Exhibit 10.1


 


LOAN AND
SECURITY AGREEMENT


 


THIS LOAN AND SECURITY AGREEMENT
(this “Agreement”) dated as of the Effective
Date between SILICON VALLEY BANK, a California
corporation (“Bank”), and INTERNET BRANDS, INC.,
a Delaware corporation (“Parent”), AUTODATA,
INC., a Delaware corporation, AUTODATA SOLUTIONS, INC., a Delaware corporation,
CARSDIRECT MORTGAGE SERVICES, INC., a Delaware corporation, CD1FINANCIAL.COM,
LLC, a Delaware limited liability company, INTERNET MEDIA SOLUTIONS, INC., a
California corporation, and LOANAPP, INC., a Delaware corporation (each a “Borrower” and, collectively, “Borrowers”),
provides the terms on which Bank shall lend to Borrowers and Borrowers 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.  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.


 


2                                         LOAN
AND TERMS OF PAYMENT


 


2.1                               Promise
to Pay.  Borrowers hereby
unconditionally promise 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.


 


2.1.1                     Revolving
Advances.


 


(a)                                  Availability.  Subject to the terms and conditions of this
Agreement, Bank shall make Advances not exceeding the Availability Amount.  Amounts borrowed hereunder may be repaid and,
prior to the Revolving Line Maturity Date, reborrowed, subject to the
applicable terms and conditions precedent herein.


 


(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.  Borrower may at any time and from time to
time prepay all or any portion of Advances, together with related unpaid
interest thereon.  With regards to Prime
Rate Advances, such prepayments may be made without premium or penalty.  With regards to LIBOR Advances, such prepayments
shall be made subject to the provisions of Sections 3.6 and 3.7 hereof.


 


2.1.2                     Letters of
Credit Sublimit.


 


(a)                                  As
part of the Revolving Line, Bank shall issue or have issued Letters of Credit
for Borrowers’ account.  Such aggregate
amounts utilized hereunder shall at all times reduce the amount otherwise
available for Advances under the Revolving Line.  The face amount of outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit and any Letter of
Credit Reserve) may not exceed the lesser of (I) Ten Million Dollars
($10,000,000) minus any amounts used for Cash Management Services and minus the
FX Reserve or (II) the Revolving Line, minus the outstanding
principal amount of any Advances (including any amounts used for Cash Management
Services and the face amount of any outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) and
minus the FX Reserve.  If, on the
Revolving Line Maturity Date, there are any outstanding Letters of Credit, then
on such date Borrowers shall provide to Bank cash collateral in an amount equal
to one hundred percent (100%) 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 good faith business judgment), to secure all of
the Obligations relating to said Letters of Credit.  All Letters of Credit shall be in form and
substance acceptable to Bank in its sole discretion and shall be subject to the
terms and conditions of Bank’s standard Application and Letter of Credit
Agreement (the “Letter of Credit Application”).  Borrowers agree to execute any further
documentation in connection with the Letters of Credit as Bank may reasonably
request.  


 

















 


Borrowers
further agree to be bound by the regulations and interpretations of the issuer
of any Letters of Credit guaranteed by Bank and opened for Borrowers’ account
or by Bank’s interpretations of any Letter of Credit issued by Bank for
Borrowers’ account, and Borrowers understand and agree that Bank shall not be
liable for any error, negligence, or mistake, whether of omission or
commission, in following Borrowers’ instructions or those contained in the
Letters of Credit or any modifications, amendments, or supplements thereto.


 


(b)                                 The
obligation of Borrowers to immediately reimburse Bank for drawings made under
Letters of Credit shall be absolute, unconditional, and irrevocable, and shall
be performed strictly in accordance with the terms of this Agreement, such
Letters of Credit, and the Letter of Credit Application.


 


2.1.3                     Foreign
Exchange Sublimit.  As part of the
Revolving Line, Borrowers may enter into foreign exchange contracts with Bank
under which Borrowers commit to purchase from or sell to Bank a specific amount
of Foreign Currency (each, a “FX Forward Contract”)
on a specified date (the “Settlement Date”).  FX Forward Contracts shall have a Settlement
Date of at least one (1) FX Business Day after the contract date and shall
be subject to a reserve of ten percent (10%) of each outstanding FX Forward
Contract in a maximum aggregate amount equal to Ten Million Dollars
($10,000,000) minus the face amount of outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit) and any amounts used for Cash
Management Services (the “FX Reserve”).  The aggregate amount of FX Forward Contracts
at any one time may not exceed ten (10) times the amount of the FX
Reserve.  The amount otherwise available
for Credit Extensions under the Revolving Line shall be reduced by an amount
equal to ten percent (10%) of each outstanding FX Forward Contract (the “FX Reduction Amount”).  Any amounts needed to fully
reimburse Bank will be treated as Advances under the Revolving Line and will
accrue interest at the interest rate applicable to Advances.


 


2.1.4                     Cash
Management Services Sublimit. 
Borrowers may use up to Ten Million Dollars ($10,000,000), minus the
face amount of outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit) and the FX Reserve, of the Revolving Line for Bank’s cash
management services which may include merchant services, direct deposit of
payroll, business credit card, and check cashing services identified in Bank’s
various cash management services agreements (collectively, the “Cash Management Services”). 
Any amounts Bank pays on behalf of Borrowers for any Cash Management
Services will be treated as Advances under the Revolving Line and will accrue
interest at the interest rate applicable to Advances.


 


2.2                               General
Provisions Relating to the Advances. 
Each Advance shall, at Parent’s option in accordance with the terms of
this Agreement, be either in the form of a Prime Rate Advance or a LIBOR
Advance; provided that in no event shall
Borrowers maintain at any time LIBOR Advances having more than five (5) different
Interest Periods.  Borrowers shall pay
interest accrued on the Advances at the rates and in the manner set forth in Section 2.3(b).


 


2.3                               Payment
of Interest on the Credit Extensions.


 


(a)                                  Computation
of Interest.  Interest on the Credit
Extensions and all fees payable hereunder shall be computed on the basis of a
three hundred sixty 360-day year and the actual number of days elapsed in the
period during which such interest accrues. 
In computing interest on any Credit Extension, the date of the making of
such 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.


 


(b)                                 Advances.  Each
Advance shall bear interest on the outstanding principal amount thereof from
the date when made, continued or converted until paid in full at a rate per annum equal to the Prime Rate plus the Prime Rate Margin
or the LIBOR Rate plus the LIBOR Rate Margin, as the case may be.  On and after the expiration of any Interest
Period applicable to any LIBOR Advance outstanding on the date of occurrence of
an Event of Default or acceleration of the Obligations, the Effective Amount of
such LIBOR Advance shall, during the continuance of such Event of Default or
after acceleration, bear interest at a rate per annum equal to the Prime Rate
plus two percent (2.00%).  Pursuant to
the terms hereof, interest on each Advance shall be paid in arrears on each
Interest Payment Date.  Interest shall
also be paid on the date of any prepayment of any Advance pursuant to this
Agreement for the portion of any Advance so prepaid and upon payment (including
prepayment) in full thereof.  All accrued
but unpaid interest on the Advances shall be due and payable on the Revolving
Line Maturity Date.


 


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(c)                                  Default
Interest.  Except as otherwise
provided in Section 2.3(b), after an Event of Default, Obligations shall
bear interest two percent (2.00%) above the rate that is otherwise applicable
thereto (the “Default Rate”).  Payment or acceptance of the increased
interest provided in this Section 2.3(c) 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.


 


(d)                                 Prime
Rate Advances.  Each change in the
interest rate of the Prime Rate Advances based on changes in the Prime Rate
shall be effective on the effective date of such change and to the extent of
such change.  Bank shall use its best
efforts to give Parent prompt notice of any such change in the Prime Rate; provided, however, that any failure by Bank to provide
Parent with notice hereunder shall not affect Bank’s right to make changes in
the interest rate of the Prime Rate Advances based on changes in the Prime
Rate.


 


(e)                                  LIBOR
Advances.  The interest rate
applicable to each LIBOR Advance shall be determined in accordance with Section 3.6(a) hereunder.  Subject to Sections 3.6 and 3.7, such rate
shall apply during the entire Interest Period applicable to such LIBOR Advance,
and interest calculated thereon shall be payable on the Interest Payment Date
applicable to such LIBOR Advance.


 


(f)                                    Debit
of Accounts.  Bank may debit any of
Borrowers’ deposit accounts, including the Designated Deposit Account, for
principal and interest payments when due, or any other amounts Borrowers owe
Bank, when due.  Bank shall use its best
efforts to notify Parent as soon as is practical of any debits to a Borrower’s
accounts.  These debits shall not
constitute a set-off.


 


2.4                               Fees.  Borrowers shall pay to Bank:


 


(a)                                  Commitment
Fee.  A fully earned, non-refundable
commitment fee of Fifty Two Thousand Five Hundred Dollars ($52,500), on the
Effective Date;


 


(b)                                 Letter
of Credit Fee.  Bank’s customary fees
and expenses for the issuance or renewal of Letters of Credit, including,
without limitation, a fee equal to the applicable Letter of Credit Fee, per
annum of the face amount of each Letter of Credit issued, upon the issuance,
each anniversary of the issuance, and the renewal of such Letter of Credit by
Bank;


 


(c)                                  Unused
Revolving Line Facility Fee.  A fee
(the “Unused Revolving Line Facility Fee”),
payable quarterly, in arrears, on a calendar year basis, in an amount equal to
three eighths of one percent (0.375%) per annum of the average unused portion
of the Revolving Line, as determined by Bank; provided however that the Unused
Revolving Line Facility Fee shall not be payable for the quarter ending December 31,
2008, unless Borrowers request the first Advance under the Revolving Line on or
prior to that date.  The unused portion of the Revolving Line, for
the purposes of this calculation, shall include amounts reserved under the Cash
Management Services Sublimit for products provided and under the Foreign
Exchange Sublimit for FX Forward Contracts. 
Borrowers shall not be entitled to any credit, rebate or
repayment of any Unused Revolving Line Facility Fee previously earned by Bank
pursuant to this Section notwithstanding any termination of the Agreement
or the suspension or termination of Bank’s obligation to make loans and
advances hereunder; and


 


(d)                                 Bank
Expenses.  All Bank Expenses (including
reasonable attorneys’ fees and expenses) incurred through and after the
Effective Date, when due. 
Notwithstanding the foregoing, attorney’s fees, photocopy, fax and
delivery charges, incurred on or prior to the Effective Date shall not exceed
Twenty Thousand Dollars ($20,000), provided however (i) such fee cap shall
be conditioned on a normal level of and reasonable approach to the negotiation
of the Loan Documents, satisfactory review of the consolidated and
consolidating financials of Borrowers and their Subsidiaries, Loan Documents
based on the “non-syndicated” forms of documents and a co-borrower structure
consisting of all domestic subsidiaries of Borrowers and (ii) out of
pocket costs for diligence and fees for diligence (including UCC and IP
filings) shall not be subject to such fee cap nor will such fees and costs be
subject to any law firm surcharge.  Bank
hereby acknowledges receipt of a Twenty Five Thousand Dollar ($25,000) deposit
from Borrower which shall be applied to Bank Expenses owing on the Closing
Date.


 


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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 Borrowers shall consent to or have delivered, 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 to which they are a party;


 


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


 


(c)                                  the
Operating Documents and good standing certificates of each Borrower certified
by the Secretaries of State of the states in which such Borrower is licensed to
do business as of a date no earlier than thirty (30) days prior to the
Effective Date;


 


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


 


(e)                                  certified
copies, dated as of a recent date, of financing statement searches, as Bank
shall request, accompanied by written evidence (including any 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;


 


(f)                                    the
Perfection Certificate executed by Parent;


 


(g)                                 evidence
satisfactory to Bank that the insurance policies required by Section 6.5
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


 


(h)                                 payment
of the fees and Bank Expenses then due as specified in Section 2.4 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:


 


(a)                                  except
as otherwise provided in Section 3.4(a), timely receipt of an executed
Payment/Advance Form;


 


(b)                                 the
representations and warranties in Section 5 shall be true in all material
respects on the date of the Payment/Advance Form 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 each Borrower’s representation and warranty on that date that the
representations and warranties in Section 5 remain true 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)                                  in
Bank’s sole discretion, there has not been a Material Adverse Change.


 


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


 


3.4                               Procedure
for the Borrowing of Advances.


 


(a)                                  Subject
to the prior satisfaction of all other applicable conditions to the making of
an Advance set forth in this Agreement, each Advance shall be made upon
Borrowers’ irrevocable written notice delivered to Bank in the form of a Notice
of Borrowing, each executed by a Responsible Officer of Parent or his or her
designee or without instructions if the Advances are necessary to meet
Obligations which have become due.  Bank
may rely on any telephone notice given by a person whom Bank believes is a
Responsible Officer or designee. 
Borrowers will indemnify Bank for any loss Bank suffers due to such
reliance.  Such Notice of Borrowing must
be received by Bank prior to 12:00 p.m. Pacific time, (i) at least three (3) Business
Days prior to the requested Funding Date, in the case of LIBOR Advances, and (ii) on the
requested Funding Date, in the case of Prime Rate Advances, specifying:


 


(i)                                     the
amount of the Advance, which, if a LIBOR Advance is requested, shall be in an
aggregate minimum principal amount of One Million Dollars ($1,000,000);


 


(ii)                                  the
requested Funding Date;


 


(iii)                               whether
the Advance is to be comprised of LIBOR Advances or Prime Rate Advances; and


 


(iv)                              the
duration of the Interest Period applicable to any such LIBOR Advances included
in such notice which shall be one (1) month, two (2) months or three (3) months;
provided that if the Notice of Borrowing
shall fail to specify the duration of the Interest Period for any Advance
comprised of LIBOR Advances, such Interest Period shall be one (1) month.


