Exhibit 10.4
 
 
LOAN AGREEMENT

THIS LOAN AGREEMENT ("Agreement") is made and entered into as of February 26,
2013 by and between AUTOBYTEL INC., a Delaware Corporation ("Borrower"), and
UNION BANK, N.A., a national banking association ("Bank").

SECTION 1. THE CREDIT

1.1            CREDIT FACILITIES

1.1.1                          The Revolving Loan.  Bank will loan to Borrower
an amount not to exceed Eight Million Dollars ($8,000,000) outstanding in the
aggregate at any one time (the "Revolving Loan").  The proceeds of the Revolving
Loan shall be used to finance working capital, capital expenditures, Permitted
Acquisitions (as defined below), Permitted Investments (as defined below),
shareholder buybacks, and other general corporate purposes.  Borrower may
borrow, repay and reborrow all or part of the Revolving Loan in accordance with
the terms of the Revolving Note (defined below). All borrowings of the Revolving
Loan must be made before February 28, 2015 (the Maturity Date”), at which time
all unpaid principal and interest of the Revolving Loan shall be due and
payable. The Revolving Loan shall be evidenced by Bank’s standard form of
commercial promissory note (the "Revolving Note").  Bank shall enter each amount
borrowed and repaid in Bank's records and such entries shall be deemed correct.
 Omission of Bank to make any such entries shall not discharge Borrower of its
obligation to repay in full with interest all amounts borrowed.

1.1.1.1   The Standby L/C Sublimit.  As a sublimit under the Revolving Loan,
Bank shall issue, for the account of Borrower, one or more irrevocable standby
letters of credit (individually, a “Standby L/C").  The aggregate amount
available to be drawn under all Standby L/Cs and the aggregate amount of unpaid
reimbursement obligations under drawn Standby L/Cs shall not exceed Two Million
Dollars ($2,000,000) and shall reduce, dollar for dollar, the maximum amount
available under the Revolving Loan.  All Standby L/Cs shall be drawn on terms
and conditions acceptable to Bank and shall be governed by the terms of (and
Borrower agrees to execute) Bank's standard form of standby letter of credit
application and reimbursement agreement.  No Standby L/C shall expire more than
three hundred and sixty five (365) days from the date of its issuance, and in no
event later than February 28, 2016; provided, however, that Borrower is required
to post cash collateral for any Standby L/Cs outstanding on or after the
Maturity Date.

1.2            Terminology.  The following words and phrases, whether used in
their singular or plural form, shall have the meanings set forth below:

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“Affiliate” means any entity which Borrower directly or indirectly controls. As
used herein, “control” means the possession, directly or indirectly, of power to
direct or cause the direction of the management policies of any entity, whether
through the ownership of voting securities, by contract or otherwise.

“Change in Control” means:
(i)            A merger or consolidation of Borrower with or into another entity
as a result of which transaction the shareholders of Borrower immediately prior
to such transaction own less than fifty percent (50%) of the outstanding voting
shares of Borrower immediately after such transaction; or

(ii)            A transaction or series of related transactions in which an
entity not controlled by Borrower acquires all or substantially all of the
assets of Borrower.

“GAAP” means generally accepted accounting principles and practices consistently
applied.  Accounting terms used in this Agreement but not otherwise expressly
defined have the meanings given them by GAAP.

“L/C” means the Commercial L/Cs or the Standby L/Cs, or both, as the context may
require.

“Lien” means any voluntary or involuntary security interest, mortgage, pledge,
claim, charge, encumbrance, title retention agreement, or third party
interest covering all or any part of the property of Borrower.

“Loan” means all the credit facilities described above.

"Loan Documents" means this Agreement, the Note, and all other documents,
instruments and agreements required by Bank and executed in connection with this
Agreement, the Note, the Loans, and with all other credit facilities from time
to time made available to Borrower by Bank.

"Note" means the Revolving Note described above.

“Permitted Acquisitions” means any acquisition of or investment in the assets or
equity interests of a third party having an acquisition price or investment
amount of (i) up to One Million Dollars ($1,000,000.00) for any single
acquisition, and (ii) up to Two Million Dollars ($2,000,000) in the aggregate
for all acquisitions consummated in any fiscal year.

“Permitted Investments” means any investment in the assets, equity interests or
debt of a third party in an amount of (i) up to One Million Dollars
($1,000,000.00) for any single investment, and (ii) up to Two Million Dollars
($2,000,000) in the aggregate for all investements made between the closing date
of this Agreement and the Maturity Date.

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1.3            Prepayment.  The Loan may be prepaid in full or in part but only
in accordance with the terms of the Note, and any such prepayment shall be
subject to any prepayment fee provided for therein.  In the event of a principal
prepayment on any term indebtedness, the amount prepaid shall be applied to the
scheduled principal installments due in the reverse order of their maturity on
the Loan being prepaid.

1.4            Interest.  The unpaid principal balance of the Loan shall bear
interest at the rate or rates provided in the Note.

1.5            Unused Fee.  Starting on the closing date of this Agreement
through March 29, 2013 and on the last calendar day of each three-month period
thereafter, Borrower shall pay to Bank a fee of one tenth of 1 percent (0.10%)
per year on the unused portion of the Revolving Loan for the preceding quarter,
computed on the basis of a 365 day year for actual days elapsed.

1.6            Disbursement.  Bank shall disburse the proceeds of the Loan as
provided in Bank's standard form Authorization(s) to Disburse executed by
Borrower.

1.7            Security.  Prior to any Loan disbursement, Borrower shall execute
one or more security agreements on Bank's standard form, and Bank shall file one
or more financing statements in the official records of the appropriate state
government and/or any other location required by Bank, granting to Bank a first
priority security interest in all present and hereafter acquired accounts
receivable generated from products or services (related to the sale of leads,
referrals, and advertisements) sold or rendered in ordinary course of business,
all books and records related to such accounts receivable, and all proceeds of
the foregoing.  Any exceptions to Bank's first priority Lien are permitted only
as provided in this Agreement. Upon expiration or termination of this Agreement
and the Revolving Loan and full payment of all unpaid principal and interest
under the Revolving Loan, Bank shall promptly take all actions and execute and
file all documents necessary to release its security interest in Borrower’s
accounts receivable, books and records, and proceeds thereof.

1.8            Termination at Election of Borrower. Borrower may elect in its
sole discretion to terminate this Agreement and the Revolving Loan at any time
prior to the Maturity Date upon written notice of termination to Bank. Upon any
such termination, all unpaid principal, interest, expenses and fees owing under
the Revolving Loan shall be immediately due and payable.

SECTION 2. CONDITIONS PRECEDENT

Bank shall not be obligated to disburse all or any portion of the Loans unless
at or prior to the time of each such disbursement, the following conditions have
been fulfilled to Bank's satisfaction:

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2.1            Compliance.  Borrower shall have performed and complied with all
terms and conditions required by this Agreement to be performed or complied
with, and shall have executed and delivered to Bank the Note and all other Loan
Documents.

2.2            Authorization to Obtain Credit.  Borrower shall have provided
Bank with an executed copy of Bank’s form Authorization to Obtain
Credit authorizing the execution, delivery and performance of this Agreement and
the other Loan Documents.

2.3            Continuing Compliance.  At the time any disbursement is to be
made and immediately thereafter, there shall not exist any Event of Default (as
hereinafter defined) or any event, condition, or act which with notice or lapse
of time, or both, would constitute an Event of Default.

SECTION 3. REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants that:

3.1            Business Activity.  Borrower’s principal business is as an
internet-based automotive service, sales referral, and marketing company.

3.2            Affiliates and Subsidiaries.  Borrower's Affiliates are as
provided on a schedule delivered to Bank on or before the date of this
Agreement.

3.3            Organization and Qualification.  Borrower is duly organized and
existing under the laws of the state of its organization, is duly qualified and
in good standing in any jurisdiction where such qualification is required, and
has the power and authority to carry on the business in which it is engaged
and/or proposes to engage.

3.4            Power and Authorization.  Borrower has the power and authority to
enter into this Agreement and to execute and deliver the Note and all other Loan
Documents. This Agreement and all things required by this Agreement and the
other Loan Documents have been duly authorized by all requisite action of
Borrower.

3.5            Authority to Borrow.  The execution, delivery and performance of
this Agreement, the Note and all other Loan Documents are not in contravention
of any of the terms of any indenture, agreement or undertaking to which Borrower
is a party or by which it or any of its property is bound or affected.

3.6            Compliance with Laws.  Borrower is in material compliance with
all applicable laws, rules, ordinances or regulations which materially affect
the operations or financial condition of Borrower.

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3.7            Title.  Except for assets which may have been disposed of in the
ordinary course of business, Borrower has good and marketable title to all
property owned by Borrower and reflected in its financial statements delivered
to Bank and to all property acquired and owned by Borrower since the date of
said financial statements, free and clear of all Liens, except Liens
specifically referred to in said financial statements or as permitted by Section
5.1 of this Agreement.

3.8            Financial Statements.  Borrower’s financial statements, including
both a balance sheet at September 30, 2012, together with supporting schedules,
and an income statement for the nine (9) months ended September 30, 2012, have
heretofore been furnished to Bank, are true and complete, and fairly represent
Borrower’s financial condition for the period covered thereby.  Since September
30, 2012, there has been no material adverse change in Borrower’s financial
condition or operations.

3.9            Litigation.  There is no litigation or proceeding pending or
threatened against Borrower or any of its property which is reasonably likely to
affect the financial condition, property or business of Borrower in a materially
adverse manner or result in liability in excess of Borrower's insurance
coverage.

3.10            ERISA.  Borrower’s defined benefit pension plans (as defined in
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
meet, as of the date hereof, the minimum funding standards of Section 302 of
ERISA, and no Reportable Event or Prohibited Transaction as defined in ERISA has
occurred with respect to any such plan.

