Loan and Security Agreement



 Exhibit 10.25 

 

 

 LOAN AND SECURITY AGREEMENT 
 This LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of the Effective Date is between SILICON VALLEY BANK, a
California corporation (“Bank”), with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 (FAX 925-227-1842), on the one hand, and BANKS.COM, INC., a Florida corporation (“Parent”),
INTERSEARCH CORPORATE SERVICES, INC., a Nevada corporation (“Intersearch”), and DOTTED VENTURES, INC., a Delaware corporation (“Dotted”, and together with Parent and Intersearch, jointly and severally, collectively
and individually, referred to herein as “Borrower”), whose address is 222 Kearny Street, Suite 550, San Francisco, California 94108 (FAX             ), on the other hand, and
provides the terms on which Bank shall lend to Borrower, and Borrower shall repay Bank. The parties agree as follows: 
 1
ACCOUNTING AND OTHER TERMS 
 Accounting terms not defined in this Agreement shall be construed following GAAP.
Calculations and determinations must be made following GAAP. The term “financial statements” includes the notes and schedules. The terms “including” and “includes” always mean “including (or includes) without
limitation,” in this or any Loan Document. 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
meanings provided by the Code, to the extent such terms are defined therein. 
 2 LOAN AND TERMS OF PAYMENT

 2.1 Promise to Pay. Borrower hereby unconditionally promises to pay Bank the unpaid principal amount of all
Advances hereunder with all interest, fees and finance charges due thereon as and when due in accordance with this Agreement. 
 2.1.1 Financing of Accounts. 
 (a) Availability. Subject to the terms of this Agreement, Borrower
may request that Bank finance specific Eligible Accounts. Bank may, in its good faith business discretion, finance such Eligible Accounts by extending credit to Borrower in an amount equal to the result of the Advance Rate multiplied by the face
amount of the Eligible Account (the “Advance”). Bank may, in its sole discretion, change the percentage of the Advance Rate for a particular Eligible Account on a case by case basis. When Bank makes an Advance, the Eligible Account becomes
a “Financed Receivable.” 
 (b) Maximum Advances. The aggregate face amount of all Financed Receivables
outstanding at any time may not exceed the Facility Amount. 







 (c) Borrowing Procedure. Borrower will deliver an Invoice Transmittal for each
Eligible Account it offers. Bank may rely on information set forth in or provided with the Invoice Transmittal. 
 (d)
Credit Quality; Confirmations. Bank may, at its option, conduct a credit check of the Account Debtor for each Account requested by Borrower for financing hereunder in order to approve any such Account Debtor’s credit before agreeing to
finance such Account. Bank may also verify directly with the respective Account Debtors the validity, amount and other matters relating to the Accounts (including confirmations of Borrower’s representations in Section 5.3) by means of
mail, telephone or otherwise, either in the name of Borrower or Bank from time to time in its sole discretion. 
 (e)
Accounts Notification/Collection. Bank may notify any Person owing Borrower money of Bank’s security interest in the funds and verify and/or collect the amount of the Account. 
 (f) Early Termination. This Agreement may be terminated prior to the Maturity Date as follows: (i) by Borrower, effective three
(3) Business Days after written notice of termination is given to Bank; or (ii) by Bank at any time after the occurrence and during the continuance of an Event of Default, without notice, effective immediately. If this Agreement is
terminated (A) by Bank in accordance with clause (i) in the foregoing sentence, or (B) by Borrower for any reason, Borrower shall pay to Bank a termination fee in an amount equal to Twenty-Five Thousand Dollars ($25,000) (the
“Early Termination Fee”). The Early Termination Fee shall be due and payable on the effective date of such termination and thereafter shall bear interest at a rate equal to the highest rate applicable to any of the Obligations.
Notwithstanding the foregoing, Bank agrees to waive the Early Termination Fee if Bank agrees to refinance and redocument this Agreement under another division of Bank (in its sole and exclusive discretion) prior to the Maturity Date. 
 (g) Maturity. This Agreement shall terminate and all Obligations outstanding hereunder shall be immediately due and payable on the
Maturity Date. 
 (h) Suspension of Advances. Borrower’s ability to request that Bank finance Eligible Accounts
hereunder will terminate if, in Bank’s sole discretion, there has been a material adverse change in the general affairs, management, results of operation, condition (financial or otherwise) or the prospect of repayment of the Obligations, or
there has been any material adverse deviation by Borrower from the most recent business plan of Borrower presented to and accepted by Bank prior to the execution of this Agreement. 
 2.2 Collections, Finance Charges, Remittances and Fees. The Obligations shall be subject to the following fees and Finance
Charges. Unpaid fees and Finance Charges may, in Bank’s discretion, accrue interest and fees as described in Section 9.2 hereof. 
 2.2.1 Collections. Collections will be credited to the Financed Receivable Balance for such Financed Receivable, but if there is an Event of Default, Bank may apply Collections to the
Obligations in any order it chooses. If Bank receives a payment for both a Financed Receivable and a non-Financed Receivable, the funds will first be applied to the Financed Receivable and, if there is no Event of Default then existing, the excess
will be remitted to Borrower, subject to Section 2.2.7. 







 2.2.2 Facility Fee. A fully earned, non refundable facility fee of Twenty-Five
Thousand Dollars ($25,000) is due upon the Effective Date (the “Facility Fee”). 
 2.2.3 Finance
Charges. In computing Finance Charges on the Obligations under this Agreement, all Collections received by Bank shall be deemed applied by Bank on account of the Obligations one (1) Business Day after receipt of the Collections.
Borrower will pay a finance charge (the “Finance Charge”) on the Financed Receivable Balance which is equal to the Applicable Rate divided by 360, multiplied by the number of days each such Financed Receivable is outstanding, multiplied by
the outstanding Financed Receivable Balance. The Finance Charge is payable when the Advance made based on such Financed Receivable is payable in accordance with Section 2.3 hereof. While any Event of Default has occurred and is continuing, the
Applicable Rate will increase an additional five percent (5.0%) per annum effective immediately upon the occurrence of such Event of Default. In the event that the aggregate amount of Finance Charges and Collateral Handling Fees earned by Bank
in any Reconciliation Period is less than the Minimum Finance Charge, Borrower shall pay to Bank an additional Finance Charge equal to (i) the Minimum Finance Charge minus (ii) the aggregate amount of all Finance Charges and Collateral
Handling Fees earned by Bank in such Reconciliation Period. Such additional Finance Charge shall be payable on the first day of the next Reconciliation Period. 
 2.2.4 Collateral Handling Fee. If Borrower’s Net Cash as of the last day of any month is equal to or greater than One Dollar ($1.00), then Borrower shall not pay any Collateral Handling
Fee (as hereinafter defined) during the immediately following month. At all other times, Borrower shall pay to Bank a Collateral Handling Fee equal to fifty-five hundredths of one percent (0.55%) per month of the Financed Receivable Balance for each
Financed Receivable outstanding based upon a three hundred sixty (360) day year (the “Collateral Handling Fee”). This fee is charged on a daily basis which is equal to the Collateral Handling Fee divided by thirty (30),
multiplied by the number of days each such Financed Receivable is outstanding, multiplied by the outstanding Financed Receivable Balance. The Collateral Handling Fee is payable when the Advance made based on such Financed Receivable is payable in
accordance with Section 2.3 hereof. In computing Collateral Handling Fees under this Agreement, all Collections received by Bank shall be deemed applied by Bank on account of Obligations one (1) Business Day after receipt of the
Collections. After an Event of Default, the Collateral Handling Fee will increase an additional one half of one percent (0.50%) effective immediately upon such Event of Default. 
 2.2.5 Accounting. After each Reconciliation Period, Bank will provide an accounting of the transactions for that
Reconciliation Period, including the amount of all Financed Receivables, all Collections, Adjustments, Finance Charges, Collateral Handling Fee and the Facility Fee. If Borrower does not object to the accounting in writing within thirty
(30) days it shall be considered accurate. All Finance Charges and other interest and fees are calculated on the basis of a 360 day year and actual days elapsed. 







