Document:

Exhibit 4.15

 

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT dated as of March 4, 2016 (this "Amendment"), by and among INTERACTIVE HOLDING CORP., a Delaware corporation (the "Borrower"), INCREDITONE INC., a Delaware corporation ("Holdings"), each of the Guarantors party hereto, each of the financial institutions party hereto as "Lenders" (the "Lenders") and SUNTRUST BANK, in its capacity as Administrative Agent (in such capacity, the "Administrative Agent").

 

W I T N E S S E T H:

WHEREAS, the Borrower, Holdings, SunTrust Bank, Silicon Valley Bank, Comerica Bank and the Administrative Agent are parties to that certain Credit Agreement dated as of November 30, 2015 (the "Credit Agreement"); and

WHEREAS, in connection with the purchase on the date hereof by Cadence Bank of (i) $10,000,000 in principal amount of Term Loans held by Comerica Bank, (ii) $3,333,333.34 in principal amount of Term Loans held by SunTrust Bank and (iii) $3,333,333.33 in principal amount of Term Loans held by Silicon Valley Bank, the Borrower has requested certain amendments to the Credit Agreement, including a request to provide Aggregate Revolving Commitments in an amount equal to $10,000,000 from the Lenders; and

WHEREAS, the Lenders and the Administrative Agent are willing to so amend the Credit Agreement on and subject to the terms and conditions herein.

NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

1. Defined Terms.  Capitalized terms which are used herein without definition and which are defined in the Credit Agreement shall have the same meanings herein as in the Credit Agreement; provided, that, solely for purposes of this Amendment, Perion Network Ltd. shall be deemed to be included in the definition of the term "Loan Party".

 

2. Amendments to Credit Agreement.

(a)             The Credit Agreement is hereby amended by deleting the defined terms "Aggregate Revolving Commitment Amount", "Consolidated EBITDA", "LC Commitment", "Permitted Third Party Bank" and "Swingline Commitment" in Section 1.1. thereof and substituting in lieu thereof the following defined terms, respectively:

"Aggregate Revolving Commitment Amount" shall mean the aggregate principal amount of the Aggregate Revolving Commitments from time to time.  On March 4, 2016, the Aggregate Revolving Commitment Amount is $10,000,000.

 

 

"Consolidated EBITDA" shall mean, for the Borrower and its Subsidiaries for any period, an amount equal to the sum of (i) Consolidated Net Income for such period plus (ii) to the extent deducted in determining Consolidated Net Income for such period and to the extent not excluded from Consolidated Net Income pursuant to the definition thereof, and without duplication, (A) Consolidated Interest Expense, (B) income tax expense determined on a consolidated basis in accordance with GAAP, (C) depreciation and amortization determined on a consolidated basis in accordance with GAAP, (D) non-cash charges related to the mark-to-market treatment of obligations under Hedging Transactions, (E) any extraordinary, unusual or non-recurring expenses or losses or restructuring charges or costs, all as determined in accordance with GAAP; provided, that, the amount under this clause (E) shall not exceed (x) $1,250,000 in the aggregate for any period of four (4) consecutive Fiscal Quarter period through December 31, 2016 and (y) and $1,000,000 in the aggregate during any Fiscal Year after December 31, 2016; (F) transaction costs and expenses paid in cash in connection with the Related Transactions in an aggregate amount not to exceed $13,756,501; (G) non-cash charges related to the Great Plains accounting software and related services; provided, that, the amount under this clause (G) shall not exceed $650,000 in the aggregate; and (H) all non-cash foreign currency exchange losses or charges and non-cash expenses deducted as a result of any grant of Capital Stock to employees, officers or directors for such period (but excluding any non-cash loss, charge or expense that is an accrual of or a reserve for a cash expenditure or payment to be made, or anticipated to be made, in a future period); provided that, for purposes of calculating compliance with the financial covenants set forth in Article VI, to the extent that during such period any Borrower Loan Party shall have consummated a Permitted Acquisition or other Acquisition approved in writing by the Required Lenders, or any sale, transfer or other disposition of any Person, business, property or assets, Consolidated EBITDA shall be calculated on a Pro Forma Basis with respect to such Person, business, property or assets so acquired or disposed of.  Notwithstanding the foregoing, but subject to any adjustment set forth above with respect to the immediately preceding proviso, Consolidated EBITDA shall be $10,118,601, $667,379, $6,920,800 and $6,645,632 for the Fiscal Quarters ended December 31, 2014, March 31, 2015, June 30, 2015 and September 30, 2015, respectively.

 

"LC Commitment" shall mean that portion of the Aggregate Revolving Commitments that may be used by the Borrower for the issuance of Letters of Credit in an aggregate face amount not to exceed $3,000,000.

 

"Permitted Third Party Bank" shall mean SunTrust Bank, Silicon Valley Bank, Cadence Bank (or with the consent of the Agent (such consent not to be unreasonably withheld or delayed), another Lender or financial institution) and with whom any Loan Party maintains a Controlled Account and with whom a Control Account Agreement has been executed.

 

"Swingline Commitment" shall mean the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding not to exceed $3,000,000.

 

(b)            The Credit Agreement is hereby further amended by adding the following new defined term "Israel Subsidiary" to Section 1.1. thereof in the appropriate alphabetical order:

 

"Israel Subsidiary" shall mean, as long as it is not a Subsidiary Loan Party, any Subsidiary of the Borrower organized under the laws of the State of Israel.

 

(c)            The Credit Agreement is hereby further amended by deleting "75 days after the Closing Date" in the first line of Section 5.11 of the Credit Agreement and substituting "March 31, 2016 (except in the case of the establishment and maintenance of a Controlled Account with HSBC Bank USA, National Association, which shall be no later than May 17, 2016)" in lieu thereof.

 

(d)            The Credit Agreement is hereby further amended by adding the following at the end of Section 5.11:

 

"Prior to May 17, 2016, the parties hereto agree that account number 1894408945 at Comerica Bank (the "Excluded Account") shall not be required to be subject to a Control Account Agreement pursuant to this Section 5.11 so long as the Borrower shall cause any and all cash at any time held in the Excluded Account to be swept and deposited on a daily basis into a Controlled Account with a Permitted Third Party Bank which is subject to a Control Account Agreement."

 

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(e)            The Credit Agreement is hereby further amended by deleting "commencing within ninety (90) days after the Closing Date" in the first line of Section 5.15 of the Credit Agreement and substituting "no later than May 17, 2016" in lieu thereof.

 

(f)             The Credit Agreement is hereby further amended by deleting clause (d) in Section 7.4 thereof in its entirety and substituting in lieu thereof the following:

 

"(d) Investments made by the Borrower in or to any Subsidiary of the Borrower and by any Subsidiary of the Borrower to the Borrower or in or to another Subsidiary of the Borrower; provided that the aggregate amount of Investments by the Borrower Loan Parties in or to, and Guarantees by the Borrower Loan Parties of Indebtedness of, (i) any Subsidiary of the Borrower that is not a Subsidiary Loan Party (other than an Israel Subsidiary) shall not exceed $1,000,000 in the aggregate for all such Subsidiaries in any Fiscal Year and (ii) any Israel Subsidiary shall not exceed (A) for the Fiscal Year ending December 31, 2016, an amount equal to $3,000,000 in the aggregate for all such Israel Subsidiaries, (B) for the Fiscal Year ending December 31, 2017, an amount equal to 15% of Consolidated EBITDA for the Fiscal Year ending December 31, 2016 (with such limit to be an aggregate amount for all such Israel Subsidiaries), (C) for the Fiscal Year ending December 31, 2018, an amount equal to 12.5% of Consolidated EBITDA for the Fiscal Year ending December 31, 2017 (with such limit to be an aggregate amount for all such Israel Subsidiaries) and (D) for the Fiscal Year ending December 31, 2019, an amount equal to 12.5% of Consolidated EBITDA for the Fiscal Year ending December 31, 2018 (with such limit to be an aggregate amount for all such Israel Subsidiaries); provided, further, that (1) both at the time of and immediately after giving effect to any such Investment, no Default or Event of Default shall have occurred and be continuing or shall result from the making of such Investment, (2) after giving effect to any such Investment, the pro forma Total Leverage Ratio of Borrower and its Subsidiaries shall not exceed the Total Leverage Ratio required under Section 6.1 as of the most recently ended Fiscal Quarter minus 0.25 to 1.00 (and in the case prior to the Fiscal Quarter ended March 31, 2016, such Total Leverage Ratio shall not exceed 2.25:1.00), calculated as if any Borrowing or other Indebtedness used to finance such Investment (if any) had been funded as of the first day of the relevant period of measurement and (3) immediately after giving effect to such Investment the sum of (i)(x) the Aggregate Revolving Commitment Amount minus (y) the aggregate principal amount of all Revolving Credit Exposure plus (ii) cash on hand (that is either unencumbered or in Controlled Accounts) of the Loan Parties is at least $7,500,000;"

 

(g)            The Credit Agreement is hereby further amended by deleting all references to "Schedule II" contained in the Credit Agreement and substituting in lieu thereof "Schedule I".

 

(h)            The Credit Agreement is hereby further amended by deleting Schedule I thereto in its entirety and substituting in lieu thereof Schedule I attached hereto.

 

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 (i)            The parties hereto acknowledge that certain Indebtedness of the Loan Parties in the form of letters of credit are outstanding and described on Schedule 7.1 (other than the Letter of Credit dated June 28, 2012 for the benefit of 101 California Venture for the amount of $75,000 (the "101 CA Venture LC")) (such letters of credit (other than the 101 CA Venture LC), collectively, the "Existing Letters of Credit").  The parties hereto further acknowledge that the Existing Letters of Credit are secured by cash collateral in a deposit account described on Schedule 7.2 (the "Existing LC Cash Collateral Account") and in Section 5.11(a)(iii), and that such cash collateral is "Excluded Property" under the Guaranty and Security Agreement.  The Administrative Agent and the Lenders hereby acknowledge and agree that, notwithstanding the terms of the Credit Agreement or any other Loan Document: (i) the Existing Letters of Credit may be replaced from time to time with one or more replacement letters of credit issued by any Person or Persons in favor of the beneficiary of such Existing Letter of Credit that is being replaced (each a "Replacement Letter of Credit") so long as the aggregate stated amount of the Existing Letters of Credit and any Replacement Letters of Credit issued in replacement thereof shall not exceed the aggregate stated amount of the Existing Letters of Credit as of the date hereof, provided that any Replacement Letter of Credit may be outstanding at the same time as its corresponding Existing Letter of Credit  for a reasonable period of time, not to exceed five (5) Business Days, (ii) the cash collateral held in the Existing LC Cash Collateral Account may be used (and such cash may be removed from the Existing LC Cash Collateral Account and deposited into one or more deposit accounts with other financial institutions for the purpose of serving as cash collateral with such deposit accounts subject to a Lien for the benefit of the financial institutions issuing the replacement letters of credit described in clause (i) immediately above) as credit support for such replacement letters of credit described in clause (i) immediately above so long as such cash collateral does not, in the aggregate, exceed $1,182,314, provided that for a reasonable period of time, not to exceed five (5) Business Days, the Existing LC Cash Collateral Account and the accounts holding cash collateral used for the purpose of providing credit support for such Replacement Letters of Credit may both be outstanding and the amount of such cash collateral may exceed $1,182,314 but shall not exceed the aggregate stated amount of the outstanding Existing Letters of Credit and any Replacement Letters of Credit described in clause (i) immediately above, (iii) for purposes of Section 5.11(a)(iii) and the definition of "Excluded Property" in the Guaranty and Security Agreement, the Existing LC Cash Collateral Account and the cash collateral held therein shall be deemed to include any new deposit accounts created for the Replacement Letters of Credit allowed by clause (i) immediately above and any cash collateral used for the purpose of providing credit support for such Replacement Letters of Credit as described in clause (ii) immediately above, and (iv) Funded Debt shall not include the replacement letters of credit described in clause (i) immediately above.

 

3.  Waiver. Subject to the satisfaction of the conditions set forth in Section 4 below, in reliance on the representations and warranties set forth in Sections 5 and 6 below, and subject to the limitations set forth in Section 7 below, the Lenders hereby waive any Default or Event of Default existing on or prior to the date hereof arising solely under (i) Section 7.4(d) of the Credit Agreement to the extent such Default or Event of Default is attributable to Investments made prior to the Closing Date and (ii) Sections 5.11 and 5.15 of the Credit Agreement.  The foregoing waiver shall not apply to any Default or Event of Default that may arise as a result of any event or circumstance that occurs or continues after the date on which the conditions precedent set forth in Section 4 hereof shall have been met (or duly waived).  The Borrower acknowledges and agrees that the waiver contained in this Section 3 shall not waive or amend (or be deemed to be or constitute an amendment to or waiver of) any other covenant, term or provision in the Credit Agreement or hinder, restrict or otherwise modify the rights and remedies of the Lenders and the Administrative Agent following the occurrence of any other present or future Default or Event of Default under the Credit Agreement or any other Loan Document.  The Borrower and Holdings represent and warrant to the Administrative Agent and the Lenders that, for the period from and including the Closing Date through the date of this Amendment, the Borrower has (x) made Investments pursuant to Section 7.4(d)(ii)(A) in an aggregate amount equal to $27,886 (which Investments are and remain outstanding in such amount as of the date hereof) and (y) made Investments pursuant to Section 7.4(d)(i) in an aggregate amount equal to $453,460 (which Investments are and remain outstanding in such amount as of the date hereof).

 

4.  Conditions Precedent to Effectiveness.  The effectiveness of this Amendment is subject to the truth and accuracy of the warranties and representations set forth in Sections 5 and 6 below and receipt by the Administrative Agent of each of the following, each of which shall be in form and substance satisfactory to Administrative Agent:

 

(a)            This Amendment, duly executed and delivered by the Borrower, Holdings, the Subsidiary Loan Parties, the Lenders and the Administrative Agent;

 

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(b)            A certificate of the Borrower dated as of the date hereof signed by a Responsible Officer of the Borrower certifying that, immediately before and after giving effect to this Amendment (i) the representations and warranties contained in Article IV of the Credit Agreement and the other Loan Documents are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall have been true and correct as of such earlier date; (ii) since December 31, 2014, there has been no event, development or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; and (iii) no Default or Event of Default (other than such Default or Event of Default expressly waived by Section 3 above) has occurred and is continuing as of the date hereof and no Default or Event of Default will exist after giving effect to the amendments contemplated by this Amendment;

 

(c)           For the account of each Lender that has requested a promissory note in respect of such Lender's Revolving Commitment, a promissory note evidencing such Lender's Revolving Commitment, duly executed by a Responsible Officer of the Borrower;

 

(d)            A Reaffirmation of Obligations Under Loan Documents (the "Reaffirmation") dated as of the date hereof duly executed by each Loan Party, in the form of Exhibit I attached hereto

 

(e)            A legal opinion addressed to the Administrative Agent and each of the Lenders from Kramer Levin Naftalis & Frankel LLP, counsel to the Borrower and Holdings, which opinion shall be dated the date hereof and covering such matters relating to the Borrower, Holdings, this Amendment, and the transactions contemplated hereby as the Administrative Agent or the Lenders shall reasonably request;

 

(f)             A certificate, dated as of the date hereof, signed by the Secretary of the Borrower, together with the resolutions of the Borrower in respect of the authorization and approval of the transactions contemplated by this Amendment;

 

(g)            Certified copies of all consents, approvals, authorizations, registrations and filings and orders required to be made or obtained under applicable law, if any, or by any Contractual Obligation of each Loan Party, in connection with the execution, delivery, performance, validity and enforceability of this Amendment or any of the transactions contemplated hereby, and such consents, approvals, authorizations, registrations, filings and orders shall be in full force and effect and all applicable waiting periods shall have expired;

 

(h)           The payment of all fees and other amounts due and payable on or prior to the effective date of this Amendment, including (x) reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel to the Administrative Agent) required to be reimbursed or paid by the Borrower and Holdings hereunder and under that certain engagement letter dated February 18, 2016 among the Borrower, Holdings and the Lenders and (y) the fees owing under that certain fee letter dated February 18, 2016 among the Borrower, Holdings and the Lenders; and

 

(i)              Such other documents as the Administrative Agent may reasonably request.

 

5.  Representations.  Each of the Borrower and Holdings represents and warrants to the Administrative Agent and the Lenders that:

 

(a)            Power and Authority.  Each of the Borrower and the other Loan Parties have the power and authority to execute, deliver and perform the terms and provisions of this Amendment and the Credit Agreement, as amended by this Amendment, and have taken all necessary corporate action to duly authorize the execution, delivery and performance of this Amendment.  Each of this Amendment and the Credit Agreement, as amended by this Amendment, constitutes the legal, valid and binding obligation of the Borrower and Holdings enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors' rights and by equitable principles.

 

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(b)            No Violation.  The execution, delivery and performance by the Borrower and the other Loan Parties of this Amendment, and compliance by them with the terms and provisions of the Credit Agreement, as amended by this Amendment: (i) will not contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or federal, state or local Governmental Authority, (ii) will not conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any lien upon any of the property or assets of any Loan Party pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other agreement, contract or instrument, to which any Loan Party is a party or by which they or any of their property or assets is bound or to which they may be subject or (iii) will not violate any provision of the certificate or articles of incorporation or bylaws of the Borrower, Holdings or any other Loan Party.

 

(c)            Governmental Approvals.  No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for those that have otherwise been obtained or made on or prior to the date of the effectiveness of this Amendment and which remain in full force and effect on such date), or exemption by, any Governmental Authority, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Amendment by the Borrower or Holdings or (ii) the legality, validity, binding effect or enforceability of the Credit Agreement, as amended by this Amendment against the Borrower or Holdings.