3.11            Regulation U.  No action has been taken or is currently planned
by Borrower, or any agent acting on its behalf, which would cause this Agreement
or the Note to violate Regulation U or any other regulation of the Board of
Governors of the Federal Reserve System, or to violate the Securities and
Exchange Act of 1934, in each case as in effect now or as the same may hereafter
be in effect.  Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock as one of its important
activities and, except as may be expressly agreed to and documented between
Borrower and Bank, none of the proceeds of the Loan will be used directly or
indirectly for such purpose.

3.12            No Event of Default.  Borrower is not now in default in the
payment of any of its material obligations, and there exists no Event of
Default, and no condition, event or act which with notice or lapse of time, or
both, would constitute an Event of Default.

3.13            Continuing Representations and Warranties.  The foregoing
representations and warranties shall be considered to have been made again at
and as of the date of each and every Loan disbursement and shall be true and
correct as of each such date.

SECTION 4. AFFIRMATIVE COVENANTS

Until all sums payable pursuant to this Agreement, the Note and the other Loan
Documents have been paid in full, unless Bank otherwise consents in writing,
Borrower agrees that:

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4.1            Use of Proceeds.  Borrower will use the proceeds of the Loan only
as provided in Section 1 above.

4.2            Payment of Obligations.  Borrower will pay and discharge promptly
when due all taxes, assessments and other governmental charges and claims levied
or imposed upon it or its property, or any part thereof; provided, however, that
Borrower shall have the right in good faith to contest any such taxes,
assessments, charges or claims and, pending the outcome of such contest, to
delay or refuse payment thereof provided that adequately funded reserves are
established by it to pay and discharge any such taxes, assessments, charges and
claims.

4.3            Maintenance of Existence.  Borrower will maintain and preserve
its existence, its material assets, and all material rights, franchises,
licenses and other authority necessary for the conduct of its business, and will
maintain and preserve its property, equipment and facilities in good order,
condition and repair.  Bank may, at reasonable times, visit and inspect any of
Borrower’s properties.

4.4            Records.  Borrower will keep and maintain full and accurate
accounts and records of its operations in accordance with GAAP and will permit
Bank, at Borrower’s expense, to have access thereto, to make examination and
photocopies thereof, and to make audits of Borrower’s accounts and records and
Bank’s collateral during regular business hours; provided, however, that unless
an Event of Default has occurred or is continuing, Bank shall be limited to not
more than one such audit in any twelve-month period.

4.5            Information Furnished.  Borrower will furnish to Bank:

(a)            Within forty five (45) days after the close of each fiscal
quarter, except for the final quarter of each fiscal year, its unaudited balance
sheet as of the close of such fiscal quarter, its unaudited income and expense
statement with year-to-date totals and supportive schedules, and its statement
of retained earnings for that fiscal quarter all prepared in accordance with
GAAP.

(b)            Within one hundred and twenty (120) days after the close of each
fiscal year, a copy of its statement of financial condition including at least
its balance sheet as of the close of such fiscal year and its income and expense
statement, and its retained earnings statement for such fiscal year, examined
and prepared on an audited basis by independent certified public accountants
selected by Borrower and reasonably satisfactory to Bank, in accordance with
GAAP.

(c)            Concurrently with delivery to Bank of the financial statements
provided in Section 4.5 (a) and Section 4.5 (b) hereof a certificate of
compliance with all covenants under this Agreement executed by Borrower’s chief
financial officer or other duly authorized officer in form acceptable to bank.
The certificate of compliance will include changes, if any, in Borrower’s
Affiliates (including any subsidiaries) and a list of all persons known to
 

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Borrower, based on public filings with the Securities and Exchange Commission,
to be the beneficial owner of more than ten percent of the Borrower’s
outstanding common stock.

(d)            Within ninety (90) days after the close of each fiscal year, a
copy of the internally prepared projections of Borrower for the forthcoming
fiscal year;

(e)            Prompt written notice to Bank of any Event of Default or breach
under any of the terms or provisions of this Agreement or any other Loan
Document, any litigation which would have a material adverse effect on
Borrower's financial condition, and any other matter which has resulted in, or
is likely to result in, a material adverse change in Borrower’s financial
condition or operations.

(f)            Prompt written notice to Bank of any change in Borrower's
officers, board members, and other senior management, Borrower's name or state
of organization, and the location of Borrower's assets.

(g)            Within fifteen (15) days after Borrower knows or has reason to
know that any Reportable Event or Prohibited Transaction (as defined in ERISA)
has occurred with respect to any defined benefit pension plan of Borrower, a
statement of an authorized officer of Borrower describing such event or
condition and the action, if any, which Borrower proposes to take with respect
thereto.

(h)            Such other financial statements and information as Bank may
reasonably request from time to time.

4.6            Net Liquidity.  Borrower will, at all times, maintain a minimum
Net Liquidity of at least Eight Million Dollars ($8,000,000).   "Net Liquidity"
to be defined as cash and cash equivalents with a rating of at least A1 or P1
maturing in less than 90 days minus any dollar borrowings under the Revolving
Loan for the same applicable period. For purposes of calculating this covenant,
all restricted cash is considered excluded from the definition of Liquidity.

4.7            Profitability.  Borrower will, at the end of each fiscal quarter,
maintain a net profit after tax of at least one dollar ($1.00).

4.8            EBITDA.  Borrower will, at the end of each fiscal quarter,
maintain quarterly EBITDA of at least the following :

                                          Minimum Amount        
                                      Quarter

    Five Hundred Thousand Dollars ($500,000)                        ending March
31st
    Six Hundred Thousand Dollars
($600,000)                                                ending June 30th
One Million Two Hundred Thousand Dollars
($1,200,000)                                   ending September 30th
   One Million Dollars
($1,000,000)                                                                                                            ending
December 31st

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“EBITDA” to be defined as earnings before interest, taxes, depreciation,
amortization, non cash share-based compensation, and other non-cash charges
expensed for the applicable period.

4.9            Tangible Net Worth.  Borrower will, at all times, maintain
Tangible Net Worth of not less than Nine Million Dollars ($9,000,0000) from the
day of closing this Agreement to December 30, 2013; increasing to Ten Million
Dollars ($10,000,000) on December 31, 2013 and staying at that level for each
measurable period thereafter.

“Tangible Net Worth” shall be defined as the net worth of the Borrower (as
defined by GAAP) increased by any indebtedness subordinated to Bank and
decreased by any patents, licenses, trademarks, trade names, amortizing loan
fees, goodwill and other similar intangible assets, organizational expenses,
covenants not to compete, and any monies due from affiliates (including
officers, shareholders, employees, and directors).

4.10            Balance.  Borrower shall maintain its major depository accounts
with Bank until all obligations of Borrower to Bank under the Loan Documents
have been paid in full.

4.11            Insurance.  Borrower will keep all of its insurable property,
whether real, personal or mixed, adequately insured by good and responsible
companies against fire and such other risks for damages to persons and property
as are customarily insured against by companies conducting similar business with
respect to like properties. Borrower will maintain adequate worker's
compensation insurance for Borrower’s employees.

4.12            Additional Requirements.  Upon Bank’s demand, Borrower will
promptly take such further action and execute all such additional documents and
instruments in connection with this Agreement and the other Loan Documents as
Bank reasonably deems necessary, and promptly supply Bank with such other
information concerning its affairs as Bank may reasonably request from time to
time.

4.13            Litigation and Attorneys' Fees.  Upon Bank’s demand, Borrower
will promptly pay to Bank reasonable attorneys' fees, including the reasonable
estimate of the allocated costs and expenses of in-house legal counsel and
staff, and all costs and other expenses paid or incurred by Bank in collecting,
modifying or compromising the Loan or in enforcing or exercising its rights or
remedies created by, connected with or provided for in this Agreement and the
other Loan Documents.  If any judicial action, arbitration or other proceeding
is commenced, only the prevailing party shall be entitled to attorneys' fees and
court costs.

4.14            Bank Expenses.  Upon Bank’s request, Borrower will pay or
reimburse Bank for all costs, expenses and fees incurred by Bank in preparing
and documenting any amendments and modifications to any Loan Documents,
including but not limited to all filing and recording fees, costs of appraisals,
insurance and attorneys' fees, including the reasonable estimate of the
allocated costs and expenses of in-house legal counsel and staff.
 

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SECTION 5. NEGATIVE COVENANTS

Until all sums payable pursuant to this Agreement, the Note and the other Loan
Documents have been paid in full, unless Bank otherwise consents in writing,
Borrower agrees that:

5.1                  Liens.  Borrower will not create, assume or suffer to exist
any Lien on any of its property, whether real, personal or mixed, now owned or
hereafter acquired, or upon the income or profits thereof, except (a) Liens in
favor of Bank, (b) Liens for taxes not delinquent and taxes and other items
being contested in good faith, (c) minor encumbrances and easements on real
property which do not affect its market value, (d) existing Liens on Borrower's
personal property, (e) future purchase money security interests encumbering only
the personal property purchased; (f) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other similar Liens arising in the
ordinary course of business which are not delinquent or remain payable without
penalty; (g) Liens incidental to the conduct of business or the ownership of
properties and assets (including Liens in connection with worker’s compensation,
unemployment insurance and other like laws and attorneys’ liens); (h) Liens to
secure the performance of bids, tenders or trade contracts or to secure
statutory obligations, surety or appeal bonds; (i) Liens of like general nature
incurred in the ordinary course of business and not in connection with the
borrowing of money; (j) Liens for borrowed money from any entity other than Bank
in an aggregate amount not to exceed One Million Dollars ($1,000,000), and (k)
Liens arising solely by virtue of any statutory or common law provision relating
to banker's liens, rights of set-off or similar rights and remedies as to
deposit accounts or other funds maintained with a creditor depository
institution; and (l) Liens of or resulting from any judgment or award the time
for the appeal or petition for rehearing of which shall not have expired, or in
respect of which Borrower shall at any time in good faith be prosecuting an
appeal or proceeding for a review and in respect of which a stay of execution
pending such appeal or proceeding for review shall have been secured and in an
amount, at any time, not to exceed more than Five Million Dollars ($5,000,000).