 


(b)                                 The
proceeds of all such Advances will then be made available to Borrowers on the
Funding Date by Bank by transfer to the Designated Deposit Account and,
subsequently, by wire transfer to such other account as Parent may instruct in
the Notice of Borrowing.  No Advances
shall be deemed made to Borrowers, and no interest shall accrue on any such
Advance, until the related funds have been deposited in the Designated Deposit
Account.


 


3.5                               Conversion
and Continuation Elections.


 


(a)                                  So
long as (i) no Event of Default or Default exists; (ii) no Borrower
shall have sent any notice of termination of this Agreement; and (iii) Borrowers
shall have complied with such customary procedures as Bank has established from
time to time for Borrowers’ requests for LIBOR Advances, Borrowers may, upon
irrevocable written notice to Bank:


 


(i)                                     elect
to convert on any Business Day, Prime Rate Advances in an amount equal to One
Million Dollars ($1,000,000) or any amount in excess thereof;


 


(ii)                                  elect
to continue on any Interest Payment Date any LIBOR Advances maturing on such
Interest Payment Date (or any part thereof in an amount equal to One Million
Dollars ($1,000,000) or any amount in excess thereof); provided,
that if the aggregate amount of LIBOR Advances shall have been reduced, by
payment, prepayment, or conversion of part thereof, to be less than One Million
Dollars ($1,000,000), such LIBOR Advances shall automatically convert into
Prime Rate Advances, and on and after such date the right of Borrowers to
continue such Advances as, and convert such Advances into, LIBOR Advances shall
terminate; or


 


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(iii)                               elect
to convert on any Interest Payment Date any LIBOR Advances maturing on such
Interest Payment Date (or any part thereof in an amount equal to One Million
Dollars ($1,000,000) or any amount in excess thereof) into Prime Rate Advances.


 


(b)                                 Parent
shall deliver a Notice of Conversion/Continuation in accordance with the terms
hereof to be received by Bank prior to 12:00 p.m. Pacific time (i) at least
three (3) Business Days in advance of the Conversion Date or Continuation
Date, if any Advances are to be converted into or continued as LIBOR Advances;
and (ii) on
the Conversion Date, if any Advances are to be converted into Prime Rate
Advances, in each case specifying the:


 


(i)                                     proposed
Conversion Date or Continuation Date;


 


(ii)                                  aggregate
amount of the Advances to be converted or continued which, if any Advances are
to be converted into or continued as LIBOR Advances, shall be in an aggregate
minimum principal amount of One Million Dollars ($1,000,000) or any amount in
excess thereof;


 


(iii)                               nature
of the proposed conversion or continuation; and


 


(iv)                              duration
of the requested Interest Period.


 


(c)                                  If
upon the expiration of any Interest Period applicable to any LIBOR Advances,
Borrowers shall have timely failed to select a new Interest Period to be
applicable to such LIBOR Advances, Borrowers shall be deemed to have elected to
convert such LIBOR Advances into Prime Rate Advances.


 


(d)                                 Any
LIBOR Advances shall, at Bank’s option, convert into Prime Rate Advances in the
event that (i) an Event of Default or Default shall exist, or (ii) the
aggregate principal amount of the Prime Rate Advances which have been
previously converted to LIBOR Advances, or the aggregate principal amount of
existing LIBOR Advances continued, as the case may be, at the beginning of an
Interest Period shall at any time during such Interest Period exceed the
Revolving Line.  Borrowers agree to pay
Bank, upon demand by Bank (or Bank may, at its option, charge the Designated
Deposit Account or any other account any Borrower maintains with Bank) any
amounts required to compensate Bank for any loss (including loss of anticipated
profits), cost, or expense incurred by Bank, as a result of the conversion of
LIBOR Advances to Prime Rate Advances pursuant to any of the foregoing.


 


(e)                                  Notwithstanding
anything to the contrary contained herein, Bank shall not be required to
purchase United States Dollar deposits in the London interbank market or other
applicable LIBOR market to fund any LIBOR Advances, but the provisions hereof
shall be deemed to apply as if Bank had purchased such deposits to fund the
LIBOR Advances.


 


3.6                               Special
Provisions Governing LIBOR Advances.


 


Notwithstanding any other provision of this Agreement
to the contrary, the following provisions shall govern with respect to LIBOR
Advances as to the matters covered:


 


(a)                                  Determination
of Applicable Interest Rate.  As soon
as practicable on each Interest Rate Determination Date, Bank shall determine
(which determination shall, absent manifest error in calculation, be final,
conclusive and binding upon all parties) the interest rate that shall apply to
the LIBOR Advances for which an interest rate is then being determined for the
applicable Interest Period and shall promptly give notice thereof (in writing
or by telephone and confirmed in writing) to Parent.


 


(b)                                 Inability
to Determine Applicable Interest Rate. 
In the event that Bank shall have determined (which determination shall
be final and conclusive and binding upon all parties hereto), on any Interest
Rate Determination Date with respect to any LIBOR Advance, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Advance on the
basis provided for in the definition of LIBOR, Bank shall on such date give
notice (by facsimile or by 


 


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telephone confirmed in
writing) to Parent of such determination, whereupon (i) no Advances may be
made as, or converted to, LIBOR Advances until such time as Bank notifies
Parent that the circumstances giving rise to such notice no longer exist, and (ii) any
Notice of Borrowing or Notice of Conversion/Continuation given by any Borrower
with respect to Advances in respect of which such determination was made shall
be deemed to be rescinded by Borrowers.


 


(c)                                  Compensation
for Breakage or Non-Commencement of Interest Periods.  Borrowers shall compensate Bank, upon written
request by Bank (which request shall set forth the manner and method of
computing such compensation), for all reasonable losses, expenses and
liabilities, if any (including any interest paid by Bank to lenders of funds
borrowed by it to make or carry its LIBOR Advances and any loss, expense or
liability incurred by Bank in connection with the liquidation or re-employment
of such funds) such that Bank may incur: (i) if for any reason (other than
a default by Bank or due to any failure of Bank to fund LIBOR Advances due to
impracticability or illegality under Sections 3.7(d) and 3.7(e)) a
borrowing or a conversion to or continuation of any LIBOR Advance does not
occur on a date specified in a Notice of Borrowing or a Notice of
Conversion/Continuation, as the case may be, or (ii) if any principal
payment or any conversion of any of its LIBOR Advances occurs on a date prior
to the last day of an Interest Period applicable to that Advance.


 


(d)                                 Assumptions
Concerning Funding of LIBOR Advances. 
Calculation of all amounts payable to Bank under this Section 3.6
and under Section 3.4 shall be made as though Bank had actually funded
each of its relevant LIBOR Advances through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to the definition of
LIBOR Rate in an amount equal to the amount of such LIBOR Advance and having a
maturity comparable to the relevant Interest Period; provided,
however, that Bank may fund each of its LIBOR Advances in any manner
it sees fit and the foregoing assumptions shall be utilized only for the
purposes / calculating amounts payable under this Section 3.6 and under Section 3.4.


 


(e)                                  LIBOR
Advances After Default.  After the
occurrence and during the continuance of an Event of Default, (i) Borrowers
may not elect to have an Advance be made or continued as, or converted to, a
LIBOR Advance after the expiration of any Interest Period then in effect for
such Advance and (ii) subject to the provisions of Section 3.6(c),
any Notice of Conversion/Continuation given by Borrowers with respect to a
requested conversion/continuation that has not yet occurred shall be deemed to
be rescinded by Borrowers and be deemed a request to convert or continue
Advances referred to therein as Prime Rate Advances.


 


3.7                               Additional
Requirements/Provisions Regarding LIBOR Advances.


 


(a)                                  If
for any reason (including voluntary or mandatory prepayment or acceleration),
Bank receives all or part of the principal amount of a LIBOR Advance prior to
the last day of the Interest Period for such Advance, Borrowers shall
immediately notify Borrowers’ account officer at Bank and, on demand by Bank,
pay Bank the amount (if any) by which (i) the additional interest which
would have been payable on the amount so received had it not been received
until the last day of such Interest Period exceeds (ii) the interest which
would have been recoverable by Bank by placing the amount so received on
deposit in the certificate of deposit markets, the offshore currency markets,
or United States Treasury investment products, as the case may be, for a period
starting on the date on which it was so received and ending on the last day of
such Interest Period at the interest rate determined by Bank in its reasonable
discretion.  Bank’s determination as to
such amount shall be conclusive absent manifest error.


 


(b)                                 Borrowers
shall pay Bank, upon demand by Bank, from time to time such amounts as Bank may
determine to be necessary to compensate it for any costs incurred by Bank that
Bank determines are attributable to its making or maintaining of any amount
receivable by Bank hereunder in respect of any Advances relating thereto (such
increases in costs and reductions in amounts receivable being herein called “Additional Costs”), in each case resulting from any
Regulatory Change which:


 


(i)                                     changes
the basis of taxation of any amounts payable to Bank under this Agreement in
respect of any Advances (other than changes which affect taxes measured by or
imposed on the overall net income of Bank by the jurisdiction in which Bank has
its principal office);


 


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(ii)                                  imposes
or modifies any reserve, special deposit or similar requirements relating to
any extensions of credit or other assets of, or any deposits with, or other
liabilities of Bank (including any Advances or any deposits referred to in the
definition of LIBOR); or


 


(iii)                               imposes
any other condition affecting this Agreement (or any of such extensions of
credit or liabilities).


 


Bank will notify Parent
of any event occurring after the Closing Date which will entitle Bank to
compensation pursuant to this Section 3.7 as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation.  Bank will furnish Parent with a statement
setting forth the basis and amount of each request by Bank for compensation
under this Section 3.7. 
Determinations and allocations by Bank for purposes of this Section 3.7
of the effect of any Regulatory Change on its costs of maintaining its
obligations to make Advances, of making or maintaining Advances, or on amounts
receivable by it in respect of Advances, and of the additional amounts required
to compensate Bank in respect of any Additional Costs, shall be conclusive
absent manifest error.


 


(c)                                  If
Bank shall determine that the adoption or implementation of any applicable law,
rule, regulation, or treaty regarding capital adequacy, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by Bank (or its
applicable lending office) with any respect or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank,
or comparable agency, has or would have the effect of reducing the rate of
return on capital of Bank or any person or entity controlling Bank (a “Bank  Parent”) as a
consequence of its obligations hereunder to a level below that which Bank (or
its Bank Parent) could have achieved but for such adoption, change, or
compliance (taking into consideration policies with respect to capital
adequacy) by an amount deemed by Bank to be material, then from time to time,
within fifteen (15) days after demand by Bank, Borrowers shall pay to Bank such
additional amount or amounts as will compensate Bank for such reduction.  A statement of Bank claiming compensation
under this Section 3.7(c) and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive absent manifest error.


 


(d)                                 If,
at any time, Bank, in its sole and absolute discretion, determines that (i) the
amount of LIBOR Advances for periods equal to the corresponding Interest
Periods are not available to Bank in the offshore currency interbank markets,
or (ii) LIBOR does not accurately reflect the cost to Bank of lending the
LIBOR Advances, then Bank shall promptly give notice thereof to Parent.  Upon the giving of such notice, Bank’s
obligation to make the LIBOR Advances shall be suspended until such capability
is restored provided, however, Advances shall not be
suspended if Bank and Borrowers agree in writing to a different interest rate
applicable to LIBOR Advances.


 


(e)                                  If
it shall become unlawful for Bank to continue to fund or maintain any LIBOR
Advances, or to perform its obligations hereunder, upon demand by Bank,
Borrowers shall prepay the Advances in full with accrued interest thereon and
all other amounts payable by Borrowers hereunder (including, without
limitation, any amount payable in connection with such prepayment pursuant to Section 3.7(a))
and such Advances shall be replaced with a Prime Rate Advance.  Notwithstanding the foregoing, to the extent
a determination by Bank as described above relates to a LIBOR Advance then
being requested by Borrowers pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, Borrowers shall have the option, subject to the
provisions of Section 3.6(c), to (i) rescind such Notice of Borrowing
or Notice of Conversion/Continuation by giving notice (by facsimile or by
telephone confirmed in writing) to Bank of such rescission on the date on which
Bank gives notice of its determination as described above, or (ii) modify
such Notice of Borrowing or Notice of Conversion/Continuation to obtain a Prime
Rate Advance or to have outstanding Advances converted into or continued as
Prime Rate Advances by giving notice (by facsimile or by telephone and confirmed
in writing) to Bank of such modification on the date on which Bank gives notice
of its determination as described above.


 


4                                         CREATION
OF SECURITY INTEREST


 


4.1                               Grant
of Security Interest.  Each 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, 


 


8

















 


wherever located, whether
now owned or hereafter acquired or arising, and all proceeds and products
thereof.  Each 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 may have superior priority to
Bank’s Lien under this Agreement).  If
any Borrower shall acquire a commercial tort claim, Borrowers shall promptly
notify Bank in a writing signed by such 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.


 


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 and at such time as Bank’s obligation to make
Credit Extensions has terminated, Bank shall, at Borrowers’ sole cost and
expense, release its Liens in the Collateral and all rights therein shall
revert to Borrowers.


 


4.2                               Authorization
to File Financing Statements.  Each
Borrower hereby authorizes Bank to file financing statements, without notice to
any 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 a 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.


 


5                                         REPRESENTATIONS
AND WARRANTIES


 


Each Borrower represents and warrants as follows:


 


5.1                               Due
Organization, Authorization; Power and Authority.  Each 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 such Borrower’s business.  In connection with this Agreement, Parent has
delivered to Bank a completed certificate signed by Parent, entitled “Perfection
Certificate”.  Parent represents and
warrants to Bank that (a) Parent’s and each other Borrower’s exact legal
name is that indicated on the Perfection Certificate and Parent’s exact legal
name is listed on the signature page thereof; (b) each 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 each Borrower’s organizational identification number; (d) the
Perfection Certificate accurately sets forth each Borrower’s place of business,
or, if more than one, its chief executive office as well as each Borrower’s mailing
address (if different than its chief executive office); (e) except as set
forth in the Perfection Certificate, each 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 number assigned by its jurisdiction; and (f) all other
information set forth on the Perfection Certificate pertaining to each Borrower
and each of their Subsidiaries is accurate and complete (it being understood and agreed that Borrowers
may from time to time update certain information in the Perfection Certificates
after the Effective Date to the extent permitted by one or more specific
provisions in this Agreement).  If
any Borrower is not now a Registered Organization but later becomes one, such
Borrower shall promptly notify Bank of such occurrence and provide Bank with
such Borrower’s organizational identification number.


