or
any Lender to enforce or collect any Obligations or to realize upon any
Collateral.
 
 
 

-13-

 
 
 
 
Material Contract: any agreement or arrangement to which an Obligor or
Subsidiary is party (other than the Loan Documents) (a) that is deemed to be a
material contract (other than management contracts or compensatory plans,
contracts or agreements) under any securities law applicable to such Person,
including the Securities Act of 1933; (b) for which breach, termination,
nonperformance or failure to renew would reasonably be expected to have a
Material Adverse Effect; or (c) that relates to Subordinated Debt, or to Debt in
an aggregate amount of $500,000 or more.
 
Minimum Balance: (a) for the period from the Closing Date through June 30, 2020,
$8,000,000 and (b) thereafter, 50% of the aggregate Revolver Commitments.
 
Moody’s: Moody’s Investors Service, Inc. or any successor acceptable to Agent.
 
Mortgage: a mortgage or deed of trust in which an Obligor grants a Lien on its
Real Estate to Agent, as security for its Obligations, in form and substance
acceptable to Agent.
 
Multiemployer Plan: any employee benefit plan of the type described in Section
4001(a)(3) of ERISA, to which an Obligor or ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five plan years, has
made or been obligated to make contributions.
 
Multiple Employer Plan: a Plan that has two or more contributing sponsors,
including an Obligor or ERISA Affiliate, at least two of whom are not under
common control, as described in Section 4064 of ERISA.
 
Net Proceeds: with respect to an Asset Disposition, proceeds (including, when
received, any deferred or escrowed payments) received by an Obligor or
Subsidiary in cash from such disposition, net of (a) reasonable and customary
costs and expenses actually incurred in connection therewith, including legal
fees and sales commissions; (b) amounts applied to repayment of Debt secured by
a Permitted Lien senior to Agent’s Liens on Collateral sold; (c) transfer or
similar taxes; and (d) reserves for indemnities, until such reserves are no
longer needed.
 
Notice of Borrowing: a request by Borrower Agent for a Borrowing of Revolver
Loans in accordance with Section 4.1.1.
 
Obligations: all (a) principal of and premium, if any, on the Loans, (b)
interest, expenses, fees, indemnification obligations, Extraordinary Expenses
and other amounts payable by Obligors under Loan Documents, (c) Secured Bank
Product Obligations, and (d) other Debts, obligations and liabilities of any
kind owing by Obligors pursuant to the Loan Documents, whether now existing or
hereafter arising, whether evidenced by a note or other writing, whether allowed
in any Insolvency Proceeding, whether arising from an extension of credit,
issuance of a letter of credit, acceptance, loan, guaranty, indemnification or
otherwise, and whether direct or indirect, absolute or contingent, due or to
become due, primary or secondary, or joint or several; provided, that
Obligations of an Obligor shall not include its Excluded Swap Obligations.
 
Obligor: each Borrower and each Guarantor.
 
OFAC: Office of Foreign Assets Control of the U.S. Treasury Department.
 
Ordinary Course of Business: the ordinary course of business of any Borrower or
Subsidiary, undertaken in good faith and consistent with Applicable Law and past
practices.
 
Organic Documents: with respect to any Person, its charter, certificate or
articles of incorporation, bylaws, articles of organization, limited liability
agreement, operating agreement, members agreement, shareholders agreement,
partnership agreement, certificate of partnership, certificate of formation,
voting trust agreement, or similar agreement or instrument governing the
formation or operation of such Person.
 
OSHA: the Occupational Safety and Hazard Act of 1970.
 
 
 

-14-

 
 
 
 
Other Agreement: each fee letter, Lien Waiver, Related Real Estate Documents,
Borrowing Base Report, Compliance Certificate, Borrower Materials, any
subordination agreement, or other note, document, instrument or agreement (other
than this Agreement or a Security Document) now or hereafter delivered by an
Obligor to Agent or a Lender in connection with any transactions relating
hereto.
 
Other Connection Taxes: Taxes imposed on a Recipient due to a present or former
connection between it and the taxing jurisdiction (other than connections
arising from the Recipient having executed, delivered, become party to,
performed obligations or received payments under, received or perfected a Lien
or engaged in any other transaction pursuant to, enforced, or sold or assigned
an interest in, any Loan or Loan Document).
 
Other Taxes: all present or future stamp, court, documentary, intangible,
recording, filing or similar Taxes that arise from any payment made under, from
the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a Lien under, or otherwise with respect to, any Loan
Document, except Other Connection Taxes imposed with respect to an assignment
(other than an assignment made pursuant to Section 13.4(c)).
 
Participant: as defined in Section 13.2.
 
Patriot Act: the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No.
107-56, 115 Stat. 272 (2001).
 
 Payment Conditions: at the time of determination with respect to with respect
to any applicable payment or Distribution, the following, in each case as
determined by the Agent in its Permitted Discretion:
 
(a) no Default or Event of Default has occurred and is continuing or would
result after giving effect thereto on a pro forma basis;
 
(b) Availability is at least $5,000,000 (i) at all times during the sixty (60)
day period immediately prior thereto, and (ii) on a pro forma basis after giving
effect thereto, at all times during the sixty (60) day period thereafter;
 
(c) the Fixed Charge Coverage Ratio as of the end of the most recently ended
twelve (12) month period is not less than 1.2 to 1.0, before and after giving
effect thereto on a pro forma basis; and
 
(d) the Agent shall receive a certificate of a Senior Officer of the Borrower
Agent demonstrating satisfaction of the foregoing conditions in reasonable
detail prior to consummation thereof.
 
Payment Item: each check, draft or other item of payment payable to a Borrower,
including those constituting proceeds of any Collateral.
 
PBGC: the Pension Benefit Guaranty Corporation.
 
Pension Funding Rules: Code and ERISA rules regarding minimum required
contributions (including installment payments) to Pension Plans set forth in,
for plan years ending prior to the Pension Protection Act of 2006 effective
date, Section 412 of the Code and Section 302 of ERISA, both as in effect prior
to such act, and thereafter, Sections 412, 430, 431, 432 and 436 of the Code and
Sections 302, 303, 304 and 305 of ERISA.
 
Pension Plan: any employee pension benefit plan (as defined in Section 3(2) of
ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA
and is sponsored or maintained by any Obligor Subsidiary or ERISA Affiliate or
to which the Obligor or ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a Multiple Employer Plan or other plan described
in Section 4064(a) of ERISA, has made contributions at any time during the
preceding five plan years.
 
 
 

-15-

 
 
 
 
Permitted Acquisition: (a) an Acquisition by a Borrower undertaken with the
prior written approval of Agent and (b) any other Acquisition by a Borrower
where:
 
(i) the Person or business to be acquired shall be, or shall be engaged in the
same or a reasonably related line of business as the Obligors;
 
(ii) immediately before and after giving effect to such acquisition, no Default
or Event of Default shall exist;
 
(iii) the acquisition consideration for any individual acquisition (or series of
related acquisitions) shall not exceed $5,000,000, and the aggregate amount of
the acquisition consideration for all Permitted Acquisitions after the Closing
Date shall not exceed $10,000,000;
 
(iv) immediately after giving effect to such acquisition on a pro forma basis,
the Fixed Charge Coverage Ratio as of the end of the most recently ended twelve
(12) month period is not less than 1.0 to 1.0 (calculated as if such acquisition
had occurred on the first day of such trailing twelve (12) month period);
 
(v) not less than fifteen (15) Business Days prior to such acquisition (or such
later date approved by Agent in its sole discretion), Agent shall have received
(A) a reasonably detailed description of such acquisition, including, financial
information and operating results (including financial statements for the most
recent twelve (12) month period if available and projections with respect to the
Person or business to be acquired for no less than a twelve (12) month period),
and the terms and conditions, including economic terms, of the proposed
acquisition and (B) copies of each material document, instrument and agreement
to be executed in connection with such acquisition, together with any lien
search reports and lien release letters and other documents to evidence the
termination of any Liens in connection with such acquisition as Agent may
reasonably request;
 
(vi) Availability plus Qualified Cash (but excluding any amounts included in the
Cash Formula Amount in the Borrowing Base) of the Borrowers shall be at least
$5,000,000 on a pro forma basis (A) at all times during the thirty (30) day
period immediately prior thereto, and (B) at all times during the thirty (30)
day period thereafter (as demonstrated by Borrowers in a manner reasonably
satisfactory to Agent); and
 
(vii) the assets being acquired (other than a de minimis amount of assets in
relation to the Obligors’ total assets) are located within the United States of
America, or the Person whose equity interests are being acquired is organized in
a jurisdiction located within the United States of America.
 
Permitted Asset Disposition: (a) as long as any Net Proceeds are remitted to a
Dominion Account in accordance with this Agreement, an Asset Disposition that is
(i) a sale of Inventory in the Ordinary Course of Business; (ii) a disposition
of Equipment in connection with Borrower’s relocation to new office space in
California during the first Loan Year; or (iii) a disposition of Equipment that,
in the aggregate during any 12 month period, has a fair market or book value
(whichever is more) of $200,000 or less; and (b) as long as no Default or Event
of Default exists and any Net Proceeds are remitted to a Dominion Account in
accordance with this Agreement, an Asset Disposition that is (i) a disposition
of Inventory that is obsolete, unmerchantable or otherwise unsalable in the
Ordinary Course of Business; (ii) a disposition or transfer of surplus, obsolete
or worn-out Equipment; (iii) termination of a lease of real or personal Property
that is not necessary for the Ordinary Course of Business, would not reasonably
be expected to have a Material Adverse Effect and does not result from an
Obligor’s default; (iv) the disposition of Intellectual Property (including
domain names) to the extent not material to the business of the Obligors; (v)
the licensing of Intellectual Property rights on a non-exclusive basis in the
Ordinary Course of Business; (vi) the sale or discount, in each case without
recourse, of Accounts (not constituting Eligible Accounts) in the Ordinary
Course of Business, but only in connection with the compromise or collection
thereof; (vii) the leasing or subleasing of assets of any Obligor in the
Ordinary Course of Business; (viii) a transfer of assets to an Obligor or to any
Subsidiary of an Obligor; (ix) a disposition of other assets with proceeds in an
amount not to exceed $500,000 in the aggregate after the Closing Date; and (x)
approved in writing by Agent and Required Lenders.
 
 
 

-16-

 
 
 
 
Permitted Contingent Obligations: Contingent Obligations (a) arising from
endorsements of Payment Items for collection or deposit in the Ordinary Course
of Business; (b) arising from Hedging Agreements permitted hereunder; (c)
existing on the Closing Date, and any extension or renewal thereof that does not
increase the amount of such Contingent Obligation when extended or renewed; (d)
incurred in the Ordinary Course of Business with respect to surety, appeal or
performance bonds, or other similar obligations; (e) arising from customary
indemnification obligations in favor of purchasers in connection with
dispositions of Equipment permitted hereunder; (f) arising under the Loan
Documents; or (g) in an aggregate amount of $100,000 or less at any time.
 
Permitted Discretion: a determination made in good faith and in the exercise
(from the perspective of a secured asset-based lender) of commercially
reasonable business judgment.
 
Permitted Lien: as defined in Section 10.2.2. The designation of a Lien as a
“Permitted Lien” shall not limit or restrict the ability of Agent to establish
an Availability Reserve relating thereto in accordance with the provisions
hereof.
 
Permitted Purchase Money Debt: Purchase Money Debt of Obligors and Subsidiaries
that is unsecured or secured only by a Purchase Money Lien, as long as the
aggregate amount does not exceed $500,000 at any time and its incurrence does
not violate Section 10.2.3.
 
Person: any individual, corporation, limited liability company, partnership,
joint venture, association, trust, unincorporated organization, Governmental
Authority or other entity.
 
Plan: an employee benefit plan (as defined in Section 3(3) of ERISA) maintained
for employees of an Obligor or ERISA Affiliate, or to which an Obligor or ERISA
Affiliate is required to contribute on behalf of its employees.
 
Platform: as defined in Section 14.3.3.
 
Pledged PNC Account: the deposit account maintained with PNC Bank, National
Association and pledged thereto to secure the Obligors’ commercial credit card
and merchant card services with PNC Bank, National Association or its
Affiliates.
 
Prepayment Fee: as defined in the Closing Date Fee Letter.
 
Pro Rata: with respect to any Lender, a percentage (rounded to the ninth decimal
place) determined (a) by dividing the amount of such Lender’s Revolver
Commitment by the aggregate outstanding Revolver Commitments; or (b) following
termination of the Revolver Commitments, by dividing the amount of such Lender’s
Loans by the aggregate outstanding Loans or, if all Loans have been paid in
full, by dividing such Lender’s and its Affiliates’ remaining Obligations by the
aggregate remaining Obligations.
 
Properly Contested: with respect to any obligation of an Obligor, (a) the
obligation is subject to a bona fide dispute regarding amount or the Obligor’s
liability to pay; (b) the obligation is being properly contested in good faith
by appropriate proceedings promptly instituted and diligently pursued; (c)
appropriate reserves have been established in accordance with GAAP; (d)
non-payment would not have a Material Adverse Effect, nor result in forfeiture
or sale of any assets of the Obligor; (e) no Lien having priority over Agent’s
Lien is imposed on assets of the Obligor, unless bonded and stayed to the
satisfaction of Agent; and (f) if the obligation results from entry of a
judgment or other order, such judgment or order is stayed pending appeal or
other judicial review.
 
Property: any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible.
 
Protective Advances: as defined in Section 2.1.5.
 
Purchase Money Debt: (a) Debt (other than the Obligations) for payment of any of
the purchase price of fixed assets (other than Real Estate); (b) Debt (other
than the Obligations) incurred within 90 days before or after acquisition of any
fixed assets (other than Real Estate), for the purpose of financing any of the
purchase price thereof; and (c) any renewals, extensions or refinancings (but
not increases) thereof.
 
 
 

-17-

 
 
 
 
Purchase Money Lien: a Lien that secures Purchase Money Debt, encumbering only
the fixed assets acquired with such Debt and constituting a Capital Lease or a
purchase money security interest under the UCC.
 
Qualified Cash: unrestricted domestic cash of the Borrowers in which Agent has a
first priority perfected Lien.
 
Qualified ECP: an Obligor with total assets exceeding $10,000,000, or that
constitutes an “eligible contract participant” under the Commodity Exchange Act
and can cause another Person to qualify as an “eligible contract participant”
under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
 
RCRA: the Resource Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i).
 
Real Estate: all right, title and interest (whether as owner, lessor or lessee)
in any real Property or any buildings, structures, parking areas or other
improvements thereon.
 
Recipient: Agent, any Lender or any other recipient of a payment to be made by
an Obligor under a Loan Document or on account of an Obligation.
 
Refinancing Conditions: (a) the Refinancing Debt is in an aggregate principal
amount that does not exceed the principal amount of the Debt being extended,
renewed or refinanced; (b) it has a final maturity no sooner than, a weighted
average life no less than, and an interest rate no greater than, the Debt being
extended, renewed or refinanced; (c) it is subordinated to the Obligations at
least to the same extent as the Debt being extended, renewed or refinanced; (d)
the representations, covenants and defaults applicable to it are no less
favorable to Borrowers than those applicable to the Debt being extended, renewed
or refinanced; (e) no additional Lien is granted to secure it; (f) no additional
Person is obligated on such Debt; and (g) upon giving effect to it, no Default
or Event of Default exists.
 
Refinancing Debt: Borrowed Money that is the result of an extension, renewal or
refinancing of Debt permitted under Section 10.2.1(b), (d) or (f).
 
Related Real Estate Documents: with respect to any Real Estate subject to a
Mortgage, the following, in form and substance satisfactory to Agent and
received by Agent for review at least 15 days prior to the effective date of the
Mortgage: (a) a mortgagee title policy (or binder therefor) covering Agent’s
interest under the Mortgage, by an insurer acceptable to Agent, which must be
fully paid on such effective date; (b) such assignments of leases, estoppel
letters, attornment agreements, consents, waivers and releases as Agent may
require with respect to other Persons having an interest in the Real Estate; (c)
a current, as-built survey of the Real Estate, containing a metes-and-bounds
property description and certified by a licensed surveyor acceptable to Agent;
(d) a life-of-loan flood hazard determination and, if the Real Estate is located
in a special flood hazard area, an acknowledged notice to borrower and real
property and contents flood insurance acceptable to Agent; (e) a current
appraisal of the Real Estate, prepared by an appraiser acceptable to Agent, and
in form and substance satisfactory to Agent; (f) an environmental assessment,
prepared by environmental engineers acceptable to Agent, and such other reports,
certificates, studies or data as Agent may reasonably require, all in form and
substance satisfactory to Agent; and (g) an Environmental Agreement and such
other documents, instruments or agreements as Agent may reasonably require with
respect to any environmental risks regarding the Real Estate.
 
Rent and Charges Reserve: the aggregate of (a) all past due rent and other
amounts owing by an Obligor to any landlord, warehouseman, processor, repairman,
mechanic, shipper, freight forwarder, broker or other Person who possesses any
Collateral or could assert a Lien on any Collateral; and (b) a reserve at least
equal to three months’ rent and other charges that could be payable to any such
Person, unless it has executed a Lien Waiver.
 
Report: as defined in Section 12.2.3.
 
Reportable Event: any event set forth in Section 4043(c) of ERISA, other than an
event for which the 30 day notice period has been waived.
 
 
 

-18-

 
 
 
 
Required Lenders: Secured Parties holding more than 50% of (a) the aggregate
outstanding Revolver Commitments; or (b) after termination of the Revolver
Commitments, the aggregate outstanding Loans or, upon Full Payment of all Loans,
the aggregate remaining Obligations; provided, however, (i) that Commitments,
Loans and other Obligations held by Defaulting Lender and its Affiliates shall
be disregarded in making such calculation, but any related Fronting Exposure
shall be deemed held as a Loan by the Lender that funded the applicable Loan,
and (ii) at any time there are two (2) or more Secured Parties, “Required
Lenders” must include at least two (2) Secured Parties who are not Affiliates of
one another).
 
Restricted Investment: any Investment by an Obligor or Subsidiary, other than
(a) Investments in an Obligor; (b) Investments in a Subsidiary of an Obligor not
exceeding $300,000 in the aggregate after the Closing Date; (c) Cash Equivalents
that are subject to Agent’s Lien and control, pursuant to documentation in form
and substance satisfactory to Agent; (d) advances to an officer or employee for
salary, travel expenses, commissions and similar items in the Ordinary Course of
Business; (e) prepaid expenses and extensions of trade credit made in the
Ordinary Course of Business; (f) deposits with financial institutions permitted
hereunder, (g) Investments received with respect to Collateral other than
Eligible Accounts or Eligible Unbilled Accounts in satisfaction or partial
satisfaction of Accounts owing by financially troubled account debtors to the
extent reasonably necessary to prevent or limit loss; (h) Permitted
Acquisitions; and (i) other Investments not exceeding $100,000 in the aggregate
after the Closing Date.
 
Restrictive Agreement: an agreement (other than a Loan Document) that conditions
or restricts the right of any Borrower, Subsidiary or other Obligor to incur or
repay Borrowed Money, to grant Liens on any assets, to declare or make
Distributions, to modify, extend or renew any agreement evidencing Borrowed
Money, or to repay any intercompany Debt.
 
Revolver Commitment: for any Lender, its obligation to make Revolver Loans up to
the maximum principal amount shown on Schedule 1.1(a) attached hereto, as
hereafter modified pursuant to an Assignment to which it is a party. “Revolver
Commitments” means the aggregate amount of such commitments of all Lenders. The
aggregate Revolver Commitments on the Closing Date are $20,000,000.
 
Revolver Loan: any loan made pursuant to Section 2.1 or as a Swingline Loan.
 
Revolver Termination Date: March 26, 2023
 
Revolver Usage: the aggregate amount of outstanding Revolver Loans.
 
S&P: Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill
Companies, Inc., or any successor acceptable to Agent.
 
Sanction: any sanction administered or enforced by the U.S. Government
(including OFAC), United Nations Security Council, European Union, Her Majesty’s
Treasury or other sanctions authority.
 
Secured Bank Product Obligations: Debt, obligations and other liabilities with
respect to Bank Products owing by an Obligor or Subsidiary to a Secured Bank
Product Provider; provided, that Secured Bank Product Obligations of an Obligor
shall not include its Excluded Swap Obligations.
 
Secured Bank Product Provider: (a) the Bank, the Agent and any of their
respective Affiliates; and (b) any other Lender or Affiliate of a Lender that is
providing a Bank Product, provided such provider delivers written notice to
Agent, in form and substance satisfactory to Agent, within 10 days following the
later of the Closing Date or creation of the Bank Product, (i) describing the
Bank Product and setting forth the maximum amount to be secured by the
Collateral and the methodology to be used in calculating such amount, and (ii)
agreeing to be bound by Section 12.13.
 
Secured Parties: Agent, Lenders and Secured Bank Product Providers.
 
Security Documents: the Guaranties, Mortgages, IP Assignments, Deposit Account
Control Agreements, and all other documents, instruments and agreements now or
hereafter securing (or given with the intent to secure) any Obligations.
 
 
 

-19-

 
 
 
 
Senior Officer: the president, chief executive officer or chief financial
officer of a Borrower or, if the context requires, an Obligor.
 
Settlement Report: a report summarizing Revolver Loans outstanding as of a given
settlement date, allocated to Lenders on a Pro Rata basis in accordance with
their Revolver Commitments.
 
Solvent: as to any Person, such Person (a) owns Property whose fair salable
value is greater than the amount required to pay all of its debts (including
contingent, subordinated, unmatured and unliquidated liabilities); (b) owns
Property whose present fair salable value (as defined below) is greater than the
probable total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities) of such Person as they become absolute and matured;
(c) is able to pay all of its debts as they mature; (d) has capital that is not
unreasonably small for its business and is sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage; (e) is not “insolvent” within the meaning of Section 101(32) of the
Bankruptcy Code; and (f) has not incurred (by way of assumption or otherwise)
any obligations or liabilities (contingent or otherwise) under any Loan
Documents, or made any conveyance in connection therewith, with actual intent to
hinder, delay or defraud either present or future creditors of such Person or
any of its Affiliates. “Fair salable value” means the amount that could be
obtained for assets within a reasonable time, either through collection or
through sale under ordinary selling conditions by a capable and diligent seller
to an interested buyer who is willing (but under no compulsion) to purchase.
 
Specified Extended Term Accounts: Accounts where Carat USA, Inc., is the Account
Debtor (so long as such Account Debtor continues to be acceptable to Agent in
its Permitted Discretion based on the then current credit and risk profile of
such Account Debtor) and which have payment terms equal to or greater than 60
days.
 
Specified Obligor: an Obligor that is not then an “eligible contract
participant” under the Commodity Exchange Act (determined prior to giving effect
to Section 5.11).
 
Specified Permitted Lien: Liens described in Section 10.2.2(a), (c), (d), (g),
(j), (l), and (m).
 
Subordinated Debt: Debt incurred by a Borrower that is expressly subordinate and
junior in right of payment to Full Payment of all Obligations, and is on terms
(including maturity, interest, fees, repayment, covenants and subordination)
satisfactory to Agent, and, if applicable, the Liens as to any Collateral
securing such Debt have been subordinated to the Liens therein of Agent pursuant
to documentation in form and substance satisfactory to Agent, in its sole
discretion.
 
Subsidiary: any entity more than 50% of whose voting securities or Equity
Interests is owned by an Obligor or combination of Obligors (including indirect
ownership through other entities in which an Obligor directly or indirectly owns
more than 50% of the voting securities or Equity Interests).
 
Swap Obligations: with respect to an Obligor, its obligations under a Hedging
Agreement that constitutes a “swap” within the meaning of Section 1a(47) of the
Commodity Exchange Act.
 
Swingline Loan: any Borrowing of Revolver Loans funded with Agent’s funds, until
such Borrowing is settled among Lenders or repaid by Borrowers. Swingline Loans
shall be funded as Revolver Loans and shall be subject to the sublimit in
Section 4.1.3(a).
 
Taxes: all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.
 
Transactions: collectively, (a) the execution, delivery and performance by the
Obligors of the Loan Documents to which they are a party and the making of the
Loans hereunder, (b) the repayment of all amounts due or outstanding under the
Existing Lender Documentation, and (c) the payment of all related costs, fees
and expenses.
 
Transferee: any actual or potential Eligible Assignee, Participant or other
Person acquiring an interest in any Obligations.
 
 
 

-20-

 
 
 
 
UCC: the Uniform Commercial Code as in effect in the State of New York or, when
the laws of any other jurisdiction govern the perfection or enforcement of any
Lien, the Uniform Commercial Code of such jurisdiction.
 
Unbilled Accounts Formula Amount: the lesser of (a) $5,000,000 and (b) up to 75%
of the Value of Eligible Unbilled Accounts billed, in each case, subject to
Agent’s Permitted Discretion; provided, however, that such percentage shall be
reduced by 1.0% for each percentage point (or portion thereof) that the Dilution
Percent exceeds 5.0%.
 
Unused Line Fee Rate: a per annum rate equal to 0.50%.
 
Upstream Payment: a Distribution by a Subsidiary of an Obligor to such Obligor.
 
U.S. Person: “United States Person” as defined in Section 7701(a)(30) of the
Code.
 
U.S. Tax Compliance Certificate: as defined in Section 5.10.2(b)(iii).
 
Value: (a) for Inventory, its value determined on the basis of the lower of cost
or market, calculated on a first-in, first-out basis, and excluding any portion
of cost attributable to intercompany profit among Borrowers and their
Affiliates; and (b) for an Account, its face amount, net of any returns,
rebates, discounts (calculated on the shortest terms), credits, allowances or
Taxes (including sales, excise or other taxes) that have been or could be
claimed by the Account Debtor or any other Person.
 
1.2 Accounting Terms. Under the Loan Documents (except as otherwise specified
therein), all accounting terms shall be interpreted, all accounting
determinations shall be made, and all financial statements shall be prepared, in
accordance with GAAP applied on a basis consistent with the most recent audited
financial statements of Borrowers delivered to Agent before the Closing Date and
using the same inventory valuation method as used in such financial statements,
except for any change required or permitted by GAAP if Borrowers’ certified
public accountants concur in such change, the change is disclosed to Agent, and
all relevant provisions of the Loan Documents are amended in a manner
satisfactory to Required Lenders to take into account the effects of the change.
 
1.3 Uniform Commercial Code. As used herein, the following terms are defined in
accordance with the UCC. “Account,” “Account Debtor,” “Chattel Paper,”
“Commercial Tort Claim,” “Deposit Account,” “Document,” “Equipment,” “General
Intangibles,” “Goods,” “Instrument,” “Investment Property,” “Letter-of-Credit
Right” and “Supporting Obligation.”
 
1.4 Certain Matters of Construction. The terms “herein,” “hereof,” “hereunder”
and other words of similar import refer to this Agreement as a whole and not to
any particular section, paragraph or subdivision. Any pronoun used shall be
deemed to cover all genders. In the computation of periods of time from a
specified date to a later specified date, “from” means “from and including,” and
“to” and “until” each mean “to but excluding.” The terms “including” and
“include” shall mean “including, without limitation” and, for purposes of each
Loan Document, the parties agree that the rule of ejusdem generis shall not be
applicable to limit any provision. Section titles appear as a matter of
convenience only and shall not affect the interpretation of any Loan Document.
All references to (a) laws include all related regulations, interpretations,
supplements, amendments and successor provisions; (b) any document, instrument
or agreement include any amendments, waivers and other modifications, extensions
or renewals (to the extent permitted by the Loan Documents); (c) any section
mean, unless the context otherwise requires, a section of this Agreement; (d)
any exhibits or schedules mean, unless the context otherwise requires, exhibits
and schedules attached hereto, which are hereby incorporated by reference; (e)
any Person include successors and assigns; (f) time of day means the time of day
in New York, New York; or (g) discretion (but not, for the avoidance of doubt,
Permitted Discretion) of Agent or any Lender means the sole and absolute
discretion of such Person exercised at any time. All references to Value,
Borrowing Base components, Loans, Obligations and other amounts herein shall be
denominated in Dollars, unless expressly provided otherwise, and all
determinations (including calculations of Borrowing Base and financial
covenants) made from time to time under the Loan Documents shall be made in
light of the circumstances existing at such time. Borrowing Base calculations
shall be consistent with historical methods of valuation and calculation, and
otherwise satisfactory to Agent (and not necessarily calculated in accordance
with GAAP). Borrowers shall have the burden of establishing any alleged
negligence, misconduct or lack of good faith by Agent or any Lender under any
Loan Documents. No provision of any Loan Documents shall be construed against
any party by reason of such party having, or being deemed to have, drafted the
provision. Reference to a Borrower’s “knowledge” or similar concept means actual
knowledge of a Senior Officer, or knowledge that a Senior Officer would have
obtained if he or she had engaged in good faith and diligent performance of his
or her duties, including reasonably specific inquiries of employees or agents
and a good faith attempt to ascertain the matter.
 
 
 

-21-

 
 
 
 
1.5 Divisions. For all purposes under the Loan Documents, in connection with any
division or plan of division under the Delaware Limited Liability Company Act
(or any comparable event under a different jurisdiction’s laws): (a) if any
asset, right, obligation or liability of any Obligor that is a limited liability
company becomes the asset, right, obligation or liability of a different
Obligor, then it shall be deemed to have been transferred from the original
Obligor to the subsequent Obligor, and (b) if any new Obligor comes into
existence, such new Obligor shall be deemed to have been organized on the first
date of its existence by the holders of its equity interests at such time.
 
1.6 Notice to Borrower Agent. In the event that Agent (a) increases or decreases
the percentages applied to the Value of Eligible Accounts or Eligible Unbilled
Accounts as set forth in the definitions of “Accounts Formula Amount” and
“Unbilled Accounts Formula Amount,” as applicable, (b) establishes Availability
Reserves, (c) increases or decreases the percentages set forth in clause (b) of
the definition of “Eligible Account” or (d) otherwise establishes criteria for
Eligible Accounts as set forth in clause (o) of the definition of “Eligible
Accounts,” then, so long as no Default or Event of Default exists and is
continuing, the Agent shall give Borrower Agent as much prior written notice as
is possible (but in any event no less than three (3) Business Days’ notice) of
the proposed changes. Each Borrower consents to any such increases or decreases,
Availability Reserves and other criteria and acknowledges that such actions may
limit or restrict the amount of Revolving Loans requested by Borrowings.
 