5.2            Borrowings.  Borrower will not sell, discount or otherwise
transfer any account receivable (other than accounts receivable in connection
with collection, dispute or settlement of such accounts receivable) or any note,
draft or other evidence of indebtedness payable to Borrower, except to Bank or
except to a financial institution at face value for deposit or collection
purposes only, and without any fees other than the financial institution’s
normal fees for such services.  Borrower will not borrow any money, become
contingently liable to borrow money, or enter any agreement to directly or
indirectly obtain borrowed money, except :  (i) pursuant to agreements with
Bank; (ii) transactions resulting in Liens permitted in Sections 5.1 (d), (e)
and (h); (iii) borrowings under Section 5.1 (j) in an amount not to exceed One
Million Dollars ($1,000,000); (iv) the existing Five Million Dollars
($5,000,000) in convertible subordinated promissory notes to the former owners
of Autotropolis, Inc. and Cyber Ventures, Inc. maturing on September 30, 2015;
and (v) trade credit or other borrowings incurred in the normal course of
business.

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5.3            Sale of Assets, Liquidation or Merger.  Borrower will not
liquidate or dissolve or enter into any transaction resulting in a Change in
Control.

5.4            Loans, Advances and Guaranties.  Borrower will not, except in the
ordinary course of business as currently conducted or between Borrower and its
wholly owned subsidiaries, make any loans or advances, become a guarantor or
surety, or pledge its credit or properties in excess of One Million Dollars
($1,000,000) in the aggregate.

5.5            Investments.  Borrower will not purchase the debt or equity of
another entity except for (i) savings accounts and certificates of deposit of
Bank, direct U.S. Government obligations, commercial paper issued by
corporations with the top ratings of Moody's or Standard & Poor's, provided that
all such permitted investments shall mature within one year of purchase; and
(ii) Permitted Investments.

5.6            Payment of Dividends.  Except for dividends, distributions or
exchanges of Rights, Series A Junior Participating Preferred Stock or common
stock in accordance with the Company’s Tax Benefit Preservation Plan, Borrower
will not declare or pay any dividends, other than dividends payable solely in
its own common stock, or authorize or make any other distribution with respect
to any of its stock now or hereafter outstanding which exceeds in the aggregate
for any fiscal year more than twenty five percent (25%) of Borrower's net profit
after taxes.

5.7            Redemption of Stock.  Except for redemption of rights or Series A
Junior Participating Preferred Stock in accordance with the Company’s Tax
Benefit Preservation Plan, Borrower will not redeem or retire any share of its
capital stock for value in excess of Three Million Dollars ($3,000,000) in any
one fiscal year.

5.8            Affiliate Transactions.  Borrower will not transfer any property
to any Affiliate, except for value received in the normal course of business and
for an amount, including any management or service fee(s), as would be conducted
and charged with an unrelated or unaffiliated entity.  Borrower will not pay any
management fee or fee for services to any Affiliate, other than as would be
conducted and charged with an unrelated or unaffiliated entity, without Bank’s
prior written consent.

5.9            Capital Expenditures.  Borrower will not purchase fixed assets in
the form of property, plant, equipment or fixtures in excess of Two Million Five
Hundred Thousand Dollars ($2,500,000) in any single fiscal year of Borrower.
 For purposes of calculating such expenditures to determine compliance with the
above limitation, the amount shall be that represented as purchase of such items
on the Consolidated Statement of Cash Flows of the Borrower's fiscal year-end
audited financial statement.

5.10            Lease Obligations.  Borrower will not incur total lease
obligations as lessee which would result in aggregate lease payments for any
fiscal year exceeding Three Million Dollars ($3,000,000).  Each such lease shall
be of equipment or real property needed by Borrower in the ordinary course of
its business.
 

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SECTION 6. EVENTS OF DEFAULT

The occurrence of any of the following events ("Events of Default") shall
terminate any obligation of Bank to make or continue the Loan and shall
automatically, unless otherwise provided under the Note, make all sums of
interest and principal and any other amounts owing under the Loan immediately
due and payable, without notice of default, presentment or demand for payment,
protest or notice of nonpayment or dishonor, or any other notices or demands:

6.1            Borrower shall default in the due and punctual payment of the
principal of or the interest on the Note or any of the Loan Documents and such
default shall continue for a period of three (3) business days; provided,
however, that no grace period shall apply to any payment default at maturity,
following acceleration or in connection with a prepayment hereunder.

6.2            Other than a payment default under Section 6.1, Borrower shall
default in any material respect in the due performance or observance of any
covenant or condition of the Loan Documents and such default shall not have been
cured by Borrower before the expiration of fifteen (15) days after the date of
the default.

6.3            There shall have occurred a Change in Control.

6.4            The insolvency of Borrower or the failure of Borrower to
generally to pay Borrower’s debts as such debts become due, subject to
applicable grace or cure periods.

6.5            The commencement by Borrower of any voluntary proceeding under
any laws relating to bankruptcy, insolvency, reorganization, dissolution,
general assignment for the benefit of creditors, debt adjustment, debtor relief,
or appointment of a receiver, trustee, custodian or similar official for all or
substantially all of Borrower’s property.

6.6            The commencement against Borrower of any involuntary proceeding
under any laws relating to bankruptcy, insolvency, reorganization, general
assignment for the benefit of creditors, debt adjustment, debtor relief, or
appointment of a receiver, trustee, custodian or similar official for all or
substantially all of Borrower’s property and any such proceeding is not
dismissed within ninety (90) days after commencement.

6.7            The failure by Borrower to comply in any respect with any order,
judgment, injunction, decree, writ or demand of any court or other public
authority where such failure would result in a material adverse change in, or a
material adverse effect upon, the operations, assets, performance, business,
properties, or condition (financial or otherwise) of Borrower such that
Borrower’s ability to perform under any Loan Document) is materially impaired.

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6.8            The default by Borrower or any Guarantor for any obligation
exceeding One Million Dollars ($1,000,000) concerning the borrowing of money,
which default enables the obligee to accelerate the entire amount due.

SECTION 7. GENERAL PROVISIONS

7.1            Additional Remedies.  The rights, powers and remedies given to
Bank hereunder shall be cumulative and not alternative and shall be in addition
to all rights, powers and remedies given to Bank by law against Borrower or any
other person or entity including but not limited to Bank's rights of setoff and
banker's lien.

7.2            Nonwaiver.  Any forbearance or failure or delay by Bank in
exercising any right, power or remedy hereunder shall not be deemed a waiver
thereof and any single or partial exercise of any right, power or remedy shall
not preclude the further exercise thereof.  No waiver shall be effective unless
it is in writing and signed by an officer of Bank.

7.3            Inurement.  The benefits of this Agreement and the other Loan
Documents shall inure to the successors and assigns of Bank and the permitted
successors and assigns of Borrower, but any attempted assignment by Borrower
without Bank's prior written consent shall be null and void.

7.4            Applicable Law.  This Agreement and the other Loan Documents
shall be governed by and construed according to the laws of the State of
California.

7.5            Severability.  Should any one or more provisions of this
Agreement or any other Loan Document be determined to be illegal or
unenforceable, all other provisions of such document shall nevertheless be
effective.

7.6            Controlling Document.  In the event of any inconsistency between
the terms of this Agreement and any other Loan Document, the terms of the other
Loan Document shall prevail.

7.7            USA Patriot Act Notice.  Bank is subject to the USA Patriot Act
and hereby notifies Borrower that pursuant to the requirements of that Act, Bank
is required to obtain, verify and record information that identifies Borrower,
which information includes the name and address of Borrower and other
information that will allow Bank to identify Borrower in accordance with that
Act.

7.8            Construction.  The section and subsection headings herein are for
convenient reference only and shall not limit or otherwise affect the
interpretation of this Agreement.

7.9            Amendments.  This Agreement may be amended only in writing signed
by all parties hereto.

--------------------------------------------------------------------------------

7.10            Counterparts.  Borrower and Bank may execute one or more
counterparts to this Agreement, each of which shall be deemed an original, but
all such counterparts when taken together, shall constitute one and the same
agreement.

7.11            Notices.  Any notices or other communications provided for or
allowed hereunder shall be effective only when given by one of the following
methods and addressed to the parties at their respective addresses and shall be
considered to have been validly given (a) upon delivery, if delivered
personally, (b) upon receipt, if mailed, first class postage prepaid, with the
United States Postal Service, (c) on the next business day, if sent by overnight
courier service of recognized standing, or (d) upon telephoned confirmation of
receipt, if telecopied or e-mailed.  The addresses to which notices or demands
are to be given may be changed from time to time by notice delivered as provided
above.

7.12            Integration Clause.  Except for the other Loan Documents, this
Agreement constitutes the entire agreement between Bank and Borrower regarding
the Loan, and all prior oral or written communications between Borrower and Bank
shall be of no further effect or evidentiary value.

THIS AGREEMENT is executed on behalf of the parties by their duly authorized
representative(s) as of the date first above written.

AUTOBYTEL INC.
 
By:      /s/ Curtis DeWalt                    
      Curtis DeWalt
      Chief Financial Officer
 
 
By:   /s/ Glenn E. Fuller               
      Glenn E. Fuller
      Executive Vice President, Chief
      Legal and Administrative Officer
      and Secretary
 
Address:
 
18872 MacArthur Blvd., Suite 200
Irvine California  92612
 
Telephone: 949-225-4500
Fax :          949-797-0450
 

--------------------------------------------------------------------------------

 
 
 
UNION BANK, N.A.
 