 2.2.6 Deductions. Bank may deduct fees, Finance Charges, Advances which become
due pursuant to Section 2.3, and other amounts due pursuant to this Agreement from any Advances made or Collections received by Bank. 
 2.2.7 Lockbox; Account Collection Services. 
 (a) Borrower shall
direct each Account Debtor (and each depository institution where proceeds of Accounts are on deposit) to remit payments with respect to the Accounts to a lockbox account established with Bank or to wire transfer payments to a cash collateral
account that Bank controls (collectively, the “Lockbox”). It will be considered an immediate Event of Default if the Lockbox is not set-up and operational within forty-five (45) days after the Effective Date. 
 (b) Until such Lockbox is established, the proceeds of the Accounts shall be paid by the Account Debtors to an address consented to by
Bank. Upon receipt by Borrower of such proceeds, Borrower shall immediately transfer and deliver same to Bank, along with a detailed cash receipts journal. Provided no Event of Default exists or an event that with notice or lapse of time will be an
Event of Default, within three (3) days of receipt of such amounts by Bank, Bank will turn over to Borrower the proceeds of the Accounts other than Collections with respect to Financed Receivables and the amount of Collections in excess of the
amounts for which Bank has made an Advance to Borrower, less any amounts due to Bank, such as the Finance Charge, the Facility Fee, payments due to Bank, other fees and expenses, or otherwise; provided, however, Bank may hold such excess amount with
respect to Financed Receivables as a reserve until the end of the applicable Reconciliation Period if Bank, in its discretion, determines that other Financed Receivable(s) may no longer qualify as an Eligible Account at any time prior to the end of
the subject Reconciliation Period. This Section does not impose any affirmative duty on Bank to perform any act other than as specifically set forth herein. All Accounts and the proceeds thereof are Collateral and if an Event of Default occurs, Bank
may apply the proceeds of such Accounts to the Obligations while such Event of Default is continuing. 
 2.2.8 Bank
Expenses. Borrower shall pay all Bank Expenses (including reasonable attorneys’ fees and expenses, plus expenses, for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due. 

2.2.9 Good Faith Deposit. Borrower has paid to Bank a deposit of $10,000 (the “Good Faith Deposit”) to initiate
Bank’s due diligence review process. On the Effective Date the Good Faith Deposit will be applied to the Facility Fee. 
 2.3 Repayment of Obligations; Adjustments. 
 2.3.1 Repayment. Borrower will repay each
Advance on the earliest of: (a) the date on which payment is received of the Financed Receivable with respect to which the Advance was made, (b) the date on which the Financed Receivable is no longer an Eligible Account, (c) the date
on which any Adjustment is asserted to the Financed Receivable (but only to the extent of the Adjustment if the Financed Receivable remains otherwise an Eligible Account), (d) the date on which there is a breach of any warranty or
representation set forth in








 
Section 5.3, or a breach of any covenant in this Agreement or (e) the Maturity Date (including any early termination). Each payment will also include all accrued Finance Charges and
Collateral Handling Fees with respect to such Advance and all other amounts then due and payable hereunder. 
 2.3.2
Repayment on Event of Default. When an Event of Default has occurred and is continuing, Borrower will, if Bank demands (or, upon the occurrence of an Event of Default under Section 8.5, immediately without notice or demand from Bank)
repay all of the Advances. The demand may, at Bank’s option, include the Advance for each Financed Receivable then outstanding and all accrued Finance Charges, Collateral Handling Fees, the Early Termination Fee, attorneys’ and
professional fees, court costs and expenses, and any other Obligations. 
 2.3.3 Debit of Accounts. Bank may debit
any of Borrower’s deposit accounts for payments or any amounts Borrower owes Bank hereunder. Bank shall promptly notify Borrower when it debits Borrower’s accounts. These debits shall not constitute a set-off. 
 2.3.4 Adjustments. If, at any time during the term of this Agreement, any Account Debtor asserts an Adjustment, Borrower
issues a credit memorandum, or any of the representations and warranties in Section 5.3 or covenants in this Agreement are no longer true in all material respects, Borrower will promptly advise Bank. 
 2.4 Power of Attorney. Borrower irrevocably appoints Bank and its successors and assigns as attorney-in-fact and authorizes
Bank, to: following the occurrence and during the continuance of an Event of Default, sell, assign, transfer, pledge, compromise, or discharge all or any part of the Financed Receivables; demand, collect, sue, and give releases to any Account Debtor
for monies due and compromise, prosecute, or defend any action, claim, case or proceeding about the Financed Receivables, including filing a claim or voting a claim in any bankruptcy case in Bank’s or Borrower’s name, as Bank chooses; and
prepare, file and sign Borrower’s name on any notice, claim, assignment, demand, draft, or notice of or satisfaction of lien or mechanics’ lien or similar document; and regardless of whether there has been an Event of Default, notify all
Account Debtors to pay Bank directly; receive, open, and dispose of mail addressed to Borrower; endorse Borrower’s name on checks or other instruments (to the extent necessary to pay amounts owed pursuant to this Agreement); and execute on
Borrower’s behalf any instruments, documents, financing statements to perfect Bank’s interests in the Financed Receivables and Collateral and do all acts and things necessary or expedient, as determined solely and exclusively by Bank, to
protect or preserve, Bank’s rights and remedies under this Agreement, as directed by Bank. 
 3 CONDITIONS OF
LOANS 
 3.1 Conditions Precedent to Initial Advance. Bank’s agreement to make the initial Advance is
subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate, including, without limitation:

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







 (b) the IP Agreements; 
 (c) subordination agreements/intercreditor agreements by certain Persons; 
 (d) Perfection Certificates by Borrower; 
 (e) duly executed original signatures to the Control Agreements; 
 (f) evidence
satisfactory to Bank that the insurance policies required by Section 6.4 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; 
 (g) payment of the fees and Bank Expenses then due and payable; 
 (h) Certificates of Good Standing/Legal Existence with regard to Borrower’s jurisdiction of formation and each jurisdiction in which
Borrower is registered to do business; 
 (i) a payoff letter executed by CapitalSouth Partners; and 
 (j) such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate. 
 3.2 Conditions Precedent to all Advances. Bank’s agreement to make each Advance, including the initial Advance, is
subject to the following: 
 (a) receipt of the Invoice Transmittal; 
 (b) Bank shall have (at its option) conducted the confirmations and verifications as described in Section 2.1.1(d); and 
 (c) each of the representations and warranties in Section 5 shall be true on the date of the Invoice Transmittal and on the
effective date of each Advance and no Event of Default shall have occurred and be continuing, or result from the Advance. Each Advance is Borrower’s representation and warranty on that date that the representations and warranties in
Section 5 remain true. 
 4 CREATION OF SECURITY INTEREST 
 4.1 Grant of Security Interest. Borrower hereby grants Bank, to secure the payment and performance in full of all of the
Obligations, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. Borrower represents, warrants, and covenants that the
security interest granted herein shall be a first priority security interest in the Collateral. If Borrower








 
shall at any time, acquire a commercial tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security
interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance 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 Advances has terminated, Bank shall, at Borrower’s sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower.

 4.2 Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing statements,
without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to
violate the rights of Bank under the Code. Any 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 
 Borrower represents and warrants as follows: 
 5.1 Due Organization and Authorization. Borrower and each of its Subsidiaries are duly existing and in good standing in their respective jurisdictions of formation and are qualified and
licensed to do business and are in good standing in any jurisdiction in which the conduct of their respective business or ownership of property requires that they be qualified except where the failure to do so could not reasonably be expected to
have a material adverse effect on Borrower’s business. In connection with this Agreement, each Borrower has delivered to Bank a completed certificate signed by Borrower, entitled “Perfection Certificate”. Borrower represents and
warrants to Bank that (a) Borrower’s exact legal name is that indicated on the Perfection Certificates and on the signature page hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the
Perfection Certificates; (c) the Perfection Certificates accurately set forth Borrower’s organizational identification number or accurately states that Borrower has none; (d) the Perfection Certificates accurately set forth
Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its chief executive office); (e) 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 Certificates pertaining to Borrower
and each of its Subsidiaries is accurate and complete (it being understood and agreed that Borrower 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 Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s organizational identification number.








 The execution, delivery and performance by Borrower of the Loan Documents to which it is a
party have been duly authorized, and do not (i) conflict with any of Borrower’s organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene,
conflict or violate any applicable order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any 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 for (A) such Governmental Approvals which have already been obtained and are in full force and
effect and (B) such actions, filings, registrations, qualifications or Governmental Approvals the absence of which could not reasonably be expected to cause a Material Adverse Change or (v) constitute an event of default under any material
agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to have a material adverse effect on Borrower’s business.

 5.2 Collateral. Borrower has good title, 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. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any, described in the Perfection
Certificates delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the
Account Debtors. All Inventory is in all material respects of good and marketable quality, free from material defects. 
 The
Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificates. None of the components of the Collateral shall be maintained at locations other than as provided in the
Perfection Certificates or as permitted pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee, then 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. 
 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 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 Borrower’s business. Except as noted on the Perfection Certificates, Borrower is not a party to, nor is bound by, any material license or other
agreement with respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which
a default under or termination of could interfere with the Bank’s right to sell any Collateral. Without prior consent from Bank, Borrower shall not enter into, or become bound by, any such license or agreement which is reasonably likely to have
a material impact on Borrower’s business or financial condition. Borrower shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or
contract rights 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. 
 5.3 Financed Receivables. Borrower represents and warrants for each
Financed Receivable: 
 (a) Such Financed Receivable is an Eligible Account; 
 (b) Borrower is the owner of and has the legal right to sell, transfer, assign and encumber such Financed Receivable; 
 (c) The correct amount is on the Invoice Transmittal and is not disputed; 
 (d) Payment is not contingent on any obligation or contract and Borrower has fulfilled all its obligations as of the Invoice Transmittal
date; 
 (e) Such Financed Receivable is based on an actual sale and delivery of goods and/or services rendered, is due to
Borrower, is not past due or in default, has not been previously sold, assigned, transferred, or pledged and is free of any liens, security interests and encumbrances other than Permitted Liens; 
 (f) There are no defenses, offsets, counterclaims or agreements for which the Account Debtor may claim any deduction or discount;

 (g) Borrower reasonably believes no Account Debtor is insolvent or subject to any Insolvency Proceedings; 
 (h) Borrower has not filed or had filed against it Insolvency Proceedings and does not anticipate any filing; 
 (i) Bank has the right to endorse and/ or require Borrower to endorse all payments received on Financed Receivables and all proceeds of
Collateral; and 
 (j) No representation, warranty or other statement of Borrower in any certificate or written statement given
to Bank contains any untrue statement of a material fact or omits to state a material fact necessary to make the statement contained in the certificates or statement not misleading. 
 5.4 Litigation. There are no actions or proceedings pending or, to the knowledge of Borrower’s Responsible Officers,
threatened in writing by or against Borrower or any Subsidiary in which an adverse decision could reasonably be expected to cause a Material Adverse Change. 
 5.5 No Material Deviation in Financial Statements. All consolidated financial statements for Borrower and any Subsidiaries delivered to Bank fairly present in all material respects
Borrower’s consolidated financial condition and Borrower’s consolidated results of operations. There has not been any material deterioration in Borrower’s consolidated financial condition since the date of the most recent financial
statements submitted to Bank. 







 5.6 Solvency. The fair salable value of each Borrower’s assets (including
goodwill minus disposition costs) exceeds the fair value of its liabilities; no Borrower is left with unreasonably small capital after the transactions in this Agreement; and each Borrower is able to pay its debts (including trade debts) as they
mature. 
 5.7 Regulatory Compliance. Borrower is not an “investment company” or a company
“controlled” by an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the
Federal Reserve Board of Governors). Neither 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. Borrower has complied in all material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of
which could reasonably be expected to cause a Material Adverse Change. None of Borrower’s or any Subsidiary’s properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous
Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other than legally. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted, except where the failure to obtain or make such consents, declarations, notices or filings would not
reasonably be expected to have a material adverse effect on Borrower’s business. 
 5.8 Subsidiaries.
Borrower does not own any stock, partnership interest or other equity securities except for Permitted Investments. 
 5.9
Tax Returns and Payments; Pension Contributions. Borrower and each Subsidiary have timely filed all required tax returns and reports, and Borrower and each Subsidiary have timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower and each Subsidiary. Borrower may defer payment of any contested taxes, provided that 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”. Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could
result in additional taxes becoming due and payable by Borrower. Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from
participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any
liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency. 