 

(d)            No Default.  No Default or Event of Default (other than such Default or Event of Default expressly waived by Section 3 above) has occurred and is continuing as of the date hereof and no Default or Event of Default will exist immediately after giving effect to this Amendment.

 

(e)          No Impairment.  The execution, delivery, performance and effectiveness of this Amendment will not: (a) impair the validity, effectiveness or priority of the Liens granted pursuant to any Loan Document, and such Liens continue unimpaired with the same priority to secure repayment of all of the applicable Obligations, whether heretofore or hereafter incurred, and (b) require that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.

 

(f)             Solvency.  As of the date hereof, on a pro forma basis after giving effect to the Revolving Commitments contemplated hereby and to all Indebtedness incurred, and to be incurred under such Revolving Commitments, the Borrower and each other Loan Party is Solvent.

 

6.  Reaffirmation of Representations. Each of the Borrower, Holdings and the Subsidiary Loan Parties hereby repeats and reaffirms all representations and warranties made to the Administrative Agent and the Lenders in the Credit Agreement and the other Loan Documents on and as of the date hereof (and after giving effect to this Amendment) with the same force and effect as if such representations and warranties were set forth in this Amendment in full (except to the extent that such representations and warranties relate expressly to an earlier date, in which case such representations and warranties were true and correct as of such earlier date).

 

7.  No Further Amendments; Ratification of Liability.  Except as expressly amended or waived hereby, the Credit Agreement and each of the other Loan Documents shall remain in full force and effect in accordance with their respective terms, and the Lenders and the Administrative Agent hereby require strict compliance with the terms and conditions of the Credit Agreement and the other Loan Documents in the future.  Each of the Borrower, Holdings and the Subsidiary Loan Parties hereby (i) restates, ratifies, confirms and reaffirms its respective liabilities, payment and performance obligations (contingent or otherwise) and each and every term, covenant and condition set forth in the Credit Agreement and the other Loan Documents to which it is a party, all as amended by this Amendment, and the liens and security interests granted, created and perfected thereby and (ii) acknowledges and agrees that this Amendment shall not in any way affect the validity and enforceability of any Loan Document to which it is a party, or reduce, impair or discharge the obligations of the Borrower, Holdings, the Subsidiary Loan Parties or the Collateral granted to the Administrative Agent and/or the Lenders thereunder.  The Lenders' agreement to the terms of this Amendment or any other amendment of the Credit Agreement or any other Loan Document shall not be deemed to establish or create a custom or course of dealing between the Borrower, Holdings, the Subsidiary Loan Parties or the Lenders, or any of them.  This Amendment shall be deemed to be a "Loan Document" for all purposes under the Credit Agreement.  After the effectiveness of this Amendment, each reference to the Credit Agreement in any of the Loan Documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment.

 

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8.  Other Provisions.

 

(a)            This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, and all counterparts, taken together, shall constitute but one and the same document.

 

(b)            The Borrower agrees to reimburse the Administrative Agent on demand for all reasonable costs and expenses (including, without limitation, reasonable and documented legal counsels' fees; provided that such counsel shall be limited to one legal counsel and, to the extent necessary, one local counsel in each relevant jurisdiction for the Administrative Agent and the Lenders, collectively, in each case selected by the Administrative Agent) incurred by the Administrative Agent in negotiating, documenting and consummating this Amendment, the other documents referred to herein, and the transactions contemplated hereby and thereby.

 

(c)            THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK) OF THE STATE OF NEW YORK.

 

(d)            THIS AMENDMENT CONSTITUTES THE ENTIRE CONTRACT AMONG THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY AND ALL PREVIOUS DISCUSSIONS, CORRESPONDENCE, AGREEMENTS AND OTHER UNDERSTANDINGS, WHETHER ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF.

 

(e)            Each of the Borrower, Holdings and the Subsidiary Loan Parties agrees to take all further actions and execute such other documents and instruments as the Administrative Agent may from time to time reasonably request to carry out the transactions contemplated by this Amendment, the Loan Documents and all other agreements executed and delivered in connection herewith.

 

(f)             THE PARTIES HERETO HAVE ENTERED INTO THIS AMENDMENT SOLELY TO AMEND TERMS OF THE CREDIT AGREEMENT.  THE PARTIES DO NOT INTEND THIS AMENDMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AMENDMENT AND THE TRANSACTION CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY ANY LOAN PARTY UNDER OR IN CONNECTION WITH THE CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH A LOAN PARTY IS A PARTY.

 

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IN WITNESS WHEREOF, the Borrower, Holdings, the Subsidiary Loan Parties, the Lenders and the Administrative Agent have caused this First Amendment to Credit Agreement to be duly executed by their respective duly authorized officers and representatives as of the day and year first above written.

 

	
 

	
INTERACTIVE HOLDING CORP.

 

By: /s/ Yacov Kaufman

Name: Yacov Kaufman

Title:  Director

 

By: /s/ Josef Mandelbaum 

Name: Josef Mandelbaum

Title:  Director

 

INCREDITONE INC.

 

By: /s/ Yacov Kaufman

Name: Yacov Kaufman

Title:  Chief Financial Officer

 

By: /s/ Josef Mandelbaum

Name: Josef Mandelbaum

Title:  Chief Executive Officer

 

[Signature Page to First Amendment to Credit Agreement]

 

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INTERCEPT INTERACTIVE INC.

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

UUU HOLDING, LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

SPARK FLOW LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

JAMBO MEDIA LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

WORLD WEB NETWORK HOLDING COMPANY, LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

[Signature Page to First Amendment to Credit Agreement]

 

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SUNTRUST BANK, in its capacities as a Lender and as Administrative Agent

 

By: /s/ Kevin Curtis

Name: Kevin Curtis

Title: Director

 

[Signature Page to First Amendment to Credit Agreement]

 

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SILICON VALLEY BANK, as a Lender

	
 

	
 

	
 

	
By: /s/ Michael Moretti

	
 

	
Name: Michael Moretti

	
 

	
Title: Managing Director

 

[Signature Page to First Amendment to Credit Agreement]

 

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CADENCE BANK, as a Lender

	
 

	
 

	
 

	
By: /s/ Steve Prichett

	
 

	
Name: Steve Prichett

	
 

	
Title: EVP

 

[End of Signatures]

 

[Signature Page to First Amendment to Credit Agreement]

 

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SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER

 

THIS SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER is dated as of May 8, 2016 (this "Amendment"), by and among INTERACTIVE HOLDING CORP., a Delaware corporation (the "Borrower"), INCREDITONE INC., a Delaware corporation ("Holdings"), each of the Guarantors party hereto, each of the financial institutions party hereto as "Lenders" (the "Lenders") and SUNTRUST BANK, in its capacity as Administrative Agent (in such capacity, the "Administrative Agent").

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, Holdings, certain of the Lenders and the Administrative Agent are parties to that certain Credit Agreement dated as of November 30, 2015, as amended by that certain First Amendment to Credit Agreement dated as of March 4, 2016 (the "Credit Agreement");

WHEREAS, the Administrative Agent and the Lenders have been made aware of certain Events of Default listed on Schedule 1 attached hereto (the "Specified Defaults") that have occurred and are continuing under the Credit Agreement;

WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders waive the Specified Defaults and amend certain provisions of the Credit Agreement, all as more particularly set forth below;

WHEREAS, subject to the terms and conditions set forth herein, the Administrative Agent and the Lenders are willing to so waive the Specified Defaults and amend the Credit Agreement, all on the terms and conditions contained in this Amendment;

NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

 

Section 1.   Defined Terms.  Capitalized terms which are used herein without definition and which are defined in the Credit Agreement shall have the same meanings herein as in the Credit Agreement; provided, that, solely for purposes of this Amendment, Perion Network Ltd. shall be deemed to be included in the definition of the term "Loan Party".

 

Section 2.   Amendments to Credit Agreement.

 

(a)            The Credit Agreement is hereby amended by restating Section 5.1(c) thereof in its entirety as follows: 

 

(b)           beginning May 10, 2016 until the occurrence of an Excluded Account Event, on the second Business Day of each calendar week a written report, in form and substance satisfactory to the Administrative Agent, detailing, as of the last Business Day of the immediately prior calendar week (i) the aggregate dollar amount of checks issued and outstanding on the Excluded Account and (ii) the balance on deposit in the Excluded Account;

 

(c)            The Credit Agreement is hereby amended by deleting "March 31, 2016" in the first line of Section 5.11 of the Credit Agreement and substituting "August 31, 2016" in lieu thereof.

 

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(d)             The Credit Agreement is hereby further amended by restating the last sentence of Section 5.11 thereof in its entirety as follows:

 

"The parties hereto agree that, prior to August 31, 2016, account number 1894408945 at Comerica Bank (the "Excluded Account") shall not be required to be subject to a Control Account Agreement pursuant to this Section 5.11.  On and after August 31, 2016, the Excluded Account shall either (i) be subject to a Control Account Agreement, (ii) qualify and continue to be maintained as an Unrestricted Account or (iii) be closed (the occurrence of any of the foregoing, an "Excluded Account Event").  Notwithstanding the foregoing, on and after May 8, 2016, the Borrower shall cause any and all cash at any time held in the Excluded Account to be swept and deposited on a daily basis into a Controlled Account with a Permitted Third Party Bank which is subject to a Control Account Agreement; provided, however that the Borrower shall be permitted to maintain a cash balance in the Excluded Account in an amount not exceeding the amount necessary, in Borrower's reasonable discretion, to cover (i) the amount of any checks issued by the Borrower or any of its Subsidiaries that have not cleared the Excluded Account and (ii) expense payables of the Borrower and its Subsidiaries in the ordinary course of business that are due during the next 15 consecutive days."

 

Section 3.  Waiver.  Subject to the satisfaction of the conditions set forth in Section 4 below, in reliance on the representations and warranties set forth in Sections 5 and 7 below, and subject to the limitations set forth in Section 8 below, the Lenders hereby waive the Specified Defaults.  The Borrower acknowledges and agrees that the waiver contained in this Section 3 shall not waive or amend (or be deemed to be or constitute an amendment to or waiver of) any other covenant, term or provision in the Credit Agreement or hinder, restrict or otherwise modify the rights and remedies of the Lenders and the Administrative Agent following the occurrence of any other present or future Default or Event of Default under the Credit Agreement or any other Loan Document.  The waiver of each Specified Default set forth above is solely with respect to the period(s) corresponding to such Specified Default prior to the date hereof.

 

Section 4.  Conditions Precedent to Effectiveness.  The effectiveness of this Amendment is subject to the truth and accuracy of the warranties and representations set forth in Sections 5 and 7 below and receipt by the Administrative Agent of each of the following, each of which shall be in form and substance satisfactory to Administrative Agent:

 

(a)               This Amendment, duly executed and delivered by the Borrower, Holdings, the Subsidiary Loan Parties, the Required Lenders and the Administrative Agent;

 

(b)              A certificate of the Borrower dated as of the date hereof signed by a Responsible Officer of the Borrower certifying that, immediately before and after giving effect to this Amendment (i) the representations and warranties contained in Article IV of the Credit Agreement and the other Loan Documents are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall have been true and correct as of such earlier date; (ii) since December 31, 2014, there has been no event, development or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; and (iii) no Default or Event of Default (other than such Default or Event of Default expressly waived by Section 3 above) has occurred and is continuing as of the date hereof and no Default or Event of Default will exist after giving effect to the amendments contemplated by this Amendment;

 

(c)             A Reaffirmation of Obligations Under Loan Documents (the "Reaffirmation") dated as of the date hereof duly executed by each Loan Party, in the form of Exhibit I attached hereto;

 

(d)            The payment of all fees and other amounts due and payable on or prior to the effective date of this Amendment, including reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel to the Administrative Agent in connection with the preparation, negotiation, execution and delivery of this Amendment and the other documents and agreements executed and delivered in connection herewith) required to be reimbursed or paid by the Borrower and Holdings hereunder; and

 

14

 

(e)               Such other documents as the Administrative Agent may reasonably request.

 

Section 5.    Representations.  Each of the Borrower and Holdings represents and warrants to the Administrative Agent and the Lenders that:

 

(g)            Power and Authority.  Each of the Borrower and the other Loan Parties have the power and authority to execute, deliver and perform the terms and provisions of this Amendment and the Credit Agreement, as amended by this Amendment, and have taken all necessary corporate action to duly authorize the execution, delivery and performance of this Amendment.  Each of this Amendment and the Credit Agreement, as amended by this Amendment, constitutes the legal, valid and binding obligation of the Borrower and Holdings enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors' rights and by equitable principles.

 

(h)             No Violation.  The execution, delivery and performance by the Borrower and the other Loan Parties of this Amendment, and compliance by them with the terms and provisions of the Credit Agreement, as amended by this Amendment: (i) will not contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or federal, state or local Governmental Authority, (ii) will not conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any lien upon any of the property or assets of any Loan Party pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other agreement, contract or instrument, to which any Loan Party is a party or by which they or any of their property or assets is bound or to which they may be subject or (iii) will not violate any provision of the certificate or articles of incorporation or bylaws of the Borrower, Holdings or any other Loan Party.

 

(i)              Governmental Approvals.  No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for those that have otherwise been obtained or made on or prior to the date of the effectiveness of this Amendment and which remain in full force and effect on such date), or exemption by, any Governmental Authority, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Amendment by the Borrower or Holdings or (ii) the legality, validity, binding effect or enforceability of the Credit Agreement, as amended by this Amendment against the Borrower or Holdings.

 

(j)              No Default.  No Default or Event of Default (other than such Default or Event of Default expressly waived by Section 3 above) has occurred and is continuing as of the date hereof and no Default or Event of Default will exist immediately after giving effect to this Amendment.

 

(k)             No Impairment.  The execution, delivery, performance and effectiveness of this Amendment will not: (a) impair the validity, effectiveness or priority of the Liens granted pursuant to any Loan Document, and such Liens continue unimpaired with the same priority to secure repayment of all of the applicable Obligations, whether heretofore or hereafter incurred, and (b) require that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.

 

Section 6.    [Reserved].

 

15

 

Section 7.    Reaffirmation of Representations. Each of the Borrower, Holdings and the Subsidiary Loan Parties hereby repeats and reaffirms all representations and warranties made to the Administrative Agent and the Lenders in the Credit Agreement and the other Loan Documents on and as of the date hereof (and after giving effect to this Amendment) with the same force and effect as if such representations and warranties were set forth in this Amendment in full (except to the extent that such representations and warranties relate expressly to an earlier date, in which case such representations and warranties were true and correct as of such earlier date).

 

Section 8.    No Further Amendments; Ratification of Liability.  Except as expressly amended or waived hereby, the Credit Agreement and each of the other Loan Documents shall remain in full force and effect in accordance with their respective terms, and the Lenders and the Administrative Agent hereby require strict compliance with the terms and conditions of the Credit Agreement and the other Loan Documents in the future.  Each of the Borrower, Holdings and the Subsidiary Loan Parties hereby (i) restates, ratifies, confirms and reaffirms its respective liabilities, payment and performance obligations (contingent or otherwise) and each and every term, covenant and condition set forth in the Credit Agreement and the other Loan Documents to which it is a party, all as amended by this Amendment, and the liens and security interests granted, created and perfected thereby and (ii) acknowledges and agrees that this Amendment shall not in any way affect the validity and enforceability of any Loan Document to which it is a party, or reduce, impair or discharge the obligations of the Borrower, Holdings, the Subsidiary Loan Parties or the Collateral granted to the Administrative Agent and/or the Lenders thereunder.  The Lenders' agreement to the terms of this Amendment or any other amendment of the Credit Agreement or any other Loan Document shall not be deemed to establish or create a custom or course of dealing between the Borrower, Holdings, the Subsidiary Loan Parties or the Lenders, or any of them.  This Amendment shall be deemed to be a "Loan Document" for all purposes under the Credit Agreement.  After the effectiveness of this Amendment, each reference to the Credit Agreement in any of the Loan Documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment.

 

Section 9.    Other Provisions.

 

 (g)            This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, and all counterparts, taken together, shall constitute but one and the same document.

 

 (h)           The Borrower agrees to reimburse the Administrative Agent on demand for all reasonable costs and expenses (including, without limitation, reasonable and documented legal counsels' fees; provided that such counsel shall be limited to one legal counsel and, to the extent necessary, one local counsel in each relevant jurisdiction for the Administrative Agent and the Lenders, collectively, in each case selected by the Administrative Agent) incurred by the Administrative Agent in negotiating, documenting and consummating this Amendment, the other documents referred to herein, and the transactions contemplated hereby and thereby.

 

 (i)             THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK) OF THE STATE OF NEW YORK.

 

 (j)             THIS AMENDMENT CONSTITUTES THE ENTIRE CONTRACT AMONG THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY AND ALL PREVIOUS DISCUSSIONS, CORRESPONDENCE, AGREEMENTS AND OTHER UNDERSTANDINGS, WHETHER ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF.

 

 (k)           Each of the Borrower, Holdings and the Subsidiary Loan Parties agrees to take all further actions and execute such other documents and instruments as the Administrative Agent may from time to time reasonably request to carry out the transactions contemplated by this Amendment, the Loan Documents and all other agreements executed and delivered in connection herewith.

 

16

 

 

THE LOAN PARTIES DO NOT INTEND THIS AMENDMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AMENDMENT AND THE TRANSACTION CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY ANY LOAN PARTY UNDER OR IN CONNECTION WITH THE CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH A LOAN PARTY IS A PARTY.

 

[Signature Page Follows]

 

17

 

 

IN WITNESS WHEREOF, the Borrower, Holdings, the Subsidiary Loan Parties, the Lenders and the Administrative Agent have caused this Second Amendment to Credit Agreement and Waiver to be duly executed by their respective duly authorized officers and representatives as of the day and year first above written.

 

	
 

	
INTERACTIVE HOLDING CORP.