 


The execution, delivery and performance by Borrowers
of the Loan Documents to which they are a party have been duly authorized, and
do not (i) conflict with any of Borrowers’ 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 any 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) constitute an event of default under any material agreement by which
any Borrower is bound.  No Borrower is in
default under any agreement to which it is a party or by which it is bound in
which the default could have a material adverse effect on such Borrower’s
business taken as a whole.


 


9

















 


5.2                               Collateral.  Each Borrower has good title to, has 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.  No Borrower has deposit
accounts other than the deposit accounts with Bank, the deposit accounts, if
any, described in the Perfection Certificate delivered to Bank in connection
herewith, or of which such Borrower has given Bank notice and taken such actions
as are necessary to give Bank a perfected security interest therein.


 


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.  In the event that any Borrower, after the
date hereof, intends to store or otherwise deliver any portion of the Collateral
to a bailee, then such Borrower will first receive the written consent of Bank
and such bailee must execute and deliver a bailee agreement in form and
substance satisfactory to Bank in its sole discretion.


 


Each Borrower is the sole owner of its
intellectual property, except for non-exclusive licenses granted to its
customers in the ordinary course of business. 
Each patent is valid and enforceable, and no part of the intellectual
property has been judged invalid or unenforceable, in whole or in part, and to
the best of such 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 could not reasonably be expected to have a material adverse
effect on a Borrower’s business.  Except
as noted on the Perfection Certificate, no Borrower is a party to, or is bound
by, any material license or other agreement with respect to which such Borrower
is the licensee (a) that prohibits or otherwise restricts such Borrower
from granting a security interest in such 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 the Bank’s right to sell any
Collateral.  Borrowers shall provide written
notice to Bank within ten (10) days of entering or becoming bound by any
such license or agreement (other than over-the-counter software that is
commercially available to the public). 
Borrowers shall take such steps as Bank requests to obtain the consent
of, or waiver by, any person whose consent or waiver is necessary for (x) all
such licenses or agreements 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 license or agreement, whether now existing or
entered into in the future, and (y) 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.


 


5.3                               Intentionally
Omitted.


 


5.4                               Litigation.  Except as otherwise disclosed in Borrower’s
public filings, there are no actions or proceedings pending or, to the
knowledge of the Responsible Officers, threatened in writing by or against any
Borrower or any of its Subsidiaries involving more than Five Hundred Thousand
Dollars ($500,000).


 


5.5                               No
Material Deviation in Financial Statements. 
All consolidated financial statements for Borrowers and any of their
Subsidiaries delivered to Bank fairly present in all material respects each
Borrower’s consolidated financial condition and each Borrower’s consolidated
results of operations.  There has not
been any material deterioration in any 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 Borrowers’ assets
(including goodwill minus disposition costs) exceeds the fair value of their
liabilities; Borrowers are not left with unreasonably small capital after the
transactions in this Agreement; and Borrowers are able to pay their debts
(including trade debts) as they mature.


 


5.7                               Regulatory
Compliance.  No Borrower is an “investment
company” or a company “controlled” by an “investment company” under the
Investment Company Act of 1940, as amended. 
No Borrower is 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).  Each Borrower has
complied in all material respects with the Federal Fair Labor Standards
Act.  No Borrower nor any of its
Subsidiaries is a “holding company” or an “affiliate” of a “holding company” or
a “subsidiary company” of a “holding company” as each term is defined and used
in the Public Utility Holding Company Act of 2005.  No Borrower has violated any laws, ordinances
or rules, the violation of which could reasonably be expected to have a
material adverse effect on its business. 
No Borrower’s or any of its Subsidiaries’ properties or assets has been
used by any Borrower or any Subsidiary or, to the best of such 


 


10

















 


Borrower’s knowledge, by
previous Persons, in disposing, producing, storing, treating, or transporting
any hazardous substance other than legally. 
Each 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 Government Authorities that are necessary to continue
their respective businesses as currently conducted, except for any such
consents, approvals authorizations and notices that could not reasonably be
expected to have a material adverse effect on Borrower’s business, taken as
whole.


 


5.8                               Subsidiaries;
Investments.  No Borrower owns any
stock, partnership interest or other equity securities except for Permitted
Investments.


 


5.9                               Tax
Returns and Payments; Pension Contributions.  Each Borrower has timely filed all required
tax returns and reports, and each Borrower has timely paid all foreign,
federal, state and local taxes, assessments, deposits and contributions owed by
such Borrower.  Borrowers may defer
payment of any contested taxes, provided that such Borrower (a) in good
faith contests its obligation to pay the taxes by appropriate proceedings
promptly and diligently instituted and conducted, (b) notifies Bank in
writing of the commencement of, and any material development in, the
proceedings, (c) posts bonds or takes 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”.  No Borrower is aware of any claims or
adjustments proposed for any Borrower’s prior tax years which could result in
additional taxes becoming due and payable by any Borrower.  Each Borrower has paid all amounts necessary
to fund all present pension, profit sharing and deferred compensation plans in
accordance with their terms, and no Borrower has 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 any Borrower, including
any liability to the Pension Benefit Guaranty Corporation or its successors or
any other governmental agency.


 


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


 


5.11                        Full
Disclosure.  No written
representation, warranty or other statement of any 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
Borrowers 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).


 


6                                         AFFIRMATIVE
COVENANTS


 


Each 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 a Borrower’s business or operations taken as
a whole.  Each Borrower shall comply, and
have each Subsidiary comply, with all laws, ordinances and regulations to which
it is subject, noncompliance with which could have a material adverse effect on
Borrower’s business taken as a whole.


 


(b)                                 Obtain
all of the Governmental Approvals necessary for the performance by such
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.  Borrowers shall promptly provide copies of
any such obtained Governmental Approvals to Bank.


 


11
















 


6.2                               Financial
Statements, Reports, Certificates.


 


(a)                                  Parent
shall deliver to Bank:  (i) as soon
as available, but no later than five (5) days after filing with the
Securities Exchange Commission, Parent’s 10K, 10Q, and 8K reports; (ii) a
Compliance Certificate together with delivery of the 10K and 10Q reports; (iii) within
thirty (30) days after the earlier of the end of each fiscal year or approval
thereof by Parent’s board of directors, annual financial projections for the
following fiscal year (on a quarterly basis) as approved by Parent’s board of
directors, together with any related business forecasts used in the preparation
of such annual financial projections; (iv) at Bank’s reasonable request, a
prompt report of any legal actions pending or threatened against a Borrower or
any Subsidiary that Borrower reasonably expects could result in a material
adverse effect on Borrower’s business, taken as a whole; and (v) at Bank’s
reasonable request, budgets, sales projections, operating plans or other
financial information.


 


Parent’s 10K, 10Q, and 8K reports required to be
delivered pursuant to Section 6.2(a)(i) shall be deemed to have been
delivered on the date on which Parent posts such report or provides a link
thereto on Parent’s or another website on the Internet; provided, that
Parent shall provide paper copies to Bank of the Compliance Certificates
required by Section 6.2(a)(ii).


 


(b)                                 Within
forty five (45) days after the last day of each month, Parent shall deliver to
Bank consolidated monthly  balance sheets
covering Borrowers’ and their Subsidiaries consolidated operations together
with a duly completed Compliance Certificate signed by a Responsible Officer of
Parent setting forth calculations showing compliance with the financial
covenants set forth in this Agreement.


 


(c)                                  As
soon as available, but no later than one hundred fifty (150) days after the
last day of Parent’s fiscal year, Parent shall deliver to Bank audited
consolidated financial statements prepared under GAAP , consistently applied,
covering Borrowers’ and their Subsidiaries consolidated operations, together
with an unqualified opinion on the financial statements from an independent
certified public accounting firm acceptable to Bank in its reasonable
discretion


 


(d)                                 Within
forty five (45) days after the last day of each quarter, Parent shall deliver
to Bank (i) a cash balance report, including account statements detailing
cash management types of investments held and maturity dates, and (ii) a
report of all Permitted Acquisitions in substantially the form attached here to
as Exhibit G including an EBITDA calculation for each such Permitted
Acquisition.


 


(e)                                  Borrowers’
shall allow Bank to audit Borrowers’ Collateral at Borrowers’ expense.  Such audits shall be conducted no more often
than once every twelve (12) months unless an Event of Default has occurred and
is continuing.


 


6.3                               Inventory;
Returns.  Keep all Inventory in good
and marketable condition, free from material defects.  Returns and allowances between a Borrower and
its Account Debtors shall follow such Borrower’s customary practices as they
exist at the Effective Date.  Borrowers
must promptly notify Bank of all returns, recoveries, disputes and claims that
involve more than One Million Five Hundred Thousand Dollars ($1,500,000).


 


6.4                               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 file, all
foreign, federal, state and local taxes, assessments, deposits and
contributions owed by each 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.


 


6.5                               Insurance.  Keep its business and the Collateral insured
for risks and in amounts standard for companies in such Borrower’s industry and
location and as Bank may reasonably request. 
Insurance policies shall be in a form, with companies, and in amounts
that are satisfactory to Bank. All property policies shall have a lender’s loss
payable endorsement showing Bank as lender loss payee and waive subrogation
against Bank, and all liability policies shall show, or have endorsements
showing, Bank as an additional insured. 
All policies (or the loss payable and additional insured endorsements)
shall provide that the insurer shall endeavor to give Bank at least 


 


12

















 


twenty (20) days notice
before canceling, amending to reduce coverage , or declining to renew its
policy.  At Bank’s request, Borrowers
shall deliver true and correct copies of policies and evidence of all premium
payments.   If a Borrower fails to obtain
insurance as required under this Section 6.5 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 6.5.


 


6.6                               Operating
Accounts.


 


(a)                                  At
all times after January 31, 2009 and prior to implementation of the
Accordion Feature, maintain Borrowers’ and their Subsidiaries’ primary domestic
operating and other deposit accounts with Bank which accounts shall represent
at least the greater of (i) average monthly balances not less than Three
Million Dollars ($3,000,000) or (ii) eighty-five percent (85%) of the
dollar value of Borrowers’ and such Subsidiaries’ cash held in deposit or
operating accounts at all banks.


 


(b)                                 At
all times after implementation of the Accordion Feature, maintain Borrowers’
and their Subsidiaries’ primary operating and other deposit accounts with Bank
which accounts shall have average monthly balances not less than Three Million
Dollars ($3,000,000) at all times.


 


(c)                                  At
all times after the date which is thirty (30) days after the Effective Date and
for so long as Borrowers and Borrowers’ Subsidiaries hold at least Twenty
Million Dollars ($20,000,000) in Cash and Cash Equivalents and Investments
Available for Sale (determined in accordance with GAAP), Borrowers shall
maintain at least Ten Million Dollars ($10,000,000) in any accounts at Bank of
Borrower’s choosing.  Bank and Borrower
hereby agree that should Bank’s money market or bank accounts have a ratings
decline by a recognized ratings agency, Borrower shall be permitted to instead
maintain such funds in a Money Market Mutual Fund offered by SVB Securities (in
which the underlying assets are not associated with SVB) that would comply with
Borrower’s investment policy. Borrower will also commit to promptly work with
Bank to identify other Bank products and services that Borrower could purchase
to provide similar value to Bank as such previously maintained accounts.


 


(d)                                 Borrowers
agree to promptly evaluate Bank and Bank’s Affiliates asset management products
and services for additional investments by Borrowers.


 


(e)                                  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 a Borrower at any time maintains, such 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.  The provisions of the previous sentence shall
not apply to deposit accounts exclusively used for payroll, payroll taxes and
other employee wage and benefit payments to or for the benefit of a Borrower’s
employees and identified to Bank by Borrowers as such.


 


6.7                               Financial
Covenants.  Borrowers shall maintain,
on a consolidated basis with respect to Borrowers and their Subsidiaries, the
following financial ratios and covenants:


 


(a)                                  Adjusted
Quick Ratio. Measured monthly, a ratio of Quick Assets to Current
Liabilities minus Deferred Revenue of at least 1.00 to 1.00.


 


(b)                                 EBITDA.  Measured as of the end of each calendar
quarter during the following periods, quarterly EBITDA of at least the
following:


 


(i)                                     If
the total amount of outstanding Obligations is less than Ten Million Dollars
($10,000,000) at all times during a quarter, EBITDA of at least Five Million
Dollars ($5,000,000) for such quarter; and


 


(ii)                                  If
the total amount of outstanding Obligations is greater than or equal to Ten
Million Dollars ($10,000,000) at any time during a quarter, EBITDA of at least
the following:


 


13

















 


	
  Period

  	
   

  	
  EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each quarter
  from Q3 2008 through Q2 2009

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each quarter
  from Q3 2009 through Q2 2010

  	
   

  	
  $

  	
  8,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Q3 2010 and each
  quarter thereafter

  	
   

  	
  $

  	
  8,500,000

  	
   

  



 


(c)                                  Debt/Annualized
EBITDA. If the Accordion Feature has been implemented,  measured as of the end of each calendar
quarter, a Debt to Annualized EBITDA Ratio of not more than 2.25 to 1.00.


