Document:

Exhibit 10.2

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of June 7, 2007 (the “Effective Date”) between SILICON VALLEY BANK, a California corporation with a loan production office located at 535 Fifth Avenue, 27th Floor, New York, New York 10017 (“Bank”), and TREMOR MEDIA, INC., a Delaware corporation (“Borrower”), provides the terms on which Bank shall lend to Borrower and Borrower shall repay Bank. The parties agree as follows:

 

1.            ACCOUNTING AND OTHER TERMS

 

Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made following GAAP. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13. All other terms contained in this Agreement. Unless otherwise indicated, shall have the meaning provided by the Code to the extent such terms are defined therein.

 

2.            LOAN AND TERMS OF PAYMENT

 

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

 

2.1.1     Venture Term Loan.

 

(a)          Availability. Subject to the terms and conditions of this Agreement, during the Draw Period, Bank shall make advances (each a -Term Loan Advance” and, collectively, the “Term Loan Advances”) not exceeding the Venture Term Loan. Each Term Loan Advance, other than the final Term Loan Advance, must be in an amount equal to at least Five Hundred Thousand Dollars ($500,000.00). After repayment, no Term Loan Advance may be reborrowed.

 

(b)          Interest Payments. Commencing on the first Payment Date of the month following the month in which the Funding Date occurs (or commencing on the Funding Date if the Funding Date is the first Payment Date of the month). Borrower shall make monthly payments of interest at the rate set forth in Section 2.2(a).

 

(c)          Repayment. Commencing on the Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall repay the outstanding Term Loan Advances in (i) thirty-six (36) equal monthly installments of principal, plus ( ii) monthly payments of accrued interest at the rate set forth in Section 2.2(a). The final payment of all unpaid principal amounts of the Term Loan Advances and all accrued but unpaid interest thereon is due and payable in full on the Venture Term Loan Maturity Date. Term Loan Advances may only be prepaid in accordance with Sections 2.1.1(d) and 2.1.1(e).

 

(d)          Mandatory Prepayment Upon an Acceleration. If the Term Loan Advances are accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Bank an amount equal to the sum of (i) all outstanding principal plus accrued

 

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and unpaid interest, and (ii) all other sums, if any, that shall have become due and payable, including interest at the Default Rate with respect to any past due amounts.

 

(e)          Permitted Prepayment of Term Loan Advances. Borrower shall have the right at any time and from time to time to prepay. without penalty or premium, all outstanding Obligations with respect to each Term Loan Advance, including, without limitation, any Bank Expenses due and payable hereunder with respect to such Term Loan Advance.

 

2.2         Payment of Interest on the Credit Extensions.

 

(a)          Interest Rate. Subject to Section 2.2(b), the principal amount of outstanding Term Loan Advances shall accrue interest at a floating per annum rate of interest equal to one percentage point (1.0%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.2(f) below.

 

(b)          Default Rate. Immediately upon the occurrence and during the continuance of an Event of Default, Obligations shall bear interest at a rate per annum which is five percentage points (5.0%) above the rate effective immediately before the Event of Default (the “Default Rate”). Payment or acceptance of the increased interest rate provided in this Section 2.2(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank.

 

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

 

(d)          360-Day Year. Interest shall be computed on the basis of a 360-day year for the actual number of days elapsed.

 

(e)          Debit of Accounts. Bank may debit any of Borrower’s deposit accounts, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off but shall be credited against Obligations due and payable.

 

(f)           Payments. Unless otherwise provided, interest is payable monthly on the Payment Date of each month. Payments of principal and/or interest received after 2:00 Eastern time are considered received at the opening of business on the next Business Day. When a payment is due on a day that is not a Business Day, the payment is due the next Business Day and additional fees or interest, as applicable, shall continue to accrue.

 

2.3         Fees. Borrower shall pay to Bank:

 

(a)          Commitment Fee. A fully earned, non-refundable commitment fee of Five Thousand Dollars ($5,000.00), on the Effective Date; and

 

(b)          Bank Expenses. All Bank Expenses (including reasonable attorneys’ fees and expenses, for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due.

 

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2.4         Good Faith Deposit. Borrower has paid to Bank a deposit of Ten Thousand Dollars ($10,000.00) (the “Good Faith Deposit”) to initiate Bank’s due diligence review process. Any portion of the Good Faith Deposit not utilized to pay Bank Expenses will be applied to the commitment fee set forth in Section 2.3(a) above.

 

3.            CONDITIONS OF LOANS

 

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

 

(a)          Duly executed original signatures of Borrower to the Loan Documents to which it is a party;

 

(b)          Duly executed original signatures of Borrower to the Control Agreement[s];

 

(c)          Borrower shall have delivered its Operating Documents and a good standing certificate of Borrower certified by the Secretary of State of the State of Delaware as of a date no earlier than thirty (30) days prior to the Effective Date;

 

(d)          Duly executed signatures to the completed Borrowing Resolutions for Borrower;

 

(e)          Bank shall have received certified copies, dated as of a recent date, of financing statement searches, as Bank shall request, accompanied by written evidence (including any Code termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial Credit Extension, will be terminated or released;

 

(f)           Borrower shall have delivered a landlord’s consent executed in favor of Bank;

 

(g)          Borrower shall have delivered a legal opinion of Borrower’s counsel dated as of the Effective Date together with the duly executed original signatures thereto;

 

(h)          Borrower shall have delivered evidence reasonably satisfactory to Bank that the insurance policies required by Section 6.5 hereof are in full force and effect, together with appropriate evidence showing loss payable and/or additional insured clauses or endorsements in favor of Bank; and

 

(i)           Borrower shall have paid the fees and Bank Expenses then due as specified in Section 2.3 hereof.

 

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

 

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

 

(b)          the representations and warranties in Section 5 shall be true in all material respects on the date of the Payment/Advance Form and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Default or Event of Default shall have occurred and be continuing or result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in Section 5 remain true in all material respects; provided, however. that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and

 

(c)          in Bank’s reasonable discretion, there has not been a Material Adverse Change.

 

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

 

3.4         Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan Advance set forth in this Agreement, to obtain a Term Loan Advance, Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time on the Funding Date of the Term Loan Advance. Together with any such electronic or facsimile notification, Borrower shall deliver to Bank by electronic mail or facsimile a completed Payment/ Advance Form executed by a Responsible Officer or his or her designee. Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee. Bank shall credit Term Loan Advances to the Designated Deposit Account. Bank may make Term Loan Advances under this Agreement based on instructions from a Responsible Officer or his or her designee or without instructions if the Term Loan Advances are necessary to meet Obligations which have become due. If any portion of the proceeds of the Term Loan Advance shall be used to purchase or finance Equipment. Borrower shall deliver to Bank by electronic mail or facsimile a copy of the invoice for the Equipment to be purchased and the request for the Term Loan Advance.

 

4.            CREATION OF SECURITY INTEREST

 

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

 

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interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that may have superior priority to Bank’s Lien under this Agreement). If Borrower shall acquire a commercial tort claim, Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and grant to Bank in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Bank.

 

If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated. Bank shall, at Borrower’s sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower.

 

4.2         Authorization to File Financing Statements.  Borrower hereby authorizes Bank to file financing statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder. including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be deemed to violate the rights of Bank under the Code.