SECTION 2. CREDIT FACILITIES
 
2.1 Revolver Commitment.
 
2.1.1 Revolver Loans. Each Lender agrees, severally on a Pro Rata basis up to
its Revolver Commitment, on the terms set forth herein, to make Revolver Loans
to Borrowers from time to time through the Commitment Termination Date. The
Revolver Loans may be repaid and reborrowed as provided herein. In no event
shall Lenders have any obligation to honor a request for a Revolver Loan if
Revolver Usage at such time plus the requested Loan would exceed the Borrowing
Base. Notwithstanding the foregoing, and subject to Sections 5.2 and 5.7,
Borrowers shall at all times maintain Revolver Usage in an amount equal to or
greater than the Minimum Balance.
 
2.1.2 Notes. Loans and interest accruing thereon shall be evidenced by the
records of Agent and the applicable Lender. At the request of a Lender,
Borrowers shall deliver promissory note(s) to such Lender, evidencing its Loans.
 
2.1.3 Use of Proceeds. The proceeds of Revolver Loans shall be used by Borrowers
solely (a) to satisfy existing Debt held by the Existing Lender; (b) to pay fees
and transaction expenses associated with the closing of this credit facility;
(c) to pay Obligations in accordance with this Agreement; and (d) for lawful
corporate purposes of Borrowers, including working capital. Borrowers shall not,
directly or indirectly, use any Loan proceeds, nor use, lend, contribute or
otherwise make available Loan proceeds to any Subsidiary, joint venture partner
or other Person, (i) to fund any activities of or business with any Person, or
in any Designated Jurisdiction, that, at the time of funding of the Loan, is the
subject of any Sanction; (ii) in any manner that would result in a violation of
a Sanction by any Person (including any Secured Party or other individual or
entity participating in any transaction); or (iii) for any purpose that would
breach the U.S. Foreign Corrupt Practices Act of 1977, UK Bribery Act 2010 or
similar law in any jurisdiction.
 
2.1.4 Voluntary Reduction or Termination of Revolver Commitments.
 
(a) The Revolver Commitments shall terminate on the Revolver Termination Date,
unless sooner terminated in accordance with this Agreement. Upon at least 15
days’ prior written notice to Agent at any time, Borrowers may, at their option,
terminate the Revolver Commitments and this credit facility. Any notice of
termination given by Borrowers shall be irrevocable. On the termination date,
Borrowers shall make Full Payment of all Obligations, including the applicable
Prepayment Fee, if any.
 
 
 

-22-

 
 
(b) Borrowers may permanently reduce the Revolver Commitments on a ratable basis
for all Lenders to an aggregate amount of not less than $15,000,000, upon at
least 15 days’ prior written notice to Agent, which notice shall specify the
amount of the reduction and shall be irrevocable once given. Each reduction
shall be in a minimum amount of $1,000,000, or an increment of $1,000,000 in
excess thereof. Any such reduction shall be accompanied by the payment of the
applicable Prepayment Fee, if any.
 
2.1.5 Protective Advances. Agent shall be authorized, in its discretion, at any
time, to make Revolver Loans (“Protective Advances”) (a) if Agent deems such
Loans necessary or desirable to preserve or protect Collateral, or to enhance
the collectability or repayment of Obligations, as long as such Loans do not
cause Revolver Usage to exceed the aggregate Revolver Commitments; or (b) to pay
any other amounts chargeable to Obligors under any Loan Documents, including
interest, costs, fees and expenses. Lenders shall participate on a Pro Rata
basis in Protective Advances outstanding from time to time. Required Lenders may
at any time revoke Agent’s authority to make further Protective Advances under
clause (a) by written notice to Agent. Absent such revocation, Agent’s
determination that funding of a Protective Advance is appropriate shall be
conclusive.
 
SECTION 3. INTEREST, FEES AND CHARGES
 
3.1 Interest.
 
3.1.1 Rates and Payment of Interest.
 
(a) The Obligations (other than Secured Bank Product Obligations) shall bear
interest at a rate per annum equal to the LIBO Rate plus the Applicable Margin
(except as may be provided by the definition of LIBO Rate or Section 3.1.2,
Section 3.5 or Section 3.6). Subject to Section 3.1.2, Section 3.5 or Section
3.6, and except as set forth in the definition of LIBO Rate, all Loans shall be
LIBOR Loans.
 
(b) During an Insolvency Proceeding with respect to any Borrower, or during any
other Event of Default if Agent or Required Lenders in their discretion so
elect, Obligations (other than Secured Bank Product Obligations) shall bear
interest at the Default Rate (whether before or after any judgment), payable on
demand.
 
(c) Interest shall accrue from the date a Loan is advanced or Obligation becomes
payable, until paid in full by Borrowers, and shall in no event be less than
zero at any time. Interest accrued the Loans shall be due and payable in
arrears, (i) on the first calendar day of each calendar month, for the Interest
Period then ended; (ii) on any date of prepayment, with respect to the principal
amount being prepaid; and (iii) on the Commitment Termination Date. Interest
accrued on any other Obligations shall be due and payable as provided in the
Loan Documents or, if no payment date is specified, on demand.
 
(d) Agent does not warrant or accept responsibility for, nor shall it have any
liability with respect to, administration, submission or any other matter
related to the rate described in the definition of LIBOR.
 
3.1.2 Interest Rate Not Ascertainable. If, due to any circumstance affecting the
London interbank market, Agent determines that adequate and fair means do not
exist for ascertaining LIBO Rate on any applicable date (and such circumstances
are not covered or governed by Section 3.6), then Agent shall immediately notify
Borrowers of such determination. Until Agent notifies Borrowers that such
circumstance no longer exists, the obligation of Lenders to make affected LIBOR
Loans shall be suspended and, if requested by Agent, Borrowers shall promptly,
at its option, either (i) pay all such affected LIBOR Loans or (ii) convert such
affected LIBOR Loans into Loans that bear reference to the Base Rate plus the
Applicable Margin (plus, if applicable, any incremental Default Rate).
 
 
 

-23-

 
 
3.2 Fees.
 
3.2.1 Unused Line Fee. Borrowers shall pay to Agent, for the Pro Rata benefit of
Lenders, a fee equal to the Unused Line Fee Rate times the amount by which the
Revolver Commitments exceed the average daily Revolver Usage during the
preceding month, calculated for the actual days elapsed. Such fee shall be
payable in arrears, on the first day of each calendar month and on the
Commitment Termination Date.
 
3.2.2 Fee Letters. Borrowers shall pay all fees set forth in any fee letter
executed in connection with this Agreement or any consent, waiver or amendment
hereto.
 
3.2.3 Wire Fees. Borrowers shall pay Agent $35.00 for any wire initiated by
Agent.
 
3.3 Computation of Interest, Fees, Yield Protection. All interest, as well as
fees and other charges calculated on a per annum basis, shall be computed for
the actual days elapsed based on a year of 360 days, except that interest
computed by reference to clause (b) of the definition of Base Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year). Each
determination by Agent of any interest, fees or interest rate hereunder shall be
final, conclusive and binding for all purposes, absent manifest error. All fees
shall be fully earned when due and shall not be subject to rebate, refund or
proration. All fees payable under Section 3.2 are compensation for services and
are not, and shall not be deemed to be, interest or any other charge for the
use, forbearance or detention of money. A certificate as to amounts payable by
Borrowers under Section 3.4, 3.6, 3.7, or 5.9, submitted to Borrower Agent by
Agent or the affected Lender shall be final, conclusive and binding for all
purposes, absent manifest error, and Borrowers shall pay such amounts to the
appropriate party within 10 days following receipt of the certificate.
 
3.4 Reimbursement Obligations. Borrowers shall pay all Extraordinary Expenses
promptly upon request. Borrowers shall also reimburse Agent for all reasonable
and out of pocket legal, accounting, appraisal, consulting, and other fees and
expenses incurred by it in connection with (a) negotiation and preparation of
any Loan Documents, including any modification thereof; (b) administration of
and actions relating to any Collateral, Loan Documents and transactions
contemplated thereby, including any actions taken to perfect or maintain
priority of Agent’s Liens on any Collateral, to maintain any insurance required
hereunder or to verify Collateral; and (c) any examination or appraisal with
respect to any Obligor or Collateral by Agent’s personnel or a third party in
accordance with this Agreement. All legal, accounting and consulting fees shall
be charged to Borrowers by Agent’s professionals at their full hourly rates,
regardless of any alternative fee arrangements that Agent, any Lender or any of
their Affiliates may have with such professionals that otherwise might apply to
this or any other transaction. Borrowers acknowledge that counsel may provide
Agent with a benefit (such as a discount, credit or accommodation for other
matters) based on counsel’s overall relationship with Agent, including fees paid
hereunder. All amounts payable by Borrowers under this Section shall be due and
payable as provided in the Loan Documents or, if no payment date is specified,
on demand.
 
3.5 Illegality. Without limiting the provisions of Section 3.6, if any Lender
determines that any Applicable Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender to
perform any of its obligations hereunder, to make, maintain, fund or charge
applicable interest or fees with respect to any Loan, or to determine or charge
interest based on LIBO Rate, or any Governmental Authority has imposed material
restrictions on the authority of such Lender to purchase or sell, or to take
deposits of, Dollars in the London interbank market, then, on notice thereof by
such Lender to Agent, any obligation of such Lender to perform such obligations,
to make, maintain or fund the Loan (or to charge interest or fees with respect
thereto), shall be suspended until such Lender notifies Agent that the
circumstances giving rise to such determination no longer exist. Upon delivery
of such notice, Borrowers shall, at their option, either prepay the applicable
Loan or, if applicable, convert LIBOR Loan(s) of such Lender to a Loan that
bears reference to the Base Rate plus the Applicable Margin, either on the last
day of the Interest Period therefor, if such Lender may lawfully continue to
maintain the LIBOR Loan to such day, or immediately, if such Lender may not
lawfully continue to maintain the LIBOR Loan. Upon any such prepayment,
Borrowers shall also pay accrued interest on the amount so prepaid.
 
3.6 Inability to Determine Rates; LIBOR Successor Rate.
 
3.6.1 Inability to Determine Rates Generally.
 
  If Agent notifies Borrower Agent in connection with a Borrowing of a LIBOR
Loan that for any reason (a) Agent determines Dollar deposits are not being
offered to banks in the London interbank Eurodollar market for the applicable
Loan amount or Interest Period, (b) Agent determines adequate and reasonable
means do not exist for determining LIBO Rate for the applicable Interest Period,
or (c) Agent or Required Lenders determine LIBOR for the applicable Interest
Period does not adequately and fairly reflect the cost to Lenders of funding the
Loan, then Lenders’ obligation to make or maintain LIBOR Loans shall be
suspended to the extent of the affected LIBOR Loan or Interest Period until
Agent (upon instruction by Required Lenders) withdraws the notice and all such
Loans shall be converted to Loans bearing interest at the Base Rate plus the
Applicable Margin. Upon receipt of the notice, Borrower Agent may revoke any
pending request for a Borrowing of a LIBOR Loan or, failing that, will be deemed
to have submitted a request for a Loan bearing interest at the Base Rate plus
the Applicable Margin.
 
 
 

-24-

 
 
3.6.2 LIBOR Successor Rate. Notwithstanding anything to the contrary in this
Agreement or any other Loan Document, if Agent (which determination shall be
conclusive absent manifest error), or the Borrower Agent or Required Lenders
notify Agent (with, in the case of the Required Lenders, a copy to Borrower
Agent) that Borrower Agent or Required Lenders (as applicable) have determined,
that:
 
(a) adequate and reasonable means do not exist for ascertaining LIBOR for any
requested Interest Period, including, without limitation, because the LIBOR
Screen Rate is not available or published on a current basis and such
circumstances are unlikely to be temporary;
 
(b) the administrator of the LIBOR Screen Rate or a Governmental Authority
having jurisdiction over the Agent has made a public statement identifying a
specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made
available, or used for determining the interest rate of loans (such specific
date, the “Scheduled Unavailability Date”); or
 
(c) syndicated loans currently being executed, or that include language similar
to that contained in this Section 3.6.2 are being executed or amended (as
applicable) to incorporate or adopt a new benchmark interest rate to replace
LIBOR;
 
then, reasonably promptly after such determination by Agent or receipt by Agent
of such notice, as applicable, Agent and Borrower Agent may amend this Agreement
to replace LIBOR with an alternate benchmark rate (including any mathematical or
other adjustments to the benchmark (if any) incorporated therein) (any such
proposed rate, a “LIBOR Successor Rate”), together with any proposed LIBOR
Successor Rate Conforming Changes and notwithstanding anything to the contrary
in this Agreement (including Section 14.1.1) any such amendment shall become
effective without any further action or consent of any other party to this
Agreement at 5:00 p.m. (New York time) on the fifth Business Day after Agent
posts or otherwise discloses such proposed amendment to all Lenders unless,
prior to such time, Required Lenders have delivered to Agent written notice that
such Required Lenders do not accept such amendment.
 
If no LIBOR Successor Rate has been determined and the circumstances under
clause (a) above exist or the Scheduled Unavailability Date has occurred (as
applicable), Agent will promptly so notify Borrower Agent and each Lender.
 Thereafter, (x) the obligation of Lenders to make or maintain LIBOR Loans shall
be suspended (to the extent of the affected LIBOR Loans or Interest Periods),
and (y) the LIBO Base Rate component shall no longer be utilized in determining
the Base Rate.  Upon receipt of such notice, Borrower Agent may revoke any
pending request for a Borrowing of LIBOR Loans (to the extent of the affected
LIBOR Loans or Interest Periods) or, failing that, will be deemed to have
converted such request into a request for a Borrowing of Loans bearing interest
at the Base Rate plus the Applicable Margin (subject to the foregoing clause
(y)) in the amount specified therein. Notwithstanding anything else herein, any
definition of LIBOR Successor Rate shall provide that in no event shall such
LIBOR Successor Rate be less than zero for purposes of this Agreement.
 
3.7 Increased Costs; Capital Adequacy.
 
3.7.1 Increased Costs Generally. If any Change in Law shall:
 
(a) impose, modify or deem applicable any reserve, liquidity, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender (except any reserve requirement reflected in calculating LIBO Rate);
 
(b) subject any Recipient to Taxes (other than (i) Indemnified Taxes, (ii) Taxes
described in clauses (b) through (d) of the definition of Excluded Taxes, and
(iii) Connection Income Taxes) with respect to any Loan, Commitment or other
obligations, or its deposits, reserves, other liabilities or capital
attributable thereto; or
 
(c) impose on any Lender or interbank market any other condition, cost or
expense affecting any Loan, Commitment or Loan Document;
 
and the result thereof shall be to increase the cost to a Lender of making or
maintaining any Loan or Commitment, or continuing any interest option for a
Loan, or to increase the cost to a Lender, or to reduce the amount of any sum
received or receivable by a Lender hereunder (whether of principal, interest or
any other amount) then, upon request of such Lender, Borrowers will pay to it
such additional amount(s) as will compensate it for the additional costs
incurred or reduction suffered.
 
 
 

-25-

 
 
3.7.2 Capital Requirements. If a Lender determines that a Change in Law
affecting such Lender or its holding company, if any, regarding capital or
liquidity requirements has or would have the effect of reducing the rate of
return on such Lender’s or holding company’s capital as a consequence of this
Agreement, or such Lender’s Commitments, Loans, or participations in Loans, to a
level below that which such Lender or holding company could have achieved but
for such Change in Law (taking into consideration its policies with respect to
capital adequacy), then from time to time Borrowers will pay to such Lender such
additional amounts as will compensate it or its holding company for the
reduction suffered.
 
3.7.3 LIBOR Loan Reserves. If any Lender is required to maintain reserves with
respect to liabilities or assets consisting of or including Eurocurrency funds
or deposits (other than to the extent included in the Eurodollar Reserve
Percentage), Borrowers shall pay additional interest to such Lender on each
LIBOR Loan equal to the costs of such reserves allocated to the Loan by the
Lender (as determined by it in good faith, which determination shall be
conclusive). The additional interest shall be due and payable on each interest
payment date for the Loan; provided, however, that if the Lender notifies
Borrowers (with a copy to Agent) of the additional interest less than 10 days
prior to the interest payment date, then such interest shall be payable 10 days
after Borrowers’ receipt of the notice.
 
3.7.4 Compensation. Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of its right
to demand such compensation, but Borrowers shall not be required to compensate a
Lender for any increased costs or reductions suffered more than nine months
(plus any period of retroactivity of the Change in Law giving rise to the
demand) prior to the date that the Lender notifies Borrower Agent of the
applicable Change in Law and of such Lender’s intention to claim compensation
therefor.
 
3.8 Mitigation. If any Lender gives a notice under Section 3.5 or requests
compensation under Section 3.7, or if Borrowers are required to pay any
Indemnified Taxes or additional amounts with respect to a Lender under Section
5.9, then at the request of Borrower Agent, such Lender shall use reasonable
efforts to designate a different Lending Office or to assign its rights and
obligations hereunder to another of its offices, branches or Affiliates, if, in
the judgment of such Lender, such designation or assignment (a) would eliminate
the need for such notice or reduce amounts payable or to be withheld in the
future, as applicable; and (b) would not subject the Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to it or unlawful.
Borrowers shall pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
 
3.9 [Reserved].
 
 
 

-26-

 
 
3.10 Maximum Interest. Regardless of any provision contained in any of the Loan
Documents, in no contingency or event whatsoever shall the aggregate of all
amounts that are contracted for, charged or received by Agent or any Lender
pursuant to the terms of this Agreement or any of the other Loan Documents and
that are deemed interest under Applicable Law exceed the highest rate
permissible under any Applicable Law (the “Maximum Rate”). No agreements,
conditions, provisions or stipulations contained in this Agreement or any of the
other Loan Documents or the exercise by Agent of the right to accelerate the
payment or the maturity of all or any portion of the Obligations, or the
exercise of any option whatsoever contained in any of the Loan Documents, or the
prepayment by any Obligor of any of the Obligations, or the occurrence of any
contingency whatsoever, shall entitle Agent or Lenders to charge or receive in
any event, interest or any charges, amounts, premiums or fees deemed interest by
Applicable Law (such interest, charges, amounts, premiums and fees referred to
herein collectively as “Interest”) in excess of the Maximum Rate and in no event
shall any Obligor be obligated to pay Interest exceeding such Maximum Rate, and
all agreements, conditions or stipulations, if any, which may in any event or
contingency whatsoever operate to bind, obligate or compel any Obligor to pay
Interest exceeding the Maximum Rate shall be without binding force or effect, at
law or in equity, to the extent only of the excess of Interest over such Maximum
Rate. If any Interest is charged or received with respect to the Obligations in
excess of the Maximum Rate (“Excess”), each Obligor stipulates that any such
charge or receipt shall be the result of an accident and bona fide error, and
such Excess, to the extent received, shall be applied first to reduce the
principal Obligations and the balance, if any, returned to the Obligors, it
being the intent of the parties hereto not to enter into an usurious or
otherwise illegal relationship. The right to accelerate the maturity of any of
the Obligations does not include the right to accelerate any Interest that has
not otherwise accrued on the date of such acceleration, and neither Agent nor
any Lender intends to collect any unearned Interest in the event of any such
acceleration. Each Obligor recognizes that, with fluctuations in the rates of
interest set forth in this Agreement, and the Maximum Rate, such an
unintentional result could inadvertently occur. All monies paid to Agent or any
Lender hereunder or under any of the other Loan Documents, whether at maturity
or by prepayment, shall be subject to any rebate of unearned Interest as and to
the extent required by Applicable Law. By the execution of this Agreement, each
Obligor covenants that (i) the credit or return of any Excess shall constitute
the acceptance by each Obligor of such Excess, and (ii) each Obligor shall not
seek or pursue any other remedy, legal or equitable, against Agent or any
Lender, based in whole or in part upon contracting for, charging or receiving
any Interest in excess of the Maximum Rate. For the purpose of determining
whether or not any Excess has been contracted for, charged or received by Agent
or any Lender, all Interest at any time contracted for, charged or received from
any Obligor in connection with any of the Loan Documents shall, to the extent
permitted by Applicable Law, be amortized, prorated, allocated and spread in
equal parts throughout the full term of the Obligations. Obligors, Agent and
Lenders shall, to the maximum extent permitted under Applicable Law, (i)
characterize any non-principal payment as an expense, fee or premium rather than
as Interest and (ii) exclude voluntary prepayments and the effects thereof. The
provisions of this Section 3.10 shall be deemed to be incorporated into every
Loan Document (whether or not any provision of this Section is referred to
therein). All such Loan Documents and communications relating to any Interest
owed by any Obligor and all figures set forth therein shall, for the sole
purpose of computing the extent of Obligations, be automatically recomputed by
the Obligors, and by any court considering the same, to give effect to the
adjustments or credits required by this Section 3.10.
 
SECTION 4. LOAN ADMINISTRATION
 
4.1 Manner of Borrowing and Funding Revolver Loans.
 
4.1.1 Notice of Borrowing.
 
(a) To request Revolver Loans, Borrower Agent shall notify Agent of such request
by telephone or email (or, if permitted by Agent, by request posted to Agent’s
StuckyNet System) a Notice of Borrowing by 11:30 a.m. on the requested funding
date. Notices received by Agent after such time shall be deemed received on the
next Business Day. Each such telephone (or posted) Notice of Borrowing shall be
irrevocable and the Borrower Agent agrees to promptly confirm any such telephone
request by hand delivery or electronic transmission to the Agent of a written
Notice of Borrowing in a form approved by the Agent, and signed by the Borrower
Agent. Each such Notice of Borrowing shall specify (A) the Borrowing amount, (B)
the requested funding date (which must be a Business Day), (C) the Availability
after giving effect to the Borrowing, and (D) the Borrower to whom proceeds from
such Borrowing are to be disbursed.
 
 
 

-27-

 
 
(b) Unless payment is otherwise made by Borrowers, the becoming due of any
Obligation (whether principal, interest, fees or other charges, including
Extraordinary Expenses, Cash Collateral and Secured Bank Product Obligations)
shall be deemed to be a request for a Revolver Loan on the due date in the
amount due and the Loan proceeds shall be disbursed as direct payment of such
Obligation. In addition, Agent may, at its option, charge such amount against
any operating, investment or other account of a Borrower maintained with Agent
or any of its Affiliates.
 
(c) If a Borrower maintains a disbursement account with Agent or any of its
Affiliates, then presentation for payment in the account of a Payment Item when
there are insufficient funds to cover it shall be deemed to be a request for a
Revolver Loan on the presentation date, in the amount of the Payment Item.
Proceeds of the Loan may be disbursed directly to the account.
 
4.1.2 Fundings by Lenders. Except for Swingline Loans, Agent shall endeavor to
notify Lenders of each Notice of Borrowing (or deemed request for a Borrowing)
by 1:00 p.m. on the proposed funding date. Each Lender shall fund its Pro Rata
share of a Borrowing in immediately available funds not later than 3:00 p.m. on
the requested funding date, unless Agent’s notice is received after the times
provided above, in which case Lender shall fund by 11:00 a.m. on the next
Business Day. Subject to its receipt of such amounts from Lenders, Agent shall
disburse the Borrowing proceeds in a manner directed by Borrower Agent and
acceptable to Agent. Unless Agent receives (in sufficient time to act) written
notice from a Lender that it will not fund its share of a Borrowing, Agent may
assume that such Lender has deposited or promptly will deposit its share with
Agent, and Agent may disburse a corresponding amount to Borrowers. If a Lender’s
share of a Borrowing or of a settlement under Section 4.1.3(b) is not received
by Agent, then Borrowers agree to repay to Agent on demand the amount of such
share, together with interest thereon from the date disbursed until repaid, at
the rate applicable to the Borrowing. A Lender may fulfill its obligations under
Loan Documents through one or more Lending Offices, and this shall not affect
any obligation of Obligors under the Loan Documents or with respect to any
Obligations.
 
4.1.3 Swingline Loans; Settlement.
 
(a) To fulfill any request for a Revolver Loan hereunder, Agent may in its
Permitted Discretion advance Swingline Loans to Borrowers, up to an aggregate
outstanding amount of $2,000,000. Swingline Loans shall constitute Revolver
Loans for all purposes, except that payments thereon shall be made to Agent for
its own account until Lenders have funded their participations therein as
provided below.
 
(b) Settlement of Loans, including Swingline Loans, among Lenders and Agent
shall take place on a date determined from time to time by Agent (but at least
weekly, unless the settlement amount is de minimis), on a Pro Rata basis in
accordance with the Settlement Report delivered by Agent to Lenders. Between
settlement dates, Agent may in its Permitted Discretion apply payments on
Revolver Loans to Swingline Loans, regardless of any designation by Borrowers or
anything herein to the contrary. Each Lender hereby purchases, without recourse
or warranty, an undivided Pro Rata participation in all Swingline Loans
outstanding from time to time until settled. If a Swingline Loan cannot be
settled among Lenders, whether due to an Obligor’s Insolvency Proceeding or for
any other reason, each Lender shall pay the amount of its participation in the
Loan to Agent, in immediately available funds, within one Business Day after
Agent’s request therefor. Lenders’ obligations to make settlements and to fund
participations are absolute, irrevocable and unconditional, without offset,
counterclaim or other defense, and whether or not the Commitments have
terminated, the Revolver Usage exceeds the Borrowing Base or the Revolver
Commitments or the conditions in Section 6 are satisfied.
 
4.1.4 Notices. If Borrowers request Loans, select interest rates or transfer
funds based on telephonic or electronic instructions to Agent, Borrowers shall
confirm each such request by prompt delivery to Agent of a Notice of Borrowing.
Neither Agent nor any Lender shall have any liability for any loss suffered by a
Borrower as a result of Agent or any Lender acting upon its understanding of
telephonic or electronic instructions from a person believed in good faith by
Agent or any Lender to be authorized to give such instructions on a Borrower’s
behalf.
 
4.2 Defaulting Lender. Notwithstanding anything herein to the contrary:
 
4.2.1 Reallocation of Pro Rata Share; Amendments. For purposes of determining
Lenders’ obligations or rights to fund, participate in or receive collections
with respect to Loans (including existing Swingline Loans and Protective
Advances), Agent may in its discretion reallocate Pro Rata shares by excluding a
Defaulting Lender’s Commitments and Loans from the calculation of shares. A
Defaulting Lender shall have no right to vote on any amendment, waiver or other
modification of a Loan Document, except as provided in Section 14.1.1(b).
 
 
 

-28-

 
 
4.2.2 Payments; Fees. Agent may, in its discretion, receive and retain any
amounts payable to a Defaulting Lender under the Loan Documents, and a
Defaulting Lender shall be deemed to have assigned to Agent such amounts until
all Obligations owing to Agent, non-Defaulting Lenders and other Secured Parties
have been paid in full. Agent may use such amounts to cover the Defaulting
Lender’s defaulted obligations, to Cash Collateralize such Lender’s Fronting
Exposure, to readvance the amounts to Borrowers or to repay Obligations. A
Lender shall not be entitled to receive any fees accruing hereunder while it is
a Defaulting Lender and its unfunded Commitment shall be disregarded for
purposes of calculating the unused line fee under Section 3.2.1.
 
4.2.3 Status; Cure. Agent may determine in its Permitted Discretion that a
Lender constitutes a Defaulting Lender and the effective date of such status
shall be conclusive and binding on all parties, absent manifest error. Borrowers
and Agent may agree in writing that a Lender has ceased to be a Defaulting
Lender, whereupon Pro Rata shares shall be reallocated without exclusion of the
reinstated Lender’s Commitments and Loans, and the Revolver Usage and other
exposures under the Revolver Commitments shall be reallocated among Lenders and
settled by Agent (with appropriate payments by the reinstated Lender, including
its payment of breakage costs for reallocated LIBOR Loans) in accordance with
the readjusted Pro Rata shares. Unless expressly agreed by Borrowers and Agent,
or as expressly provided herein with respect to Bail-In Actions and related
matters, no reallocation of Commitments and Loans to non-Defaulting Lenders or
reinstatement of a Defaulting Lender shall constitute a waiver or release of
claims against such Lender. The failure of any Lender to fund a Loan or
otherwise to perform obligations hereunder shall not relieve any other Lender of
its obligations under any Loan Document. No Lender shall be responsible for
default by another Lender.
 
4.3 Borrower Agent. Each Borrower hereby designates AutoWeb (“Borrower Agent”)
as its representative and agent for all purposes under the Loan Documents,
including requests for and receipt of Loans, designation of interest rates,
delivery or receipt of communications, delivery of Borrower Materials, payment
of Obligations, requests for waivers, amendments or other accommodations,
actions under the Loan Documents (including in respect of compliance with
covenants), and all other dealings with Agent or any Lender. Borrower Agent
hereby accepts such appointment. Agent and Lenders shall be entitled to rely
upon, and shall be fully protected in relying upon, any notice or communication
(including any notice of borrowing) delivered by Borrower Agent on behalf of any
Borrower. Agent and Lenders may give any notice or communication with a Borrower
hereunder to Borrower Agent on behalf of such Borrower. Each of Agent and
Lenders shall have the right, in its discretion, to deal exclusively with
Borrower Agent for all purposes under the Loan Documents. Each Borrower agrees
that any notice, election, communication, delivery, representation, agreement,
action, omission or undertaking by Borrower Agent shall be binding upon and
enforceable against such Borrower.
 
4.4 One Obligation. The Loans and other Obligations constitute one general
obligation of Borrowers and are secured by Agent’s Lien on all Collateral;
provided, however, that Agent and each Lender shall be deemed to be a creditor
of, and the holder of a separate claim against, each Borrower to the extent of
any Obligations jointly or severally owed by such Borrower.
 