 


6.8                               Protection
and Registration of Intellectual Property Rights.  Each Borrower shall:  (a) protect, defend and maintain the
validity and enforceability of its intellectual property; (b) promptly
advise Bank in writing of material infringements of its intellectual property;
and (c) not allow any intellectual property material to such Borrower’s
business to be abandoned, forfeited or dedicated to the public without Bank’s
written consent.  If a Borrower (i) obtains
any patent, registered trademark or servicemark, 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 or servicemark, then such Borrower shall
promptly provide written notice thereof to Bank and shall execute such
intellectual property security agreements and other documents and take such
other actions as Bank shall request in its good faith business judgment to perfect
and maintain a first priority perfected security interest in favor of Bank in
such property.  If a Borrower decides to
register any copyrights or mask works in the United States Copyright Office,
such Borrower shall: (x) provide Bank with at least fifteen (15) days
prior written notice of such 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 (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; and (z) record such intellectual property
security agreement with the United States Copyright Office contemporaneously
with filing the copyright or mask work application(s) with the United
States Copyright Office.  Each Borrower
shall promptly provide to Bank copies of all applications that it files for
patents or for the registration of trademarks, servicemarks, copyrights or mask
works, together with evidence of the recording of the intellectual property
security agreement necessary for Bank to perfect and maintain a first priority
perfected security interest in such property.


 


6.9                               Litigation
Cooperation.  From the date hereof
and continuing through the termination of this Agreement, make available to
Bank, without expense to Bank, Borrowers and their officers, employees and
agents and Borrowers’ 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
Borrowers.


 


6.10                        Acquisition
of Additional Domestic Entities. 
Upon the consummation of any Permitted Acquisition which constitutes the
acquisition by a Borrower or a Subsidiary of a Borrower of all or substantially
all of the capital stock of a Domestic Entity, Parent shall promptly notify
Bank of the consummation of such transaction and shall promptly take all action
as Bank reasonably requests to cause such Domestic Entity to become a Borrower
hereunder and to grant Bank a security interest in all the assets of such
Domestic Entity, provided however that the acquired Domestic Entity is merged
into a Borrower within thirty (30) days after such acquisition, then such
acquired Domestic Entity shall not be required to become a Borrower.


 


6.11                        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 Borrowers or any of their Subsidiaries.


 


14

















 


7                                         NEGATIVE
COVENANTS


 


No Borrower shall do any of the following without Bank’s
prior written consent which shall not be unreasonably withheld or delayed:


 


7.1                               Dispositions.  Convey, sell, lease, transfer 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:


 


(a)                                  Transfers
in the ordinary course of business or transfers of single website assets for
reasonably equivalent consideration;


 


(b)                                 Transfers
from a Borrower to another Borrower;


 


(c)                                  Transfers
from Borrowers to Subsidiaries which are not Borrowers in an amount not to
exceed One Million Five Hundred Thousand Dollars ($1,500,000) in any fiscal
year;


 


(d)                                 Transfers
of property in connection with sale-leaseback transactions;


 


(e)                                  Transfers
of property to the extent such property is exchanged for credit against, or
proceeds are promptly applied to, the purchase price of other property used or
useful in the business of such Borrower or its Subsidiaries;


 


(f)                                    Transfers
constituting non-exclusive licenses and similar arrangements for the use of the
property of such Borrower or its Subsidiaries in the ordinary course of
business and other non-perpetual licenses that may be exclusive in some
respects other than territory (and/or that may be exclusive as to territory
only in discreet geographical areas outside of the United States), but that
could not result in a legal transfer of such Borrower’s title in the licensed
property;


 


(g)                                 Transfers
otherwise permitted by the Loan Documents;


 


(h)                                 sales
or discounting of delinquent accounts in the ordinary course of business;


 


(i)                                     Transfers
associated with the making or disposition of a Permitted Investment;


 


(j)                                     Transfers
in connection with Permitted Acquisitions; and


 


(k)                                  Transfers
of assets in the ordinary course of such Borrower’s business.


 


7.2                               Changes
in Business; Change in Control; Jurisdiction of Formation. Engage in any
material line of business other than those lines of business conducted by
Borrowers and their Subsidiaries on the date hereof and any businesses
reasonably related, complementary or incidental thereto or reasonable
extensions thereof, as mutually determined by Borrowers and Bank in their
reasonable discretion;  permit or
suffer any Change in Control.  No
Borrower will, without prior written notice, change its jurisdiction of
formation.


 


7.3                               Mergers
or Acquisitions.  Merge or
consolidate, or permit any of their Subsidiaries to merge or consolidate, with
any other Person, or acquire, or permit any of its Subsidiaries to acquire, all
or substantially all of the capital stock or property of another Person.
Notwithstanding the foregoing, Borrowers and their Subsidiaries shall be
permitted to consummate any Permitted Acquisitions so long as no Event of
Default has occurred and is continuing or would exist after giving effect to
any such transactions.  Bank shall use
its best efforts to respond to any requests by Borrower to approve any such
transactions which would not be Permitted Acquisitions within five (5) Business
Days.


 


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


 


15

















 


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, 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
Borrowers or any Subsidiary from assigning, mortgaging, pledging, granting a
security interest in or upon, or encumbering any of a Borrower’s or any
Subsidiary’s intellectual property, except as is otherwise permitted in Section 7.1
hereof and the definition of “Permitted Lien” herein.


 


7.6                               Maintenance
of Collateral Accounts.  Maintain any
Collateral Account except pursuant to the terms of Section 6.6.(b) hereof.


 


7.7                               Distributions;
Investments.  (a) Pay any
dividends or make any distribution or payment or redeem, retire or purchase any
capital stock other than Permitted Distributions; or (b) directly or
indirectly acquire or own any Person, or make any Investment in any Person,
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
any Borrower except for (a) transactions that are in the ordinary course
of a Borrower’s business, upon fair and reasonable terms (when viewed in the
context of any series of transactions of which it may be a part, if applicable)
that are no less favorable to such Borrower than would be obtained in an arm’s
length transaction with a non-affiliated Person, as mutually determined by
Borrowers and Bank in their reasonable discretion; or (b) transactions
among Borrowers and their Subsidiaries so long as no Event of Default exists or
could result therefrom.


 


7.9                               Subordinated
Debt.  Make or permit any payment on
or amendments of any Subordinated Debt unless permitted by the terms of any
Subordination Agreement entered into by Bank and the holder or holders of such
Subordinated Debt.


 


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 any 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 a 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.  Borrowers fail to (a) make
any payment of principal or interest on any Credit Extension on its due date,
or (b) pay any other Obligations within three (3) Business Days after
such Obligations are due and payable (which three (3) day grace period
shall not apply to payments due on the Revolving Line Maturity Date).  During the cure period, the failure to cure
the payment default is not an Event of Default (but no Credit Extension will be
made during the cure period);


 


16

















 


8.2                               Covenant
Default.


 


(a)                                  Borrowers
fail or neglect to perform any obligation in Sections 6.2, 6.4, 6.5, 6.6 or 6.7
or violate any covenant in Section 7; or


 


(b)                                 Borrowers
fail or neglect 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
Borrowers be cured within such ten (10) day period, and such default is
likely to be cured within a reasonable time, then Borrowers 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 periods provided under this section
shall not apply, among other things, to financial covenants or any other
covenants set forth in subsection (a) above;


 


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 any Borrower or of any entity under control of any Borrower (including a
Subsidiary) on deposit with Bank or any Bank Affiliate, or (ii) a notice
of lien, levy, or assessment is filed against any of a Borrower’s assets by any
government agency, 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;
and (b) (i) any material portion of a 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 a Borrower from conducting any part
of its business;


 


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


 


8.6                               Other
Agreements.  If a Borrower fails to (a) make
any payment that is due and payable with respect to any Material Indebtedness
and such failure continues after the applicable grace or notice period, if any,
specified in the agreement or instrument relating thereto, or (b) perform
or observe any other condition or covenant, or any other event shall occur or
condition exist under any agreement or instrument relating to any Material
Indebtedness, and such failure continues after the applicable grace or notice
period, if any, specified in the agreement or instrument relating thereto and
the effect of such failure, event or condition is to cause the holder or
holders of such Material Indebtedness to accelerate the maturity of such
Material Indebtedness or cause the mandatory repurchase of any Material
Indebtedness;


 


8.7                               Judgments.  One or more judgments, orders, or decrees for
the payment of money in an amount, individually or in the aggregate, of at
least One Million Five Hundred Thousand Dollars ($1,500,000) (not covered by
independent third-party insurance as to which liability has been accepted by
such insurance carrier) shall be rendered against any Borrower and shall remain
unsatisfied, unvacated, or unstayed for a period of twenty (20) days after the
entry thereof (provided that no Credit Extensions will be made prior to the
satisfaction, vacation, or stay of such judgment, order, or decree);


 


8.8                               Misrepresentations.  A Borrower or any Person acting for a
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;


 


17

















 


8.9                               Subordinated
Debt.  A default or breach occurs
under any agreement between any Borrower and any creditor of a Borrower that
signed a subordination, intercreditor, or other similar agreement with Bank, or
any creditor that has signed such an agreement with Bank breaches any terms of
such agreement; or


 


9                                         BANK’S
RIGHTS AND REMEDIES


 


9.1                               Rights
and Remedies.  While an Event of
Default occurs and continues 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 Borrowers’ benefit under this Agreement
or under any other agreement between Borrowers and Bank;


 


(c)                                  demand
that Borrowers (i) deposit cash with Bank in an amount equal to the
aggregate amount of any Letters of Credit remaining undrawn, as collateral
security for the repayment of any future drawings under such Letters of Credit,
and Borrowers 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 Forward Contracts;


 


(e)                                  settle
or adjust disputes and claims directly with Account Debtors for amounts on
terms and in any order that Bank considers advisable, notify any Person owing a
Borrower money of Bank’s security interest in such funds, and verify the amount
of such account;


 


(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.  Each Borrower shall assemble the Collateral
if Bank requests and make it available as Bank designates.  Bank may enter premises where the Collateral
is located during normal business hours, 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. Each Borrower grants Bank a license to enter and occupy any
of its premises, without charge, to exercise any of Bank’s rights or remedies;


 


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


 


(h)                                 ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise
for sale, and sell the Collateral.  Bank
is hereby granted a non-exclusive, royalty-free license or other right to use,
without charge, each Borrower’s labels, patents, copyrights, mask works, rights
of use of any name, trade secrets, trade names, trademarks, service marks, 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, each
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)                                     have
reasonable access to Borrowers’ Books; and


 


(k)                                  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).


 


18

















 


9.2                               Power
of Attorney.  Each Borrower hereby
irrevocably appoints Bank as its lawful attorney-in-fact, exercisable upon the
occurrence and during the continuance of an Event of Default, to:  (a) endorse such Borrower’s name on any
checks or other forms of payment or security; (b) sign such Borrower’s
name on any invoice or bill of lading for any Account or drafts against Account
Debtors; (c) settle and adjust disputes and claims about the Accounts
directly with Account Debtors, for amounts and on terms Bank determines
reasonable; (d) make, settle, and adjust all claims under such Borrower’s
insurance policies; (e) pay, contest or settle any Lien, charge,
encumbrance, security interest, and adverse claim in or to the Collateral, or
any judgment based thereon, or otherwise take any action to terminate or
discharge the same; and (f) transfer the Collateral into the name of Bank
or a third party as the Code permits. 
Each Borrower hereby appoints Bank as its lawful attorney-in-fact to
sign such 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 Bank is under no further obligation to make Credit Extensions
hereunder.  Bank’s foregoing appointment
as each 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 Bank’s obligation to provide Credit Extensions
terminates.


 


9.3                               Protective
Payments.  If a Borrower fails to
obtain the insurance called for by Section 6.5 or fails to pay any premium
thereon or fails to pay any other amount which such Borrower is obligated to
pay under this Agreement or any other Loan Document, 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
applicable rate, and secured by the Collateral. 
Bank will make reasonable efforts to provide such 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.  No
Borrower shall have the right to specify the order or the accounts to which
Bank shall allocate or apply any payments required to be made by Borrowers to
Bank or otherwise received by Bank under this Agreement when any such
allocation or application is not specified elsewhere in this Agreement.  If an Event of Default has occurred and is continuing,
Bank may apply any funds in its possession, whether from Borrowers account
balances, payments, proceeds realized as the result of any collection of
Accounts or other disposition of the Collateral, or otherwise, to the
Obligations in such order as Bank shall determine in its sole discretion.  Any surplus shall be paid to Borrowers or
other Persons legally entitled thereto; each Borrower shall remain liable to
Bank for any deficiency.  If Bank, in its
good faith business judgment, 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.  So long as
Bank complies with reasonable banking practices and applicable laws and
regulations 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.  Borrowers bear 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 Borrowers 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 Bank 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 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.  Each 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 such Borrower is liable.


 


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 or facsimile transmission; (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, facsimile number, or email address indicated below.  Bank or Borrowers may change their mailing or
electronic mail address or facsimile number by giving the other party written
notice thereof in accordance with the terms of this Section 10.


 


	
  If to Borrowers:

  	
   

  	
  Internet Brands, Inc. (on behalf of all Borrowers)

  
	
   

  	
   

  	
  909 N. Sepulveda Blvd., 11th Floor

  
	
   

  	
   

  	
  El Segundo, CA 90245

  
	
   

  	
   

  	
  Attn: Scott Friedman

  
	
   

  	
   

  	
  Fax: (310) 280-5325

  
	
   

  	
   

  	
  Email: scott.friedman@internetbrands.com

  
	
   

  	
   

  	
   

  
	
  If to Bank:

  	
   

  	
  Silicon Valley Bank

  
	
   

  	
   

  	
  5820 Canoga Avenue, Suite 210

  
	
   

  	
   

  	
  Woodland Hills, CA 91367

  
	
   

  	
   

  	
  Attn: Stephen Hughes

  
	
   

  	
   

  	
  Fax: (818) 340-0397

  
	
   

  	
   

  	
  Email: SHughes@SVBank.com

  



 


11                                  CHOICE
OF LAW, VENUE, JURY TRIAL WAIVER AND JUDICIAL REFERENCE


 


California law governs the Loan Documents without
regard to principles of conflicts of law. 
Borrowers and Bank each submit to the exclusive jurisdiction of the
State and Federal courts in Santa Clara County, California; 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. 
Each Borrower expressly submits and consents in advance to such
jurisdiction in any action or suit commenced in any such court, and each
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.  Each 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 such Borrower at the address set forth in Section 10 of this
Agreement and that service so made shall be deemed completed upon the earlier
to occur of such Borrower’s actual receipt thereof or three (3) days after
deposit in the U.S. mails, proper postage prepaid.