 

By: /s/ Josef Mandelbaum

Name: Josef Mandelbaum

Title: Director

 

By: /s/ Yacov Kaufman

Name: Yacov Kaufman

Title: Director

 

INCREDITONE INC.

 

By: /s/ Josef Mandelbaum

Name: Josef Mandelbaum

Title: Chief Executive Officer

 

By: /s/ Yacov Kaufman

Name: Yacov Kaufman

Title: Chief Financial Officer

 

[Signature Page to Second Amendment to Credit Agreement and Waiver]

 

18

 

 

	
 

	
INTERCEPT INTERACTIVE INC.

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

UUU HOLDING, LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

SPARK FLOW LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

JAMBO MEDIA LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

WORLD WEB NETWORK HOLDING COMPANY, LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

[Signature Page to Second Amendment to Credit Agreement and Waiver]

 

19

  

	
 

	
SUNTRUST BANK, in its capacities as a Lender and as Administrative Agent

 

By: /s/ Eric Saxon

Name: Eric Saxon

Title: Vice President

 

[Signature Page to Second Amendment to Credit Agreement and Waiver]

 

20

 

	
 

	
SILICON VALLEY BANK, as a Lender

	
 

	
 

	
 

	
By: /s/ Michael Moretti

	
 

	
Name: Michael Moretti

	
 

	
Title: Managing Director

 

[Signature Page to Second Amendment to Credit Agreement and Waiver]

 

21

 

 

	
 

	
CADENCE BANK, as a Lender

	
 

	
 

	
 

	
By: /s/ Steve Prichett

	
 

	
Name: Steve Prichett

	
 

	
Title: EVP

 

[End of Signatures]

 

[Signature Page to Second Amendment to Credit Agreement and Waiver]

 

22

 

 

THIRD AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER

 

THIS THIRD AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER is dated as of October 7, 2016 (this "Amendment"), by and among INTERACTIVE HOLDING CORP., a Delaware corporation (the "Borrower"), INCREDITONE INC., a Delaware corporation ("Holdings"), each of the Guarantors party hereto, each of the financial institutions party hereto as "Lenders" (the "Lenders") and SUNTRUST BANK, in its capacity as Administrative Agent (in such capacity, the "Administrative Agent").

 

W I T N E S S E T H:

 

WHEREAS, the Borrower, Holdings, certain of the Lenders and the Administrative Agent are parties to that certain Credit Agreement dated as of November 30, 2015, as amended by that certain First Amendment to Credit Agreement dated as of March 4, 2016 and by that certain Second Amendment to Credit Agreement and Waiver dated as of May 8, 2016 (as so amended, the "Credit Agreement");

 

WHEREAS, the Administrative Agent and the Lenders have been made aware of certain Defaults and Events of Default listed on Schedule 1 attached hereto (the "Specified Defaults") that have occurred and are continuing under the Credit Agreement;

 

WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders waive the Specified Defaults and amend certain provisions of the Credit Agreement, all as more particularly set forth below;

 

WHEREAS, subject to the terms and conditions set forth herein, the Administrative Agent and the Lenders are willing to so waive the Specified Defaults and amend the Credit Agreement, all on the terms and conditions contained in this Amendment;

 

NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

 

Section 1.    Defined Terms.  Capitalized terms which are used herein without definition and which are defined in the Credit Agreement shall have the same meanings herein as in the Credit Agreement.

 

Section 2.    Amendments to Credit Agreement.

 

 (d)            The Credit Agreement is hereby amended by deleting the defined terms "Aggregate Revolving Commitment Amount", "Consolidated EBITDA", "Consolidated Fixed Charges", "LC Commitment" and "Swingline Commitment" set forth in Section 1.1 thereof in its entirety and substituting in lieu thereof the following:

 

"Aggregate Revolving Commitment Amount" shall mean the aggregate principal amount of the Aggregate Revolving Commitments from time to time.  On October 7, 2016, the Aggregate Revolving Commitment Amount is $2,500,000.

 

23

 

"Consolidated EBITDA" shall mean, for the Borrower and its Subsidiaries for any period, an amount equal to the sum of (i) Consolidated Net Income for such period plus (ii) to the extent deducted in determining Consolidated Net Income for such period and to the extent not excluded from Consolidated Net Income pursuant to the definition thereof, and without duplication, (A) Consolidated Interest Expense, (B) income tax expense determined on a consolidated basis in accordance with GAAP, (C) depreciation and amortization determined on a consolidated basis in accordance with GAAP, (D) non-cash charges related to the mark-to-market treatment of obligations under Hedging Transactions, (E) any extraordinary, unusual or non-recurring expenses or losses or restructuring charges or costs, all as determined in accordance with GAAP; provided, that, the amount under this clause (E) shall not exceed (x) $1,250,000 in the aggregate for any period of four (4) consecutive Fiscal Quarter period through December 31, 2016 and (y) and $1,000,000 in the aggregate during any Fiscal Year after December 31, 2016; (F) transaction costs and expenses paid in cash in connection with the Related Transactions in an aggregate amount not to exceed $13,756,501; (G) non-cash charges related to the Great Plains accounting software and related services; provided, that, the amount under this clause (G) shall not exceed $650,000 in the aggregate; (H) all non-cash foreign currency exchange losses or charges and non-cash expenses deducted as a result of any grant of Capital Stock to employees, officers or directors for such period (but excluding any non-cash loss, charge or expense that is an accrual of or a reserve for a cash expenditure or payment to be made, or anticipated to be made, in a future period); (I) all non-cash expenses allocated by the Parent to the Borrower related to headcount at the Israel development cost center for the benefit of the Borrower in an aggregate amount not to exceed (x) for the Fiscal Year ending December 31, 2016, $1,750,000, (y) for the Fiscal Year ending December 31, 2017, $2,500,000 and (z) for the Fiscal Year ending December 31, 2018, 3,750,000; provided that, for purposes of calculating compliance with the financial covenants set forth in Article VI, to the extent that during such period any Borrower Loan Party shall have consummated a Permitted Acquisition or other Acquisition approved in writing by the Required Lenders, or any sale, transfer or other disposition of any Person, business, property or assets, Consolidated EBITDA shall be calculated on a Pro Forma Basis with respect to such Person, business, property or assets so acquired or disposed of.  Notwithstanding the foregoing, but subject to any adjustment set forth above with respect to the immediately preceding proviso, Consolidated EBITDA shall be $10,118,601, $667,379, $6,920,800 and $6,645,632 for the Fiscal Quarters ended December 31, 2014, March 31, 2015, June 30, 2015 and September 30, 2015, respectively.

 

"Consolidated Fixed Charges" shall mean, for the Borrower and its Subsidiaries for any period, the sum (without duplication) of (i) Consolidated Interest Expense for such period, (ii) scheduled principal payments made on Consolidated Total Debt (including the Term Loan but excluding the Revolving Loans) during such period (as such scheduled principal payments may be reduced as a result of any voluntary or mandatory prepayments of the principal amounts of such Indebtedness for such period or any prior period) and (iii) payments in respect of Capital Lease Obligations of the Borrower and its Subsidiaries during such period.  For purposes of calculating the Consolidated Fixed Charges for the four quarters ending December 31, 2015, March 31, 2016, June 30, 2016 and September 30, 2016, scheduled payments of principal of Consolidated Total Debt shall be deemed to be $625,000 for each such quarter.  For purposes of calculating Consolidated Fixed Charges for the December 31, 2015 determination date, Consolidated Interest Expense shall be deemed to be $3,000,000.  For the March 31, 2016 through December 31, 2016 determination dates, Consolidated Interest Expense shall be determined on a cumulative basis for the period beginning January 1, 2016 and ending on the applicable date of determination and annualized.  For the determination dates ending March 31, 2017 and thereafter, Consolidated Interest Expense shall be determined on a trailing four quarter basis.

 

"LC Commitment" shall mean that portion of the Aggregate Revolving Commitments that may be used by the Borrower for the issuance of Letters of Credit in an aggregate face amount not to exceed $2,500,000.

 

"Swingline Commitment" shall mean the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding not to exceed $2,500,000.

 

24

 

 (e)           The Credit Agreement is hereby further amended by adding the following new defined term "Third Amendment Effective Date" to Section 1.1 thereof in the appropriate alphabetical order:

 

"Third Amendment Effective Date" shall mean October 7, 2016.

 

 (f)              The Credit Agreement is hereby further amended by deleting the first grid immediately under the heading "COMMITMENT AMOUNTS" on Schedule I attached thereto and substituting in lieu thereof the following:

 

	
 

Lender

	 	
Revolving

 Commitment

	 	 	
Term Loan

 Commitment Amount

	 
	
SunTrust Bank

	 	
$

	
833,333.34

	 	 	
$

	
0

	 
	
Silicon Valley Bank

	 	
$

	
833,333.33

	 	 	
$

	
0

	 
	
Cadence Bank

	 	
$

	
833,333.33

	 	 	
$

	
0

	 
	
 

	 	 	 	 	 	 	 	 
	
TOTAL

	 	
$

	
2,500,000

	 	 	
$

	
0

	 

 

 

     (g)         The Credit Agreement is hereby further amended by deleting clause (c) of Section 5.11 thereof in its entirety and substituting in lieu thereof the following:

 

"(c)         at any time after the occurrence and during the continuance of an Event of Default, at the request of the Administrative Agent or the Required Lenders, Holdings and the Borrower will, and will cause each other Loan Party to, cause all payments constituting proceeds of accounts or other Collateral to be directed into deposit accounts that are subject to Control Account Agreements. The parties hereto agree that account number 1894408945 at Comerica Bank (the "Excluded Account") shall not be required to be subject to a Control Account Agreement pursuant to this Section 5.11.  On or prior to May 31, 2017, the Excluded Account shall be closed (such closure, an "Excluded Account Event").  Notwithstanding the foregoing, at all times prior to May 31, 2017, the Borrower shall cause any and all cash (except as provided in the proviso in this Section 5.11(c)) at any time held in the Excluded Account to be swept and deposited on a daily basis into a Controlled Account with a Permitted Third Party Bank which is subject to a Control Account Agreement; provided, however, that the Borrower may maintain a balance of $2000 at all times in the Excluded Account to pay wiring and other banking fees to Comerica Bank."

 

25

 

 (h)             The Credit Agreement is hereby further amended by deleting Section 6.1 thereof (Total Leverage Ratio) in its entirety and substituting in lieu thereof the following:

 

"Section 6.1.         Total Leverage Ratio.  The Borrower will not permit the Total Leverage Ratio, as of the last day of each Fiscal Quarter specified below, to exceed the ratio set forth below opposite such corresponding Fiscal Quarter:

 

	
 

	
Fiscal Quarter

	
Total Leverage Ratio

	
 

	
 

	
 

	
 

	
Each Fiscal Quarter ending on or

	
2.50:1.00

	
 

	
prior to March 31, 2016

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
2.50:1.00

	
 

	
June 30, 2016

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
2.75:1.00

	
 

	
September 30, 2016

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
2.95:1.00

	
 

	
December 31, 2016

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
2.95:1.00

	
 

	
March 31, 2017

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
2.75:1.00

	
 

	
June 30, 2017

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
2.50:1.00

	
 

	
September 30, 2017

	
 

 

	
 

	
Fiscal Quarter ending

	
2.50:1.00

	
 

	
December 31, 2017

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
2.25:1.00

	
 

	
March 31, 2018

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
2.00:1.00

	
 

	
June 30, 2018

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
1.75:1.00

	
 

	
September 30, 2018

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
1.75:1.00

	
 

	
December 31, 2018 and each

	
 

	
 

	
Fiscal Quarter thereafter"

	
 

 

26

 

 

(i)              The Credit Agreement is hereby further amended by deleting Section 6.2 thereof (Fixed Charge Coverage Ratio) in its entirety and substituting in lieu thereof the following:

 

"Section 6.2.    Fixed Charge Coverage Ratio.  The Borrower will not permit the Fixed Charge Coverage Leverage Ratio, as of the last day of each Fiscal Quarter specified below, to be less than the ratio set forth below opposite such corresponding Fiscal Quarter:

 

	
 

	
Fiscal Quarter

	
Fixed Charge Coverage Ratio

	
 

	
 

	
 

	
 

	
Each Fiscal Quarter ending on or

	
2.00:1.00

	
 

	
prior to March 31, 2016

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
2.00:1.00

	
 

	
June 30, 2016

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
1.50:1.00

	
 

	
September 30, 2016

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
1.50:1.00

	
 

	
December 31, 2016

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
1.50:1.00

	
 

	
March 31, 2017

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
1.50:1.00

	
 

	
June 30, 2017

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
1.55:1.00

	
 

	
September 30, 2017

	
 

 

	
 

	
Fiscal Quarter ending

	
1.60:1.00

	
 

	
December 31, 2017

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
1.60:1.00

	
 

	
March 31, 2018

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
1.75:1.00

	
 

	
June 30, 2018

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
1.75:1.00

	
 

	
September 30, 2018

	
 

	
 

	
 

	
 

	
 

	
Fiscal Quarter ending

	
2.00:1.00

	
 

	
December 31, 2018 and each

	
 

	
 

	
Fiscal Quarter thereafter"

	
 

 

27

 

(j)             The Credit Agreement is hereby further amended by deleting Section 7.4(d) thereof in its entirety and substituting in lieu thereof the following:

 

(d)             Investments made by the Borrower in or to any Subsidiary of the Borrower and by any Subsidiary of the Borrower to the Borrower or in or to another Subsidiary of the Borrower; provided that the aggregate amount of Investments by the Borrower Loan Parties in or to, and Guarantees by the Borrower Loan Parties of Indebtedness of, any Subsidiary of the Borrower that is not a Subsidiary Loan Party shall not exceed $2,000,000 in the aggregate at any time outstanding (the "Investment Cap"); provided further that Investments made prior to the Third Amendment Effective Date by the Borrower Loan Parties in or to, and Guarantees by the Borrower Loan Parties of Indebtedness of, any Subsidiary of the Borrower that is not a Subsidiary Loan Party, and that are described on Schedule 7.4(a) (which Schedule shall include the outstanding amount of all such Investments set forth on such Schedule as of the Third Amendment Effective Date) shall be excluded for purposes of determining compliance with this clause (d) as it relates to the Investment Cap.

 

(k)            The Credit Agreement is hereby further amended by adding ", 5.11(c)" immediately after the reference therein to "5.9" in Section 8.1(d) thereof.

 

(l)             The Credit Agreement is hereby further amended by deleting Section 8.1(h) thereof in its entirety and substituting in lieu thereof the following:

 

"(h)           Holdings or any of its Subsidiaries (other than Foreign Subsidiaries that are Immaterial Subsidiaries liquidated and dissolved in accordance with Section 7.3(a)(iv)) shall (i) commence a voluntary case or other proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a custodian, trustee, receiver, liquidator or other similar official of it or any substantial part of its property, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in subsection (i) of this Section, (iii) apply for or consent to the appointment of a custodian, trustee, receiver, liquidator or other similar official for Holdings or any such Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors, or (vi) take any action for the purpose of effecting any of the foregoing; or"

 

(m)           The Credit Agreement is hereby further amended by adding Schedule 7.4(a) attached hereto.

 

Section 3.    Waiver and Acknowledgment.

 

(a)            Subject to the satisfaction of the conditions set forth in Section 4 below, in reliance on the representations and warranties set forth in Sections 5 and 7 below, and subject to the limitations set forth in Section 8 below, the Lenders hereby waive the Specified Defaults.  The Borrower acknowledges and agrees that the waiver contained in this Section 3 shall not waive or amend (or be deemed to be or constitute an amendment to or waiver of) any other covenant, term or provision in the Credit Agreement or hinder, restrict or otherwise modify the rights and remedies of the Lenders and the Administrative Agent following the occurrence of any other present or future Default or Event of Default under the Credit Agreement or any other Loan Document.  The waiver of each Specified Default set forth above is solely with respect to the period(s) corresponding to such Specified Default prior to the date hereof.

 

28

 

(b)           Notwithstanding anything to the contrary contained in the Credit Agreement (as amended by this Amendment), the Administrative Agent and the Required Lenders acknowledge and agree that (i) they have received notice that U.U.U.I. Undertone Israel Ltd., a private limited liability company organized under the laws of Israel ("U.U.U.I."), has been designated by the Borrower as an Immaterial Subsidiary, (ii) the liquidation and dissolution of U.U.U.I. is not materially disadvantageous to the Lenders and (iii) the proposed conversion of intercompany loans in the aggregate amount of approximately $12,000,000 made by Intercept Interactive Inc. to each of World Web Network Ltd. and World Web Network GmbH to equity will not be a Default  and, if such conversion has occurred prior to the effectiveness of this Amendment, is not a Default, under the Credit Agreement (as amended by this Amendment), including but not limited to Section 7.4(d) thereof; provided, that, such acknowledgment and agreement are conditioned upon there being no adverse effect on the Lenders as a result of such conversion (other than the fact that Intercept Interactive Inc. would no longer hold an intercompany receivable in the amount of approximately $12,000,000).

