LOAN
AND SECURITY AGREEMENT


 


THIS
LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of December 28, 2016 (the “Effective Date”)
among (a) SILICON VALLEY BANK, a California corporation (“Bank”), and (b) FRANKLY INC., a corporation
continued under the laws of British Columbia, Canada (“Canadian Borrower”), FRANKLY CO., a Delaware
corporation (“Frankly Co.”) and FRANKLY MEDIA LLC, a Delaware limited liability company (“Frankly
LLC” and, together with Canadian Borrower and Frankly Co., individually and collectively, jointly and severally, “Borrower”),
provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. The parties agree as follows:


 


1
ACCOUNTING AND OTHER TERMS


 


Accounting
terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following
GAAP. Notwithstanding the foregoing, all financial covenant and other financial calculations shall be calculated with respect
to Borrower on a consolidated basis for every Borrower together as a group (but for clarity, such consolidated group shall not
include any entity other than a Borrower, including without limitation, any Subsidiary). Capitalized terms not otherwise defined
in this Agreement shall have the meanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise
indicated, shall have the meaning provided by the Code to the extent such terms are defined therein. All references to “Dollars”
or “$” are United States Dollars, unless otherwise noted.


 


2
LOAN AND TERMS OF PAYMENT


 


2.1
Promise to Pay. Borrower hereby unconditionally promises to pay Bank the outstanding principal amount of all Credit Extensions
and accrued and unpaid interest thereon as and when due in accordance with this Agreement.


 


2.2
Revolving Line.


 


(a)
Availability. Subject to the terms and conditions of this Agreement and to deduction of Reserves, upon Frankly LLC’s
request, Bank shall make Advances to Frankly LLC in amounts up to the Availability Amount. Amounts borrowed under the Revolving
Line may be repaid and, prior to the Revolving Line Maturity Date, reborrowed, subject to the applicable terms and conditions
precedent herein. Notwithstanding the foregoing, until the completion of the Initial Audit, the aggregate amount of Advances outstanding
at any time will not exceed One Million Five Hundred Thousand Dollars ($1,500,000.00).


 


(b)
Termination; Repayment. The Revolving Line terminates on the Revolving Line Maturity Date, when the principal amount of
all Advances, the unpaid interest thereon, and all other Obligations relating to the Revolving Line shall be immediately due and
payable.


 


2.3
Overadvances. If, at any time, the outstanding principal amount of any Advances exceeds the lesser of either the Revolving
Line or the Borrowing Base, Borrower shall immediately pay to Bank in cash the amount of such excess (such excess, the “Overadvance”).
Without limiting Borrower’s obligation to repay Bank any Overadvance, Borrower agrees to pay Bank interest on the outstanding
amount of any Overadvance, on demand, at a per annum rate equal to the rate that is otherwise applicable to Advances plus five
percent (5.0%).


 


2.4
Payment of Interest on the Credit Extensions.


 


(a)
Interest Rate. Subject to Section 2.4(b), the principal amount outstanding under the Revolving Line shall accrue interest
at a floating per annum rate equal to two and one-quarter of one percent (2.25%) above the Prime Rate, which interest shall be
payable monthly in accordance with Section 2.4(d) below.


 


(b)
Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear
interest at a rate per annum which is five percent (5.0%) above the rate that is otherwise applicable thereto (the “Default
Rate”). Fees and expenses which are required to be paid by Borrower pursuant to the Loan Documents (including, without
limitation, Bank Expenses) but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable
to the Obligations. Payment or acceptance of the increased interest rate provided in this Section 2.4(b) is not a permitted alternative
to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies
of Bank.


 




    	 	 	 



    	 	 	 



    

 


(c)
Adjustment to Interest Rate. Changes to the interest rate of any Credit Extension based on changes to the Prime Rate shall
be effective on the effective date of any change to the Prime Rate and to the extent of any such change.


 


(d)
Payment; Interest Computation. Interest is payable monthly on the Payment Date of each month and shall be computed on the
basis of a 360-day year for the actual number of days elapsed. In computing interest, (i) all payments received after 12:00 p.m.
Pacific time on any day shall be deemed received at the opening of business on the next Business Day, and (ii) the date of the
making of any Credit Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit
Extension is repaid on the same day on which it is made, such day shall be included in computing interest on such Credit Extension.


 


2.5
Fees. Borrower shall pay to Bank:


 


(a)
Revolving Line Commitment Fee. A fully earned, non refundable commitment fee of Fifteen Thousand Dollars ($15,000.00),
on the Effective Date;


 


(b)
Termination Fee. Upon termination of this Agreement or the termination of the Revolving Line for any reason prior to the
Revolving Line Maturity Date, in addition to the payment of any other amounts then-owing, a termination fee in an amount equal
to one percent (1.0%) of the Revolving Line (the “Termination Fee”); and


 


(c)
Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and expenses for documentation and negotiation
of this Agreement) incurred through and after the Effective Date, when due (or, if no stated due date, upon demand by Bank).


 


(d)
Fees Fully Earned. Unless otherwise provided in this Agreement or in a separate writing by Bank, Borrower shall not be
entitled to any credit, rebate, or repayment of any fees earned by Bank pursuant to this Agreement notwithstanding any termination
of this Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder. Bank may deduct
amounts owing by Borrower under the clauses of this Section 2.5 pursuant to the terms of Section 2.6(c). Bank shall provide Borrower
written notice of deductions made from the Designated Deposit Account pursuant to the terms of the clauses of this Section 2.5.


 


2.6
Payments; Application of Payments; Debit of Accounts. 


 


(a)
All payments to be made by Borrower under any Loan Document shall be made in immediately available funds in Dollars, without setoff
or counterclaim, before 12:00 p.m. Pacific time on the date when due. Payments of principal and/or interest received after 12:00
p.m. Pacific time are considered received at the opening of business on the next Business Day. When a payment is due on a day
that is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall
continue to accrue until paid.


 


(b)
Bank has the exclusive right to determine the order and manner in which all payments with respect to the Obligations may be applied.
Borrower shall have no right to specify the order or the accounts to which Bank shall allocate or apply any payments required
to be made by Borrower to Bank or otherwise received by Bank under this Agreement when any such allocation or application is not
specified elsewhere in this Agreement.


 


(c)
Bank may debit any of Borrower’s deposit accounts, including the Designated Deposit Account, for principal and interest
payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off.


 




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2.7
Withholding. Payments received by Bank from Borrower under this Agreement will be made free and clear of and without deduction
for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges
imposed by any Governmental Authority (including any interest, additions to tax or penalties applicable thereto). Specifically,
however, if at any time any Governmental Authority, applicable law, regulation or international agreement requires Borrower to
make any withholding or deduction from any such payment or other sum payable hereunder to Bank, Borrower hereby covenants and
agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the
extent necessary to ensure that, after the making of such required withholding or deduction, Bank receives a net sum equal to
the sum which it would have received had no withholding or deduction been required, and Borrower shall pay the full amount withheld
or deducted to the relevant Governmental Authority. Borrower will, upon request, furnish Bank with proof reasonably satisfactory
to Bank indicating that Borrower has made such withholding payment; provided, however, that Borrower need not make any withholding
payment if the amount or validity of such withholding payment is contested in good faith by appropriate and timely proceedings
and as to which payment in full is bonded or reserved against by Borrower. The agreements and obligations of Borrower contained
in this Section 2.7 shall survive the termination of this Agreement.


 


3
CONDITIONS OF LOANS


 


3.1
Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial Credit Extension is subject
to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion
of such other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation:


 


(a)
duly executed original signatures to the Loan Documents;


 


(b)
duly executed original signatures to the Control Agreements;


 


(c)
the Operating Documents and long-form good standing certificates of Frankly Co. certified by the Secretary of State (or equivalent
agency) of Delaware, each as of a date no earlier than thirty (30) days prior to the Effective Date;


 


(d)
the Operating Documents and long-form good standing certificates of Frankly LLC certified by the Secretary of State (or equivalent
agency) of Delaware and New York, each as of a date no earlier than thirty (30) days prior to the Effective Date;


 


(e)
a secretary’s corporate borrowing certificate of Frankly Co. with respect to such Frankly Co.’s Operating Documents,
incumbency, specimen signatures and resolutions authorizing the execution and delivery of this Agreement and the other Loan Documents
to which it is a party;


 


(f)
a limited liability company borrowing certificate of Frankly LLC with respect to such Frankly LLC’s Operating Documents,
incumbency, specimen signatures and resolutions authorizing the execution and delivery of this Agreement and the other Loan Documents
to which it is a party;


 


(g)
an officer’s certificate of Canadian Borrower with respect to its notice of articles, articles, shareholder agreement (or
equivalent), incumbency and resolutions authorizing the execution and delivery of this Agreement and the other Loan Documents;


 


(h)
a Certificate of Good Standing for Canadian Borrower;


 


(i)
duly executed original signatures to the completed Borrowing Resolutions for each Borrower;


 


(j)
duly executed original signatures to the Intercreditor Agreement, together with copies of the underlying documents evidencing
Borrower’s Indebtedness with Raycom;


 




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(k)
certified copies, dated as of a recent date, of financing statement searches (including, without limitation, UCC searches, PPSA
searches and Bank Act searches), as Bank may request, accompanied by written evidence (including any PPSA/UCC termination statements)
that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with
the initial Credit Extension, will be terminated or released;


 


(l)
the Perfection Certificate(s) of Borrower, together with the duly executed original signature thereto;


(m)
Intellectual Property search results with the United States Patent and Trademark Office, the United States Copyright Office and
the Canadian Intellectual Property Office and completed exhibits to the IP Agreement;


 


(n)
legal opinions of each Borrower’s counsel (authority/enforceability) dated as of the Effective Date, together with the duly
executed original signature thereto, in form and substance acceptable to Bank;


 


(o)
evidence satisfactory to Bank that the insurance policies and endorsements required by Section 6.7 hereof are in full force and
effect, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor
of Bank; and


 


(p)\
payment of the fees and Bank Expenses then due as specified in Section 2.5 hereof.


 


3.2
Conditions Precedent to all Credit Extensions. Bank’s obligations to make each Credit Extension, including the initial
Credit Extension, is subject to the following conditions precedent:


 


(a)
timely receipt of the Credit Extension request and any materials and documents required by Section 3.4;


 


(b)
the representations and warranties in this Agreement shall be true, accurate, and complete in all material respects on the date
of the proposed Credit Extension and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier
shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text
thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true,
accurate and complete in all material respects as of such date, and no Event of Default shall have occurred and be continuing
or result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the
representations and warranties in this Agreement remain true, accurate, and complete in all material respects; provided, however,
that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified
by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific
date shall be true, accurate and complete in all material respects as of such date; and


 


(c)
Bank determines to its satisfaction that there has not been any material impairment in the general affairs, management, results
of operation, financial condition or the prospect of repayment of the Obligations, nor any material adverse deviation by Borrower
from the most recent business plan of Borrower presented to and accepted by Bank.


 


3.3
Covenant to Deliver. Borrower agrees to deliver to Bank each item required to be delivered to Bank under this Agreement as
a condition precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by
Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation to deliver such item, and the making
of any Credit Extension in the absence of a required item shall be in Bank’s sole discretion.


 




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3.4
Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of an Advance
set forth in this Agreement, to obtain an Advance, Borrower shall notify Bank (which notice shall be irrevocable) by electronic
mail by 12:00 p.m. Pacific time on the Funding Date of the Advance. Such notice shall be made by Borrower through Bank’s
online banking program, provided, however, if Borrower is not utilizing Bank’s online banking program, then such notice
shall be in a written format acceptable to Bank that is executed by an Authorized Signer. Bank shall have received satisfactory
evidence that the provision of such notices and the requests for Advances have been approved by the Board. In connection with
any such notification, Borrower must promptly deliver to Bank by electronic mail or through Bank’s online banking program
such reports and information, including without limitation, sales journals, cash receipts journals, accounts receivable aging
reports, as Bank may request in its sole discretion. Bank shall credit proceeds of an Advance to the Designated Deposit Account.
Bank may make Advances under this Agreement based on instructions from an Authorized Signer or without instructions if the Advances
are necessary to meet Obligations which have become due.


 


4
CREATION OF SECURITY INTEREST


 


4.1
Grant of Security Interest. Borrower hereby grants Bank, to secure the payment and performance in full of all of the Obligations,
a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired
or arising, and all proceeds and products thereof.