 5.10 Use of Proceeds. Borrower shall use the proceeds of the initial Advance to pay
off in full all Indebtedness owed by Borrower to CapitalSouth Partners. Borrower shall use all other proceeds of the Advances solely as working capital, and to fund its general business requirements and not for personal, family, household or
agricultural purposes. 
 5.11 Full Disclosure. No written representation, warranty or other statement of Borrower
in any certificate or written statement given to Bank, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Bank, contains any untrue statement
of a material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading (it being recognized by Bank that projections and forecasts provided by Borrower in good faith and based
upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted results). 
 6 AFFIRMATIVE COVENANTS 
 Borrower shall do all of the following: 
 6.1 Government Compliance.

 (a) Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of
formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations. 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. 
 (b) Obtain all of the Governmental Approvals necessary for the performance by Borrower of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Bank in
all of its property. Borrower shall promptly provide copies of any such obtained Governmental Approvals to Bank. 
 6.2
Financial Statements, Reports, Certificates. 
 (a) Deliver to Bank: (i) as soon as available, but no later than
thirty (30) days after the last day of each month, a company prepared consolidated balance sheet and income statement covering Borrower’s consolidated operations during the period certified by a Responsible Officer and in a form acceptable
to Bank; (ii) a prompt report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in damages or costs to Borrower or any Subsidiary of One Hundred Thousand Dollars ($100,000.00) or more;
(iii) prompt notice of any material change in the composition of the Intellectual Property Collateral, or the registration of any copyright, including any subsequent ownership right of Borrower in or to any copyright, patent or trademark not
shown in the IP Agreements or knowledge of an event that materially adversely affects the value of the Intellectual Property Collateral; (iv) as soon as available, but no later than thirty (30) days after the earlier to occur of
Borrower’s fiscal year end or approval by Borrower’s Board of Directors, annual financial projections for the following fiscal year commensurate in form and substance with those provided to Borrower’s investors/Board of Directors; and
(v) budgets, sales projections, operating plans or other financial information reasonably requested by Bank. 







 (b) Within five (5) days of filing, copies of all periodic and other reports, proxy
statements and other materials filed by Borrower with the SEC, any Governmental Authority succeeding to any or all of the functions of the SEC or with any national securities exchange, or distributed to its shareholders, as the case may be,
including, without limitation, all reports on Form 10-K, 10-Q and 8 K filed with the SEC. 
 (c) Within thirty (30) days
after the last day of each month, deliver to Bank with the monthly financial statements a Compliance Certificate signed by a Responsible Officer in the form of Exhibit B. 
 (d) Allow Bank to audit Borrower’s Collateral, including, but not limited to, Borrower’s Accounts, at Borrower’s expense,
upon reasonable notice to Borrower; provided, however, when no Event of Default has occurred and is continuing, Borrower shall be obligated to pay for not more than one (1) audit per year. The charge for the foregoing audits shall be Eight
Hundred Fifty Dollars ($850) per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable out-of-pocket expenses. Borrower hereby acknowledges that the first such audit will be
conducted within sixty (60) days after the execution of this Agreement. After the occurrence and during the continuance of an Event of Default, Bank may audit Borrower’s Collateral, including, but not limited to, Borrower’s Accounts
at Borrower’s expense and at Bank’s sole and exclusive discretion and without notification and authorization from Borrower. 
 (e) Upon Bank’s request, provide a written report respecting any Financed Receivable, if payment of any Financed Receivable does not occur by its due date and include the reasons for the delay. 
 (f) Provide Bank with, as soon as available, but no later than thirty (30) days following each Reconciliation Period, an aged listing
of accounts receivable and accounts payable by invoice date, in form acceptable to Bank. 
 (g) Provide Bank with, as soon as
available, but no later than thirty (30) days following each Reconciliation Period, a Deferred Revenue report, if applicable, in form acceptable to Bank. 
 6.3 Taxes. Borrower shall make, and cause each Subsidiary to make, timely payment of all foreign, federal, state, and local taxes or assessments (other than taxes and assessments which
Borrower is contesting in good faith, with adequate reserves maintained in accordance with GAAP) and will deliver to Bank, on demand, appropriate certificates attesting to such payments. 
 6.4 Insurance. Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s
industry and location, and as Bank may reasonably request. Insurance policies shall be in a form, with companies, and in amounts that are satisfactory to Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as
an additional 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
must give Bank at least twenty (20) days notice before canceling, amending, or declining to renew its policy. At Bank’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable
under any policy shall, at Bank’s option, be payable to Bank on account of the Obligations. If Borrower fails to obtain insurance as required under this Section 6.4 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 6.4, and take any action under the policies Bank deems prudent. 
 6.5 Accounts. 
 (a) To permit Bank to monitor Borrower’s financial performance and condition, Borrower shall maintain Borrower’s primary depository and operating accounts and securities accounts with Bank and
Bank’s affiliates. 
 (b) Borrower shall identify to Bank, in writing, any deposit or securities account opened by
Borrower with any institution other than Bank. In addition, for each such account that Borrower at any time opens or maintains, Borrower shall, at Bank’s request and option, pursuant to an agreement in form and substance acceptable to Bank,
cause the depository bank or securities intermediary to agree that such account is the collateral of Bank pursuant to 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 Borrower’s employees. 
 6.6
Inventory; Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower and its Account Debtors shall follow Borrower’s customary practices as they exist at the
Effective Date. Borrower must promptly notify Bank of all returns, recoveries, disputes and claims that involve more than One Hundred Thousand Dollars ($100,000). 
 6.7 Protection and Registration of Intellectual Property Rights. 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 Borrower’s business to be abandoned, forfeited or dedicated to the public without
Bank’s written consent. If 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 Borrower shall immediately provide written notice thereof to Bank and shall execute such intellectual property security agreements and other documents and
take such other actions as Bank 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 Borrower decides to register any copyrights or mask works in
the United States Copyright Office, Borrower shall: (x) provide Bank with at least fifteen (15) days prior written notice of Borrower’s intent to register such copyrights or mask works together with a copy of the application it
intends to file with the United States Copyright Office (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. 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. 
 6.8 Litigation Cooperation. From the date hereof and continuing through the termination of this Agreement, make available to
Bank, without expense to Bank, Borrower and its officers, employees and agents and Borrower’s Books and records, to the extent that Bank may deem them reasonably necessary to prosecute or defend any third-party suit or proceeding instituted by
or against Bank with respect to any Collateral or relating to Borrower. 
 6.9 Further Assurances. Borrower shall
execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s security interest in the Collateral or to effect the purposes of this Agreement. 
 7 NEGATIVE COVENANTS 
 Borrower shall not do any of the following without Bank’s prior written consent. 
 7.1 Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively a “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for
Transfers (a) of Inventory in the ordinary course of business; (b) of worn-out or obsolete Equipment; (c) in connection with Permitted Liens and Permitted Investments; and (d) of non-exclusive licenses for the use of the property
of Borrower or its Subsidiaries in the ordinary course of business. 
 7.2 Changes in Business; Change in Management or
Control; Jurisdiction of Formation. Engage in any material line of business other than those lines of business conducted by Borrower on the date hereof and any businesses reasonably related, complementary or incidental thereto or reasonable
extensions thereof, or have a change of management in which the Key Person ceases to hold such office with Parent. Parent shall not permit or suffer any Change in Control, and none of Intersearch, Dotted or Mystockfund Securities, Inc. shall cease
to be a wholly-owned Subsidiary of Parent. Borrower will not, without prior written notice to Bank: (i) change its jurisdiction of organization, (ii) change its organizational structure or type, (iii) change its legal name,
(iv) change any organizational number (if any) assigned by its jurisdiction of organization, or add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Five Thousand
Dollars ($5,000) in Borrower’s assets or property) or deliver any portion of the Collateral to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificates. If Borrower intends to deliver any
portion of the Collateral to a bailee, and Bank and such bailee are not already parties to a bailee agreement governing both the Collateral and the location to which Borrower intends to deliver the Collateral, then Borrower will first receive the
written consent of Bank, and such bailee shall execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion. 