 

5.            REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants as follows:

 

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

 

The execution, delivery and performance of the Loan Documents have been duly authorized, and do not conflict with Borrower’s organizational documents, nor constitute an

 

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event of default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or by which it is bound in which the default could reasonably be expected to have a material adverse effect on Borrower’s business.

 

5.2         Collateral. Borrower has good title to, has rights in, and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no deposit accounts other than the deposit accounts with Bank, the deposit accounts, if any, described in the Perfection Certificate delivered to Bank in connection herewith, or of which Borrower has given Bank notice and taken such actions as are necessary to give Bank a perfected security interest therein. The Accounts are bona fide, existing obligations of the Account Debtors.

 

The Collateral is not in the possession of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate. None of the components of the Collateral shall be maintained at locations other than as provided in the Perfection Certificate or as Borrower has given Bank notice pursuant to Section 7.2. In the event that Borrower, after the date hereof, intends to store or otherwise deliver any portion of the Collateral to a bailee, then Borrower will first receive the written consent of Bank and such bailee must execute and deliver a bailee agreement in form and substance satisfactory to Bank in its sole discretion.

 

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

 

Except as noted on the Perfection Certificate, Borrower is not a party to, nor is bound by, any material license or other agreement with respect to which Borrower is the licensee that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property. Borrower shall provide written notice to Bank within ten ( 10) days of entering or becoming bound by any such license or agreement which is reasonably likely to have a material impact on Borrower’s business or financial condition (other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for all such licenses or contract rights to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any such license or agreement (such consent or authorization may include a licensor’s agreement to a contingent assignment of the license to Bank if Bank determines that is necessary in its good faith judgment), whether now existing or entered into in the future.

 

5.3         Litigation. There are no actions or proceedings pending or, to the knowledge of the Responsible Officers, threatened in writing by or against Borrower or any of its Subsidiaries involving more than One Hundred Fifty Thousand Dollars ($150.000).

 

5.4         No Material Deterioration in Financial Statements. All consolidated financial statements for Borrower and any of its Subsidiaries delivered to Bank fairly present in all material respects Borrower’s consolidated financial condition and Borrower’s consolidated results of operations for the periods covered thereby. There has not been any material

 

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deterioration in Borrower’s consolidated financial condition since the date of the most recent financial statements submitted to Bank.

 

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

 

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

 

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

 

5.8         Tax Returns and Payments; Pension Contributions.  Borrower has timely filed, or has obtained valid extensions for the filing of, all required tax returns and reports, and Borrower and its Subsidiaries have timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower. Borrower may defer payment of any contested taxes, provided that Borrower (a) in good faith contests its obligation to pay the taxes by appropriate proceedings promptly and diligently instituted and conducted, (b) notifies Bank in writing of the commencement of, and any material development in, the proceedings, (c) posts bonds or takes any other steps required to prevent the governmental authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien”. Borrower is unaware of any claims or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes becoming due and payable by Borrower. Borrower has paid all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency.

 

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

 

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

 

6.            AFFIRMATIVE COVENANTS

 

Borrower shall do all of the following:

 

6.1         Government Compliance. Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower shall comply, and have each Subsidiary comply, with all laws, ordinances and regulations to which it is subject, the noncompliance with which could have a material adverse effect on Borrower’s business.

 

6.2         Financial Statements, Reports, Certificates.

 

(a)          Deliver to Bank: (i) as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated balance sheet and income statement covering Borrower’s consolidated operations during the period certified by a Responsible Officer or Borrower’s Chief Financial Officer or Controller and in a form reasonably acceptable to Bank together with aged listings of accounts receivable and accounts payable (by invoice date); (ii) as soon as available, but no later than one hundred fifty (150) days after the last day of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm acceptable to Bank in its reasonable discretion; ( iii) within five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt; (iv) in the event that Borrower becomes subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission or a link thereto on Borrower’s or another website on the Internet; ( v) a prompt report of any legal actions pending or threatened against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of One Hundred Fifty Thousand Dollars ($150,000) or more; and (vi) other financial information reasonably requested by Bank.

 

(b)          Within thirty (30) days after the last day of each month, deliver to Bank with the monthly financial statements, a duly completed Compliance Certificate signed by a Responsible Officer or Borrower’s Chief Financial Officer or Controller.

 

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6.3         Inventory; Returns. Keep all Inventory in good and marketable condition, free from material defects. Returns and allowances between Borrower and its Account Debtors shall follow Borrower’s customary practices as they exist at the Effective Date. Borrower must promptly notify Bank of all returns, recoveries, disputes and claims that involve more than One Hundred Thousand Dollars ($100,000).

 

6.4         Taxes; Pensions. Make, and cause each of its Subsidiaries to make, timely payment of all foreign, federal, state, and local taxes or assessments (other than taxes and assessments which Borrower is contesting pursuant to the terms of Section 5.8 hereof) and shall deliver to Bank, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and deferred compensation plans in accordance with their terms.

 

6.5         Insurance. Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s industry and location and as Bank may reasonably request. Insurance policies shall be in a form, with companies, and in amounts that are satisfactory to Bank. All property policies shall have a lender’s loss payable endorsement showing Bank as lender loss payee and waive subrogation against Bank, and all liability policies shall show, or have endorsements showing, Bank as an additional insured. All policies (or the loss payable and additional insured endorsements) shall provide that the insurer must give Bank at least twenty (20) days notice before canceling, amending, or declining to renew its policy. At Bank’s request, Borrower shall deliver certified copies of policies and evidence of all premium payments. Proceeds payable under any policy shall, at Bank’s option, be payable to Bank on account of the Obligations. Notwithstanding the foregoing, (a) so long as no Event of Default has occurred and is continuing, Borrower shall have the option of applying the proceeds of any casualty policy up to $50,000, in the aggregate, toward the replacement or repair of destroyed or damaged property; provided that any such replaced or repaired property (i) shall be of equal or like value as the replaced or repaired Collateral and (ii) shall be deemed Collateral in which Bank has been granted a first priority security interest, and (b) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Bank, be payable to Bank on account of the Obligations. If Borrower fails to obtain insurance as required under this Section 6.5 or to pay any amount or furnish any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.5, and take any action under the policies Bank deems prudent.

 

6.6         Operating Accounts.

 

(a)          Within thirty (30) days after the Effective Date, maintain its and its Subsidiaries’ depository, operating, and securities accounts with Bank and Bank’s affiliates.

 

(b)          Provide Bank five (5) days prior written notice before establishing any Collateral Account at or with any bank or financial institution other than Bank or its Affiliates. In addition, for each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable bank or financial institution (other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in accordance with the terms hereunder. The provisions of the previous

 

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sentence shall not apply to deposit accounts exclusively used for payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such.

 

6.7         Protection of Intellectual Property Rights. Borrower shall protect, defend and maintain the validity and enforceability of its intellectual property, except to the extent that Bank gives its prior written consent or if Borrower determines in good faith and upon consultation of its legal counsel that the foregoing is not in the best interests of Borrower.

 

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

 

6.9         Further Assurances. Execute any further instruments and take further action as Bank reasonably requests to perfect or continue Bank’s Lien in the Collateral or to effect the purposes of this Agreement.

 

7.            NEGATIVE COVENANTS

 

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

 

7.1         Dispositions. Convey, sell, lease, transfer. assign, or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of surplus, worn-out or obsolete Equipment; (c) in connection with Permitted Liens and Permitted Investments; and (d) of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries in the ordinary course of business.