 


Borrower
acknowledges that it previously has entered, and/or may in the future enter, into Bank Services Agreements with Bank. Regardless
of the terms of any Bank Services Agreement, Borrower agrees that any amounts Borrower owes Bank thereunder shall be deemed to
be Obligations hereunder and that it is the intent of Borrower and Bank to have all such Obligations secured by the first priority
perfected security interest in the Collateral granted herein (subject only to Permitted Liens that are permitted pursuant to the
terms of this Agreement to have superior priority to Bank’s Lien in this Agreement and except that the first priority aspect
may be subject to the security interest of Raycom in certain property, but only to the extent contemplated by the Intercreditor
Agreement).


 


If
this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity
obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations)
and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at the sole cost and expense
of Borrower, release its Liens in the Collateral and all rights therein shall revert to Borrower. In the event (x) all Obligations
(other than inchoate indemnity obligations), except for Bank Services, are satisfied in full, and (y) this Agreement is terminated,
Bank shall terminate the security interest granted herein upon Borrower providing cash collateral acceptable to Bank in its good
faith business judgment for Bank Services, if any. In the event such Bank Services consist of outstanding Letters of Credit, Borrower
shall provide to Bank cash collateral in an amount equal to (x) if such Letters of Credit are denominated in Dollars, then at
least one hundred five percent (105.0%); and (y) if such Letters of Credit are denominated in a Foreign Currency, then at least
one hundred ten percent (110.0%), of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest,
fees, and costs due or to become due in connection therewith (as estimated by Bank in its business judgment), to secure all of
the Obligations relating to such Letters of Credit.


 


4.2
Priority of Security Interest. Borrower represents, warrants, and covenants that the security interest granted herein is and
shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens
that are permitted pursuant to the terms of this Agreement to have superior priority to Bank’s Lien in this Agreement and
except that the first priority aspect may be subject to the security interest of Raycom in certain property, but only to the extent
contemplated by the Intercreditor Agreement). If Borrower shall acquire a commercial tort claim, Borrower shall promptly notify
Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security interest therein
and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory
to Bank.


 


4.3
Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing statements, without notice to
Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice
that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Bank
under the Code. Such financing statements may indicate the Collateral as “all assets of the Debtor” or words of similar
effect, or as being of an equal or lesser scope, or with greater detail, all in Bank’s discretion.


 




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5
REPRESENTATIONS AND WARRANTIES


 


Borrower
represents and warrants as follows:


 


5.1
Due Organization, Authorization; Power and Authority. Borrower is duly existing and in good standing as a Registered Organization
in its jurisdiction of formation and is qualified and licensed to do business and is in good standing in any jurisdiction in which
the conduct of its business or its ownership of property requires that it be qualified except where the failure to do so could
not reasonably be expected to have a material adverse effect on Borrower’s business. In connection with this Agreement,
each Borrower has delivered to Bank a completed certificate signed by Borrower, entitled “Perfection Certificate”
(collectively, the “Perfection Certificate”). Borrower represents and warrants to Bank that (a) Borrower’s
exact legal name is that indicated on the Perfection Certificate and on the signature page hereof; (b) Borrower is an organization
of the type and is organized in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately
sets forth Borrower’s organizational identification/corporation number or accurately states that Borrower has none; (d)
the Perfection Certificate accurately sets forth Borrower’s place of business, or, if more than one, its chief executive
office as well as Borrower’s mailing address (if different than its chief executive office); (e) except as set forth on
the Perfection Certificate, Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction
of formation, organizational structure or type, or any organizational/corporation number assigned by its jurisdiction; and (f)
all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate
and complete in all material respects (it being understood and agreed that Borrower may from time to time update certain information
in the Perfection Certificate after the Effective Date to the extent permitted by one or more specific provisions in this Agreement).
If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence
and provide Bank with Borrower’s organizational identification number.


 


The
execution, delivery and performance by Borrower of the Loan Documents to which it is a party have been duly authorized, and do
not (i) conflict with any of Borrower’s organizational documents, (ii) contravene, conflict with, constitute a default under
or violate any material Requirement of Law, (iii) contravene, conflict or violate any applicable order, writ, judgment, injunction,
decree, determination or award of any Governmental Authority by which Borrower or any of its Subsidiaries or any of their property
or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with, or Governmental Approval
from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and
effect), or (v) conflict with, contravene, constitute a default or breach under, or result in or permit the termination or acceleration
of, any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or
by which it is bound in which the default could reasonably be expected to have a material adverse effect on Borrower’s business.


 


5.2
Collateral. Borrower has good title to, rights in, and the power to transfer each item of the Collateral upon which it purports
to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no Collateral Accounts at
or with any bank or financial institution other than Bank or Bank’s Affiliates except for the Collateral Accounts described
in the Perfection Certificate delivered to Bank in connection herewith and which Borrower has taken such actions as are necessary
to give Bank a perfected security interest therein, pursuant to the terms of Section 6.8(b) but subject to the Intercreditor Agreement.
The Accounts are bona fide, existing obligations of the Account Debtors.


 


The
Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection
Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection
Certificate or as permitted pursuant to Section 7.2.


 


All
Inventory is in all material respects of good and marketable quality, free from material defects.


 


Borrower
is the sole owner of the Intellectual Property which it owns or purports to own except for (a) non-exclusive licenses granted
to its customers in the ordinary course of business, (b) over-the-counter software that is commercially available to the public,
and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns
or purports to own and which is material to Borrower’s business is valid and enforceable, and no part of the Intellectual
Property which Borrower owns or purports to own and which is material to Borrower’s business has been judged invalid or
unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the Intellectual
Property violates the rights of any third party except to the extent such claim would not reasonably be expected to have a material
adverse effect on Borrower’s business.


 




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Except
as noted on the Perfection Certificate, Borrower is not a party to, nor is it bound by, any Restricted License.


 


5.3
Accounts Receivable. 


 


(a)
For each Account with respect to which Advances are requested, on the date each Advance is requested and made, such Account shall
be an Eligible Account.


 


(b)
All account statements given and all unpaid balances appearing in all invoices, instruments and other documents evidencing the
Eligible Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower’s
Books are genuine and in all respects what they purport to be. All sales and other transactions underlying or giving rise to each
Eligible Account shall comply in all material respects with all applicable laws and governmental rules and regulations. Borrower
has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in
any Borrowing Base Report. To the best of Borrower’s knowledge, all signatures and endorsements on all documents, instruments,
and agreements relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable
in accordance with their terms.


 


5.4
Litigation. Except as set forth on the Perfection Certificate, there are no actions or proceedings pending or, to the knowledge
of any Responsible Officer, threatened in writing by or against Borrower or any of its Subsidiaries involving more than, individually
or in the aggregate, Fifty Thousand Dollars ($50,000.00).


 


5.5
Financial Statements; Financial Condition. All consolidated financial statements for Borrower and any of its Subsidiaries
delivered to Bank fairly present in all material respects Borrower’s consolidated financial condition and Borrower’s
consolidated results of operations. There has not been any material deterioration in Borrower’s consolidated financial condition
since the date of the most recent financial statements submitted to Bank.


 


5.6
Solvency. The fair salable value of Borrower’s consolidated assets (including goodwill minus disposition costs) exceeds
the fair value of Borrower’s liabilities; Borrower is not left with unreasonably small capital after the transactions in
this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.


 


5.7
Regulatory Compliance. Borrower is not an “investment company” or a company “controlled” by an “investment
company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities
in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors). Borrower (a) has
complied in all material respects with all Requirements of Law, and (b) has not violated any Requirements of Law the violation
of which could reasonably be expected to have a material adverse effect on its business. None of Borrower’s or any of its
Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge,
by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower
and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with,
and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently
conducted.


 


5.8
Subsidiaries; Investments. Borrower does not own any stock, partnership, or other ownership interest or other equity securities
except for Permitted Investments.


 




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5.9
Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required tax returns and reports, and Borrower
has timely paid all foreign, federal, state, provincial and local taxes, assessments, deposits and contributions owed by Borrower
except (a) to the extent such taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently
conducted, so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall
have been made therefor, or (b) if such taxes, assessments, deposits and contributions do not, individually or in the aggregate,
exceed Five Thousand Dollars ($5,000.00).


 


To
the extent Borrower defers payment of any contested taxes, Borrower shall (i) notify Bank in writing of the commencement of, and
any material development in, the proceedings, and (ii) post bonds or take any other steps required to prevent the Governmental
Authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted
Lien.” Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could
result in additional taxes becoming due and payable by Borrower in excess of Five Thousand Dollars ($5,000.00). Borrower has paid
all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms,
and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the
occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of
Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.


 


5.10
Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as working capital and to fund its general
business requirements and not for personal, family, household or agricultural purposes.


 


5.11
Full Disclosure. No written representation, warranty or other statement of Borrower in any certificate or written statement
given to Bank, as of the date such representation, warranty, or other statement was made, taken together with all such written
certificates and written statements given to Bank, contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized by Bank
that the projections and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as
facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected
or forecasted results).


 


5.12
Definition of “Knowledge.” For purposes of the Loan Documents, whenever a representation or warranty is made to
Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification,
knowledge or awareness means the actual knowledge, after reasonable investigation, of any Responsible Officer.


 


6
AFFIRMATIVE COVENANTS


 


Borrower
shall do all of the following:


 


6.1
Government Compliance. 


 


(a)
Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation
and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material
adverse effect on Borrower’s business or operations, provided that upon prior written notice to Bank, Borrower may dissolve
Frankly Co. (so long as all assets of Frankly Co. are transferred to another Borrower) or merge Frankly Co. into another Borrower.
Borrower shall comply, and have each Subsidiary comply, in all material respects, with all laws, ordinances and regulations to
which it is subject.


 


(b)
Obtain all of the Governmental Approvals necessary for the performance by Borrower of its obligations under the Loan Documents
to which it is a party and the grant of a security interest to Bank in all of its property. Borrower shall promptly provide copies
of any such obtained Governmental Approvals to Bank.


 




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6.2
Financial Statements, Reports, Certificates. Provide Bank with the following:


 


(a)
(i) a Borrowing Base Report (and any schedules related thereto and including any other information requested by Bank with respect
to Borrower’s Accounts), (ii) monthly accounts receivable agings, aged by invoice date, (iii) monthly accounts payable agings,
aged by invoice date, and outstanding or held check registers, if any, and (iv) monthly reconciliations of accounts receivable
agings (aged by invoice date), transaction reports and general ledger, in each case (A) no later than Friday of each week when
a Streamline Period is not in effect and (B) within thirty (30) days after the end of each month when a Streamline Period is in
effect;


 


(b)
as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated balance
sheet and income statement covering Borrower’s consolidated operations for such month certified by a Responsible Officer
and in a form acceptable to Bank (the “Monthly Financial Statements”);


 


(c)
within thirty (30) days after the last day of each month and together with the Monthly Financial Statements, a duly completed
Compliance Certificate signed by a Responsible Officer, certifying that as of the end of such month, Borrower was in full compliance
with all of the terms and conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants
set forth in this Agreement and such other information as Bank may reasonably request, including, without limitation, a statement
that at the end of such month there were no held checks;


 


(d)
annually, on the earlier to occur of (i) seven (7) Business Days following approval by the Board and (ii) March 31st
of each year, and contemporaneously with any updates or amendments thereto, (A) an annual consolidated operating budget for Canadian
Borrower (including income statements, balance sheets and cash flow statements, by month), and (B) annual consolidated financial
projections for Canadian Borrower (on a quarterly basis) as approved by the Board, together with any related business forecasts
used in the preparation of such annual financial projections;


(e)
as soon as available, and in any event within one hundred twenty (120) days following the end of Borrower’s fiscal year,
audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the
financial statements from an independent certified public accounting firm reasonably acceptable to Bank;


 


(f)
in the event that Borrower becomes subject to the reporting requirements under the Exchange Act within five (5) days of filing,
copies of all periodic and other reports, proxy statements and other materials filed by Borrower and/or any Guarantor with the
SEC, any Governmental Authority succeeding to any or all of the functions of the SEC or with any national securities exchange,
or distributed to its shareholders, as the case may be. Documents required to be delivered pursuant to the terms hereof (to the
extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered,
shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s
website on the internet at Borrower’s website address; provided, however, Borrower shall promptly notify Bank in writing
(which may be by electronic mail) of the posting of any such documents;


 


(g)
within five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s security holders
or to any holders of Subordinated Debt;


 


(h)
prompt report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries that could result
in damages or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, Fifty Thousand Dollars ($50,000.00)
or more;


 


(i)
prompt written notice of (i) any material change in the composition of the Intellectual Property, (ii) the registration of any
Copyright, including any subsequent ownership right of Borrower in or to any Copyright, Patent or Trademark not shown in the IP
Agreement, and (iii) Borrower’s knowledge of an event that could reasonably be expected to materially and adversely affect
the value of the Intellectual Property; and


(j)
promptly, from time to time, such other information regarding Borrower or compliance with the terms of any Loan Documents as reasonably
requested by Bank.