 

Section 4.   Conditions Precedent to Effectiveness.  The effectiveness of this Amendment is subject to the truth and accuracy of the warranties and representations set forth in Sections 5 and 7 below and receipt by the Administrative Agent of each of the following, each of which shall be in form and substance satisfactory to Administrative Agent:

 

(a)            This Amendment, duly executed and delivered by the Borrower, Holdings, the Subsidiary Loan Parties, the Required Lenders and the Administrative Agent;

 

(b)           A certificate of the Borrower dated as of the date hereof signed by a Responsible Officer of the Borrower certifying that, immediately before and after giving effect to this Amendment (i) the representations and warranties contained in Article IV of the Credit Agreement and the other Loan Documents are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall have been true and correct as of such earlier date; (ii) since December 31, 2015, there has been no event, development or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; and (iii) no Default or Event of Default (other than such Default or Event of Default expressly waived by Section 3 above) has occurred and is continuing as of the date hereof and no Default or Event of Default will exist after giving effect to the amendments contemplated by this Amendment;

 

(c)             A certified copy of resolutions adopted by the Board of Directors of the Borrower authorizing and approving the transactions contemplated by this Amendment;

 

(d)            Evidence that the Borrower shall have received an indirect cash equity contribution from the Parent immediately prior to the effectiveness of this Amendment in the amount of $4,000,000 and payment by the Borrower in an amount equal to $2,000,000 in immediately available funds to be applied as a prepayment to the outstanding principal amount of the Term Loans in accordance with Section 6 of this Amendment;

 

 (e)            A Reaffirmation of Obligations Under Loan Documents (the "Reaffirmation") dated as of the date hereof duly executed by each Loan Party and the Parent, in the form of Exhibit I attached hereto;

 

 (f)            The payment of all fees and other amounts due and payable on or prior to the effective date of this Amendment, including reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel to the Administrative Agent in connection with the preparation, negotiation, execution and delivery of this Amendment and the other documents and agreements executed and delivered in connection herewith) required to be reimbursed or paid by the Borrower and Holdings hereunder; and

 

 (g)           Such other documents as the Administrative Agent may reasonably request.

 

29

 

 

Section 5.    Representations.  Each of the Borrower and Holdings represents and warrants to the Administrative Agent and the Lenders that:

 

 (l)            Power and Authority.  Each of the Borrower and the other Loan Parties have the power and authority to execute, deliver and perform the terms and provisions of this Amendment and the Credit Agreement, as amended by this Amendment, and have taken all necessary corporate action to duly authorize the execution, delivery and performance of this Amendment.  Each of this Amendment and the Credit Agreement, as amended by this Amendment, constitutes the legal, valid and binding obligation of the Borrower and Holdings enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors' rights and by equitable principles.

 

(m)            No Violation.  The execution, delivery and performance by the Borrower and the other Loan Parties of this Amendment, and compliance by them with the terms and provisions of the Credit Agreement, as amended by this Amendment: (i) will not contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or federal, state or local Governmental Authority, (ii) will not conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any lien upon any of the property or assets of any Loan Party pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other agreement, contract or instrument, to which any Loan Party is a party or by which they or any of their property or assets is bound or to which they may be subject or (iii) will not violate any provision of the certificate or articles of incorporation or bylaws of the Borrower, Holdings or any other Loan Party.

 

 (n)           Governmental Approvals.  No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for those that have otherwise been obtained or made on or prior to the date of the effectiveness of this Amendment and which remain in full force and effect on such date), or exemption by, any Governmental Authority, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Amendment by the Borrower or Holdings or (ii) the legality, validity, binding effect or enforceability of the Credit Agreement, as amended by this Amendment against the Borrower or Holdings.

 

(o)             No Default.  No Default or Event of Default (other than such Default or Event of Default expressly waived by Section 3 above) has occurred and is continuing as of the date hereof and no Default or Event of Default will exist immediately after giving effect to this Amendment.

 

(p)            No Impairment.  The execution, delivery, performance and effectiveness of this Amendment will not: (a) impair the validity, effectiveness or priority of the Liens granted pursuant to any Loan Document, and such Liens continue unimpaired with the same priority to secure repayment of all of the applicable Obligations, whether heretofore or hereafter incurred, and (b) require that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.

 

Section 6.  Common Equity Capital Contribution/Prepayment of Term Loans/Agreement regarding EBITDA Addback.

 

(a)            The parties hereto acknowledge and agree that (i) the prepayment made by the Borrower in the amount of $2,000,000 on September 29, 2016 was irrevocable and was applied as a prepayment to the Term Loans on such date to the principal installments of the Term Loans in inverse order of maturity (notwithstanding anything to the contrary in the Credit Agreement) and (ii) the prepayment made by the Borrower in the amount of $2,000,000 (described in Section 4(d) of this Amendment) shall be irrevocable and applied as a prepayment to the Term Loans on the date hereof to the principal installments of the Term Loans in inverse order of maturity (notwithstanding anything to the contrary in the Credit Agreement).  Such prepayment described in clause (ii) immediately above shall be made pro rata to the Lenders based on their Pro Rata Shares of the Term Loans.  The Administrative Agent and the Lenders waive any prior notice requirements under the Credit Agreement in respect of such prepayment.

 

30

 

(b)           Each of Holdings and the Borrower acknowledge and agree that the $2,000,000 used to make the prepayment described in clause (a)(ii) immediately above (together with the additional $2,000,000 cash equity contribution that was received from the Parent at the same time) was received as a common equity capital contribution from the Parent to Holdings, which in turn was used by Holdings to make a common equity capital contribution into the Borrower, and such contributions do not qualify as, and will not be included as, an "Excluded Equity Contribution" or a "Specified Equity Contribution" under and as defined in the Credit Agreement.

 

(c)            The Loan Parties acknowledge and agree that (i) the expenses described in clause (I) of the definition of "Consolidated EBITDA" shall not be paid, repaid or reimbursed by any Loan Party to any other Person, whether in cash or otherwise, and (ii) the Loan Parties will not, and will not allow or permit any of their Subsidiaries to, set off against any obligation or liability owing to such Loan Party, whether directly or indirectly, on account of, or in respect of, any of the expenses described in clause (I) of the definition of "Consolidated EBITDA".

 

Section 7.    Reaffirmation of Representations. Each of the Borrower, Holdings and the Subsidiary Loan Parties hereby repeats and reaffirms all representations and warranties made to the Administrative Agent and the Lenders in the Credit Agreement and the other Loan Documents on and as of the date hereof (and after giving effect to this Amendment) with the same force and effect as if such representations and warranties were set forth in this Amendment in full (except to the extent that such representations and warranties relate expressly to an earlier date, in which case such representations and warranties were true and correct as of such earlier date).

 

Section 8.    No Further Amendments; Ratification of Liability.  Except as expressly amended or waived hereby, the Credit Agreement and each of the other Loan Documents shall remain in full force and effect in accordance with their respective terms, and the Lenders and the Administrative Agent hereby require strict compliance with the terms and conditions of the Credit Agreement and the other Loan Documents in the future.  Each of the Borrower, Holdings and the Subsidiary Loan Parties hereby (i) restates, ratifies, confirms and reaffirms its respective liabilities, payment and performance obligations (contingent or otherwise) and each and every term, covenant and condition set forth in the Credit Agreement and the other Loan Documents to which it is a party, all as amended by this Amendment, and the liens and security interests granted, created and perfected thereby and (ii) acknowledges and agrees that this Amendment shall not in any way affect the validity and enforceability of any Loan Document to which it is a party, or reduce, impair or discharge the obligations of the Borrower, Holdings, the Subsidiary Loan Parties or the Collateral granted to the Administrative Agent and/or the Lenders thereunder.  The Lenders' agreement to the terms of this Amendment or any other amendment of the Credit Agreement or any other Loan Document shall not be deemed to establish or create a custom or course of dealing between the Borrower, Holdings, the Subsidiary Loan Parties or the Lenders, or any of them.  This Amendment shall be deemed to be a "Loan Document" for all purposes under the Credit Agreement.  After the effectiveness of this Amendment, each reference to the Credit Agreement in any of the Loan Documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment.

 

Section 9.    Other Provisions.

 

 (l)            This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, and all counterparts, taken together, shall constitute but one and the same document.

 

31

 

 

 (m)          The Borrower agrees to reimburse the Administrative Agent on demand for all reasonable costs and expenses (including, without limitation, reasonable and documented legal counsels' fees; provided that such counsel shall be limited to one legal counsel and, to the extent necessary, one local counsel in each relevant jurisdiction for the Administrative Agent and the Lenders, collectively, in each case selected by the Administrative Agent) incurred by the Administrative Agent in negotiating, documenting and consummating this Amendment, the other documents referred to herein, and the transactions contemplated hereby and thereby.

 

 (n)          THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK) OF THE STATE OF NEW YORK.

 

 (o)           THIS AMENDMENT CONSTITUTES THE ENTIRE CONTRACT AMONG THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY AND ALL PREVIOUS DISCUSSIONS, CORRESPONDENCE, AGREEMENTS AND OTHER UNDERSTANDINGS, WHETHER ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF.

 

 (p)            Each of the Borrower, Holdings and the Subsidiary Loan Parties agrees to take all further actions and execute such other documents and instruments as the Administrative Agent may from time to time reasonably request to carry out the transactions contemplated by this Amendment, the Loan Documents and all other agreements executed and delivered in connection herewith.

 

THE LOAN PARTIES DO NOT INTEND THIS AMENDMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AMENDMENT AND THE TRANSACTION CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY ANY LOAN PARTY UNDER OR IN CONNECTION WITH THE CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH A LOAN PARTY IS A PARTY.

 

[Signature Page Follows]

 

32

 

IN WITNESS WHEREOF, the Borrower, Holdings, the Subsidiary Loan Parties, the Lenders and the Administrative Agent have caused this Third Amendment to Credit Agreement and Waiver to be duly executed by their respective duly authorized officers and representatives as of the day and year first above written.

 

	
 

	
INTERACTIVE HOLDING CORP.

 

By: /s/ Yacov Kaufman

Name: Yacov Kaufman

Title: Director

 

By: /s/ Josef Mandelbaum

Name: Josef Mandelbaum

Title: Director

 

INCREDITONE INC.

 

By: /s/ Yacov Kaufman

Name: Yacov Kaufman

Title: Chief Financial Officer

 

By: /s/ Josef Mandelbaum

Name: Josef Mandelbaum

Title: Chief Executive Officer

 

 [Signature Page to Third Amendment Credit Agreement and Limited Waiver]

 

33

 

	
 

	
INTERCEPT INTERACTIVE INC.

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

UUU HOLDING, LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

SPARK FLOW LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

JAMBO MEDIA LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

WORLD WEB NETWORK HOLDING COMPANY, LLC

 

By: /s/ Michael Waxman-Lenz

Name: Michael Waxman-Lenz

Title: Chief Financial Officer

 

[Signature Page to Third Amendment to Credit Agreement and Limited Waiver]

 

34

	
 

	
SUNTRUST BANK, in its capacities as a Lender and as Administrative Agent

 

By: /s/ Kevin Curtis

Name: Kevin Curtis

Title: Director

 

[Signature Page to Third Amendment to Credit Agreement and Limited Waiver]

 

 

35

 

	
 

	
SILICON VALLEY BANK, as a Lender

	
 

	
 

	
 

	
By: /s/ Michael Moretti

	
 

	
Name: Michael Moretti

	
 

	
Title: MD

 

[Signature Page to Third Amendment to Credit Agreement and Limited Waiver]

 

36

  

	
 

	
CADENCE BANK, as a Lender

	
 

	
 

	
 

	
By: /s/ Steve Prichett

	
 

	
Name: Steve Prichett

	
 

	
Title: EVP

 

[End of Signatures]

 

[Signature Page to Third Amendment to Credit Agreement and Limited Waiver]

 

37

 

FOURTH AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER

THIS FOURTH AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER is dated as of March 6, 2018 (this “Amendment”), by and among INTERACTIVE HOLDING CORP., a Delaware corporation (the “Borrower”), INCREDITONE INC., a Delaware corporation (“Holdings”), each of the financial institutions party hereto as “Lenders” (the “Lenders”) and SUNTRUST BANK, in its capacity as Administrative Agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower, Holdings, certain of the Lenders and the Administrative Agent are parties to that certain Credit Agreement dated as of November 30, 2015, as amended by that certain First Amendment to Credit Agreement dated as of March 4, 2016, as further amended by that certain Second Amendment to Credit Agreement and Waiver dated as of May 8, 2016 and as further amended by that certain Third Amendment to Credit Agreement and Limited Waiver dated as of October 7, 2016 (as so amended, the “Credit Agreement”);

WHEREAS, the Administrative Agent and the Lenders have been made aware of certain Defaults and/or Events of Default listed on Schedule A attached hereto (the “Specified Defaults”) that have occurred and are continuing under the Credit Agreement;

WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders waive the Specified Defaults and amend certain provisions of the Credit Agreement, all as more particularly set forth below;

WHEREAS, subject to the terms and conditions set forth herein, the Administrative Agent and the Lenders are willing to so waive the Specified Defaults and amend the Credit Agreement, all on the terms and conditions contained in this Amendment;

NOW, THEREFORE, for and in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

Section 1.  Defined Terms.  Capitalized terms which are used herein without definition and which are defined in the Credit Agreement shall have the same meanings herein as in the Credit Agreement.

Section 2.  Amendments to Credit Agreement.

(a)           The Credit Agreement is hereby amended by deleting the defined terms “Aggregate Revolving Commitment Amount”, “LC Commitment” and “Swingline Commitment” set forth in Section 1.1 thereof in its entirety and substituting in lieu thereof the following:

“Aggregate Revolving Commitment Amount” shall mean the aggregate principal amount of the Aggregate Revolving Commitments from time to time.  On March 6, 2018, the Aggregate Revolving Commitment Amount is $0.

 

38

“LC Commitment” shall mean that portion of the Aggregate Revolving Commitments that may be used by the Borrower for the issuance of Letters of Credit in an aggregate face amount not to exceed $0.

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding not to exceed $0.

(b)           The Credit Agreement is hereby further amended by adding the following new defined term “Designated Term Loan Prepayment” to Section 1.1 thereof in the appropriate alphabetical order:

“Designated Term Loan Prepayment” shall have the meaning set forth in Section 2.11(b).

(c)           The Credit Agreement is hereby further amended by deleting the table set forth in Section 2.9(b) thereof in its entirety and substituting in lieu thereof the following:

	
Installment Date

	
Principal Amount

	
March 31, 2016

	
$625,000

	
June 30, 2016

	
$625,000

	
September 30, 2016

	
$625,000

	
December 31, 201

	
$625,000

	
March 31, 2017

	
$937,500

	
June 30, 2017

	
$937,500

	
September 30, 2017

	
$937,500

	
December 31, 2017

	
$937,500

	
March 31, 2018

	
$1,074,412.66

	
June 30, 2018

	
$1,074,412.66

	
September 30, 2018

	
$1,074,412.66

	
December 31, 2018

	
$1,074,412.66

	
March 31, 2019

	
$1,074,412.66

	
June 30, 2019

	
$1,074,412.66

	
September 30, 2019

	
$1,074,412.66

	
Maturity Date

	
All Term Loans outstanding

 

(d)          The Credit Agreement is hereby further amended by adding “(a)” immediately before the first sentence of Section 2.11 and adding the following Section 2.11(b) immediately following Section 2.11(a) as follows:

(b)          Notwithstanding anything to the contrary contained in Section 2.11(a), the Borrower shall have the right to make prepayments of Term Loans in accordance with the terms of this clause (b) (each a “Designated Term Loan Prepayment”), by giving written notice (or telephonic notice promptly confirmed in writing) to the Administrative Agent no later than three (3) Business Days prior to the date of such prepayment (or such shorter period as the Administrative Agent may agree) and designating such prepayment as a Designated Term Loan Prepayment in such notice to be applied in accordance with this Section 2.11(b) and whether such Designated Term Loan Prepayment is the “first” or “second” Designated Term Loan Prepayment.  Each such notice shall be irrevocable and shall specify the proposed date of such prepayment.  Upon receipt of any such notice, the Administrative Agent shall promptly notify each affected Lender of the contents thereof and of such Lender’s Pro Rata Share of any such prepayment.  If such notice is given, the aggregate amount specified in such notice shall be due and payable on the date designated in such notice, together with accrued interest to such date on the amount so prepaid in accordance with Section 2.13(d); provided that if a Eurodollar Borrowing is prepaid on a date other than the last day of an Interest Period applicable thereto, the Borrower shall also pay all amounts required pursuant to Section 2.19.  In order to qualify as a “Designated Term Loan Prepayment”, such prepayment must comply with each of the following limitations and requirements: (i) there shall be no more than two (2) Designated Term Loan Prepayments during the term of this Agreement, (ii) each Designated Term Loan Prepayment shall be in an amount equal to $2,000,000 and (iii) each Designated Term Loan Prepayment shall be applied to the principal balance of the Term Loans in inverse order of maturity and made pro rata to the Lenders based on their Pro Rata Shares of the Term Loans.  For the avoidance of doubt, in respect of each Fiscal Quarter, the Borrower shall maintain the financial ratio tests set forth in Sections 6.1 and 6.2 as in effect on the last day of such Fiscal Quarter notwithstanding any Designated Term Loan Prepayment made following the end of such Fiscal Quarter.  Any change to such financial ratio tests triggered by the Borrower making a Designated Term Loan Prepayment shall not apply to any Fiscal Quarter ending prior to the date that such Designated Term Loan Prepayment is made but only apply to those Fiscal Quarters ending on or after the date on which such Designated Term Loan Prepayment is made.  For the avoidance of doubt, if the Borrower makes both Designated Term Loan Prepayments permitted by this Section 2.11(b) on the same day in a single payment, the Borrower shall be deemed to receive the benefit of the third paragraphs of Sections 6.1 and 6.2 hereof on and after such date.