 

7.2         Changes in Business, Management, Ownership, or Business Locations. (a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve; or (c) (1) have a change in management such that the Key Person resigns, is terminated, or is no longer actively involved in the management of the Borrower in his/her current position and a replacement reasonably satisfactory to Borrower’s Board of Directors for such Key Person is not made within one hundred twenty (120) days after departure from Borrower, or (ii) enter into any transaction or series of related transactions in which the stockholders of Borrower immediately prior to the first such transaction own less than 51% of the voting stock of Borrower immediately after giving effect to such transaction or related series of such transactions (other than by the sale of Borrower’s equity securities in a public offering or to venture capital investors so long as Borrower identifies to Bank the venture capital investors prior to the closing of the transaction). Borrower shall not, without at least thirty (30) days prior written notice to Bank: (1) add any new offices or business locations, including warehouses (unless such new offices or business locations contain less than Twenty-Five Thousand Dollars ($25,000) in Borrower’s assets or property), (2) change its jurisdiction of

 

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organization, (3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization.

 

7.3       Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person. A Subsidiary may merge or consolidate into another Subsidiary or into Borrower or its assets may be acquired by another Subsidiary or by Borrower.

 

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

 

7.5       Encumbrance. Create, incur, or allow any Lien on any of its property, or assign or convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not to be subject to the first priority security interest granted herein, or enter into any agreement, document, instrument or other arrangement (except with or in favor of Bank) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of Borrower’s or any Subsidiary’s intellectual property, except as is otherwise permitted in Section 7.1 hereof and the definition of ‘Permitted Liens” herein.

 

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

 

7.7       Distributions; Investments. (a) Directly or indirectly make any Investment other than Permitted Investments, or permit any of its Subsidiaries to do so; or (b) pay any dividends or make any distribution or payment or redeem, retire or purchase any capital stock, provided that (i) Borrower may convert any of its convertible securities into other securities pursuant to the terms of such convertible securities or otherwise in exchange thereof, (ii) Borrower may pay dividends solely in common stock; and (iii) Borrower may repurchase the stock of former employees or consultants pursuant to stock repurchase agreements so long as an Event of Default does not exist at the time of such repurchase and would not exist after giving effect to such repurchase, provided such repurchase does not exceed in the aggregate of $50,000 per fiscal year.

 

7.8       Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower, except for transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person, it being understood that Borrower’s institutional venture capital stockholders and Affiliates may provide equity and/or unsecured convertible debt or equity financing to Borrower subject to the terms hereof.

 

7.9       Subordinated Debt. (a) Make or permit any payment on any Subordinated Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the

 

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Subordinated Debt which would increase the amount thereof or adversely affect the subordination thereof to Obligations owed to Bank.

 

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

 

8.         EVENTS OF DEFAULT

 

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

 

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

 

8.2       Covenant Default.

 

(a)        Borrower fails or neglects to perform any obligation in Sections 6.2, 6.5, 6.6, or violates any covenant in Section 7; or

 

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

 

8.3       Material Adverse Change.  A Material Adverse Change occurs;

 

12.

 

8.4       Attachment. (a) Any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a trustee or receiver and the attachment, seizure or levy is not removed in ten (10) days; (b) the service of process seeking to attach. by trustee or similar process, any funds of Borrower, or of any entity under control of Borrower (including a Subsidiary), on deposit with Bank or Bank’s Affiliate; (c) Borrower is enjoined, restrained, or prevented by court order from conducting a material part of its business; (d) a judgment or other claim in excess of One Hundred Thousand Dollars ($100.000) becomes a Lien on any of Borrower’s assets, and the same is not released within ten (10) days; or (e) a notice of lien, levy, or assessment is filed against any of Borrower’s assets by any government agency and not paid within ten (10) days after Borrower receives notice. These are not Events of Default if stayed or if a bond is posted pending contest by Borrower (but no Credit Extensions shall be made during the cure period);

 

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

 

8.6       Other Agreements. There is a default in any agreement to which Borrower is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of One Hundred Thousand Dollars ($100,000) or that could have a material adverse effect on Borrower’s business;

 

8.7       Judgments. A judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least One Hundred Thousand Dollars ($100,000) (not covered by independent third-party insurance) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of ten (10) days after the entry thereof (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment);

 

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

 

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

 

9.         BANK’S RIGHTS AND REMEDIES

 

9.1       Rights and Remedies. While an Event of Default occurs and continues Bank may, without notice or demand, do any or all of the following:

 

13.

 

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

 

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

 

(c)        demand that Borrower ( i) deposits cash with Bank in an amount equal to the aggregate amount of any letters of credit remaining undrawn, as collateral security for the repayment of any future drawings under such letters of credit, and Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any letters of credit;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

14.

 

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

 

9.3       Accounts Verification; Collection. Whether or not an Event of Default has occurred and is continuing, Bank may notify any Person owing Borrower money of Bank’s security interest in such funds and verify the amount of such account. After the occurrence of an Event of Default, any amounts received by Borrower shall be held in trust by Borrower for Bank, and, if requested by Bank. Borrower shall immediately deliver such receipts to Bank in the form received from the Account Debtor, with proper endorsements for deposit.

 

9.4       Protective Payments. If Borrower fails to obtain the insurance called for by Section 6.5 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest applicable rate charged by Bank, and secured by the Collateral. Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No payments by Bank are deemed an agreement to make similar payments in the future or Bank’s waiver of any Event of Default.

 

9.5       Application of Payments and Proceeds. Unless an Event of Default has occurred and is continuing. Bank shall apply any funds in its possession, whether from Borrower account balances, payments, or proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, first, to Bank Expenses, including without limitation, the reasonable costs, expenses, liabilities, obligations and attorneys’ fees incurred by Bank in the exercise of its rights under this Agreement; second, to the interest due upon any of the Obligations; and third, to the principal of the Obligations and any applicable fees and other charges, in such order as Bank shall determine in its sole discretion. Any surplus shall be paid to Borrower or other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency. If an Event of Default has occurred and is continuing, Bank may apply any funds in its possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the

 

15.

 

Obligations in such order as Bank shall determine in its sole discretion. Any surplus shall be paid to Borrower or other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency. If Bank, in its good faith business judgment, directly or indirectly enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor.

 

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

 

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

 

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

 

10.       NOTICES

 

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

 

	
If   to Borrower:
    	
Tremor   Media, Inc.,
   122 West 26th St., 8th Floor 
    

 

16.

 

	
 
    	
New York, New York   10001 
   Attn: President 
   Fax: (212) 202-3793
    
	
 
    	
 
    
	
with   a copy to:
    	
Sonnenschein   Nath & Rosenthal LLP
   1221 Avenue of the Americas
   New York, New York 10020
   Attn: Victor H. Boyajian, Esquire
   Fax (973) 912-7199 
   Email: vboyajian@sonnenschein.com
    
	
 
    	
 
    
	
If   to Bank:
    	
Silicon Valley Bank
   535 Fifth Avenue, 27th Floor,
   New York, New York 10017
   Attn: Mr. Michael Moretti
   Fax: (212) 688-5994
   Email:M.Moretti@svb.com
    
	
 
    	
 
    
	
with   a copy to:
    	
Riemer &   Braunstein LLP
   Three Center Plaza
   Boston, Massachusetts 02108
   Attn: David A. Ephraim, Esquire
   Fax: (617) 880-3456
   Email: DEphraim@riemerlaw.com
    

 

 

11.       CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

 

New York law governs the Loan Documents without regard to principles of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in New York; provided, however, that if for any reason Bank cannot avail itself of such courts in the State of New York, Borrower accepts jurisdiction of the courts and venue in Santa Clara County, California. NOTWITHSTANDING THE FOREGOING, BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZF ON THE COLLATERAL OR TO OTHERWISE ENFORCE BANK’S RIGHTS AGAINST BORROWER OR ITS PROPERTY.