 




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6.3
Accounts Receivable.


 


(a)
Schedules and Documents Relating to Accounts. Borrower shall deliver to Bank transaction reports and schedules of collections,
as provided in Section 6.2, on Bank’s standard forms; provided, however, that Borrower’s failure to execute and deliver
the same shall not affect or limit Bank’s Lien and other rights in all of Borrower’s Accounts, nor shall Bank’s
failure to advance or lend against a specific Account affect or limit Bank’s Lien and other rights therein. If reasonably
requested by Bank, Borrower shall furnish Bank with copies (or, at Bank’s request, originals) of all contracts, orders,
invoices, and other similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of
delivery, for any goods the sale or disposition of which gave rise to such Accounts. In addition, Borrower shall deliver to Bank,
on its request, the originals of all instruments, chattel paper, security agreements, guarantees and other documents and property
evidencing or securing any Accounts, in the same form as received, with all necessary indorsements, and copies of all credit memos.


 


(b)
Disputes. Borrower shall promptly notify Bank of all disputes or claims relating to Accounts. Borrower may forgive (completely
or partially), compromise, or settle any Account for less than payment in full, or agree to do any of the foregoing so long as
(i) Borrower does so in good faith, in a commercially reasonable manner, in the ordinary course of business, in arm’s-length
transactions, and reports the same to Bank in the regular reports provided to Bank; (ii) no Event of Default has occurred and
is continuing; and (iii) after taking into account all such discounts, settlements and forgiveness, the total outstanding Advances
will not exceed the lesser of the Revolving Line or the Borrowing Base.


 


(c)\
Collection of Accounts. Borrower shall direct Account Debtors to deliver or transmit all proceeds of Accounts into a lockbox
account, or such other “blocked account” as specified by Bank (either such account, the “Cash Collateral
Account”). Whether or not an Event of Default has occurred and is continuing, Borrower shall immediately deliver all
payments on and proceeds of Accounts to the Cash Collateral Account. Subject to Bank’s right to maintain a reserve pursuant
to Section 6.3(d), all amounts received in the Cash Collateral Account shall be (i) applied to immediately reduce the Obligations
when a Streamline Period is not in effect (unless Bank, in its sole discretion, at times when an Event of Default exists, elects
not to so apply such amounts), or (ii) transferred on a daily basis to Borrower’s operating account with Bank when a Streamline
Period is in effect. Borrower hereby authorizes Bank to transfer to the Cash Collateral Account any amounts that Bank reasonably
determines are proceeds of the Accounts (provided that Bank is under no obligation to do so and this allowance shall in no event
relieve Borrower of its obligations hereunder).


 


(d)\
Reserves. Notwithstanding any terms in this Agreement to the contrary, at times when an Event of Default exists, Bank may
hold any proceeds of the Accounts and any amounts in the Cash Collateral Account that are not applied to the Obligations pursuant
to Section 6.3(c) above (including amounts otherwise required to be transferred to Borrower’s operating account with Bank
when a Streamline Period is in effect) as a reserve to be applied to any Obligations regardless of whether such Obligations are
then due and payable.


 


(e)
Returns. Provided no Event of Default has occurred and is continuing, if any Account Debtor returns any Inventory to Borrower,
Borrower shall promptly (i) determine the reason for such return, (ii) issue a credit memorandum to the Account Debtor in the
appropriate amount, and (iii) if a credit is due, provide a copy of such credit memorandum to Bank, upon request from Bank. In
the event any attempted return occurs after the occurrence and during the continuance of any Event of Default, Borrower shall
hold the returned Inventory in trust for Bank, and immediately notify Bank of the return of the Inventory.


 


(f)
Verifications; Confirmations; Credit Quality; Notifications. Bank may, from time to time, (i) verify and confirm directly
with the respective Account Debtors the validity, amount and other matters relating to the Accounts, either in the name of Borrower
or Bank or such other name as Bank may choose, and notify any Account Debtor of Bank’s security interest in such Account
and/or (ii) conduct a credit check of any Account Debtor to approve any such Account Debtor’s credit. In addition, Bank
may notify Account Debtors to make payments in respect of Accounts directly to Bank. So long as no Event of Default exists, Bank
will notify Borrower prior to making any direct contact with an Account Debtor.


 




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(g)
No Liability. Bank shall not be responsible or liable for any shortage or discrepancy in, damage to, or loss or destruction
of, any goods, the sale or other disposition of which gives rise to an Account, or for any error, act, omission, or delay of any
kind occurring in the settlement, failure to settle, collection or failure to collect any Account, or for settling any Account
in good faith for less than the full amount thereof, nor shall Bank be deemed to be responsible for any of Borrower’s obligations
under any contract or agreement giving rise to an Account. Nothing herein shall, however, relieve Bank from liability for its
own gross negligence or willful misconduct.


 


6.4
Remittance of Proceeds. Except as otherwise provided in Section 6.3(c), deliver, in kind, all proceeds arising from the disposition
of any Collateral to Bank in the original form in which received by Borrower not later than the following Business Day after receipt
by Borrower, to be applied to the Obligations (a) prior to an Event of Default, pursuant to the terms of Section 6.3(c) hereof,
and (b) after the occurrence and during the continuance of an Event of Default, pursuant to the terms of Section 9.4 hereof; provided
that, if no Event of Default has occurred and is continuing, Borrower shall not be obligated to remit to Bank the proceeds of
the sale of worn out or obsolete Equipment disposed of by Borrower in good faith in an arm’s length transaction for an aggregate
purchase price of Fifty Thousand Dollars ($50,000.00) or less (for all such transactions in any fiscal year). Borrower agrees
that it will not commingle proceeds of Collateral with any of Borrower’s other funds or property, but will hold such proceeds
separate and apart from such other funds and property and in an express trust for Bank. Nothing in this Section 6.4 limits the
restrictions on disposition of Collateral set forth elsewhere in this Agreement.


 


6.5
Taxes; Pensions. Timely file, and require each of its Subsidiaries to timely file, all required tax returns and reports and
timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state, provincial and local taxes, assessments,
deposits and contributions owed by Borrower and each of its Subsidiaries, except for deferred payment of any taxes contested pursuant
to the terms of Section 5.9 hereof, and shall deliver to Bank, on demand, appropriate certificates attesting to such payments,
and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their
terms.


 


6.6
Access to Collateral; Books and Records. At reasonable times, on one (1) Business Day’s notice (provided no notice is
required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right to inspect the Collateral
and the right to audit and copy Borrower’s Books. Such inspections and audits shall be conducted as frequently as Bank determines
in its sole discretion that conditions warrant (provided that Bank will not complete more than one (1) such audit and inspection
per calendar quarter at times when no Event of Default exists). The foregoing inspections and audits shall be conducted at Borrower’s
expense. The charge therefor shall be One Thousand Dollars ($1,000.00) per person per day (or such higher amount as shall represent
Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses. In the event Borrower and Bank
schedule an audit more than ten (10) days in advance, and Borrower cancels or seeks to or reschedules the audit with less than
ten (10) days written notice to Bank, then (without limiting any of Bank’s rights or remedies) Borrower shall pay Bank a
fee of One Thousand Dollars ($1,000.00) plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated
costs and expenses of the cancellation or rescheduling. Borrower acknowledges that the first such audit will occur within sixty
(60) days of the Effective Date.


 


6.7
Insurance. 


 


(a)
Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and
location and as Bank may reasonably request. Insurance policies shall be in a form, with financially sound and reputable insurance
companies that are not Affiliates of Borrower, and in amounts that are satisfactory to Bank. All property policies shall have
a lender’s loss payable endorsement showing Bank as a lender loss payee. All liability policies shall show, or have endorsements
showing, Bank as an additional insured. Bank shall be named as lender loss payee and/or additional insured with respect to any
such insurance providing coverage in respect of any Collateral.


 


(b)
Ensure that proceeds payable under any property policy are, at Bank’s option, payable to Bank on account of the Obligations.


 



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(c)
At Bank’s request, Borrower shall deliver certified copies of insurance policies and evidence of all premium payments. Each
provider of any such insurance required under this Section 6.7 shall agree, by endorsement upon the policy or policies issued
by it or by independent instruments furnished to Bank, that it will give Bank thirty (30) days prior written notice before any
such policy or policies shall be materially altered or canceled. If Borrower fails to obtain insurance as required under this
Section 6.7 or to pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make all or part
of such payment or obtain such insurance policies required in this Section 6.7, and take any action under the policies Bank deems
prudent.


 


6.8
Accounts.


 


(a)
Maintain all of its and all of its Subsidiaries operating, depository and securities/investment accounts with Bank and Bank’s
Affiliates; provided, however, (i) Borrower may maintain its existing account with Bank of America as disclosed on the Perfection
Certificate (account number ending E+11) and its existing accounts with Western Alliance Bank as disclosed on the Perfection Certificate
(account numbers ending 182, 166, 190, 174, 967, 771, 489, 638 and 315) (collectively, the “Transition Accounts”)
so long as (A) the Transition Accounts are only permitted to be maintained until the date that is sixty (60) days following the
Effective Date (at which point such accounts must be closed and all funds therein must be transferred to an account or accounts
of Borrower maintained with Bank), (B) all funds in the Transition Accounts are transferred to an account of Borrower maintained
with Bank on the Effective Date and (C) all funds maintained in the Transition Accounts on or after the Effective Date are transferred
to an account of Borrower maintained with Bank within one (1) Business Day and (ii) Canadian Borrower may maintain its existing
accounts with Royal Bank of Canada in Canada as disclosed on the Perfection Certificate (account numbers ending 289-4 and 727-0)
so long as (A) such accounts, at all times, are located in Canada and are depository/operating accounts and (B) the aggregate
amount of funds maintained therein does not exceed at any time an amount necessary for the ordinary and necessary current monthly
operating expenses in Canada of Canadian Borrower. Any Guarantor shall maintain all of its operating, depository and securities/investment
accounts with Bank and Bank’s Affiliates.


 


(b)
In addition to and without limiting the restrictions in (a), Borrower shall provide Bank five (5) days prior written notice before
establishing any Collateral Account at or with any bank or financial institution other than Bank or Bank’s Affiliates. For
each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution
(other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate
instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with
the terms hereunder which Control Agreement may not be terminated without the prior written consent of Bank. The provisions of
the previous sentence shall not apply to (i) the Transition Accounts for a period of sixty (60) days following the Effective Date
or (ii) deposit accounts exclusively used for payroll, payroll taxes, and other employee wage and benefit payments to or for the
benefit of Borrower’s employees and identified to Bank by Borrower as such.


 


6.9
Financial Covenants.


 


(a)
Cash at Bank. Maintain at all times, to be tested as of each day, unrestricted and unencumbered cash at Bank in an aggregate
amount of at least One Million Dollars ($1,000,000.00).


 


(b)
Adjusted Quick Ratio. Maintain at all times, to be tested as of the last day of each month, an Adjusted Quick Ratio of
at least (i) 1.10 to 1.0 until the earlier to occur of (A) March 31, 2017 and (B) such date as when any Borrower’s securities
are first listed or approved for trading or quotation on a United States national stock exchange or market such as NYSE or NASDAQ
and (ii) 1.30 to 1.0 at such time and at all times thereafter.


 


6.10
Protection and Registration of Intellectual Property Rights.


 





(a)
(i) Protect, defend and maintain the validity and enforceability of its Intellectual Property that is material to its business
(it being acknowledged that the Intellectual Property owned by Frankly Co. as of the Effective Date shall not be deemed material
to Borrower’s business); (ii) promptly advise Bank in writing of material infringements or any other event that could reasonably
be expected to materially and adversely affect the value of its Intellectual Property; and (iii) not allow any Intellectual Property
material to Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent.