 

39

(e)           The Credit Agreement is hereby further amended by deleting Section 6.1 thereof in its  entirety and substituting in lieu thereof the following:

“Section 6.1.          Total Leverage Ratio.  Until the receipt by the Administrative Agent of a Designated Term Loan Prepayment in accordance with Section 2.11(b) hereof, the Borrower will not permit the Total Leverage Ratio, as of the last day of each Fiscal Quarter specified below, to exceed the ratio set forth below opposite such corresponding Fiscal Quarter:

 

	Fiscal Quarter  	Total Leverage Ratio
	 	 
	
Each Fiscal Quarter ending on or

	2.50:1.00
	
prior to March 31, 2016

	 
	 	 
	
Fiscal Quarter ending

	
2.50:1.00

	
June 30, 2016

	 
	 	 
	
Fiscal Quarter ending

	
2.75:1.00

	
September 30, 2016

	 
	 	 
	
Fiscal Quarter ending

	
2.95:1.00

	
December 31, 2016

	 
	 	 
	
Fiscal Quarter ending

	
2.95:1.00

	
March 31, 2017

	 
	 	 
	
Fiscal Quarter ending

	
2.75:1.00

	
June 30, 2017

	 
	 	 
	
Fiscal Quarter ending

	
2.50:1.00

	
September 30, 2017

	 
	 	 
	
Fiscal Quarter ending

	
2.50:1.00

	
December 31, 2017

	 
	 	 
	
Fiscal Quarter ending

	
2.65:1.00

	
March 31, 2018

	 
	 	 
	
Fiscal Quarter ending

	
2.40:1.00

	
June 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
2.35:1.00

	
September 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.75:1.00

	
December 31, 2018 and each

	 
	
Fiscal Quarter thereafter

	 

  

40

Notwithstanding the foregoing, commencing on the date a Designated Term Loan Prepayment is received by the Administrative Agent (but prior to the date a second Designated Term Loan Prepayment is received by the Administrative Agent), the Borrower will not permit the Total Leverage Ratio, as of the last day of each Fiscal Quarter specified below, to exceed the ratio set forth below opposite such corresponding Fiscal Quarter:

 

	
Fiscal Quarter ending

	
2.75:1.00

	
March 31, 2018

	 
	 	 
	
Fiscal Quarter ending

	
2.55:1.00

	
June 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
2.50:1.00

	
September 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
2.00:1.00

	
December 31, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.75:1.00

	
March 31, 2019 and each

Fiscal Quarter thereafter

	 

 

Notwithstanding the foregoing, commencing on the date a second Designated Term Loan Prepayment is received by the Administrative Agent, the Borrower will not permit the Total Leverage Ratio, as of the last day of each Fiscal Quarter specified below, to exceed the ratio set forth below opposite such corresponding Fiscal Quarter:

	
Fiscal Quarter ending

	
2.75:1.00

	
March 31, 2018

	 
	 	 
	
Fiscal Quarter ending

	
2.70:1.00

	
June 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
2.70:1.00

	
September 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
2.25:1.00

	
December 31, 2018

	 
	 	 
	
Fiscal Quarter ending

	
2.00:1.00

	
March 31, 2019

	 
	 	 
	
Fiscal Quarter ending

	
1.75:1.00

	
June 30, 2019 and each

	 
	
Fiscal Quarter thereafter”

	 

 

41

  

(f)           The Credit Agreement is hereby further amended by deleting Section 6.2 thereof in its entirety and substituting in lieu thereof the following:

“Section 6.2.          Fixed Charge Coverage Ratio.  Until the receipt by the Administrative Agent of a Designated Term Loan Prepayment in accordance with Section 2.11(b) hereof, the Borrower will not permit the Fixed Charge Coverage Leverage Ratio, as of the last day of each Fiscal Quarter specified below, to be less than the ratio set forth below opposite such corresponding Fiscal Quarter:

	
Fiscal Quarter

	
Fixed Charge Coverage Ratio

	 	 
	
Each Fiscal Quarter ending on or

	2.00:1.00
	
prior to March 31, 2016

	 
	 	 
	
Fiscal Quarter ending

	
2.00:1.00

	
June 30, 2016

	 
	 	 
	
Fiscal Quarter ending

	
1.50:1.00

	
September 30, 2016

	 
	 	 
	
Fiscal Quarter ending

	
1.50:1.00

	
December 31, 2016

	 
	 	 
	
Fiscal Quarter ending

	
1.50:1.00

	
March 31, 2017

	 
	 	 
	
Fiscal Quarter ending

	
1.50:1.00

	
June 30, 2017

	 
	 	 
	
Fiscal Quarter ending

	
1.55:1.00

	
September 30, 2017

	 
	 	 
	
Fiscal Quarter ending

	
1.60:1.00

	
December 31, 2017

	 
	 	 
	
Fiscal Quarter ending

	
1.20:1.00

	
March 31, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.45:1.00

	
June 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.45:1.00

	
September 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.70:1.00

	
December 31, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.70:1.00

	
March 31, 2019

	 
	 	 
	
Fiscal Quarter ending

	
2.00:1.00

	
June 30, 2019 and each

	 
	
Fiscal Quarter thereafter

	 

 

42

  

Notwithstanding the foregoing, commencing on the date a Designated Term Loan Prepayment is received by the Administrative Agent (but prior to the date a second Designated Term Loan Prepayment is received by the Administrative Agent), the Borrower will not permit the Fixed Charge Coverage Leverage Ratio, as of the last day of each Fiscal Quarter specified below, to be less than the ratio set forth below opposite such corresponding Fiscal Quarter:

	
Fiscal Quarter ending

	
1.15:1.00

	
March 31, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.40:1.00

	
June 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.40:1.00

	
September 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.60:1.00

	
December 31, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.60:1.00

	
March 31, 2019

	 
	 	 
	
Fiscal Quarter ending

	
1.95:1.00

	
June 30, 2019

	 
	 	 
	
Fiscal Quarter ending

	
2.00:1.00

	
September 30, 2019 and each

	 
	
Fiscal Quarter thereafter

	 

 

43

  

Notwithstanding the foregoing, commencing on the date a second Designated Term Loan Prepayment is received by the Administrative Agent, the Borrower will not permit the Fixed Charge Coverage Leverage Ratio, as of the last day of each Fiscal Quarter specified below, to be less than the ratio set forth below opposite such corresponding Fiscal Quarter:

 

	
Fiscal Quarter ending

	
1.10:1.00

	
March 31, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.30:1.00

	
June 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.30:1.00

	
September 30, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.50:1.00

	
December 31, 2018

	 
	 	 
	
Fiscal Quarter ending

	
1.50:1.00

	
March 31, 2019

	 
	 	 
	
Fiscal Quarter ending

	
1.85:1.00

	
June 30, 2019

	 
	 	 
	
Fiscal Quarter ending

	
2.00:1.00

	
September 30, 2019 and each

	 
	
Fiscal Quarter thereafter”

	 

 

 

44

 

(g)          The Credit Agreement is hereby further amended by substituting the notice address for Holdings set forth in Section 10.1(a)(i) thereof with the following address:

“To Holdings:                                       Increditone Inc.

340 Madison Avenue, 8th Floor

New York, New York 10173

Attention: Liran Buskila

Facsimile Number: (212) 685-8001

Telephone Number: (646) 588-3607

Email: lbouskila@undertone.com

With a copy to (for

Information purposes only):               Perion Network Ltd.

Azrieli Center 1, Building A, 4th Floor

26 Harokmim St.

Holon, 5885849 Israel

Attention: Sharon Shachak/Maoz Sagron

Facsimile Number: +972-3-603-1585

Telephone Number: + 972-73-398-1302/

    +972-73-398-1001

Email: sharons@perion.com/maozs@perion.com

and

Mayer Brown LLP

1221 Avenue of the Americas

New York, New York 10020

Attention: Mae Rogers

Facsimile Number: (212) 849-5737

Email: mrogers@mayerbrown.com”

 

45

(h)          The Credit Agreement is hereby further amended by deleting Schedule I thereto in its entirety and substituting in lieu thereof Schedule I attached hereto.

Section 3.  Waiver and Acknowledgment.  Subject to the satisfaction of the conditions set forth in Section 4 below, in reliance on the representations and warranties set forth in Sections 5 and 7 below, and subject to the limitations set forth in Section 8 below, the Lenders hereby waive the Specified Defaults.  The Borrower acknowledges and agrees that the waiver contained in this Section 3 shall not waive or amend (or be deemed to be or constitute an amendment to or waiver of) any other covenant, term or provision in the Credit Agreement or hinder, restrict or otherwise modify the rights and remedies of the Lenders and the Administrative Agent following the occurrence of any other present or future Default or Event of Default under the Credit Agreement or any other Loan Document.  The waiver of each Specified Default set forth above is solely with respect to the period(s) corresponding to such Specified Default prior to the date hereof.

Section 4.  Conditions Precedent to Effectiveness.  The effectiveness of this Amendment is subject to the truth and accuracy of the warranties and representations set forth in Sections 5 and 7 below and receipt by the Administrative Agent of each of the following, each of which shall be in form and substance satisfactory to Administrative Agent:

(a)          This Amendment, duly executed and delivered by the Borrower, Holdings, the Lenders and the Administrative Agent;

(b)          A certificate of the Borrower dated as of the date hereof signed by a Responsible Officer of the Borrower certifying that, immediately before and after giving effect to this Amendment (i) the representations and warranties contained in Article IV of the Credit Agreement and the other Loan Documents are true and correct on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall have been true and correct as of such earlier date; (ii) since December 31, 2016, there has been no event, development or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect; and (iii) no Default or Event of Default (other than such Default or Event of Default expressly waived by Section 3 above) has occurred and is continuing as of the date hereof and no Default or Event of Default will exist after giving effect to the amendments contemplated by this Amendment;

 

(c)          A certified copy of resolutions adopted by the Board of Directors of the Borrower authorizing and approving the transactions contemplated by this Amendment;

(d)          Evidence that the Borrower shall have received an indirect cash equity contribution from the Parent immediately prior to the effectiveness of this Amendment in the amount of $8,000,000 and payment by the Borrower in an amount equal to $8,000,000 in immediately available funds to be applied as a prepayment to the outstanding principal amount of the Term Loans in accordance with Section 6 of this Amendment;

(e)          A Reaffirmation of Obligations Under Loan Documents (the “Reaffirmation”) dated as of the date hereof duly executed by each Loan Party and the Parent, in the form of Exhibit I attached hereto;

 

46

(f)          The payment of all fees and other amounts due and payable on or prior to the effective date of this Amendment, including reimbursement or payment of all out-of-pocket expenses (including the fees described in Section 9(b) hereof as well as reasonable fees, charges and disbursements of counsel to the Administrative Agent in connection with the preparation, negotiation, execution and delivery of this Amendment and the other documents and agreements executed and delivered in connection herewith) required to be reimbursed or paid by the Borrower and Holdings hereunder;

(g)          Delivery of the financial statements and corresponding executed Compliance Certificate required by Sections 5.1(b) and 5.1(d) of the Credit Agreement in respect of the Fiscal Quarter ending December 31, 2017; and

(g)          Such other documents as the Administrative Agent may reasonably request.

Section 5.  Representations.  Each of the Borrower and Holdings represents and warrants to the Administrative Agent and the Lenders that:

(a)          Power and Authority.  Each of the Borrower and the other Loan Parties have the power and authority to execute, deliver and perform the terms and provisions of this Amendment and the Credit Agreement, as amended by this Amendment, and have taken all necessary corporate action to duly authorize the execution, delivery and performance of this Amendment.  Each of this Amendment and the Credit Agreement, as amended by this Amendment, constitutes the legal, valid and binding obligation of the Borrower and Holdings enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles.

(b)          No Violation.  The execution, delivery and performance by the Borrower and the other Loan Parties of this Amendment, and compliance by them with the terms and provisions of the Credit Agreement, as amended by this Amendment: (i) will not contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or federal, state or local Governmental Authority, (ii) will not conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any lien upon any of the property or assets of any Loan Party pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other agreement, contract or instrument, to which any Loan Party is a party or by which they or any of their property or assets is bound or to which they may be subject or (iii) will not violate any provision of the certificate or articles of incorporation or bylaws of the Borrower, Holdings or any other Loan Party.

 

47

(c)          Governmental Approvals.  No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for those that have otherwise been obtained or made on or prior to the date of the effectiveness of this Amendment and which remain in full force and effect on such date), or exemption by, any Governmental Authority, is required to authorize, or is required in connection with, (i) the execution, delivery and performance of this Amendment by the Borrower or Holdings or (ii) the legality, validity, binding effect or enforceability of the Credit Agreement, as amended by this Amendment against the Borrower or Holdings.

(d)          No Default.  No Default or Event of Default (other than such Default or Event of Default expressly waived by Section 3 above) has occurred and is continuing as of the date hereof and no Default or Event of Default will exist immediately after giving effect to this Amendment.

(e)          No Impairment.  The execution, delivery, performance and effectiveness of this Amendment will not: (a) impair the validity, effectiveness or priority of the Liens granted pursuant to any Loan Document, and such Liens continue unimpaired with the same priority to secure repayment of all of the applicable Obligations, whether heretofore or hereafter incurred, and (b) require that any new filings be made or other action taken to perfect or to maintain the perfection of such Liens.

Section 6.  Common Equity Capital Contribution/Prepayment of Term Loans/Agreements and Consents.

(a)          The parties hereto acknowledge and agree that the prepayment made by the Borrower in the amount of $8,000,000 (described in Section 4(d) of this Amendment) shall be irrevocable and applied as a prepayment to the Term Loans on the date hereof to the principal installments of the Term Loans in inverse order of maturity (notwithstanding anything to the contrary in the Credit Agreement).  Such prepayment described in the sentence immediately above shall be made pro rata to the Lenders based on their Pro Rata Shares of the Term Loans.  The Administrative Agent and the Lenders waive any prior notice requirements under the Credit Agreement in respect of such prepayment.

(b)          Each of Holdings and the Borrower acknowledge and agree that the $8,000,000 used to make the prepayment described in clause (a) immediately above was received as a common equity capital contribution from the Parent to Holdings, which in turn was used by Holdings to make a common equity capital contribution into the Borrower, and such contributions do not qualify as, and will not be included as, an “Excluded Equity Contribution” or a “Specified Equity Contribution” under and as defined in the Credit Agreement.

(c)          Each Loan Party hereby acknowledges and agrees that, as of the date hereof and after giving effect to the prepayment described in Section 4(d) of this Amendment, the aggregate principal amount of all outstanding Term Loans equals $24,345,301.24.

Section 7.  Reaffirmation of Representations. Each of the Borrower, Holdings and the Subsidiary Loan Parties hereby repeats and reaffirms all representations and warranties made to the Administrative Agent and the Lenders in the Credit Agreement and the other Loan Documents on and as of the date hereof (and after giving effect to this Amendment) with the same force and effect as if such representations and warranties were set forth in this Amendment in full (except to the extent that such representations and warranties relate expressly to an earlier date, in which case such representations and warranties were true and correct as of such earlier date).

 

48

Section 8.  No Further Amendments; Ratification of Liability.  Except as expressly amended or waived hereby, the Credit Agreement and each of the other Loan Documents shall remain in full force and effect in accordance with their respective terms, and the Lenders and the Administrative Agent hereby require strict compliance with the terms and conditions of the Credit Agreement and the other Loan Documents in the future.  Each of the Borrower, Holdings and the Subsidiary Loan Parties hereby (i) restates, ratifies, confirms and reaffirms its respective liabilities, payment and performance obligations (contingent or otherwise) and each and every term, covenant and condition set forth in the Credit Agreement and the other Loan Documents to which it is a party, all as amended by this Amendment, and the liens and security interests granted, created and perfected thereby and (ii) acknowledges and agrees that this Amendment shall not in any way affect the validity and enforceability of any Loan Document to which it is a party, or reduce, impair or discharge the obligations of the Borrower, Holdings, the Subsidiary Loan Parties or the Collateral granted to the Administrative Agent and/or the Lenders thereunder.  The Lenders’ agreement to the terms of this Amendment or any other amendment of the Credit Agreement or any other Loan Document shall not be deemed to establish or create a custom or course of dealing between the Borrower, Holdings, the Subsidiary Loan Parties or the Lenders, or any of them.  This Amendment shall be deemed to be a “Loan Document” for all purposes under the Credit Agreement.  After the effectiveness of this Amendment, each reference to the Credit Agreement in any of the Loan Documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment.  The amendments contained herein shall be deemed to have prospective application only.

Section 9.  Other Provisions.

(a)          This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, and all counterparts, taken together, shall constitute but one and the same document.

(b)          The Borrower agrees to reimburse the Administrative Agent on demand for all reasonable costs and expenses (including, without limitation, reasonable and documented legal counsels’ fees; provided that such counsel shall be limited to one legal counsel and, to the extent necessary, one local counsel in each relevant jurisdiction for the Administrative Agent and the Lenders, collectively, in each case selected by the Administrative Agent) incurred by the Administrative Agent in negotiating, documenting and consummating this Amendment, the other documents referred to herein, and the transactions contemplated hereby and thereby.  The Borrower agrees to pay (x) a consent fee to each of the Lenders that delivers an executed signature page to this Amendment in an amount equal to 0.30% multiplied by the outstanding principal balance of the Term Loan held by such Lender immediately after giving effect to the payment described in Section 4(d) hereof and (y) such other fees as are contained in a separate fee letter among the Borrower, Holdings and the Administrative Agent or its affiliates.

(c)          THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK) OF THE STATE OF NEW YORK.

(d)          THIS AMENDMENT CONSTITUTES THE ENTIRE CONTRACT AMONG THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF AND SUPERSEDES ANY AND ALL PREVIOUS DISCUSSIONS, CORRESPONDENCE, AGREEMENTS AND OTHER UNDERSTANDINGS, WHETHER ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF.

 

49

(e)          Each of the Borrower, Holdings and the Subsidiary Loan Parties agrees to take all further actions and execute such other documents and instruments as the Administrative Agent may from time to time reasonably request to carry out the transactions contemplated by this Amendment, the Loan Documents and all other agreements executed and delivered in connection herewith.

 

     THE LOAN PARTIES DO NOT INTEND THIS AMENDMENT NOR THE TRANSACTIONS CONTEMPLATED HEREBY TO BE, AND THIS AMENDMENT AND THE TRANSACTION CONTEMPLATED HEREBY SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING BY ANY LOAN PARTY UNDER OR IN CONNECTION WITH THE CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH A LOAN PARTY IS A PARTY.