By:   /s/ Gregory Dubnansky                                           
      Gregory Dubnansky
      Vice President
 
Address:
 
18300 Von Karman Avenue, Suite 310
Irvine, California  92612
 
Telephone:  949-553-6879
Fax :           949-553-7112
 
 

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FIRST AMENDMENT
TO LOAN AGREEMENT

THIS FIRST AMENDMENT TO THE LOAN AGREEMENT ("First Amendment"), dated as of
September 10, 2013, is made and entered into by and between AUTOBYTEL, INC., a
Delaware corporation ("Borrower"), and UNION BANK, N.A., a national banking
association ("Bank").
RECITALS:
A.        Borrower and Bank are parties to that certain Loan Agreement dated as
of February 26, 2013 (the "Agreement"), pursuant to which Bank agreed to extend
credit to Borrower in the form of an Eight Million Dollar ($8,000,000) revolving
line of credit (the "Facility").
B.        Borrower has requested that Bank agree to amend the Agreement in
certain respects and Bank is willing to so agree to amend the Agreement,
subject, however, to the terms and conditions of this First Amendment.
AGREEMENT:
In consideration of the above recitals and of the mutual covenants and
conditions contained herein, Borrower and Bank hereby agree as follows:
1.        Defined Terms.  Initially capitalized terms used herein which are not
otherwise defined shall have the meanings assigned thereto in the Agreement.

2.        Amendment to the Agreement.

The definition of "Permitted Investments" is deleted in its entirety and
replaced with the following:
"Permitted Investments" means any investment in the assets, equity interests, or
debt of a third party in an amount not to exceed (i) Five Million Dollars
($5,000,000) for an equity investment in AutoWeb.com, ii) up to One Million
Dollars ($1,000,000)for any single investment, and (iii) up to Two Million
Dollars ($2,000,000) in the aggregate for all investments made between February
26, 201 3 and the Maturity Date (excluding AutoWeb.com)".
3.        Effectiveness of this First Amendment.  This First Amendment shall
become effective as of the date hereof when, and only when, Bank shall have
received all of the following, in form and substance satisfactory to Bank:
(a)        A counterpart of this First Amendment, duly executed by Borrower;
(b)        Such other documents, instruments or agreements as Bank may
reasonably deem necessary in order to effect fully the purposes of this First
Amendment.
4.        Ratification.
(a)        Except as specifically amended hereinabove, the Agreement shall
remain in full force and effect and is hereby ratified and confirmed; and
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(b)        Upon the effectiveness of this First Amendment, each reference in the
Agreement to "this Agreement", "hereunder", "herein", "hereof' or words of like
import referring to the Agreement shall mean and be a reference to the Agreement
as amended by this First Amendment,

5.      Representations and Warranties.  Borrower represents and warrants as
follows:
(a)        Each of the representations and warranties contained in Section 3 of
the Agreement, as amended hereby, is hereby reaffirmed as of the date hereof,
each as if set forth herein;

(b)        The execution, delivery and performance of this First Amendment are
within Borrower's corporate powers, have been duly authorized by all necessary
corporate action, have received all necessary approvals, if any, and do not
contravene any law or any contractual restriction binding on Borrower; and

(c)        Except as previously disclosed to Bank, no event has occurred and is
continuing or would result from this First Amendment which constitutes an Event
of Default under the Agreement, or would constitute an Event of Default but for
the requirement that notice be given or time elapse or both.

6.        Governing Law.  This First Amendment shall be deemed a contract under
and subject to, and shall be construed for all purposes and in accordance with,
the laws of the State of California.

7.        Counterparts.  This First Amendment may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

WITNESS the due execution hereof as of the date first above written.

"Borrower"

AUTOBYTEL, INC.

By:  /s/ Curtis DeWalt    
                                                                                                      
 Curtis DeWalt
      Senior Vice President and
       Chief Financial Officer

By:  /s/ Glenn E.
Fuller                                                                                                         
Glenn E. Fuller
     Executive Vice President,
      Chief Legal and Administrative
      Officer and Secretary

"Bank"

UNION BANK, N.A.

By:   /s/ Gregory
Dubnansky                                                                      
       Gregory Dubnansky
        Vice President

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SECOND AMENDMENT
TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO THE LOAN AGREEMENT (“Second Amendment”), dated as of
January 13, 2014, is made and entered into by and between AUTOBYTEL INC., a
Delaware corporation (“Borrower”), and UNION BANK, N.A., a national banking
association (“Bank”).
RECITALS:
A.        Borrower and Bank are parties to that certain Loan Agreement dated as
of February 26, 2013, that certain Consent dated July 29, 2013, and that certain
First Amendment dated September 10, 2013 (collectively the “Agreement”),
pursuant to which Bank agreed to extend credit to Borrower in the form of an
Eight Million Dollar ($8,000,000) revolving line of credit.
B.        Borrower has requested that Bank agree to amend the Agreement in
certain respects including, but not limited to, (a) the approval of Borrower's
acquisition of AutoNation's leads generation business, (b) the addition of a new
Nine Million Dollar ($9,000,000) Term Loan, and (c) the amendment of certain
financial covenants. Bank is willing to amend the Agreement, subject, however,
to the terms and conditions of this Second Amendment.
C.        Borrower has informed Bank that it intends to purchase AutoNation’s
leads generation business (the “Acquisition”) for Fourteen Million Dollars
($14,000,000) in accordance with the terms of the letter of intent dated
November 25, 2013 (“LOI”).  Borrower has requested that Bank consent to this
Acquisition not withstanding any provisions to the contrary contained in the
Agreement.
AGREEMENT:
In consideration of the above recitals and of the mutual covenants and
conditions contained herein, Borrower and Bank hereby agree as follows:
1.        Defined Terms.  Initially capitalized terms used herein which are not
otherwise defined shall have the meanings assigned thereto in the Agreement.
 
2.        Amendments to the Agreement.
 
(a)        Notwithstanding any provisions to the contrary in the Agreement, Bank
hereby consents to the Acquisition, provided that (a) the purchase price for
such acquisition does not exceed Fourteen Million Dollars ($14,000,000), (b)
such Acquisition is consummated in accordance with the LOI, the form and
substance of which shall be acceptable to Bank, (c) the Acquisition closes
within the next ninety (90) days, and (d) both before and after giving effect to
such Acquisition, no default or Event of Default shall exist under the Agreement
after giving effect to the forgoing consent.
(b)        Section 1.1.1 of the Agreement, which relates to the Revolving Loan,
is hereby amended by substituting the new maturity date of “March 31, 2017” for
the existing maturity date of “February 28, 2015 appearing in line eight
thereof.
(c)        Section 1.1 .1.1 of the Agreement, which relates to the Standby L/C
Sublimit, is hereby amended by substituting the new maturity date of “March 31,
2018” for the existing maturity date of “February 28, 2016” appearing in line
twelve thereof.
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(d)                Section 1.1 of the Agreement, which related to the Credit
Facilities, is hereby amended by adding a new Section, 1.1.2, for the new term
loan, which shall read as follows:
“1.1.2                    Term Loan.  Pursuant to the terms and conditions of
the Second Amendment, Bank shall make a new term loan (“Term Loan”) to Borrower
in one disbursement on the closing date of this Second Amendment in the
aggregate principal amount of Nine Million Dollars ($9,000,000).  Proceeds of
this Term Loan are to be used to finance a portion of the acquisition of
AutoNation's leads generation business.  Borrower's obligation to repay the
principal amount of this Term Loan, together with accrued interest thereon,
shall be evidenced by a promissory note (“Term Note”), issued by Borrower in
favor of Bank on the standard form used by Bank to evidence its commercial
loans.  This Term Note shall provide for quarterly payments of principal and
interest as set forth therein and shall be fully repaid by no later than
December 31, 2017.”
                    (e)        Section 1.7 of the Agreement, which relates to
the Security Agreement, is hereby deleted in its entirety and replaced with the
following:
 
        “1.7            Security.  Prior to the making of any advance under the
Revolving Loan or Term Loan, Borrower shall execute one or more security
agreements, each on Bank's standard form, granting to Bank a first priority
security interest in such of Borrower's personal property (the “Collateral”) as
is described in such security agreement or security agreements.  Bank is hereby
authorized to file one or more financing statements covering all or any portion
of the Collateral in the official records of the appropriate state government
and/or any other location required by Bank. Any exceptions to Bank's first
priority security interest in the Collateral are permitted only as provided in
this Agreement.  At Bank's request, Borrower will use commercially reasonable
efforts to obtain executed landlord's and mortgagee's waivers, each on Bank's
form, covering all of Borrower's fixed assets located on leased or encumbered
real property.  Upon the expiration or termination of this Agreement, along with
full payment of all unpaid principal, interest and fees under the Loans
thereunder, Bank shall promptly take all actions to execute and file documents
necessary to release its security in the assets of the Borrower.”
 
       (f)        Section 4.6 of the Agreement, which relates to Net Liquidity,
is hereby deleted in its entirety and replaced with the following:
 
“4.6            Minimum Liquidity.  Borrower will, at all times, maintain a
minimum Liquidity of at least the following:

(i) Eight Million Dollars ($8,000,000) from the day of the closing of this
Amendment through June 30, 2014, increasing to

(ii)
Nine Million Dollars ($9,000,000) from July 1, 2014 through December 31, 2014,
increasing to
 

(iii) Ten Million Dollars ($10,000,000) on January 1, 2015 and for every period
thereafter.