 




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(b)
If Borrower (i) obtains any Patent, registered Trademark, registered Copyright, registered mask work, or any pending application
for any of the foregoing, whether as owner, licensee or otherwise, or (ii) applies for any Patent or the registration of any Trademark,
then Borrower shall immediately provide written notice thereof to Bank and shall execute such intellectual property security agreements
and other documents and take such other actions as Bank may request in its good faith business judgment to perfect and maintain
a first priority perfected security interest in favor of Bank in such property (except that the first priority aspect may be subject
to the security interest of Raycom in certain property, but only to the extent contemplated by the Intercreditor Agreement). If
Borrower decides to register any Copyrights or mask works in the United States Copyright Office or the Canadian Intellectual Property
Office, Borrower shall: (x) provide Bank with at least fifteen (15) days prior written notice of Borrower’s intent to register
such Copyrights or mask works together with a copy of the application it intends to file with the United States Copyright Office
or the Canadian Intellectual Property Office (excluding exhibits thereto); (y) execute an intellectual property security agreement
and such other documents and take such other actions as Bank may request in its good faith business judgment to perfect and maintain
a first priority perfected security interest in favor of Bank in the Copyrights or mask works intended to be registered with the
United States Copyright Office or the Canadian Intellectual Property Office (except that the first priority aspect may be subject
to the security interest of Raycom in certain property, but only to the extent contemplated by the Intercreditor Agreement); and
(z) record such intellectual property security agreement with the United States Copyright Office or the Canadian Intellectual
Property Office contemporaneously with filing the Copyright or mask work application(s) with the United States Copyright Office
or the Canadian Intellectual Property Office. Borrower shall promptly provide to Bank copies of all applications that it files
for Patents or for the registration of Trademarks, Copyrights or mask works, together with evidence of the recording of the intellectual
property security agreement required for Bank to perfect and maintain a first priority perfected security interest in such property
(except that the first priority aspect may be subject to the security interest of Raycom in certain property, but only to the
extent contemplated by the Intercreditor Agreement).


 


(c)
Provide written notice to Bank within ten (10) days of entering or becoming bound by any Restricted License (other than over-the-counter
software that is commercially available to the public). Borrower shall take such steps as Bank reasonably requests to obtain the
consent of, or waiver by, any person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral”
and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any
such Restricted License, whether now existing or entered into in the future, and (ii) Bank to have the ability in the event of
a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement
and the other Loan Documents.


 


6.11
Litigation Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to Bank,
without expense to Bank, Borrower and its officers, employees and agents and Borrower’s books and records, to the extent
that Bank may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by or against
Bank with respect to any Collateral or relating to Borrower.


 


6.12
Online Banking. Utilize Bank’s online banking platform for all matters requested by Bank which shall include, without
limitation (and without request by Bank for the following matters), uploading information pertaining to Accounts and Account Debtors,
requesting approval for exceptions making certain Accounts Eligible Accounts, requesting Credit Extensions, and uploading financial
statements and other reports required to be delivered by this Agreement (including, without limitation, those described in Section
6.2 of this Agreement).


 


6.13       Further
Assurances. Execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s
Lien in the Collateral or to effect the purposes of this Agreement. Deliver to Bank, within five (5) days after the same are sent
or received, copies of all correspondence, reports, documents and other filings with any Governmental Authority regarding compliance
with or maintenance of Governmental Approvals or Requirements of Law or that could reasonably be expected to have a material effect
on any of the Governmental Approvals or otherwise on the operations of Borrower or any of its Subsidiaries.


 




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7
NEGATIVE COVENANTS


 


Borrower
shall not do any of the following without Bank’s prior written consent:


 


7.1
Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”),
or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory
in the ordinary course of business; (b) of worn-out or obsolete Equipment that is, in the reasonable judgment of Borrower, no
longer economically practicable to maintain or useful in the ordinary course of business of Borrower; (c) consisting of Permitted
Liens and Permitted Investments; (d) consisting of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries
in the ordinary course of business; (e) of other property with an aggregate value not to exceed Fifty Thousand Dollars ($50,000.00)
per year; and (f) transfers from Frankly Co. to Frankly LLC.


 


7.2
Changes in Business, Management, Control, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage
in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related
thereto; (b) liquidate or dissolve (provided that upon prior written notice to Bank, Frankly Co. may dissolve so long as all assets
of Frankly Co. are transferred to another Borrower); (c) fail to provide notice to Bank of any Key Person departing from or ceasing
to be employed by Borrower within five (5) days after such Key Person’s departure from Borrower; or (d) permit or suffer
any Change in Control.


 


Borrower
shall not, without at least fifteen (15) days prior written notice to Bank: (1) add any new offices or business locations, including
warehouses (unless such new offices or business locations contain less than Ten Thousand Dollars ($10,000.00) in Borrower’s
assets or property) or deliver any portion of the Collateral valued, individually or in the aggregate, in excess of One Hundred
Thousand Dollars ($100,000.00) to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection
Certificate, (2) change its jurisdiction of organization, (3) change its organizational structure or type, (4) change its legal
name, (5) change its registered office or its chief executive office, or (6) change any organizational number (if any) assigned
by its jurisdiction of organization. If Borrower intends to deliver any portion of the Collateral valued, individually or in the
aggregate, in excess of Ten One Hundred Dollars ($100,000.00) to a bailee, and Bank and such bailee are not already parties to
a bailee agreement governing both the Collateral and the location to which Borrower intends to deliver the Collateral, then Borrower
will first receive the written consent of Bank, and such bailee shall execute and deliver a bailee agreement in form and substance
reasonably satisfactory to Bank.


 


7.3
Mergers, Amalgamations or Acquisitions. Merge, amalgamate or consolidate, or permit any of its Subsidiaries to merge, amalgamate
or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock, membership interests, or property of another Person (including, without limitation, by the formation of any Subsidiary).
A Subsidiary (other than a Borrower) may merge, amalgamate or consolidate into another Subsidiary or into Borrower, provided that
upon prior written notice to Bank, Frankly Co. may merge into another Borrower.


 


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


 


7.5
Encumbrance. Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any right to receive income,
including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral
not to be subject to the first priority security interest granted herein (subject only to Permitted Liens that are permitted pursuant
to the terms of this Agreement to have superior priority to Bank’s Lien in this Agreement and except that the first priority
aspect may be subject to the security interest of Raycom in certain property, but only to the extent contemplated by the Intercreditor
Agreement), or enter into any agreement, document, instrument or other arrangement (except with or in favor of Bank) with any
Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging,
pledging, granting a security interest in or upon, or encumbering any of Borrower’s or any Subsidiary’s Intellectual
Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein.


 


7.6
Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of Section 6.8(b) hereof.


 



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7.7
Distributions; Investments. (a) Pay any dividends or make any distribution or payment to equityholders or redeem, retire or
purchase any capital stock or membership interests (provided that the foregoing will not apply to the Canadian Borrower’s
conversion of shareholders’ Class A restricted voting common shares into common shares); or (b) directly or indirectly make
any Investment (including, without limitation, by the formation of any Subsidiary) other than Permitted Investments, or permit
any of its Subsidiaries to do so.


 


7.8
Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate
of Borrower (excluding a merger of Frankly Co. with, or transfer of assets of Frankly Co. to, another Borrower), except for transactions
that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower
than would be obtained in an arm’s length transaction with a non-affiliated Person.


 


7.9
Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor,
or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to
the Subordinated Debt which would increase the amount thereof, provide for earlier or greater principal, interest, or other payments
thereon, or adversely affect the subordination thereof to Obligations owed to Bank.


 


7.10
Compliance. Become an “investment company” or a company controlled by an “investment company”, under
the Investment Company Act of 1940, as amended, or undertake as one of its important activities extending credit to purchase or
carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of
any Credit Extension for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited
Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law
or regulation, if the violation could reasonably be expected to have a material adverse effect on Borrower’s business, or
permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or
complete termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and
deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability
to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.


 


8
EVENTS OF DEFAULT


 


Any
one of the following shall constitute an event of default (an “Event of Default”) under this Agreement:


 


8.1
Payment Default. Borrower fails to (a) make any payment of principal or interest on any Credit Extension when due, or (b)
pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business
Day cure period shall not apply to payments due on the Revolving Line Maturity Date). During the cure period, the failure to make
or pay any payment specified under clause (b) hereunder is not an Event of Default (but no Credit Extension will be made during
the cure period);


 


8.2
Covenant Default.


 


(a)
Borrower fails or neglects to perform any obligation in Sections 6.2, 6.3, 6.4, 6.5, 6.6, 6.8, 6.9, 6.10, or 6.12 of this Agreement
or violates any covenant in Section 7 of this Agreement; or


 


(b)
Borrower fails or neglects to perform, keep, or observe any other term, provision, condition, covenant or agreement contained
in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such other
term, provision, condition, covenant or agreement that can be cured, has failed to cure the default within ten (10) days after
the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or
cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within
a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt
to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default
(but no Credit Extensions shall be made during such cure period). Grace and cure periods provided under this Section 8.2 shall
not apply, among other things, to financial covenants or any covenants set forth in clause (a) above;


 



    	 	 15	 



    	 		 



    




 


8.3
Material Adverse Change. A Material Adverse Change occurs;


 


8.4
Attachment; Levy; Restraint on Business. 


 


(a)
(i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any entity under the
control of Borrower (including a Subsidiary), or (ii) a notice of lien or levy is filed against any of Borrower’s assets
by any Governmental Authority, and the same under subclauses (i) and (ii) hereof are not, within ten (10) days after the occurrence
thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall
be made during any ten (10) day cure period; or


 


(b)
(i) any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver,
or (ii) any court order enjoins, restrains, or prevents Borrower from conducting all or any material part of its business;


 


8.5
Insolvency. (a) Borrower or any of its Subsidiaries is unable to pay its debts (including trade debts) as they become due
or otherwise becomes insolvent; (b) Borrower or any of its Subsidiaries begins an Insolvency Proceeding; or (c) an Insolvency
Proceeding is begun against Borrower or any of its Subsidiaries and is not dismissed or stayed within thirty (30) days (but no
Credit Extensions shall be made while any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding
is dismissed);


 


8.6
Other Agreements. There is, under any agreement to which Borrower or any Guarantor is a party with a third party or parties,
(a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any
Indebtedness in an amount individually or in the aggregate in excess of Fifty Thousand Dollars ($50,000.00); or (b) any breach
or default by Borrower or Guarantor, the result of which could have a material adverse effect on Borrower’s or any Guarantor’s
business;


 


8.7
Judgments; Penalties. One or more fines, penalties or final judgments, orders or decrees for the payment of money in an amount,
individually or in the aggregate, of at least Fifty Thousand Dollars ($50,000.00) (not covered by independent third-party insurance
as to which liability has been accepted by such insurance carrier) shall be rendered against Borrower by any Governmental Authority,
and the same are not, within ten (10) days after the entry, assessment or issuance thereof, discharged, satisfied, or paid, or
after execution thereof, stayed or bonded pending appeal, or such judgments are not discharged prior to the expiration of any
such stay (provided that no Credit Extensions will be made prior to the satisfaction, payment, discharge, stay, or bonding of
such fine, penalty, judgment, order or decree);


 


8.8
Misrepresentations. Borrower or any Person acting for Borrower makes any representation, warranty, or other statement now
or later in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or
any Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made;


 


8.9
Subordinated Debt. Any document, instrument, or agreement evidencing any Subordinated Debt shall, for reason of Borrower’s
breach, be revoked or invalidated or otherwise cease to be in full force and effect, or the Obligations shall for any reason be
subordinated or shall not have the priority contemplated by this Agreement any applicable subordination or intercreditor agreement
or the Intercreditor Agreement;


 


8.10
Guaranty. (a) Any guaranty of any Obligations terminates or ceases for any reason to be in full force and effect; (b) any
Guarantor does not perform any obligation or covenant under any guaranty of the Obligations; (c) any circumstance described in
Sections 8.3, 8.4, 8.5, 8.6, 8.7, or 8.8 of this Agreement occurs with respect to any Guarantor, (d) the death, liquidation, winding
up, or termination of existence of any Guarantor; or (e) (i) a material impairment in the perfection or priority of Bank’s
Lien in the collateral provided by Guarantor or in the value of such collateral or (ii) a material adverse change in the general
affairs, management, results of operation, condition (financial or otherwise) or the prospect of repayment of the Obligations
occurs with respect to any Guarantor;


 




    	 	 16	 



    	 		 



    

 


8.11
Governmental Approvals. Any Governmental Approval shall have been (a) revoked, rescinded, suspended, modified in an adverse
manner or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Authority that designates
a hearing with respect to any applications for renewal of any of such Governmental Approval or that could result in the Governmental
Authority taking any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension,
modification or non-renewal (i) causes, or could reasonably be expected to cause, a Material Adverse Change, or (ii) adversely
affects the legal qualifications of Borrower or any of its Subsidiaries to hold such Governmental Approval in any applicable jurisdiction
and such revocation, rescission, suspension, modification or non-renewal could reasonably be expected to affect the status of
or legal qualifications of Borrower or any of its Subsidiaries to hold any Governmental Approval in any other jurisdiction; or


 


8.12
Raycom. The occurrence of any default or event of default (howsoever defined) under any document evidencing or in connection
with Borrower’s Indebtedness and obligations with Raycom.