[Signature Page Follows]

 

50

 

IN WITNESS WHEREOF, the Borrower, Holdings, the Subsidiary Loan Parties, the Lenders and the Administrative Agent have caused this Fourth Amendment to Credit Agreement and Waiver to be duly executed by their respective duly authorized officers and representatives as of the day and year first above written.

	
 

	
INTERACTIVE HOLDING CORP.

 

By: /s/ Doron Gerstel  

Name: Doron Gerstel

Title: Chief Executive Officer

 

INCREDITONE INC.

 

By: /s/ Doron Gerstel    

Name: Doron Gerstel

Title: Chief Executive Officer

[Signature Page to Fourth Amendment to Credit Agreement and Limited Waiver]

 

51

 

 

	
 

	

SUNTRUST BANK, in its capacities as a Lender and as Administrative Agent

 

By: /s/ Cynthia Burton

Name: Cynthia Burton

Title: Director

 

[Signature Page to Fourth Amendment to Credit Agreement and Limited Waiver]

 

52

 

	 	
SILICON VALLEY BANK, as a Lender

	 	 
	 	
By: /s/ Claudia Candles

	 	
Name: Claudia Candles

	 	
Title: Director

[Signature Page to Fourth Amendment to Credit Agreement and Limited Waiver]

 

53

 

	 	
CADENCE BANK, as a Lender

	 	 
	 	
By: /s/ Steve Prichett

	 	
Name: Steve Prichett

	 	
Title: EVP

 

[End of Signatures]

 

54Exhibit 4.16

 

Material indicated with a “[***]” has been redacted pursuant to a request for Confidential Treatment under the Freedom of Information Act. Such material has been filed separately with the Securities and Exchange Commission.

 

SEARCH DISTRIBUTION AGREEMENT

THIS SEARCH DISTRIBUTION AGREEMENT (“Agreement”) is made effective as of January 1, 2018 (“Effective Date”) by and between Microsoft Ireland Operations Limited, an Irish Corporation (“Microsoft”) and Perion Network Ltd., an Israeli corporation (“Company”).  Company and Microsoft are referred to individually, as a “Party” and, together, as the “Parties.”   

 

This Agreement consists of the terms and conditions below and these Exhibits:

 

		·	
Exhibit 1: Microsoft Brand Features; Microsoft Trademark Usage and Microsoft Editorial Guidelines);

 

		·	
Exhibit 2: (Traffic Quality Requirements);

 

		·	
Exhibit 3: (Distribution, Third-Party, and Download Guidelines);

 

		·	
Exhibit 4: (Company Brand Features and Trademark Usage Guidelines)

 

		·	
Exhibit 5: (Default Search Homepage, Browser Search, Company Toolbar and New Tabs Displays);

 

		·	
Exhibit 6: (Approved Company Products);

 

		·	
Exhibit 7: (Pre-Approved Offer Screens);

 

		·	
Exhibit 8: [******];

 

		·	
Exhibit 9: [******];

 

Addresses and contacts for notices:

 

	
Table 1

	
Company

	
Microsoft

	
Perion Network Ltd.

26 HaRokmim St.

Azrieli Center 1, Building A, 4th Floor

Holon 5885849

Israel

 

	
Microsoft Ireland Operations Limited

The Atrium Building, Block B

Carmanhall Road, Sandyford Industrial Estate

Dublin 18

Ireland

 

	
Jurisdiction of Formation:

Israel

	
Jurisdiction of Formation:

Ireland

	
Address for Notices:

Address: 26 HaRokmim St., Azrieli Center 1, Building A, 4th Floor, Holon 5885849, Israel

Phone:

Email:  [******]

Attention:  [******]

	
Microsoft Ireland Operations Limited

Attention:   MIOL Contract Operations Specialist

The Atrium Building, Block B

Carmanhall Road, Sandyford Industrial Estate,

Dublin 18, Ireland

Email:     [******]

	
Copy of notice must also be sent to:

Attention:  Perion Legal Department

Address:  26 HaRokmim St., Azrieli Center 1, Building A, 4th Floor, Holon 5885849, Israel

Phone:  [******]

Email:  [******]

	
Copy of notice must also be sent to:

Attention:  Legal and Corporate Affairs (re Bing Distribution Contracts)

Address:  Microsoft Corporation, One Microsoft Way, Redmond, WA 98052 USA

Fax: [******]

 

	
Term:

	
3 years

	
NDA dated:

	
[******]

 

 

Agreed and accepted:

 

	
Perion Network Ltd.

	
Microsoft Ireland Operations Limited

	
Signature: /s/ Doron Gerstel, /s/ Ophir Yakovian

	
Signature: /s/ Alessandro Loche

	
Name:             Doron Gerstel       Ophir Yakovian

	
Name:              Alessandro Loche

	
Title:                 CEO                       CEO 

	
Title:          Channel Executive Manager

	
Date:                     October 25, 2017

	
Date:                  October 25, 2017

2

 

	Section 1.	
PURPOSE.

 

This Agreement sets forth the terms under which Company may distribute Microsoft’s Bing Search Services.

 

	Section 2.	
DEFINITIONS.

 

In addition to terms defined elsewhere in this Agreement, and whether used in the singular or the plural, the following terms will have the following meanings.

 

“Ad Revenues” means all revenues recognized by Microsoft in accordance with GAAP in connection with advertisements returned for Included Searches from Users in the Territory. The calculation of Ad Revenue is subject to Section 5.1.

 

“Ad Revenue Deduction” means [******]

 

“Adjusted Revenues” means, for a given period, the Ad Revenues less the Ad Revenue Deduction for activity during the applicable period.

 

“Affiliate” means any entity that directly or indirectly controls, is controlled by, or is under common control with a party, where “control” means the ownership of, or the power to vote, at least fifty percent (50%) of the voting stock, shares or other equity interests of the entity, or the effective ability to control the management and direction of the entity.

 

 “API Call” means a search query request to the Bing Search Services [******].

 

“Bing Search Service” means the standalone internet search service that indexes and searches the world wide web and other data sources that Microsoft may at its discretion choose to index as part of its online search service as it exists as of the Effective Date, including all improvements thereto and any successor or substitute services that are used on the Bing Site.

“Bing Site” means www.bing.com and the Bing mobile website www.m.bing.com, any equivalent Bing in-application services, the localized equivalents of each (e.g., www.bing.co.uk or www.bing.fr), all subdomains and any successor sites that replace such sites and subdomains, as well as any equivalent Bing in-application services.

“Company Brand Features” means all trademarks, service marks, logos and other distinctive brand features of Company that are used in or relate to its business and are listed on Exhibit 4, as such Exhibit may be updated by Company from time-to-time.

“Company Network” means Company, Company’s Affiliates and Company Partners.

“Company Partner” means a publisher, distribution partner or distribution channel with whom Company has contracted to offer search services and that have been approved by Microsoft pursuant to the terms of this Agreement.

 

3

 

“Company Toolbars” means an add-on client software application developed, owned by or licensed to Company and distributed by Company under this Agreement for use by end-users with internet browser technology that provides a navigation bar on the browser general user interface containing internet search functionality, and links to various internet sites and services specified by Company.  During the Term and Tail Period, such Company Toolbars distributed under this Agreement may be set with the Bing Search Service as the default internet search provider from all Search Access Points within the Company Toolbars, and in order for Company to be paid under this Agreement, will include Tracking Codes or other tracking codes within such Search Access Points (in addition to setting the Bing Search Service as the default internet search).  Exhibit 5 illustrates how the Company Toolbars will appear during the Term and the Tail Period, unless mutually agreed otherwise by the Parties.

“Company User Data” means User Data collected by Company in connection with Queries entered in a Search Access Point on any Company-branded Default Search Homepage or New Tab or Company Partner-branded Default Search Homepage or New Tab identified on Exhibit 5, which is owned or operated by Company or Company Partner.

 

“Default Browser Search” means Users setting Company as the default internet search provider in a User’s web browser and set as default search in the User’s browser and actually Redirects to the Bing Search Service upon a query from the default search box or address bar.

 

“Default Search Homepage” means, at Company’s option, (i) webpages hosted and controlled by Company or a Company Partner including a search box or (ii) the Bing Site homepage or successor web page,  or a different approved homepage (in which event, Microsoft will recognize and track traffic from Company and each Company Partner for purposes of accounting for Ad Revenue), with such webpages offered to end-users to be the default homepage (which may include being the default homepage in a new browser tab) for such end-users within their browser(s) on the end-users’ device, or may be other such websites with a search box, so long in all instances as the primary purpose of the website is a general internet search page.  Upon a User conducting a search, the Default Search Homepages will Redirect to the Bing Search Service, or may be set to the Bing Site, during the Term.  Exhibit 5 illustrates, without limitation, examples of how the Default Search Homepages will appear during the Term, unless mutually agreed otherwise by the Parties.

“Guidelines” means all of the guidelines specified in Exhibit 1 (“[******] Guidelines”); Exhibit 2 (“[******] Requirements”); Exhibit 3 (“[******] Guidelines”); and any instructions or documentation relating to this Agreement; as any of the foregoing may be updated by Microsoft from time to time.

 

“Included Search” means a Query that includes Tracking Codes specific to Company, from Search Access Points. Queries conducted by a User following an initial search (“Follow-on Searches”) is considered Included Search to the extent that Microsoft’s Tracking Codes or other mechanism used by Microsoft allow Microsoft to account for follow-on searches.  If Company implements a Tracking Code, Microsoft will use commercially reasonable efforts to track Initial Searches and Follow-on Searches using those Tracking Codes or such other mechanisms and to have such Tracking Codes or other mechanisms persist to track subsequent searches.

 

4

 

“Microsoft Brand Features” means all trademarks, service marks, logos and other distinctive brand features of Microsoft that are used in or relate to its business and are listed in Exhibit 1, as such Exhibit may be updated by Microsoft from time-to-time.

 

“Microsoft User Data” means User Data collected by Microsoft.

“Mobile Device” means: (a) an iOS or Android mobile telephony device used for any computing, communications or other services; and (b) any other device that Microsoft and Company either agree in writing are Mobile Devices or that both treat as a mobile device for purposes of rendering the user experience.

“NDA” means the Non-Disclosure Agreement between the Parties, dated as shown on the cover page.

“New Tab” means a new tab in a browser, where the default new tab page includes a Search Access Point, as determined by Company or Company Partner.

“OEM” means any company that manufactures computers, tablets or mobile devices.

“Original Agreements” means collectively, the agreements between: (a) Microsoft Online, Inc. and Company dated July 29, 2014, as amended; (b) Microsoft Online, Inc. and Company dated December 28, 2012; and (c) Microsoft Online, Inc. and ClientConnect Ltd. dated November 19, 2010, as amended.

“Paid Listings” means a listing provided by Microsoft’s Bing ads platform in response to a User query or other active user input in a Search Access Point and related keyword suggestions on the Bing Site in connection with Included Searches, that include hypertext links to web pages, which may result in payment to Microsoft for displaying the listing, regardless of the basis on which Microsoft is paid.

“Personal Computer” means a general purpose computer, such as a desktop, notebook, laptop, tablet or netbook that: (a) is not a Mobile Device; and (b) is primarily designed to be used by a single person or small group of persons at one time and to perform a multiplicity of general purpose computing functions at the direction of the user through applications.

“Platform” means a Personal Computer or Mobile Device.

“Products” means the Default Search Homepages, Default Browser Search, Company Toolbars, New Tabs, other applications or search access points permitted pursuant to Section 4.4.1 below or modified pursuant to Section 4.3.2 below, and the applications, products and services listed in Exhibit 6, as such Exhibit may be updated from time to time in accordance with this Agreement.

“Query” means the internet search query resulting from a user actively initiating a single search request [******].

 

5

“Redirect” means redirection of a User to the Bing Search Service, in accordance with this Agreement, upon a User’s initiation of an Included Search.

“Revenue Share” means, the sum for each country of, the product of the applicable Revenue Share Percentage in Table 2 set forth in Section 5.1 and the Adjusted Revenues during the period.

 

“Search Access Points” means all areas including search boxes included within or enabled by any of the Products, where a User can initiate a Query with the Tracking Codes.

“Serving Cost Rate” means [******].

“Tail Period” means the [******] period that immediately follows the expiration or the termination of this Agreement for any reason except for Company insolvency or breach of the Agreement.

“Term” has the meaning given in Table 1.

“Territory” means [******].

 

“Tracking Codes” means the unique code, search settings or other instrumentation that Microsoft provides and Company will implement in Search Access Points as contemplated under this Agreement, allowing Microsoft to track and monitor information relating to the Search Access Points and other data.

 

“[******]” means [******]

“[******] Requirements” refers to the requirements set forth in Exhibit 2.

“User” means a person who initiates a Query.

 

“User Data” means information provided by or obtained from Users by accessing the Bing Search Service.

 

“[******]” means [******]

 

“Violation” has the meaning ascribed to it in Section 4.9(b).

 

“Violation Notice” means any written notice from Microsoft to Company communicating an actual Violation which includes information reasonably sufficient to remediate the behavior or activity giving rise to the Violation.

 

Other capitalized terms used, but not defined in this Section 2 have the meanings attributed to them elsewhere in this Agreement.  All references to “days,” “months,” and “years” are to calendar days, months, and years in the United States of America, unless otherwise expressly stated in this Agreement.  A “business day” means any day other than a Friday, Saturday or Sunday or any day on which the Federal Reserve Bank of New York is closed.  All monetary amounts are in U.S. dollars. Any reference to Company’s obligations shall also apply to all of Company’s Affiliates. Any notice or termination notice issued by Microsoft to Company shall also apply to Company’s Affiliates whether or not expressly referred to therein.

 

6

 

	Section 3.	
LICENSE GRANTS.

 

            Subject to the terms and conditions of this Agreement, the Parties grant to each other the licenses set forth below.  All rights not expressly granted are reserved to the licensor.

	3.1.	
Grant of Licenses to Company.

 

		3.1.1.	
Bing Search Service.  Microsoft grants to Company and its Affiliates a limited, nonexclusive, non-transferable (except as provided herein), non-sublicensable, royalty-free license during the Term and Tail Period in the Territory to: (a) reproduce, distribute and implement Tracking Codes for the purposes set out in this Agreement; and (b) enable Redirects from Search Access Points within the Company Network, pursuant to the terms of this Agreement.

 

		3.1.2.	
Microsoft Brand Features.  Microsoft grants Company and its Affiliates a limited, non-exclusive, nontransferable (except as provided herein), non-sublicensable, royalty-free license during the Term and Tail Period in the Territory to use, reproduce, distribute and display the Microsoft Brand Features solely in connection with the distribution of the Products contemplated and authorized by Microsoft under this Agreement and promotion of the Bing Search Service and Redirect functionality on all Products.  Company’s uses of the Microsoft Brand Features must comply with Microsoft’s Trademark Usage Guidelines set forth in Exhibit 1 and Company will not use any Microsoft Brand Feature in a way that is misleading or deceptive.  The form of all usage of Microsoft Brand Features by or under the authority of Company will be subject to Microsoft’s prior approval.  Company will not take any action which may suggest or imply that Microsoft has endorsed Company or any product or service thereof, or that there is any connection or relationship between Microsoft and Company, other than as set forth herein. All uses of Microsoft Brand Features, and all goodwill associated therewith, inure solely to the benefit of Microsoft.  Notwithstanding anything else to the contrary in this Agreement, [******].  For avoidance of doubt, the foregoing includes the right for Company Partners to reproduce, distribute and display the Microsoft Brand Features in connection with their distribution of the Products and enablement of the Bing Search Service as contemplated in this Agreement.

 

	3.2.	
Grant of License to Microsoft.  Company grants to Microsoft a limited, non-exclusive, nontransferable, royalty-free license to use, reproduce, distribute and display the Company Brand Features solely in connection with the marketing and promotion of the Bing Search Service, as contemplated in this Agreement.  In its use of any Company Brand Feature, Microsoft agrees to adhere to Company’s brand treatment guidelines for use of Company’s Brand Features, as such guidelines may be provided by Company to Microsoft from time to time.  Microsoft will not take any action which may suggest or imply that Company has endorsed Microsoft or any product or service thereof, or that there is any connection or relationship between Microsoft and Company, other than as set forth herein.  All uses of Company Brand Features, and all goodwill associated therewith, inure solely to the benefit of Company.

 

7

	Section 4.	
RIGHTS AND RESPONSIBILITIES FOR DISTRIBUTION.

 

	4.1.	
Provision of Services.  During the Term and the Tail Period, and in accordance with the provisions of this Agreement, Microsoft will provide the Bing Search Service to Users in response to all Redirects from traffic sources that comply with the Agreement. Notwithstanding the foregoing, if [******] fails to [******] due to [******], such failure will [******].

 

	4.2.	
[******].In response to [******],[******] will provide [******] with substantially [******] as [******] on [******] unless otherwise agreed by both Parties in writing.  [******] will use [******] to enforce [******] consistently with [******] with [******]; provided, however, that [******] will not be considered [******].

 

	4.3.	
 Review and Approvals.

 

		4.3.1.	
New Products.

 

		(a)	
Company may request approval of new Products by submitting such request and information needed to review such request, to Microsoft, in writing. Microsoft may ask for additional information from Company as reasonably needed to complete its review of Company’s request. [******] Microsoft may in its sole discretion, approve or reject such requests.

 

		(b)	
Company acknowledges that [******] will [******] pursuant to Section 4.3.1(a) above [******].  Notwithstanding the foregoing, if [******] exceeds [******], Microsoft will [******] to [******].