 7.3 Mergers or Acquisitions. Merge or consolidate, or permit any of its
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. A Subsidiary may merge or consolidate into another
Subsidiary or into Borrower. 
 7.4 Indebtedness. Create, incur, assume, or be liable for any Indebtedness, or
permit any Subsidiary to do so, other than Permitted Indebtedness. 
 7.5 Encumbrance. Create, incur, or allow 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, or 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 Borrower from
assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s intellectual property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Lien”
herein. 
 7.6 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. 
 7.7 Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material
transaction with any Affiliate of Borrower, except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length
transaction with a non-affiliated Person. 
 7.8 Subordinated Debt. (a) Make or permit any payment on any
Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would
increase the amount thereof or adversely affect the subordination thereof to Obligations owed to Bank. 
 7.9
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 Advance for that purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable
Event or Prohibited Transaction, each as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if the violation could reasonably be expected to have a material adverse effect on
Borrower’s business, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete termination of, or permit the occurrence of any other








 
event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability to the
Pension Benefit Guaranty Corporation or its successors or any other governmental agency. 
 8 EVENTS OF DEFAULT 

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

 8.1 Payment Default. Borrower fails to pay any of the Obligations when due; 
 8.2 Covenant Default. Borrower fails or neglects to perform any obligation in Section 6 or violates any covenant in
Section 7 or fails or neglects to perform, keep, or observe any other material term, provision, condition, covenant or agreement contained in this Agreement, any Loan Documents and as to any default 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, grace and cure periods provided under this section shall not apply to financial covenants or any other
covenants that are required to be satisfied, completed or tested by a date certain; 
 8.3 Material Adverse
Change. A Material Adverse Change occurs; 
 8.4 Attachment; Levy; Restraint on Business.
(a) (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any entity under control of 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 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 Advances shall be made during any ten (10) day cure period; or (b) (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes
into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower from conducting any part of its business; 
 8.5 Insolvency. (a) Borrower is unable to pay its debts (including trade debts) as they become due or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or
(c) an Insolvency Proceeding is begun against Borrower and not dismissed or stayed within thirty (30) days (but no Advances 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 there is a default in any agreement to which Borrower is a
party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of One Hundred Thousand Dollars ($100,000) or that could result
in a Material Adverse Change; 
 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 Two Hundred Thousand Dollars ($200,000) (not covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall be rendered against
Borrower and shall remain








 
unsatisfied, unvacated, or unstayed for a period of ten (10) days after the entry thereof (provided that no Advances will be made prior to the satisfaction, vacation, or stay of such
judgment, order, or decree); 
 8.8 Misrepresentations. Borrower or any Person acting for Borrower makes any
representation, warranty, or other statement now or later in this Agreement, any Loan Document or in writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such representation, warranty, or other statement is
incorrect in any material respect when made; 
 8.9 Subordinated Debt. A default or breach occurs under any
agreement between Borrower and any creditor of Borrower that signed a subordination agreement, intercreditor agreement, or other similar agreement with Bank, or any creditor that has signed such an agreement with Bank breaches any terms of the
agreement; or 
 8.10 Governmental Approvals. Any Governmental Approval shall have been (a) revoked,
rescinded, suspended, modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Authority that designates a hearing with respect to any applications for renewal of any
of such Governmental Approval or that could result in the Governmental Authority taking any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension, modification or non-renewal (i) has, or
could reasonably be expected to have, a Material Adverse Change, or (ii) adversely affects the legal qualifications of Borrower or any of its Subsidiaries to hold such Governmental Approval in any applicable jurisdiction and such revocation,
rescission, suspension, modification or non-renewal could reasonably be expected to affect the status of or legal qualifications of Borrower or any of its Subsidiaries to hold any Governmental Approval in any other jurisdiction. 
 9 BANK’S RIGHTS AND REMEDIES 
 9.1 Rights and Remedies. When 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 Borrower’s
benefit under this Agreement or under any other agreement between Borrower and Bank; 
 (c) Settle or adjust disputes and
claims directly with Account Debtors for amounts, on terms and in any order that Bank considers advisable and notify any Person owing Borrower money of Bank’s security interest in such funds and verify the amount of such account. Borrower shall
collect all payments in trust for Bank and, if requested by Bank, immediately deliver the payments to Bank in the form received from the Account Debtor, with proper endorsements for deposit; 
 (d) Make any payments and do any acts it considers necessary or reasonable to protect its security interest in the Collateral. Borrower
shall assemble the








 
Collateral if Bank requests and make it available as Bank designates. Bank may enter premises where the Collateral is located, take and maintain possession of any part of the Collateral, and pay,
purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without charge, to exercise any of
Bank’s rights or remedies; 
 (e) Apply to the Obligations any (i) balances and deposits of Borrower it holds, or
(ii) any amount held by Bank owing to or for the credit or the account of Borrower; 
 (f) 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, 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, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit; 
 (g) 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; 
 (h) Demand and receive possession of Borrower’s Books; and 
 (i) Exercise all rights and remedies available to
Bank under the Loan Documents or at law or equity, including all remedies provided by the Code (including disposal of the Collateral pursuant to the terms thereof). 
 9.2 Protective Payments. If Borrower fails to obtain insurance called for by Section 6.4 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated
to pay under this Agreement or by 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 effort to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No payments by Bank are deemed an agreement to make
similar payments in the future or Bank’s waiver of any Event of Default. 
 9.3 Bank’s Liability for
Collateral. So long as Bank complies with reasonable banking practices regarding the safekeeping of Collateral in possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the
Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or
destruction of the Collateral. 
 9.4 Remedies Cumulative. Bank’s failure, at any time or times, to require
strict performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance and








 
compliance herewith or therewith. No waiver hereunder shall be effective unless signed by 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. 
 9.5 Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement,
extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable. 
 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 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 or facsimile number provided at the beginning of this Agreement. Bank or Borrower may
change its address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10. 
 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. Borrower 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. Borrower expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal
jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of such legal or equitable relief as is deemed appropriate by such court. Borrower hereby waives personal service of the summons, complaints, and other process
issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by registered or certified mail addressed to Borrower at the address set forth in Section 10 of this Agreement and that service so
made shall be deemed completed upon the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid. 
 TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR








 
CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A
MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. 
 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 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. Borrower may not assign this Agreement or any rights or
obligations under it without Bank’s prior written consent which may be granted or withheld in Bank’s discretion. Bank has the right, without the consent of or notice to Borrower, to sell, transfer, negotiate, or grant participation in all
or any part of, or any interest in, Bank’s obligations, rights and benefits under this Agreement, the Loan Documents or any related agreement. Bank will provide notice to Borrower of any transfer by Bank under this Section. 