 

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

 

17.

 

AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

 

12.       GENERAL PROVISIONS

 

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

 

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

 

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

 

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

 

12.5     Amendments in Writing; Integration. All amendments to this Agreement must be in writing signed by both Bank and Borrower. This Agreement and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements, including, without limitation, the term sheet dated March 29, 2007 between Borrower and Bank. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Agreement and the Loan Documents merge into this Agreement and the Loan Documents.

 

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

 

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

 

12.8     Confidentiality. In handling any confidential information, Bank shall exercise the same degree of care that it exercises for its own proprietary information, but disclosure of 

 

18.

 

information may be made: (a) to Bank’s Subsidiaries or Affiliates (who shall be bound by the term of this Section); (b) to prospective transferees or purchasers of any interest in the Credit Extensions (provided, however, Bank shall use commercially reasonable efforts to obtain such prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or other order; (d) to Bank’s regulators or as otherwise required in connection with Bank’s examination or audit; and (e) as Bank reasonably considers appropriate in exercising remedies under this Agreement. Confidential information does not include information that either: (1) is in the public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public domain after disclosure to Bank (by no fault of Bank); or (ii) is disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the information.

 

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

 

13.       DEFINITIONS

 

13.1     Definitions. As used in this Agreement, the following terms have the following meanings:

 

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

 

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

 

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

 

“Agreement” is defined in the preamble hereof.

 

“Amortization Date” is the first (1st) Payment Date following the Draw Period End Date.

 

19.

 

“Bank” is defined in the preamble hereof.

 

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

 

“Borrower” is defined in the preamble hereof.

 

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

 

“Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such Person’s Board of Directors and delivered by such Person to Bank approving the Loan Documents to which such Person is a party and the transactions contemplated thereby, together with a certificate executed by its secretary on behalf of such Person certifying that (a) such Person has the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party, (b) that attached as Exhibit A to such certificate is a true, correct, and complete copy of the resolutions then in full force and effect authorizing and ratifying the execution, delivery, and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents on behalf of such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such Person shall have delivered to Bank a further certificate canceling or amending such prior certificate.

 

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

 

“Cash Equivalents” are (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service. Inc., (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue, and Bank’s money market accounts.

 

“Claims” are defined in Section 12.2.

 

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

 

20.

 

provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions.

 

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

 

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

 

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

 

“Communication” is defined in Section 10.

 

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

 

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

 

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

 

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

 

“Default” is any event which with notice or passage of time or both, would constitute an Event of Default.

 

“Default Rate” is defined in Section 2.2(b).

 

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

 

21.

 

“Designated Deposit Account” is Borrower’s deposit account, account number maintained with Bank.

 

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

 

“Draw Period” is the period of time from the Effective Date through the Draw Period End Date.

 

“Draw Period End Date” is the earliest to occur of (a) June 7, 2008 or (b) an Event of Default. Notwithstanding the foregoing, in the event Borrower reports as of and for the quarter ending December 31, 2007, Net Income for such quarter of greater than or equal to One Dollar ($1.00), the Draw Period End Date shall be the earliest to occur of (a) December 7, 2008 or (b) an Event of Default.

 

“Effective Date” is defined in the preamble of this Agreement.

 

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

 

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

 

“Event of Default” is defined in Section 8.

 

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

 

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

 

“General Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, any trade secret rights, including any rights to unpatented inventions, payment intangibles, royalties, contract rights, goodwill, franchise agreements, purchase orders, customer lists, route lists, telephone numbers, domain names, claims, income and other tax refunds, security and other deposits, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise), insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind.

 

“Good Faith Deposit” is defined in Section 2.4.

 

22.

 

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

 

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

 

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

 

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

 

“Key Person” is the Borrower’s Chief Executive Officer, who is, as of the Effective Date, Jason Glickman.

 

“Lien” is a mortgage, lien, deed of trust, charge, pledge, security interest or other encumbrance.

 

“Loan Documents” are, collectively, this Agreement, the Warrant, the Perfection Certificate, any note, or notes executed by Borrower, and any other present or future agreement between Borrower and/or for the benefit of Bank in connection with this Agreement, all as amended, restated, or otherwise modified.

 

“Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.

 

“Net Income” means, as calculated for any period as at any date of determination, the net profit (or loss), after provision for taxes, of Borrower for such period taken as a single accounting period.

 

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

 

23.

 

“Operating Documents” are, for any Person, such Person’s formation documents, as certified with the Secretary of State of such Person’s state of formation on a date that is no earlier than 30 days prior to the Effective Date, and its bylaws in current form each of the foregoing with all current amendments or modifications thereto.

 

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

 

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

 

“Perfection Certificate” is defined in Section 5.1.

 

“Permitted Indebtedness” is:

 

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

 

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

 

(c)        Subordinated Debt;

 

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

 

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

 

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

 

“Permitted Investments” are:

 

(a)        Investments shown on the Perfection Certificate and existing on the Effective Date;

 

(b)        Cash Equivalents;

 

(c)        Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors;

 

(d)       Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent 

 

24.

 

obligations of and other disputes with, customers or suppliers arising in the ordinary course of business;

 

(e)        Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (e) shall not apply to Investments of Borrower in any Subsidiary; and

 

(f)        joint ventures or strategic alliances, in the ordinary course of Borrower’s business, consisting of the nonexclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash investments by Borrower do not exceed Fifty Thousand Dollars ($50,000.00) in the aggregate in any fiscal year, and provided further that no Event of Default has occurred, is continuing, or would exist after such event.

 

“Permitted Liens” are:

 

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

 

(b)        Liens for taxes, fees, assessments or other government charges or levies, either not delinquent or being contested in good faith and for which Borrower maintains adequate reserves on Borrower’s Books, if they have no priority over any of Bank’s Liens, and statutory Liens securing claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other Persons imposed without action of such parties, provided, they have no priority over any of Bank’s Lien and the aggregate amount of such Liens does not at any time exceed $50,000.00;

 

(c)        purchase money Liens (i) on Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment securing no more than One Hundred Thousand Dollars ($100,000) in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Lien is confined to the property and improvements and the proceeds of the Equipment;

 

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

 

(e)        non-exclusive license of intellectual property granted to third parties in the ordinary course of business.

 

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

 

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

 

25.

 

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

 

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

 

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

 

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

 

“Subsidiary” is, with respect to any Person, any Person of which more than 50% of the voting stock or other equity interests (in the case of Persons other than corporations) is owned or controlled, directly or indirectly, by such Person.

 

“Term Loan Advance” or “Term Loan Advances” is defined in Section 2.1.1(a).

 

“Transfer” is defined in Section 7.1.