“Liquidity” to be defined as cash and equivalents with a S&P or Moody's rating
of at least A1 or PI and maturing in less than 90 days from the date of
determination.  All restricted cash shall be excluded from this Liquidity
calculation.”
(g)        Section 4.7 of the Agreement, which relates to Profitability, is
hereby deleted in its entirety and replaced with the following:
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“4.7            Minimum Annual EBITDA.  Borrower will, at the end of each fiscal
year, maintain a minimum EBITDA of at least Five Million Three Hundred Thousand
Dollars ($5,300,000).
“EBITDA” to be defined as earnings before interest, taxes, depreciation,
amortization, non cash share-based compensation, and other non-cash charges
expensed for the applicable period.”
(h)        Section 4.8 of the Agreement, which relates to EBITDA, is hereby
deleted in its entirety and replaced with the following:
“4.8                Quarterly EBITDA.  Borrower will, at the end of each fiscal
quarter, maintain a minimum quarterly EBITDA of at least the following:
 
Minimum Amount
Quarter
Seven Hundred Fifty Thousand Dollars ($750,000)
ending March 31st
One Million Dollars ($1,000,000)
ending June 30th
One Million Five Hundred Thousand Dollars ($1,500,000)
ending Sept 30th
One Million Two Hundred Fifty Thousand Dollars (1,250,000)
ending December 31st

(i)        Section 4.9 of the Agreement, which relates to Tangible Net Worth, is
hereby deleted in its entirety and replaced with the following:

“4.9 Tangible Net Worth.  Borrower will, at all times, maintain a Tangible Net
Worth of not less than 75% of the combined balance sheet Tangible Net Worth at
the time of the Acquisition's closing and staying at that level for each
measurable period thereafter

“Tangible Net Worth” shall be defined as the net worth of the Borrower (as
defined by GAAP) increased by any indebtedness subordinated to Bank and
decreased by any patents, licenses, trademarks, trade names, amortizing loan
fees, goodwill and other similar intangible assets, organizational expenses,
covenants not to compete, and any monies due from affiliates (including
officers, shareholders, employees, and directors).”
(j)        Section 5.2 of the Agreement, which relates to Borrowings, is hereby
amended by adding subset iv) to the end of the paragraph as follows:
“, and vi) the One Million Dollars ($1,000,000) seller note issued in
conjunction with the acquisition of AutoNation's lead generation business.”
3.          Effectiveness of this Second Amendment.  This Second Amendment shall
become effective as of the date hereof when, and only when, Bank shall have
received all of the following, in form and substance satisfactory to Bank:
(a)        A counterpart of this Second Amendment, duly executed by Borrower;
(b)        A replacement Revolving Note and new Term Note; and
(c)        Such other documents, instruments or agreements as Bank may
reasonably deem necessary in order to effect fully the purposes of this Second
Amendment.
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4.        Ratification.

(a)        Except as specifically amended herein above, the Agreement shall
remain in full force and effect and is hereby ratified and confirmed; and
 
(b)        Upon the effectiveness of this Second Amendment, each reference in
the Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of
like import referring to the Agreement shall mean and be a reference to the
Agreement as amended by this Second Amendment.
5.          Representations and Warranties.  Borrower represents and warrants as
follows:
(a)        Each of the representations and warranties contained in Section 3 of
the Agreement, as amended hereby, is hereby reaffirmed as of the date hereof,
each as if set forth herein;
(b)        The execution, delivery and performance of this Second Amendment are
within Borrower's corporate powers, have been duly authorized by all necessary
corporate action, have received all necessary approvals, if any, and do not
contravene any law or any contractual restriction binding on Borrower; and
(c)        Except as previously disclosed to Bank, no event has occurred and is
continuing or would result from this Second Amendment which constitutes an Event
of Default under the Agreement, or would constitute an Event of Default but for
the requirement that notice be given or time elapse or both.
6.           Governing Law.  This Second Amendment shall be deemed a contract
under and subject to, and shall be construed for all purposes and in accordance
with, the laws of the State of California.
7.           Counterparts.  This Second Amendment may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
WITNESS the due execution hereof as of the date first above written
“Borrower”
AUTOBYTEL INC.

By:             /s/ Curtis DeWalt                       
Curtis DeWalt
Chief Financial Officer

By:             /s/ Glenn E. Fuller                     
        Glenn E. Fuller
          Executive Vice President, Chief Legal
          and Administrative Officer and Secretary

4

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“Bank”

UNION BANK, N.A.

By:       /s/ Gregory Dubnansky                        
Gregory Dubnansky
    Vice President

 
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                                          SECURITY AGREEMENT

This Security Agreement ("Agreement") is executed at Irvine, California on
January 13, 2014 by Autobytel Inc. a Delaware corporation (herein called
"Debtor").

As security for the payment and performance of all of Debtor's obligations to
UNION BANK, N.A., (herein called "Bank"), regardless of the manner in which or
the time at which such obligations arose or shall arise, whether direct or
indirect, alone or with others, or absolute or contingent, Debtor hereby grants
a continuing security interest in, and assigns and transfers to Bank, the
following personal property, whether or not delivered to or in the possession or
control of Bank or its agents, and whether now or hereafter owned or in
existence, and all proceeds thereof (hereinafter called the "Collateral"):

All present and hereafter acquired personal property including but not limited
to all accounts, chattel paper, Swap Contract (as defined in the security
agreement), instruments, contract rights, general intangibles, goods, equipment,
inventory, documents, certificates of title, deposit accounts, returned or
repossessed goods, fixtures, commercial tort claims, insurance claims, rights
and policies, letter of credit rights, investment property, supporting
obligations, and the proceeds, products, parts, accessories, attachments,
accessions, replacements, substitutions, additions, and improvements of or to
each of the foregoing.

Entities executing this Security Agreement as Debtor agree not to change their
state of organization, principal place of business (if a general partnership or
other nonregistered entity) or name, as identified below, without Bank's prior
written consent::

LEGAL NAME OF DEBTOR                             STATE OF ORGANIZATION/PRINCIPAL
PLACE OF BUSINESS
Autobytel
Inc.                                                                                        State
of Delaware
 
AGREEMENT
1.            The term "credit" or "indebtedness" as used throughout this
Agreement means any indebtedness to Bank under that certain Promissory Note
dated as of January 13, 2014 (“Note”), executed by Debtor in favor of Bank.
Credit may be granted at the request of any one Debtor without further
authorization by or notice to any other Debtor. Collateral shall be security for
all nonconsumer indebtedness of Debtor to Bank in accordance with the terms and
conditions herein.

2.            Debtor will: (a) pay when due all indebtedness to Bank; (b)
execute such other documents and do such other acts and things as Bank may from
time to time require to establish and maintain a valid perfected security
interest in Collateral, including payment of all costs and fees in connection
with any of the foregoing when deemed necessary by Bank; (c) furnish Bank such
information concerning Debtor and Collateral as Bank may from time to time
request, including but not limited to current financial statements in accordance
with that certain Loan Agreement dated February 26, 2013 (all Amendments and the
Loan Agreement together called the “Loan Agreement”); (d) keep Collateral
separate and identifiable where such Collateral is currently located and permit
Bank and its representatives to inspect Collateral and/or records pertaining
thereto from time to time during normal business hours; (e) not sell, assign or
create or permit to exist any lien on or security interest in Collateral in
favor of anyone other than Bank unless Bank consents thereto in writing and at
Debtor's expense upon Bank's request remove any unauthorized lien or security
interest and defend any claim affecting the Collateral; (f) pay all charges
against Collateral prior to delinquency including but not limited to taxes,
assessments, encumbrances, insurance and diverse claims, and upon Debtor's
failure to do so Bank may pay any such charge as it deems necessary and add the
amount paid to the indebtedness of Debtor hereunder; (g) protect, defend and
maintain the Collateral and the perfected security interest of Bank and
initiate, commence and maintain any action or proceeding to protect the
Collateral; (h) reimburse Bank for any expenses, including but not limited to
reasonable attorneys' fees and expenses (including the allocated costs of Bank's
in-house counsel and legal staff)
1

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incurred by Bank in seeking to protect, collect or enforce any rights in
Collateral; (i) provide insurance in accordance with the Loan Agreement; (j)
intentionally omitted; (k) perform all of the obligations of the Debtor under
the Collateral and save Bank harmless from the consequence of any failure to do
so; and (l) at its own expense, upon request of Bank, notify any parties
obligated to Debtor on any Collateral to make payment to Bank and Debtor hereby
irrevocably grants Bank power of attorney to make said notifications and
collections. Debtor hereby appoints Bank the true and lawful attorney of Debtor
and authorizes Bank to perform any and all acts which Bank in good faith deems
necessary for the protection and preservation of Collateral or its value or
Bank's perfected security interest therein, including transferring any
Collateral into its own name and receiving the income thereon as additional
security hereunder. Bank does not assume any of the obligations arising under
the Collateral.

3.            Debtor warrants that: (a) it is and will be the lawful owner of
all Collateral free of all claims, liens, encumbrances and setoffs whatsoever,
other than the security interest granted pursuant hereto; (b) it has the
capacity to grant a security interest in Collateral to Bank; (c) all information
furnished by Debtor to Bank heretofore or hereafter, whether oral or written, is
and will be correct and true as of the date given; and (d) if Debtor is an
entity, the execution, delivery and performance hereof are within its powers and
have been duly authorized.

4.            The term default shall have the same meaning as such term is
defined in the Note.

5.            Whenever a default exists, Bank, at its option, may: (a) without
notice accelerate the maturity of any part or all of the indebtedness and
terminate any agreement for the granting of further credit to Debtor; (b) sell,
lease or otherwise dispose of Collateral at public or private sale; (c) transfer
any Collateral into its own name or that of its nominee; (d) retain Collateral
in satisfaction of obligations secured hereby, with notice of such retention
sent to Debtor as required by law; (e) notify any parties obligated on any
Collateral consisting of accounts, instruments, chattel paper, choses in action
or the like to make payment to Bank and enforce collection of any Collateral;
(f) file any action or proceeding which Bank may deem necessary or appropriate
to protect and preserve the right, title and interest of the Bank in the
Collateral; (g) require Debtor to assemble and deliver any Collateral to Bank at
a reasonably convenient place designated by Bank; (h) apply all sums received or
collected from or on account of Collateral, including the proceeds of any sale
thereof, to the payment of the costs and expenses incurred in preserving and
enforcing rights of Bank, including reasonable attorneys' fees (including the
allocated costs of Bank's in-house counsel and legal staff), and indebtedness
secured hereby in such order and manner as Bank in its sole discretion
determines; Bank shall account to Debtor for any surplus remaining thereafter,
and shall pay such surplus to the party entitled thereto, including any second
secured party who has made a proper demand upon Bank and has furnished proof to
Bank as requested in the manner provided by law; in like manner, Debtor agrees
to pay to Bank without demand any deficiency after any Collateral has been
disposed of and proceeds applied as aforesaid; and (i) exercise its banker's
lien or right of setoff in the same manner as though the credit were unsecured.
Bank shall have all the rights and remedies of a secured party under the Uniform
Commercial Code of California and in any jurisdiction where enforcement is
sought, whether in said state or elsewhere. All rights, powers and remedies of
Bank hereunder shall be cumulative and not alternative. No delay on the part of
Bank in the exercise of any right or remedy shall constitute a waiver thereof
and no exercise by Bank of any right or remedy shall preclude the exercise of
any other right or remedy or further exercise of the same remedy.