 

		4.3.2.	
Variations.

 

		(a)	
Company must request and receive Microsoft’s approval before implementing any addition, update or variation (collectively, “Variation”) to [******] that affects the functionality of Bing Search Service or user experience of Bing Search Service, [******]

 

		(b)	
Subject to Section 4.3.2(c) below, Company must notify Microsoft of any Variation to Products [******] of implementing such Variation.

 

		(c)	
Company may implement Variations [******].

 

		(d)	
[******]. If Company does not comply, the Parties [******]. If [******] are unable to [******] within [******]: (1) if [******] is [******],[******] may [******] (2) if [******] is the source of [******],[******] must remove [******], the respective [******] in the respective [******], or the [******] of the respective [******]. Any failure to [******] described in this Section 4.3.2 (d) is a [******] for purposes of the [******] described in Section [******].

 

8

	4.4.	
Methods of Distribution.

 

		4.4.1.	
General.  Beginning no later than [******], and subject to Section 4.3, during [******] and in the Territory, Company may: (i) Redirect users from all approved Search Access Points in its Products to the Bing Search Service; and (ii) enable Default Browser Search.  Company may distribute each of the foregoing independently of each other to each respective user, in Company’s discretion and through the distribution activities and entry points set forth on; provided, that [******]. Company will only engage in such distribution during the Term and in the Territory in accordance with Section 4.9.  [******]

 

		4.4.2.	
Approved Products.  [******]. Microsoft reserves the right to review any expressly approved or deemed approved Products at any time during the Term. If Microsoft determines that a previously (expressly or deemed) approved Product does not comply with the Guidelines, [******]. If Company fails to remedy [******], then Microsoft reserves the right, [******].

 

		4.4.3.	
[******].  [******] may [******] or otherwise [******] the [******] with [******] for any other [******], provided that each [******] also itself complies with [******] herein.  Upon request, [******] will provide [******] with reasonable detail of the [******] with each [******]. In the event of [******] between the terms contained with the body of this Agreement and [******], including those set forth in [******], the terms of [******] will control.

 

		4.4.4.	
Manner of Distribution.  Company may present the offer for the Products to end-users.  When Company displays an offer to end-users as a part of the implementation screen display, it will [******]. In the event that: (i[******] is prohibited by law; (ii) [******] is consistent with [******] in a given [******]; or (iii) adverse action is undertaken or is reasonably expected to be undertaken against [******] by an organization known for [******], [******] may  notify [******] in writing that the implementation must be [******] and [******] will implement [******] within [******] of such notice.   If [******] notice is given under subsection (i) of this Section 4.4.4, the [******] shall only apply where [******].  If [******] notice is given under subsectionn (ii) of this Section 4.4.4, then if [******] is to apply in [******], the [******] shall no longer apply [******] after [******]has been fully implemented by [******].

 

9

 

	4.5.	
Tracking Codes or [******].

 

		4.5.1.	
Placement of Tracking Codes.  Prior to the Effective Date, Microsoft will have provided Company with [******] (the “Initial Tracking Codes”) under the Original Agreements.  Company shall be entitled to require Microsoft to provide for [******] Tracking Codes (the “Additional Tracking Codes”). Company understands that such Additional Tracking Codes will be provided by Microsoft within [******] from Company’s written request for such Additional Tracking Codes. Company will place Tracking Codes in any Search Access Points, and all such tagged Search Access Points will redirect to the Bing Search Service. Microsoft will pay the applicable compensation to Company, as set forth in Section 5.1, only to the extent that a Tracking Code exists in a Search Access Point.  Microsoft will inform Company of any search queries that Microsoft receives without Tracking Codes that it believes originates under this Agreement (when Microsoft becomes aware).  The parties will notify each other of any errors or other technical problems with the implementation of Tracking Codes and will use reasonable efforts to remedy such errors or technical problems. [******] Company acknowledges that Microsoft does not represent or warrant that Tracking Codes can be set or retained on all Search Access Points (for example, on all browsers and versions of browsers).

 

		4.5.2.	
No Disclosure of Tracking Codes [******].  During and after the Term, Company will not disclose or provide any access to the Tracking Codes [******] to a third party unless authorized in writing by Microsoft.

 

		4.5.3.	
[******].

 

		(a)	
[******].

 

		(b)	
[******].

 

		(c)	
[******].

 

	4.6.	
Use of Company User Data.  Company will have the right to [******]. Company undertakes that any Company User Data collected and used in connection therewith will, at all times, comply with the provisions of Section 8.1 below (“User Data; Compliance with Privacy and User Data Laws”). Company will not take any other action to alter Redirects from going directly to the Bing Search Service and Company will not have any such other traffic routed to the Bing Search Service via Company’s servers or intermediary websites or domains.  For the avoidance of doubt, Company will not use any mechanisms to track Users (as such) on Microsoft domains or services.

 

	4.7.	
Service Support. Company and Company Partners shall provide customer support to Users relating to the Products.  Microsoft shall provide customer support to Users relating solely to the Bing Search Service.

 

	4.8.	
Attribution.  Company may include Microsoft Brand Features on all Products during the Term and Tail Period.  For Products already installed on Users’ systems as of the Effective Date, the branding will remain the same, unless Microsoft requests modification to such attribution.  For all new Products that Company desires to distribute, the Parties will mutually agree on the appearance of the Microsoft Brand Features on such Products before they are distributed or otherwise made available to the public.  Company will not use the Microsoft Brand Features in any way that could be fraudulent, deceptive or misleading to a User or otherwise violate the Guidelines.

 

10

 

	4.9.	
Distribution Guidelines.

 

		4.9.1.	
Compliance.

 

		(a)	
Company agrees that, in connection with its rights to offer Redirect functionality to the Bing Search Service under this Agreement, it shall not and neither shall any Company Partner: (i) knowingly infringe on any third party’s proprietary rights; or (ii) violate any applicable law, statue, ordinance or regulation, including the laws and regulations governing (A) misleading, false or deceptive advertising, (B) anti-discrimination, (C) unfair competition, (D) fraud, or (E) export control (and, for clarity, [******] will be subject to [******]. Without limiting the foregoing, Company will use commercially reasonable efforts not to distribute a Product that [******]. Where open-source software is incorporated within a product, service or application bundled within or distributed with a Product, Company undertakes to review the license terms applicable to such open source software and respect all applicable use restrictions therein or similar. “Commercially reasonable efforts” as used in the foregoing means that [******].

 

		(b)	
Company agrees that, in connection with its distribution of Redirect functionality in connection with this Agreement, [******] will comply with the Guidelines throughout the Term and the Tail Period. Notwithstanding the foregoing, non-compliance of the Guidelines by Company or a Company Partner shall still be subject [******]. Microsoft will use commercially reasonable efforts to provide at least [******].

 

		4.9.2.	
Compliance with Guidelines.  Company will provide a User notice and obtain such User’s consent pursuant to Section 4.4.4 above, and in a manner that is not misleading and that complies with applicable laws and applicable Guidelines before changing any user settings with respect to any Search Access Points.

 

		4.9.3.	
Offer Screen.  Except for approved offer screens identified on Exhibit 7 , the Parties will work together to develop the offer screens.  Company must receive Microsoft’s approval in writing for [******].  For the avoidance of doubt, [******].

 

		4.9.4.	
Traffic Quality Requirements.

 

		(a)	
Each Party agrees that, in connection with its Redirect distribution under this Agreement, it shall not violate Traffic Quality Requirements.

 

		(b)	
Company will work with Microsoft to manage traffic generated by the Company Network according to Microsoft specifications. Upon notification of the specifications related to Traffic Quality Requirements from Microsoft to Company, the Parties will collaborate in good faith to implement the specifications [******] which will account for any technical work needed for Company and Company Partners to implement the specifications, as communicated in writing by Company to Microsoft. Microsoft reserves the right to update such specifications from time to time. As at the Effective Date, the Parties acknowledge that the measurement parameters, standards, and operational processes [******] and the Parties agree to work in good faith to [******].

 

11

 

		(c)	
Company will follow any Guidelines provided by Microsoft to manage traffic for individual traffic sources. [******], Company, at Microsoft’s discretion, may remove the individual traffic source at issue from its network, [******].

 

		4.9.5.	
Unauthorized or Fraudulent Revenue. In connection with Company’s Redirect distribution, Company will not, and will not authorize any third party to, generate invalid [******].  [******], Microsoft will measure invalid click-throughs, and any search, impression, click-through or conversion generated in violation of this paragraph will not be counted for purposes of Company’s compensation.

 

		4.9.6.	
Distribution Partners.

 

		(a)	
Company may distribute the Products through the Company Partners that make up the Company Network. Company will disclose to Microsoft, [******] during the Term and Tail Period and upon Microsoft’s request, all Company Partners that make up the Company Network.  Such disclosure will be deemed Company’s Confidential Information as that term is defined in the NDA.

 

		(b)	
If any Company Partner or related traffic: (i) [******]; (ii) violates law with respect to the Products or their distribution; (iii) is engaged in or derived from fraudulent practices; or (iv) has [******], then Company will ensure that the Company Partner removes the Bing Search Service and Redirect functionality from those Products ([******]) within [******] of receipt of a Violation Notice from Microsoft, which Microsoft will provide to Company using commercially reasonable efforts. [******]. By way of clarification and not limitation, [******].

 

		(c)	
In the event that [******]. On 1st January each year during the Term, [******].

 

		(d)	
Company, its Affiliates and Company Partners must not sub-syndicate or otherwise distribute Products incorporating the Bing Search Service Redirect functionality through any means to any search distribution companies including [******].

 

		(e)	
Company must not directly or indirectly offer the Redirect functionality to [******].

 

		(f)	
During the Term and the Tail Period, neither Company nor Microsoft will actively solicit a commercial relationship to provide the Bing Search Service to any suspended partner directly nor shall it expressly permit any third party to do so.

 

		(g)	
Company and its Affiliates must not take any action that directs or otherwise moves traffic from any Company or Company Partners [******].

 

12

 

	4.10.	
Non-Web Vertical-Only Entry Points.  The use of the Services on Products (or versions thereof) whose default search functionality is to [******] is not permitted under this Agreement.  Perion may [******] to this Section 4.10 pursuant to Section 4.3.

 

	4.11.	
[******].

 

		4.11.1.	
General.

 

		(a)	
[******]. Except as otherwise provided in this Agreement, Company will redirect to the Bing Search Service, [******].  Within [******] of the end of each calendar quarter (“Report Submission Period”), Company will provide Microsoft with written reports [******] against [******].

 

		(b)	
Product and [******].  Products that have been [******] shall not be counted toward the [******].

 

		4.11.2.	
[******].

 

		(a)	
[******].

 

		(b)	
[******].

 

		4.11.3.	
[******]. If the [******] is removed by Microsoft or Company from [******] arising from non-compliance with this Agreement then [******] through that [******] will not be used to calculate the [******] set forth in Section [******] (i.e., such [******] may be directed elsewhere and the remainder of the applicable [******] shall be subject to the [******]).

 

		4.11.4.	
Query Assignment.  Company will reasonably cooperate with Microsoft, to the extent necessary, to cause query share from the queries submitted to Bing Search Service from Products under this Agreement to be attributed to Microsoft by third party traffic measurement agencies.  Without limiting the foregoing, Company will, if requested by Microsoft, sign a letter assigning all query traffic to Microsoft for purposes of tracking online search traffic by comScore, Inc.

 

	4.12.	
Reporting by Microsoft. During the Term and Tail Period, Microsoft will use commercially reasonable efforts to provide Company with [******] reporting [******], reflecting the most recent data that Microsoft. As of [******], Microsoft has provided Company with the ability to generate up to [******], or such [******] as the Parties may agree, so that [******].  Without limiting the foregoing, Microsoft will use commercially reasonable efforts to provide [******]. However, it being understood that [******] will be based upon [******].  Only [******] shall be used for [******].

 

	4.13.	
Reporting by Company. To the extent that reporting data, whether complete or partial, is available to Company, within [******] after the end of each calendar quarter, Company will provide a report to Microsoft in a mutually agreeable form and content (for example, [******], as well as other information reasonably requested by Microsoft).  Upon Microsoft’s request (such requests only [******]), Company shall provide Microsoft with [******].

 

13

 

	4.14.	
Cooperation.  Neither Party will unreasonably withhold, delay or condition any approvals or consents under this Agreement.

 

	Section 5.	
COMPENSATION

 

	5.1.	
Payment. During the Term and the Tail Period, Microsoft will pay Company the [******] for each applicable payment period under this Agreement according to [******].  Payment will be made in accordance with the payment terms in Section 5 of this Agreement.  If the [******], Microsoft will pay [******].  Except as specifically set forth in this Section 5.1, Microsoft will retain all revenues derived from or in connection with its services.

 

Table 2: [******]

	
[******]

	5.2.	
Tail Period Payments.  During the Tail Period, Microsoft will continue to pay Company a Revenue Share for traffic generated by Products or Search Access Points that were implemented or distributed prior to the end of the Term, so long as (i) [******], (ii) [******].  Company will not drive new implementation or distribution of Products or Search Access Points under this Schedule during the Tail Period, and Microsoft will not [******]. The Tail Period will [******]if a) [******] or b) [******].

 

	5.3.	
Method and Timing of Payments.

 

		5.3.1.	
Monthly Reports. Within no later than [******] following the end of each calendar month in which a payment may be owed, Microsoft will make a report available to Company showing the information necessary to calculate amounts payable during such calendar month.  If Microsoft [******], any [******]. Information contained in such reports is Confidential Information of each Party.

 

		5.3.2.	
Invoices and Payments. Microsoft will pay Company no later than [******] after Microsoft makes the report available to Company, according to Microsoft's then-current payment delivery practices, which is, as of the Effective Date, payment via ACH electronic payment to Company's financial institution in accordance with instructions supplied to Microsoft by Company in Microsoft's ACH Electronic Payment Forms.  Microsoft may change the payment delivery practice upon giving [******] to Company. If Company fails to supply the information described in Section 4.5.3(b), Microsoft will have no obligation to pay Company for any revenue generated by the publishers or products that are the subject of such request.  For any amounts paid and later determined to have been generated in violation of the Agreement, Microsoft may invoice Company or offset against amounts owed to Company in a later billing period.  In addition, Microsoft may invoice and Company will pay any negative amount of payment calculation results, or Microsoft may offset such amount against Revenue Share payable in other months, at its discretion.

 

14

 

		5.3.3.	
[******].  Microsoft may, [******], which Microsoft, in its sole reasonable discretion, determines was [******].  Upon its discovery, Microsoft will use commercially reasonable efforts to notify Company of any [******].

 

	5.4.	
Audit

 

		5.4.1.	
General.   During the Term, Tail Period, [******], [******] at its own expense may hire a mutually agreeable independent accounting firm of international stature (not compensated on a contingency fee basis) to audit [******] under this Agreement [******]solely to the extent relevant to the determination [******] Company under this Agreement for [******].  The auditor shall be under obligations of confidentiality to the auditing party and the auditing party shall remain responsible for any breach of confidentiality by the auditor.  Unless [******] as set forth below, [******].

 

		5.4.2.	
[******]. In addition to Microsoft's rights under Section [******], if [******] under Section [******] determines that [******], Company will [******]. If [******], [******], Company will pay Microsoft for all reasonable costs and expense incurred conducting the audit.

 

		5.4.3.	
Anti-corruption. For any audits related to any applicable anti-corruption laws, besides the obligations above, will also maintain a system of internal controls to prevent the payment of bribes and provide reasonable assurance that financial statements and reporting are accurate.  Company will not have undisclosed or unrecorded accounts for any purpose and false which are, misleading, incomplete, inaccurate or artificial entries in the books and records are prohibited.  [******].

 

	Section 6.	
TERMINATION RIGHTS.

 

	6.1.	
Termination for Insolvency.  This Agreement may be terminated at any time by a Party immediately upon written notice if the other Party: (i) becomes insolvent; (ii) files a petition in bankruptcy if within sixty (60) days after the commencement of any such proceedings, the proceedings have not been dismissed; or (iii) makes an assignment for the benefit of its creditors.

 

	6.2.	
Termination for Cause. Either Party may terminate this Agreement: (i) with [******] written notice due to the other Party’s material breach of this Agreement (a) where such breach is incurable and (b) which, if curable is not cured (or if the breaching Party is not making substantial progress toward curing such breach) within [******] after receiving notice,  or (ii) immediately upon written notice to the other Party if the other Party materially breaches its confidentiality obligations in the NDA (being a single event or a series of events which are together a material breach of the NDA).

 

	6.3.	
Termination for [******].

 

		6.3.1.	
[******].

 

		6.3.2.	
 [******].

15

 

	6.4.	
Termination for [******].

 

	6.5.	
Termination for [******].

 

	6.6.	
Effect of Termination on Tail Period.  In the event of termination by Microsoft pursuant to Section 6.1, Section 6.2, Section 6.3, and Section 6.5,  Company shall forfeit the Tail Period described in Section 5.2.

 

	6.7.	
Survival.  The following provisions survive any termination or expiration of this Agreement for any reason:  Section 6.7, Section 7, Section 8.2, Section 8.4, Section 9,  Section 10, Section 11, Section 12 and any other provision specifically stating it applies following the Term. In addition,

 

Section 5.3.3 will survive any termination or expiration of the Agreement for a period of one (1) year after the termination or expiration of the Term.

	Section 7.	
OWNERSHIP.

 

	7.1.	
Microsoft Ownership. Company acknowledges and agrees that as between Company, on the one hand, and Microsoft, on the other hand, Microsoft owns all right, title and interest in the Bing Search Service, the Microsoft Brand Features and Microsoft User Data.  Except for the licenses set forth in this Agreement, nothing in the Agreement confers upon Company any license or right, title, or interest in the foregoing.