 


TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWERS 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 ALL PARTIES TO ENTER INTO THIS AGREEMENT.  EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS
COUNSEL.


 


WITHOUT INTENDING IN ANY
WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT TO A TRIAL
BY JURY, if the above waiver of the right to a trial by jury is not
enforceable, the parties hereto agree that any and all disputes or
controversies of any nature between them arising at any time shall be decided
by a reference to a private judge, mutually selected by the parties (or, if
they cannot agree, by the Presiding Judge of the Santa Clara County, California
Superior Court) appointed in accordance with California Code of Civil Procedure
Section 638 (or pursuant to comparable provisions of federal law if the
dispute falls within the 


 


20

















 


exclusive jurisdiction of the federal courts), sitting without a jury,
in Santa Clara County, California; and the parties hereby submit to the
jurisdiction of such court.  The
reference proceedings shall be conducted pursuant to and in accordance with the
provisions of California Code of Civil Procedure §§ 638 through 645.1,
inclusive.  The private judge shall have
the power, among others, to grant provisional relief, including without
limitation, entering temporary restraining orders, issuing preliminary and
permanent injunctions and appointing receivers. 
All such proceedings shall be closed to the public and confidential and
all records relating thereto shall be permanently sealed.  If during the course of any dispute, a party
desires to seek provisional relief, but a judge has not been appointed at that
point pursuant to the judicial reference procedures, then such party may apply
to the Santa Clara County, California Superior Court for such relief.  The proceeding before the private judge shall
be conducted in the same manner as it would be before a court under the rules of
evidence applicable to judicial proceedings. 
The parties shall be entitled to discovery which shall be conducted in
the same manner as it would be before a court under the rules of discovery
applicable to judicial proceedings.  The
private judge shall oversee discovery and may enforce all discovery rules and
order applicable to judicial proceedings in the same manner as a trial court
judge.  The parties agree that the
selected or appointed private judge shall have the power to decide all issues
in the action or proceeding, whether of fact or of law, and shall report a
statement of decision thereon pursuant to the California Code of Civil
Procedure § 644(a).  Nothing in this
paragraph shall limit the right of any party at any time to exercise self-help
remedies, foreclose against collateral, or obtain provisional remedies.  The private judge shall also determine all
issues relating to the applicability, interpretation, and enforceability of
this paragraph


 


12                                  GENERAL
PROVISIONS


 


12.1                        Successors
and Assigns.  This Agreement binds
and is for the benefit of the successors and permitted assigns of each
party.  No Borrower may 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 Borrowers, to sell, transfer, 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.


 


12.2                        Indemnification.  Each 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:  (a) all obligations, demands, claims,
and liabilities (collectively, “Claims”)
asserted by any other party in connection with the transactions contemplated by
the Loan Documents; and (b) all losses or Bank Expenses incurred, or paid
by such Indemnified Person from, following, or arising from transactions
between Bank and Borrowers (including reasonable attorneys’ fees and expenses),
except for Claims and/or losses directly caused by such Indemnified Person’s
gross negligence or willful misconduct.


 


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


 


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


 


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


 


12.6                        Amendments
in Writing; Integration.  All
amendments to this Agreement must be in writing and signed by Bank and each
Borrower.  This Agreement and 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 this Agreement and
the Loan Documents merge into this Agreement and the Loan Documents.


 


12.7                        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, are an original, and all taken together,
constitute one Agreement.


 


21
















 


12.8                        Borrowers’
Liability.  Any Borrower may, acting
singly, request Advances hereunder.  Each
Borrower hereby appoints the other as agent for the other for all purposes
hereunder, including with respect to requesting Advances hereunder. Each
Borrower hereunder shall be obligated to repay all Advances made hereunder,
regardless of which Borrower actually receives said Advance, as if each
Borrower hereunder directly received all Advances.  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 such 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 a 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 a Borrower with
respect to the Obligations in connection with this Agreement or otherwise,
until the Obligations are indefeasibly paid in full and this Agreement is
terminated.  Any agreement providing for
indemnification, reimbursement or any other arrangement prohibited under this Section shall
be null and void.  If any payment is made
to a Borrower in contravention of this Section, 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.


 


12.9                        Survival.  All covenants, representations and warranties
made in this Agreement continue in full force until this Agreement has
terminated pursuant to its terms and all Obligations (other than inchoate
indemnity obligations and any other obligations which, by their terms, are to
survive the termination of this Agreement) have been satisfied.  The obligation of Borrowers in Section 12.2
to indemnify Bank shall survive until the statute of limitations with respect
to such claim or cause of action shall have run.


 


12.10                 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; (b) to prospective transferees or
purchasers of any interest in the Credit Extensions (provided, however, Bank
shall use commercially reasonable efforts to obtain such 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 either: (i) is
in the public domain or in Bank’s possession when disclosed to Bank, or becomes
part of the public domain after disclosure to Bank; or (ii) is disclosed
to Bank by a third party, if Bank does not know that the third party is
prohibited from disclosing the information.


 


Bank may use confidential information for any purpose,
including, without limitation, for the development of client databases,
reporting purposes, and market analysis, so long as Bank does not disclose any
Borrower’s identity or the identity of any person associated with Borrowers
unless otherwise expressly permitted by this Agreement.  The provisions of the immediately preceding
sentence shall survive the termination of this Agreement.


 


12.11                 Attorneys’ Fees,
Costs and Expenses.  In any action or
proceeding between Borrowers and Bank arising out of or relating to the Loan
Documents, the prevailing party shall be entitled to recover its reasonable
attorneys’ fees and other costs and expenses incurred, in addition to any other
relief to which it may be entitled.


 


13                                  DEFINITIONS


 


13.1                        Definitions.  As used in this Agreement, the following
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 Borrowers.


 


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


 


22

















 


“Accordion Feature”
shall mean an increase to the Revolving Line to an amount equal to Seventy Five
Million Dollars ($75,000,000); provided (i) Parent requests the Accordion
Feature upon no less than thirty (30) Business Days’ prior written notice to
Bank, (ii) there is no Default or Event of Default in existence, and none
will exist upon the making of such Accordion Feature (both before and
immediately after giving effect to such Accordion Feature), (iii) Bank has
obtained the written commitment of an additional lender or lenders to fund such
increase to the Revolving Line on terms and conditions satisfactory to Bank and
Borrowers; (iv) Bank, Borrowers and such additional lender or lenders have
executed all documents requested by Bank and such additional lender or lenders
to evidence such additional commitment to lend; and (v) Borrowers have
taken all other actions requested by Bank and such additional lender or lenders
in connection therewith to the satisfaction of Bank and such lender or lenders
in their reasonable business discretion.


 


“Advance” or “Advances” means an advance (or advances) under the Revolving
Line.


 


“Affiliate” of
any Person is a 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.


 


“Availability Amount”
is (a) the Revolving Line, minus (b) the amount of all outstanding
Letters of Credit (including drawn but unreimbursed Letters of Credit), minus (c) the
FX Reserve, minus (d) any amounts used for Cash Management Services, and
minus (e) the outstanding principal balance of any Advances; provided
however, if as of the end of the preceding calendar quarter, Borrower’s EBITDA
is less than the level required by Section 6.7(b)(ii) hereof for such
quarter, until such time as Borrower’s EBITDA for a succeeding calendar quarter
is greater than or equal to  the level
required by Section 6.7(b)(ii) hereof for such succeeding calendar
quarter, the term “Availability Amount” shall mean: (a) Ten Million
Dollars ($10,000,000), minus (b) the amount of all outstanding Letters of
Credit (including drawn but unreimbursed Letters of Credit), minus (c) the
FX Reserve, minus (d) any amounts used for Cash Management Services, and
minus (e) the outstanding principal balance of any Advances.


 


“Bank” is
defined in the preamble hereof.


 


“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 Borrowers.


 


“Borrower” and “Borrowers” is defined in the preamble hereof


 


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


 


“Borrowing Resolutions”
are, with respect to any Person, those resolutions substantially in the forms
attached hereto as Exhibit E.


 


“Business Day”
is any day other than a Saturday, Sunday or other day on which banking
institutions in the State of California are authorized or required by law or
other governmental action to close, except that if any determination of a “Business
Day” shall relate to a LIBOR Advance, the term “Business Day” shall also mean a
day on which dealings are carried on in the London interbank market, and if any
determination of a “Business Day” shall relate to an FX Forward Contract, the
term “Business Day” shall mean a day on which dealings are carried on in the
country of settlement of the foreign (i.e., non-Dollar) currency.


 


“Cash Management Services” is
defined in Section 2.1.4.


 


23















 
“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of California; 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 California, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes on 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
Borrowers 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 F.


 


“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 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.


 


“Continuation Date”
means any date on which a Borrower elects to continue a LIBOR Advance into
another Interest Period.


 


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


 


“Conversion Date”
means any date on which Borrowers elect to convert a Prime Rate Advance to a
LIBOR Advance or a LIBOR Advance to a Prime Rate Advance.


 


“Credit Extension”
is any Advance, Letter of Credit, FX Forward Contract, amount utilized for Cash
Management Services, or any other extension of credit by Bank for a Borrower’s
benefit.


 


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


 


“Debt to Annualized EBITDA
Ratio” means a ratio of (i) all Indebtedness of Borrowers and
their Subsidiaries to (ii) EBITDA, measured on a trailing six (6) month
basis and multiplied by two (2).


 


 “Default Rate” is defined in Section 2.3(c).


 


24

















 


“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 Parents’ deposit account, account number                           ,
maintained with Bank.


 


“Dollars,”  “dollars” and “$” each mean
lawful money of the United States.


 


“Domestic Entity”
means a Person organized under the laws of the United States or any state or
territory thereof or the District of Columbia.


 


“EBITDA” means Net Income, plus
taxes, plus depreciation (including depreciation in cost of sales), plus
amortization, plus equity based compensation, plus other expense (foreign
exchange loss, realized investment losses, loss on asset sale, etc.), plus, to
the extent deducted in the calculation of Net Income, any non-recurring,
non-cash charges and any non-recurring cash charges (but only to the extent
such charges do not exceed Five Million Dollars ($5,000,000) in any calendar
year and Three Million Dollars ($3,000,000) per event), minus interest income,
minus other income (foreign exchange gain, realized investment gains, gain on
asset sale, etc.), all determined in accordance with GAAP (as applicable) and
on a consolidated basis for Borrowers and their Subsidiaries.  For the purposes of the foregoing EBITDA
calculation, a charge shall be deemed to be “non-recurring” if such charge
results from a different cause or is of a different type than a charge that was
previously taken and would otherwise be classified to be an extraordinary
event; Borrowers and Bank shall cooperate and use reasonable efforts to achieve
a mutually satisfactory determination as to whether or not a charge is “non-recurring”.  Items included in this EBITDA calculation
will be those incorporated in Borrowers’ measure of Adjusted EBITDA in
Borrowers’ public filings and/or disclosures.


 


 “Effective Amount” means with respect to any Advances on any
date, the aggregate outstanding principal amount thereof after giving effect to
any borrowing and prepayments or repayments thereof occurring on such date.


 


“Effective Date”
is the date Bank executes this Agreement as indicated on the signature page hereof.


 


“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.


 


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


 


“Foreign Subsidiary”
means any Subsidiary which is not a Domestic Subsidiary.


 


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


 


“FX Business Day”
is any day when (a) Bank’s Foreign Exchange Department is conducting its
normal business and (b) the Foreign Currency being purchased or sold by
Borrowers is available to Bank from the entity from which Bank shall buy or
sell such Foreign Currency.


 


“FX Forward Contract”  is defined in Section 2.1.3.


 


“FX Reduction Amount”
is defined in Section 2.1.3.


 


25

















 


“FX Reserve”  is defined in Section 2.1.3.


 


“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 copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work, whether published or unpublished, any patents, trademarks, service marks
and, to the extent permitted under applicable law, any applications therefor,
whether registered or not, any trade secret rights, including any rights to
unpatented inventions, payment intangibles, royalties, contract rights,
goodwill, franchise agreements, purchase orders, customer lists, route lists,
telephone numbers, domain names, claims, income and other tax refunds, security
and other deposits, 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 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.


 


“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 obligations, and (d) Contingent
Obligations.


 


“Indemnified Person”
is defined in Section 12.2.


 


“Insolvency Proceeding”
is any proceeding by or against any Person under the United States Bankruptcy
Code, 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.


 


“Interest Payment Date”
means, with respect to any LIBOR Advance, the last day of each Interest Period
applicable to such LIBOR Advance and, with respect to Prime Rate Advances, the
last day of each month (or, if the last day of the month does not fall on a
Business Day, then on the first Business Day following such date), and each date
a Prime Rate Advance is converted into a LIBOR Advance to the extent of the
amount converted to a LIBOR Advance.


 


“Interest Period”
means, as to any LIBOR Advance, the period commencing on the date of such LIBOR
Advance, or on the conversion/continuation date on which the LIBOR Advance is
converted into or continued as a LIBOR Advance, and ending on the date that is
one (1), two (2), or three (3) months thereafter, in each case as a
Borrower may elect in the applicable Notice of Borrowing or Notice of Conversion/Continuation;
provided, however, that (a) no
Interest Period with respect to any LIBOR Advance shall end later than the
Revolving Line Maturity Date, (b) the last day of an Interest Period shall
be determined in accordance with the practices of the LIBOR interbank market as
from time to time in effect, (c) if any Interest Period would otherwise
end on a day that is not a Business Day, that Interest Period shall be extended
to the following Business Day unless, in the case of a LIBOR Advance, the result
of such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the preceding Business
Day, (d) any Interest Period pertaining to a LIBOR Advance that begins on
the last Business Day of a calendar month (or on a day for which there is no 


 


26

















 


numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period, and (e) interest shall
accrue from and include the first Business Day of an Interest Period but
exclude the last Business Day of such Interest Period.