6.            Debtor waives: (a) all right to require Bank to proceed against
any other person including any other Debtor hereunder or to apply any Collateral
Bank may hold at any time or to pursue any other remedy; Collateral, endorsers
or guarantors may be released, substituted or added without affecting the
liability of Debtor hereunder; (b) the defense of the Statute of Limitations in
any action upon any obligations of Debtor secured hereby; (c) any right of
subrogation and any right to participate in Collateral until all obligations
secured hereby have been paid in full; and (d) to the fullest extent permitted
by law, any right to oppose the appointment of a receiver or similar official to
operate Debtor's business.

7.            The right of Bank to have recourse against Collateral shall not be
affected in any way by the fact that the credit is secured by a mortgage, deed
of trust or other lien upon real property.

8.            The security interest granted herein is irrevocable and shall
remain in full force and effect until there is payment in full of the
indebtedness or the security interest is released in writing by Bank.
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9.            Debtor shall be obligated to request the release, reassignment or
return of Collateral after the payment in full of all existing obligations. Bank
shall be under no duty or obligation to release, reassign or return any
Collateral except upon the express written request of Debtor and then only where
all of Debtor's obligations hereunder have been paid in full.

10.            If more than one Debtor executes this Agreement, the obligations
hereunder are joint and several. All words used herein in the singular shall be
deemed to have been used in the plural when the context and construction so
require. Any married person who signs this Agreement expressly agrees that
recourse may be had against his/her separate property for all of his/her
obligations to Bank.

11.            This Agreement shall inure to the benefit of and bind Bank, its
successors and assigns and each of the undersigned, their respective heirs,
executors, administrators and successors in interest. Upon transfer by Bank of
any part of the obligations secured hereby, Bank shall be fully discharged from
any liability with respect to Collateral transferred therewith.

12.            Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but, if any provision of this Agreement shall be prohibited or invalid under
applicable law, such provisions shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such or the
remaining provisions of this Agreement.

The grant of a security interest in proceeds does not imply the right of Debtor
to sell or dispose of any Collateral without the express consent in writing by
Bank.

Debtor:

Autobytel Inc., a Delaware corporation

By:   /s/ Glenn E. Fuller                         
Glenn E. Fuller
Title:               E.V.P. and Secretary

By:   /s/ Curtis E. DeWalt                       
Curtis E. DeWalt
Title:              S.V.P., Chief Financial Officer

 
 
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COMMERCIAL PROMISSORY NOTE
(Base Rate)

    Debtor Name:                           Autobytel Inc., a Delaware
corporation
Office:  45061
    Debtor Address:               18872 MacArthur Blvd., Suite #200
Irvine, CA
 92612-1448                                                                                                  Loan
Number: 055-716-185-7

Maturity Date:  December 31,
2017                                                  Amount:  $9,000,000.00

$
 9,000,000.00                                                                                                                         
Date:  January 13, 2014

FOR VALUE RECEIVED, on December 31, 2017 , the undersigned ("Debtor") promises
to pay to the order of UNION BANK, N.A. ("Bank"), as indicated below, the
principal sum of Nine Million and 00/100ths Dollars ($ 9,000,000.00 ), or so
much thereof as is disbursed, together with interest on the balance of such
principal from time to time outstanding, at the per annum rate or rates and at
the times set forth below.
 
1.            PRINCIPAL AND INTEREST PAYMENTS.  Debtor shall pay principal in
installments of $562,500.00  each on the 31st day of each quarter commencing
March 31.2014,  Debtor shall pay interest on the 31st day of each quarter
commencing March 31.2014.  Should interest not be paid when due, it shall become
part of the principal and bear interest as herein provided. All computations of
interest under this note shall be made on the basis of a year of 365 days, for
actual days elapsed.  If any interest rate defined in this note ceases to be
available from Bank for any reason, then said interest rate shall be replaced by
the rate then offered by Bank, which, in the sole discretion of Bank, most
closely approximates the unavailable rate. The availability under this note
shall be reduced on the same day and in the same amount as each scheduled
principal payment.

(a)            BASE INTEREST RATE.  At Debtor's option, amounts outstanding
hereunder in minimum amounts of $100,000 shall bear interest at a rate, based on
an index selected by Debtor, which is two and one-half percent (2.5 %) per annum
in excess of the LIBOR Rate for the lnterest Period selected by Debtor,
acceptable to Bank.

No Base lnterest Rate may be changed, altered or otherwise modified until the
expiration of the lnterest Period selected by Debtor. The exercise of interest
rate options by Debtor shall be as recorded in Bank's records, which records
shall be prima facie evidence of the amount borrowed under either interest
option and the interest rate; provided, however, that failure of Bank to make
any such notation in its records shall not discharge Debtor from its obligations
to repay in full with interest all amounts borrowed. In no event shall any
lnterest Period extend beyond the maturity date of this note.
To exercise this option, Debtor may, from time to time with respect to principal
outstanding on which a Base lnterest Rate is not accruing, and on the expiration
of any lnterest Period with respect to principal outstanding on which a Base
lnterest Rate has been accruing, select an index offered by Bank for a Base
lnterest Rate Loan and an lnterest Period by telephoning an authorized lending
officer of Bank located at the banking office identified below prior to 10:00
a.m., Pacific
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time, on any Business Day and advising that officer of the selected index, the
lnterest Period and the Origination Date selected (which Origination Date, for a
Base lnterest Rate Loan based on the LIBOR Rate, shall follow the date of such
selection by no more than two (2) Business Days).
Bank will mail a written confirmation of the terms of the selection to Debtor
promptly after the selection is made. Failure to send such confirmation shall
not affect Bank's rights to collect interest at the rate selected. If, on the
date of the selection, the index selected is unavailable for any reason, the
selection shall be void. Bank reserves the right to fund the principal from any
source of funds notwithstanding any Base lnterest Rate selected by Debtor.
(b)            VARIABLE INTEREST RATE.  All principal outstanding hereunder
which is not bearing interest at a Base Interest Rate shall bear interest at a
rate per annum of one-half percent (00.5%) less than the Reference Rate, which
rate shall vary as and when the Reference Rate changes.

Debtor shall pay all amounts due under this note in lawful money of the United
States at Bank's P.O. Box 30115, Los Angeles, CA 90030-0115 Office, or such
other office as may be designated by Bank, from time to time.

2.            LATE PAYMENTS.  If any payment required by the terms of this note
shall remain unpaid ten days after same is due, at the option of Bank, Debtor
shall pay a fee of $100 to Bank.

3.            INTEREST RATE FOLLOWING DEFAULT.  In the event of default, at the
option of Bank, and, to the extent permitted by law, interest shall be payable
on the outstanding principal under this note at a per annum rate equal to five
percent (5%) in excess of the interest rate specified in paragraph 1.b, above,
calculated from the date of default until all amounts payable under this note
are paid in full.

4.            PREPAYMENT.

(a)            Amounts outstanding under this note bearing interest at a rate
based on the Reference Rate may be prepaid in whole or in part at any time,
without penalty or premium. Debtor may prepay amounts outstanding under this
note bearing interest at a Base lnterest Rate in whole or in part provided
Debtor has given Bank not less than five (5) Business Days prior written notice
of Debtor's intention to make such prepayment and pays to Bank the prepayment
fee due as a result. The prepayment fee shall also be paid, if Bank, for any
other reason, including acceleration or foreclosure, receives all or any portion
of principal bearing interest at a Base lnterest Rate prior to its scheduled
payment date. The prepayment fee shall be an amount equal to the present value
of the product of: (i) the difference (but not less than zero) between (a) the
Base lnterest Rate applicable to the principal amount which is being prepaid,
and (b) the return which Bank could obtain if it used the amount of such
prepayment of principal to purchase at bid price regularly quoted securities
issued by the United States having a maturity date most closely coinciding with
the relevant Base Rate Maturity Date and such securities were held by Bank until
the relevant Base Rate Maturity Date ("Yield Rate"); (ii) a fraction, the
numerator of which is the number of days in the period between the date of
prepayment and the relevant Base Rate Maturity Date and the denominator of which
is 365; and (iii) the amount of the principal so prepaid (except in the event
that principal payments are required and have been made as scheduled under the
terms of the Base lnterest Rate Loan being prepaid, then an amount equal to the
lesser of (A) the amount prepaid or (B) 50% of the sum of (1) the amount prepaid
and (2) the amount of principal scheduled under the terms of the Base lnterest
Rate Loan being prepaid to be outstanding at the relevant Base Rate Maturity
Date). Present value under this note is determined by discounting the above
product to present value using the Yield Rate as the annual discount factor.
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(b)              In no event shall Bank be obligated to make any payment or
refund to Debtor, nor shall Debtor be entitled to any setoff or other claim
against Bank, should the return which Bank could obtain under this prepayment
formula exceed the interest that Bank would have received if no prepayment had
occurred. All prepayments shall include payment of accrued interest on the
principal amount so prepaid and shall be applied to payment of interest before
application to principal. A determination by Bank as to the prepayment fee
amount, if any, shall be conclusive. In the event of partial prepayment, such
prepayments shall be applied to principal payments in the inverse order of their
maturity.

(c)              Bank shall provide Debtor a statement of the amount payable on
account of prepayment. Debtor acknowledges that (i) Bank establishes a Base
lnterest Rate upon the understanding that it apply to the Base lnterest Rate
Loan for the entire lnterest Period, and (ii) Bank would not lend to Debtor
without Debtor's express agreement to pay Bank the prepayment fee described
above.