 12.2 Indemnification. Borrower agrees to indemnify, defend, and hold Bank and
its officers, directors, 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 Borrower contemplated by the Loan Documents (including reasonable attorneys’ fees and expenses), except for Claims, Bank Expenses 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 signed by both Bank and 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. 
 12.8 Borrower 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 Borrower to the rights of Bank under this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Borrower, or any other Person now or hereafter primarily or
secondarily liable for any of the Obligations, for any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit from, or to participate in, any security for
the Obligations as a result of any payment made by Borrower with respect to the Obligations in connection with this Agreement or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this
Section 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. 







 Each Borrower waives any suretyship defenses available to it under the Code or any other
applicable law. Each Borrower waives any right to require Bank to: (a) proceed against any Borrower or any other person; (b) proceed against or exhaust any security; or (c) pursue any other remedy. Bank may exercise or not exercise
any right or remedy it has against any Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower’s liability. 
 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
Borrower 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 (such Subsidiaries and Affiliates, together with Bank, collectively, “Bank Entities”); (b) to prospective transferees or purchasers of any interest in the
Advances (provided, however, Bank shall use its best efforts to obtain any prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to
Bank’s regulators or as otherwise required in connection with Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies under the Loan Documents; and (f) to third-party service providers of Bank so
long as such service providers have executed a confidentiality agreement with Bank with terms no less restrictive than those contained herein. Confidential information does not include information that is either: (i) in the public domain
or in Bank’s possession when disclosed to Bank, or becomes part of the public domain after disclosure to Bank; or (ii) disclosed to Bank by a third party if Bank does not know that the third party is prohibited from disclosing the
information. 
 Bank Entities may use the confidential information for reporting purposes and the development and distribution
of databases and market analyses so long as such confidential information is aggregated and anonymized prior to distribution unless otherwise expressly prohibited by Borrower. 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 Borrower 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. In this Agreement: 
 “Account” is any “account” as defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other
sums owing to Borrower. 







 “Account Debtor” is as defined in the Code and shall include, without
limitation, any person liable on any Financed Receivable, such as, a guarantor of the Financed Receivable and any issuer of a letter of credit or banker’s acceptance. 
 “Adjustments” are all discounts, allowances, returns, disputes, counterclaims, offsets, defenses, rights of recoupment,
rights of return, warranty claims, or short payments, asserted by or on behalf of any Account Debtor for any Financed Receivable. 
 “Advance” is defined in Section 2.1.1. 
 “Advance Rate” eighty percent (80.0%),
net of any offsets related to each specific Account Debtor, including, without limitation, Deferred Revenue. 
 “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. 
 “Applicable Rate” is a per annum rate equal to the following: (a) if Borrower’s Net Cash is less than One Dollar ($1.00) as of the last day of any month, then the
“Applicable Rate” during the immediately following month shall be equal to the Prime Rate plus three and one quarter percent (3.25%), and (b) at all other times the “Applicable Rate” shall be equal to the Prime Rate plus two
and one half percent (2.5%). 
 “Bank Expenses” are all audit fees and expenses, costs, and expenses (including
reasonable attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or
otherwise incurred with respect to Borrower. 
 “Borrower’s Books” are all Borrower’s books and
records including ledgers, federal and state tax returns, records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such
information. 
 “Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.

 “Change in Control” means any event, transaction, or occurrence as a result of which (a) any
“person” (as such term is defined in Sections 3(a)(9) and 13(d)(3) of the Exchange Act), other than a trustee or other fiduciary holding securities under an employee benefit plan of Parent, is or becomes a beneficial owner (within the
meaning Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of Parent, representing twenty-five percent (25%) or more of the combined voting power of Parent’s then outstanding securities; or (b)








 
during any period of twelve consecutive calendar months, individuals who at the beginning of such period constituted the Board of Directors of Parent (together with any new directors whose
election by the Board of Directors of Parent was approved by a vote of not less than two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason other than death or disability to constitute a majority of the directors then in office. 
 “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 Borrower described
on Exhibit A. 
 “Collateral Handling Fee” is defined in Section 2.2.4. 
 “Collections” are all funds received by Bank from or on behalf of an Account Debtor for Financed Receivables. 

“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 attached as Exhibit B. 
 “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. 
 “Control Agreements” are any control agreements entered into among the depository institution at which Borrower maintains a Deposit Account or the securities intermediary or








 
commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such
Deposit Account, Securities Account, or Commodity Account. 
 “Deferred Revenue” is all amounts received or
invoiced, as appropriate, 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. 
 “Early Termination Fee” is defined in Section 2.1.1(f). 
 “Effective Date” is
the date Bank executes this Agreement as indicated on the signature page hereof. 
 “Eligible Accounts” are
billed Accounts in the ordinary course of Borrower’s business that meet all Borrower’s representations and warranties in Section 5.3, have been, at the option of Bank, confirmed in accordance with Section 2.1.1(d), and are due
and owing from Account Debtors deemed creditworthy by Bank in its sole discretion. Without limiting the fact that the determination of which Accounts are eligible hereunder is a matter of Bank discretion in each instance, Eligible Accounts shall not
include the following Accounts (which listing may be amended or changed in Bank’s discretion with notice to Borrower): 
 (a) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date regardless of invoice payment period terms; 
 (b) Accounts billed in the United States and owing from an Account Debtor which does not have its principal place of business in the United States or Canada unless such Accounts are otherwise Eligible
Accounts and (i) covered in full by credit insurance satisfactory to Bank, less any deductible, (ii) supported by letter(s) of credit acceptable to Bank, (iii) supported by a guaranty from the Export-Import Bank of the United States,
or (iv) that Bank otherwise approves of in writing; 
 (c) Accounts billed and payable outside of the United States unless
the Bank has a first priority, perfected security interest or other enforceable Lien in such Accounts; 
 (d) Accounts owing
from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit
accounts), with the exception of customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the ordinary course of its business; 
 (e) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or agent; 
 (f) Accounts owing from an Account Debtor which is a United States government entity or any department, agency, or instrumentality thereof unless Borrower has assigned its payment rights to Bank and the
assignment has been acknowledged under the Federal Assignment of Claims Act of 1940, as amended; 