 

“Venture Term Loan” is a Term Loan Advance or Term Loan Advances in an aggregate amount not to exceed Three Million Dollars ($3,000,000.00).

 

“Venture Term Loan Maturity Date” is the earliest of (a) the Payment Date that is thirty-five (35) months after the Amortization Date, or (b) the occurrence of an Event of Default.

 

“Warrant” is that certain Warrant to Purchase Stock dated as of the Effective Date executed by Borrower in favor of Bank.

 

Signature page follows.

 

26.

 

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

 

	
BORROWER:
    	
 
    
	
 
    	
 
    
	
TREMOR MEDIA, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/Jason Glickman
    	
 
    
	
Name:
    	
Jason Glickman
    	
 
    
	
Title:
    	
CEO
    	
 
    
	
BANK:
    	
 
    
	
 
    	
 
    
	
SILICON VALLEY BANK
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
					

 

27.

 

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

 

	
BORROWER:
    	
 
    
	
 
    	
 
    
	
TREMOR MEDIA, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
BANK:
    	
 
    
	
 
    	
 
    
	
SILICON VALLEY BANK
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Michael Moretti
    	
 
    
	
Name:
    	
Michael Moretti
    	
 
    
	
Title:
    	
SVP
    	
 
    
					

 

28.

 

EXHIBIT A

 

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

 

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except as provided below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, all certificates of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever located; and all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing.

 

Notwithstanding the foregoing, the Collateral does not include any of the following, whether now owned or hereafter acquired any copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, any patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in part of the same, trademarks, service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill of the business of Borrower connected with and symbolized thereby, know-how, operating manuals, trade secret rights, rights to unpatented inventions, and any claims for damage by way of any past, present, or future infringement of any of the foregoing; provided, however, the Collateral shall include all Accounts, license and royalty fees and other revenues, proceeds, or income arising out of or relating to any of the foregoing.

 

Pursuant to the terms of a certain negative pledge arrangement with Bank, Borrower has agreed not to encumber any of its copyright rights, copyright applications, copyright registrations and like protections in each work of authorship and derivative work, whether published or unpublished, domain names, any patents, patent applications and like protections, including improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, trademarks, service marks arid, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill of the business of Borrower connected with and symbolized thereby, know-how, operating manuals, trade secret rights, rights to unpatented inventions, and any claims for damage by way of any past, present, or future infringement of any of the foregoing, without Bank’s prior written consent.

 

29.

 

EXHIBIT B

 

Loan Payment/Advance Request Form

 

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

 

	
Fax To:
    	
Date:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
LOAN PAYMENT:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
TREMOR MEDIA, INC.
    
	
 
    	
 
    	
 
    
	
From Account #
    	
 
    	
 
    	
To Account #
    	
 
    	
 
    
	
 
    	
(Deposit Account   #)
    	
 
    	
 
    	
(Loan Account #)
    	
 
    
	
 
    	
 
    	
 
    
	
Principal $
    	
 
    	
 
    	
and/or Interest $
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Authorized Signature:
    	
 
    	
 
    	
Phone Number.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Print Name/Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
LOAN   ADVANCE:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Complete Outgoing Wire Request section below if all or a portion of   the funds from this loan advance are for an outgoing wire.
    
	
 
    	
 
    	
 
    
	
From Account #
    	
 
    	
 
    	
To Account #
    	
 
    	
 
    
	
 
    	
(Loan Account #)
    	
 
    	
 
    	
(Deposit Account   #)
    	
 
    
	
 
    	
 
    	
 
    
	
Amount of Advance $
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
All   Borrower’s representations and warranties in the Loan and Security Agreement   are true, correct and complete in all material respects on the date of the   request for an advance; provided, however, that such materiality qualifier   shall not be applicable to any representations and warranties that already   are qualified or modified by materiality in the text thereof; and provided,   further that those representations and warranties expressly referring to a   specific date shall be true, accurate and complete in all material respects   as of such date:
    
	
 
    	
 
    	
 
    
	
Authorized Signature:
    	
 
    	
 
    	
Phone Number.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Print Name/Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
OUTGOING   WIRE REQUEST:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Complete   only if all or a portion of funds from the loan advance above is to he wired.
    
	
 
    	
 
    	
 
    
	
Deadline for same day   processing is noon, E.S.T.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Beneficiary Name:
    	
 
    	
 
    	
Amount of Wire: $
    	
 
    	
 
    
	
Beneficiary Bank:
    	
 
    	
 
    	
Account Number:
    	
 
    	
 
    
	
City and State:
    	
 
    	
 
    	
 
    
	
Beneficiary Bank Transit   (ABA) #:
    	
 
    	
 
    	
Beneficiary Bank Code   (Swift, Sort, Chip, etc.):
    	
 
    	
 
    
	
 
    	
 
    	
(For International Wire Only)
    
	
 
    	
 
    	
 
    
	
Intermediary Bank:
    	
 
    	
 
    	
Transit (ABA) #:
    	
 
    	
 
    
	
For Further Credit to:
    	
 
    	
 
    
	
Special Instruction:
    	
 
    	
 
    
	
By   signing below, I (we) acknowledge and agree that my (our) fluids   transfer request shall he processed in accordance with and subject to the   terms and conditions set forth in the agreements( s) covering funds transfer   service(s), which agreements(s) were previously received and executed by   me (us).
    
	
 
    	
 
    	
 
    
	
Authorized Signature:
    	
 
    	
 
    	
2nd Signature (if   required):
    	
 
    	
 
    
	
Print Name/Title:
    	
 
    	
 
    	
Print Name/Title:
    	
 
    	
 
    
	
Telephone #:
    	
 
    	
 
    	
Telephone #:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
																																			

 

 

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

 

30.

 

EXHIBIT C

COMPLIANCE CERTIFICATE

	
TO:
    	
SILICON VALLEY BANK
    	
Date:
    	
 
    	
 
    
	
FROM:
    	
TREMOR MEDIA. INC.
    	
 
    	
 
    

 

The undersigned authorized officer of Tremor Media, Inc. (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending  with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.8 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents as appropriate supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

 

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

 

	
Reporting Covenant

 
    	
Required
    	
Complies
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Monthly financial   statements with Compliance Certificate
    	
Monthly within 30 days
    	
Yes No
    
	
Annual financial   statement (CPA Audited)
    	
FYE within 150 days
    	
Yes No
    
	
10-Q, 10-K and 8-K

 
    	
Within 5 days after   filing with SEC
    	
Yes No
    
	
A/P Agings
    	
Monthly within 30 days
    	
Yes No 
    
	
AIR Agings
    	
Monthly within 30 days
    	
Yes No
    

 

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

 

	
 
    
	
 
    
	
 
    

 

31.

 

 

 

	
TREMOR MEDIA, INC.
    	
BANK   USE ONLY
    
	
 
    	
 
    
	
By:                                                             
    	
Received by:                                       
    
	
Name:                                                        
    	
AUTHORIZED   SIGNER
    
	
Title:                                                          
    	
 
    
	
 
    	
 
    
	
 
    	
Date:                                                    
    
	
 
    	
Verified:                                               
    
	
 
    	
AUTHORIZED   SIGNER
    
	
 
    	
 
    
	
 
    	
Date:                                                    
    
	
 
    	
Compliance Status
    	
Yes  No
    
	
 
    	
 
    

 

32.