 


“Interest Rate
Determination Date” means each date for calculating the LIBOR for
purposes of determining the interest rate in respect of an Interest
Period.  The Interest Rate Determination
Date shall be the second Business Day prior to the first day of the related
Interest Period for a LIBOR Advance.


 


“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 Borrowers’ 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 Agreements”
are those certain Intellectual Property Security Agreements executed and
delivered by Borrowers to Bank dated as of October 7, 2008.


 


“Letter of Credit Fee”
is (a) if Borrowers’ Debt to Annualized EBITDA Ratio is less than 1.00 to
1.00, one and three quarters percent (1.75%) of the face amount of such Letter
of Credit, (b) if Borrowers’ Debt to Annualized EBITDA Ratio is greater
than or equal to 1.00 to 1.00 and less than or equal to than 2.00 to 1.00, two
and one quarter percent (2.25%) of the face amount of such Letter of Credit,
and (c) if Borrowers’ Debt to Annualized EBITDA Ratio is greater than 2.00
to 1.00, two and three quarters percent (2.75%) of the face amount of such
Letter of Credit.  Such Letter of Credit
Fee shall be adjusted quarterly based on Borrower’s Debt to Annualized EBITDA
reported for the prior quarter.


 


“LIBOR Rate”
means, for each Interest Period in respect of LIBOR Advances comprising part of
the same Advances, an interest rate per annum
(rounded upward, if necessary, to the nearest 1/10,000th of one percent
(0.0001%)) equal to LIBOR for such Interest Period divided by
one (1) minus the Reserve Requirement for
such Interest Period.


 


“LIBOR Rate Margin”
is (a) if Borrowers’ Debt to Annualized EBITDA Ratio is less than 1.00 to
1.00, one and three quarters percent (1.75%), (b) if Borrowers’ Debt to
Annualized EBITDA Ratio is greater than or equal to 1.00 to 1.00 and less than
or equal to than 2.00 to 1.00, two and one quarter percent (2.25%), and (c) if
Borrowers’ Debt to Annualized EBITDA Ratio is greater than 2.00 to 1.00, two
and three quarters percent (2.75%). Such LIBOR Rate Margin shall be adjusted
quarterly based on Borrower’s Debt to Annualized EBITDA reported for the prior
quarter.


 


“LIBOR” means,
for any Interest Rate Determination Date with respect to an Interest Period for
any Advance to be made, continued as or converted into a LIBOR Advance, the
rate of interest per annum determined by Bank to be the per annum rate of
interest at which deposits in United States Dollars are offered to Bank in the
London interbank market (rounded upward, if necessary, to the nearest
1/10,000th of one percent (0.0001%)) in which Bank customarily participates at
11:00 a.m. (local time in such interbank market) two (2) Business
Days prior to the first day of such Interest Period for a period approximately
equal to such Interest Period and in an amount approximately equal to the
amount of such Advance.


 


“LIBOR Advance”
means an Advance that bears interest based at the LIBOR Rate.


 


“Letter of Credit”
means a standby letter of credit issued by Bank or another institution based
upon an application, guarantee, indemnity or similar agreement on the part of
Bank as set forth in Section 2.1.2.


 


“Letter of Credit
Application” is defined in Section 2.1.2(a).


 


27

















 


“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.


 


“Loan Documents”
are, collectively, this Agreement, the Perfection Certificate, the IP
Agreements, any note, or notes or guaranties executed by a Borrower, and any
other present or future agreement between any Borrower and/or for the benefit
of Bank in connection with this Agreement, 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; or (b) a material
adverse change in the business, operations, or condition (financial or otherwise)
of a Borrower.


 


“Material Indebtedness”
is any Indebtedness the principal amount of which is equal to or greater than
Five Hundred Thousand Dollars ($500,000).


 


“Net Income”
means, as calculated on a consolidated basis for Borrowers and their Subsidiaries
for any period as at any date of determination, the net profit (or loss), after
provision for taxes, of Borrowers and their Subsidiaries for such period taken
as a single accounting period.


 


“Notice of Borrowing”
means a notice given by Borrowers to Bank in accordance with Section 3.4(a),
substantially in the form of Exhibit C, with appropriate
insertions.


 


“Notice of
Conversion/Continuation” means a notice given by Borrowers to Bank
in accordance with Section 3.5, substantially in the form of Exhibit D,
with appropriate insertions.


 


“Obligations”
are Borrowers’ obligations to pay when due any debts, principal, interest, Bank
Expenses and other amounts Borrowers owe Bank now or later, whether under this
Agreement, the Loan Documents, or otherwise, including, without limitation, all
obligations relating to letters of credit (including reimbursement obligations
for drawn and undrawn letters of credit), cash management services, and foreign
exchange contracts, if any, and including interest accruing after Insolvency
Proceedings begin and debts, liabilities, or obligations of Borrowers assigned
to Bank, and the performance of Borrowers’ duties under the Loan Documents.


 


“Operating Documents” are, for
any Person, such Person’s formation documents, as certified with the Secretary
of State of such Person’s state of formation on a date that is no earlier than
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.


 


“Parent” is
Internet Brands, Inc., a Delaware corporation.


 


“Payment/Advance Form”
is that certain form attached hereto as Exhibit B.


 


“Perfection Certificate”
is defined in Section 5.1.


 


“Permitted Acquisitions” means
the acquisition by Borrowers or their Subsidiaries of all or substantially all
of the capital stock or property of another Person or Persons where (i) the
consideration paid by Borrowers or their Subsidiaries in connection with such
transactions does not exceed (a) Twenty Million Dollars ($20,000,000) in
the aggregate in any calendar quarter or (b) Fifteen Million Dollars
($15,000,000) for any one transaction and (ii) where the aggregate EBITDA
of all entities acquired in connection with such transactions in each such
calendar quarter is greater than or equal to One Dollar ($1.00).


 


28

















 


“Permitted Distributions”
means:


 


(a)                                  purchases
of capital stock from former employees, consultants and directors pursuant to
repurchase agreements or other similar agreements in an aggregate amount not to
exceed One Million Five Hundred Thousand Dollars ($1,500,000) in any fiscal
year provided that at the time of such purchase no Default or Event of Default
has occurred and is continuing;


 


(b)                                 distributions
or dividends consisting solely of a Borrower’s capital stock;


 


(c)                                  purchases
for value of any rights distributed in connection with any stockholder rights
plan;


 


(d)                                 purchases
of capital stock or options to acquire such capital stock with the proceeds
received from a substantially concurrent issuance of capital stock or
convertible securities;


 


(e)                                  purchases
of capital stock pledged as collateral for loans to employees;


 


(f)                                    purchases
of capital stock in connection with the exercise of stock options or stock
appreciation rights by way of cashless exercise or in connection with the
satisfaction of withholding tax obligations;


 


(g)                                 purchases
of fractional shares of capital stock arising out of stock dividends, splits or
combinations or business combinations; and


 


(h)                                 the
settlement or performance of such Person’s obligations under any equity
derivative transaction, option contract or similar transaction or combination
of transactions.


 


 “Permitted Indebtedness” is:


 


(a)                                  Borrowers’
Indebtedness to Bank under this Agreement and any other Loan Document;


 


(b)                                 (i) any
Indebtedness that does not exceed One Million Five Hundred Thousand Dollars
($1,500,000) in principal amount existing on the Effective Date, and (ii) any
Indebtedness in excess of One Million Five Hundred Thousand Dollars ($1,500,000)
in principal amount existing on the Effective Date and shown on the Perfection
Certificate;


 


(c)                                  Subordinated
Debt;


 


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


 


(e)                                  guaranties
of Permitted Indebtedness;


 


(f)                                    Indebtedness
incurred as a result of endorsing negotiable instruments received in the
ordinary course of business;


 


(g)                                 Indebtedness
consisting of interest rate, currency, or commodity swap agreements, interest
rate cap or collar agreements or arrangements designated to protect Borrowers
against fluctuations in interest rates, currency exchange rates, or commodity
prices;


 


(h)                                 Indebtedness
between any Borrower and any of its Subsidiaries or among any of Borrowers’
Subsidiaries;


 


(i)                                     Indebtedness
with respect to documentary letters of credit;


 


(j)                                     capitalized
leases and purchase money Indebtedness not to exceed One Million Five Hundred
Thousand Dollars ($1,500,000) in the aggregate in any fiscal year secured by
Permitted Liens; and


 


29

















 


(k)                                  refinanced
Permitted Indebtedness, provided that the amount of such Indebtedness is not
increased except by an amount equal to a reasonable premium or other reasonable
amount paid in connection with such refinancing and by an amount equal to any
existing, but unutilized, commitment thereunder.


 


 “Permitted Investments” are:


 


(a)                                  Investments
existing on the Effective Date;


 


(b)                                 (i) marketable
direct obligations issued or unconditionally guaranteed by the United States or
its agencies or any State maturing within 1 year from its acquisition, (ii) commercial
paper maturing no more than 2 years after its creation and having the highest
rating from either Standard & Poor’s Corporation or Moody’s Investors
Service, Inc., and (iii) Bank’s certificates of deposit maturing no
more than 2 years after issue;


 


(c)                                  Investments
approved by a Parent’s Board of Directors or otherwise pursuant to a
Board-approved investment policy;


 


(d)                                 Investments
in or to a Borrower or any of its Subsidiaries;


 


(e)                                  Investments
consisting of Collateral Accounts in the name of a Borrower or any Subsidiary
so long as Bank has a first priority, perfected security interest in such
Collateral Accounts;


 


(f)                                    Investments
consisting of extensions of credit to a Borrower’s or its Subsidiaries’
customers in the nature of accounts receivable, prepaid royalties or notes
receivable arising from the sale or lease of goods, provision of services or
licensing activities of a Borrower;


 


(g)                                 Investments
received in satisfaction or partial satisfaction of obligations owed by
financially troubled obligors;


 


(h)                                 Investments
acquired in exchange for any other Investments in connection with or as a
result of a bankruptcy, workout, reorganization or recapitalization;


 


(i)                                     Investments
acquired as a result of a foreclosure with respect to any secured Investment;


 


(j)                                     Investments
consisting of interest rate, currency, or commodity swap agreements, interest
rate cap or collar agreements or arrangements designated to protect a Person
against fluctuations in interest rates, currency exchange rates, or commodity
prices; and


 


(k)                                  Investments
consisting of loans and advances to employees in an aggregate amount not to
exceed One Million Five Hundred Thousand Dollars ($1,500,000).


 


 “Permitted Liens” are:


 


(a)                                  (i) Liens
securing Permitted Indebtedness described under clause (b) of the
definition of “Permitted Indebtedness” or (ii) Liens arising under this
Agreement or other Loan Documents;


 


(b)                                 Liens
for taxes, fees, assessments or other government charges or levies, either not
delinquent or being contested in good faith and for which Borrowers maintain
adequate reserves on their 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)                                  Liens
(including with respect to capital leases) (i) on property (including
accessions, additions, parts, replacements, fixtures, improvements and
attachments thereto, and the proceeds thereof) acquired or held by a Borrower
or its Subsidiaries incurred for financing such property (including accessions,
additions, parts, replacements, fixtures, improvements and attachments thereto,
and the proceeds thereof) other than Accounts, Inventory, and Financed
Equipment, or (ii) existing on property (and accessions, additions, parts,
replacements, 


 


30

















 


fixtures, improvements
and attachments thereto, and the proceeds thereof) when acquired other than
Accounts, Inventory, and Financed Equipment, if the Lien is confined to such
property (including accessions, additions, parts, replacements, fixtures,
improvements and attachments thereto, and the proceeds thereof);


 


(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 it secures may not increase;


 


(e)                                  leases
or subleases of real property granted in the ordinary course of business, and
leases, subleases, non-exclusive licenses or sublicenses of property (other
than real property or intellectual property) granted in the ordinary course of
a Borrower’s business, if the leases, subleases, licenses and
sublicenses do not prohibit granting Bank a security interest;


 


(f)                                    non-exclusive
license of intellectual property granted to third parties in the ordinary
course of business, and licenses of intellectual property that could not result
in a legal transfer of title of the licensed property that may be exclusive in
respects other than territory and that may be exclusive as to territory only as
to discreet geographical areas outside of the United States;


 


(g)                                 leases
or subleases granted in the ordinary course of a Borrower’s business, including
in connection with a Borrower’s leased premises or leased property;


 


(h)                                 Liens
arising from attachments or judgments, orders, or decrees in circumstances not
constituting an Event of Default under Sections 8.4 and 8.7;


 


(i)                                     Liens
in favor of other financial institutions arising in connection with a Borrower’s
deposit or securities accounts held at such institutions provided Bank has a
perfected security interest in such accounts;


 


(j)                                     Liens
of carriers, warehousemen, suppliers, or other Persons that are possessory in
nature arising in the ordinary course of business so long as such Liens attach
only to Inventory, securing liabilities in the aggregate amount not to exceed
One Million Five Hundred Thousand Dollars ($1,500,000) and which are not
delinquent or remain payable without penalty or which are being contested in
good faith and by appropriate proceedings which proceedings have the effect of
preventing the forfeiture or sale of the property subject thereto;  and


 


(k)                                  Liens
to secure payment of workers’ compensation, employment insurance, old-age
pensions, social security and other like obligations incurred in the ordinary
course of business (other than Liens imposed by ERISA).


 


 “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.


 


“Prime Rate” is
Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest
rate.


 


“Prime Rate Advance”
means an Advance that bears interest based at the Prime Rate.