4.5 Effect of Termination. On the effective date of the termination of all
Commitments, the Obligations shall be immediately due and payable, and each
Secured Bank Product Provider may terminate its Bank Products; provided,
however, if any Secured Bank Product Provider agrees not to terminate its
Secured Bank Product Obligations on such effective date, then such Secured Bank
Product Obligations shall not be due and payable at such time. Until Full
Payment of the Obligations, all undertakings of Borrowers contained in the Loan
Documents shall continue, and Agent shall retain its Liens in the Collateral and
all of its rights and remedies under the Loan Documents. Agent shall not be
required to terminate its Liens unless it receives Cash Collateral or a written
agreement, in each case satisfactory to it, protecting Agent and Lenders from
dishonor or return of any Payment Item previously applied to the Obligations.
Sections 3.4, 3.7, 5.5, 5.9, 5.10, 12, 14.2, this Section, and each indemnity or
waiver given by an Obligor or Lender in any Loan Document, shall survive Full
Payment of the Obligations.
 
SECTION 5.  PAYMENTS
 
5.1 General Payment Provisions. All payments of Obligations shall be made in
Dollars, without offset or deduction for counterclaim or defense of any kind,
without deduction or withholding for any Taxes (except as required by Applicable
Law), and in immediately available funds, not later than 12:00 noon on the due
date. Any payment after such time shall be deemed made on the next Business Day.
Except as otherwise set forth in Section 5.6, Borrowers agree that Agent shall
have the continuing, exclusive right to apply and reapply payments and proceeds
of Collateral against the Obligations, in such manner as Agent deems advisable.
 
 
 

-29-

 
 
5.2 Repayment of Revolver Loans. Revolver Loans shall be due and payable in full
on the Revolver Termination Date, unless payment is sooner required hereunder.
Revolver Loans may be prepaid from time to time, without penalty or premium,
other than (a) any applicable Prepayment Fee arising in connection with Section
2.1.4 and (b) any applicable Prepayment Fee if such prepayment occurs in
connection with any involuntary termination of all Revolver Commitments,
including after acceleration of any of the Obligations, termination of the
Revolver Commitments and/or termination of this Agreement; provided, however,
except (i) in the case the Obligations are Paid in Full and the Commitments
terminated, (ii) at a time when Agent is exercising rights and remedies pursuant
to Section 11.2, (iii) when Loans are not available pursuant to Section 6.2, or
(iv) in connection with repayments permitted under Sections 3.1.2 or 3.5, in no
event shall Loans be optionally prepaid if after giving effect to such
prepayment the average daily outstanding principal balance of the Revolver Usage
and other Loans for the immediately prior thirty (30) day period would be less
than the Minimum Balance. Notwithstanding anything herein to the contrary, if
Revolver Usage exceeds the Borrowing Base at any time, Borrowers shall, on
Agent’s demand, repay Revolver Loans in an amount sufficient to reduce Revolver
Usage to the Borrowing Base. If any Asset Disposition includes the disposition
of Accounts or Inventory, Borrowers shall apply Net Proceeds to repay Revolver
Loans equal to the greater of (a) the net book value of such Accounts and
Inventory, or (b) the reduction in Borrowing Base resulting from such
disposition.
 
5.3 [Reserved].
 
5.4 Payment of Other Obligations. Obligations other than Loans, including
Extraordinary Expenses, shall be paid by Borrowers as provided in the Loan
Documents (or documents governing Secured Bank Product Obligations, if
applicable) or, if no payment date is specified, on demand.
 
5.5 Marshaling; Payments Set Aside. None of Agent or Lenders shall be under any
obligation to marshal any assets in favor of any Obligor or against any
Obligations. If any payment by or on behalf of Borrowers is made to Agent or any
Lender, or if Agent or any Lender exercises a right of setoff, and any of such
payment or setoff is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by Agent or a Lender in its Permitted Discretion) to be repaid to a
trustee, receiver or any other Person, then the Obligation originally intended
to be satisfied, and all Liens, rights and remedies relating thereto, shall be
revived and continued in full force and effect as if such payment or setoff had
not occurred.
 
5.6 Application and Allocation of Payments.
 
5.6.1 Application. Payments made by Borrowers hereunder (including, for
avoidance of doubt pursuant to Section 5.7) shall be applied (a) first, as
specifically required hereby; (b) second, to all Obligations then due and owing;
(c) third, subject to Section 5.2, to other Obligations specified by Borrowers;
and (d) fourth, as otherwise directed by the Borrowers.
 
5.6.2 Post-Default Allocation. Notwithstanding anything in any Loan Document to
the contrary, during an Event of Default under Section 11.1(j), or during any
other Event of Default at the discretion of (including, for avoidance of doubt,
pursuant to Section 5.7) Agent or Required Lenders, monies to be applied to the
Obligations, whether arising from payments by Obligors, realization on
Collateral, setoff or otherwise, shall be allocated as follows:
 
(a) first, to all fees, indemnification, costs and expenses, including
Extraordinary Expenses, owing to Agent;
 
(b) second, to all other amounts owing to Agent, including Swingline Loans,
Protective Advances, and Loans and participations that a Defaulting Lender has
failed to settle or fund;
 
(c) third, to all Obligations (other than Secured Bank Product Obligations)
constituting fees, indemnification, costs or expenses owing to Lenders;
 
(d) fourth, to all Obligations (other than Secured Bank Product Obligations)
constituting interest;
 
(e) fifth, to all Loans, and to Secured Bank Product Obligations arising under
Hedge Agreements (including Cash Collateralization thereof) up to the amount of
the Bank Product Reserve existing therefor;
 
(f) sixth, to all other Secured Bank Product Obligations; and
 
(g) last, to all remaining Obligations.
 
 
 

-30-

 
 
Amounts shall be applied to payment of each category of Obligations only after
Full Payment of amounts payable from time to time under all preceding
categories. If amounts are insufficient to satisfy a category, they shall be
paid ratably among outstanding Obligations in the category. Monies and proceeds
obtained from an Obligor shall not be applied to its Excluded Swap Obligations,
but appropriate adjustments shall be made with respect to amounts obtained from
other Obligors to preserve the allocations in each category. Agent shall have no
obligation to calculate the amount of any Secured Bank Product Obligation and
may request a reasonably detailed calculation thereof from a Secured Bank
Product Provider. If the provider fails to deliver the calculation within five
days following request, Agent may assume the amount is zero. The allocations set
forth in this Section are solely to determine the rights and priorities among
Secured Parties, and may be changed by agreement of the affected Secured
Parties, without the consent of any Obligor. This Section is not for the benefit
of or enforceable by any Obligor, and each Borrower irrevocably waives the right
to direct the application of any payments or Collateral proceeds subject to this
Section.
 
5.6.3 Erroneous Application. Agent shall not be liable for any application of
amounts made by it in good faith and, if any such application is subsequently
determined to have been made in error, the sole recourse of any Lender or other
Person to which such amount should have been paid shall be to recover the amount
from the Person that actually received it (and, if such amount was received by a
Secured Party, the Secured Party agrees to return it).
 
5.7 Dominion Account. The ledger balance in the Dominion Account as of the end
of a Business Day shall be applied to the Obligations in accordance with this
Agreement at the beginning of the next Business Day, and for purposes of
computing interest on the Obligations (other than Secured Bank Product
Obligations), such application shall be deemed to be applied by Agent on the
third Business Day after receipt thereof; provided, however, such application
shall only be made to the extent that after giving effect to such application
the average daily outstanding principal balance of the Revolver Usage and other
Loans for the immediately prior thirty (30) day period would be equal to or more
than the Minimum Balance (except (i) at a time when Agent is exercising rights
or remedies pursuant to Section 11.2, (ii) when Revolver Loans are not available
pursuant to Section 6.2, or (iii) in connection with repayments permitted under
Sections 3.1.2 or 3.5). Any resulting credit balance shall not accrue interest
in favor of Borrowers and shall be made available to Borrowers as long as no
Default or Event of Default exists.
 
5.8 Account Stated. Agent shall maintain, in accordance with its customary
practices, loan account(s) evidencing the Debt of Borrowers hereunder. Any
failure of Agent to record anything in a loan account, or any error in doing so,
shall not limit or otherwise affect the obligation of Borrowers to pay any
amount owing hereunder. Entries made in a loan account shall constitute
presumptive evidence of the information contained therein. If any information
contained in a loan account is provided to or inspected by any Person, the
information shall be conclusive and binding on such Person for all purposes
absent manifest error, except to the extent such Person notifies Agent in
writing within 30 days after receipt or inspection that specific information is
subject to dispute.
 
5.9 Taxes.
 
5.9.1 Payments Free of Taxes; Obligation to Withhold; Tax Payment.
 
(a) All payments of Obligations by Obligors shall be made without deduction or
withholding for any Taxes, except as required by Applicable Law. If Applicable
Law (as determined by Agent in its Permitted Discretion) requires the deduction
or withholding of any Tax from any such payment by Agent or an Obligor, then
Agent or such Obligor shall be entitled to make such deduction or withholding
based on information and documentation provided pursuant to Section 5.10.
 
(b) If Agent or any Obligor is required by the Code to withhold or deduct Taxes,
including backup withholding and withholding taxes, from any payment, then (i)
Agent shall pay the full amount that it determines is to be withheld or deducted
to the relevant Governmental Authority pursuant to the Code, and (ii) to the
extent the withholding or deduction is made on account of Indemnified Taxes, the
sum payable by the applicable Obligor shall be increased as necessary so that
the Recipient receives an amount equal to the sum it would have received had no
such withholding or deduction been made.
 
 
 

-31-

 
 
(c) If Agent or any Obligor is required by any Applicable Law other than the
Code to withhold or deduct Taxes from any payment, then (i) Agent or such
Obligor, to the extent required by Applicable Law, shall timely pay the full
amount to be withheld or deducted to the relevant Governmental Authority, and
(ii) to the extent the withholding or deduction is made on account of
Indemnified Taxes, the sum payable by the applicable Obligor shall be increased
as necessary so that the Recipient receives an amount equal to the sum it would
have received had no such withholding or deduction been made.
 
5.9.2 Payment of Other Taxes.
 
  Without limiting the foregoing, Borrowers shall timely pay to the relevant
Governmental Authority in accordance with Applicable Law, or at Agent’s option,
timely reimburse Agent for payment of, any Other Taxes.
 
5.9.3 Tax Indemnification.
 
(a) Each Borrower shall indemnify and hold harmless, on a joint and several
basis, each Recipient against any Indemnified Taxes (including those imposed or
asserted on or attributable to amounts payable under this Section) payable or
paid by a Recipient or required to be withheld or deducted from a payment to a
Recipient, and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. Each
Borrower shall indemnify and hold harmless Agent against any amount that a
Lender fails for any reason to pay indefeasibly to Agent as required pursuant to
this Section. Each Borrower shall make payment within 10 days after demand for
any amount or liability payable under this Section. A certificate as to the
amount of such payment or liability delivered to Borrowers by a Lender (with a
copy to Agent), or by Agent on its own behalf or on behalf of any Recipient,
shall be conclusive absent manifest error.
 
(b) Each Lender shall indemnify and hold harmless, on a several basis, (i) Agent
against any Indemnified Taxes attributable to such Lender (but only to the
extent Borrowers have not already paid or reimbursed Agent therefor and without
limiting Borrowers’ obligation to do so), (ii) Agent and Obligors, as
applicable, against any Taxes attributable to such Lender’s failure to maintain
a Participant register as required hereunder, and (iii) Agent and Obligors, as
applicable, against any Excluded Taxes attributable to such Lender, in each
case, that are payable or paid by Agent or an Obligor in connection with any
Obligations, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. Each Lender shall make
payment within 10 days after demand for any amount or liability payable under
this Section. A certificate as to the amount of such payment or liability
delivered to any Lender by Agent shall be conclusive absent manifest error.
 
5.9.4 Treatment of Certain Refunds. Unless required by Applicable Law, at no
time shall Agent have any obligation to file for or otherwise pursue on behalf
of a Lender, nor have any obligation to pay to any Lender, any refund of Taxes
withheld or deducted from funds paid for the account of a Lender. If a Recipient
determines in its discretion that it has received a refund of Taxes that were
indemnified by Borrowers or with respect to which a Borrower paid additional
amounts pursuant to this Section, it shall pay the amount of such refund to
Borrowers (but only to the extent of indemnity payments or additional amounts
actually paid by Borrowers with respect to the Taxes giving rise to the refund),
net of all out-of-pocket expenses (including Taxes) incurred by such Recipient
and without interest (other than interest paid by the relevant Governmental
Authority with respect to such refund). Borrowers shall, upon request by the
Recipient, repay to the Recipient such amount paid over to Borrowers (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) if the Recipient is required to repay such refund to the Governmental
Authority. Notwithstanding anything herein to the contrary, no Recipient shall
be required to pay any amount to Borrowers if such payment would place it in a
less favorable net after-Tax position than it would have been in if the Tax
subject to indemnification and giving rise to such refund had not been deducted,
withheld or otherwise imposed and the indemnification payments or additional
amounts with respect to such Tax had never been paid. In no event shall Agent or
any Recipient be required to make its tax returns (or any other information
relating to its taxes that it deems confidential) available to any Obligor or
other Person.
 
5.9.5 Survival. Each party’s obligations under Sections 5.9 and 5.10 shall
survive the resignation or replacement of Agent or any assignment of rights by
or replacement of a Lender, the termination of the Commitments, and the
repayment, satisfaction, discharge or Full Payment of any Obligations.
 
 
 

-32-

 
 
5.10 Lender Tax Information.
 
5.10.1 Status of Lenders. Any Lender that is entitled to an exemption from or
reduction of withholding Tax with respect to payments of Obligations shall
deliver to Borrowers and Agent properly completed and executed documentation
reasonably requested by Borrowers or Agent as will permit such payments to be
made without or at a reduced rate of withholding. In addition, any Lender, if
reasonably requested by Borrowers or Agent, shall deliver such other
documentation prescribed by Applicable Law or reasonably requested by Borrowers
or Agent to enable them to determine whether such Lender is subject to backup
withholding or information reporting requirements. Notwithstanding the
foregoing, such documentation (other than documentation described in Sections
5.10.2(a), (b) and (d)) shall not be required if a Lender reasonably believes
delivery of the documentation would subject it to any material unreimbursed cost
or expense or would materially prejudice its legal or commercial position.
 
5.10.2 Documentation. Without limiting the foregoing, if any Borrower is a U.S.
Person,
 
(a) Any Lender that is a U.S. Person shall deliver to Borrowers and Agent on or
prior to the date on which such Lender becomes a Lender hereunder (and from time
to time thereafter upon reasonable request of Borrowers or Agent), executed
copies of IRS Form W-9, certifying that such Lender is exempt from U.S. federal
backup withholding Tax;
 
(b) Any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to Borrowers and Agent (in such number of copies as shall be requested
by the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender hereunder (and from time to time thereafter upon reasonable request of
Borrowers or Agent), whichever of the following is applicable:
 
(i) in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party, (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BENE
establishing an exemption from or reduction of U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty, and (y) with respect to
other payments under the Loan Documents, IRS Form W-8BENE establishing an
exemption from or reduction of U.S. federal withholding Tax pursuant to the
“business profits” or “other income” article of such tax treaty;
 
(ii) executed copies of IRS Form W-8ECI;
 
(iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under Section 881(c) of the Code, (x) a certificate in form
satisfactory to Agent to the effect that such Foreign Lender is not a “bank”
within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent
shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of the
Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of
the Code (“U.S. Tax Compliance Certificate”), and (y) executed copies of IRS
Form W-8BENE; or
 
(iv) to the extent a Foreign Lender is not the beneficial owner, executed copies
of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BENE, a U.S. Tax
Compliance Certificate in form satisfactory to Agent, IRS Form W-9, and/or other
certification documents from each beneficial owner, as applicable; provided that
if the Foreign Lender is a partnership and one or more of its direct or indirect
partners is claiming the portfolio interest exemption, such Foreign Lender may
provide a U.S. Tax Compliance Certificate on behalf of each such partner;
 
(c) any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to Borrowers and Agent (in such number of copies as shall be requested
by the recipient) on or prior to the date on which such Foreign Lender becomes a
Lender hereunder (and from time to time thereafter upon reasonable request),
executed copies of any other form prescribed by Applicable Law as a basis for
claiming exemption from or a reduction in U.S. federal withholding Tax, duly
completed, together with such supplementary documentation as may be prescribed
by Applicable Law to permit Borrowers or Agent to determine the withholding or
deduction required to be made; and
 
 
 

-33-

 
 
(d) if payment of an Obligation to a Lender would be subject to U.S. federal
withholding Tax imposed by FATCA if such Lender were to fail to comply with the
applicable reporting requirements of FATCA (including those contained in Section
1471(b) or 1472(b) of the Code), such Lender shall deliver to Borrowers and
Agent, at the time(s) prescribed by law and otherwise upon reasonable request,
such documentation prescribed by Applicable Law (including Section
1471(b)(3)(C)(i) of the Code) and such additional documentation as may be
appropriate for Borrowers or Agent to comply with their obligations under FATCA
and to determine that such Lender has complied with its obligations under FATCA
or to determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (d), “FATCA” shall include any amendments made to FATCA
after the date hereof.
 
5.10.3 Redelivery of Documentation. If any form or certification previously
delivered by a Lender pursuant to this Section expires or becomes obsolete or
inaccurate in any respect, such Lender shall promptly update the form or
certification or notify Borrowers and Agent in writing of its inability to do
so.
 
5.11 Nature and Extent of Each Borrower’s Liability.
 
5.11.1 Joint and Several Liability. Each Borrower agrees that it is jointly and
severally liable for, and absolutely and unconditionally guarantees to Agent and
Lenders the prompt payment and performance of, all Obligations and all
agreements under the Loan Documents, except its Excluded Swap Obligations. Each
Borrower agrees that its guaranty obligations hereunder constitute a continuing
guaranty of payment and not of collection, that such obligations shall not be
discharged until Full Payment of the Obligations, and that such obligations are
absolute and unconditional, irrespective of (a) the genuineness, validity,
regularity, enforceability, subordination or any future modification of, or
change in, any Obligations or Loan Document, or any other document, instrument
or agreement to which any Obligor is or may become a party or be bound; (b) the
absence of any action to enforce this Agreement (including this Section) or any
other Loan Document, or any waiver, consent or indulgence of any kind by Agent
or any Lender with respect thereto; (c) the existence, value or condition of, or
failure to perfect a Lien or to preserve rights against, any security or
guaranty for any Obligations or any action, or the absence of any action, by
Agent or any Lender in respect thereof (including the release of any security or
guaranty); (d) the insolvency of any Obligor; (e) any election by Agent or any
Lender in an Insolvency Proceeding for the application of Section 1111(b)(2) of
the Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Borrower,
as debtor-in-possession under Section 364 of the Bankruptcy Code or otherwise;
(g) the disallowance of any claims of Agent or any Lender against any Obligor
for the repayment of any Obligations under Section 502 of the Bankruptcy Code or
otherwise; or (h) any other action or circumstances that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
except Full Payment of the Obligations.
 
5.11.2 Waivers.
 
(a) Each Borrower expressly waives all rights that it may have now or in the
future under any statute, at common law, in equity or otherwise, to compel Agent
or Lenders to marshal assets or to proceed against any Obligor, other Person or
security for the payment or performance of any Obligations before, or as a
condition to, proceeding against such Borrower. Each Borrower waives all
defenses available to a surety, guarantor or accommodation co-obligor other than
Full Payment of Obligations and waives, to the maximum extent permitted by law,
any right to revoke any guaranty of Obligations as long as it is a Borrower. It
is agreed among each Borrower, Agent and Lenders that the provisions of this
Section 5.11 are of the essence of the transaction contemplated by the Loan
Documents and that, but for such provisions, Agent and Lenders would decline to
make Loans. Each Borrower acknowledges that its guaranty pursuant to this
Section is necessary to the conduct and promotion of its business, and can be
expected to benefit such business.
 
(b) Agent may, in its discretion, pursue such rights and remedies as they deem
appropriate, including realization upon Collateral or any Real Estate by
judicial foreclosure or nonjudicial sale or enforcement, without affecting any
rights and remedies under this Section 5.11. If, in taking any action in
connection with the exercise of any rights or remedies, Agent or any Lender
shall forfeit any other rights or remedies, including the right to enter a
deficiency judgment against any Borrower or other Person, whether because of any
Applicable Laws pertaining to “election of remedies” or otherwise, each Borrower
consents to such action and waives any claim based upon it, even if the action
may result in loss of any rights of subrogation that any Borrower might
otherwise have had. Any election of remedies that results in denial or
impairment of the right of Agent or any Lender to seek a deficiency judgment
against any Borrower shall not impair any other Borrower’s obligation to pay the
full amount of the Obligations. Each Borrower waives all rights and defenses
arising out of an election of remedies, such as nonjudicial foreclosure with
respect to any security for Obligations, even though that election of remedies
destroys such Borrower’s rights of subrogation against any other Person. Agent
may bid Obligations, in whole or part, at any foreclosure, trustee or other
sale, including any private sale, and the amount of such bid need not be paid by
Agent but shall be credited against the Obligations. The amount of the
successful bid at any such sale, whether Agent or any other Person is the
successful bidder, shall be conclusively deemed to be the fair market value of
the Collateral, and the difference between such bid amount and the remaining
balance of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Section 5.11, notwithstanding that any present
or future law or court decision may have the effect of reducing the amount of
any deficiency claim to which Agent or any Lender might otherwise be entitled
but for such bidding at any such sale.
 
 
 

-34-

 
 
5.11.3 Extent of Liability; Contribution.
 
(a) Notwithstanding anything herein to the contrary, each Borrower’s liability
under this Section 5.11 shall not exceed the greater of (i) all amounts for
which such Borrower is primarily liable, as described in clause (c) below, and
(ii) such Borrower’s Allocable Amount.
 
(b) If any Borrower makes a payment under this Section 5.11 of any Obligations
(other than amounts for which such Borrower is primarily liable) (a “Guarantor
Payment”) that, taking into account all other Guarantor Payments previously or
concurrently made by any other Borrower, exceeds the amount that such Borrower
would otherwise have paid if each Borrower had paid the aggregate Obligations
satisfied by such Guarantor Payments in the same proportion that such Borrower’s
Allocable Amount bore to the total Allocable Amounts of all Borrowers, then such
Borrower shall be entitled to receive contribution and indemnification payments
from, and to be reimbursed by, each other Borrower for the amount of such
excess, ratably based on their respective Allocable Amounts in effect
immediately prior to such Guarantor Payment. The “Allocable Amount” for any
Borrower shall be the maximum amount that could then be recovered from such
Borrower under this Section 5.11 without rendering such payment voidable under
Section 548 of the Bankruptcy Code or under any applicable state fraudulent
transfer or conveyance act, or similar statute or common law.
 
(c) Section 5.11.3(a) shall not limit the liability of any Borrower to pay or
guarantee Loans made directly or indirectly to it (including Loans advanced
hereunder to any other Person and then re-loaned or otherwise transferred to, or
for the benefit of, such Borrower), Secured Bank Product Obligations incurred to
support its business, and all accrued interest, fees, expenses and other related
Obligations with respect thereto, for which such Borrower shall be primarily
liable for all purposes hereunder. Agent and Lenders shall have the right, at
any time in their discretion, to condition Loans upon a separate calculation of
borrowing availability for each Borrower and to restrict the disbursement and
use of Loans to a Borrower based on that calculation.
 
(d) Each Obligor that is a Qualified ECP when its guaranty of or grant of Lien
as security for a Swap Obligation becomes effective hereby jointly and
severally, absolutely, unconditionally and irrevocably undertakes to provide
funds or other support to each Specified Obligor with respect to such Swap
Obligation as may be needed by such Specified Obligor from time to time to honor
all of its obligations under the Loan Documents in respect of such Swap
Obligation (but, in each case, only up to the maximum amount of such liability
that can be hereby incurred without rendering such Qualified ECP’s obligations
and undertakings under this Section 5.11 voidable under any applicable
fraudulent transfer or conveyance act). The obligations and undertakings of each
Qualified ECP under this Section shall remain in full force and effect until
Full Payment of all Obligations. Each Obligor intends this Section to
constitute, and this Section shall be deemed to constitute, a guarantee of the
obligations of, and a “keepwell, support or other agreement” for the benefit of,
each Obligor for all purposes of the Commodity Exchange Act.
 
5.11.4 Joint Enterprise. Each Borrower has requested that Agent and Lenders make
this credit facility available to Borrowers on a combined basis, in order to
finance Borrowers’ business most efficiently and economically. Borrowers’
business is a mutual and collective enterprise, and the successful operation of
each Borrower is dependent upon the successful performance of the integrated
group. Borrowers believe that consolidation of their credit facility will
enhance the borrowing power of each Borrower and ease administration of the
facility, all to their mutual advantage. Borrowers acknowledge that Agent’s and
Lenders’ willingness to extend credit and to administer the Collateral on a
combined basis hereunder is done solely as an accommodation to Borrowers and at
Borrowers’ request.
 
5.11.5 Subordination. Each Borrower hereby subordinates any claims, including
any rights at law or in equity to payment, subrogation, reimbursement,
exoneration, contribution, indemnification or set off, that it may have at any
time against any other Obligor, howsoever arising, to the Full Payment of its
Obligations.
 
SECTION 6. CONDITIONS PRECEDENT
 
6.1 Conditions Precedent to Initial Loans. In addition to the conditions set
forth in Section 6.2, Lenders shall not be required to fund any requested Loan
or otherwise extend credit to Borrowers hereunder, until the date (“Closing
Date”) that each of the following conditions has been satisfied:
 
 
 

-35-

 
 
(a) Each Loan Document shall have been duly executed and delivered to Agent by
each of the signatories thereto, and each Obligor shall be in compliance with
all terms thereof.
 
(b) Agent shall have received (i) acknowledgments of all filings or recordations
necessary to perfect its Liens in the Collateral (including, without limitation,
(A) UCC financing statements to be filed with the applicable Secretary of State
and (B) recording of any IP Assignments to be filed with the United States
Patent and Trademark Office), (ii) originals of each stock certificate
evidencing Collateral, together with a transfer power executed in blank, (iii)
copies of each promissory note constituting Collateral (if any), together with
an executed allonge, and (iv) UCC and Lien searches and other evidence
satisfactory to Agent that such Liens are the only Liens upon the Collateral,
except Permitted Liens.
 
(c) Agent shall have received duly executed Deposit Account Control Agreements
with respect to all of each Borrower’s Deposit Accounts (other than Excluded
Accounts), in each case, in form and substance, and with financial institutions,
satisfactory to Agent.
 
(d) Agent shall have received certificates, in form and substance satisfactory
to it, from a knowledgeable Senior Officer of each Borrower certifying that,
after giving effect to the initial Loans and Transactions hereunder, (i) such
Borrower is Solvent; (ii) no Default or Event of Default exists; (iii) the
representations and warranties set forth in Section 9 are true and correct; and
(iv) such Borrower has complied with all agreements and conditions to be
satisfied by it under the Loan Documents.
 
(e) Agent shall have received a certificate of a duly authorized officer of each
Obligor, certifying (i) that attached copies of such Obligor’s charter,
certificate or articles of incorporation, bylaws or similar agreement or
instrument governing the formation of such Obligor are true and complete, and in
full force and effect, without amendment except as shown; (ii) that an attached
copy of resolutions authorizing execution and delivery of the Loan Documents is
true and complete, and that such resolutions are in full force and effect, were
duly adopted, have not been amended, modified or revoked, and constitute all
resolutions adopted with respect to this credit facility; and (iii) to the
title, name and signature of each Person authorized to sign the Loan Documents.
Agent may conclusively rely on this certificate until it is otherwise notified
by the applicable Obligor in writing.
 
(f) Agent shall have received a written opinion of Jones Day, as well as any
local counsel to Borrowers or Agent, in form and substance satisfactory to
Agent.
 
(g) Agent shall have received copies of the charter documents of each Obligor,
certified by the Secretary of State or other appropriate official of such
Obligor’s jurisdiction of organization. Agent shall have received good standing
certificates for each Obligor, issued by the Secretary of State or other
appropriate official of such Obligor’s jurisdiction of organization and each
jurisdiction where such Obligor maintains offices.
 
(h) Agent shall have received copies of policies or certificates of insurance
and related endorsements for the insurance policies carried by Borrowers, all in
compliance with the Loan Documents (including the requirements of Section
8.6.2).
 
(i) Agent shall have completed and be satisfied with its business, financial and
legal due diligence of Obligors, including but not limited to, (i) a field
examination of the books, records and operations of Borrowers and Subsidiaries
and a roll-forward of such field examination; (ii) receipt of audited financial
statements of Borrowers and Subsidiaries for the last three Fiscal Years; (iii)
review of material contracts of Borrowers and Subsidiaries; (iv) receipt of a
pro forma balance sheet of Borrowers and Subsidiaries, dated as of the Closing
Date, which balance sheet shall reflect no material changes from the most recent
pro forma balance sheet of Borrowers and Subsidiaries previously delivered to
Agent; (v) interim financial statements for Borrowers and Subsidiaries as of a
date not more than 30 days prior to the Closing Date; and (vi) monthly financial
projections of Borrowers and Subsidiaries for the next 12 calendar months and
quarterly projections of Borrowers and Subsidiaries for the next 3 Fiscal Years,
including balance sheets, income statements and cash flow statements. No
material adverse change in the financial condition of any Obligor or in the
quality, quantity or value of any Collateral shall have occurred since December
31, 2018.
 
(j) Borrowers shall have paid all fees and expenses to be paid to Agent and
Lenders on the Closing Date.
 
 
 

-36-

 
 
(k) Agent shall have received a Borrowing Base Report as of February 29, 2020.
Upon giving effect to the initial funding of Loans, and the payment by Borrowers
of all fees and expenses incurred in connection herewith, as well as any
payables stretched beyond their customary payment practices, (i) Availability
shall be at least $2,000,000 and (ii) the sum of (A) Availability plus (B)
unrestricted cash of the Borrowers on the Closing Date shall be at least
$8,000,000.
 