 

FIRST LOAN MODIFICATION AGREEMENT

 

This First Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of December 8, 2008, by and between SILICON VALLEY BANK, a California corporation, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at 535 Fifth Avenue, 27th Floor, New York, New York 10017 (“Bank”) and TREMOR MEDIA, INC., a Delaware corporation with its chief executive office located at 122 West 26th Street, 8th Floor, New York 10001(“Borrower”).

 

1.                                  DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of June 7, 2007, evidenced by, among other documents, a certain Loan and Security Agreement dated as of June 7, 2007, between Borrower and Bank (as amended from time to time, the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

 

2.                                    DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement (together with any other collateral security granted to Bank, the “Security Documents”). Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”.

 

3.                                    DESCRIPTION OF CHANGE IN TERMS.

 

A.                                Modifications to Loan Agreement.

 

1                                        The Loan Agreement shall be amended by inserting the following, to appear as Section 2.1.2 thereof:

 

“2.1.2 2008 Venture Term Loan.

 

(a)                               Availability. Subject to the terms and conditions of this Agreement, during the 2008 Draw Period, Bank shall make advances (each a “2008 Term Loan Advance” and, collectively, the “2008 Term Loan Advances”) not exceeding the 2008 Venture Term Loan. Each 2008 Term Loan Advance, other than the final 2008 Term Loan Advance, must be in an amount equal to at least Five Hundred Thousand Dollars ($500,000.00). After repayment, no Term Loan Advance may be reborrowed.

 

(b)                              Interest Payments. Commencing on the first Payment Date of the month following the month in which the Funding Date of a 2008 Term Loan Advance occurs (or commencing on the Funding Date if the Funding Date is the first Payment Date of the month) until June 30, 2009, Borrower shall make monthly payments of interest with respect to such 2008 Term Loan Advance at the rate set forth in Section 2.2(a)(ii).

 

1.

 

(c)                               Repayment. Commencing on the 2008 Amortization Date, and continuing on the Payment Date of each month thereafter, Borrower shall repay the outstanding 2008 Term Loan Advances in (i) thirty-six (36) equal monthly installments of principal, plus (ii) monthly payments of accrued interest at the rate set forth in Section 2.2(a)(ii). The final payment of all unpaid principal amounts of the 2008 Term Loan Advances and all accrued but unpaid interest thereon is due and payable in full on the 2008 Venture Term Loan Maturity Date. 2008 Term Loan Advances may only be prepaid in accordance with Sections 2.1.2(d) and 2.1.2(e).

 

(d)                             Mandatory Prepayment Upon an Acceleration. If the 2008 Term Loan Advances are accelerated following the occurrence of an Event of Default, Borrower shall immediately pay to Bank an amount equal to the sum of (i) all outstanding principal plus accrued and unpaid interest, (ii) the Prepayment Fee, and (iii) all other sums, if any, that shall have become due and payable, including interest at the Default Rate with respect to any past due amounts.

 

(e)                               Permitted Prepayment of 2008 Term Loan Advances. So long as no Event of Default has occurred and is continuing, Borrower shall have the option to prepay all, but not less than all, of any 2008 Term Loan Advance advanced by Bank under this Agreement, provided Borrower (i) delivers written notice to Bank of its election to prepay such 2008 Term Loan Advance at least three (3) days prior to such prepayment, and (ii) pays, on the date of such prepayment (A) all outstanding principal plus accrued and unpaid interest relating to such 2008 Term Loan Advance, (B) the Prepayment Fee, and (C) all other sums relating to such 2008 Term Loan Advance, if any, that shall have become due and payable, including interest at the Default Rate with respect to any past due amounts.”

 

2                                        The Loan Agreement shall be amended by inserting the following new sections, to appear immediately following Section 2.1.2 thereof:

 

“2.1.3 Revolving Advances.

 

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

 

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

 

2.

 

2.1.4                Letters of Credit Sublimit

 

(a)                               As part of the Revolving Line, Bank shall issue or have issued Letters of Credit for Borrower’s account. Such aggregate amounts utilized hereunder shall at all times reduce the amount otherwise available for Advances under the Revolving Line. The face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed Three Million Dollars ($3,000,000.00), inclusive of Credit Extensions relating to Sections 2.1.5 and 2.1.6. The aggregate amount available to be used for the issuance of Letters of Credit may not exceed (i) the lesser of (A) the Revolving Line, or (B) the Borrowing Base, minus (ii) the outstanding principal amount of any Advances (including any amounts used for Cash Management Services and the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve), and minus (iii) the FX Reduction Amount. If, on the Revolving Line Maturity Date, or the effective date of any termination of this Agreement by Borrower, there are any outstanding Letters of Credit, then on such date Borrower shall provide to Bank cash collateral in an amount equal to 105% of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating to said Letters of Credit. All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s standard Application and Letter of Credit Agreement (the “Letter of Credit Application”). Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably request. Borrower further agrees to be bound by the regulations and interpretations of the issuer of any Letters of Credit guaranteed by Bank and opened for Borrower’s account or by Bank’s interpretations of any Letter of Credit issued by Bank for Borrower’s account, and Borrower understands and agrees that Bank shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments, or supplements thereto.

 

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

 

(c)                               Borrower may request that Bank issue a Letter of Credit payable in a Foreign Currency. If a demand for payment is made under any such Letter of Credit, Bank shall treat such demand as an Advance to Borrower of the equivalent of the amount thereof (plus fees and charges in

 

3.

 

connection therewith such as wire, cable, SWIFT or similar charges) in Dollars at the then-prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign Currency.

 

(d)                             To guard against fluctuations in currency exchange rates, upon the issuance of any Letter of Credit payable in a Foreign Currency, Bank shall create a reserve (the “Letter of Credit Reserve”) under the Revolving Line in an amount equal to ten percent (10%) of the face amount of such Letter of Credit. The amount of the Letter of Credit Reserve may be adjusted by Bank from time to time to account for fluctuations in the exchange rate. The availability of funds under the Revolving Line shall be reduced by the amount of such Letter of Credit Reserve for as long as such Letter of Credit remains outstanding.

 

2.1.5                Foreign Exchange Sublimit. As part of the Revolving Line, Borrower may enter into foreign exchange contracts with Bank under which Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency (each, a “FX Forward Contract”) on a specified date (the “Settlement Date”). Each FX Forward Contract shall have a Settlement Date of at least one (1) FX Business Day after the contract date and shall be subject to a reserve of ten percent (10%) of the outstanding amount of the FX Forward Contract (the “FX Reserve”). The aggregate amount of FX Forward Contracts at any one time may not exceed Three Million Dollars ($3,000,000.00). The amount otherwise available for Credit Extensions under the Revolving Line shall be reduced by an amount equal to the aggregate FX Reserves for all outstanding FX Forward Contracts (the “FX Reduction Amount”). Any amounts needed to fully reimburse Bank will be treated as Advances under the Revolving Line and will accrue interest at the interest rate applicable to Advances.

 

2.1.6                Cash Management Services Sublimit. Borrower may use up to Three Million Dollars ($3,000,000.00), inclusive of Credit Extensions relating to Sections 2.1.4 and 2.1.5 and the FX Reduction Amount, of the Revolving Line for Bank’s cash management services which may include merchant services, direct deposit of payroll, business credit card, and check cashing services identified in Bank’s various cash management services agreements (collectively, the “Cash Management Services”). Any amounts Bank pays on behalf of Borrower for any Cash Management Services will be treated as Advances under the Revolving Line and will accrue interest at the interest rate applicable to Advances.