DEBTOR INITIAL HERE:                    GEF                
 CED                        

5.            DEFAULT AND ACCELERATION OF TIME FOR PAYMENT. The occurrence of
any of the following shall constitute a default (a) Debtor shall default in the
due and punctual payment of the principal of or the interest on the note or any
of the Loan Documents (as such term is defined in that certain Loan Agreement of
even date herewith ("Loan Agreement")) and such default shall continue for a
period of three (3) business days; provided, however, that no grace period shall
apply to any payment default at maturity, following acceleration or in
connection with a prepayment hereunder; (b) other than a payment default under
paragraph 5(a), above, Debtor shall default in any material respect in the due
performance or observance of any covenant or condition of the Loan Documents and
such default shall not have been cured by Debtor before the expiration of
fifteen (15) days after the date of the default; (c) there shall have occurred a
Change in Control (as defined in the Loan Agreement); (d) the insolvency of
Debtor or the failure of Debtor to generally to pay Debtor's debts as such debts
become due, subject to applicable grace or cure periods; (e) the commencement by
Debtor of any voluntary proceeding under any laws relating to bankruptcy,
insolvency, reorganization, dissolution, general assignment for the benefit of
creditors, debt adjustment, debtor relief, or appointment of a receiver,
trustee, custodian or similar official for all or substantially all of Debtor's
property; (f) the commencement against Debtor of any involuntary proceeding
under any laws relating to bankruptcy, insolvency, reorganization, general
assignment for the benefit of creditors, debt adjustment, debtor relief, or
appointment of a receiver, trustee, custodian or similar official for all or
substantially all of Debtor's property and any such proceeding is not dismissed
within ninety (90) days after commencement; (g) the failure by Debtor to comply
in any respect with any order, judgment, injunction, decree, writ or demand of
any court or other public authority where such failure would result in a
material adverse change in, or a material adverse effect upon, the operations,
assets, performance, business, properties, or condition (financial or otherwise)
of Debtor such that Debtor's ability to perform under any Loan Document) is
materially impaired; or (h) the default by Debtor or any Guarantor for any
obligation exceeding One Million Dollars ($1,000,000) concerning the borrowing
of money, which default enables the obligee to accelerate the entire amount due.
Upon the occurrence of any such default, Bank, in its discretion, may cease to
advance funds hereunder and may declare all obligations under this note
immediately due and payable; however, upon the occurrence of an event of default
under e, all principal and interest shall automatically become immediately due
and payable.
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6.            ADDITIONAL AGREEMENTS OF DEBTOR.  If any amounts owing under this
note are not paid when due, Debtor promises to pay all costs and expenses,
including reasonable attorneys' fees, (including the allocated costs of Bank's
in-house counsel and legal staff) incurred by Bank in the negotiation,
documentation and modification of this note and all related documents and in the
collection or enforcement of any amount outstanding hereunder. Debtor and any
Obligor, for the maximum period of time and the full extent permitted by law,
(a) waive diligence, presentment, demand, notice of nonpayment, protest, notice
of protest, and notice of every kind; (b) waive the right to assert the defense
of any statute of limitations to any debt or obligation hereunder; and (c)
consent to renewals and extensions of time for the payment of any amounts due
under this note. If this note is signed by more than one party, the term
"Debtor" includes each of the undersigned and any successors in interest
thereof; all of whose liability shall be joint and several. Any married person
who signs this note agrees that recourse may be had against the separate
property of that person for any obligations hereunder. The receipt of any check
or other item of payment by Bank, at its option, shall not be considered a
payment on account until such check or other item of payment is honored when
presented for payment at the drawee bank. Bank may delay the credit of such
payment based upon Bank's schedule of funds availability, and interest under
this note shall accrue until the funds are deemed collected. In any action
brought under or arising out of this note, Debtor and any Obligor, including
their successors and assigns, hereby consent to the jurisdiction of any
competent court within the State of California, as provided in any alternative
dispute resolution agreement executed between Debtor and Bank, and consent to
service of process by any means authorized by said state's law. The term "Bank"
includes, without limitation, any holder of this note. This note shall be
construed in accordance with and governed by the laws of the State of
California. This note hereby incorporates any alternative dispute resolution
agreement previously, concurrently or hereafter executed between Debtor and
Bank.

7.            DEFINITIONS.  As used herein, the following terms shall have the
meanings respectively set forth below:  "Base lnterest Rate" means a rate of
interest based on the LlBOR Rate.  "Base lnterest Rate Loan" means amounts
outstanding under this note that bear interest at a Base lnterest Rate. "Base
Rate Maturity Date" means the last day of the lnterest Period with respect to
principal outstanding under a Base lnterest Rate Loan.  "Business Day" means a
day on which Bank is open for business for the funding of corporate loans, and,
with respect to the rate of interest based on the LlBOR Rate, on which dealings
in U.S. dollar deposits are carried out in the London interbank market.
 "lnterest Period" means with respect to funds bearing interest at a rate based
on the LIBOR Rate, any calendar period of 1,2, 3, 6 or 12 months. In determining
an Interest Period, a month means a period that starts on one Business Day in a
month and ends on and includes the day preceding the numerically corresponding
day in the next month. For any month in which there is no such numerically
corresponding day, then as to that month, such day shall be deemed to be the
last calendar day of such month.  Any lnterest Period which would otherwise end
on a non-Business Day shall end on the next succeeding Business Day unless that
is the first day of a month, in which event such lnterest Period shall end on
the next preceding Business Day. "LIBOR Rate" means, for any specified lnterest
Period, a per annum rate of interest determined by Bank as equal to the rate for
deposits in US Dollars for a period comparable to the lnterest Period which
appears on the Reuters Screen LlBOR 01 Page (or any replacement or successor
page or service) as of 11:00 a.m., London time, on the day that is two
(2) Business Days preceding the first day of such lnterest Period.  "Origination
Date" means the first day of the lnterest Period.  "Reference Rate" means the
rate announced by Bank from time to time at its corporate headquarters as its
Reference Rate.  The Reference Rate is an index rate determined by Bank from
time to time as a means of pricing certain extensions of credit and is neither
directly tied to any external rate of interest or index nor necessarily the
lowest rate of interest charged by Bank at any given time.

SEE FOLLOWING PAGE FOR ALL (OR ADDITIONAL) SIGNATURES
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DEBTOR:

Autobytel Inc., a Delaware corporation

By:  /s/ Curtis DeWalt                           
Curtis DeWalt, Chief Financial Officer

By:     /s/ Glenn E. Fuller                      
Glenn E. Fuller, E.V.P., Chief Legal/
Admin Off., Sec.
 
 
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 COMMERCIAL PROMISSORY NOTE
(Base Rate)

    Debtor Name:                         Autobytel Inc., a Delaware corporation
Office:  45061
    Debtor Address:                18872 MacArthur Blvd., Suite #200
Irvine, CA
 92612-1448                                                                                                  Loan
Number: 055-716-185-7

Maturity Date:  March 31,
2017                                                                                                                Amount:
 $8,000,000.00

$
 8,000,000.00                                                                                                                       
              Date:  January 13, 2014

FOR VALUE RECEIVED, on March 31, 2017, the undersigned ("Debtor") promises to
pay to the order of UNION BANK, N.A. ("Bank"), as indicated below, the principal
sum of Eight Million and 00/100ths Dollars ($ 8,000,000.00), or so much thereof
as is disbursed, together with interest on the balance of such principal from
time to time outstanding, at the per annum rate or rates and at the times set
forth below. Any letter of credit issued and outstanding in connection with this
note shall result in reduction of the amount available to Debtor.

1.            INTEREST PAYMENTS.  Debtor shall pay interest on the last day of
each month commencing January 31, 2014.  Should interest not be paid when due,
it shall become part of the principal and bear interest as herein provided. All
computations of interest under this note shall be made on the basis of a year of
365 days, for actual days elapsed. If any interest rate defined in this note
ceases to be available from Bank for any reason, then said interest rate shall
be replaced by the rate then offered by Bank, which, in the sole discretion of
Bank, most closely approximates the unavailable rate.

 
(a)     BASE INTEREST RATE.  At Debtor's option, amounts outstanding hereunder
in minimum amounts of $ 100,000 shall bear interest at a rate, based on an index
selected by Debtor, which is two and one-half percent (2.5 %) per annum in
excess of the LIBOR Rate for the Interest Period selected by Debtor, acceptable
to Bank.

No Base Interest Rate may be changed, altered or otherwise modified until the
expiration of the Interest Period selected by Debtor. The exercise of interest
rate options by Debtor shall be as recorded in Bank's records, which records
shall be prima facie evidence of the amount borrowed under either interest
option and the interest rate; provided, however, that failure of Bank to make
any such notation in its records shall not discharge Debtor from its obligations
to repay in full with interest all amounts borrowed. In no event shall any
Interest Period extend beyond the maturity date of this note.

To exercise this option, Debtor may, from time to time with respect to principal
outstanding on which a Base Interest Rate is not accruing, and on the expiration
of any Interest Period with respect to principal outstanding on which a Base
Interest Rate has been accruing, select an index offered by Bank for a Base
Interest Rate Loan and an Interest Period by telephoning an authorized lending
officer of Bank located at the banking office identified below prior to 10:00
a.m., Pacific time, on any Business Day and advising that officer of the
selected index, the Interest Period and the Origination Date selected (which
Origination Date, for a Base Interest Rate Loan based on the LIBOR Rate, shall
follow the date of such selection by no more than two (2) Business Days).
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--------------------------------------------------------------------------------

Bank will mail a written confirmation of the terms of the selection to Debtor
promptly after the selection is made. Failure to send such confirmation shall
not affect Bank's rights to collect interest at the rate selected. If, on the
date of the selection, the index selected is unavailable for any reason, the
selection shall be void. Bank reserves the right to fund the principal from any
source of funds notwithstanding any Base Interest Rate selected by Debtor.

 
(b)   VARIABLE INTEREST RATE.  All principal outstanding hereunder which is not
bearing interest at a Base Interest Rate shall bear interest at a rate per annum
of one-half percent (00.5 %) less than the Reference Rate, which rate shall vary
as and when the Reference Rate changes.