(l) Agent shall have received evidence that the loans and other obligations
under the Existing Lender Documentation and under any other agreements with
respect to any Debt not permitted pursuant to Section 10.2.1 hereof have been
repaid or will be repaid with the initial Loans made hereunder on the Closing
Date and the commitments thereunder have been terminated, and the Agent shall
have received a customary payoff letter in form and substance reasonably
satisfactory to it relating to the termination (or assignment to the Agent) of
all mortgages, financing statements, and liens associated therewith.
 
(m) Agent and Lenders, shall have each received (and shall be satisfied with) at
least ten (10) Business Days prior to the Closing Date, (i) an executed
Certificate of Beneficial Ownership with respect to each Obligor (other than
AutoWeb); and (ii) all other documentation and other information about the
Obligors required under applicable “know your customer” and anti-money
laundering rules and regulations, including the PATRIOT Act, that has been
requested by the Agent and the Lenders at least ten (10) Business Days prior to
the Closing Date.
 
(n) Agent shall have received a certificate of the Borrower Agent's chief
financial officer, in form, substance and detail satisfactory to the Agent,
demonstrating that the EBITDA of the Borrowers and Subsidiaries, on a
consolidated basis (as adjusted in a manner satisfactory to the Agent), for the
twelve month period ended February 29, 2020, is greater than $(3,600,000).
 
(o) No action, suit, investigation, litigation or proceeding pending or
threatened in any court or before any arbitrator or Governmental Authority that,
in Agent’s judgment, (i) would reasonably be expected to have a Material Adverse
Effect or (ii) could reasonably be expected to materially and adversely affect
the transactions contemplated by this Agreement and the other Loan Documents.
 
(p) Agent shall be satisfied with the ownership, organizational, legal, tax
management, capitalization, and capital structure of Borrowers and Subsidiaries,
and shall be satisfied that Borrowers and Subsidiaries will be Solvent, after
giving effect to the Transactions.
 
(q) The respective credit committees of each Lender shall have approved the
provision of the credit facilities under this Agreement.
 
(r) Agent shall have received evidence that Borrowers have received all
governmental and third party consents and approvals as may be appropriate in
connection with the transactions contemplated by this Agreement and the other
Loan Documents.
 
(s) Agent shall have received a duly executed copy of a Lien Waiver for
Borrower’s location at 400 North Ashley Drive, Suite 300, Tampa, Florida 33602,
in form and substance satisfactory to Agent.
 
(t) Agent shall have received written instructions from Borrower Agent directing
the application of proceeds of the initial Loans made pursuant to this Agreement
(which in the aggregate shall be no less than the Minimum Balance).
 
(u) Agent shall be satisfied that each Borrower is in good standing with its
vendors with satisfactory accounts payable relative to the vendor terms and
agreements and industry standards.
 
(v) All corporate and other proceedings, and all documents, instruments and
other legal matters in connection with the transactions shall be satisfactory in
form and substance to Agent and its counsel.
 
 
 

-37-

 
 
6.2 Conditions Precedent to All Credit Extensions. Agent and Lenders shall in no
event be required to make any credit extension hereunder (including funding any
Loan or granting any other accommodation to or for the benefit of any Borrower),
if the following conditions are not satisfied on such date and upon giving
effect thereto:
 
(a) No Default or Event of Default exists;
 
(b) The representations and warranties of each Obligor set forth in the Loan
Documents are true and correct in all material respects on and as of the date of
such credit extension; provided that, to the extent that such representations
and warranties specifically refer to an earlier date, they shall be true and
correct in all material respects as of such earlier date; provided further that
any representation and warranty that is qualified as to “materiality,” “Material
Adverse Effect” or similar language shall be true and correct in all respects on
the date of such credit extension or on such earlier date, as the case may be;
 
(c) All conditions precedent in any Loan Document are satisfied; and
 
(d) No event has occurred or circumstance exists that has or would reasonably be
expected to have a Material Adverse Effect.
 
Each request (or deemed request) by a Borrower for any credit extension shall
constitute a representation by Borrowers that the foregoing conditions are
satisfied on the date of such request and on the date of the credit extension.
As an additional condition to a credit extension, Agent may request any other
information, certification, document, instrument or agreement as it deems
appropriate.
 
SECTION 7.  COLLATERAL
 
7.1 Grant of Security Interest. To secure the prompt payment and performance of
its Obligations, each Obligor hereby grants to Agent, for the benefit of Secured
Parties, a continuing security interest in and Lien upon all Property of such
Obligor, including all of the following Property, whether now owned or hereafter
acquired, and wherever located:
 
(a) all Accounts;
 
(b) all Chattel Paper, including electronic chattel paper;
 
(c) all Commercial Tort Claims, including those shown on Schedule 9.1.16 of the
Disclosure Schedule;
 
(d) all Deposit Accounts;
 
(e) all Documents;
 
(f) all General Intangibles, including Intellectual Property;
 
(g) all Goods, including Inventory, Equipment and fixtures;
 
(h) all Instruments;
 
(i) all Investment Property;
 
(j) all Letter-of-Credit Rights;
 
(k) all Supporting Obligations;
 
(l) all monies, whether or not in the possession or under the control of Agent,
a Lender, or a bailee or Affiliate of Agent or a Lender, including any Cash
Collateral;
 
(m) all accessions to, substitutions for, and all replacements, products, and
cash and non-cash proceeds of the foregoing, including proceeds of and unearned
premiums with respect to insurance policies, and claims against any Person for
loss, damage or destruction of any Collateral; and
 
(n) all books and records (including customer lists, blueprints, technical
specifications, manuals, files, correspondence, tapes, computer programs,
print-outs, computer records, disks and other electronic storage media and
related data processing software and similar items that at any time evidence or
contain information relating to the Collateral or are otherwise necessary or
helpful in the collection or realization thereupon) pertaining to the foregoing.
 
 
 

-38-

 
 
Notwithstanding the foregoing or anything else contained in any Loan Document,
the Collateral shall not include any Excluded Property.
 
7.2 Lien on Deposit Accounts; Cash Collateral.
 
7.2.1 Deposit Accounts. To further secure the prompt payment and performance of
its Obligations, each Obligor hereby grants to Agent a continuing security
interest in and Lien upon all amounts credited to any Deposit Account of such
Obligor, including sums in any blocked, lockbox, sweep or collection account.
Each Obligor hereby authorizes and directs each bank or other depository to
deliver to Agent, upon request, all balances in any Deposit Account subject to a
Deposit Account Control Agreement in accordance with the terms of such Deposit
Account Control Agreement, without inquiry into the authority or right of Agent
to make such request.
 
7.2.2 Cash Collateral. Cash Collateral may be invested, at Agent’s Permitted
Discretion (with the consent of Obligors, provided no Event of Default exists),
but Agent shall have no duty to do so, regardless of any agreement or course of
dealing with any Obligor, and shall have no responsibility for any investment or
loss. As security for its Obligations, each Obligor hereby grants to Agent a
security interest in and Lien upon all Cash Collateral delivered hereunder from
time to time, whether held in a segregated cash collateral account or otherwise.
Agent may apply Cash Collateral to payment of such Obligations as they become
due in accordance with the terms of this Agreement. All Cash Collateral and
related deposit accounts shall be under the sole dominion and control of Agent,
and no Obligor or other Person shall have any right to any Cash Collateral until
Full Payment of the Obligations.
 
7.3 Real Estate Collateral.
 
7.3.1 Lien on Real Estate. The Obligations shall also be secured by Mortgages
upon all Real Estate owned by Obligors. If any Obligor acquires Real Estate
after the Closing Date, such Obligor shall, within 45 days, execute, deliver and
record a Mortgage sufficient to create a first priority Lien in favor of Agent
on such Real Estate, and shall deliver all Related Real Estate Documents.
 
7.3.2 Collateral Assignment of Leases. To further secure the prompt payment and
performance of its Obligations, unless otherwise prohibited by the terms of the
applicable lease, each Obligor hereby transfers and assigns to Agent all of such
Obligor’s right, title and interest in, to and under all now or hereafter
existing leases of real Property to which such Obligor is a party, whether as
lessor or lessee, and all extensions, renewals, modifications and proceeds
thereof.
 
7.4 Other Collateral.
 
7.4.1 Commercial Tort Claims. Obligors shall promptly notify Agent in writing if
any Obligor has a Commercial Tort Claim (other than, as long as no Default or
Event of Default exists, a Commercial Tort Claim for less than $500,000), shall
promptly amend Schedule 9.1.16 of the Disclosure Schedule to include such claim,
and shall take such actions as Agent deems appropriate to subject such claim to
a duly perfected, first priority Lien in favor of Agent.
 
7.4.2 Certain After-Acquired Collateral. Obligors shall promptly notify Agent in
writing if, after the Closing Date, any Obligor obtains any interest in any
Collateral consisting of Deposit Accounts, Chattel Paper, Documents,
Instruments, Investment Property or Letter-of-Credit Rights and, upon Agent’s
request, shall promptly take such actions as Agent deems appropriate to effect
Agent’s duly perfected, first priority Lien upon such Collateral, including
obtaining any appropriate possession, control agreement or, as applicable, Lien
Waiver (it being agreed that, unless a Default or Event of Default exists and is
continuing, no actions need to be taken with respect to (a) Excluded Accounts or
(b) Chattel Paper, Instruments, or Letter-of-Credit Rights with an aggregate
value of less than $500,000). If any Collateral with a value in excess of
$100,000 is in the possession of a third party, at Agent’s request, Obligors
shall use commercially reasonable efforts to obtain an acknowledgment that such
third party holds the Collateral for the benefit of Agent. If an Obligor
registers any Intellectual Property with a Governmental Authority or obtains any
Intellectual Property that is registered with a Governmental Authority, such
Obligor shall notify Agent in writing thereof when it delivers the next
Compliance Certificate and, upon Agent’s request, shall promptly take such
actions as Agent deems appropriate to effect Agent’s duly perfected, first
priority Lien upon such Intellectual Property.
 
 
 

-39-

 
 
7.5 Limitations. The Lien on Collateral granted hereunder is given as security
only and shall not subject Agent or any Lender to, or in any way modify, any
obligation or liability of Obligors relating to any Collateral. In no event
shall the grant of any Lien under any Loan Document secure an Excluded Swap
Obligation of the granting Obligor.
 
7.6 Further Assurances. All Liens granted to Agent under the Loan Documents are
for the benefit of Secured Parties. Promptly upon request, Obligors shall
deliver such instruments and agreements, and shall take such actions, as Agent
deems appropriate under Applicable Law to evidence or perfect its Lien on any
Collateral, or otherwise to give effect to the intent of this Agreement. Each
Obligor authorizes Agent to file any financing statement that describes the
Collateral as “all assets” or “all personal property” of such Obligor, or words
to similar effect, and ratifies any action taken by Agent before the Closing
Date to effect or perfect its Lien on any Collateral.
 
7.7 Foreign Subsidiary Stock. Notwithstanding Section 7.1, the Collateral shall
include that percentage of the outstanding equity securities of Foreign
Subsidiaries which would not create a material adverse tax consequence for the
Borrowers, taken as a whole.
 
SECTION 8. COLLATERAL ADMINISTRATION
 
8.1 Borrowing Base Reports. Borrowers shall deliver to Agent (and Agent shall
promptly deliver same to Lenders) a Borrowing Base Report (i) as of the close of
business of the previous month by the fifteenth day of each month, (ii) as of
the close of business of the previous week by the third Business Day of each
week, and (iii) at such other times as Agent may request (including, without
limitation, following the occurrence and during the continuance of any Event of
Default). Each Borrowing Base Report shall (a) be accompanied by schedules which
provide detail supporting such Borrowing Base Report, including, without
limitation, an accounts receivable aging, accounts payable aging, sales/invoice
registers and collection journals, and a detailed report of all Accounts that
meet one or more criteria in clauses (a) through (o) of the definition of
Eligible Accounts and (b) include a revised Schedule 8.6.1 of the Disclosure
Schedule, which has been updated as of the end of the immediately preceding
month in accordance with Section 8.6.1, all in form and substance satisfactory
to Agent in its Permitted Discretion. All information (including a calculation
of Availability) in a Borrowing Base Report shall be certified by Borrowers.
Agent may from time to time adjust such report in its Permitted Discretion (x)
to reflect Agent’s reasonable estimate of declines in value of Collateral, due
to collections received in the Dominion Account or otherwise; (y) to adjust
advance rates to reflect changes in dilution, quality, mix and other factors
affecting Collateral; and (z) to the extent any information or calculation does
not comply with this Agreement.
 
8.2 Accounts.
 
8.2.1 Records and Schedules of Accounts. Each Borrower shall keep accurate and
complete records of its Accounts, including all payments and collections
thereon, and shall submit to Agent sales, collection, reconciliation and other
reports in form satisfactory to Agent, on such periodic basis as Agent may
request. Each Borrower shall also provide to Agent, on or before the 15th day of
each month, a detailed aged trial balance of all Accounts as of the end of the
preceding month, specifying each Account’s Account Debtor name and address,
amount, invoice date and due date, showing any discount, allowance, credit,
authorized return or dispute, and including such proof of delivery, copies of
invoices and invoice registers, copies of related documents, repayment
histories, status reports and other information as Agent may reasonably request.
If Accounts in an aggregate face amount of $200,000 or more cease to be Eligible
Accounts, Borrowers shall notify Agent of such occurrence promptly (and in any
event within one Business Day) after any Borrower has knowledge thereof.
 
8.2.2 Taxes. If an Account of any Borrower includes a charge for any Taxes and
the Borrower does not timely pay the amount thereof to the proper taxing
authority, Agent is authorized, in its discretion, to pay such amount for the
account of such Borrower and to charge Borrowers therefor; provided, however,
that neither Agent nor Lenders shall be liable for any Taxes that may be due
from Borrowers or with respect to any Collateral.
 
 
 

-40-

 
 
8.2.3 Account Verification. Whether or not a Default or Event of Default exists,
Agent shall have the right at any time, in the name of Agent, any designee of
Agent or any Borrower, to verify the validity, amount or any other matter
relating to any Accounts of Borrowers by mail, telephone or otherwise. Borrowers
shall cooperate fully with Agent in an effort to facilitate and promptly
conclude any such verification process (provided that Agent shall cooperate with
Borrowers to (a) keep confidential the transactions contemplated hereby and (b)
so long as no Default or Event of Default exists and is continuing, conduct such
verifications in a manner designed to minimize interruption of the Obligor’s
business).
 
8.2.4 Maintenance of Dominion Account. Obligors shall maintain a Dominion
Account pursuant to lockbox or other arrangements acceptable to Agent. Obligors
shall obtain an agreement (in form and substance satisfactory to Agent) from
each lockbox servicer and Dominion Account bank, establishing Agent’s control
over and Lien in the lockbox or Dominion Account, requiring immediate deposit of
all remittances received in the lockbox to the Dominion Account, and waiving
offset rights of such servicer or bank, except for customary administrative
charges. If the Dominion Account is not maintained with Bank, Agent may require
immediate transfer of all funds in such account to a Dominion Account maintained
with another financial institution reasonably acceptable to Agent. Agent and
Lenders assume no responsibility to Obligors for any lockbox arrangement or
Dominion Account, including any claim of accord and satisfaction or release with
respect to any Payment Items accepted by any bank.
 
8.2.5 Proceeds of Collateral. Obligors shall request in writing and otherwise
take all necessary steps to ensure that all payments on Accounts or otherwise
relating to Collateral are made directly to a Dominion Account (or a lockbox
relating to a Dominion Account). If any Obligor or Subsidiary receives cash or
Payment Items with respect to any Collateral, it shall hold same in trust for
Agent and promptly (not later than two (2) Business Days after receipt) deposit
same into the Dominion Account.
 
8.3 [Reserved].
 
8.4 Equipment.
 
8.4.1 Records and Schedules of Equipment. Each Borrower shall keep accurate and
complete records of its Equipment, including kind, quality, quantity, cost,
acquisitions (including copies of purchase orders, invoices, and shipping and
delivery documents) and dispositions thereof, and shall submit to Agent, on such
periodic basis as Agent may request, a current schedule thereof, in form
satisfactory to Agent. Promptly upon request, Borrowers shall deliver to Agent
evidence of their ownership or interests in any Equipment.
 
8.4.2 Dispositions of Equipment. No Borrower shall sell, lease or otherwise
dispose of any Equipment, without the prior written consent of Agent, other than
a Permitted Asset Disposition.
 
8.4.3 Condition of Equipment. The Equipment is in good operating condition and
repair, and all necessary replacements and repairs have been made so that the
value and operating efficiency of the Equipment is preserved at all times,
reasonable wear and tear excepted. Each Borrower shall ensure that the Equipment
is mechanically and structurally sound, and capable of performing the functions
for which it was designed, in accordance with manufacturer specifications. No
Borrower shall permit any material Equipment to become affixed to real Property
unless any landlord or mortgagee delivers a Lien Waiver or other acknowledgment
that such Equipment does not constitute a fixture.
 
8.5 Deposit Accounts. Schedule 8.5 of the Disclosure Schedule shows all Deposit
Accounts maintained by Obligors, including Dominion Accounts. Each Obligor shall
take all actions necessary to establish Agent’s first priority Lien on each
Deposit Account (except Excluded Accounts). Obligors shall be the sole account
holders of each Deposit Account and shall not allow any Person (other than Agent
and the depository bank) to have control over their Deposit Accounts or any
Property deposited therein. Obligors shall promptly notify Agent of any opening
or closing of a Deposit Account and will amend Schedule 8.5 of the Disclosure
Schedule to reflect same.
 
 
 

-41-

 
 
8.6 General Provisions.
 
8.6.1 Location of Collateral. All tangible items of Collateral, other than
Inventory in transit, shall at all times be kept by Obligors at the business
locations set forth in Schedule 8.6.1 of the Disclosure Schedule, except that
Obligors may (a) make sales or other dispositions of Collateral in accordance
with Section 10.2.6; and (b) move Collateral to another location in the United
States (or, if such Collateral is outside the United States and has a value of
less than $100,000, to another location outside the United States), upon 30
days’ prior written notice to Agent.
 
8.6.2 Insurance of Collateral; Condemnation Proceeds.
 
(a) Each Obligor shall maintain (i) insurance with respect to the Collateral,
covering casualty, hazard, theft, malicious mischief, flood and other risks, in
amounts, with endorsements and with insurers (with a Best rating of at least A+,
unless otherwise approved by Agent in its Permitted Discretion) satisfactory to
Agent, and (ii) ensure that all Real Estate subject to a Mortgage is insured
pursuant to policies which are valid and in full force and effect and which
provide adequate coverage from reputable and financially sound insurers in
amounts sufficient to insure the assets and risks of each applicable Obligor so
as to cause each Lender to be in compliance with Flood Laws. All proceeds under
each policy shall be payable to Agent. From time to time upon request by Agent,
Obligors shall deliver to Agent certificates of insurance, copies of insurance
policies, and updated flood plain searches. Unless Agent shall agree otherwise,
each policy shall include satisfactory endorsements (i) showing Agent as
lender’s loss payee and additional insured, as applicable; (ii) requiring 30
days prior written notice to Agent in the event of cancellation of the policy
for any reason whatsoever; and (iii) specifying that the interest of Agent shall
not be impaired or invalidated by any act or neglect of any Obligor or the owner
of the Property, nor by the occupation of the premises for purposes more
hazardous than are permitted by the policy. If any Obligor fails to provide and
pay for any insurance, Agent may, at its option, but shall not be required to,
procure the insurance and charge Obligors therefor. Each Obligor agrees to
deliver to Agent, promptly as rendered, copies of all reports made to insurance
companies. While no Event of Default exists, Obligors may settle, adjust or
compromise any insurance claim, as long as the proceeds are delivered to Agent.
If an Event of Default exists, only Agent shall be authorized to settle, adjust
and compromise such claims.
 
(b) Any proceeds of insurance (other than proceeds from workers’ compensation or
D&O insurance) and any awards arising from condemnation of any Collateral shall
be paid to Agent. Any such proceeds or awards that relate to Accounts or
Inventory shall be applied to payment of the Obligations in accordance with the
terms of this Agreement.
 
(c) If requested by Borrowers in writing within 15 days after Agent’s receipt of
any insurance proceeds or condemnation awards in excess of $200,000 relating to
any loss or destruction of Equipment or Real Estate, Borrowers may use such
proceeds or awards to repair or replace such Equipment or Real Estate (and until
so used, the proceeds shall be held by Agent as Cash Collateral) as long as (i)
no Default or Event of Default exists; (ii) such repair or replacement is
promptly undertaken and concluded, in accordance with plans reasonably
satisfactory to Agent; (iii) replacement buildings are constructed on the sites
of the original casualties and are of comparable size, quality and utility to
the destroyed buildings; (iv) the repaired or replaced Property is free of
Liens, other than Permitted Liens that are not Purchase Money Liens; and (v)
Borrowers comply with disbursement procedures for such repair or replacement as
Agent may reasonably require.
 
8.6.3 Protection of Collateral. All expenses of protecting, storing,
warehousing, insuring, handling, maintaining and shipping any Collateral, all
Taxes payable with respect to any Collateral (including any sale thereof), and
all other payments required to be made by Agent to any Person to realize upon
any Collateral, shall be borne and paid by Borrowers. Agent shall not be liable
or responsible in any way for the safekeeping of any Collateral, for any loss or
damage thereto (except for reasonable care in its custody while Collateral is in
Agent’s actual possession), for any diminution in the value thereof, or for any
act or default of any warehouseman, carrier, forwarding agency or other Person
whatsoever, but the same shall be at Obligors’ sole risk.
 
8.6.4 Defense of Title. Each Obligor shall use commercially reasonable efforts
to defend its title to Collateral and Agent’s Liens therein against all Persons,
claims and demands, except Permitted Liens.
 
 
 

-42-

 
 
8.7 Power of Attorney. Each Obligor hereby irrevocably constitutes and appoints
Agent (and all Persons designated by Agent) as such Obligor’s true and lawful
attorney (and agent-in-fact) for the purposes provided in this Section. Agent,
or Agent’s designee, may, without notice and in either its or an Obligor’s name,
but at the cost and expense of Borrowers:
 
(a) Endorse an Obligor’s name on any Payment Item or other proceeds of
Collateral (including proceeds of insurance) that come into Agent’s possession
or control; and
 
(b) During an Event of Default, (i) notify any Account Debtors of the assignment
of their Accounts, demand and enforce payment of Accounts by legal proceedings
or otherwise, and generally exercise any rights and remedies with respect to
Accounts; (ii) settle, adjust, modify, compromise, discharge or release any
Accounts or other Collateral, or any legal proceedings brought to collect
Accounts or Collateral; (iii) sell or assign any Accounts and other Collateral
upon such terms, for such amounts and at such times as Agent deems advisable;
(iv) collect, liquidate and receive balances in Deposit Accounts or investment
accounts, and take control, in any manner, of proceeds of Collateral; (v)
prepare, file and sign an Obligor’s name to a proof of claim or other document
in a bankruptcy of an Account Debtor, or to any notice, assignment or
satisfaction of Lien or similar document; (vi) receive, open and dispose of mail
addressed to an Obligor, and notify postal authorities to deliver any such mail
to an address designated by Agent; (vii) endorse any Chattel Paper, Document,
Instrument, bill of lading, or other document or agreement relating to any
Accounts, Inventory or other Collateral; (viii) use an Obligor’s stationery and
sign its name to verifications of Accounts and notices to Account Debtors; (ix)
use information contained in any data processing, electronic or information
systems relating to Collateral; (x) make and adjust claims under insurance
policies; (xi) take any action as may be necessary or appropriate to obtain
payment under any letter of credit, banker’s acceptance or other instrument for
which an Obligor is a beneficiary; and (xii) take all other actions as Agent
deems appropriate to fulfill any Obligor’s obligations under the Loan Documents.
 
SECTION 9. REPRESENTATIONS AND WARRANTIES
 
9.1 General Representations and Warranties. To induce Agent and Lenders to enter
into this Agreement and to make available the Commitments and Loans, each
Obligor represents and warrants that:
 
9.1.1 Organization and Qualification. Each Obligor and Subsidiary is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Each Obligor and Subsidiary is duly qualified,
authorized to do business and in good standing as a foreign corporation in each
jurisdiction where failure to be so qualified would reasonably be expected to
have a Material Adverse Effect. No Obligor is an EEA Financial Institution.
 
9.1.2 Power and Authority. Each Obligor is duly authorized to execute, deliver
and perform its Loan Documents. The execution, delivery and performance of the
Loan Documents have been duly authorized by all necessary action, and do not (a)
require any consent or approval of any holders of Equity Interests of any
Obligor, except those already obtained; (b) contravene the Organic Documents of
any Obligor; (c) violate or cause a default under any Applicable Law or Material
Contract except where the violation or default would not reasonably be expected
to result in a Material Adverse Effect; or (d) result in or require imposition
of a Lien (other than Permitted Liens) on any Obligor’s Property.
 
9.1.3 Enforceability. Each Loan Document is a legal, valid and binding
obligation of each Obligor party thereto, enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally.
 
9.1.4 Capital Structure. Schedule 9.1.4 of the Disclosure Schedule shows as of
the Closing Date, for each Obligor and Subsidiary, its name, jurisdiction of
organization, and, other than with respect to AutoWeb, the number of its
authorized and issued Equity Interests, holders of its Equity Interests, and
agreements binding on such holders with respect to such Equity Interests. Except
as disclosed on Schedule 9.1.4 of the Disclosure Schedule, in the five years
preceding the Closing Date, no Obligor or Subsidiary has acquired any
substantial assets from any other Person nor been the surviving entity in a
merger or combination. Each Obligor has good title to its Equity Interests in
its Subsidiaries, subject only to Specified Permitted Liens, and all such Equity
Interests are duly issued, fully paid and non-assessable. Except as disclosed on
Schedule 9.1.4 of the Disclosure Schedule, there are no outstanding purchase
options, warrants, subscription rights, agreements to issue or sell, convertible
interests, phantom rights or powers of attorney relating to Equity Interests of
any Obligor (other than AutoWeb) or Subsidiary.
 
 
 

-43-

 
 
9.1.5 Title to Properties; Priority of Liens.
 
(a) Each Obligor and Subsidiary has good and marketable title to (or valid
leasehold interests in) all of its Real Estate, and good title to all of its
personal Property, including all Property reflected in any financial statements
delivered to Agent or Lenders, in each case free of Liens except Permitted
Liens. Each Obligor and Subsidiary has paid and discharged all lawful claims
that, if unpaid, could become a Lien on its Properties, other than Permitted
Liens. All Liens of Agent in the Collateral are duly perfected, first priority
Liens, subject only to Permitted Liens.
 
(b) Set forth on Schedule 9.1.5 of the Disclosure Schedule is a complete and
accurate list of all real property owned, leased, licensed or otherwise used in
the operations of the business of each Obligor as of the Closing Date and
showing the current street address (including, where applicable, county, state
and other relevant jurisdictions), record owner (if owned) or leasehold interest
holder and, (if leased) lessee or other user thereof. Each of such leases and
subleases is valid and enforceable in accordance with its terms (except as such
enforceability may be subject to or limited by bankruptcy, insolvency,
reorganization or other similar laws) and is in full force and effect, and to
each Obligor's knowledge, no default by any party to any material lease or
material sublease exists, except for defaults that would not reasonably be
expected to result in a Material Adverse Effect.
 
9.1.6 Accounts. Agent may rely, in determining which Accounts are Eligible
Accounts, on all statements and representations made by Borrowers with respect
to such Accounts. Borrowers warrant, with respect to each Account shown in a
Borrowing Base Report as eligible to be an Eligible Account, that:
 
(a) it is genuine and in all respects what it purports to be;
 
(b) it arises out of a completed, bona fide sale and delivery of goods or
rendition of services in the Ordinary Course of Business, and substantially in
accordance with any purchase order, contract or other document relating thereto;
 
(c) it is for a sum certain, maturing as stated in the applicable invoice, a
copy of which has been furnished or is available to Agent on request;
 
(d) it is not subject to any offset, Lien (other than Specified Permitted
Liens), deduction, defense, dispute, counterclaim or other adverse condition
except as disclosed to Agent; and it is absolutely owing by the Account Debtor,
without contingency of any kind;
 
(e) no purchase order, agreement, document or Applicable Law restricts
assignment of the Account to Agent (regardless of whether, under the UCC, the
restriction is ineffective), and the applicable Borrower is the sole payee or
remittance party shown on the invoice;
 
(f) no extension, compromise, settlement, modification, credit, deduction or
return has been authorized or is in process with respect to the Account, except
discounts or allowances granted in the Ordinary Course of Business for prompt
payment that are reflected (i) on the face of the invoice related thereto and in
the reports submitted to Agent hereunder or (ii) otherwise communicated to Agent
at the time of such discount or allowance; and
 
(g) to Borrowers’ knowledge (without any obligation to make specific inquiries),
(i) there are no facts or circumstances that are reasonably likely to impair the
enforceability or collectability of such Account; (ii) the Account Debtor had
the capacity to contract when the Account arose, continues to meet the
applicable Borrower’s customary credit standards, is Solvent, is not
contemplating or subject to an Insolvency Proceeding, and has not failed, or
suspended or ceased doing business; and (iii) there are no proceedings or
actions threatened or pending against any Account Debtor that would reasonably
be expected to have a material adverse effect on the Account Debtor’s financial
condition.
 
9.1.7 Financial Statements. The consolidated and consolidating balance sheets,
and related statements of income, cash flow and shareholders equity, of
Borrowers and Subsidiaries that have been and are hereafter delivered to Agent
and Lenders, were and will be prepared in accordance with GAAP, and fairly
present the financial positions and results of operations of Borrowers and
Subsidiaries at the dates and for the periods indicated. All projections
delivered from time to time to Agent and Lenders have been prepared in good
faith, based on reasonable assumptions in light of the circumstances at such
time. Since December 31, 2018, there has been no change in the condition,
financial or otherwise, of any Borrower or Subsidiary that would reasonably be
expected to have a Material Adverse Effect. Each Borrower is Solvent, and the
Borrowers and the Subsidiaries, taken as a whole, are Solvent.
 