 


“Prime Rate Margin”
is (a) if Borrowers’ Debt to Annualized EBITDA Ratio is less than 1.00 to
1.00, zero percent (0%), (b) if Borrowers’ Debt to Annualized EBITDA Ratio
is greater than or equal to 1.00 to 1.00 and less than or equal to than 2.00 to
1.00, one quarter of one percent (0.25%), and (c) if Borrowers’ Debt to
Annualized EBITDA Ratio is greater than 2.00 to 1.00, one half of one percent
(0.50%).  Such Prime Rate Margin shall be
adjusted quarterly based on Borrower’s Debt to Annualized EBITDA reported for
the prior quarter.


 


“Quick Assets”
is, on any date, Borrowers’ and Borrowers’ Subsidiaries consolidated,
unrestricted cash and marketable securities and net accounts receivable
(determined in accordance with GAAP).


 


31
















 


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


 


“Regulatory Change”
means, with respect to Bank, any change on or after the date of this Agreement
in United States federal, state, or foreign laws or regulations, including
Regulation D, or the adoption or making on or after such date of any
interpretations, directives, or requests applying to a class of lenders
including Bank, of or under any United States federal or state, or any foreign
laws or regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.


 


“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.


 


“Reserve Requirement”
means, for any Interest Period, the average maximum rate at which reserves
(including any marginal, supplemental, or emergency reserves) are required to
be maintained during such Interest Period under Regulation D against
“Eurocurrency liabilities” (as such term is used in Regulation D) by member
banks of the Federal Reserve System. 
Without limiting the effect of the foregoing, the Reserve Requirement
shall reflect any other reserves required to be maintained by Bank by reason of
any Regulatory Change against (a) any category of liabilities which
includes deposits by reference to which the LIBOR Rate is to be determined as
provided in the definition of LIBOR or (b) any category of extensions of
credit or other assets which include Advances.


 


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


 


“Revolving Line”
is an Advance or Advances in an amount equal to (a) Thirty Million Dollars
($30,000,000) prior to Borrowers achieving a trailing four (4) quarter
EBITDA of at least Thirty Five Million Dollars ($35,000,000), and (b) thereafter,
Thirty Five Million Dollars ($35,000,000); provided however, upon implementation
of the Accordion Feature, the term “Revolving Line” shall mean an Advance or
Advances in an amount equal to Seventy Five Million Dollars ($75,000,000).


 


“Revolving Line Maturity Date” is
October 7, 2012.


 


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


 


“Settlement Date”  is defined in Section 2.1.3.


 


“Subordinated Debt”
is (a) Indebtedness incurred by a Borrower subordinated to such Borrower’s
Indebtedness owed to Bank and which is reflected in a written agreement in a
manner and form reasonably acceptable to Bank and approved by Bank in writing,
and (b) to the extent the terms of subordination do not change adversely
to Bank, refinancings, refundings, renewals, amendments or extensions of any of
the foregoing.


 


“Subsidiary”
means, with respect to any Person, any Person of which more than 50.0% of the
voting stock or other equity interests (in the case of Persons other than
corporations) is owned or controlled directly or indirectly by such Person or
one or more of Affiliates of such Person.


 


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


 


 “Transfer” is defined in Section 7.1.


 


“Unused Revolving Line
Facility Fee” is defined in Section 2.4(c).


 


32

















 


[Signature page follows.]


 


33

















 


IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed as of the Effective Date.


 


	
  BORROWERS:

  	
   

  
	
   

  	
   

  
	
  INTERNET BRANDS, INC.

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  AUTODATA, INC.

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  AUTODATA SOLUTIONS, INC.

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
									



 


[Signature Page to
Loan and Security Agreement]


[Signatures
continued next page.]


 

















 


	
  CARSDIRECT MORTGAGE SERVICES, INC.

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  CD1FINANCIAL.COM, LLC

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  INTERNET MEDIA SOLUTIONS, INC.

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  LOANAPP, INC.

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
										



 


[Signature Page to
Loan and Security Agreement]


[Signatures
continued next page.]


 

















 


	
  BANK:

  	
   

  
	
   

  	
   

  
	
  SILICON VALLEY BANK

  	
   

  
	
   

  	
   

  
	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Effective Date:

  	
   

  	
   

  
						



 


[Signature Page to
Loan and Security Agreement]


 

















 


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,
commercial tort claims, documents, instruments (including any promissory
notes), chattel paper (whether tangible or electronic), cash, deposit accounts,
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.


 


Notwithstanding the foregoing,
the “Collateral” does not include more than 65% of the presently existing and
hereafter arising issued and outstanding shares of capital stock owned by
Borrower of any foreign Subsidiary which shares entitle the holder thereof to
vote for directors or any other matter.


 

















 


EXHIBIT B


 


Loan Payment/Advance Request Form


 


DEADLINE FOR SAME DAY PROCESSING IS NOON P.S.T.*


 


	
  Fax To:

  	
   

  	
  Date:

  	
   

  



 


	
  LOAN PAYMENT:

  
	
   

  
	
  INTERNET BRANDS, INC., on behalf of all Borrowers

  
	
   

  	
   

  	
   

  
	
  From Account #

  	
   

  	
   

  	
  To Account #

  	
   

  
	
   

  	
         (Deposit Account #)

  	
   

  	
   

  	
                    (Loan Account #)

  
	
   

  	
   

  	
   

  
	
  Principal $

  	
   

  	
   

  	
  and/or Interest $

  	
   

  
	
   

  	
   

  	
   

  
	
  Authorized Signature:

  	
   

  	
   

  	
  Phone Number:

  	
   

  
	
  Print Name/Title:

  	
   

  	
   

  	
   

  	
   

  
										



 


	
  LOAN ADVANCE:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Complete Outgoing Wire Request section
  below if all or a portion of the funds from this loan advance are for
  an outgoing wire.

  
	
   

  	
   

  	
   

  
	
  From Account #

  	
   

  	
   

  	
  To Account #

  	
   

  
	
   

  	
          (Loan Account
  #)

  	
   

  	
   

  	
                 (Deposit
  Account #)

  
	
   

  	
   

  	
   

  
	
  Amount of
  Advance $

  	
   

  	
   

  	
   

  
								



 


All Borrowers’
representations and
warranties in the Loan and Security Agreement are true, correct and complete in
all material respects on the date of the request for an advance; 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:


 


	
  Authorized
  Signature:

  	
   

  	
   

  	
  Phone Number:

  	
   

  
	
  Print
  Name/Title:

  	
   

  	
   

  	
   

  	
   

  
						



 


OUTGOING WIRE REQUEST:


Complete only if all or a portion
of funds from the loan advance above is to be wired.


Deadline for same day
processing is noon, P.S.T.


 


	
  Beneficiary
  Name:

  	
   

  	
   

  	
  Amount
  of Wire: $

  	
   

  
	
  Beneficiary
  Bank:

  	
   

  	
   

  	
  Account
  Number:

  	
   

  
	
  City and State:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Beneficiary Bank
  Transit (ABA) #:

  	
   

  	
   

  	
  Beneficiary Bank
  Code (Swift, Sort, Chip, etc.):

  	
   

  
	
   

  	
   

  	
   

  	
             (For
  International Wire Only)

  	
   

  
	
   

  	
   

  	
   

  
	
  Intermediary
  Bank:

  	
   

  	
   

  	
  Transit (ABA) #:

  	
   

  
	
  For Further
  Credit to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Special
  Instruction:

  	
   

  
														



 


By signing below, I (we)
acknowledge and agree that my (our) funds transfer request shall be processed
in accordance with and subject to the terms and conditions set forth in the
agreements(s) covering funds transfer service(s), which agreements(s) were
previously received and executed by me (us).


 


	
  Authorized
  Signature:

  	
   

  	
   

  	
  2nd
  Signature (if required):

  	
   

  
	
  Print
  Name/Title:

  	
   

  	
   

  	
  Print
  Name/Title:

  	
   

  
	
  Telephone
  #:

  	
   

  	
   

  	
  Telephone #:

  	
   

  
									



 






* Unless
otherwise provided for an Advance bearing interest at LIBOR.


 

















 


EXHIBIT C


 


FORM OF NOTICE OF BORROWING


 


INTERNET BRANDS, INC., on behalf of all Borrowers


 


	
   

  	
   

  	
  Date:

  



 


TO:         SILICON
VALLEY BANK


3003 Tasman Drive


Santa Clara, CA
95054


Attention:  Corporate Services Department


 


RE:          Loan
and Security Agreement dated as of October 7, 2008 (as amended, modified,
supplemented or restated from time to time, the “Loan
Agreement”), by and between INTERNET BRANDS, INC., AUTODATA, INC.,
AUTODATA SOLUTIONS, INC., CARSDIRECT MORTGAGE SERVICES, INC., CD1FINANCIAL.COM,
LLC, INTERNET MEDIA SOLUTIONS, INC. AND LOANAPP, INC.  (each
a “Borrower” and, collectively, “Borrowers”), and Silicon Valley Bank (the “Bank”)


 


Ladies and
Gentlemen:


 


The undersigned
refers to the Loan Agreement, the terms defined therein and used herein as so
defined, and hereby gives you notice irrevocably, pursuant to Section 3.4(a) of
the Loan Agreement, of the borrowing of an Advance.


 


1.             The Funding Date, which shall be a
Business Day, of the requested borrowing is
                              .


 


2.             The aggregate amount of the requested
borrowing is
$                          .


 


3.             The requested Advance shall consist of
$                      
of Prime Rate Advances and $            
of LIBOR Advances.


 


4.             The duration of the Interest Period for
the LIBOR Advances included in the requested Advance shall be
                    
months.


 


The undersigned
hereby certifies that the following statements are true on the date hereof, and
will be true on the date of the proposed Advance before and after giving effect
thereto, and to the application of the proceeds therefrom, as applicable:


 


(a)           all representations and
warranties of Borrowers contained in the Loan Agreement are true, accurate and
complete in all material respects as of the date hereof; 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;


 


(b)           no Default or Event of
Default has occurred and is continuing, or would result from such proposed
Advance; and


 


(c)           the
requested Advance will not cause the aggregate principal amount of the outstanding
Advances to exceed, as of the designated Funding Date, (i) the Revolving
Line minus (ii) the amount of all outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit), minus (iii) the FX Reserve, and
minus (iv) the aggregate outstanding Advances (including any amounts used
for Cash Management Services).


 

















 


	
   

  	
   

  	
  INTERNET BRANDS, INC., on
  behalf of all

  
	
   

  	
   

  	
  Borrowers

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						



 


For
internal Bank use only


 


	
  LIBOR Pricing Date

  	
   

  	
  LIBOR

  	
   

  	
  LIBOR Variance

  	
   

  	
  Maturity Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
      

  	
  %

  	
   

  	
   

  



 
















 


EXHIBIT D


 


FORM OF NOTICE OF CONVERSION/CONTINUATION


 


INTERNET BRANDS, INC., on behalf of all Borrowers


 


	
   

  	
   

  	
  Date:

  	
   

  



 


To:                              Silicon
Valley Bank


3003 Tasman Drive


Santa Clara, CA 
95054


Attention:


 


Re:                               Loan
and Security Agreement dated as of October 7, 2008 (as amended, modified,
supplemented or restated from time to time, the “Loan
Agreement”), by and between INTERNET BRANDS, INC., AUTODATA, INC.,
AUTODATA SOLUTIONS, INC., CARSDIRECT MORTGAGE SERVICES, INC., CD1FINANCIAL.COM,
LLC, INTERNET MEDIA SOLUTIONS, INC. and LOANAPP, INC.  (each
a “Borrower” and, collectively, “Borrowers”), and Silicon Valley Bank (the “Bank”)


 


Ladies and Gentlemen:


 


The
undersigned refers to the Loan Agreement, the terms defined therein being used
herein as therein defined, and hereby gives you notice irrevocably, pursuant to
Section 3.5 of the Loan Agreement, of the [conversion] [continuation] of
the Advances specified herein, that:


 


1.             The date of the [conversion] [continuation] is                                 ,
20      .


 


2.             The aggregate amount of the proposed Advances to be
[converted] is $                         
or [continued] is $                            .


 


3.             The Advances are to be [converted into] [continued as]
[LIBOR] [Prime Rate] Advances.


 


4.             The duration of the
Interest Period for the LIBOR Advances included in the [conversion]
[continuation] shall be months.


 


The
undersigned, on behalf of all Borrowers, hereby certifies that the following
statements are true on the date hereof, and will be true on the date of the
proposed [conversion] [continuation], before and after giving effect thereto
and to the application of the proceeds therefrom:


 


(a)           all representations and warranties of
Borrowers stated in the Loan Agreement are true, accurate and complete in all
material respects as of the date hereof; 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


 


(b)           no Default or Event of Default has occurred and is
continuing, or would result from such proposed [conversion] [continuation].


 


[Signature page follows.]


 

















 


	
   

  	
  INTERNET
  BRANDS, INC., on behalf of all

  
	
   

  	
  Borrowers

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


For
internal Bank use only


 


	
  LIBOR Pricing Date

  	
   

  	
  LIBOR

  	
   

  	
  LIBOR Variance

  	
   

  	
  Maturity Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  



 

















 


EXHIBIT E


 


Forms of
Corporate/LLC Borrowing Resolutions


 





















 


BORROWING RESOLUTIONS


 


	
  

  	
   

  	
  Silicon Valley Bank

  



 


CORPORATE BORROWING CERTIFICATE


 


	
  BORROWER:
  [BORROWER]

  	
   

  	
  DATE:
  October 7, 2008

  
	
  BANK:   Silicon Valley Bank

  	
   

  	
   

  



 


I
hereby certify as follows, as of the date set forth above:


 


1.   I
am the Secretary, Assistant Secretary or other officer of the Borrower. My
title is as set forth below.


 


2.   Borrower’s
exact legal name is set forth above. Borrower is a corporation existing under
the laws of the State of


	
   

  	
  .

  



             [print name of state]


 


3.   Attached
hereto are true, correct and complete copies of Borrower’s Articles/Certificate
of Incorporation (including amendments), as filed with the Secretary of State
of the state in which Borrower is incorporated as set forth in paragraph 1
above. Such Articles/Certificate of Incorporation have not been amended,
annulled, rescinded, revoked or supplemented, and remain in full force and
effect as of the date hereof.