At any time prior to the maturity date of this note, subject to the provisions
of paragraph 4 below, Debtor may borrow, repay and reborrow hereunder so long as
the total outstanding at any one time does not exceed the principal amount of
this note.

Debtor shall pay all amounts due under this note in lawful money of the United
States at Bank's P.O. Box 30115, Los Angeles, CA 90030-0115 Office, or such
other office as may be designated by Bank, from time to time.

2.            LATE PAYMENTS. If any payment required by the terms of this note
shall remain unpaid ten days after same is due, at the option of Bank, Debtor
shall pay a fee of $100 to Bank.

3.            INTEREST RATE FOLLOWING DEFAULT.  In the event of default, at the
option of Bank, and, to the extent permitted by law, interest shall be payable
on the outstanding principal under this note at a per annum rate equal to five
percent (5 %) in excess of the interest rate specified in paragraph 1.b, above,
calculated from the date of default until all amounts payable under this note
are paid in full.

4.
PREPAYMENT.

 
(a)   Amounts outstanding under this note bearing interest at a rate based on
the Reference Rate may be prepaid in whole or in part at any time, without
penalty or premium. Debtor may prepay amounts outstanding under this note
bearing interest at a Base Interest Rate in whole or in part provided Debtor has
given Bank not less than five (5) Business Days prior written notice of Debtor's
intention to make such prepayment and pays to Bank the prepayment fee due as a
result. The prepayment fee shall also be paid, if Bank, for any other reason,
including acceleration or foreclosure, receives all or any portion of principal
bearing interest at a Base Interest Rate prior to its scheduled payment date.
The prepayment fee shall be an amount equal to the present value of the product
of: (i) the difference (but not less than zero) between (a) the Base Interest
Rate applicable to the principal amount which is being prepaid, and (b) the
return which Bank could obtain if it used the amount of such prepayment of
principal to purchase at bid price regularly quoted securities issued by the
United States having a maturity date most closely coinciding with the relevant
Base Rate Maturity Date and such securities were held by Bank until the relevant
Base Rate Maturity Date ("Yield Rate"); (ii) a fraction, the numerator of which
is the number of days in the period between the date of prepayment and the
relevant Base Rate Maturity Date and the denominator of which is 365; and (iii)
the amount of the principal so prepaid (except in the event that principal
payments are required and have been made as scheduled under the terms of the
Base Interest Rate Loan being prepaid, then an amount equal to the lesser of (A)
the amount prepaid or (B) 50% of the sum of (1) the amount prepaid and (2) the
amount of principal scheduled under the terms of the Base Interest Rate Loan
being prepaid to be outstanding at the relevant Base Rate Maturity Date).
 Present value under this note is determined by discounting the above product to
present value using the Yield Rate as the annual discount factor.

2

--------------------------------------------------------------------------------

 
(b)   In no event shall Bank be obligated to make any payment or refund to
Debtor, nor shall Debtor be entitled to any setoff or other claim against Bank,
should the return which Bank could obtain under this prepayment formula exceed
the interest that Bank would have received if no prepayment had occurred.  All
prepayments shall include payment of accrued interest on the principal amount so
prepaid and shall be applied to payment of interest before application to
principal.  A determination by Bank as to the prepayment fee amount, if any,
shall be conclusive.

 
(c)   Bank shall provide Debtor a statement of the amount payable on account of
prepayment. Debtor acknowledges that (i) Bank establishes a Base Interest Rate
upon the understanding that it apply to the Base Interest Rate Loan for the
entire Interest Period, and (ii) Bank would not lend to Debtor without Debtor's
express agreement to pay Bank the prepayment fee described above.

DEBTOR INITIAL HERE:                   GEF               CED                

5.            DEFAULT AND ACCELERATION OF TIME FOR PAYMENT.  The occurrence of
any of the following shall constitute a default (a) Debtor shall default in the
due and punctual payment of the principal of or the interest on the note or any
of the Loan Documents (as such term is defined in that certain Loan Agreement of
even date herewith ("Loan Agreement")) and such default shall continue for a
period of three (3) business days; provided, however, that no grace period shall
apply to any payment default at maturity, following acceleration or in
connection with a prepayment hereunder; (b) other than a payment default under
paragraph 5(a), above, Debtor shall default in any material respect in the due
performance or observance of any covenant or condition of the Loan Documents and
such default shall not have been cured by Debtor before the expiration of
fifteen (15) days after the date of the default; (c) there shall have occurred a
Change in Control (as defined in the Loan Agreement); (d) the insolvency of
Debtor or the failure of Debtor to generally to pay Debtor's debts as such debts
become due, subject to applicable grace or cure periods; (e) the commencement by
Debtor of any voluntary proceeding under any laws relating to bankruptcy,
insolvency, reorganization, dissolution, general assignment for the benefit of
creditors, debt adjustment, debtor relief, or appointment of a receiver,
trustee, custodian or similar official for all or substantially all of Debtor's
property; (f) the commencement against Debtor of any involuntary proceeding
under any laws relating to bankruptcy, insolvency, reorganization, general
assignment for the benefit of creditors, debt adjustment, debtor relief, or
appointment of a receiver, trustee, custodian or similar official for all or
substantially all of Debtor's property and any such proceeding is not dismissed
within ninety (90) days after commencement; (g) the failure by Debtor to comply
in any respect with any order, judgment, injunction, decree, writ or demand of
any court or other public authority where such failure would result in a
material adverse change in, or a material adverse effect upon, the operations,
assets, performance, business, properties, or condition (financial or otherwise)
of Debtor such that Debtor's ability to perform under any Loan Document) is
materially impaired; or (h) the default by Debtor or any Guarantor for any
obligation exceeding One Million Dollars ($1,000,000) concerning the borrowing
of money, which default enables the obligee to accelerate the entire amount due.
Upon the occurrence of any such default, Bank, in its discretion, may cease to
advance funds hereunder and may declare all obligations under this note
immediately due and payable; however, upon the occurrence of an event of default
under e, all principal and interest shall automatically become immediately due
and payable.

6.            ADDITIONAL AGREEMENTS OF DEBTOR.  If any amounts owing under this
note are not paid when due, Debtor promises to pay all costs and expenses,
including reasonable attorneys' fees, (including the allocated costs of Bank's
in-house counsel and legal staff) incurred by Bank in the negotiation,
documentation and modification of this note and all related documents and in the
collection or enforcement of any amount outstanding hereunder.  Debtor and any
Obligor, for the maximum period of time and the full extent permitted by law,
(a) waive diligence, presentment,
3

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demand, notice of nonpayment, protest, notice of protest, and notice of every
kind; (b) waive the right to assert the defense of any statute of limitations to
any debt or obligation hereunder; and (c) consent to renewals and extensions of
time for the payment of any amounts due under this note. If this note is signed
by more than one party, the term "Debtor" includes each of the undersigned and
any successors in interest thereof; all of whose liability shall be joint and
several. Any married person who signs this note agrees that recourse may be had
against the separate property of that person for any obligations hereunder. The
receipt of any check or other item of payment by Bank, at its option, shall not
be considered a payment on account until such check or other item of payment is
honored when presented for payment at the drawee bank. Bank may delay the credit
of such payment based upon Bank's schedule of funds availability, and interest
under this note shall accrue until the funds are deemed collected. In any action
brought under or arising out of this note, Debtor and any Obligor, including
their successors and assigns, hereby consent to the jurisdiction of any
competent court within the State of California, as provided in any alternative
dispute resolution agreement executed between Debtor and Bank, and consent to
service of process by any means authorized by said state's law. The term "Bank"
includes, without limitation, any holder of this note. This note shall be
construed in accordance with and governed by the laws of the State of
California. This note hereby incorporates any alternative dispute resolution
agreement previously, concurrently or hereafter executed between Debtor and
Bank.

7.            DEFINITIONS.  As used herein, the following terms shall have the
meanings respectively set forth below:  "Base Interest Rate" means a rate of
interest based on the LIBOR Rate.  "Base Interest Rate Loan" means amounts
outstanding under this note that bear interest at a Base Interest Rate.  "Base
Rate Maturity Date" means the last day of the Interest Period with respect to
principal outstanding under a Base Interest Rate Loan.  "Business Day" means a
day on which Bank is open for business for the funding of corporate loans, and,
with respect to the rate of interest based on the LIBOR Rate, on which dealings
in U.S. dollar deposits are carried out in the London interbank market.
 "Interest Period" means with respect to funds bearing interest at a rate based
on the LIBOR Rate, any calendar period of 1, 2, 3, 6 or 12 months.  In
determining an Interest Period, a month means a period that starts on one
Business Day in a month and ends on and includes the day preceding the
numerically corresponding day in the next month. For any month in which there is
no such numerically corresponding day, then as to that month, such day shall be
deemed to be the last calendar day of such month.  Any Interest Period which
would otherwise end on a non-Business Day shall end on the next succeeding
Business Day unless that is the first day of a month, in which event such
Interest Period shall end on the next preceding Business Day.  "LIBOR Rate"
means, for any specified Interest Period, a per annum rate of interest
determined by Bank as equal to the rate for deposits in US Dollars for a period
comparable to the Interest Period which appears on the Reuters Screen LIBOR 01
Page (or any replacement or successor page or service) as of 11:00 a.m., London
time, on the day that is two (2) Business Days preceding the first day of such
Interest Period.  "Origination Date" means the first day of the Interest Period.
 "Reference Rate" means the rate announced by Bank from time to time at its
corporate headquarters as its Reference Rate.  The Reference Rate is an index
rate determined by Bank from time to time as a means of pricing certain
extensions of credit and is neither directly tied to any external rate of
interest or index nor necessarily the lowest rate of interest charged by Bank at
any given time.
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DEBTOR:

Autobytel Inc., a Delaware corporation

By:  /s/Curtis DeWaltt                            
      Curtis DeWalt, Chief Financial Officer

By:   /s/ Glenn E. Fuller                          
Glenn E. Fuller, E.V.P., Chief Legal/
Admin Off., Sec.

 
5