 
 

-44-

 
 
9.1.8 Surety Obligations. No Obligor or Subsidiary is obligated as surety or
indemnitor under any bond or other contract that assures payment or performance
of any obligation of any Person, except as permitted hereunder.
 
9.1.9 Taxes. Each Obligor and Subsidiary has filed all federal and all material
state and local tax returns and other reports that it is required by law to
file, and has paid, or made provision for the payment of, all Taxes upon it, its
income and its Properties that are due and payable, except to the extent being
Properly Contested. The provision for Taxes on the books of each Obligor and
Subsidiary is adequate for all years not closed by applicable statutes, and for
its current Fiscal Year.
 
9.1.10 Brokers. There are no brokerage commissions, finder’s fees or investment
banking fees payable by or on behalf of Borrowers in connection with any
transactions contemplated by the Loan Documents.
 
9.1.11 Intellectual Property. Each Obligor and Subsidiary owns or has sufficient
lawful rights to use all Intellectual Property that is material and necessary
for the conduct of its business. There is no pending or, to any Obligor’s
knowledge, threatened Intellectual Property Claim with respect to any Obligor,
any Subsidiary or any of their Property (including any Intellectual Property)
necessary for the conduct of its business. No Obligor or Subsidiary pays or owes
any royalty or other compensation to any Person with respect to any Intellectual
Property, other than for Intellectual Property included with third party
products or services used in the Ordinary Course of Business. As of the Closing
Date, all Intellectual Property owned, used or licensed by, or otherwise subject
to any interests of, any Obligor or Subsidiary that is material and necessary
for the conduct of its business is shown on Schedule 9.1.11 of the Disclosure
Schedule.
 
9.1.12 Governmental Approvals. Each Obligor and Subsidiary has, is in compliance
with, and is in good standing with respect to, all Governmental Approvals
necessary to conduct its business and to own, lease and operate its Properties,
except where noncompliance would not reasonably be expected to have a Material
Adverse Effect. All necessary import, export or other licenses, permits or
certificates for the import or handling of any goods or other Collateral have
been procured and are in effect, and Obligors and Subsidiaries have complied
with all foreign and domestic laws with respect to the shipment and importation
of any goods or Collateral, except where noncompliance would not reasonably be
expected to have a Material Adverse Effect.
 
9.1.13 Compliance with Laws. Each Obligor and Subsidiary has duly complied, and
its Properties and business operations are in compliance, in all material
respects with all Applicable Law, except where noncompliance would not
reasonably be expected to have a Material Adverse Effect. There is no
outstanding citation, notice or order of material noncompliance issued to any
Obligor or Subsidiary under any Applicable Law where noncompliance would
reasonably be excepted to result in a Material Adverse Effect. No Inventory has
been produced in violation of the FLSA.
 
9.1.14 Compliance with Environmental Laws. To Borrowers’ knowledge, no Obligor’s
or Subsidiary’s past or present operations, Real Estate or other Properties are
subject to any federal, state or local investigation to determine whether any
remedial action is needed to address any environmental pollution, hazardous
material or environmental clean-up. No Obligor or Subsidiary has received any
outstanding Environmental Notice. No Obligor or Subsidiary has any knowledge of
any contingent liability with respect to any Environmental Release,
environmental pollution or hazardous material on any Real Estate now or
previously owned, leased or operated by it.
 
9.1.15 Burdensome Contracts. No Obligor or Subsidiary is a party or subject to
any contract, agreement or charter restriction that would reasonably be expected
to have a Material Adverse Effect. No Obligor or Subsidiary is party or subject
to any Restrictive Agreement, except as permitted by Section 10.2.14. No such
Restrictive Agreement prohibits the execution, delivery or performance of any
Loan Document by an Obligor.
 
9.1.16 Litigation. There are no proceedings or investigations pending or, to any
Obligor’s knowledge, threatened against any Obligor or Subsidiary, or any of
their businesses, operations, Properties, prospects or conditions, that (a)
relate to any Loan Documents or transactions contemplated thereby; or (b) would
reasonably be expected to have a Material Adverse Effect if determined adversely
to any Obligor or Subsidiary. Except as shown on Schedule 9.1.16 of the
Disclosure Schedule (as updated pursuant to Section 7.4.1), no Obligor has a
Commercial Tort Claim (other than, as long as no Default or Event of Default
exists, a Commercial Tort Claim for less than $500,000). No Obligor or
Subsidiary is in default with respect to any order, injunction or judgment of
any Governmental Authority.
 
 
 

-45-

 
 
9.1.17 No Defaults. No event or circumstance has occurred or exists that
constitutes a Default or Event of Default. No Obligor or Subsidiary is in
default, and no event or circumstance has occurred or exists that with the
passage of time or giving of notice would constitute a default under, or permit
the applicable counterparty to terminate, as a result thereof, any Material
Contract (except where the default would not reasonably be expected to result in
a Material Adverse Effect) or in the payment of any Borrowed Money.
 
9.1.18 ERISA.
 
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code, and other federal and state laws. Each Plan that
is intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the knowledge
of Obligors, nothing has occurred which would prevent, or cause the loss of,
such qualification. Each Obligor and ERISA Affiliate has met all applicable
requirements under the Code, ERISA and the Pension Protection Act of 2006, in
all material respects, and no application for a waiver of the minimum funding
standards or an extension of any amortization period has been made with respect
to any Plan.
 
(b) There are no pending or, to the knowledge of Obligors, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan that would reasonably be expected to have a Material Adverse Effect.
There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted in or would
reasonably be expected to have a Material Adverse Effect.
 
(c) (i) No ERISA Event has occurred or is reasonably expected to occur; (ii) as
of the most recent valuation date for any Pension Plan, the funding target
attainment percentage (as defined in Section 430(d)(2) of the Code) is at least
60%; and no Obligor or ERISA Affiliate knows of any reason that such percentage
could reasonably be expected to drop below 60%; (iii) no Obligor or ERISA
Affiliate has incurred any liability to the PBGC except for the payment of
premiums, and no premium payments are due and unpaid; (iv) no Obligor or ERISA
Affiliate has engaged in a transaction that could be subject to Section 4069 or
4212(c) of ERISA; and (v) no Pension Plan has been terminated by its plan
administrator or the PBGC, and no fact or circumstance exists that could
reasonably be expected to cause the PBGC to institute proceedings to terminate a
Pension Plan.
 
(d) With respect to any Foreign Plan, (i) all employer and employee
contributions required by law or by the terms of the Foreign Plan have been
made, or, if applicable, accrued, in accordance with normal accounting
practices; (ii) the fair market value of the assets of each funded Foreign Plan,
the liability of each insurer for any Foreign Plan funded through insurance, or
the book reserve established for any Foreign Plan, together with any accrued
contributions, is sufficient to procure or provide for the accrued benefit
obligations with respect to all current and former participants in such Foreign
Plan according to the actuarial assumptions and valuations most recently used to
account for such obligations in accordance with applicable generally accepted
accounting principles; and (iii) it has been registered as required and has been
maintained in good standing with applicable regulatory authorities.
 
9.1.19 Trade Relations. There exists no actual or threatened termination,
limitation or materially adverse modification of any business relationship
between any Obligor or Subsidiary and any customer or supplier, or any group of
customers or suppliers, who individually or in the aggregate are material to the
business of such Obligor or Subsidiary. There exists no condition or
circumstance that could reasonably be expected to impair the ability of any
Obligor or Subsidiary to conduct its business at any time hereafter in
substantially the same manner as conducted on the Closing Date.
 
9.1.20 Labor Relations. No Obligor or Subsidiary is party to or bound by any
collective bargaining agreement. There are no material grievances, disputes or
controversies with any union or other organization of any Obligor’s or
Subsidiary’s employees, or, to any Borrower’s knowledge, any asserted or
threatened strikes, work stoppages or demands for collective bargaining.
 
9.1.21 Payable Practices. No Obligor or Subsidiary has made any material change
in its historical accounts payable practices from those in effect on the Closing
Date.
 
 
 

-46-

 
 
9.1.22 Not a Regulated Entity. No Obligor is (a) an “investment company” or a
“person directly or indirectly controlled by or acting on behalf of an
investment company” within the meaning of the Investment Company Act of 1940; or
(b) subject to regulation under the Federal Power Act, the Interstate Commerce
Act, any public utilities code or any other Applicable Law regarding its
authority to incur Debt.
 
9.1.23 Margin Stock. No Obligor or Subsidiary is engaged, principally or as one
of its important activities, in the business of extending credit for the purpose
of purchasing or carrying any Margin Stock. No Loan proceeds will be used by
Obligors to purchase or carry, or to reduce or refinance any Debt incurred to
purchase or carry, any Margin Stock or for any related purpose governed by
Regulations T, U or X of the Board of Governors.
 
9.1.24 OFAC. No Obligor, Subsidiary, or, to Borrowers’ knowledge, any director,
officer, employee, agent, affiliate or representative thereof, is or is owned or
controlled by any individual or entity that is currently the subject or target
of any Sanction or is located, organized or resident in a Designated
Jurisdiction.
 
9.1.25 Anti-Corruption Laws. Each Obligor and Subsidiary has conducted its
business in accordance with applicable anti-corruption laws in all material
respects and has instituted and maintained policies and procedures designed to
promote and achieve compliance with such laws.
 
9.1.26 Certificate of Beneficial Ownership. The Certificate of Beneficial
Ownership executed and delivered to Agent and Lenders for each Obligor, if
applicable, on or prior to the date of this Agreement, as updated from time to
time in accordance with this Agreement, is accurate, complete and correct as of
the date hereof and as of the date any such update is delivered. Each Obligor
acknowledges and agrees that the Certificate of Beneficial Ownership is one of
the Loan Documents.
 
9.2 Complete Disclosure. The Loan Documents do not contain any untrue statement
of a material fact, nor fails to disclose any material fact necessary to make
the statements contained therein not materially misleading when taken as a
whole. There is no fact or circumstance that any Obligor has failed to disclose
to Agent in writing that would reasonably be expected to have a Material Adverse
Effect.
 
SECTION 10. COVENANTS AND CONTINUING AGREEMENTS
 
10.1 Affirmative Covenants. Until Full Payment, each Obligor shall, and shall
cause each Subsidiary to:
 
10.1.1 Inspections; Appraisals.
 
(a) Permit Agent from time to time, subject (unless a Default or Event of
Default exists) to reasonable notice and normal business hours, to visit and
inspect the Properties of any Obligor or Subsidiary, inspect, audit and make
extracts from any Obligor’s or Subsidiary’s books and records, and discuss with
its officers, employees, agents, advisors and independent accountants such
Obligor’s or Subsidiary’s business, financial condition, assets, prospects and
results of operations. Lenders may participate in any such visit or inspection,
at their own expense. Secured Parties shall have no duty to any Obligor to make
any inspection, nor to share any results of any inspection, appraisal or report
with any Obligor. Obligors acknowledge that all inspections, appraisals and
reports are prepared by Agent and Lenders for their purposes, and Obligors shall
not be entitled to rely upon them.
 
(b) Reimburse Agent for all its charges, costs and expenses in connection with
examinations of Obligors’ books and records or any other financial or Collateral
matters as it deems appropriate, up to two times per Loan Year; provided,
however, that if an examination is initiated during a Default or Event of
Default, all reasonable and out-of-pocket charges, costs and expenses relating
thereto shall be reimbursed by Borrowers without regard to such limits.
Borrowers shall pay reasonable and customary charges for examination activities,
including charges for its internal examination and appraisal groups, as well as
the charges of any third party used for such purposes.
 
 
 

-47-

 
 
10.1.2 Financial and Other Information. Keep adequate records and books of
account with respect to its business activities, in which proper entries are
made in accordance with GAAP reflecting all financial transactions; and furnish
to Agent and Lenders:
 
(a) as soon as available, and in any event within 90 days after the close of
each Fiscal Year, balance sheets as of the end of such Fiscal Year and the
related statements of income, cash flow and shareholders equity for such Fiscal
Year, on consolidated and consolidating bases for Borrowers and Subsidiaries,
which consolidated statements shall be audited (without qualification) by a firm
of independent certified public accountants of recognized standing selected by
Borrowers and acceptable to Agent, and shall set forth in comparative form
corresponding figures for the preceding Fiscal Year;
 
(b) as soon as available, and in any event within 30 days after the end of each
month (but within 60 days after the last month in a Fiscal Year), unaudited
balance sheets as of the end of such month and the related statements of income
and cash flow for such month and for the portion of the Fiscal Year then
elapsed, on consolidated and consolidating bases for Borrowers and Subsidiaries,
setting forth in comparative form corresponding figures for the preceding Fiscal
Year and certified by the chief financial officer of Borrower Agent as prepared
in accordance with GAAP and fairly presenting the financial position and results
of operations for such month and period, subject to normal year-end adjustments
and the absence of footnotes;
 
(c) concurrently with delivery of financial statements under clauses (a) and (b)
above, or more frequently if requested by Agent while a Default or Event of
Default exists, a Compliance Certificate executed by the chief financial officer
of Borrower Agent;
 
(d) concurrently with delivery of financial statements under clause (a) above,
copies of all management letters and other material reports submitted to
Borrowers by their accountants in connection with such financial statements;
 
(e) not later than 30 days prior to the end of each Fiscal Year, projections of
Borrowers’ consolidated balance sheets, results of operations, cash flow and
Availability for the next Fiscal Year, month by month, and for the next three
Fiscal Years, year by year;
 
(f) at Agent’s request, a listing of each Borrower’s trade payables, specifying
the trade creditor and balance due, and a detailed trade payable aging, all in
form satisfactory to Agent;
 
(g) promptly after the sending or filing thereof, copies of any proxy
statements, financial statements or reports that any Obligor has made generally
available to its shareholders; copies of any regular, periodic and special
reports or registration statements or prospectuses that any Obligor files with
the Securities and Exchange Commission or any other Governmental Authority, or
any securities exchange; and copies of any press releases or other statements
made available by an Obligor to the public concerning material changes to or
developments in the business of such Obligor;
 
(h) promptly after the sending or filing thereof, copies of any annual report to
be filed in connection with each Plan or Foreign Plan; and
 
(i) such other reports and information (financial or otherwise) as Agent may
reasonably request from time to time in connection with any Collateral or any
Borrower’s, Subsidiary’s or other Obligor’s financial condition or business.
 
10.1.3 Notices. Notify Agent and Lenders in writing, promptly after a Borrower’s
obtaining knowledge thereof, of any of the following that affects an Obligor:
(a) the threat or commencement of any proceeding or investigation, whether or
not covered by insurance, if an adverse determination would have a Material
Adverse Effect; (b) any pending or threatened labor dispute, strike or walkout,
or the expiration of any material labor contract; (c) any material default under
or termination of a Material Contract; (d) the existence of any Default or Event
of Default; (e) any judgment in an amount exceeding $250,000; (f) the assertion
of any Intellectual Property Claim, if an adverse resolution would have a
Material Adverse Effect; (g) any violation or asserted violation of any
Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an
adverse resolution would have a Material Adverse Effect; (h) any Environmental
Release by an Obligor or on any Property owned, leased or occupied by an
Obligor; or receipt of any Environmental Notice, in each case where the release
or notice would result in liabilities exceeding $250,000; (i) the occurrence of
any ERISA Event; (j) the discharge of or any withdrawal or resignation by
Borrowers’ independent accountants; or (k) any opening of a new office or place
of business as provided in Section 8.6.1; or (l) any and all default notices
sent or received under or with respect to (i) any leased location or (ii) public
warehouse where Collateral is located (which shall be delivered within two
Business Days after receipt thereof.
 
 
 

-48-

 
 
10.1.4 Landlord and Storage Agreements. Upon request, provide Agent with copies
of all existing agreements, and promptly after execution thereof provide Agent
with copies of all future agreements, between an Obligor and any landlord,
warehouseman, processor, shipper, bailee or other Person that owns any premises
at which any Collateral consisting of books and records or with a value greater
than $100,000 may be kept or that otherwise may possess or handle any such
Collateral.
 
10.1.5 Compliance with Laws. Comply with all Applicable Laws, including ERISA,
Environmental Laws, FLSA, OSHA, Anti-Terrorism Laws, and laws regarding
collection and payment of Taxes, and maintain all Governmental Approvals
necessary to the ownership of its Properties or conduct of its business, unless
failure to comply (other than failure to comply with Anti-Terrorism Laws) or
maintain would not reasonably be expected to have a Material Adverse Effect.
Without limiting the generality of the foregoing, if any Environmental Release
occurs at or on any Properties of any Obligor or Subsidiary, to the extent
required by Applicable Law, it shall act promptly and diligently to investigate
and report to all appropriate Governmental Authorities the extent of, and to
make appropriate remedial action to eliminate, such Environmental Release,
whether or not directed to do so by any Governmental Authority.
 
10.1.6 Taxes. Pay and discharge all material Taxes prior to the date on which
they become delinquent or penalties attach, unless such Taxes are being Properly
Contested.
 
10.1.7 Insurance. In addition to the insurance required hereunder with respect
to Collateral, maintain insurance with insurers (with a Best rating of at least
A+, unless otherwise approved by Agent in its discretion) satisfactory to Agent,
(a) with respect to the Property and business of Obligors and Subsidiaries of
such type (including product liability, workers’ compensation, larceny,
embezzlement, or other criminal misappropriation insurance), in such amounts,
and with such coverages and deductibles as are customary for companies similarly
situated; and (b) business interruption insurance in an amount not less than
$10,000,000, with deductibles and subject to an endorsement or assignment
satisfactory to Agent.
 
10.1.8 Licenses. Keep each material License affecting any Collateral (including
the manufacture, distribution or disposition of Inventory) or any other material
Property of Obligors and Subsidiaries in full force and effect, except where the
failure to keep a License in full force and effect would not reasonably have a
Material Adverse Effect; promptly notify Agent of any proposed modification to
any such License, or entry into any new material License affecting any
Collateral (including the manufacture, distribution or disposition of Inventory)
or any other material Property of Obligors, in each case promptly after the
effective date therefor; pay all royalties and other amounts when due under any
such License; and notify Agent of any material default or breach asserted by any
Person to have occurred under any such License.
 
10.1.9 Future Subsidiaries. Promptly notify Agent upon any Person becoming a
Subsidiary (whether by acquisition, formation, and/or division of any Obligor in
accordance with applicable law) and, if such Person is not a Foreign Subsidiary,
cause it to guaranty the Obligations in a manner satisfactory to Agent, and to
execute and deliver such documents, instruments and agreements and to take such
other actions as Agent shall require to evidence and perfect a Lien in favor of
Agent on all assets of such Person, including delivery of such legal opinions,
in form and substance satisfactory to Agent, as it shall deem appropriate. The
foregoing provisions of this Section 10.1.9 shall not apply to any Subsidiary
formed for the sole purpose of implementing an acquisition in a triangular
merger in which such Subsidiary is a disappearing entity upon completion of the
merger.
 
10.1.10 Anti-Corruption Laws. Conduct its business in compliance in all material
respects with applicable anti-corruption laws and maintain policies and
procedures designed to promote and achieve compliance with such laws.
 
10.1.11 Compliance with Flood Laws. Take all actions required under Flood Laws
and/or requested by Agent to assist in ensuring that each Lender is in
compliance with Flood Laws, including, but not limited to, providing Agent with
the address and/or GPS coordinates of each structure located upon any Real
Estate that will be subject to a Mortgage in favor of Agent and, to the extent
required by applicable Flood Laws, obtaining flood insurance as more
particularly set forth in Section 8.6.2 for such property, structures and
contents prior to such property, structures and contents becoming Collateral.
 
 
 

-49-

 
 
10.1.12 Beneficial Ownership. Provide to Agent and the Lenders: (a) upon request
by Agent or any Lender, confirmation of the accuracy of the information set
forth in the most recent Certificate of Beneficial Ownership provided to the
Agent and Lenders; (b) a new Certificate of Beneficial Ownership, in form and
substance reasonably acceptable to Agent and each Lender, promptly when the
Persons required to be identified as a Beneficial Owner have changed; and (c)
such other information and documentation as may reasonably be requested by Agent
or any Lender from time to time for purposes of compliance by Agent or such
Lender with Applicable Laws (including without limitation the USA Patriot Act,
“know your customer” laws and other Anti-Terrorism Laws), and any policy or
procedure implemented by Agent or such Lender to comply therewith.
 
10.1.13 Post-Closing Covenant. Satisfy the following requirement: for a period
of ninety (90) days after the Closing Date (or such longer period as determined
by Agent in its sole discretion), Borrowers shall use commercially reasonable
efforts to deliver to Agent a duly executed copy of a collateral access
agreement in form and substance satisfactory to Agent for Borrower’s colocation
facility at 17836 Gillette, Irvine, CA 92614.
 
10.2 Negative Covenants. Until Full Payment, each Obligor shall not, and shall
cause each Subsidiary not to:
 
10.2.1 Permitted Debt. Create, incur, guarantee or suffer to exist any Debt,
except:
 
(a) the Obligations;
 
(b) Subordinated Debt (provided that such Subordinated Debt is subordinated to
the Obligations on terms reasonably acceptable to Agent);
 
(c) Permitted Purchase Money Debt;
 
(d) Borrowed Money (other than the Obligations, Subordinated Debt and Permitted
Purchase Money Debt), but only to the extent outstanding on the Closing Date and
not satisfied with proceeds of the initial Loans;
 
(e) Debt with respect to (i) Cash Management Services with respect to deposit
accounts permitted in accordance with this Agreement, (ii) commercial credit
card and merchant card services incurred in the Ordinary Course of Business, and
(iii) Bank Products;
 
(f) Debt that is in existence when a Person becomes a Subsidiary pursuant to a
transaction permitted under this Agreement or that is secured by an asset when
acquired by an Obligor or Subsidiary pursuant to a transaction permitted under
this Agreement, as long as such Debt was not incurred in contemplation of such
Person becoming a Subsidiary or pursuant to such transaction, and does not
exceed $100,000 in the aggregate at any time;
 
(g) Permitted Contingent Obligations;
 
(h) Refinancing Debt as long as each Refinancing Condition is satisfied;
 
(i) Debt owing to an Obligor or a Subsidiary to the extent permitted under
Section 10.2.5;
 
(j) Debt in respect of performance bonds, bid bonds, appeal bonds, and similar
obligations not in connection with money borrowed, in each case provided in the
Ordinary Course of Business, including those incurred to secure health, safety
and environmental obligations in the Ordinary Course of Business;
 
(k) Debt resulting from a bank or other financial institution honoring a check,
draft or similar instrument in the Ordinary Course of Business; and
 
(l) Debt that is not included in any of the preceding clauses of this Section,
is not secured by a Lien and does not exceed $200,000 in the aggregate at any
time.
 
 
 

-50-

 
 
10.2.2 Permitted Liens. Create or suffer to exist any Lien upon any of its
Property, except the following (collectively, “Permitted Liens”):
 
(a) Liens in favor of Agent;
 
(b) Purchase Money Liens securing Permitted Purchase Money Debt;
 
(c) Liens for Taxes not yet due or being Properly Contested;
 
(d) statutory Liens (other than Liens for Taxes or imposed under ERISA) arising
in the Ordinary Course of Business, but only if (i) payment of the obligations
secured thereby is not yet due or is being Properly Contested, and (ii) such
Liens do not materially impair the value or use of the Property or materially
impair operation of the business of any Obligor or Subsidiary;
 
(e) deposits made in the Ordinary Course of Business to secure the performance
of government tenders, bids, contracts, statutory obligations and other similar
obligations;
 
(f) deposits or pledges to secure obligations under worker's compensation,
social security or similar laws, or under unemployment insurance;
 
(g) carriers’, repairmens’, mechanics’, workers’, materialmen’s or other like
Liens arising in the Ordinary Course of Business with respect to obligations
which are not due or which are being Properly Contested;
 
(h) any interest or title of a lessor, sublessor, licensor or sublicensor under
leases or licenses permitted by this Agreement that are entered into in the
Ordinary Course of Business;
 
(i) leases, licenses, subleases or sublicenses granted to others in the Ordinary
Course of Business that do not (i) interfere in any material respect with the
ordinary conduct of the business of Loan Parties or (ii) secure any Borrowed
Money;
 
(j) Liens arising in the Ordinary Course of Business that are subject to Lien
Waivers;
 
(k) Liens arising by virtue of a judgment or judicial order against any Obligor
or Subsidiary, or any Property of an Obligor or Subsidiary, as long as such
Liens do not constitute an Event of Default under Section 11.1(g);
 
(l) easements, rights-of-way, restrictions, covenants or other agreements of
record, and other similar charges or encumbrances on Real Estate, that do not
secure any monetary obligation and do not interfere with the Ordinary Course of
Business;
 
(m) normal and customary rights of setoff upon deposits in favor of depository
institutions, and Liens of a collecting bank on Payment Items in the course of
collection;
 
(n) Liens on assets (other than Accounts and Inventory) acquired in a Permitted
Acquisition, securing Debt permitted by Section 10.2.1(f);
 
(o) Liens on the Pledged PNC Account (so long as the deposits in such account do
not exceed (a) for the period from the Closing Date through the date which is 60
days after the Closing Date, $500,000 and (b) thereafter, $300,000); and
 
(p) existing Liens shown on Schedule 10.2.2 of the Disclosure Schedule.
 
10.2.3 Capital Expenditures. Make Capital Expenditures in excess of $3,000,000
in the aggregate during any Fiscal Year.
 
10.2.4 Distributions; Upstream Payments. Declare or make any Distributions
(except Upstream Payments) unless the Payment Conditions have been satisfied; or
create or suffer to exist any encumbrance or restriction on the ability of a
Subsidiary to make any Upstream Payment, except for restrictions under the Loan
Documents or under Applicable Law.
 
 
 

-51-

 
 
10.2.5 Restricted Investments. Make any Restricted Investment.
 
10.2.6 Disposition of Assets. Make any Asset Disposition, except a Permitted
Asset Disposition.
 
10.2.7 [Reserved].
 
10.2.8 Restrictions on Payment of Certain Debt. Make any payments (whether
voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or
acquisition) with respect to any (a) Subordinated Debt, except regularly
scheduled payments of principal, interest and fees, but only to the extent
permitted under any subordination agreement relating to such Debt (and a Senior
Officer of Borrower Agent shall certify to Agent, not less than five Business
Days prior to the date of payment, that all conditions under such agreement have
been satisfied); or (b) Borrowed Money (other than the Obligations) prior to its
due date under the agreements evidencing such Debt as in effect on the Closing
Date (or as amended thereafter with the consent of Agent); provided that
Borrowers may make unscheduled term debt repayments so long as the Payment
Conditions have been satisfied.
 
10.2.9 Fundamental Changes. Liquidate, wind up its affairs or dissolve itself;
or merge, combine or consolidate with any Person, whether in a single
transaction or in a series of related transactions, except for mergers or
consolidations of a wholly-owned Subsidiary with another wholly-owned Subsidiary
or into an Obligor or, without at least 30 days’ prior written notice to Agent,
change its name or conduct business under any fictitious name; change its tax,
charter or other organizational identification number; change its form or state
of organization.
 
10.2.10 Subsidiaries.  Form or acquire any Subsidiary after the Closing Date,
except in accordance with Sections 10.1.9, 10.2.5 and 10.2.9; or permit any
existing Subsidiary to issue any additional Equity Interests except directors’
qualifying shares.
 
10.2.11 Organic Documents. Amend, modify or otherwise change any of its Organic
Documents in any manner that would be adverse to the interest of Agent or
Lenders or in any manner not permitted under Section 10.2.9.
 
10.2.12 Tax Consolidation. File or consent to the filing of any consolidated
income tax return with any Person other than the Obligors and Subsidiaries.
 
10.2.13 Accounting Changes. Make any material change in accounting treatment or
reporting practices, except as required by GAAP and in accordance with Section
1.2; or change its Fiscal Year.
 
10.2.14 Restrictive Agreements. Become a party to any Restrictive Agreement,
except a Restrictive Agreement (a) in effect on the Closing Date; (b) relating
to secured Debt permitted hereunder, as long as the restrictions apply only to
collateral for such Debt; or (c) constituting customary restrictions on
assignment in leases and other contracts.
 
10.2.15 Hedging Agreements. Enter into any Hedging Agreement, except to hedge
risks arising in the Ordinary Course of Business and not for speculative
purposes.
 
10.2.16 Conduct of Business. Engage in any business, other than its business as
conducted on the Closing Date and any businesses reasonably ancillary,
incidental, or related thereto.
 
10.2.17 Affiliate Transactions. Enter into or be party to any transaction or
agreement with an Affiliate, except (a) transactions expressly permitted by the
Loan Documents; (b) payment of reasonable compensation to officers and employees
for services actually rendered, and payment of customary directors’ fees and
indemnities; (c) indemnities provided for the benefit of directors (or
comparable managers) of an Obligor so long as such indemnity has been approved
by the board of directors of such Obligor in accordance with Applicable Law; (d)
transactions solely among Borrowers; (e) transactions with Affiliates
consummated prior to the Closing Date, as shown on Schedule 10.2.17 of the
Disclosure Schedule; and (f) transactions with Affiliates upon fair and
reasonable terms fully disclosed to Agent and no less favorable than would be
obtained in a comparable arm’s-length transaction with a non-Affiliate.
 
 
 

-52-

 
 
10.2.18 Plans. Become party to any Multiemployer Plan or Foreign Plan, other
than any in existence on the Closing Date.
 
10.2.19 Amendments to Subordinated Debt. Amend, supplement or otherwise modify
any document, instrument or agreement relating to any Subordinated Debt, (a) if
such modification (i) increases the principal balance of such Debt, or increases
any required payment of principal or interest; (ii) accelerates the date on
which any installment of principal or any interest is due, or adds any
additional redemption, put or prepayment provisions; (iii) shortens the final
maturity date or otherwise accelerates amortization; (iv) increases the interest
rate; (v) increases or adds any fees or charges; (vi) modifies any covenant in a
manner or adds any representation, covenant or default that is more onerous or
restrictive in any material respect for any Obligor or Subsidiary, or that is
otherwise materially adverse to any Obligor, any Subsidiary or Lenders; (vii)
results in the Obligations not being fully benefited by the subordination
provisions thereof, or (viii) is otherwise prohibited by the terms of the
subordination agreement with respect thereto or (b) without providing a copy of
any such material amendment, supplement or other modification to Agent promptly
upon its execution.
 