 


9
BANK’S RIGHTS AND REMEDIES


 


9.1
Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may, without notice or demand,
do any or all of the following:


 


(a)
declare all Obligations immediately due and payable (but if an Event of Default described in Section 8.5 occurs all Obligations
are immediately due and payable without any action by Bank);


 


(b)
stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other agreement between
Borrower and Bank;


(c)
demand that Borrower (i) deposit cash with Bank in an amount equal to at least (A) one hundred five percent (105.0%) of the Dollar
Equivalent of the aggregate face amount of all Letters of Credit denominated in Dollars remaining undrawn, and (B) one hundred
ten percent (110.0%) of the Dollar Equivalent of the aggregate face amount of all Letters of Credit denominated in a Foreign Currency
remaining undrawn (plus, in each case, all interest, fees, and costs due or to become due in connection therewith (as estimated
by Bank in its good faith business judgment)), to secure all of the Obligations relating to such Letters of Credit, as collateral
security for the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such
amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any Letters
of Credit;


 


(d)
terminate any FX Contracts;


 


(e)
verify the amount of, demand payment of and performance under, and collect any Accounts and General Intangibles, settle or adjust
disputes and claims directly with Account Debtors for amounts on terms and in any order that Bank considers advisable, and notify
any Person owing Borrower money of Bank’s security interest in such funds. Borrower shall collect all payments in trust
for Bank and, if requested by Bank, immediately deliver the payments to Bank in the form received from the Account Debtor, with
proper endorsements for deposit;


 


(f)
make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its security interest
in the Collateral. Borrower shall assemble the Collateral if Bank requests and make it available as Bank designates. Bank may
enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay, purchase,
contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred.
Borrower grants Bank a license to enter and occupy any of its premises, without charge, to exercise any of Bank’s rights
or remedies;


 



    	 	 17	 



    	 		 



    




 


(g)
apply to the Obligations any (i) balances and deposits of Borrower it holds, or (ii) amount held by Bank owing to or for the credit
or the account of Borrower;


 


(h)
ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the Collateral. Subject
to the rights of third parties, to the extent such third parties’ rights are senior to Bank’s rights, Bank is hereby
granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, Patents, Copyrights,
mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter, or any similar property
as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection
with Bank’s exercise of its rights under this Section 9.1, Borrower’s rights under all licenses and all franchise
agreements inure to Bank’s benefit;


 


(i)
place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive control, any entitlement order,
or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral;


 


(j)
demand and receive possession of Borrower’s Books;


 


(k)
obtain from any court of competent jurisdiction an order for the sale or foreclosure of any or all of the Collateral;


 


(l)
appoint in writing a receiver or receiver and manager (a “Receiver”) for all or any part of the Collateral
who shall be vested with all of Bank’s rights and remedies under this Agreement, at law or in equity. Any such Receiver,
with respect to responsibility for its acts, shall, to the extent permitted by applicable law, be deemed to the agent of Borrower
and not Bank;


 


(m)
obtain from any court of competent jurisdiction an order for the appointment of a Receiver of Borrower or of any or all of the
Collateral;


 


(n)
realize on any or all of the Collateral and sell, lease, assign, give options to purchase, or otherwise dispose of and deliver
any or all of the Collateral (or contract to do any of the above), in one or more parcels at any public or private sale, on such
terms and conditions as Bank may deem advisable and at such prices as it may deem best; and


 


(o)
exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all remedies provided
under the Code (including disposal of the Collateral pursuant to the terms thereof).


 


Without
limiting the foregoing, Bank acknowledges that, solely as between Bank and Raycom, Bank’s ability to take certain of the
foregoing actions may be subject to the terms of the Intercreditor Agreement.


 


9.2
Power of Attorney. Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact to: (a) exercisable following
the occurrence of an Event of Default, (i) sign Borrower’s name on any invoice or bill of lading for any Account or drafts
against Account Debtors; (ii) demand, collect, sue, and give releases to any Account Debtor for monies due, settle and adjust
disputes and claims about the Accounts directly with Account Debtors, and compromise, prosecute, or defend any action, claim,
case, or proceeding about any Collateral (including filing a claim or voting a claim in any bankruptcy case in Bank’s or
Borrower’s name, as Bank chooses); (iii) make, settle, and adjust all claims under Borrower’s insurance policies;
(iv) pay, contest or settle any Lien, charge, encumbrance, security interest, or other claim in or to the Collateral, or any judgment
based thereon, or otherwise take any action to terminate or discharge the same; (v) transfer the Collateral into the name of Bank
or a third party as the Code permits; (vi) receive, open and dispose of mail addressed to Borrower; (vii) endorse Borrower’s
name on any checks, payment instruments, or other forms of payment or security; and (b) regardless of whether an Event of Default
has occurred, notify all Account Debtors to pay Bank directly. Borrower hereby appoints Bank as its lawful attorney-in-fact to
sign Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security interest
in the Collateral regardless of whether an Event of Default has occurred until all Obligations have been satisfied in full and
the Loan Documents have been terminated. Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s
rights and powers, coupled with an interest, are irrevocable until all Obligations have been fully repaid and performed and the
Loan Documents have been terminated


 




    	 	 18	 



    	 		 



    

 


9.3
Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.7 or fails to pay any premium thereon
or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document or which may
be required to preserve the Collateral, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are
Bank Expenses and immediately due and payable, bearing interest at the then highest rate applicable to the Obligations, and secured
by the Collateral. Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time
it is obtained or within a reasonable time thereafter. No payments by Bank are deemed an agreement to make similar payments in
the future or Bank’s waiver of any Event of Default.


 


9.4
Application of Payments and Proceeds. Bank shall have the right to apply in any order any funds in its possession, whether
from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of
the Collateral, or otherwise, to the Obligations. Bank shall pay any surplus to Borrower by credit to the Designated Deposit Account
or to other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency. If Bank, directly or indirectly,
enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have the option,
exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction
of the Obligations until the actual receipt by Bank of cash therefor.


 


9.5
Bank’s Liability for Collateral. In the absence of gross negligence or willful misconduct by Bank, so long as Bank complies
with reasonable banking practices regarding the safekeeping of the Collateral in the possession or under the control of Bank,
Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral;
(c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person.
Borrower bears all risk of loss, damage or destruction of the Collateral.


 


9.6
No Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to require strict performance by Borrower of any
provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand
strict performance and compliance herewith or therewith. No waiver hereunder shall be effective unless signed by the party granting
the waiver and then is only effective for the specific instance and purpose for which it is given. Bank’s rights and remedies
under this Agreement and the other Loan Documents are cumulative. Bank has all rights and remedies provided under the Code, by
law, or in equity. Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising
any other remedy under this Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event of Default
is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence.


 


9.7
Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default,
nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper,
and guarantees held by Bank on which Borrower is liable.


 


9.8
Borrower Liability. Subject to Section 2.2(a), each Borrower may, acting singly, request Credit Extensions hereunder. Each
Borrower hereby appoints the others as agent for itself for all purposes hereunder, including with respect to requesting Credit
Extensions hereunder. Each Borrower hereunder shall be jointly and severally obligated to repay all Credit Extensions made hereunder,
regardless of which Borrower actually receives said Credit Extensions, as if each Borrower hereunder directly received all Credit
Extensions. Each Borrower waives (a) any suretyship defenses available to it under the Code or any other applicable law, and (b)
any right to require Bank to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security;
or (iii) pursue any other remedy. Bank may exercise or not exercise any right or remedy it has against any Borrower or any security
it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower’s liability.
Notwithstanding any other provision of this Agreement or other related document, each Borrower irrevocably waives all rights that
it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Bank under this
Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person
now or hereafter primarily or secondarily liable for any of the Obligations, for any payment made by Borrower with respect to
the Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit from, or to participate
in, any security for the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection
with this Agreement or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited
under this Section 9.8 shall be null and void. If any payment is made to a Borrower in contravention of this Section 9.8, such
Borrower shall hold such payment in trust for Bank and such payment shall be promptly delivered to Bank for application to the
Obligations, whether matured or unmatured.


 



    	 	 19	 



    	 		 



    




 


10
NOTICES


 


All
notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document
must be in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt
and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt requested,
with proper postage prepaid; (b) upon transmission, when sent by electronic mail; (c) one (1) Business Day after deposit with
a reputable overnight courier with all charges prepaid; or (d) when delivered, if hand-delivered by messenger, all of which shall
be addressed to the party to be notified and sent to the address, or email address indicated below. Bank or Borrower may change
its mailing or electronic mail address by giving the other party written notice thereof in accordance with the terms of this Section
10.


 


	 	If
    to Borrower:	Frankly
    Inc.
	 	 	Frankly
    Co.
	 	 	Frankly
    Media LLC
	 	 	27-01
    Queens Plaza North, Suite 502
	 	 	Long
    Island City, New York 11101
	 	 	Attn:
    Lou Schwartz
	 	 	Email:
    lou@franklyinc.com
	 	 	 
	 	If
    to Bank:	Silicon
    Valley Bank
	 	 	555
    Mission Street
	 	 	San
    Francisco, California 94105
	 	 	Attn:
    Trefor Bacon
	 	 	Email:
    TBacon@svb.com
	 	 	 
	 	with
    a copy to:	Riemer
    & Braunstein LLP
	 	 	Three
    Center Plaza
	 	 	Boston,
    Massachusetts 02108
	 	 	Attn:
    David A. Ephraim, Esquire
	 	 	Email:
    DEphraim@riemerlaw.com


 


11
CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER


 


Except
as otherwise expressly provided in any of the Loan Documents, New York law governs the Loan Documents without regard to principles
of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in New York;
provided, however, that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing suit or taking other
legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a
judgment or other court order in favor of Bank. Borrower expressly submits and consents in advance to such jurisdiction in any
action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal
jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as
is deemed appropriate by such court. Borrower hereby waives personal service of the summons, complaints, and other process issued
in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified
mail addressed to Borrower at the address set forth in, or subsequently provided by Borrower in accordance with, Section 10 of
this Agreement and that service so made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt
thereof or three (3) Business Days after deposit in the U.S. mails, proper postage prepaid.


 




    	 	 20	 



    	 		 



    

 





BORROWER
AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE
LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS
A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.


 


NO
DOCUMENT SHALL BE DEEMED DELIVERED TO BANK UNTIL RECEIVED AND ACCEPTED BY BANK AT ITS OFFICES IN THE STATE OF CALIFORNIA. UNDER
NO CIRCUMSTANCES SHALL THIS AGREEMENT TAKE EFFECT UNTIL EXECUTED AND ACCEPTED BY BANK AT SAID OFFICES.


 


This
Section 11 shall survive the termination of this Agreement.


 


12 GENERAL
PROVISIONS


 


12.1
Termination Prior to Maturity Date; Survival. All covenants, representations and warranties made in this Agreement
shall continue in full force until this Agreement has terminated pursuant to its terms and all Obligations have been
satisfied. So long as Borrower has satisfied the Obligations (other than inchoate indemnity obligations, and any other
obligations which, by their terms, are to survive the termination of this Agreement, and any Obligations under Bank Services
Agreements that are cash collateralized in accordance with Section 4.1 of this Agreement), this Agreement may be terminated
prior to the Revolving Line Maturity Date by Borrower, effective three (3) Business Days after written notice of termination
is given to Bank. Those obligations that are expressly specified in this Agreement as surviving this Agreement’s
termination shall continue to survive notwithstanding this Agreement’s termination.


 


12.2
Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted assigns of each
party. Borrower may not assign this Agreement or any rights or obligations under it without Bank’s prior written
consent (which may be granted or withheld in Bank’s discretion). Bank has the right, without the consent of or notice
to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in,
Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents.