 

2.1.7                Overadvances. If, at any time, the sum of (a) the outstanding principal amount of any Advances (including any amounts used for Cash Management Services), plus (b) the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve), plus (c) the FX Reduction Amount exceeds

 

4.

 

the lesser of either the Revolving Line or the Borrowing Base, Borrower shall immediately pay to Bank in cash such excess.”

 

3                                        The Loan Agreement shall be amended by deleting the following text, appearing as Section 2.2(a) thereof:

 

“                                         (a)                               Interest Rate. Subject to Section 2.2(b), the principal amount of outstanding Term Loan Advances shall accrue interest at a floating per annum rate of interest equal to one percentage point (1.0%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.2(f) below.”

 

and inserting in lieu thereof the following:

 

“                                         (b)                              Interest Rate.

 

(i)                                  Venture Term Loan. Subject to Section 2.2(b), the principal amount of outstanding Term Loan Advances shall accrue interest at a floating per annum rate of interest equal to one percentage point (1.0%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.2(f) below.

 

(ii)                              2008 Venture Term Loan. Subject to Section 2.2(b), the principal amount of outstanding 2008 Term Loan Advances shall accrue interest at a floating per annum rate of interest equal to one and one-half of one percentage point (1.50%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.2(f) below.

 

(iii)                          Advances. Subject to Section 2.2(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to one percentage point (1.0%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.2(f) below.”

 

4                                        The Loan Agreement shall be amended by inserting the following new text, to appear immediately following Section 2.3(b) thereof:

 

“                                         (c)                               Prepayment Fee. The Prepayment Fee, when due hereunder.”

 

5                                        The Loan Agreement shall be amended by deleting the following text, appearing in Section 3.4 thereof:

 

“Subject to the prior satisfaction of all other applicable conditions to the making of a Term Loan Advance set forth in this Agreement. to obtain a Term Loan Advance, Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time on the Funding Date of the Term Loan Advance. Together

 

5.

 

with any such electronic or facsimile notification, Borrower shall deliver to Bank by electronic mail or facsimile a completed Payment/ Advance Form executed by a Responsible Officer or his or her designee. Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee. Bank shall credit Term Loan Advances to the Designated Deposit Account. Bank may make Term Loan Advances under this Agreement based on instructions from a Responsible Officer or his or her designee or without instructions if the Term Loan Advances are necessary to meet Obligations which have become due. If any portion of the proceeds of the Term Loan Advance shall be used to purchase or finance Equipment, Borrower shall deliver to Bank by electronic mail or facsimile a copy of the invoice for the Equipment to be purchased and the request for the Term Loan Advance.”

 

and inserting in lieu thereof the following:

 

“Subject to the prior satisfaction of all other applicable conditions to the making of a Credit Extension set forth in this Agreement, to obtain a Term Loan Advance, a 2008 Term Loan Advance, or an Advance, Borrower shall notify Bank (which notice shall be irrevocable) by electronic mail, facsimile, or telephone by 12:00 noon Eastern time on the Funding Date of the Term Loan Advance, 2008 Term Loan Advance, or Advance. Together with any such electronic or facsimile notification, Borrower shall deliver to Bank by electronic mail or facsimile a completed Payment/ Advance Form executed by a Responsible Officer or his or her designee. Bank may rely on any telephone notice given by a person whom Bank believes is a Responsible Officer or designee. Bank shall credit Credit Extensions to the Designated Deposit Account. Bank may make Credit Extensions under this Agreement based on instructions from a Responsible Officer or his or her designee or without instructions if the Credit Extensions are necessary to meet Obligations which have become due. If any portion of the proceeds of the Term Loan Advance or 2008 Term Loan Advance shall be used to purchase or finance Equipment, Borrower shall deliver to Bank by electronic mail or facsimile a copy of the invoice for the Equipment to be purchased and the request for the Term Loan Advance or 2008 Term Loan Advance.”

 

6                                        The Loan Agreement shall be amended by inserting the following new text, appearing as Section 5.11 thereof:

 

“                                         5.11                    Accounts Receivable. For any Eligible Account in any Borrowing Base Certificate, all statements made and all unpaid balances appearing in all invoices, instruments and other documents evidencing such Eligible Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all respects what they purport to be. Whether or not an Event of Default has occurred and is continuing, Bank may notify any

 

6.

 

Account Debtor owing Borrower money of Bank’s security interest in such funds and verify the amount of such Eligible Account. All sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all applicable laws and governmental rules and regulations. Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in any Borrowing Base Certificate. To the best of Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms.”

 

7                                        The Loan Agreement shall be amended by deleting the following text, appearing as Section 6.2 thereof:

 

“                                        6.2                            Financial Statements, Reports, Certificates.

 

(a)                               Deliver to Bank: (i) as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated balance sheet and income statement covering Borrower’s consolidated operations during the period certified by a Responsible Officer or Borrower’s Chief Financial Officer or Controller and in a form reasonably acceptable to Bank together with aged listings of accounts receivable and accounts payable (by invoice date); (ii) as soon as available, but no later than one hundred fifty (150) days after the last day of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm acceptable to Bank in its reasonable discretion; (iii) within five (5) days of delivery, copies of all statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt; (iv) in the event that Borrower becomes subject to the reporting requirements under the Securities Exchange Act of 1934, as amended, within five (5) days of filing, all reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange Commission or a link thereto on Borrower’s or another website on the Internet; (v) a prompt report of any legal actions pending or threatened against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or any of its Subsidiaries of One Hundred Fifty Thousand Dollars ($150,000) or more; and (vi) other financial information reasonably requested by Bank.

 

(b)                              Within thirty (30) days after the last day of each month, deliver to Bank with the monthly financial statements, a duly completed Compliance Certificate signed by a Responsible Officer or Borrower’s Chief Financial Officer or Controller.”

 

and inserting in lieu thereof the following:

 

7.

 

“                                        6.2                            Financial Statements, Reports, Certificates.

 

(c)                               Deliver to Bank: (i) as soon as available, but no later than thirty (30) days after the last day of each month, a company prepared consolidated balance sheet and income statement covering Borrower’s consolidated operations during the period certified by a Responsible Officer and in a form reasonably acceptable to Bank; (ii) as soon as available, but no later than one hundred eighty (180) days after the last day of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified public accounting firm reasonably acceptable to Bank; (iii) in the event that Borrower’s stock becomes publicly held, within five (5) days of filing, copies of all statements, reports and notices made available to Borrower’s security holders or to any holders of Subordinated Debt and all reports on Form 10-K, 10-Q and 8 K filed with the Securities and Exchange Commission or a link thereto on Borrower’s or another website on the interne; (iv) a prompt report of any legal actions pending or threatened against Borrower or any Subsidiary that could result in damages or costs to Borrower or any Subsidiary of One Hundred Fifty Thousand Dollars ($150,000.00) or more; (v) at least annually, within ten (10) days of approval by Borrower’s Board, and within ten (10) days of any updates or changes thereto, Board approved projections and a budget; and (vi) budgets, sales projections, operating plans or other financial information reasonably requested by Bank.

 

(d)                             Within thirty (30) days after the last day of each month, deliver to Bank with the monthly financial statements a completed Compliance Certificate signed by a Responsible Officer.