SECTION 11. EVENTS OF DEFAULT; REMEDIES ON DEFAULT
 
11.1 Events of Default. Each of the following shall be an “Event of Default” if
it occurs for any reason whatsoever, whether voluntary or involuntary, by
operation of law or otherwise:
 
(a) Any Obligor fails to pay (i) its Obligations (other than Secured Bank
Product Obligations) when due (whether at stated maturity, on demand, upon
acceleration or otherwise) or (ii) its Secured Bank Product Obligations within
five days of when due (whether at stated maturity, on demand, upon acceleration
or otherwise);
 
(b) Any representation, warranty or other written statement of an Obligor made
in connection with any Loan Document or transaction contemplated thereby is
incorrect or misleading in any material respect when given;
 
(c) An Obligor breaches or fails to perform any covenant contained in Section
7.2, 7.3, 7.6, 8.1, 8.2, 8.5, 8.6.1, 8.6.2, 10.1.1, 10.1.2, 10.1.3, 10.1.13, or
10.2;
 
(d) An Obligor breaches or fails to perform (i) any covenant contained in
Section 10.1.7 or 10.1.11 and such breach or failure is not cured within 10 days
after a Senior Officer of such Obligor has knowledge thereof or receives notice
thereof from Agent, whichever is sooner, or (ii) any other covenant contained in
any Loan Document, and such breach or failure is not cured within 20 days after
a Senior Officer of such Obligor has knowledge thereof or receives notice
thereof from Agent, whichever is sooner; provided, however, that such notice and
opportunity to cure shall not apply if the breach or failure to perform is not
capable of being cured within such period or is a willful breach by an Obligor;
 
(e) A Guarantor repudiates, revokes or attempts to revoke its Guaranty; an
Obligor or third party denies or contests the validity or enforceability of any
Loan Document or Obligation, or the perfection or priority of any Lien granted
to Agent; or any Loan Document ceases to be in full force or effect for any
reason (other than a waiver or release by Agent and Lenders);
 
(f) Any breach or default of an Obligor occurs under (i) any agreement or
document governing or giving rise to Subordinated Debt, or any Person party
thereto (other than Agent) shall materially breach the terms of any
subordination agreement or repudiate, revoke or attempt to revoke such
subordination agreement, or any subordination agreement ceases to be in full
force or effect for any reason (other than a waiver or release by Agent), or
(ii) any Hedging Agreement in excess of $300,000 or any instrument or agreement
to which it is a party or by which it or any of its Properties is bound,
relating to any Borrowed Money (other than the Obligations) in excess of
$300,000, if the maturity of or any payment with respect to such Debt may be
accelerated or demanded due to such breach;
 
(g) Any judgment or order for the payment of money is entered against an Obligor
in an amount that exceeds, individually or cumulatively with all unsatisfied
judgments or orders against all Obligors, $300,000 (net of insurance coverage
therefor that has not been denied by the insurer), unless a stay of enforcement
of such judgment or order is in effect;
 
 
 

-53-

 
 
(h) A loss, theft, damage or destruction occurs with respect to any Collateral
if the amount not covered by insurance exceeds $500,000;
 
(i) An Obligor is enjoined, restrained or in any way prevented by any
Governmental Authority from conducting any material part of its business for any
material period of time; there is a cessation of any material part of an
Obligor’s business for a material period of time; an Obligor agrees to or
commences any liquidation, dissolution or winding up of its affairs not
permitted hereunder; or a Borrower is not Solvent;
 
(j) An Insolvency Proceeding is commenced by an Obligor; an Obligor makes an
offer of settlement, extension or composition to its unsecured creditors
generally; a trustee is appointed to take possession of any substantial Property
of or to operate any of the business of an Obligor; or an Insolvency Proceeding
is commenced against an Obligor and the Obligor consents to institution of the
proceeding, the petition commencing the proceeding is not timely contested by
the Obligor, the petition is not dismissed within 60 days after filing, or an
order for relief is entered in the proceeding;
 
(k) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan
that has resulted or could reasonably be expected to result in liability of an
Obligor to a Pension Plan, Multiemployer Plan or PBGC, or that constitutes
grounds for appointment of a trustee for or termination by the PBGC of any
Pension Plan or Multiemployer Plan; an Obligor or ERISA Affiliate fails to pay
when due any installment payment with respect to its withdrawal liability under
Section 4201 of ERISA under a Multiemployer Plan; or any event similar to the
foregoing occurs or exists with respect to a Foreign Plan;
 
(l) An Obligor or any of its Senior Officers is criminally indicted or convicted
for (i) a felony committed in the conduct of the Obligor’s business, or (ii)
violating any state or federal law (including the Controlled Substances Act,
Money Laundering Control Act of 1986 and Illegal Exportation of War Materials
Act) that could lead to forfeiture of any material Property or any material
Collateral;
 
(m) A Change of Control occurs; or
 
(n) Any event occurs or condition exists that has a Material Adverse Effect.
 
11.2 Remedies upon Default. If an Event of Default described in Section 11.1(j)
occurs with respect to any Obligor, then to the extent permitted by Applicable
Law, all Obligations (other than Secured Bank Product Obligations) shall become
automatically due and payable and all Commitments shall terminate, without any
action by Agent or notice of any kind. In addition, or if any other Event of
Default exists, Agent may in its discretion (and shall upon written direction of
Required Lenders) do any one or more of the following from time to time:
 
(a) declare any Obligations (other than Secured Bank Product Obligations)
immediately due and payable, whereupon they shall be due and payable without
diligence, presentment, demand, protest or notice of any kind, all of which are
hereby waived by Borrowers to the fullest extent permitted by law;
 
(b) terminate, reduce or condition any Commitment or adjust the Borrowing Base;
 
(c) require Obligors to Cash Collateralize their Secured Bank Product
Obligations and other Obligations that are contingent or not yet due and
payable, and if Obligors fail promptly to deposit such Cash Collateral, Agent
may (and shall upon the direction of Required Lenders) advance the required Cash
Collateral as Revolver Loans (whether or not at such time Revolver Usage exceeds
the Borrowing Base or will exceed the Borrowing Base with the making of such
Revolver Loans, or the conditions in Section 6 are satisfied); and
 
 
 

-54-

 
 
(d) exercise any other rights or remedies afforded under any agreement, by law,
at equity or otherwise, including the rights and remedies of a secured party
under the UCC. Such rights and remedies include the rights to (i) take
possession of any Collateral; (ii) require Obligors to assemble Collateral, at
Borrowers’ expense, and make it available to Agent at a place designated by
Agent; (iii) enter any premises where Collateral is located and store Collateral
on such premises until sold (and if the premises are owned or leased by an
Obligor, Obligors agree not to charge for such storage); (iv) sell, assign,
lease, license (on an exclusive or nonexclusive basis) as Agent in its
discretion deems advisable or otherwise dispose of any Collateral in its then
condition, or after any further manufacturing or processing thereof, at public
or private sale, with such notice as may be required by Applicable Law, in lots
or in bulk, at such locations, as Agent in its discretion deems advisable and
(v) bring suit or otherwise commence any action or proceeding to enforce any
Account, contractual right or Intellectual Property, all as Agent, in its
discretion, deems advisable. Each Obligor agrees that 10 days’ notice of any
proposed sale or other disposition of Collateral by Agent shall be reasonable,
and that any sale conducted on the internet or to a licensor of Intellectual
Property shall be commercially reasonable. Agent may conduct sales on any
Obligor’s premises, without charge, and any sale may be adjourned from time to
time in accordance with Applicable Law. Agent shall have the right to sell,
lease or otherwise dispose of any Collateral for cash, credit or any combination
thereof, and Agent may purchase any Collateral at public or, if permitted by
law, private sale and, in lieu of actual payment of the purchase price, may
credit bid and set off the amount of such price against the Obligations. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of any Obligor, and each Obligor hereby waives (to
the extent permitted by Applicable Law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any rule
of law or statute now existing or hereafter enacted. Each Obligor agrees that,
to the extent notice of sale shall be required by law, at least ten (10) days’
notice to such Obligor of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Each Obligor agrees that it
would not be commercially unreasonable for Agent to dispose of the Collateral or
any portion thereof by using Internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable
capability of doing so, or that match buyers and sellers of assets. Each Obligor
hereby waives any claims against Agent arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if Agent
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Obligations, Obligors shall be liable for the
deficiency and the fees of any attorneys employed by Agent to collect such
deficiency. Each Obligor further agrees that a breach of any of the covenants
contained in this Section 11.2 will cause irreparable injury to Agent, that
Agent has no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 11.2 shall
be specifically enforceable against such Obligor, and such Obligor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants, except for a defense that no Default has occurred giving rise
to the Obligations becoming due and payable prior to their stated maturities.
Nothing in this Section 11.2 shall in any way alter the rights of Agent
hereunder. Agent may sell the Collateral without giving any warranties as to the
Collateral. Agent may specifically disclaim or modify any warranties of title or
the like. This procedure will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral. If Agent shall have no
obligation to marshal any of the Collateral. If Agent sells any of the
Collateral upon credit, Obligor will be credited only with payments actually
made by purchaser and received by Agent and applied to indebtedness of the
purchaser. In the event the purchaser fails to pay for the Collateral, Agent may
resell the Collateral and Obligor shall be credited with proceeds of the sale.
 
11.3 License. Agent is hereby granted an irrevocable, non-exclusive license or
other right to use, license or sub-license (without payment of royalty or other
compensation to any Person) any or all Intellectual Property of Obligors,
computer hardware and software, trade secrets, brochures, customer lists,
promotional and advertising materials, labels, packaging materials and other
Property, in advertising for sale, marketing, selling, collecting, completing
manufacture of, or otherwise exercising any rights or remedies with respect to,
any Collateral. Each Obligor’s rights and interests under Intellectual Property
shall inure to Agent’s benefit.
 
 
 

-55-

 
 
11.4 Setoff. At any time during an Event of Default, Agent, Lenders, and any of
their Affiliates are authorized, to the fullest extent permitted by Applicable
Law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by Agent, such Lender or
such Affiliate to or for the credit or the account of an Obligor against its
Obligations, whether or not Agent, such Lender or such Affiliate shall have made
any demand under this Agreement or any other Loan Document and although such
Obligations may be contingent or unmatured or are owed to a branch or office of
Agent, such Lender or such Affiliate different from the branch or office holding
such deposit or obligated on such indebtedness. The rights of Agent, each Lender
and each such Affiliate under this Section are in addition to other rights and
remedies (including other rights of setoff) that such Person may have.
 
11.5 Remedies Cumulative; No Waiver.
 
11.5.1 Cumulative Rights. All agreements, warranties, guaranties, indemnities
and other undertakings of Obligors under the Loan Documents are cumulative and
not in derogation of each other. The rights and remedies of Agent and Lenders
are cumulative, may be exercised at any time and from time to time, concurrently
or in any order, and are not exclusive of any other rights or remedies available
by agreement, by law, at equity or otherwise. All such rights and remedies shall
continue in full force and effect until Full Payment of all Obligations.
 
11.5.2 Waivers. No waiver or course of dealing shall be established by (a) the
failure or delay of Agent or any Lender to require strict performance by any
Obligor under any Loan Document, or to exercise any rights or remedies with
respect to Collateral or otherwise; (b) the making of any Loan during a Default,
Event of Default or other failure to satisfy any conditions precedent; or (c)
acceptance by Agent or any Lender of any payment or performance by an Obligor
under any Loan Documents in a manner other than that specified therein. Any
failure to satisfy a financial covenant on a measurement date shall not be cured
or remedied by satisfaction of such covenant on a subsequent date.
 
SECTION 12.  AGENT
 
12.1 Appointment, Authority and Duties of Agent.
 
12.1.1 Appointment and Authority. Each Secured Party irrevocably appoints and
designates CNC as Agent under all Loan Documents. Agent may, and each Secured
Party irrevocably authorizes Agent to, enter into all Loan Documents to which
Agent is intended to be a party and accept all Security Documents. Any action
taken by Agent in accordance with the provisions of the Loan Documents, and the
exercise by Agent of any rights or remedies set forth therein, together with all
other powers reasonably incidental thereto, shall be authorized by and binding
upon all Secured Parties. Without limiting the generality of the foregoing,
Agent shall have the sole and exclusive authority to (a) act as the disbursing
and collecting agent for Lenders with respect to all payments and collections
arising in connection with the Loan Documents; (b) execute and deliver as Agent
each Loan Document, including any intercreditor or subordination agreement, and
accept delivery of each Loan Document; (c) act as collateral agent for Secured
Parties for purposes of perfecting and administering Liens under the Loan
Documents, and for all other purposes stated therein; (d) manage, supervise or
otherwise deal with Collateral; and (e) take any Enforcement Action or otherwise
exercise any rights or remedies with respect to any Collateral or under any Loan
Documents, Applicable Law or otherwise. Agent alone shall be authorized to
determine eligibility and applicable advance rates under the Borrowing Base,
whether to impose or release any reserve, or whether any conditions to funding
any Loan have been satisfied (which determinations and judgments, if exercised
in good faith, shall exonerate Agent from liability to any Secured Party or
other Person for any error in judgment).
 
12.1.2 Duties. The title of “Agent” is used solely as a matter of market custom
and the duties of Agent are administrative in nature only. Agent has no duties
except those expressly set forth in the Loan Documents, and in no event does
Agent have any agency, fiduciary or implied duty to or relationship with any
Secured Party or other Person by reason of any Loan Document or related
transaction. The conferral upon Agent of any right shall not imply a duty to
exercise such right, unless instructed to do so by Lenders in accordance with
this Agreement.
 
 
 

-56-

 
 
12.1.3 Agent Professionals. Agent may perform its duties through agents and
employees. Agent may consult with and employ Agent Professionals, and shall be
entitled to act upon, and shall be fully protected in any action taken in good
faith reliance upon, any advice given by an Agent Professional. Agent shall not
be responsible for the negligence or misconduct of any agents, employees or
Agent Professionals that it selects in the absence of the Agent’s gross
negligence or willful misconduct (as finally determined in a non-appealable
decision of a court of competent jurisdiction).
 
12.1.4 Instructions of Required Lenders. The rights and remedies conferred upon
Agent under the Loan Documents may be exercised without the necessity of joining
any other party, unless required by Applicable Law. In determining compliance
with a condition for any action hereunder, including satisfaction of any
condition in Section 6, Agent may presume that the condition is satisfactory to
a Secured Party unless Agent has received notice to the contrary from such
Secured Party before Agent takes the action. Agent may request instructions from
Required Lenders or other Secured Parties with respect to any act (including the
failure to act) in connection with any Loan Documents or Collateral, and may
seek assurances to its satisfaction from Secured Parties of their
indemnification obligations against Claims that could be incurred by Agent.
Agent may refrain from any act until it has received such instructions or
assurances, and shall not incur liability to any Person by reason of so
refraining. Instructions of Required Lenders shall be binding upon all Secured
Parties, and no Secured Party shall have any right of action whatsoever against
Agent as a result of Agent acting or refraining from acting pursuant to
instructions of Required Lenders. Notwithstanding the foregoing, instructions by
and consent of specific parties shall be required to the extent provided in
Section 14.1.1. In no event shall Agent be required to take any action that it
determines in its discretion is contrary to Applicable Law or any Loan Documents
or could subject any Agent Indemnitee to liability.
 
12.1.5 Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to any Obligor,
the Agent (irrespective of whether the principal of any Loan (including any
Swingline Loan) shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Agent shall have made
any demand on the Obligors) shall be entitled and empowered, by intervention in
such proceeding or otherwise:
 
(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans, Swingline Loans and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of Secured Parties and Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of Secured Parties and the Agent and their respective agents and
counsel and all other amounts due Secured Parties and the Agent under Sections
3.2, 3.4 and 10.1.1(b).
 
(b) to collect and receive any monies or other property payable or deliverable
on any such claims and to distribute the same;
 
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Secured Party to make such payments to Agent and, in the event that Agent
shall consent to the making of such payments directly to Secured Parties, to pay
to Agent any amount due for the reasonable compensation, expenses, disbursements
and advances of Agent and its agents and counsel, and any other amounts due
Agent under Sections 3.2, 3.4 and 10.1.1(b).
 
12.2 Agreements Regarding Collateral; Borrower Materials; Credit Bidding.
 
12.2.1 Lien Releases; Care of Collateral. Secured Parties authorize Agent to
release any Lien on any Collateral (a) upon Full Payment of the Obligations; (b)
that is the subject of a disposition or Lien that Borrowers certify in writing
is a Permitted Asset Disposition or a Permitted Lien entitled to priority over
Agent’s Liens (and Agent may rely conclusively on such certificate without
further inquiry); (c) that does not constitute a material part of the
Collateral; or (d) subject to Section 14.1, with the consent of Required
Lenders, and to execute in connection with such events such payoff letters and
related documentation in form and substance satisfactory to Agent in its sole
discretion, as shall in Agent's sole discretion be deemed advisable. Secured
Parties authorize Agent to subordinate its Liens to any Purchase Money Lien or
other Lien entitled to priority hereunder. Agent has no obligation to assure
that any Collateral exists or is owned by an Obligor, or is cared for, protected
or insured, nor to assure that Agent’s Liens have been properly created,
perfected or enforced, or are entitled to any particular priority, nor to
exercise any duty of care with respect to any Collateral.
 
 
 

-57-

 
 
12.2.2 Possession of Collateral. Agent and Secured Parties appoint each Secured
Party as agent (for the benefit of Secured Parties) for the purpose of
perfecting Liens in Collateral held or controlled by it, to the extent such
Liens are perfected by possession or control. If a Secured Party obtains
possession or control of any Collateral, it shall notify Agent thereof and,
promptly upon Agent’s request, deliver such Collateral to Agent or otherwise
deal with it in accordance with Agent’s instructions.
 
12.2.3 Reports. Agent shall promptly provide to Lenders, when complete, any
field examination, audit or appraisal report prepared for Agent with respect to
any Obligor or Collateral (“Report”). Reports and other Borrower Materials may
be made available to Lenders by providing access to them on the Platform, but
Agent shall not be responsible for system failures or access issues that may
occur from time to time. Each Lender agrees (a) that Reports are not intended to
be comprehensive audits or examinations, and that Agent or any other Person
performing an audit or examination will inspect only limited information and
will rely significantly upon Borrowers’ books, records and representations; (b)
that Agent makes no representation or warranty as to the accuracy or
completeness of any Borrower Materials and shall not be liable for any
information contained in or omitted from any Borrower Materials, including any
Report; and (c) to keep all Borrower Materials confidential and strictly for
such Lender’s internal use, not to distribute any Report or other Borrower
Materials (or the contents thereof) to any Person (except to such Lender’s
Participants, attorneys and accountants), and to use all Borrower Materials
solely for administration of the Obligations. Each Lender shall indemnify and
hold harmless Agent and any other Person preparing a Report from any action such
Lender may take as a result of or any conclusion it may draw from any Borrower
Materials, as well as from any Claims arising as a direct or indirect result of
Agent furnishing same to such Lender, via the Platform or otherwise.
 
12.2.4 Credit Bidding. Secured Parties hereby irrevocably authorize Agent
(absent, with respect to any particular transaction, Agent receiving contrary
written bidding instructions from the Required Lenders before such transaction),
to credit bid all or any portion of the Obligations (including accepting some or
all of the Collateral in satisfaction of some or all of the Obligations pursuant
to a deed in lieu of foreclosure or otherwise) and in such manner purchase
(either directly or through one or more acquisition vehicles) all or any portion
of the Collateral (a) at any sale thereof conducted under the provisions of the
Bankruptcy Code, including under Section 363, 1123 or 1129 of the Bankruptcy
Code, or any similar Laws in any other jurisdictions to which an Obligor is
subject, (b) at any other sale or foreclosure or acceptance of collateral in
lieu of debt conducted by (or with the consent or at the direction of) Agent
(whether by judicial action or otherwise) in accordance with any Applicable
Law.  In connection with any such credit bid and purchase, the Obligations owed
to Secured Parties shall be entitled to be, and shall be, credit bid on a
ratable basis (with Obligations with respect to contingent or unliquidated
claims receiving contingent interests in the acquired assets on a ratable basis
that would vest upon the liquidation of such claims in an amount proportional to
the liquidated portion of the contingent claim amount used in allocating the
contingent interests) in the asset or assets so purchased (or in the Equity
Interest or debt instruments of the acquisition vehicle or vehicles that are
used to consummate such purchase).  In connection with any such bid Agent shall
be authorized (i) to form one or more acquisition vehicles to make a bid, (ii)
to adopt documents providing for the governance of the acquisition vehicle or
vehicles (provided that any actions by Agent with respect to such acquisition
vehicle or vehicles, including any disposition of the assets or Equity Interest
thereof shall be governed, directly or indirectly, by the vote of Required
Lenders, irrespective of the termination of this Agreement and without giving
effect to the limitations on actions by Required Lenders contained in clauses
(a) through (g) of Section 14.1.1 of this Agreement (provided that, in any
event, the consent of each Lender shall be required for any amendment that would
treat or attempts to treat a Lender or a class of Lenders in a manner different
than all other Lenders), and (iii) to the extent that Obligations that are
assigned to an acquisition vehicle are not used to acquire Collateral for any
reason (as a result of another bid being higher or better, because the amount of
Obligations assigned to the acquisition vehicle exceeds the amount of debt
credit bid by the acquisition vehicle or otherwise), such Obligations shall
automatically be reassigned to the Lenders pro rata and the Equity Interest
and/or debt instruments issued by any acquisition vehicle on account of the
Obligations that had been assigned to the acquisition vehicle shall
automatically be cancelled, without the need for any Secured Party or any
acquisition vehicle to take any further action.
 
 
 

-58-

 
 
12.3 Reliance By Agent.
 
(a) Agent shall be entitled to rely, and shall be fully protected in relying,
upon any writing, communication, signature, resolution, representation, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, electronic mail message, statement or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to any Obligor), independent accountants and other experts
selected by Agent. Agent shall have a reasonable and practicable amount of time
to act upon any instruction, notice or other communication under any Loan
Document and shall not be liable for any delay in acting. Agent shall be fully
justified in failing or refusing to take any action under any Loan Document
unless it shall first receive such advice or concurrence of Required Lenders as
it deems appropriate and, if it so requests, it shall first be indemnified to
its satisfaction by Secured Parties against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other Loan Document in accordance with
a request or consent of Required Lenders (or such greater number of Lenders as
may be expressly required hereby in any instance) and such request and any
action taken or failure to act pursuant thereto shall be binding upon all
Secured Parties. Notwithstanding the foregoing, Agent shall not be required to
take, or to omit to take, any action that is, in the opinion of Agent or its
counsel, contrary to any Loan Document or Applicable Law.
 
(b) For purposes of determining compliance with the conditions specified in
Article 6, each Lender that has signed this Agreement (or an addendum or joinder
to this Agreement) shall be deemed to have consented to, approved or accepted or
to be satisfied with, each document or other matter required hereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless
Agent shall have received notice from such Lender prior to the proposed Closing
Date specifying its objection thereto.
 
12.4 Action Upon Default. Agent shall not be deemed to have knowledge of any
Default or Event of Default, or of any failure to satisfy any conditions in
Section 6, unless it has received written notice from a Borrower or Required
Lenders specifying the occurrence and nature thereof. If a Lender acquires
knowledge of a Default, Event of Default or failure of such conditions, it shall
promptly notify Agent and the other Lenders thereof in writing. Each Secured
Party agrees that, except as otherwise provided in any Loan Documents or with
the written consent of Agent and Required Lenders, it will not take any
Enforcement Action, accelerate Obligations (other than Secured Bank Product
Obligations) or assert any rights relating to any Collateral.
 
12.5 Ratable Sharing. If any Lender obtains any payment or reduction of any
Obligation, whether through set-off or otherwise, in excess of its ratable share
of such Obligation, such Lender shall forthwith purchase from Secured Parties
participations in the affected Obligation as are necessary to share the excess
payment or reduction on a Pro Rata basis or in accordance with Section 5.6.2, as
applicable. If any of such payment or reduction is thereafter recovered from the
purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest. Notwithstanding
the foregoing, if a Defaulting Lender obtains a payment or reduction of any
Obligation, it shall immediately turn over the full amount thereof to Agent for
application under Section 4.2.2 and it shall provide a written statement to
Agent describing the Obligation affected by such payment or reduction. No Lender
shall set off against a Dominion Account without Agent’s prior consent.
 
12.6 Indemnification. EACH SECURED PARTY SHALL INDEMNIFY AND HOLD HARMLESS AGENT
INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGORS, ON A PRO RATA BASIS,
AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY SUCH
INDEMNITEE, PROVIDED THAT ANY CLAIM AGAINST AN AGENT INDEMNITEE RELATES TO OR
ARISES FROM ITS ACTING AS OR FOR AGENT (IN THE CAPACITY OF AGENT). In Agent’s
Permitted Discretion, it may reserve for any Claims made against an Agent
Indemnitee, and may satisfy any judgment, order or settlement relating thereto,
from proceeds of Collateral prior to making any distribution of Collateral
proceeds to Secured Parties. If Agent is sued by any receiver, trustee or other
Person for any alleged preference or fraudulent transfer, then any monies paid
by Agent in settlement or satisfaction of such proceeding, together with all
interest, costs and expenses (including attorneys’ fees) incurred in the defense
of same, shall be promptly reimbursed to Agent by each Secured Party to the
extent of its Pro Rata share. No Lender shall be liable for the payment to any
Indemnitee of any portion of such claims to the extent determined in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
primarily from such Indemnitee’s own gross negligence or willful misconduct;
provided, however, that no action taken in furtherance of the directions of
Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section 12.6. Without limitation of the
foregoing, each Lender shall reimburse each Indemnitee upon demand for its
ratable share of any costs or out-of-pocket expenses (including attorney costs)
incurred by any Indemnitee in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement, any other Loan
Document, or any document contemplated by or referred to herein. The obligations
of Lenders hereunder shall not diminish the obligations of Obligors to indemnify
and reimburse the Indemnitees for such amounts. Agent may in its discretion
first seek payment from Lenders hereunder before seeking payment from the
Obligors for such amounts or may seek payments first from Obligors. In any
event, any amounts received from Obligors as reimbursement for amounts already
reimbursed by Lenders shall be paid to Lenders in accordance with the terms
hereof. The undertaking in this Section 12.6 shall survive the termination of
this Agreement and the resignation of the Agent.
 
 
 

-59-

 
 
12.7 Limitation on Responsibilities of Agent. Agent shall not be liable to any
Secured Party for any action taken or omitted to be taken under the Loan
Documents, except for losses directly and solely caused by Agent’s gross
negligence or willful misconduct. Agent does not assume any responsibility for
any failure or delay in performance or any breach by any Obligor, Lender or
other Secured Party of any obligations under the Loan Documents. Agent does not
make any express or implied representation, warranty or guarantee to Secured
Parties with respect to any Obligations, Collateral, Liens, Loan Documents or
Obligor. Without limitation of the foregoing, no Agent Indemnitee shall be
responsible to Secured Parties for any recitals, statements, information,
representations or warranties contained in any Loan Documents or Borrower
Materials; the execution, validity, genuineness, effectiveness or enforceability
of any Loan Documents; the genuineness, enforceability, collectability, value,
sufficiency, ownership, state or condition, insurance regarding, location or
existence of any Collateral, or the validity, creation, extent, perfection,
continuation, or priority of any Lien therein; any assignment or participation
of the Obligations, or disclosure of any information to any Secured Party or
such Secured Party's representatives or Affiliates; the validity, enforceability
or collectability of any Obligations; or the assets, liabilities, financial
condition, results of operations, business, creditworthiness or legal status of
any Obligor or Account Debtor. No Agent Indemnitee shall have any obligation to
any Secured Party to ascertain or inquire into the existence of any Default or
Event of Default, the observance by any Obligor of any terms of the Loan
Documents, or the satisfaction or waiver of any conditions precedent contained
in any Loan Documents. In addition and not in limitation of the foregoing, it is
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, Agent may act in any manner it may deem appropriate, in
its sole discretion, given Agent's own interest in the Collateral in its
capacity as one of the Secured Parties, and that Agent shall have no other duty
or liability whatsoever to any Secured Party as to any of the foregoing,
including, without limitation, the preparation, form or filing of any Uniform
Commercial Code financing statement, amendment or continuation or of any other
type of document related to the creation, perfection, continuation or priority
of any Lien as to property of Obligors.
 
12.8 Successor Agent and Co-Agents.
 
12.8.1 Resignation; Successor Agent. Agent may resign at any time by giving at
least 10 days written notice thereof to Lenders and Borrowers. Required Lenders
may appoint a successor that is (a) a Lender or Affiliate of a Lender; or (b) a
financial institution reasonably acceptable to Required Lenders and (provided no
Default or Event of Default exists) Borrowers. If no successor is appointed by
the effective date of Agent’s resignation, then on such date, Agent may appoint
a successor acceptable to it in its discretion (which shall be a Lender unless
no Lender accepts the role) or, in the absence of such appointment, Required
Lenders shall automatically assume all rights and duties of Agent. The successor
Agent shall thereupon succeed to and become vested with all the powers and
duties of the retiring Agent without further act. The retiring Agent shall be
discharged from its duties hereunder on the effective date of its resignation,
but shall continue to have all rights and protections available to Agent under
the Loan Documents with respect to actions, omissions, circumstances or Claims
relating to or arising while it was acting or transferring responsibilities as
Agent or holding any Collateral on behalf of Secured Parties, including the
indemnification set forth in Sections 12.6 and 14.2, and all rights and
protections under this Section 12. Any successor to CNC by merger or acquisition
of stock or this loan shall continue to be Agent hereunder without further act
on the part of any Secured Party or Obligor.
 