12.3
Indemnification. Borrower agrees to indemnify, defend and hold Bank and its directors, officers, employees,
agents, attorneys, or any other Person affiliated with or representing Bank (each, an “Indemnified
Person”) harmless against: (i) all obligations, demands, claims, and liabilities (collectively,
“Claims”) claimed or asserted by any other party in connection with the transactions contemplated by the
Loan Documents; and (ii) all losses or expenses (including Bank Expenses) in any way suffered, incurred, or paid by such
Indemnified Person as a result of, following from, consequential to, or arising from transactions between Bank and Borrower
contemplated by the Loan Documents (including reasonable attorneys’ fees and expenses), except for Claims and/or losses
directly caused by such Indemnified Person’s gross negligence or willful misconduct.


 


This
Section 12.3 shall survive until all statutes of limitation with respect to the Claims, losses, and expenses for which indemnity
is given shall have run.


 


12.4
Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement.


 


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


 




    	 	 21	 



    	 		 



    

 


12.6
Correction of Loan Documents. Bank may correct patent errors and fill in any blanks in the Loan Documents consistent with
the agreement of the parties.


 


12.7
Amendments in Writing; Waiver; Integration. No purported amendment or modification of any Loan Document, or waiver,
discharge or termination of any obligation under any Loan Document, shall be enforceable or admissible unless, and only to
the extent, expressly set forth in a writing signed by the party against which enforcement or admission is sought. Without
limiting the generality of the foregoing, no oral promise or statement, nor any action, inaction, delay, failure to require
performance or course of conduct shall operate as, or evidence, an amendment, supplement or waiver or have any other effect
on any Loan Document. Any waiver granted shall be limited to the specific circumstance expressly described in it, and shall
not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or evidence, any
obligation or commitment to grant any further waiver. The Loan Documents represent the entire agreement about this subject
matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and
negotiations between the parties about the subject matter of the Loan Documents merge into the Loan Documents.


 


12.8
Counterparts. This Agreement may be executed in any number of counterparts and by different parties on
separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute
one Agreement.


 


12.9
Confidentiality. In handling any confidential information, Bank shall exercise the same degree of care that it exercises
for its own proprietary information, but disclosure of information may be made: (a) to Bank’s Subsidiaries or
Affiliates (such Subsidiaries and Affiliates, together with Bank, collectively, “Bank Entities”); (b) to
prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall use its best
efforts to obtain any prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as
required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection
with Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies under the Loan Documents;
and (f) to third-party service providers of Bank so long as such service providers have executed a confidentiality agreement
with Bank with terms no less restrictive than those contained herein. Confidential information does not include information
that is either: (i) in the public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public
domain (other than as a result of its disclosure by Bank in violation of this Agreement) after disclosure to Bank; or (ii)
disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the
information.


 


Bank
Entities may use confidential information for the development of databases, reporting purposes, and market analysis so long as
such confidential information is aggregated and anonymized prior to distribution unless otherwise expressly permitted by Borrower.
The provisions of the immediately preceding sentence shall survive the termination of this Agreement.


 


12.10
Electronic Execution of Documents. The words “execution,” “signed,” “signature” and
words of like import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity and enforceability as a manually executed
signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any
applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act.


 


12.11
Right of Setoff. Borrower hereby grants to Bank a Lien and a right of setoff as security for all Obligations to Bank,
whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter
in the possession, custody, safekeeping or control of Bank or any entity under the control of Bank (including a subsidiary of
Bank) or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default,
without demand or notice, Bank may set off the same or any part thereof and apply the same to any liability or Obligation of
Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL
RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS,
PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.


 




    	 	 22	 



    	 		 



    

 


12.12
Captions. The headings used in this Agreement are for convenience only and shall not affect the interpretation of this
Agreement.


 


12.13
Construction of Agreement. The parties mutually acknowledge that they and their attorneys have participated in the
preparation and negotiation of this Agreement. In cases of uncertainty this Agreement shall be construed without regard to
which of the parties caused the uncertainty to exist.


 


12.14
Relationship. The relationship of the parties to this Agreement is determined solely by the provisions of this Agreement.
The parties do not intend to create any agency, partnership, joint venture, trust, fiduciary or other relationship with
duties or incidents different from those of parties to an arm’s-length contract.


 


12.15
Third Parties. Nothing in this Agreement, whether express or implied, is intended to: (a) confer any benefits, rights or
remedies under or by reason of this Agreement on any persons other than the express parties to it and their respective
permitted successors and assigns; (b) relieve or discharge the obligation or liability of any person not an express party to
this Agreement; or (c) give any person not an express party to this Agreement any right of subrogation or action against any
party to this Agreement.


 


13 DEFINITIONS


 


13.1
Definitions. As used in the Loan Documents, the word “shall” is mandatory, the word “may” is
permissive, the word “or” is not exclusive, the words “includes” and “including” are not
limiting, the singular includes the plural, and numbers denoting amounts that are set off in brackets are negative. As used
in this Agreement, the following capitalized terms have the following meanings:


 


“Account”
is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes,
without limitation, all accounts receivable and other sums owing to Borrower.


 


“Account
Debtor” is any “account debtor” as defined in the Code with such additions to such term as may hereafter
be made.


 


“Adjusted
Quick Ratio” is the ratio of (a) Quick Assets to (b) Current Liabilities minus the current portion of non-refundable
Deferred Revenue.


“Advance”
or “Advances” means a revolving credit loan (or revolving credit loans) under the Revolving Line.


 


“Affiliate”
is, with respect to any Person, each other Person that owns or controls directly or indirectly the Person, any Person that controls
or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors,
partners and, for any Person that is a limited liability company, that Person’s managers and members.


 


“Agreement”
is defined in the preamble hereof.


 


“Applicable
Borrowing Base Percentage” is (a) eighty-five percent (85.0%) at times when the dilution rate with respect to Accounts
(as determined by Bank) is less than three and one-half of one percent (3.50%) and (b) eighty percent (80.0%) at times when the
dilution rate with respect to Accounts (as determined by Bank) is three and one-half of one percent (3.50%) or higher. Notwithstanding
the foregoing, Bank has the right to decrease the Applicable Borrowing Base Percentage (i) in its good faith business judgment
to mitigate the impact of events, conditions, contingencies, or risks which may adversely affect the Collateral or its value and
(ii) in its sole discretion at times when the dilution rate with respect to Accounts (as determined by Bank) is five percent (5.0%)
or higher.


 


“Authorized
Signer” is any individual listed in Borrower’s Borrowing Resolution who is authorized to execute the Loan Documents,
including making (and executing if applicable) any Credit Extension request, on behalf of Borrower.




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“Availability
Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base minus (b)
the outstanding principal balance of any Advances.


 


“Bank”
is defined in the preamble hereof.


 


“Bank
Entities” is defined in Section 12.9.


 


“Bank
Expenses” are all audit fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses)
for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation,
those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower or any Guarantor.


 


“Bank
Services” are any products, credit services, and/or financial accommodations previously, now, or hereafter provided
to Borrower or any of its Subsidiaries by Bank or any Bank Affiliate, including, without limitation, any letters of credit, cash
management services (including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check
cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified
in Bank’s various agreements related thereto (each, a “Bank Services Agreement”).


 


“Bank
Services Agreement” is defined in the definition of Bank Services.


 


“Board”
is Borrower’s board of directors.


 


“Borrower”
is defined in the preamble hereof.


 


“Borrower’s
Books” are all Borrower’s books and records including ledgers, federal, state and provincial tax returns, records
regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer
programs or storage or any equipment containing such information.


 


“Borrowing
Base” is the Applicable Borrowing Base Percentage of Eligible Accounts, as determined by Bank from Borrower’s
most recent Borrowing Base Report (and as may subsequently be updated by Bank in Bank’s sole discretion based upon information
received by Bank including, without limitation, Accounts that are paid and/or billed following the date of the Borrowing Base
Report).


 


“Borrowing
Base Report” is that certain report of the value of certain Collateral in the form attached hereto as Exhibit C.


 


“Borrowing
Resolutions” are, with respect to any Person, those resolutions adopted by such Person’s board of directors (and,
if required under the terms of such Person’s Operating Documents, stockholders, members and/or managers) and delivered by
such Person to Bank approving the Loan Documents to which such Person is a party and the transactions contemplated thereby, together
with a certificate executed by its secretary or other senior officer on behalf of such Person certifying (a) such Person has the
authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party, (b) that set
forth as a part of or attached as an exhibit to such certificate is a true, correct, and complete copy of the resolutions then
in full force and effect authorizing and ratifying the execution, delivery, and performance by such Person of the Loan Documents
to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents, including making (and executing
if applicable) any Credit Extension request, on behalf of such Person, together with a sample of the true signature(s) of such
Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such Person shall have delivered to Bank
a further certificate canceling or amending such prior certificate.


 


“Business
Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.


 


“Canadian
Borrower” is defined in the preamble hereof.


 


“Cash
Collateral Account” is defined in Section 6.3(c).




    	 	 24	 



    	 		 



    

 


 


“Cash
Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by(i) the United States or
any agency or any State thereof, or (ii) Canada or any agency or Province thereof, having maturities of not more than one (1)
year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest
rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) Bank’s certificates
of deposit issued maturing no more than one (1) year after issue; and (d) money market funds at least ninety-five percent (95%)
of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition.


 


“Change
in Control” means (a) at any time, any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act, shall become, or obtain rights (whether by means of warrants, options or otherwise) to become,
the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
forty percent (40.0%) or more of the ordinary voting power for the election of directors of Borrower (determined on a fully diluted
basis) other than by the sale of Borrower’s equity securities in a public offering or to venture capital or private equity
investors so long as Borrower identifies to Bank the venture capital or private equity investors at least seven (7) Business Days
prior to the closing of the transaction and provides to Bank a description of the material terms of the transaction; (b) during
any period of twelve (12) consecutive months following the Effective Date, a majority of the members of the board of directors
or other equivalent governing body of Borrower cease to be composed of individuals (i) who were members of that board or equivalent
governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was
approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority
of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body
was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination
at least a majority of that board or equivalent governing body; or (c) at any time, Borrower shall cease to own and control, of
record and beneficially, directly or indirectly, one hundred percent (100.0%) of each class of outstanding capital stock or membership
interests of each subsidiary of Borrower free and clear of all Liens (except Permitted Liens).


 


“Claims”
is defined in Section 12.3.


 


“Code”
is (a) with respect to any assets located in the United States, the Uniform Commercial Code, as the same may, from time to time,
be enacted and in effect in the State of New York; provided, that, to the extent that the Code is used to define any term herein
or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of
such term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions
of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral
is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of New York, the term “Code”
shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions
and (b) with respect to any assets located in Canada, the PPSA; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on
any Collateral is governed by the PPSA or equivalent legislation in effect in a provincial jurisdiction other than British Columbia,
the term “Code” shall mean the PPSA or equivalent legislation as enacted and in effect in such other province solely
for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions
relating to such provisions.


 


“Collateral”
is any and all properties, rights and assets of Borrower described on Exhibit A.


 


“Collateral
Account” is any Deposit Account, Securities Account, or Commodity Account.


 


“Commodity
Account” is any “commodity account” as defined in the Code with such additions to such term as may hereafter
be made.


 


“Compliance
Certificate” is that certain certificate in the form attached hereto as Exhibit B.




    	 	 25	 



    	 		 



    

 


 


“Contingent
Obligation” is, for any Person, any direct or indirect liability, contingent or not, of that Person for (a) any indebtedness,
lease, dividend, letter of credit or other obligation of another such as an obligation, in each case, directly or indirectly guaranteed,
endorsed, co made, discounted or sold with recourse by that Person, or for which that Person is directly or indirectly liable;
(b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate,
currency or commodity swap agreement, interest rate cap or collar agreement, or other agreement or arrangement designated to protect
a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation”
does not include endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined
amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated
liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any
guarantee or other support arrangement.


 


“Control
Agreement” is any control agreement entered into among the depository institution at which Borrower maintains a Deposit
Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity
Account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such Deposit Account,
Securities Account, or Commodity Account.


 


“Copyrights”
are any and all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship
and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret.


 


“Credit
Extension” is any Advance, any Overadvance, or any other extension of credit by Bank for Borrower’s benefit.


 


“Currency”
is coined money and such other banknotes or other paper money as are authorized by law and circulate as a medium of exchange.


 


“Current
Liabilities” are (a) all obligations and liabilities of Borrower to Bank, plus (b) without duplication, the aggregate
amount of Borrower’s Total Liabilities that mature within one (1) year.


 


“Default
Rate” is defined in Section 2.4(b).


 


“Deferred
Revenue” is all amounts received or invoiced in advance of performance under contracts and not yet recognized as revenue.