 

	7.2.	
Company Ownership.  Microsoft acknowledges and agrees that as between Microsoft, on the one hand, and Company, on the other hand, Company owns all right, title and interest in the Products, Company Brand Features, Default Search Homepages, New Tabs and Company User Data. Except for the licenses set forth in this Agreement, nothing in this Agreement confers upon Microsoft or the Microsoft Affiliates any licenses or right, title, or interest in the foregoing.

 

	Section 8.	
USER DATA; REPRESENTATIONS AND WARRANTIES.

 

	8.1.	
User Data. Compliance with Privacy and User Data Laws.  All Microsoft User Data will be retained and owned solely by Microsoft and its Affiliates, as applicable.  All Company User Data will be retained and owned solely by Company.  Each Party represents and warrants to the other Party that: (i) all of its collection and use of User Data during or resulting from Users’ use of Bing Search Service or Products, Default Search Homepages, Default Browser Search, or New Tabs or any other Search Access Point will comply with all applicable laws and regulations, including federal and state privacy and consumer protection laws of the United States and its territories, and standard legal terms and conditions, attached as part of Exhibit 1 hereto (as may be amended from time to time); (ii) it has, and will at all times maintain, a specific end-user license agreement and privacy policy governing the delivery and use of its assets hereunder; and (iii) it abides, and will at a times abide, by such end-user license agreement and privacy policies.  Company will provide Microsoft with a copy of its privacy policies, user terms and conditions, and disclosures made to Users.  Each Party will ensure that appropriate disclosures are provided to each User.

 

16

 

	8.2.	
Mutual Representations and Warranties.  Each Party represents and warrants to the other Party that during the Term of the Agreement and Tail Period: (a) it has the full corporate right, power and authority to enter into the Agreement and to perform the acts required of it under the Agreement, including, without limitation, the right to grant any and all rights and licenses under the Agreement without violation of the rights of any third party; (b) the execution of the Agreement and performance of its obligations under the Agreement do not and will not violate any other agreement to which it is a party; (c) the Agreement, when executed and delivered, constitutes its legal, valid and binding obligation; and (d) any and all activities it undertakes in connection with the Agreement will be performed in compliance with all applicable laws, rules and regulations.

 

	8.3.	
Intellectual Property Compliance.  Without limiting anything else in this Agreement to the contrary, each Party covenants and agrees to maintain responsible business practices regarding ownership and compliance with applicable intellectual property laws, rules and regulations, and to maintain, to the extent applicable to it, policies for complying with all such laws, rules and regulations (for example, when applicable and without limitation, a policy for compliance with the Digital Millennium Copyright Act, as amended), and to use reasonable efforts to ensure any of its agents comply with the obligations under this Section 8.4.

 

	8.4.	
Disclaimer.  EXCEPT FOR THE EXPRESS WARRANTIES MADE IN THE AGREEMENT, ALL MATERIALS AND DELIVERABLES PROVIDED BY ONE PARTY TO THE OTHER PARTIES HEREUNDER ARE PROVIDED “AS IS.”  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES MAKE NO OTHER WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, AND EACH PARTY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, TITLE AND NON-INFRINGEMENT.

 

	Section 9.	
INDEMNIFICATION.

 

	9.1.	
Scope. [******]. Each Party agrees to indemnify and hold the other Party harmless from and against [******]. The indemnifying Party will solely conduct the defense of any such claim or action and all negotiations for its settlement or compromise; provided, however, that (i) no settlement or compromise will be entered into that admits fault on behalf of the other Party or requires any payment by the other Party without the other Party’s prior written consent, and (ii) the other Party has the right to participate, at its own cost and expense (including, without limitation, attorneys’ fees), in the defense and any settlement of any such claim or action in order to protect its own interests.

 

	9.2.	
Notice. [******]’s indemnification obligation under Section 9 is contingent upon [******]: (a) promptly notifying the indemnifying Party in writing of the claim, except that any failure to promptly provide this notice will only relieve the indemnifying Party of its indemnification responsibility under this Section 9 to the extent its defense is materially prejudiced by the delay; (b) granting the indemnifying Party sole control of the defense and any settlement of the claim except as expressly provided under Section 9; and (c) providing the indemnifying Party, at the indemnifying Party’s expense, with all assistance, information and authority reasonably required for the defense and any settlement of the claim, but in a manner consistent with the indemnified Party’s confidentiality obligations and preservation of attorney/client, work product and other privileges.

 

17

 

	Section 10.	
LIMITATION OF LIABILITY.

 

	10.1.	
Lost Profits; Consequential Damages.  EXCEPT AS OTHERWISE PROVIDED IN SECTION 10.2, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, (I) NO PARTY WILL BE LIABLE FOR [******], OR FOR ANY OTHER INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE AGREEMENT, HOWEVER CAUSED, AND UNDER WHATEVER CAUSE OF ACTION OR THEORY OF LIABILITY BROUGHT (INCLUDING, WITHOUT LIMITATION, UNDER ANY CONTRACT, NEGLIGENCE OR OTHER TORT THEORY OF LIABILITY) EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND (II) [******] EXCEED THE GREATER OF (i) [******] OR (ii) [******].

 

	10.2.	
Exceptions.  THE ABOVE EXCLUSIONS AND LIMITATIONS OF LIABILITY WILL NOT APPLY: (i) TO A PARTY’S BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER SECTION 12.4 (NONDISCLOSURE AGREEMENT); (ii) A PARTY’S DAMAGES CAUSED BY THE OTHER PARTY’S FRAUD, WILLFUL MISCONDUCT, OR GROSS NEGLIGENCE IN CONNECTION WITH THE AGREEMENT; (iii) A PARTY’S INDEMNIFICATION OBLIGATION UNDER Section 9 (INDEMNIFICATION); OR (IV) AMOUNTS OWED UNDER SECTION 12.12 (TAX MATTERS.

 

	Section 11.	
DISPUTE RESOLUTION [******].

 

	11.1.	
Dispute Resolution.  Except with respect to (1) a Party’s request for equitable or provisional relief or to otherwise protect its intellectual property rights, or Confidential Information provided under this Agreement, no civil action, proceeding as set forth below with respect to any dispute, controversy or claim arising out of, or relating to, or in connection with, this Agreement, or the breach, termination, or validity hereof, including the validity of this dispute resolution provision (each of which dispute, controversy, or claim will be termed a “Dispute”) between the Parties may be commenced, nor may a Party terminate any portion of this Agreement for a material breach of a material warranty, representation, covenant or obligation of this Agreement, until the Parties have first attempted in good faith to resolve the Dispute amicably in accordance with this Section 11.1.

 

		11.1.1.	
Notice of Dispute.  In the event of a Dispute, the Party raising the Dispute shall give written notice to the other Party setting forth the details of the Dispute and any proposed solution or compromise.  The Parties shall cooperate in good faith to resolve the Dispute within 30 days of receipt of the notice of Dispute.

 

		11.1.2.	
[******].  [******].

 

	11.2.	
[******].  [******].

 

18

 

	Section 12.	
GENERAL PROVISIONS.

 

	12.1.	
Notices. Save for the [******] in [******], which may be delivered by fax or email to Company to the respective parties listed on the cover page of this Agreement (with a simultaneous  copy sent by email to [******]), all notices and other communications required or permitted under this Agreement must be in writing and delivered personally, mailed, first class mail, postage prepaid, certified and return receipt requested or via an internationally recognized overnight courier, to the applicable Party at the addresses set forth on the first page to this Agreement, unless, by notice, a Party changes or supplements the addressee and addresses for giving notice. All notices are deemed given: (i) if given personally or by overnight courier, on the date personally delivered; or (ii) if given by first class mail, five days after placed in the mail as specified.

 

	12.2.	
Counterparts.  This Agreement may be executed in two counterparts, both of which taken together constitute a single instrument.  Execution and delivery of this Agreement may be evidenced by scanned copies in pdf exchanged via email.

 

	12.3.	
Successors and Assigns.  This Agreement and the performance of any duties hereunder may not be assigned, transferred, delegated (except as set forth below), sold or otherwise disposed of by a Party other than (a) with the prior written consent of the other Party, or (b) [******].  Microsoft may update Exhibit 8 at the end of each quarter. This Agreement will be binding upon and shall inure to the benefit of a Party’s permitted successors and assigns. Any assignment not permitted by the Agreement is void.  Notwithstanding the foregoing, either Party may delegate its performance to, or exercise its rights through, one or more Affiliates in the Territory; provided that in the event of any such delegation or exercise, each Party will remain liable and fully responsible for its Affiliates’ performance of and compliance with such Party’s obligations and duties under this Agreement.

 

	12.4.	
Nondisclosure Agreement.  The NDA is incorporated by reference and made a part of this Agreement and governs the Agreement.  The Agreement and all discussions under or relating to it are considered “confidential information” under the NDA.

 

	12.5.	
Amendment and Waiver; Entire Agreement.  No amendment to, or waiver of, any provision of the Agreement will be effective unless in writing and signed by both Parties.  The waiver by any Party of any breach or default will not constitute a waiver of any different or subsequent breach or default.  As of the Effective Date, this Agreement, together with all exhibits, represents the entire agreement between the Parties with respect to the subject matter of this Agreement.  As of the Effective Date, this Agreement supersedes all prior agreements and communications of the Parties, oral or written, relating to its subject matter.  As of the Effective Date, this Agreement supersedes the Original Agreements.  All internet searches conducted prior to the Effective Date (and revenue therefrom) under the Original Agreements will be governed by the Original Agreements, and all Included Searches (and revenue therefrom) as of and after the Effective Date will be governed by this Agreement. For the avoidance of doubt, (i) this Agreement does not supersede or modify the NDA, and (ii) the surviving portions of the Original Agreements will apply with respect thereto.

 

	12.6.	
Export Control.  The Parties will comply in all material respects with all relevant export or import laws and regulations of the United States, or of any foreign government to or from where a Party is shipping, in connection with the import, export or re-export, directly or indirectly, of software in connection with this Agreement.

 

19

 

	12.7.	
Severability.  If any provision of the Agreement is held to be invalid, illegal or unenforceable for any reason, such invalidity, illegality or unenforceability will not affect any other provisions of the Agreement, and instead, the Agreement will be construed as if such invalid, illegal or unenforceable provision had never been contained in it.

 

	12.8.	
Publicity.  No Party may make any public announcement or issue any press release about the existence or terms of the Agreement without the other Party’s prior written approval, which shall not be unreasonably withheld.  It is understood between the Parties that Company desires to issue a press release upon the execution of this Agreement, which will be subject to Microsoft’s prior written approval.  Any and all publicity relating to the Agreement or any subsequent transactions between the Parties under it must be approved by both Parties in writing and in advance of the release. Microsoft acknowledges that Company is a publicly traded company, and agrees that as a public company, Company may be obliged, as part of certain disclosure rules, to disclose the existence of this Agreement and certain of its general terms and conditions. Company will only disclose information that is absolutely required to be disclosed by law or regulation, will not disclose the Agreement in its entirety, will not disclose any of the Agreement’s economic terms, and will give Microsoft prior written notice on any such disclosure.

 

	12.9.	
Independent Contractors.  Each Party is an independent contractor with respect to the other for purposes of the Agreement and its subject matter.  Nothing contained in the Agreement creates in any manner whatsoever any partnership, joint venture, employment, agency, fiduciary, or other similar relationship between the Parties.

 

	12.10.	
Sole Responsibility.  Company will remain solely responsible for the operation of the Products, and Microsoft will remain solely responsible for the operation of the Bing Search Service.

 

	12.11.	
Event of Force Majeure.  Neither Party will be in violation of any of the requirements of this Agreement to the extent that its performance is impaired as a result of any delay, failure in performance, or interruption of service, resulting directly or indirectly from acts of God, acts of civil or military authorities, civil disturbances, wars, acts of terrorism, strikes or other labor disputes, fires, transportation contingencies, outages of third party telecommunications networks with whom the non-performing Party does not have a direct contractual relationship, failure of suppliers with whom the non-performing Party does not have a direct contractual relationship, or other similar occurrences which are beyond such Party’s reasonable control; provided, however, that any such delay or failure will be remedied by such Party as soon as reasonably possible.  Upon the occurrence of an event of force majeure, the Party unable to perform will, if and as soon as possible, provide written notice to the other Party indicating that an event of force majeure occurred and detailing how such event of force majeure impacts the performance of its obligations.  Microsoft will maintain during the Term and Tail Period, [******].

 

20

 

	12.12.	
Tax Matters.

 

		12.12.1.	
General. The amounts to be paid by Microsoft to Company do not include any taxes.  Microsoft is not liable for any taxes that Company is legally obligated to pay (“Company Taxes”) which are incurred or arise in connection with or related to the sale of goods and/or services under this Agreement, and all such taxes shall be the financial responsibility of Company, provided that Microsoft shall pay to Company any sales, use or value added taxes that are owed by Microsoft solely as a result of entering into this Agreement and which are to be collected from Microsoft by Company under applicable law. Microsoft may provide to Company a valid exemption certificate in which case Company shall not collect the taxes covered by such certificate Company agrees to indemnify, defend and hold Microsoft harmless from Company’s Taxes (including sales or use taxes paid by Microsoft to Company) or claims, causes of action, costs (including, without limitation, reasonable attorneys’ fees) and any other liabilities of any nature whatsoever related to such Company Taxes.

 

		12.12.2.	
Withholding Taxes. If taxes are required to be withheld on any amounts otherwise to be paid by Microsoft to Company, Microsoft will deduct such taxes from the amount otherwise owed and pay them to the appropriate taxing authority.  Microsoft shall secure and deliver to Company an official receipt for any taxes withheld.  Microsoft shall use reasonable efforts to minimize such taxes to the extent permissible under applicable law.

 

		12.12.3.	
Cooperation on Tax Matters.  Microsoft and Company will reasonably cooperate with each other to mitigate, reduce or eliminate any withholding taxes arising in connection with this Agreement, including by using commercially reasonable efforts to obtain any certificate or other document from any governmental authority or any other person as may be necessary to mitigate, reduce or eliminate any such taxes.  If Microsoft intends to withhold any withholding taxes, Microsoft will provide prior written notice to Company describing the rationale for such determination.  Such notice shall be provided to Company promptly following Microsoft’s determination to withhold and sufficiently in advance of any actual withholding ([******]) to provide Company a reasonable time to contest such determination.

 

	12.13.	
Jurisdiction, Venue, and Governing Law.  This Agreement is governed by and interpreted in accordance with the laws of the State of New York, without regard to the conflicts of laws principles thereof.  The parties each irrevocably consent to the exclusive jurisdiction and venue of the state or federal courts in the Borough of Manhattan, New York, USA for all disputes arising out of or relating to this Agreement.

 

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21

 

 

		EXHIBIT 1	
MICROSOFT BRAND FEATURES; MICROSOFT TRADEMARK USAGE AND MICROSOFT EDITORIAL GUIDELINES

 

The following identifies the location of the Microsoft Brand Features, Microsoft Trademark Usage,  Microsoft Editorial Guidelines.  Company acknowledges that the terms of the guidelines may change at any time at Microsoft’s sole but reasonable discretion (provided that such changes shall apply consistently to Microsoft and all of its other distribution partners); and, following notice of any such change, Company will, within a reasonable time following such notice and otherwise in accordance with the Agreement, comply with the new guidelines for all Products, whether already distributed or not yet distributed. In the event of any conflict between such guidelines and this Agreement, this Agreement shall control.

		1.	
The Bing Product Guidelines (incorporating the Microsoft Brand Features):

 

https://advertiseonbing.blob.core.windows.net/blob/bingads/media/library/docs/bing-marketing-guidelines.pdf

 

		2.	
The Microsoft Trademark Usage Guidelines:

 

http://www.microsoft.com/en-us/legal/intellectualproperty/Trademarks/Usage/General.aspx

 

		3.	
Microsoft Editorial Guidelines:

 

http://advertise.bingads.microsoft.com/en-us/editorial-guidelines

 

including without limitation the User Safety Privacy and Download Guidelines:

 

http://advertise.bingads.microsoft.com/en-us/editorial-privacy-guidelines

 

[******].

 

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22

 

		EXHIBIT 2	
[******] REQUIREMENTS

 

In connection with Company’s distribution and use of the Bing Search Service under this Agreement Company will, and will ensure that Company Partners, comply with the [******] Requirements, which are incorporated by reference herein, and available to Company at https://[******]  or any successor site as provided to Company by Microsoft.

 

[Remainder of page intentionally left blank]

 

23

 

		EXHIBIT 3	
[******] GUIDELINES

 

In connection with Company’s distribution and use of the Bing Search Service under this Agreement Company will, and will ensure that Company Partners, comply with the [******] Guidelines, which are incorporated by reference herein, and available to Company at https://[******] or any successor site as provided to Company by Microsoft.

 

[Remainder of page intentionally left blank.]

 

24

 

		EXHIBIT 4	
COMPANY BRAND FEATURES AND TRADEMARK USAGE GUIDELINES

 

The Company’s Brand and Trademark Usage Guidelines can be found here:

 

https://www.perion.com/media-kit/

 

25

 

		EXHIBIT 5	
DEFAULT SEARCH HOMEPAGE, BROWSER SEARCH, COMPANY TOOLBAR AND NEW TABS DISPLAYS

 

Home page and default search pages where search boxes shown below redirects users to Bing.com:

 

[******]

 

[Remainder of page intentionally left blank.]

26

 

		EXHIBIT 6	
APPROVED COMPANY PRODUCTS

 

[******]

[******]

[******]

 

[Remainder of page intentionally left blank.]

 

27

 

		EXHIBIT 7	
PRE-APPROVED OFFER SCREENS

 

[******]

 

28

  

		EXHIBIT 8	
[******]

 

[******]

[******]

[******]

[******]

[******]

[******]

 

[Remainder of page intentionally left blank.]

 

29

 

		EXHIBIT 9	
[******]

 

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

[******]

 

 [END OF AGREEMENT]

 

30

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