12.8.2 Co-Collateral Agent. If appropriate under Applicable Law, Agent may
appoint a Person to serve as a co-collateral agent or separate collateral agent
under any Loan Document. Each right, remedy and protection intended to be
available to Agent under the Loan Documents shall also be vested in such agent.
Secured Parties shall execute and deliver any instrument or agreement that Agent
may request to effect such appointment. If any such agent shall die, dissolve,
become incapable of acting, resign or be removed, then all the rights and
remedies of the agent, to the extent permitted by Applicable Law, shall vest in
and be exercised by Agent until appointment of a new agent.
 
12.9 Due Diligence and Non-Reliance. Each Lender acknowledges and agrees that it
has, independently and without reliance upon Agent or any other Lenders, and
based upon such documents, information and analyses as it has deemed
appropriate, made its own credit analysis of each Obligor and its own decision
to enter into this Agreement and to fund Loans hereunder. Each Secured Party has
made such inquiries as it feels necessary concerning the Loan Documents,
Collateral and Obligors. Each Secured Party acknowledges and agrees that the
other Secured Parties have made no representations or warranties concerning any
Obligor, any Collateral or the legality, validity, sufficiency or enforceability
of any Loan Documents or Obligations. Each Secured Party will, independently and
without reliance upon any other Secured Party, and based upon such financial
statements, documents and information as it deems appropriate at the time,
continue to make and rely upon its own credit decisions in making Loans, and in
taking or refraining from any action under any Loan Documents. Except for
notices, reports and other information expressly required to be furnished to the
Lenders by the Agent by this Agreement, no Agent Indemnitee shall have any duty
or responsibility to provide any Secured Party with any notices, reports or
certificates furnished to any Agent Indemnitee by any Obligor or any credit or
other information concerning the affairs, financial condition, credit
worthiness, business or Properties of any Obligor (or any of its Affiliates)
which may come into possession of any Agent Indemnitee or its Affiliates.
 
 
 

-60-

 
 
12.10 Remittance of Payments and Collections.
 
12.10.1 Remittances Generally. Payments by any Secured Party to Agent shall be
made by the time and date provided herein, in immediately available funds. If no
time for payment is specified or if payment is due on demand and request for
payment is made by Agent by 1:00 p.m. on a Business Day, then payment shall be
made by the Secured Party by 3:00 p.m. on such day, and if request is made after
1:00 p.m., then payment shall be made by 11:00 a.m. on the next Business Day.
Payment by Agent to any Secured Party shall be made by wire transfer, in the
type of funds received by Agent. Any such payment shall be subject to Agent’s
right of offset for any amounts due from such payee under the Loan Documents.
 
12.10.2 Failure to Pay. If any Secured Party fails to deliver when due any
amount payable by it to Agent hereunder, such amount shall bear interest, from
the due date until paid in full, at the greater of the Federal Funds Rate or the
rate determined by Agent as customary for interbank compensation for two
Business Days and thereafter at the Default Rate for Revolver Loans. In no event
shall Borrowers be entitled to credit for any interest paid by a Secured Party
to Agent, nor shall a Defaulting Lender be entitled to interest on amounts held
by Agent pursuant to Section 4.2.
 
12.10.3 Recovery of Payments. If Agent pays an amount to a Secured Party in the
expectation that a related payment will be received by Agent from an Obligor and
such related payment is not received, then Agent may recover such amount from
the Secured Party. If Agent determines that an amount received by it must be
returned or paid to an Obligor or other Person pursuant to Applicable Law or
otherwise, then Agent shall not be required to distribute such amount to any
Secured Party. If Agent is required to return any amounts applied by it to
Obligations held by a Secured Party, such Secured Party shall pay to Agent, on
demand, its share of the amounts required to be returned.
 
12.11 Individual Capacities. As a Lender, CNC shall have the same rights and
remedies under the Loan Documents as any other Lender, and the terms “Lenders,”
“Required Lenders” or any similar term shall include CNC in its capacity as a
Lender. Agent, Lenders and their Affiliates may accept deposits from, lend money
to, provide Bank Products to, act as financial or other advisor to, and
generally engage in any kind of business with, Obligors and their Affiliates, as
if they were not Agent or Lenders hereunder, without any duty to account
therefor to any Secured Party. In their individual capacities, Agent, Lenders
and their Affiliates may receive information regarding Obligors, their
Affiliates and their Account Debtors (including information subject to
confidentiality obligations), and shall have no obligation to provide such
information to any Secured Party.
 
12.12 Titles. Each Lender, other than CNC, that is designated in connection with
this credit facility as an “Arranger,” “Bookrunner” or “Agent” of any kind shall
have no right or duty under any Loan Documents other than those applicable to
all Lenders, and shall in no event have any fiduciary duty to any Secured Party.
 
12.13 Bank Product Providers. Each Secured Bank Product Provider, by delivery of
a notice to Agent of a Bank Product, agrees to be bound by the Loan Documents,
including Sections 5.6, 14.3.3 and 12. Each Secured Bank Product Provider shall
indemnify and hold harmless Agent Indemnitees, to the extent not reimbursed by
Obligors, against all Claims that may be incurred by or asserted against any
Agent Indemnitee in connection with such provider’s Secured Bank Product
Obligations.
 
12.14 Flood Laws. Agent has adopted internal policies and procedures that
address requirements under Flood Laws. Agent may post on the Platform (or
otherwise distribute to each Lender in the syndicate) documents that it receives
in connection with the Flood Laws. However, Agent reminds each Lender and
Participant in the facility that, pursuant to the Flood Laws, each federally
regulated Lender (whether acting as a Lender or Participant in the credit
facility) is responsible for assuring its own compliance with Flood Laws, and
Agent disclaims any liability in connection with the failure of any such Lender
or Participant to comply with Flood Laws and flood insurance requirements.
 
12.15 No Third Party Beneficiaries. This Section 12 is an agreement solely among
Secured Parties and Agent, and shall survive Full Payment of the Obligations.
This Section 12 does not confer any rights or benefits upon Borrowers or any
other Person. As between Borrowers and Agent, any action that Agent may take
under any Loan Documents or with respect to any Obligations shall be
conclusively presumed to have been authorized and directed by Secured Parties.
 
 
 

-61-

 
 
12.16 Certain ERISA Matters.
 
(a) Each Lender (x) represents and warrants, as of the date such Person became a
Lender party hereto, to, and (y) covenants, from the date such Person became a
Lender party hereto to the date such Person ceases being a Lender party hereto,
for the benefit of, the Agent and not, for the avoidance of doubt, to or for the
benefit of any Borrower or any other Obligor, that at least one of the following
is and will be true:
 
(i) such Lender is not using “plan assets” (within the meaning of Section 3(42)
of ERISA or otherwise) of one or more Benefit Plans with respect to such
Lender’s entrance into, participation in, administration of and performance of
the Loans, the Commitments or this Agreement;
 
(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14
(a class exemption for certain transactions determined by independent qualified
professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with respect
to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Commitments and this Agreement;
 
(iii) such Lender is an investment fund managed by a “Qualified Professional
Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender
to enter into, participate in, administer and perform the Loans, the Commitments
and this Agreement, (C) the entrance into, participation in, administration of
and performance of the Loans, the Commitments and this Agreement satisfies the
requirements of sub-sections (b) through (g) of Part I of PTE 84- 14 and (D) to
the best knowledge of such Lender, the requirements of subsection (a) of Part I
of PTE 84-14 are satisfied with respect to such Lender’s entrance into,
participation in, administration of and performance of the Loans, the
Commitments and this Agreement; or
 
(iv) such other representation, warranty and covenant as may be agreed in
writing between the Agent, in its sole discretion, and such Lender.
 
(b) In addition, unless either (1) sub-clause (i) in the immediately preceding
clause (a) is true with respect to a Lender or (2) a Lender has provided another
representation, warranty and covenant in accordance with sub-clause (iv) in the
immediately preceding clause (a), such Lender further (x) represents and
warrants, as of the date such Person became a Lender party hereto, to, and (y)
covenants, from the date such Person became a Lender party hereto to the date
such Person ceases being a Lender party hereto, for the benefit of, the Agent
and not, for the avoidance of doubt, to or for the benefit of any Borrower or
any other Obligor, that the Agent is not a fiduciary with respect to the assets
of such Lender involved in such Lender’s entrance into, participation in,
administration of and performance of the Loans, the Commitments and this
Agreement (including in connection with the reservation or exercise of any
rights by the Administrative Agent under this Agreement, any Loan Document or
any documents related hereto or thereto).
 
SECTION 13. BENEFIT OF AGREEMENT; ASSIGNMENTS
 
13.1 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of Obligors, Agent, Lenders, Secured Parties, and their respective
successors and assigns, except that (a) no Obligor shall have the right to
assign its rights or delegate its obligations under any Loan Documents; and (b)
any assignment by a Lender must be made in compliance with Section 13.3. Agent
may treat the Person which made any Loan as the owner thereof for all purposes
until such Person makes an assignment in accordance with Section 13.3. Any
authorization or consent of a Lender shall be conclusive and binding on any
subsequent transferee or assignee of such Lender.
 
 
 

-62-

 
 
13.2 Participations.
 
13.2.1 Permitted Participants; Effect. Subject to Section 13.3.3, any Lender may
sell to a financial institution (“Participant”) a participating interest in the
rights and obligations of such Lender under any Loan Documents. Despite any sale
by a Lender of participating interests to a Participant, such Lender’s
obligations under the Loan Documents shall remain unchanged, it shall remain
solely responsible to the other parties hereto for performance of such
obligations, it shall remain the holder of its Loans and Commitments for all
purposes, all amounts payable by Borrowers shall be determined as if it had not
sold such participating interests, and Borrowers and Agent shall continue to
deal solely and directly with such Lender in connection with the Loan Documents.
Each Lender shall be solely responsible for notifying its Participants of any
matters under the Loan Documents, and Agent and the other Lenders shall not have
any obligation or liability to any such Participant. A Participant that would be
a Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 5.9 unless Borrowers agree otherwise in writing.
 
13.2.2 Voting Rights. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, waiver or other
modification of a Loan Document other than that which forgives principal,
interest or fees, reduces the stated interest rate or fees payable with respect
to any Loan or Commitment in which such Participant has an interest, postpones
the Commitment Termination Date or any date fixed for any regularly scheduled
payment of principal, interest or fees on such Loan or Commitment, or releases
any Borrower, Guarantor or substantially all Collateral.
 
13.2.3 Participant Register. Each Lender that sells a participation shall,
acting as a non-fiduciary agent of Borrowers (solely for tax purposes), maintain
a register ("Participant Register") in which it enters the Participant’s name,
address and interest in Commitments and Loans (and stated interest). Entries in
the Participant Register shall be conclusive, absent manifest error, and such
Lender shall treat each Person recorded in the Participant Register as the owner
of the participation for all purposes, notwithstanding any notice or knowledge
to the contrary. No Lender shall have an obligation to disclose any information
in such Participant Register except to the extent necessary to establish that a
Participant’s interest is in registered form under the Code. For avoidance of
doubt, Agent (in its capacity as Agent) shall have no responsibility for
maintaining a Participant Register.
 
13.2.4 Benefit of Setoff. Each Participant shall have a right of set-off in
respect of its participating interest to the same extent as if such interest
were owing directly to a Lender, and each Lender shall also retain the right of
set-off with respect to any participating interests sold by it. By exercising
any right of set-off, a Participant agrees to share with Lenders all amounts
received through its set-off, in accordance with Section 12.5 as if such
Participant were a Lender.
 
13.3 Assignments.
 
13.3.1 Permitted Assignments. A Lender may assign to an Eligible Assignee any of
its rights and obligations under the Loan Documents, as long as (a) each
assignment is of a constant, and not a varying, percentage of the transferor
Lender’s rights and obligations under the Loan Documents and, in the case of a
partial assignment, is in a minimum principal amount of $1,000,000 (unless
otherwise agreed by Agent in its discretion) and integral multiples of
$1,000,000 in excess of that amount; (b) except in the case of an assignment in
whole of a Lender’s rights and obligations, the aggregate amount of the
Commitments retained by the transferor Lender is at least $1,000,000 (unless
otherwise agreed by Agent in its discretion); and (c) the parties to each such
assignment shall execute and deliver an Assignment to Agent for acceptance and
recording. Nothing herein shall limit the right of a Lender to pledge or assign
any rights under the Loan Documents to secure obligations of such Lender,
including a pledge or assignment to a Federal Reserve Bank; provided, however,
that no such pledge or assignment shall release the Lender from its obligations
hereunder nor substitute the pledge or assignee for such Lender as a party
hereto.
 
13.3.2 Effect; Effective Date. Upon delivery to Agent of an Assignment Notice
and a processing fee of $3,500 (unless otherwise agreed by Agent in its
discretion), the assignment shall become effective as specified in the notice,
if it complies with this Section 13.3. From such effective date, the Eligible
Assignee shall for all purposes be a Lender under the Loan Documents, and shall
have all rights and obligations of a Lender thereunder. Upon consummation of an
assignment, the transferor Lender, Agent and Borrowers shall make appropriate
arrangements for issuance of replacement and/or new notes, if applicable. The
transferee Lender shall comply with Section 5.10 and deliver, upon request, an
administrative questionnaire satisfactory to Agent.
 
 
 

-63-

 
 
13.3.3 Certain Assignees. No assignment or participation may be made to an
Obligor, Affiliate of an Obligor, Defaulting Lender or natural person. Agent
shall have no obligation to determine whether any assignment is permitted under
the Loan Documents or whether any assignment has been properly effectuated
pursuant to this Agreement. Any assignment by a Defaulting Lender must be
accompanied by satisfaction of its outstanding obligations under the Loan
Documents in a manner satisfactory to Agent, including payment by the Defaulting
Lender or Eligible Assignee of an amount sufficient upon distribution (through
direct payment, purchases of participations or other methods acceptable to Agent
in its discretion) to satisfy all funding and payment liabilities of the
Defaulting Lender. If any assignment by a Defaulting Lender (by operation of law
or otherwise) does not comply with the foregoing, the assignee shall be deemed a
Defaulting Lender for all purposes until compliance occurs.
 
13.3.4 Register. Agent, acting as a non-fiduciary agent of Borrowers (solely for
tax purposes), shall maintain (a) a copy (or electronic equivalent) of each
Assignment delivered to it, and (b) a register for recordation of the names,
addresses and Commitments of, and the Loans and interest owing to, each Lender.
Entries in the register shall be conclusive, absent manifest error, and
Borrowers, Agent and Lenders shall treat each Person recorded in such register
as a Lender for all purposes under the Loan Documents, notwithstanding any
notice or knowledge to the contrary; provided that failure to make any such
recordation, or any error in such recordation, shall not affect any Lender's
commitments or any Borrower's or other Obligor's Obligations in respect of any
Loan. Agent may choose to show only one Borrower as the borrower in the
register, without any effect on the liability of any Obligor with respect to the
Obligations. The register shall be available for inspection by Borrowers or any
Lender, from time to time upon reasonable notice. The Obligors hereby agree that
Agent and the other Agent Indemnitees constitute Indemnities pursuant to Section
14.2 in connection with this register and all of their respective actions and
activities and failures to act in connection therewith.
 
13.4 Replacement of Certain Lenders. If a Lender (a) within the last 120 days
failed to give its consent to any amendment, waiver or action for which consent
of all Lenders was required and Required Lenders consented, (b) is a Defaulting
Lender, or (c) within the last 120 days gave a notice under Section 3.5 or
requested payment or compensation under Section 3.7 or 5.9 (and has not
designated a different Lending Office pursuant to Section 3.8), then Agent or
Borrower Agent may, upon 10 days’ notice to such Lender, require it to assign
its rights and obligations under the Loan Documents to Eligible Assignee(s),
pursuant to appropriate Assignment(s), within 20 days after the notice. Agent is
irrevocably appointed as attorney-in-fact to execute any such Assignment if the
Lender fails to execute it. Such Lender shall be entitled to receive, in cash,
concurrently with such assignment, all amounts owed to it under the Loan
Documents through the date of assignment.
 
SECTION 14.  MISCELLANEOUS
 
14.1 Consents, Amendments and Waivers.
 
14.1.1 Amendment. No modification of any Loan Document, including any extension
or amendment of a Loan Document or any waiver of a Default or Event of Default,
shall be effective without the prior written agreement of Agent (with the
consent of Required Lenders) and each Obligor party to such Loan Document;
provided, however, that:
 
(a) without the prior written consent of Agent, no modification shall alter any
provision in a Loan Document that relates to any rights, duties or discretion or
Permitted Discretion of Agent;
 
(b) without the prior written consent of each affected Lender, including a
Defaulting Lender, no modification shall (i) increase the Commitment of such
Lender; (ii) reduce the amount of, or waive or delay payment of, any principal,
interest or fees payable to such Lender (except as provided in Section 4.2);
(iii) extend the Revolver Termination Date applicable to such Lender’s
Obligations; or (iv) amend this clause (c); provided, however, that only the
consent of Required Lenders shall be necessary to amend the definition of
"Default Rate" or to waive any obligation of the Borrowers to pay interest at
the Default Rate;
 
(c) without the prior written consent of all Lenders (except any Defaulting
Lender), no modification shall (i) alter Section 5.6.2, 7.1 (except to add
Collateral) or this Section 14.1.1; (ii) amend the definition of Borrowing Base,
Availability Block, Accounts Formula Amount, or Unbilled Accounts Formula Amount
(or any defined term used in such definitions) if the effect of such amendment
is to increase borrowing availability, Pro Rata or Required Lenders; (iii)
decrease the Availability Block; (iv) release all or substantially all
Collateral; or (v) except in connection with a merger, disposition or similar
transaction expressly permitted hereby, release any Obligor from liability for
any Obligations;
 
 
 

-64-

 
 
(d) without the prior written consent of all Lenders (except any Defaulting
Lenders) no modification shall consensually subordinate the Liens of Agent on
the Collateral or consensually subordinate the Obligations to other Debt (except
in accordance with this Agreement as in effect on the date hereof or in
accordance with financing to one or more Obligors pursuant to Section 364 of the
Bankruptcy Code or any similar Insolvency Proceeding);
 
(e) without the prior written consent of all Lenders, no modification shall
alter the first sentence of Section 13.3.1 hereof; and
 
(f) without the prior written consent of a Secured Bank Product Provider, no
modification shall affect its relative payment priority under Section 5.6.2.
 
14.1.2 Limitations. The agreement of Obligors shall not be required for any
modification of a Loan Document that deals solely with the rights and duties of
Lenders and/or Agent as among themselves. Only the consent of the parties to any
agreement relating to fees or a Bank Product shall be required for modification
of such agreement, and no Bank Product provider (in such capacity) shall have
any right to consent to modification of any Loan Document other than its Bank
Product agreement. Any waiver or consent granted by Agent or Lenders hereunder
shall be effective only if in writing and only for the matter specified.
 
14.1.3 Payment for Consents. No Obligor will, directly or indirectly, pay any
remuneration or other thing of value, whether by way of additional interest, fee
or otherwise, to any Lender (in its capacity as a Lender hereunder) as
consideration for agreement by such Lender with any modification of any Loan
Documents, unless such remuneration or value is concurrently paid, on the same
terms, on a Pro Rata basis to all Lenders providing their consent.
 
14.2 Indemnity. EACH OBLIGOR SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES
AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE,
INCLUDING CLAIMS ASSERTED BY ANY OBLIGOR OR OTHER PERSON OR ARISING FROM THE
NEGLIGENCE OF AN INDEMNITEE. In no event shall any party to a Loan Document have
any obligation thereunder to indemnify or hold harmless an Indemnitee with
respect to a Claim that is determined in a final, non-appealable judgment by a
court of competent jurisdiction to result from the gross negligence or willful
misconduct of such Indemnitee. Without limiting the generality of any provision
of this Section 14.2, to the fullest extent permitted by law, each Obligor
hereby waives all rights for contribution or any other rights of recovery with
respect to liabilities, losses, damages, costs and expenses arising under or
relating to Environmental Laws or any other Applicable Law that it might have by
statute or otherwise against any Indemnitee, except to the extent that such
items are determined by a final and non-appealable decision of a court of
competent jurisdiction to have resulted from the gross negligence or willful
misconduct of such Indemnitee. No Obligor shall, without the prior written
consent of each applicable Indemnitee, effect any settlement of any pending or
threatened proceedings in respect of which indemnity has been sought hereunder
by such Indemnitee unless such settlement (a) includes an unconditional release
of such Indemnitee in form and substance satisfactory to such Indemnitee from
all liability or claims that are the subject matter of such proceedings and (b)
does not include any statement as to or any admission of fault, culpability,
wrong doing or a failure to act by or on behalf of any Indemnitee.
 
14.3 Notices and Communications.
 
14.3.1 Notice Address. Subject to Section 14.3.2, all notices and other
communications by or to a party hereto shall be in writing and shall be given to
any Obligor, at Borrower Agent’s address shown on the signature pages hereof,
and to any other Person at its address shown on the signature pages hereof (or,
in the case of a Person who becomes a Lender after the Closing Date, at the
address shown on its Assignment), or at such other address as a party may
hereafter specify by notice in accordance with this Section 14.3. Each
communication shall be effective only (a) if given by mail, three Business Days
after deposit in the U.S. mail, with first-class postage pre-paid, addressed to
the applicable address or (b) if given by personal delivery, when duly delivered
to the notice address with receipt acknowledged. Any written communication that
is not sent in conformity with the foregoing provisions shall nevertheless be
effective on the date actually received by the noticed party. Any notice
received by Borrower Agent shall be deemed received by all Borrowers.
 
 
 

-65-

 
 
14.3.2 Communications. Electronic and telephonic communications (including
e-mail, messaging, voice mail and websites) may be used only in a manner
acceptable to Agent. Secured Parties make no assurance as to the privacy or
security of electronic or telephonic communications. Except where expressly
provided in this Agreement or any other Loan Document, e-mail and voice mail
shall not be effective notices under the Loan Documents unless the sender shall
have received an acknowledgement of such e-mail or voice mail by return e-mail,
telephone call or voice mail.
 
14.3.3 Platform. Borrower Materials shall be delivered pursuant to procedures
approved by Agent, including electronic delivery (if possible) upon request by
Agent to an electronic system maintained by Agent (“Platform”). Borrowers shall
notify Agent of each posting of Borrower Materials on the Platform and the
materials shall be deemed received by Agent only upon its receipt of such
notice. Borrower Materials and other information relating to this credit
facility may be made available to Secured Parties on the Platform. The Platform
is provided “as is” and “as available.” Agent does not warrant the accuracy or
completeness of any information on the Platform nor the adequacy or functioning
of the Platform, and expressly disclaims liability for any errors or omissions
in the Borrower Materials or any issues involving the Platform. NO WARRANTY OF
ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS, OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY AGENT
WITH RESPECT TO BORROWER MATERIALS OR THE PLATFORM. No Agent Indemnitee shall
have any liability to Borrowers, Secured Parties or any other Person for losses,
claims, damages, liabilities or expenses of any kind (whether in tort, contract
or otherwise) relating to use by any Person of the Platform, including any
unintended recipient, nor for delivery of Borrower Materials and other
information via the Platform, internet, e-mail, or any other electronic platform
or messaging system.
 
14.3.4 Public Information. Obligors and Secured Parties acknowledge that
“public” information may not be segregated from material non-public information
on the Platform. Secured Parties acknowledge that Borrower Materials may include
Obligors’ material non-public information, and should not be made available to
personnel who do not wish to receive such information or may be engaged in
investment or other market-related activities with respect to an Obligor’s
securities.
 
14.3.5 Non-Conforming Communications. Agent and Lenders may rely upon any
communications purportedly given by or on behalf of any Obligor even if they
were not made in a manner specified herein, were incomplete or were not
confirmed, or if the terms thereof, as understood by the recipient, varied from
a later confirmation. Each Obligor shall indemnify and hold harmless each
Indemnitee from any liabilities, losses, costs and expenses arising from any
electronic or telephonic communication purportedly given by or on behalf of an
Obligor.
 
14.4 Performance of Obligors’ Obligations. Agent may, in its Permitted
Discretion at any time and from time to time, at Borrowers’ expense, pay any
amount or do any act required of an Obligor under any Loan Documents or
otherwise lawfully requested by Agent to (a) enforce any Loan Documents or
collect any Obligations; (b) protect, insure, maintain or realize upon any
Collateral; or (c) defend or maintain the validity or priority of Agent’s Liens
in any Collateral, including any payment of a judgment, insurance premium,
warehouse charge, finishing or processing charge, or landlord claim, or any
discharge of a Lien. All payments, costs and expenses (including Extraordinary
Expenses) of Agent under this Section shall be reimbursed to Agent by Borrowers
in accordance with the terms of this Agreement. Any payment made or action taken
by Agent under this Section shall be without prejudice to any right to assert an
Event of Default or to exercise any other rights or remedies under the Loan
Documents.
 
14.5 Credit Inquiries. Agent and Lenders may (but shall have no obligation) to
respond to usual and customary credit inquiries from third parties concerning
any Obligor or Subsidiary.
 
14.6 Severability. Wherever possible, each provision of the Loan Documents shall
be interpreted in such manner as to be valid under Applicable Law. If any
provision is found to be invalid under Applicable Law, it shall be ineffective
only to the extent of such invalidity and the remaining provisions of the Loan
Documents shall remain in full force and effect.
 
 
 

-66-

 
 
14.7 Cumulative Effect; Conflict of Terms. The provisions of the Loan Documents
are cumulative. The parties acknowledge that the Loan Documents may use several
limitations or measurements to regulate similar matters, and they agree that
these are cumulative and that each must be performed as provided. Except as
otherwise provided in another Loan Document (by specific reference to the
applicable provision of this Agreement), if any provision contained herein is in
direct conflict with any provision in another Loan Document, the provision
herein shall govern and control.
 
14.8 Counterparts; Execution. Any Loan Document may be executed in counterparts,
each of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall become effective when
Agent has received counterparts bearing the signatures of all parties hereto.
Agent may (but shall have no obligation to) accept any signature, contract
formation or record-keeping through electronic means, which shall have the same
legal validity and enforceability as manual or paper-based methods, to the
fullest extent permitted by Applicable Law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any similar state law based on the Uniform
Electronic Transactions Act. Upon request by Agent, any electronic signature or
delivery shall be promptly followed by a manually executed or paper document.
 
14.9 Entire Agreement. Time is of the essence with respect to all Loan Documents
and Obligations. The Loan Documents constitute the entire agreement, and
supersede all prior understandings and agreements, among the parties relating to
the subject matter thereof.
 
14.10 Relationship with Lenders. The obligations of each Lender hereunder are
several, and no Lender shall be responsible for the obligations or Commitments
of any other Lender. Amounts payable hereunder to each Lender shall be a
separate and independent debt. It shall not be necessary for Agent or any other
Lender to be joined as an additional party in any proceeding for such purposes.
Nothing in this Agreement and no action of Agent, Lenders or any other Secured
Party pursuant to the Loan Documents or otherwise shall be deemed to constitute
Agent and any Secured Party to be a partnership, joint venture or similar
arrangement, nor to constitute control of any Obligor.
 
14.11 No Advisory or Fiduciary Responsibility. In connection with all aspects of
each transaction contemplated by any Loan Document, Obligors acknowledge and
agree that (a)(i) this credit facility and any arranging or other services by
Agent, any Lender, any of their Affiliates or any arranger are arm’s-length
commercial transactions between Obligors and their Affiliates, on one hand, and
Agent, any Lender, any of their Affiliates or any arranger, on the other hand;
(ii) Obligors have consulted their own legal, accounting, regulatory and tax
advisors to the extent they have deemed appropriate; and (iii) Obligors are
capable of evaluating, and understand and accept, the terms, risks and
conditions of the transactions contemplated by the Loan Documents; (b) each of
Agent, Lenders, their Affiliates and any arranger is and has been acting solely
as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for Obligors, their Affiliates or any other Person, and has no
obligation with respect to the transactions contemplated by the Loan Documents
except as expressly set forth therein; and (c) Agent, Lenders, their Affiliates
and any arranger may be engaged in a broad range of transactions that involve
interests that differ from those of Obligors and their Affiliates, and have no
obligation to disclose any of such interests to Obligors or their Affiliates. To
the fullest extent permitted by Applicable Law, each Obligor hereby waives and
releases any claims that it may have against Agent, Lenders, their Affiliates
and any arranger with respect to any breach of agency or fiduciary duty in
connection with any transaction contemplated by a Loan Document.
 
 
 

-67-

 
 
14.12 Confidentiality. Each of Agent and Lenders shall maintain the
confidentiality of all Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and Approved Funds, and to its and their
partners, directors, officers, employees, agents, advisors and representatives
(provided they are informed of the confidential nature of the Information and
instructed to keep it confidential); (b) to the extent requested by any
governmental, regulatory or self-regulatory authority purporting to have
jurisdiction over it or its Affiliates and Approved Funds; (c) to the extent
required by Applicable Law or by any subpoena or other legal process; (d) to any
other party hereto; (e) in connection with the exercise of remedies hereunder or
under any other Loan Document or any action or proceeding relating to any Loan
Documents or Obligations; (f) subject to an agreement containing provisions
substantially the same as this Section, to any Transferee or any actual or
prospective party (or its advisors) to any Bank Product or to any swap,
derivative or other transaction under which payments are to be made by reference
to an Obligor or Obligor’s obligations; (g) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) is available to Agent, any Lender or any of their Affiliates on a
nonconfidential basis from a source other than Obligors; (h) on a confidential
basis to a provider of a Platform; or (i) with the consent of Borrower Agent.
Notwithstanding the foregoing, Agent and Lenders may publish or disseminate
general information concerning this credit facility for league table, tombstone
and advertising purposes, and may use Borrowers’ logos, trademarks or product
photographs in advertising materials with the prior consent of Borrowers. As
used herein, “Information” means information received from an Obligor or
Subsidiary relating to it or its business that is identified as confidential
when delivered. A Person required to maintain the confidentiality of Information
pursuant to this Section shall be deemed to have complied if it exercises a
degree of care similar to that accorded its own confidential information. Each
of Agent and Lenders acknowledges that (i) Information may include material
non-public information; (ii) it has developed compliance procedures regarding
the use of such information; (iii) it will handle the material non-public
information in accordance with Applicable Law; and (iv) without limiting the
generality or effect of any of the foregoing, that United States securities laws
prohibit any person or entity that possesses material, non-public information
regarding a publicly-held company such as AutoWeb from purchasing, selling or
otherwise trading securities of such company or from communicating that
information to any person or entity for such purpose.
 