 


“Deposit
Account” is any “deposit account” as defined in the Code with such additions to such term as may
hereafter be made.


 


“Designated
Deposit Account” is the account number ending 342 maintained by Borrower with Bank (provided, however, if no such account
number is included, then the Designated Deposit Account shall be any deposit account of Borrower maintained with Bank as chosen
by Bank).


 


“Dollars,”
“dollars” or use of the sign “$” means only lawful money of the United States and not any other
currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted
into lawful money of the United States.


 


“Dollar
Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect
to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Bank at such time
on the basis of the then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer
to the country issuing such Foreign Currency.


 


“Effective
Date” is defined in the preamble hereof.


 


“Eligible
Accounts” means Accounts of Frankly LLC which arise in the ordinary course of Frankly LLC’s business that meet
all Borrower’s representations and warranties in Section 5.3, that have been, at the option of Bank, confirmed in accordance
with Section 6.3(f) of this Agreement, and are due and owing from Account Debtors deemed creditworthy by Bank in its good faith
business judgment. Bank reserves the right, at any time after the Effective Date, in its good faith business judgment in each
instance, to either (i) adjust any of the criteria set forth below and to establish new criteria or (ii) deem any Accounts owing
from a particular Account Debtor or Account Debtors to not meet the criteria to be Eligible Accounts. Unless Bank otherwise agrees
in writing, Eligible Accounts shall not include:


 




    	 	 26	 



    	 		 



    

(a)
Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or agent, and Accounts that are
intercompany Accounts;


 


(b)
Accounts that the Account Debtor has not paid within ninety (90) days of invoice date regardless of invoice payment period
terms;


 


(c)
Accounts with credit balances over ninety (90) days from invoice date;


 


(d)
Accounts owing from an Account Debtor if fifty percent (50%) or more of the Accounts owing from such Account Debtor have not
been paid within ninety (90) days of invoice date;


 


(e)
Accounts owing from an Account Debtor which does not have its principal place of business in the United States or Canada,
unless otherwise approved by Bank in writing on a case-by-case basis in its sole discretion;


 


(f)
Accounts billed from and/or payable to Borrower outside of the United States (sometimes called foreign invoiced
accounts);


 


(g)
Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to the Account
Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable,
customer deposits or credit accounts);


 


(h)
Accounts owing from an Account Debtor which is a United States or Canadian government entity or any department, agency, or
instrumentality thereof unless Borrower has assigned its payment rights to Bank and the assignment has been acknowledged
under the Federal Assignment of Claims Act of 1940, as amended, the Financial Administration Act (Canada) or any like
provincial statute, as applicable;


 


(i)
Accounts for demonstration or promotional equipment, or in which goods are consigned, or sold on a “sale
guaranteed”, “sale or return”, “sale on approval”, or other terms if Account Debtor’s
payment may be conditional;


 


(j)
Accounts owing from an Account Debtor where goods or services have not yet been rendered to the Account Debtor (sometimes
called memo billings or pre-billings), except for pre-billings with respect to non-cancellable contracts;


 


(k)
Accounts subject to contractual arrangements between Borrower and an Account Debtor where payments shall be scheduled or due
according to completion or fulfillment requirements (sometimes called contracts accounts receivable, progress billings,
milestone billings, or fulfillment contracts);


 


(l)
Accounts owing from an Account Debtor the amount of which may be subject to withholding based on the Account Debtor’s
satisfaction of Borrower’s complete performance (but only to the extent of the amount withheld; sometimes called
retainage billings);


 


(m)
Accounts subject to trust provisions, subrogation rights of a bonding company, or a statutory trust;


 


(n)
Accounts owing from an Account Debtor that has been invoiced for goods that have not been shipped to the Account Debtor
unless Bank, Borrower, and the Account Debtor have entered into an agreement acceptable to Bank wherein the Account Debtor
acknowledges that (i) it has title to and has ownership of the goods wherever located, (ii) a bona fide sale of the goods has
occurred, and (iii) it owes payment for such goods in accordance with invoices from Borrower (sometimes called “bill
and hold” accounts);


 




    	 	 27	 



    	 		 



    

 


(o)
Accounts for which the Account Debtor has not been invoiced;


 


(p)
Accounts that represent non-trade receivables or that are derived by means other than in the ordinary course of
Borrower’s business;


 


(q)
Accounts for which Borrower has permitted Account Debtor’s payment to extend beyond ninety (90) days (including
Accounts with a due date that is more than ninety (90) days from invoice date);


 


(r)
Accounts arising from chargebacks, debit memos or other payment deductions taken by an Account Debtor;


 


(s)
Accounts arising from product returns and/or exchanges (sometimes called “warranty” or “RMA”
accounts);


 


(t)
Accounts in which the Account Debtor disputes liability or makes any claim (but only up to the disputed or claimed amount),
or if the Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or goes out of business;


 


(u)
Accounts owing from an Account Debtor with respect to which Borrower has received Deferred Revenue (but only to the extent of
such Deferred Revenue), except for Deferred Revenue arising solely from pre-billings with respect to non-cancellable
contracts;


 


(v)
Accounts owing from an Account Debtor, whose total obligations to Borrower exceed thirty-five percent (35.0%) of all
Accounts, for the amounts that exceed that percentage, unless Bank approves in writing;


 


(w)
Accounts for which Bank in its good faith business judgment determines collection to be doubtful, including, without
limitation, accounts represented by “refreshed” or “recycled” invoices; and


 


(x)
Accounts of Canadian Borrower or Frankly Co.


  


“Equipment”
is all “equipment” as defined in the Code with such additions to such term as may hereafter be made, and includes
without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of
the foregoing.


 


“ERISA”
is the Employee Retirement Income Security Act of 1974, and its regulations.


 


“Event
of Default” is defined in Section 8.


 


“Exchange
Act” is the Securities Exchange Act of 1934, as amended.


 


“Foreign
Currency” means lawful money of a country other than the United States.


 


“Frankly
Co.” is defined in the preamble hereof.


 


“Frankly
LLC” is defined in the preamble hereof.


 


“Funding
Date” is any date on which a Credit Extension is made to or for the account of Borrower which shall be a Business Day.


 


“FX
Contract” is any foreign exchange contract by and between Borrower and Bank under which Borrower commits to purchase
from or sell to Bank a specific amount of Foreign Currency on a specified date.


 




    	 	 28	 



    	 		 



    

 


“GAAP”
is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of determination.


 


“General
Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims, income and
other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal
property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies
(including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights
to payment of any kind.


 


“Governmental
Approval” is any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, registration,
filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority.


 


“Governmental
Authority” is any nation or government, any state, province, or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative functions of or pertaining to government, any securities exchange and any self-regulatory organization.


 


“Guarantor”
is any Person providing a Guaranty in favor of Bank.


 


“Guaranty”
is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated, modified or otherwise
supplemented.


 


“Indebtedness”
is (a) indebtedness for borrowed money or the deferred price of property or services, such as reimbursement and other obligations
for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital
lease and real property lease obligations, and (d) Contingent Obligations.


 


“Indemnified
Person” is defined in Section 12.3.


 


“Initial
Audit” is Bank’s inspection of Borrower’s Accounts, the Collateral, and Borrower’s Books, with results
satisfactory to Bank in its reasonable discretion.


 


“Insolvency
Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, the Bankruptcy and Insolvency
Act (Canada), the Companies’ Creditors Arrangement Act (Canada) or any other bankruptcy or insolvency law, including assignments
for the benefit of creditors, compositions, extensions generally with its creditors, or proceedings seeking reorganization, arrangement,
or other relief.


 


“Intellectual
Property” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following:


 


(a)
its Copyrights, Trademarks and Patents;


 


(b)
any and all trade secrets and trade secret rights, including, without limitation, any rights to unpatented inventions,
know-how and operating manuals;


 


(c)
any and all source code;


 


(d)
any and all design rights which may be available to such Person;


 




    	 	 29	 



    	 		 



    

 


(e)
any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the right, but
not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights
identified above; and


 


(f)
all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.


 


“Intercreditor
Agreement” is that certain Intercreditor Agreement dated as of the Effective Date by and between Bank and Raycom and
acknowledged by Borrower, as the same may from time to time be amended, modified, supplemented, and/or restated from time to time.


 


“Inventory”
is all “inventory” as defined in the Code in effect on the date hereof with such additions to such term as
may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials,
work in process and finished products, including without limitation such inventory as is temporarily out of Borrower’s custody
or possession or in transit and including any returned goods and any documents of title representing any of the above.


 


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


 


“IP
Agreement” is, collectively, (a) that certain Intellectual Property Security Agreement between Canadian Borrower and
Bank dated as of the Effective Date, (b) that certain Intellectual Property Security Agreement between Frankly Co. and Bank dated
as of the Effective Date and (c) that certain Intellectual Property Security Agreement between Frankly LLC and Bank dated as of
the Effective Date, in each case as may be amended, modified, supplemented and/or restated from time to time.


 


“Key
Person” is each of Borrower’s Chief Executive Officer and Chief Financial Officer.


 


“Letter
of Credit” is a standby or commercial letter of credit issued by Bank upon request of Borrower based upon an application,
guarantee, indemnity, or similar agreement.


 


“Lien”
is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance of any kind, whether voluntarily
incurred or arising by operation of law or otherwise against any property.


 


“Liquidity”
is (a) the aggregate amount of Borrower’s unrestricted and unencumbered cash and Cash Equivalents, in each only to the extent
maintained with Bank plus (b) the Availability Amount.


 


“Loan
Documents” are, collectively, this Agreement and any schedules, exhibits, certificates, notices, and any other documents
related to this Agreement, the IP Agreement, any Bank Services Agreement, the Perfection Certificate, the Intercreditor Agreement,
any subordination agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or
future agreement by Borrower and/or any Guarantor with or for the benefit of Bank, all as amended, restated, or otherwise modified.


 


“Material
Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or
in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise)
of Borrower; (c) a material impairment of the prospect of repayment of any portion of the Obligations; or (d) Bank determines,
based upon information available to it and in its reasonable judgment, that there is a reasonable likelihood that Borrower shall
fail to comply with one or more of the financial covenants in Section 6 during the next succeeding financial reporting period.


 


“Monthly
Financial Statements” is defined in Section 6.2(b).


 


“Obligations”
are Borrower’s obligations to pay when due any debts, principal, interest, fees, Bank Expenses, the Termination Fee, and
other amounts Borrower owes Bank now or later, whether under this Agreement, the other Loan Documents, or otherwise, including,
without limitation, all obligations relating to Bank Services and interest accruing after Insolvency Proceedings begin and debts,
liabilities, or obligations of Borrower assigned to Bank, and to perform Borrower’s duties under the Loan Documents.


 




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“Operating
Documents” are, for any Person, such Person’s formation documents, as certified by the Secretary of State (or
equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior
to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability
company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership
agreement (or similar agreement), each of the foregoing with all current amendments or modifications thereto.


 


“Overadvance”
is defined in Section 2.3.


 


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


 


“Payment
Date” is the last calendar day of each month.


 


“Perfection
Certificate” is defined in Section 5.1.


 


“Permitted
Indebtedness” is:


 


(a)
Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents;


 


(b)
Indebtedness existing on the Effective Date which is shown on the Perfection Certificate;


 


(c)
Subordinated Debt;


 


(d)
unsecured Indebtedness to trade creditors incurred in the ordinary course of business;


 


(e)
Indebtedness to Raycom pursuant to the Raycom Loan Agreement in an aggregate original principal amount of up to Sixteen
Million Dollars ($16,000,000.00), which amount shall be reduced on a dollar for dollar basis as such Indebtedness is repaid
or otherwise satisfied; provided that such Indebtedness shall at all times be subject to the Intercreditor
Agreement;


 


(f)
extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness (a) through (d)
above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more
burdensome terms upon Borrower or its Subsidiary, as the case may be; and


 


(g)
Indebtedness secured by Liens permitted under clause (c) of the definition of “Permitted
Liens” hereunder.


 


“Permitted
Investments” are:


 


(a)
Investments (including, without limitation, Subsidiaries) existing on the Effective Date which are shown on the
Perfection Certificate; and


 


(b)
Investments consisting of Cash Equivalents.