 


4.   The
following resolutions were duly and validly adopted by Borrower’s Board of
Directors at a duly held meeting of such directors (or pursuant to a unanimous
written consent or other authorized corporate action). Such resolutions are in
full force and effect as of the date hereof and have not been in any way modified,
repealed, rescinded, amended or revoked, and Bank may rely on them until Bank
receives written notice of revocation from Borrower.


 


RESOLVED,
that any one of the following officers or
employees of Borrower, whose names, titles and signatures are below, may act on
behalf of Borrower:


 


	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  	
   

  	
  Authorized to

  Add or Remove

  Signatories

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  



 


RESOLVED
FURTHER, that any one of the
persons designated above with a checked box beside his or her name may, from time
to time, add or remove any individuals to and from the above list of persons
authorized to act on behalf of Borrower.


 


RESOLVED FURTHER, that such
individuals may, on behalf of Borrower:


 


Borrow
Money. Borrow money from Silicon Valley Bank (“Bank”).


Execute
Loan Documents. Execute any loan documents Bank requires.


Grant
Security. Grant Bank a security interest in any of Borrower’s
assets.


 

















 


Negotiate
Items. Negotiate or discount all drafts, trade acceptances,
promissory notes, or other indebtedness in which Borrower has an interest and
receive cash or otherwise use the proceeds.


Letters
of Credit. Apply for letters of credit from Bank.


Foreign
Exchange Contracts. Execute spot or forward foreign exchange
contracts.


Further
Acts. Designate other individuals to request advances, pay
fees and costs and execute other documents or agreements (including documents
or agreement that waive Borrowers right to a jury trial) they believe to be
necessary to effectuate such
resolutions.


 


RESOLVED FURTHER, that all acts
authorized by the above resolutions and any prior acts relating thereto are
ratified.


 


5.
The persons listed above are Borrower’s officers or employees with their
titles and signatures shown next to their names.


 


	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


*** If the Secretary, Assistant Secretary or other
certifying officer executing above is designated by the resolutions set forth
in paragraph 4 as one of the authorized signing officers, this Certificate must
also be signed by a second authorized officer or director of Borrower.


 


I, the
                                                    
of Borrower, hereby certify as to paragraphs 1 through 5 above, as 

                                 [print
title]


of the date set forth
above.


 


	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 

















 


	
  

  	
   

  	
  Silicon Valley Bank

  



 


LIMITED LIABILITY COMPANY BORROWING CERTIFICATE


 


	
  BORROWER:

  	
   

  	
  DATE:
  October 7, 2008

  



BANK:   Silicon
Valley Bank


 


I/We hereby certify as
follows, as of the date set forth above:


 


Borrower is duly
organized, existing and in good standing as a


          o
member-managed


          o
manager-managed


 


limited liability company
under the laws of the State of                  ,
and that we are all of Borrower’s


          o
members


          o
managers


 


and that Borrower’s name
shown above is the exact legal name of Borrower.


 


We/ I certify
that at a duly held meeting of Borrower (or by other authorized company action)
the following resolutions were adopted. Such
resolutions are in full force and effect as of the date hereof and have not
been in any way modified, repealed, rescinded, amended or revoked, and Bank may
rely on them until Bank receives written notice of revocation from Borrower.


 


RESOLVED,
that any one of the following individuals,
whose names, titles and signatures are below, may act on behalf of Borrower:


 


	
  Name

  	
   

  	
  Title

  	
   

  	
  Signature

  	
   

  	
  Authorized to

  Add or Remove

  Signatories

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  o

  



 


RESOLVED
FURTHER, that any one of the
persons designated above with a checked box beside his or her name may, from
time to time, add or remove any individuals to and from the above list of
persons authorized to act on behalf of Borrower.


 


RESOLVED
FURTHER, that such
individuals may, on behalf of Borrower:


 


Borrow
Money. Borrow money from Bank.


Execute
Loan Documents. Execute any loan documents Bank requires.


Grant
Security. Grant Bank a security interest in any of Borrower’s
assets.


Negotiate
Items. Negotiate or discount all drafts, trade acceptances,
promissory notes, or other indebtedness in which Borrower has an interest and
receive cash or otherwise use the proceeds.


Letters
of Credit. Apply for letters of credit from Bank.


Foreign
Exchange Contracts. Execute spot or forward foreign exchange
contracts.


 

















 


Further
Acts. Designate other individuals to request advances, pay
fees and costs and execute other documents or agreements (including documents
or agreement that waive Borrowers right to a
jury trial) they believe to be necessary to effectuate such resolutions.


 


RESOLVED FURTHER, that all acts
authorized by the above resolutions and any prior acts relating thereto are
ratified.


 


The
persons listed above are Borrower’s members/managers or employees with their
titles and signatures shown next to their names.


 


The execution, delivery,
and performance of this Certificate are within the undersigned’s powers, have
been duly authorized, and are not in conflict with nor constitute a breach of
any provision contained in the undersigned’s operating agreement, nor will they
constitute an event of default under any material agreement to which the undersigned
is a party or by which the undersigned is bound. No consent from any other
party is required to execute this Certificate.


 


We/I certify that the
persons listed below are Borrower’s members/managers with their signatures
shown above their names.


 


We/I have read all the
provisions of this Limited Liability Company Borrowing Certificate, and we
certify and agree to its terms.


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
    [print
  name] 

  	
   

  	
    [print
  name] 

  
	
   

  	
   

  	
   

  
	
    [title]

  	
   

  	
    [title]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
    [print
  name] 

  	
   

  	
    [print
  name] 

  
	
   

  	
   

  	
   

  
	
    [title]

  	
   

  	
    [title]

  



 

















 


EXHIBIT F


 


COMPLIANCE CERTIFICATE


 


	
  TO:

  	
   

  	
  SILICON VALLEY
  BANK

  	
  Date:

  	
   

  
	
  FROM:

  	
   

  	
  INTERNET BRANDS,
  INC., for itself and on behalf of all Borrowers

  	
   

  	
   

  



 


The undersigned
authorized officer of Internet Brands, Inc. (“Parent”) certifies, on behalf
of itself and all other Borrowers, that under the terms and conditions of the
Loan and Security Agreement between Parent, the other Borrowers and Bank (the “Agreement”),
(1) Borrowers are 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) Borrowers,
and each of their Subsidiaries, have timely filed all required tax returns and
reports, and Borrowers have timely paid all foreign, federal, state and local
taxes, assessments, deposits and contributions owed by Borrowers 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 Borrowers or any
of their Subsidiaries relating to unpaid employee payroll or benefits of which
Borrowers have 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 Borrowers are 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
  Covenant

  	
   

  	
  Required

  	
   

  	
  Complies

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Monthly balance
  sheet with Compliance Certificate

  	
   

  	
  Monthly within
  45 days

  	
   

  	
  Yes  No

  
	
  Annual financial
  statement (CPA Audited) + CC

  	
   

  	
  FYE within 150
  days

  	
   

  	
  Yes  No

  
	
  10-Q, 10-K and
  8-K

  	
   

  	
  Within 5 days
  after filing with SEC

  	
   

  	
  Yes  No

  
	
  Quarterly report
  of Cash/Investment Balances and Permitted Acquisitions

  	
   

  	
  Quarterly within
  45 days

  	
   

  	
  Yes  No

  
	
  Annual
  Projections

  	
   

  	
  Earlier of 30
  days after FYE or board approval

  	
   

  	
  Yes  No

  



 


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

  



 


	
  Financial
  Covenant

  	
   

  	
  Required

  	
   

  	
  Actual

  	
   

  	
  Complies

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum Adjusted
  Quick Ratio (Monthly)

  	
   

  	
  1.00:1.00

  	
   

  	
  :1.00

  	
   

  	
  Yes  No

  
	
  Minimum EBITDA
  (Quarterly)

  	
   

  	
  See Attached

  	
   

  	
  $

  	
   

  	
  Yes  No

  
	
  Maximum Debt to
  Annualized EBITDA (Quarterly)

  	
   

  	
  *

  	
   

  	
  :1.00

  	
   

  	
    Yes  No*

  



 






*  2.25 to 1.00
required after implementation of the Accordion Feature but to be reported
quarterly for purposes of determining applicable margins and letter of credit
fees


 

















 


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.”)


 


 


 


	
  INTERNET
  BRANDS, INC., for itself and 

  	
  BANK USE ONLY

  
	
  on
  behalf of all Borrowers

  	
   

  	
   

  
	
   

  	
  Received
  by:

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  AUTHORIZED
  SIGNER

  
	
  Name:

  	
   

  	
   

  	
  Date:

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Verified:

  	
   

  
	
   

  	
   

  	
  AUTHORIZED
  SIGNER

  
	
   

  	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
  Compliance
  Status:            Yes   No

  
												



 

















 


Schedule 1 to Compliance
Certificate


 


Financial Covenants of
Borrower


 


I.              Adjusted Quick Ratio
(Section 6.7(a))


 


Required:               1.00:1.00


 


Actual:


 


	
  A.

  	
   

  	
  Aggregate value of the unrestricted cash and
  marketable securities of Borrowers and their Subsidiaries

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Aggregate value of the net accounts receivable of
  Borrowers and their Subsidiaries (per GAAP)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Quick Assets (line A plus line B)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Aggregate value of Obligations to Bank

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Aggregate value of liabilities of Borrowers and
  their Subsidiaries (including all Indebtedness) that matures within one
  (1) year.

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Aggregate value of all amounts received or
  invoiced by Borrowers in advance of performance under contracts and not yet
  recognized as revenue

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Current Liabilities (line D plus line E minus line
  F)

  	
   

  	
  $

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  Adjusted Quick Ratio (line C divided by line G)

  	
   

  	
   

  



 


Is line H equal to or
greater than 1.00:1:00?


 


	
                o  No,
  not in compliance

  	
   

  	
  o  Yes,
  in compliance

  



 
















 


II.            EBITDA (Section 6.7(b))


 


Required:


 


(i) If the total amount of outstanding
Obligations is less than Ten Million Dollars ($10,000,000) at all times during
a quarter, EBITDA of at least Five Million Dollars ($5,000,000); and


 


(ii)           If
the total amount of outstanding Obligations is greater than or equal to Ten
Million Dollars ($10,000,000) at any time during a quarter, EBITDA of at least
the following:


 


	
  Period

  	
   

  	
  EBITDA

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each quarter
  from Q3 2008 through Q2 2009

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  Each quarter
  from Q3 2009 through Q2 2010

  	
   

  	
  $

  	
  8,000,000

  	
   

  
	
  Q3 2010 and each
  quarter thereafter

  	
   

  	
  $

  	
  8,500,000

  	
   

  



 


Actual:


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A.

  	
   

  	
  Net Income of
  Borrowers and their Subsidiaries

  	
   

  	
  $

  	
         

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Income taxes

  	
   

  	
  $

  	
         

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Depreciation
  (including Depreciation in Cost of Sales) & Amortization

  	
   

  	
  $

  	
         

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Equity Based
  Compensation

  	
   

  	
  $

  	
         

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Other expense
  (foreign exchange loss, realized investment losses, loss on asset sale, etc.)

  	
   

  	
  $

  	
         

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  to the extent
  deducted from Net Income, non-recurring, non-cash charges

  	
   

  	
  $

  	
         

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  to the extent deducted from Net Income,
  non-recurring cash charges (but only to the extent such charges do not exceed
  Five Million Dollars ($5,000,000) in any calendar year and Three Million
  Dollars ($3,000,000) per event)

  	
   

  	
  $

  	
         

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  Interest income

  	
   

  	
  $

  	
         

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  Other income
  (foreign exchange gain, realized investment gains, gain on asset sale, etc.)

  	
   

  	
  $

  	
         

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  J.

  	
   

  	
  EBITDA (line A plus line B plus line C plus line D
  plus line E plus line F plus line G minus line H minus line I)

  	
   

  	
        

  	
   

  



 


Is line J equal to or greater than the amount required
above for the applicable quarter?


 


	
  o No,
  not in compliance

  	
   

  	
                                 o Yes,
  in compliance

  



 

















 


III.           Debt to Annualized EBITDA (Section 6.7(c))


 


Required:               2.25:1.00
(after implementation of the Accordion Feature)


 


Actual:


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A.

  	
   

  	
  Aggregate value
  of all Indebtedness of Borrowers and their Subsidiaries

  	
   

  	
  $

  	
         

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  2X the value of
  Schedule II, line J above measured on a trailing 6 month basis

  	
   

  	
  $

  	
         

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Debt to
  Annualized EBITDA Ratio (line A divided by line B)

  	
   

  	
   

  	
         

  	
   

  



 


Is line C equal to or greater than 2.25:1.00?


 


	
                 o  No,
  not in compliance

  	
   

  	
                        o  Yes,
  in compliance

  



 

















 


EXHIBIT G


 


REPORT OF PERMITTED ACQUISITIONS


 


[Please see attached Excel Spreadsheet]


 

















 


	
  EBITDA Calculation for Permitted Acquisitions

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A.

  	
   

  	
  Net
  Income of Acquired Entity

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Income
  taxes

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Depreciation
  (including Depreciation in Cost of Sales) & Amortization

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Equity
  Based Compensation

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Other
  expense (foreign exchange loss, realized investment losses, loss on asset
  sale, etc.)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  to the extent deducted
  from Net Income, non-recurring, non-cash charges

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  to the extent deducted
  from Net Income, non-recurring cash charges (but only to the extent such
  charges do not exceed Five Million Dollars ($5,000,000) in any calendar year
  and Three Million Dollars ($3,000,000) per event)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  Interest
  income

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  Other
  income (foreign exchange gain, realized investment gains, gain on asset sale,
  etc.)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  J.

  	
   

  	
  EBITDA
  (line A plus line B plus line C plus line D plus line E plus line F plus line
  G minus line H minus line I)

  	
   

  	
  $

  	
   

  



 


a