 
14.13 GOVERNING LAW. UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW
PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.
 
14.14 Consent To Forum.
 
14.14.1 Forum. EACH OBLIGOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY
STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK, OR THE UNITED STATES DISTRICT
COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION
OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT
ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT
SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES
ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S
PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY
HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH
COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 14.3.1. A final judgment in any proceeding of any such court shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
any other manner provided by Applicable Law.
 
14.14.2 Other Jurisdictions. Nothing herein shall limit the right of Agent or
any Lender to bring proceedings against any Obligor in any other court, nor
limit the right of any party to serve process in any other manner permitted by
Applicable Law. Nothing in this Agreement shall be deemed to preclude
enforcement by Agent of any judgment or order obtained in any forum or
jurisdiction.
 
 
 

-68-

 
 
14.15 Waivers by Obligors. To the fullest extent permitted by Applicable Law,
each Obligor waives (a) the right to trial by jury (which Agent and each Lender
hereby also waive) in any proceeding or dispute of any kind relating in any way
to any Loan Documents, Obligations or Collateral; (b) presentment, demand,
protest, notice of presentment, notice of intent to accelerate, notice of
acceleration, default, non-payment, maturity, release, compromise, settlement,
extension or renewal of any commercial paper, accounts, documents, instruments,
chattel paper and guaranties at any time held by Agent on which an Obligor may
in any way be liable, and hereby ratifies anything Agent may do in this regard;
(c) notice prior to taking possession or control of any Collateral; (d) any bond
or security that might be required by a court prior to allowing Agent to
exercise any rights or remedies; (e) the benefit of all valuation, appraisement
and exemption laws; (f) any claim against Agent or any Lender, on any theory of
liability, for special, indirect, consequential, exemplary or punitive damages
(as opposed to direct or actual damages) in any way relating to any Enforcement
Action, Obligations, Loan Documents or transactions relating thereto; and (g)
notice of acceptance hereof. Each Obligor acknowledges that the foregoing
waivers are a material inducement to Agent and Lenders entering into this
Agreement and that they are relying upon the foregoing in their dealings with
Obligors. Each Obligor has reviewed the foregoing waivers with its legal counsel
and has knowingly and voluntarily waived its jury trial and other rights
following consultation with legal counsel. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
 
14.16 Patriot Act Notice. Agent and Lenders hereby notify Obligors that pursuant
to the Patriot Act, Agent and Lenders are required to obtain, verify and record
information that identifies each Obligor, including its legal name, address, tax
ID number and other information that will allow Agent and Lenders to identify it
in accordance with the Patriot Act. Agent and Lenders will also require
information regarding any personal guarantor and may require information
regarding Obligors’ management and owners, such as legal name, address, social
security number and date of birth. Obligors shall, promptly upon request,
provide all documentation and other information as Agent or any Lender may
request from time to time in order to comply with any obligations under any
“know your customer,” anti-money laundering or other requirements of Applicable
Law.
 
14.17 NO ORAL AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.
THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.
 
SECTION 15. GUARANTY
 
15.1 Guaranty of the Obligations. Subject to the provisions of Section 15.2,
Guarantors jointly and severally hereby irrevocably and unconditionally guaranty
to Agent and Lenders the due and punctual payment in full of all Obligations
(other than Excluded Swap Obligations) when the same shall become due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code) (collectively, the
“Guaranteed Obligations”).
 
 
 

-69-

 
 
15.2 Contribution by Guarantors. All Guarantors desire to allocate among
themselves (collectively, the “Contributing Guarantors”), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor (a
“Funding Guarantor”) under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled
to a contribution from each of the other Contributing Guarantors in an amount
sufficient to cause each Contributing Guarantor’s Aggregate Payments to equal
its Fair Share as of such date. “Fair Share” means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor, to (ii) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by, (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. “Fair
Share Contribution Amount” means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
comparable applicable provisions of state law; provided, solely for purposes of
calculating the “Fair Share Contribution Amount” with respect to any
Contributing Guarantor for purposes of this Section 15.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. “Aggregate Payments” means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 15.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 15.2. The amounts payable as contributions hereunder shall be determined
as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 15.2 shall not be construed in
any way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor is a third-party beneficiary to the contribution agreement set forth
in this Section 15.2.
 
15.3 Payment by Guarantors. Subject to Section 15.2, Guarantors hereby jointly
and severally agree, in furtherance of the foregoing and not in limitation of
any other right which Agent or any Lender may have at law or in equity against
any Guarantor by virtue hereof, that upon the failure of any Borrower to pay any
of the Guaranteed Obligations when and as the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code), Guarantors will
upon demand pay, or cause to be paid, in cash, to Agent, for the benefit of
itself and the Lenders, an amount equal to the sum of the unpaid principal
amount of all Guaranteed Obligations then due as aforesaid, accrued and unpaid
interest on such Guaranteed Obligations (including interest which, but for any
Borrower’s becoming the subject of a case under the Bankruptcy Code, would have
accrued on such Guaranteed Obligations, whether or not a claim is allowed
against such Borrower for such interest in the related bankruptcy case) and all
other Guaranteed Obligations then owed to Agent and Lenders as aforesaid.
 
15.4 Liability of Guarantors Absolute. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:
 
(a) this Guaranty is a guaranty of payment when due and not of collectability.
This Guaranty is a primary obligation of each Guarantor and not merely a
contract of surety;
 
(b) Agent may enforce this Guaranty upon the occurrence of an Event of Default
notwithstanding the existence of any dispute between any Borrower and Agent or
any Lender with respect to the existence of such Event of Default;
 
 
 

-70-

 
 
(c) the obligations of each Guarantor hereunder are independent of the
obligations of Borrowers and the obligations of any other guarantor (including
any other Guarantor) of the obligations of Borrowers, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any
action is brought against any Borrower or any of such other guarantors and
whether or not any Borrower is joined in any such action or actions;
 
(d) payment by any Guarantor of a portion, but not all, of the Guaranteed
Obligations shall in no way limit, affect, modify or abridge any Guarantor’s
liability for any portion of the Guaranteed Obligations which has not been paid.
Without limiting the generality of the foregoing, if Agent or any Lender is
awarded a judgment in any suit brought to enforce any Guarantor’s covenant to
pay a portion of the Guaranteed Obligations, such judgment shall not be deemed
to release such Guarantor from its covenant to pay the portion of the Guaranteed
Obligations that is not the subject of such suit, and such judgment shall not,
except to the extent satisfied by such Guarantor, limit, affect, modify or
abridge any other Guarantor’s liability hereunder in respect of the Guaranteed
Obligations;
 
(e) Agent and/or Lenders, upon such terms as they deem appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of any Guarantor’s liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Guaranteed Obligations; (ii) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Guaranteed Obligations or any
agreement relating thereto and/or subordinate the payment of the same to the
payment of any other obligations; (iii) request and accept other guaranties of
the Guaranteed Obligations and take and hold security for the payment hereof or
the Guaranteed Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify, with or
without consideration, any security for payment of the Guaranteed Obligations,
any other guaranties of the Guaranteed Obligations, or any other obligation of
any Person (including any other Guarantor) with respect to the Guaranteed
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of Agent for the benefit of itself and the Lenders in respect hereof
or the Guaranteed Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that Agent may have against any such
security, in each case as Agent in its discretion may determine consistent
herewith or any applicable security agreement, including foreclosure on any such
security pursuant to one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable, and even though such
action operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against any Borrower or
any security for the Guaranteed Obligations; and (vi) exercise any other rights
available to it under the Loan Documents; and
 
(f) this Guaranty and the obligations of Guarantors hereunder shall be valid and
enforceable and shall not be subject to any reduction, limitation, impairment,
discharge or termination for any reason (other than payment in full of the
Guaranteed Obligations), including the occurrence of any of the following,
whether or not any Guarantor shall have had notice or knowledge of any of them:
(i) any failure or omission to assert or enforce or agreement or election not to
assert or enforce, or the stay or enjoining, by order of court, by operation of
law or otherwise, of the exercise or enforcement of, any claim or demand or any
right, power or remedy (whether arising under the Loan Documents, at law, in
equity or otherwise) with respect to the Guaranteed Obligations or any agreement
relating thereto, or with respect to any other guaranty of or security for the
payment of the Guaranteed Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including provisions relating to events of default) hereof, any of
the other Loan Documents or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Guaranteed Obligations, in
each case whether or not in accordance with the terms hereof or such Loan
Document, or any agreement relating to such other guaranty or security; (iii)
the Guaranteed Obligations, or any agreement relating thereto, at any time being
found to be illegal, invalid or unenforceable in any respect; (iv) the
application of payments received from any source (other than payments received
pursuant to the other Loan Documents or from the proceeds of any security for
the Guaranteed Obligations, except to the extent such security also serves as
collateral for indebtedness other than the Guaranteed Obligations) to the
payment of indebtedness other than the Guaranteed Obligations, even though Agent
or Lenders might have elected to apply such payment to any part or all of the
Guaranteed Obligations; (v) Agent’s or Lenders’ consent to the change,
reorganization or termination of the corporate structure or existence of any
Borrower or any of its Subsidiaries and to any corresponding restructuring of
the Guaranteed Obligations; (vi) any failure to perfect or continue perfection
of a security interest in any collateral which secures any of the Guaranteed
Obligations; (vii) any defenses, set-offs or counterclaims which any Borrower
may allege or assert against Agent or any Lender in respect of the Guaranteed
Obligations, including failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and usury;
and (viii) any other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary the risk of any
Guarantor as an Obligor in respect of the Guaranteed Obligations.
 
 
 

-71-

 
 
15.5 Waivers by Guarantors. Each Guarantor hereby waives, for the benefit of
Agent and each Lender: (a) any right to require Agent or any Lender, as a
condition of payment or performance by such Guarantor, to (i) proceed against
any Borrower, any other guarantor (including any other Guarantor) of the
Guaranteed Obligations or any other Person, (ii) proceed against or exhaust any
security held from any Borrower, any such other guarantor or any other Person,
(iii) proceed against or have resort to any balance of any Deposit Account,
securities account or commodities account or credit on the books of Agent or any
Lender in favor of any Borrower or any other Person, or (iv) pursue any other
remedy in the power of Agent or any Lender whatsoever; (b) any defense arising
by reason of the incapacity, lack of authority or any disability or other
defense of any Borrower or any other Guarantor including any defense based on or
arising out of the lack of validity or the unenforceability of the Guaranteed
Obligations or any agreement or instrument relating thereto or by reason of the
cessation of the liability of any Borrower or any other Guarantor from any cause
other than payment in full of the Guaranteed Obligations; (c) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than that
of the principal; (d) any defense based upon Agent’s or any Lender’s errors or
omissions in the administration of the Guaranteed Obligations; (e) (i) any
principles or provisions of law, statutory or otherwise, which are or might be
in conflict with the terms hereof and any legal or equitable discharge of such
Guarantor’s obligations hereunder, (ii) the benefit of any statute of
limitations affecting such Guarantor’s liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv)
promptness, diligence and any requirement that Agent or any Lender protect,
secure, perfect or insure any security interest or lien or any property subject
thereto; (f) notices, demands, presentments, protests, notices of protest,
notices of dishonor and notices of any action or inaction, including acceptance
hereof, notices of default hereunder or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the Guaranteed
Obligations or any agreement related thereto, notices of any extension of credit
to Borrowers and notices of any of the matters referred to in Section 15.4 and
any right to consent to any thereof; and (g) any defenses or benefits that may
be derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.
 
15.6 Guarantors’ Rights of Subrogation, Contribution, etc.  Until the Guaranteed
Obligations shall have been Paid in Full and the Revolver Commitment shall have
terminated, each Guarantor hereby waives any claim, right or remedy, direct or
indirect, that such Guarantor now has or may hereafter have against any Borrower
or any other Guarantor or any of its assets in connection with this Guaranty or
the performance by such Guarantor of its obligations hereunder, in each case
whether such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise and including without limitation (a) any
right of subrogation, reimbursement or indemnification that such Guarantor now
has or may hereafter have against any Borrower with respect to the Guaranteed
Obligations, (b) any right to enforce, or to participate in, any claim, right or
remedy that Agent or any Lender now has or may hereafter have against any
Borrower, and (c) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by Agent or any Lender. In
addition, until the Guaranteed Obligations shall have been Paid in Full and the
Revolver Commitment shall have terminated, each Guarantor shall withhold
exercise of any right of contribution such Guarantor may have against any other
guarantor (including any other Guarantor) of the Guaranteed Obligations,
including, without limitation, any such right of contribution as contemplated by
Section 15.2. Each Guarantor further agrees that, to the extent the waiver or
agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of
competent jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have against
any Borrower or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights Agent or any Lender may have against any
Borrower, to all right, title and interest Agent or Lender may have in any such
collateral or security, and to any right Agent or any Lender may have against
such other guarantor. If any amount shall be paid to any Guarantor on account of
any such subrogation, reimbursement, indemnification or contribution rights at
any time when all Guaranteed Obligations shall not have been Paid in Full, such
amount shall be held in trust for Agent and Lenders and shall forthwith be paid
over to Agent to be credited and applied against the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms hereof.
 
15.7 Subordination of Other Obligations. Any indebtedness of any Borrower or any
Guarantor now or hereafter held by any Guarantor (the “Obligee Guarantor”) is
hereby subordinated in right of payment to the Guaranteed Obligations, and any
such indebtedness collected or received by the Obligee Guarantor after an Event
of Default has occurred and is continuing shall be held in trust for Agent and
Lenders and shall forthwith be paid over to Agent to be credited and applied
against the Guaranteed Obligations but without affecting, impairing or limiting
in any manner the liability of the Obligee Guarantor under any other provision
hereof.
 
 
 

-72-

 
 
15.8 Continuing Guaranty. This Guaranty is a continuing guaranty and shall
remain in effect until all of the Guaranteed Obligations shall have been Paid in
Full and the Revolver Commitment shall have terminated. Each Guarantor hereby
irrevocably waives any right to revoke this Guaranty as to future transactions
giving rise to any Guaranteed Obligations.
 
15.9 Authority of Guarantors or Borrowers. It is not necessary for Agent or any
Lender to inquire into the capacity or powers of any Guarantor or any Borrower
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
 
15.10 Financial Condition of Borrowers. Any Loan may be made to Borrowers from
time to time, without notice to or authorization from any Guarantor regardless
of the financial or other condition of Borrowers at the time of any such grant.
Neither Agent nor any Lender shall have any obligation to disclose or discuss
with any Guarantor its assessment, or any Guarantor’s assessment, of the
financial condition of any Borrower. Each Guarantor has adequate means to obtain
information from each Borrower on a continuing basis concerning the financial
condition of such Borrower and its ability to perform its obligations under the
Loan Documents, and each Guarantor assumes the responsibility for being and
keeping informed of the financial condition of Borrowers and of all
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations.
Each Guarantor hereby waives and relinquishes any duty on the part of Agent or
any Lender to disclose any matter, fact or thing relating to the business,
operations or conditions of any Borrower now known or hereafter known by Agent
or any Lender.
 
15.11 Bankruptcy, etc.  So long as any Guaranteed Obligations remain
outstanding, no Guarantor shall, without the prior written consent of Agent,
commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency case or proceeding of or against any Borrower or
any other Guarantor.
 
(a) The obligations of Guarantors hereunder shall not be reduced, limited,
impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of any Borrower or any
other Guarantor or by any defense which any Borrower or any other Guarantor may
have by reason of the order, decree or decision of any court or administrative
body resulting from any such proceeding.
 
(b) Each Guarantor acknowledges and agrees that any interest on any portion of
the Guaranteed Obligations which accrues after the commencement of any case or
proceeding referred to in Section 15.11(a) above (or, if interest on any portion
of the Guaranteed Obligations ceases to accrue by operation of law by reason of
the commencement of such case or proceeding, such interest as would have accrued
on such portion of the Guaranteed Obligations if such case or proceeding had not
been commenced) shall be included in the Guaranteed Obligations because it is
the intention of Guarantors and Agent and Lenders that the Guaranteed
Obligations which are guaranteed by Guarantors pursuant hereto should be
determined without regard to any rule of law or order which may relieve any
Borrower of any portion of such Guaranteed Obligations. Guarantors will permit
any trustee in bankruptcy, receiver, debtor in possession, assignee for the
benefit of creditors or similar person to pay Agent and Lenders, or allow the
claim of Agent and Lenders in respect of, any such interest accruing after the
date on which such case or proceeding is commenced.
 
(c) In the event that all or any portion of the Guaranteed Obligations are paid
by any Borrower, the obligations of Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from Agent or any Lender as a preference, fraudulent
transfer or otherwise, and any such payments which are so rescinded or recovered
shall constitute Guaranteed Obligations for all purposes hereunder.
 
[Remainder of page intentionally left blank; signatures begin on following page]
 
 

-73-

 
IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date set forth above.
 
 
BORROWER:
 
AUTOWEB, INC.
 
 
By: _____________________________
                                                     

Name:                                                                 
Title:                                                       
 
 
Address:
 
 
 
Attn:                                           
Telecopy:                                           
 

 

-74-

 
 
 
GUARANTORS:
 
AUTOBYTEL, INC.
 
 
By:  _____________________________
                                                     
Name:                                                                 
Title:                                                       
 
 
AW GUA USA, INC.
 
 
By:  _____________________________
                                                     
Name:                                                                 
Title:                                                       
 
 
CAR.COM, INC.
 
 
By:  _____________________________
                                                     
Name:                                                                 
Title:                                                       
 
 
Address:
 
 
 
Attn:                                           
Telecopy:                                           
 

 

-75-

 
 
 
AGENT AND LENDERS:
 
CIT NORTHBRIDGE CREDIT LLC,
as Agent
 
 
By:  _____________________________
                                                     
Name:                                                                 
Title:                                                       
 
 
Address:
 
 
 
Attn:                                           
Telecopy:                                           
 
 
CIT NORTHBRIDGE FUNDING I LLC,
as a Lender
 
 
By:  _____________________________
                                                     
Name:                                                                 
Title:                                                       
 
 
Address:
 
 
 
Attn:                                           
Telecopy:                                           
 

-76-

 
 
EXHIBIT A-1
to
Loan, Security and Guarantee Agreement
 
 
ASSIGNMENT AND ACCEPTANCE
 
Reference is made to the Loan, Security and Guarantee Agreement dated as of
March 26, 2020, as amended (“Loan Agreement”), among AUTOWEB, INC., a Delaware
corporation (“AutoWeb”), and any other Person from time to time joined thereto
as a Borrower (together with AutoWeb, each, a “Borrower” and, collectively,
“Borrowers”), the other Persons from time to time party to the Loan Agreement as
Guarantors, CIT NORTHBRIDGE CREDIT LLC, as agent (“Agent”) for the financial
institutions from time to time party to the Loan Agreement (“Lenders”), and such
Lenders. Terms are used herein as defined in the Loan Agreement.
 
______________________________________ (“Assignor”) and
_________________________ _____________ (“Assignee”) agree as follows:
 
1.           Assignor hereby assigns to Assignee and Assignee hereby purchases
and assumes from Assignor (a) a principal amount of $________ of Assignor’s
outstanding Revolver Loans, and (b) the amount of $__________ of Assignor’s
Revolver Commitment (which represents ____% of the total Revolver Commitments)
(the foregoing items being, collectively, “Assigned Interest”), together with an
interest in the Loan Documents corresponding to the Assigned Interest. This
Agreement shall be effective as of the date (“Effective Date”) indicated in the
corresponding Assignment Notice delivered to Agent, provided such Assignment
Notice is executed by Assignor, Assignee, Agent and Borrower Agent, if
applicable. From and after the Effective Date, Assignee hereby expressly
assumes, and undertakes to perform, all of Assignor’s obligations in respect of
the Assigned Interest, and all principal, interest, fees and other amounts which
would otherwise be payable to or for Assignor’s account in respect of the
Assigned Interest shall be payable to or for Assignee’s account, to the extent
such amounts accrue on or after the Effective Date.
 
2.           Assignor (a) represents that as of the date hereof, prior to giving
effect to this assignment, its Revolver Commitment is $__________, the
outstanding balance of its Revolver Loans is $__________; (b) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Agreement or any other instrument or document
furnished pursuant thereto, other than that Assignor is the legal and beneficial
owner of the interest being assigned by it hereunder and that such interest is
free and clear of any adverse claim; and (c) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrowers or the performance by Borrowers of their obligations under the Loan
Documents. [Assignor is attaching the promissory note[s] held by it and requests
that Agent exchange such note[s] for new promissory notes payable to Assignee
[and Assignor].]
 
3.           Assignee (a) represents and warrants that it is legally authorized
to enter into this Assignment; (b) confirms that it has received copies of the
Loan Agreement and such other Loan Documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment; (c) agrees that it shall, independently and without reliance upon
Assignor and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents; (d) confirms that it is an Eligible
Assignee; (e) appoints and authorizes Agent to take such action as agent on its
behalf and to exercise such powers under the Loan Agreement as are delegated to
Agent by the terms thereof, together with such powers as are incidental thereto;
(f) agrees that it will observe and perform all obligations that are required to
be performed by it as a “Lender” under the Loan Documents; and (g) represents
and warrants that the assignment evidenced hereby will not result in a
non-exempt “prohibited transaction” under Section 406 of ERISA.
 
4.           This Agreement shall be governed by the laws of the State of New
York. If any provision is found to be invalid under Applicable Law, it shall be
ineffective only to the extent of such invalidity and the remaining provisions
of this Agreement shall remain in full force and effect.
 
 

 
 
5.           Each notice or other communication hereunder shall be in writing,
shall be sent by messenger, by electronic transmission, or by first-class mail,
shall be deemed given when sent and shall be sent as follows:
 
(a) 
If to Assignee, to the following address (or to such other address as Assignee
may designate from time to time):
 
__________________________
__________________________
__________________________
 
(b) 
If to Assignor, to the following address (or to such other address as Assignor
may designate from time to time):
__________________________
__________________________
__________________________
__________________________
 
Payments hereunder shall be made by wire transfer of immediately available
Dollars as follows:
 
If to Assignee, to the following account (or to such other account as Assignee
may designate from time to time):
 
______________________________
______________________________
ABA No._______________________
______________________________
Account No.____________________
Reference: _____________________
 
If to Assignor, to the following account (or to such other account as Assignor
may designate from time to time):
 
______________________________
______________________________
ABA No._______________________
______________________________
Account No.____________________
Reference: _____________________
 
 

 
 
IN WITNESS WHEREOF, this Assignment and Acceptance is executed as of
_____________.
 
_____________________________________
(“Assignee”)
 
 
By___________________________________
     Title:
 
_____________________________________
(“Assignor”)
 
 
By___________________________________
     Title:
 

 
EXHIBIT A-2
to
Loan, Security and Guarantee Agreement
 
 
ASSIGNMENT NOTICE
 
Reference is made to (1) the Loan, Security and Guarantee Agreement dated as of
March 26, 2020, as amended (“Loan Agreement”), among AUTOWEB, INC., a Delaware
corporation (“AutoWeb”), and any other Person from time to time joined thereto
as a Borrower (together with AutoWeb, each, a “Borrower” and, collectively,
“Borrowers”), the other Persons from time to time party to the Loan Agreement as
Guarantors, CIT NORTHBRIDGE CREDIT LLC, as agent (“Agent”) for the financial
institutions from time to time party to the Loan Agreement (“Lenders”), and such
Lenders; and (2) the Assignment and Acceptance dated as of ____________, 20__
(“Assignment”), between __________________ (“Assignor”) and ____________________
(“Assignee”). Terms are used herein as defined in the Loan Agreement.
 
Assignor hereby notifies Borrowers and Agent of Assignor’s intent to assign to
Assignee pursuant to the Assignment (a) a principal amount of $________ of
Assignor’s outstanding Revolver Loans, and (b) the amount of $__________ of
Assignor’s Revolver Commitment (which represents ____% of the total Revolver
Commitments) (the foregoing items being, collectively, the “Assigned Interest”),
together with an interest in the Loan Documents corresponding to the Assigned
Interest. This Agreement shall be effective as of the date (“Effective Date”)
indicated below, provided this Assignment Notice is executed by Assignor,
Assignee, Agent and Borrower Agent, if applicable. Pursuant to the Assignment,
Assignee has expressly assumed all of Assignor’s obligations under the Loan
Agreement to the extent of the Assigned Interest, as of the Effective Date.
 
For purposes of the Loan Agreement, Agent shall deem Assignor’s Revolver
Commitment to be reduced by $_________, and Assignee’s Revolver Commitment to be
increased by $_________.
 
The address of Assignee to which notices and information are to be sent under
the terms of the Loan Agreement is:
 
________________________
________________________
________________________
________________________
 
The address of Assignee to which payments are to be sent under the terms of the
Loan Agreement is shown in the Assignment.
 
This Notice is being delivered to Borrowers and Agent pursuant to Section 13.3
of the Loan Agreement. Please acknowledge your acceptance of this Notice by
executing and returning to Assignee and Assignor a copy of this Notice.
 
 

 
 
IN WITNESS WHEREOF, this Assignment Notice is executed as of _____________.
 
_____________________________________
(“Assignee”)
 
 
By___________________________________
     Title:
 
_____________________________________
(“Assignor”)
 
 
By___________________________________
     Title:
 
ACKNOWLEDGED AND AGREED,
AS OF THE DATE SET FORTH ABOVE:
 
BORROWER AGENT:*
 
AUTOWEB, INC.
 
 
By_______________________________
     Title:
 
* No signature required if Assignee is a Lender, Affiliate of a Lender or
Approved Fund, or if an Event of Default exists.
 
CIT NORTHBRIDGE CREDIT LLC,
as Agent
 
 
By_______________________________
     Title:
 

 
 
EXHIBIT C
 
 to
 
 Loan, Security and Guarantee Agreement
 
 
COMPLIANCE CERTIFICATE
 
 
 
 
THE UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:
 
1. I am the [___________] (the “Chief Financial Officer”) of AUTOWEB, INC., a
Delaware corporation (“AutoWeb”). Capitalized terms used but not defined in this
Compliance Certificate (this “Certificate”) shall have the meanings set forth in
the Loan Agreement (as defined below).
 
2. I have reviewed the terms of that certain Loan, Security and Guarantee
Agreement, dated as of March 26, 2020 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Loan Agreement”), by
and among AutoWeb, and any other Person from time to time joined thereto as a
Borrower (together with AutoWeb, each, a “Borrower” and, collectively,
“Borrowers”), the other Persons from time to time party to the Loan Agreement as
Guarantors, the financial institutions party thereto from time to time as
lenders (collectively, the “Lenders”), and CIT NORTHBRIDGE CREDIT LLC, a
Delaware limited liability company, as agent for the Lenders (in such capacity,
and together with its successors and assigns in such capacity, the “Agent”), and
I have made, or have caused to be made under my supervision, a review in
reasonable detail of the transactions and condition of Borrowers and their
Subsidiaries during the accounting period covered by the attached financial
statements.
 
3. This Certificate is delivered in connection with the [calendar month] [fiscal
year] ending [_____________] (the “Reporting Period”).
 
4. Attached hereto as Exhibit A are the financial statements, comparisons and
reports required to be delivered under Section [10.1.2(a)/10.1.2(b)] of the Loan
Agreement with respect to the Reporting Period (collectively, the “Financial
Statements”).
 
5. The examination described in paragraph 2 above did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes an
Event of Default or Default during or at the end of the Reporting Period or as
of the date of this Certificate, except as set forth in Exhibit B as attached
hereto, if any, to this Certificate, describing in detail the nature of the
condition or event, the period during which it has existed and the action which
Obligors have taken, are taking, or propose to take with respect to each such
condition or event.
 
6. The Financial Statements delivered with this Certificate are prepared in
accordance with GAAP [(other than the absence of footnotes and year-end audit
adjustments)],1 and fairly present the financial positions and results of
operations of Borrowers and their Subsidiaries at the dates and for the periods
indicated. No change in GAAP or the application thereof has occurred since the
Effective Date which affects the Financial Statements delivered with this
Certificate.
 
7. The Obligors and their Subsidiaries have observed and complied with the
covenant set forth in Section 10.2.3 (Capital Expenditures) of the Loan
Agreement, and attached hereto as Exhibit C are calculations reflecting such
compliance.
 
[Signature Page Follows]
 
The foregoing certifications, together with the attachments as set forth on the
Exhibits attached hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ___ day of
____________, 20__ pursuant to Section 10.1.2(c) of the Loan Agreement.
 
 
AUTOWEB, INC.
 
 
By: _____________________________

Name:
Title:
 
 
 
 
1 Include for unaudited financial statements
 
 
 

 

 
Exhibit A
Financial Statements
 
 
 
 
 

 
 
Exhibit B
Events of Default and/or Defaults
 
 
 
 
 

 
 
Exhibit C
Capital Expenditures
 
 
A. Capital Expenditures through end of Reporting Period
 
$[______]
Compliance (Yes or No)
 

 
 
 
 
 
 
 

 
 
SCHEDULE 1.1(a)
to
Loan, Security and Guarantee Agreement
 
COMMITMENTS OF LENDERS
 
 
Lender
Revolver Commitment
Total Commitments
CIT Northbridge Funding I LLC
$20,000,000
$20,000,000
TOTAL
$20,000,000
$20,000,000