 (g) Accounts for demonstration or promotional equipment, or in which goods are consigned,
or sold on a “sale guaranteed”, “sale or return”, “sale on approval”, or other terms if Account Debtor’s payment may be conditional; 
 (h) Accounts owing from an Account Debtor that has not been invoiced or where goods or services have not yet been rendered to the Account Debtor (sometimes called memo billings or pre-billings);

 (i) Accounts subject to contractual arrangements between Borrower and an Account Debtor where payments shall be scheduled or
due according to completion or fulfillment requirements where the Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to perform in accordance with the contract (sometimes called contracts accounts
receivable, progress billings, milestone billings, or fulfillment contracts); 
 (j) Accounts owing from an Account Debtor the
amount of which may be subject to withholding based on the Account Debtor’s satisfaction of Borrower’s complete performance (but only to the extent of the amount withheld; sometimes called retainage billings); 
 (k) Accounts subject to trust provisions, subrogation rights of a bonding company, or a statutory trust; 
 (l) Accounts owing from an Account Debtor that has been invoiced for goods that have not been shipped to the Account Debtor unless Bank,
Borrower, and the Account Debtor have entered into an agreement acceptable to Bank in its sole discretion wherein the Account Debtor acknowledges that (i) it has title to and has ownership of the goods wherever located, (ii) a bona fide
sale of the goods has occurred, and (iii) it owes payment for such goods in accordance with invoices from Borrower (sometimes called “bill and hold” accounts); 
 (m) Accounts for which the Account Debtor has not been invoiced; 
 (n) Accounts that represent non-trade receivables or that are derived by means other than in the ordinary course of Borrower’s
business; 
 (o) Accounts subject to chargebacks or others payment deductions taken by an Account Debtor (but only to the
extent the chargeback is determined invalid and subsequently collected by Borrower); 
 (p) Accounts owing from an Account
Debtor with respect to which Borrower has received Deferred Revenue (but only to the extent of such Deferred Revenue); 
 (q)
Accounts in which the Account Debtor disputes liability or makes any claim (but only up to the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or goes out of business; and








 (r) Accounts for which Bank in its good faith business judgment determines collection to be
doubtful. 
 “ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations. 

“Events of Default” are set forth in Article 8. 
 “Facility Amount” is Three Million One Hundred Twenty-Five Thousand Dollars ($3,125,000). 
 “Facility Fee” is defined in Section 2.2.2. 
 “Finance Charges” is defined in Section 2.2.3. 
 “Financed Receivables” are all those Eligible Accounts, including their proceeds which Bank finances and makes an Advance,
as set forth in Section 2.1.1. A Financed Receivable stops being a Financed Receivable (but remains Collateral) when the Advance made for the Financed Receivable has been fully paid. 
 “Financed Receivable Balance” is the total outstanding gross face amount, at any time, of any Financed Receivable.

 “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. 
 “Good Faith Deposit” is defined in Section 2.2.8. 
 “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. 
 “Intellectual Property Collateral” is all “Intellectual Property Collateral” under, and as
defined in, the IP Agreements. 
 “Inventory” is all “inventory” as defined in the Code in effect on
the date hereof with such additions to such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without
limitation such inventory as is temporarily out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above. 
 “Investment” is any beneficial ownership of (including stock, partnership interest or other securities) any Person, or any
loan, advance or capital contribution to any Person. 
 “Invoice Transmittal” shows Eligible Accounts which
Bank may finance and, for each such Account, includes the Account Debtor’s, name, address, invoice amount, invoice date and invoice number. 
 “IP Agreements” are those certain Intellectual Property Security Agreements executed and delivered by each Borrower to Bank. 
 “Key Person” is Parent’s Chief Executive Officer, who is, as of the Effective Date, Dan O’Donnell. 
 “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 Certificates, the IP Agreements, any note, or notes or guaranties executed by Borrower, and any other present or future agreement between Borrower and/or for the benefit of Bank
in connection with this Agreement, all as amended, restated, or otherwise modified. 
 “Lockbox” is defined in
Section 2.2.7. 
 “Material Adverse Change” is: (a) a material impairment in the perfection or
priority of Bank’s security interest in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; or (c) a material impairment of
the prospect of repayment of any portion of the Obligations. 
 “Maturity Date” is 364 days from the date of
this Agreement. 
 “Minimum Finance Charge” is $3,500. 







 “Net Cash” is an amount equal to Borrower’s unrestricted cash and
Investments with maturities of fewer than twelve (12) months held at or through Bank, minus the outstanding Obligations. 
 “Obligations” are Borrower’s obligation to pay when due any debts, principal, interest, Bank Expenses, and other amounts Borrower owes Bank now or later, whether under this Agreement, the Loan Documents, or otherwise,
including, without limitation, any interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and the performance of Borrower’s duties under the Loan Documents. 
 “Perfection Certificate” is a certain Perfection Certificate completed and delivered by each Borrower to Bank in connection
with this Agreement. 
 “Permitted Distributions” are: 
 (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 $100,000 in any fiscal year, provided that at the time of such purchase no Event of Default has occurred and is continuing; 
 (b) distributions or dividends consisting solely of Borrower’s capital stock; 
 (c) purchases of fractional shares of capital stock arising out of stock dividends, splits or combinations or business combinations.

 “Permitted Indebtedness” is: 
 (a) Borrower’s indebtedness to Bank under this Agreement or the Loan Documents; 
 (b) Subordinated Debt; 
 (c) Indebtedness to trade creditors incurred in the ordinary course of business; and

 (d) Indebtedness secured by Permitted Liens. 
 “Permitted Investments” are: (i) marketable direct obligations issued or unconditionally guaranteed by the United States or its agency or any state maturing within 1 year from its
acquisition, (ii) commercial paper maturing no more than 1 year after its creation and having the highest rating from either Standard & Poor’s Corporation or Moody’s Investors Service, Inc., (iii) Bank’s
certificates of deposit issued maturing no more than 1 year after issue, (iv) any other investments administered through Bank, (v) Investments by Borrower in Mystockfund Securities, Inc., provided that such Investments do not exceed One
Hundred Fifty Thousand Dollars ($150,000) in the aggregate in any calendar quarter, and (vi) Investments by any Borrower in another Borrower. 