 


“Permitted
Liens” are:


 


(a)
Liens existing on the Effective Date which are shown on the Perfection Certificate or arising under this Agreement or the
other Loan Documents;


 




    	 	 31	 



    	 		 



    

 


(b)
Liens for taxes, fees, assessments or other government charges or levies, either (i) not due and payable or (ii)
being contested in good faith and for which Borrower maintains adequate reserves on Borrower’s Books, provided
that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations adopted thereunder;


 


(c)
purchase money Liens (including capital leases) (i) on Equipment acquired or held by Borrower incurred for financing the
acquisition of the Equipment securing no more than Fifty Thousand Dollars ($50,000.00) in the aggregate amount outstanding,
or (ii) existing on Equipment when acquired, if the Lien is confined to the property and improvements and the proceeds
of the Equipment;


 


(d)
Liens incurred in the extension, renewal or refinancing of the Indebtedness secured by Liens described in (a) through (c), but
any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the
principal amount of the indebtedness may not increase;


 


(e)
Liens in favor of Raycom securing the Indebtedness to Raycom described in subsection (e) of the definition of Permitted
Indebtedness, but only to the extent that such Liens are subject to the Intercreditor Agreement; and


 


(h)
non-exclusive licenses of Intellectual Property granted to third parties in the ordinary course of business.


 


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


 


“PPSA”
means the Personal Property Security Act (British Columbia) as amended and as may be further amended and in effect from time to
time.


 


“Prime
Rate” is the rate of interest per annum from time to time published in the money rates section of The Wall Street Journal
or any successor publication thereto as the “prime rate” then in effect; provided that, in the event such rate of
interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement; and provided further that if
such rate of interest, as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable
for any reason as determined by Bank, the “Prime Rate” shall mean the rate of interest per annum announced by Bank
as its prime rate in effect at its principal office in the State of California (such Bank announced Prime Rate not being intended
to be the lowest rate of interest charged by Bank in connection with extensions of credit to debtors).


 


“Quick
Assets” is, on the last day of a calendar month, Borrower’s unrestricted and unencumbered cash maintained with
Bank (or maintained in the Transition Accounts during the first sixty (60) days following the Effective Date) plus net billed
accounts receivable determined according to GAAP.


 


“Raycom”
is, individually and collectively, (a) Raycom Media, Inc., a Delaware corporation and (b) The Teachers’ Retirement System
of Alabama.


 


“Raycom
Loan Agreement” is a certain Credit Agreement among Borrower and Raycom Media, Inc. dated as of August 31, 2016 in existence
on the Effective Date or as modified with Bank’s prior written consent.


 


“Receiver”
is defined in 9.1(l).


 


“Registered
Organization” is any “registered organization” as defined in the Code, as applicable, with such additions
to such term as may hereafter be made.


 


“Requirement
of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common),
treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or any of its property is subject.




    	 	 32	 



    	 		 



    

 


“Reserves”
means, as of any date of determination, such amounts as Bank may from time to time establish and revise in its good faith business
judgment, reducing the amount of Advances and other financial accommodations which would otherwise be available to Borrower (a)
to reflect events, conditions, contingencies or risks which, as determined by Bank in its good faith business judgment, do or
may adversely affect (i) the Collateral or any other property which is security for the Obligations or its value (including without
limitation any increase in delinquencies of Accounts), (ii) the assets, business or prospects of Borrower or any Guarantor, or
(iii) the security interests and other rights of Bank in the Collateral (including the enforceability, perfection and priority
thereof); or (b) to reflect Bank’s reasonable belief that any collateral report or financial information furnished by or
on behalf of Borrower or any Guarantor to Bank is or may have been incomplete, inaccurate or misleading in any material respect;
or (c) in respect of any state of facts which Bank determines constitutes an Event of Default or may, with notice or passage of
time or both, constitute an Event of Default.


 


“Responsible
Officer” is any of the Chief Executive Officer, President, Chief Financial Officer and Controller of Borrower.


 


“Restricted
License” is any material license or other agreement with respect to which Borrower is the licensee (a) that prohibits
or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or
any other property, or (b) for which a default under or termination of could interfere with Bank’s right to sell any Collateral.


 


“Revolving
Line” is an aggregate principal amount equal to Three Million Dollars ($3,000,000.00).


 


“Revolving
Line Maturity Date” is one (1) year from the Effective Date.


 


“SEC”
shall mean the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.


 


“Securities
Account” is any “securities account” as defined in the Code with such additions to such term as may
hereafter be made.


 


“Streamline
Balance” is defined in the definition of Streamline Period.


 


“Streamline
Period” is, on and after the Effective Date, provided no Event of Default has occurred and is continuing, the period
(a) commencing on the first day of the month following the day that Borrower provides to Bank a written report that Borrower has
maintained, for each consecutive day in the immediately preceding month, as determined by Bank in its discretion, Liquidity of
at least Three Million Dollars ($3,000,000.00) (the “Streamline Balance”); and (b) terminating on the earlier
to occur of (i) the occurrence of an Event of Default, and (ii) the first day thereafter in which Borrower fails to maintain the
Streamline Balance, as determined by Bank in its discretion. Upon the termination of a Streamline Period, Borrower must maintain
the Streamline Balance each consecutive day for two (2) months as determined by Bank in its discretion, prior to entering into
a subsequent Streamline Period. Borrower shall give Bank prior written notice of Borrower’s election to enter into any such
Streamline Period, and each such Streamline Period shall commence on the first day of the monthly period following the date Bank
determines, in its reasonable discretion, that the Streamline Balance has been achieved.


 


“Subordinated
Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to
Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered
into between Bank and the other creditor), on terms acceptable to Bank.


 


“Subsidiary”
is, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by
reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless the context otherwise requires, each reference to a Subsidiary
herein shall be a reference to a Subsidiary of Borrower or Guarantor.




    	 	 33	 



    	 		 



    

 


“Total
Liabilities” is on any day, obligations that should, under GAAP, be classified as liabilities on Borrower’s consolidated
balance sheet, including all Indebtedness.


 


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


 


“Transfer”
is defined in Section 7.1.


 


“Transition
Accounts” is defined in Section 6.8(a).


 


[Signature
page follows.]


 




    	 	 34	 



    	 		 



    

 


IN
WITNESS WHEREOF, this Agreement, and all documents executed in connection therewith, or relating thereto, have been negotiated,
prepared and deemed to be executed by Borrower in the United States of America. In addition, this Agreement is being executed
as of the Effective Date.


 


BORROWER:


 


FRANKLY
INC.


 


	By	 /s/
    Steve Chung	 
	 	 	 
	Name:	 Steve Chung	 
	 	 	 
	Title:	Chief
Executive Officer	 


 


FRANKLY
MEDIA LLC


 





	By	 /s/
    Steve Chung	 
	 	 	 
	Name:	 Steve Chung	 
	 	 	 
	Title:	Chief
Executive Officer	 


 





FRANKLY
CO.


 


	By	/s/
    Steve Chung	 
	 	 	 
	Name:	 Steve Chung	 
	 	 	 
	Title:	Chief
Executive Officer	 





 


BANK:


 


SILICON
VALLEY BANK


 






	By	/s/
    Bailey Morrow	 
	 	 	 
	Name:	 Bailey Morrow	 
	 	 	 
	Title:	Vice
President	 





 







    	 	 	 



    	 	 	 



    

 


EXHIBIT
A - COLLATERAL DESCRIPTION


 


The
Collateral consists of all of Borrower’s right, title and interest in and to the following personal property:


 


All
goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases,
license agreements, franchise agreements, General Intangibles, Intellectual Property, commercial tort claims, documents, instruments
(including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, certificates of deposit,
fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other
investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located;
and


 


all
Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions
for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds
of any or all of the foregoing.


 







    	 	 	 



    	 	 	 



    

 


EXHIBIT
B


COMPLIANCE
CERTIFICATE


 





	TO:


	SILICON VALLEY BANK	 	Date:	 



 


FROM:
FRANKLY INC., FRANKLY MEDIA LLC and FRANKLY CO.


 


The
undersigned authorized officer of FRANKLY INC., FRANKLY MEDIA LLC and FRANKLY CO. (individually and collectively, jointly and
severally, “Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending _______________
with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties
in the Agreement are true and correct in all material respects on this date except as noted below; provided, however,
that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified
by materiality in the text thereof; and provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its
Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state,
provincial and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to
the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries,
if any, relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to
Bank. Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in accordance
with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned
acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with
any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized
terms used but not otherwise defined herein shall have the meanings given them in the Agreement.


 


Please indicate compliance status by circling Yes/No under “Complies” column.    




 


	Reporting
    Covenants	 	Required	 	Complies
	 	 	 	 	 
	Monthly
    financial statements and Compliance Certificate 	 	Monthly
    within 30 days	 	Yes     No
	Annual
    financial statements (CPA audited)	 	FYE
    within 120 days	 	Yes     No
	10-Q,
    10-K and 8-K	 	Within
        5 days after filing with

        SEC
	 	Yes     No
	Borrowing
    Base Report, A/R Agings and A/P Agings	 	On
        Friday of each week when not in a Streamline Period

         

        Monthly
        within 30 days in a Streamline Period
	 	Yes     No
	Board-approved
    Projections	 	Earlier
        of 7 Business Days following

        Board
        approval, and March 31st of each year (and in each case as updated or amended)
	 	Yes     No
	 	 	 	 	 
	


The following Intellectual Property was registered after the Effective Date (if no registrations, state “None”)


____________________________________________________________________________


 








 


	Financial
    Covenants	 	Required	 	Actual	 	Complies
	Maintain
    as indicated:	 	 	 	 	 	 
	Cash
    at Bank	 	$1,000,000.00	 	$______________	 	Yes     No
	Adjusted
    Quick Ratio	 	>
    ______ : 1.0	 	_____
    :1.0	 	Yes     No


 





*As
set forth in Section 6.9(b)





 


	Streamline
    Eligible	 	Applies	 	 
	Required	 	Actual	 	 
	Liquidity
    of $3,000,000.00	 	$______________	 	Yes
    No


 


The
following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the
date of this Certificate.


 


The
following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)


 


—————————————————————————————————————————————————————————————————————————


 


	FRANKLY INC.	 	BANK USE ONLY
	FRANKLY MEDIA LLC	 	Received by:	 
	
        FRANKLY CO.

        
	 	authorized signer
	By:	 	 	Date:	 
	Name:	 	 	Verified	 
	Title:	 	 	
        authorized
        signer

        

	 	 	Date:	 
	 	 	Compliance Status 	Yes          No







 




    	 	 	 



    	 	 	 



    

 


Schedule
1 to Compliance Certificate


 


Financial
Covenants of Borrower


 


In
the event of a conflict between this Schedule and the Agreement, the terms of the Agreement shall govern.


 


Dated:____________________


 


I. Cash
at Bank (Section 6.9(a))


 


Required:
$1,000,000.00


 


Actual:
$________________


 


Is
Borrower’s unrestricted and unencumbered cash at Bank equal to or greater than the required amount set forth above?


 


	___ No,
not in compliance	___ Yes, in compliance



 


II. Adjusted
Quick Ratio (Section 6.9(b))


 


Required:
_____ : 1.0 (see Section 6.9(b))


 


Actual:
_____ : 1.0


 


	A.	 	Aggregate value of the unrestricted and unencumbered cash of Borrower at Bank (or maintained in the Transition Accounts during the first sixty (60) days following the Effective Date)	 	$		 
	 	 	 	 	 	 	 
	B.	 	Aggregate value of the net billed accounts receivable of Borrower	 	$		 
	 	 	 	 	 	 	 
	C.	 	Quick Assets (the sum of lines A and B)	 	$		 
	 	 	 	 	 	 	 
	D.	 	All obligations and liabilities of Borrower to Bank 
	 	$		 
	 	 	 	 	 	 	 
	E.	 	Obligations that mature within one year not otherwise reflected in Line D that should, under GAAP, be classified as liabilities on Borrower’s consolidated balance sheet, including all Indebtedness	 	$		 
	 	 	 	 	 	 	 
	F.	 	Current Liabilities (the sum of lines D and E)	 	$		 
	 	 	 	 	 	 	 
	G.	 	Current portion of non-refundable Deferred Revenue	 	$		 
	 	 	 	 	 	 	 
	H.	 	Line F minus Line G	 	$		 
	 	 	 	 	 	 	 
	I.	 	Adjusted Quick Ratio (Line C divided by Line H)	 	 	____:1.0	 



 


Is
line I equal to or greater than or equal to the amount set forth above?


 


               __________No,
not in compliance                                      ____________Yes, in compliance


 




    	 	 	 



    	 	 	 



    

 


EXHIBIT
C


 


Borrowing
Base Report