 “Permitted Liens” are: 
 (a) 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 Borrower maintains adequate reserves on its Books, if they have no priority over any of Bank’s security interests; 
 (c) Purchase money Liens securing no more than $100,000 in the aggregate amount outstanding (i) on equipment acquired or held by Borrower incurred for financing the acquisition of the equipment, or (ii) existing on equipment when
acquired, if the Lien is confined to the property and improvements and the proceeds of the equipment; 
 (d) Leases or
subleases and non-exclusive licenses or sublicenses granted in the ordinary course of Borrower’s business, if the leases, subleases, licenses and sublicenses permit granting Bank a security interest; 
 (e) Liens incurred in the extension, renewal or refinancing of the indebtedness secured by Liens described in (a) through (d), but any
extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the indebtedness may not increase. 
 “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
the greater of (i) four percent (4%) or (ii) Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest rate. 
 “Reconciliation Day” is the last calendar day of each month. 
 “Reconciliation Period” is each calendar month. 
 “Registered Organization” is any
“registered organization” as defined in the Code with such additions to such term as may hereafter be made. 
 “Requirement of Law” is as to any Person, the organizational or governing documents of such Person, and any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. 
 “Responsible Officer” is each of the Chief Executive Officer, President, Chief Financial Officer and Controller of Borrower. 
 “SEC” shall mean the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.








 “Securities Account” is any “securities account” as defined in
the Code with such additions to such term as may hereafter be made. 
 “Subordinated Debt” is indebtedness
incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and the
other creditor), on terms acceptable to Bank. 
 “Subsidiary” is, 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. 
 [Signature page follows.] 







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

			
	BORROWER:
	
	BANKS.COM, INC.
		
	By	 	 /s/ Daniel M. O’Donnell

	Name:	 	 Daniel M. O’Donnell

	Title:	 	 President

	
	INTERSEARCH CORPORATE SERVICES, INC.
		
	By	 	 /s/ Kimberly L. O’Donnell

	Name:	 	 Kimberly L. O’Donnell

	Title:	 	 President

	
	DOTTED VENTURES, INC.
		
	By	 	 /s/ Daniel M. O’Donnell

	Name:	 	 Daniel M. O’Donnell

	Title:	 	 President


  

			
	BANK:
	
	SILICON VALLEY BANK
		
	By	 	 /s/ Vincent Vallejos

	Name:	 	 Vincent Vallejos

	Title:	 	 Relationship Manager


 Effective Date: March 3rd, 2010 







 EXHIBIT A 
 The Collateral consists of all of Borrower’s right, title and interest in and to the following: 
 All goods, equipment, inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, general
intangibles (including payment intangibles), accounts (including health-care receivables), 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), commercial tort claims, securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located;
and any copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, now owned or later acquired; any patents, trademarks, service marks and
applications therefor; trade styles, trade names, any trade secret rights, including any rights to unpatented inventions, know how, operating manuals, license rights and agreements and confidential information, now owned or hereafter acquired; or
any claims for damages by way of any past, present and future infringement of any of the foregoing; and 
 All Borrower’s
books relating to the foregoing and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance
proceeds of any or all of the foregoing. 







 EXHIBIT B 

 

 

 SPECIALTY FINANCE DIVISION 
 Compliance Certificate 
 I, an authorized officer of
Banks.com, Inc., on behalf of each “Borrower” under the Loan and Security Agreement (the “Agreement”) dated             , 2010 among Banks.com, Inc., Intersearch
Corporate Services, Inc., Dotted Ventures, Inc. and Silicon Valley Bank (“Bank”), certify as follows (all capitalized terms used herein shall have the meaning set forth in the Agreement): 
 Borrower represents and warrants for each Financed Receivable: 
 Each Financed Receivable is an Eligible Account. 
 Borrower is the owner with legal right to sell,
transfer, assign and encumber such Financed Receivable; 
 The correct amount is on the Invoice Transmittal and is not disputed; 
 Payment is not contingent on any obligation or contract and Borrower has fulfilled all its obligations as of the Invoice Transmittal date; 
 Each Financed Receivable is based on an actual sale and delivery of goods and/or services rendered, is due to Borrower, is not past due or in default, has
not been previously sold, assigned, transferred, or pledged and is free of any liens, security interests and encumbrances other than Permitted Liens; 
 There are no defenses, offsets, counterclaims or agreements for which the Account Debtor may claim any deduction or discount; 
 It
reasonably believes no Account Debtor is insolvent or subject to any Insolvency Proceedings; 
 It has not filed or had filed against it
Insolvency Proceedings and does not anticipate any filing; 
 Bank has the right to endorse and/ or require Borrower to endorse all payments
received on Financed Receivables and all proceeds of Collateral. 
 No representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank contains any untrue statement of a material fact or omits to state a material fact necessary to make the statement contained in the certificates or statement not misleading. 







 Additionally, Borrower represents and warrants as follows: 
 Borrower and each Subsidiary is duly existing and in good standing in its state of formation and qualified and licensed to do business in, and in good
standing in, any state 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 cause a Material Adverse Change. The execution, delivery and
performance of the Loan Documents have been duly authorized, and do not conflict with Borrower’s organizational documents, nor constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default
under any agreement to which or by which it is bound in which the default could reasonably be expected to cause a Material Adverse Change. 
 Borrower has good title to the Collateral, free of Liens except Permitted Liens. All inventory is in all material respects of good and marketable quality, free from material defects. 
 Borrower is not an “investment company” or a company “controlled” by an “investment company” under the Investment Company Act
of 1940, as amended. Neither 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. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of the Federal Reserve Board of Governors). Borrower
has complied in all material respects with the Federal Fair Labor Standards Act. Borrower has not violated any laws, ordinances or rules, the violation of which could reasonably be expected to cause a Material Adverse Change. None of Borrower’s
or any Subsidiary’s properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing, producing, storing, treating, or transporting any hazardous substance other
than legally. Borrower and each Subsidiary has timely filed all required tax returns and paid, or made adequate provision to pay, all material taxes, except those being contested in good faith with adequate reserves under GAAP. Borrower and each
Subsidiary has 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 its business as currently conducted except where the
failure to obtain or make such consents, declarations, notices or filings would not reasonably be expected to cause a Material Adverse Change. 
  

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

			
	 Reporting Covenant
	  	 Required
	  	 Complies

			
	Monthly financial statements with Compliance Certificate	  	Monthly within 30 days	  	Yes  No
			
	SEC filings, including 10-K, 10-Q and 8-K	  	Within 5 days after filing with SEC	  	Yes  No
			
	A/R & A/P Agings and Deferred Revenue Report	  	Monthly within 30 days	  	Yes  No
			
	Annual Financial Projections	  	Annually within 30 days after the earlier of Board Approval or FYE	  	Yes  No









					
	 Performance Pricing
	  	 Applies

			
	Net Cash 3$1.00	  	Prime + 2.5%; No Collateral Handling Fee	  	Yes  No
			
	Net Cash < $1.00	  	Prime + 3.25%; Collateral Handling Fee of 0.55%	  	Yes  No

 The following
Intellectual Property was registered after the Closing Date (if no registrations, state “None”): 
 All representations and warranties
in the Agreement are true and correct in all material respects on this date, and Borrower represents that there is no existing Event of Default. 
  

	
	Sincerely,
	
	Banks.com, Inc.
	
	  

	Signature
	
	  

	Title
	
	  

	Date