 

(e)                               Within thirty (30) days after the last day of each month, deliver to Bank a duly completed Borrowing Base Certificate signed by a Responsible Officer, with aged listings of accounts receivable and accounts payable (by invoice date).

 

(f)                                Allow Bank to audit Borrower’s Collateral, including, but not limited to, Borrower’s Accounts at Borrower’s expense, upon reasonable notice to Borrower; provided, however, prior to the occurrence of an Event of Default, Borrower shall be obligated to pay for not more than one (1) audit per year. Borrower hereby acknowledges that the first such audit will be conducted within sixty (60) days after the 2008 Effective Date. After the occurrence of an Event of Default, Bank may audit Borrower’s Collateral, including, but not limited to, Borrower’s Accounts at Borrower’s expense and at Bank’s sole and exclusive discretion and without notification and authorization from Borrower.”

 

8.

 

8                                        The Loan Agreement shall be amended by deleting the following text, appearing in Section 6.6 thereof:

 

“                                        (a)                               Within thirty (30) days after the Effective Date, maintain its and its Subsidiaries’ depository, operating, and securities accounts with Bank and Bank’s affiliates.”

 

and inserting in lieu thereof the following:

 

“                                        (b)                              To permit Bank to monitor Borrower’s financial performance and condition, Borrower, and all Borrower’s Subsidiaries, shall maintain Borrower’s and such Subsidiaries’, primary operating accounts with Bank and all of Borrower’s and such Subsidiaries’ cash or securities in excess of that amount used for Borrower’s or such Subsidiaries’ current operations shall be maintained or administered through Bank and Bank’s affiliates.”

 

9                                        The Loan Agreement shall be amended by inserting the following new text, to appear immediately following Section 6.6(b) thereof:

 

“                                         (c)                               As and when directed by Bank in writing from time to time, at Bank’s option and at the sole and exclusive discretion of Bank (regardless of whether an Event of Default has occurred), Borrower shall direct each Account Debtor (and each depository institution where proceeds of Accounts are on deposit) to remit payments with respect to the Accounts to a lockbox account established with Bank or to wire transfer payments to a cash collateral account that Bank controls.”

 

10                                The Loan Agreement shall be amended by inserting the following new Section 6.10 thereof:

 

“                                        6.10                    Financial Covenants.

 

After the occurrence of the Equity Event, Borrower shall maintain at all times, to be tested as of the last day of each month, unless otherwise noted (all calculations shall be computed with respect to the Borrower only, and not on a consolidated basis):

 

(a)                               Tangible Net Worth. A Tangible Net Worth of at least Eight Million Dollars ($8,000,000.00). Notwithstanding the foregoing, the amount required in the prior sentence shall increase by an amount equal to (i) seventy-five percent (75.0%) of any positive quarterly Net Income earned by Borrower, or its Affiliates, during any of Borrower’s fiscal quarters ending after the occurrence of the Equity Event, plus (ii) fifty percent (50.0%) of net proceeds received by Borrower from the sale of its equity, other than with respect to the Equity Event, after the occurrence of the Equity Event.

 

9.

 

(b)                              Adjusted Quick Ratio. A a ratio of (i) Quick Assets, to (ii) Current Liabilities minus Current Deferred Revenue of at least 1.15 to 1.0.”

 

11                                The Loan Agreement shall be amended by deleting the following text, appearing as Section 7.1 thereof:

 

“                                        7.1                            Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of surplus, worn-out or obsolete Equipment; (c) in connection with Permitted Liens and Permitted Investments; and (d) of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries in the ordinary course of business.” and inserting in lieu thereof the following:

 

“                                        7.1                            Dispositions. Unless provision is made for the repayment in full of the Obligations under this Agreement and the 2008 Loan Agreement and the termination of this Agreement and the 2008 Loan Agreement as of or prior to the consummation thereof, convey, sell, lease, transfer, assign, or otherwise dispose of (collectively a “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of surplus, worn-out or obsolete Equipment; (c) in connection with Permitted Liens and Permitted Investments; and (d) of non-exclusive licenses for the use of the property of Borrower or its Subsidiaries in the ordinary course of business.”

 

12                                The Loan Agreement shall be amended by deleting the following text, appearing as Section 7.3 thereof:”

 

“                                        7.3                            Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person. A Subsidiary may merge or consolidate into another Subsidiary or into Borrower or its assets may be acquired by another Subsidiary or by Borrower.” and inserting in lieu thereof the following:

 

“                                        7.3                            Mergers or Acquisitions. Unless provision is made for the repayment in full of the Obligations under this Agreement and the 2008 Loan Agreement and the termination of this Agreement and the 2008 Loan Agreement as of or prior to the consummation thereof, merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person. A Subsidiary may merge or consolidate into another Subsidiary or into

 

10.

 

Borrower or its assets may be acquired by another Subsidiary or by Borrower.”

 

13                                The Loan Agreement shall be amended by deleting the following text, appearing as Section 8.1 thereof:

 

“                                        8.1                            Payment Default. Borrower fails to (a) make any payment of principal or interest on any Credit Extension on its due date, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day grace period will not apply to payments due on the Venture Term Loan Maturity Date). During the cure period, the failure to cure the payment default is not an Event of Default (but no Credit Extension will be made during the cure period);” and inserting in lieu thereof the following:

 

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

 

14                                The Loan Agreement shall be amended by deleting the following text, appearing in Section 8.2 thereof:

 

“                                         (a)                               Borrower fails or neglects to perform any obligation in Sections 6.2, 6.5, 6.6, or violates any covenant in Section 7; or” and inserting in lieu thereof the following:

 

“                                         (a)                               Borrower fails or neglects to perform any obligation in Sections 6.2, 6.5, 6.6, or 6.10, or violates any covenant in Section 7; or”

 

15                                The Loan Agreement shall be amended by inserting the following new Section 8.10 immediately following Section 8.9 thereof:

 

“                                         8.10                    2008 Loan Agreement. An Event of Default (as such term is defined under the 2008 Loan Agreement) occurs under the 2008 Loan Agreement.”

 

16                                The Loan Agreement shall be amended by deleting the following definitions appearing in Section 13.1 thereof:

 

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

 

“                                        “Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the value of

 

11.

 

such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; or (c) a material impairment of the prospect of repayment of any portion of the Obligations.”

 

“                                        “Permitted Investments” are:

 

(a)                               Investments shown on the Perfection Certificate and existing on the Effective Date;

 

(b)                              Cash Equivalents;

 

(c) Investments consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plans or agreements approved by Borrower’s Board of Directors;

 

(d) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business;

 

(e) Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; provided that this paragraph (e) shall not apply to Investments of Borrower in any Subsidiary; and

 

(f) joint ventures or strategic alliances, in the ordinary course of Borrower’s business, consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash investments by Borrower do not exceed Fifty Thousand Dollars ($50,000.00) in the aggregate in any fiscal year, and provided further that no Event of Default has occurred, is continuing, or would exist after such event.” and inserting in lieu thereof the following:

 

“                                        “Credit Extension” is any Advance, Term Loan Advance, 2008 Term Loan Advance, or any other extension of credit hereunder by Bank for Borrower’s benefit.”

 

“                                        “Material Adverse Change” is (a) a material impairment in the perfection or priority of Bank’s security interest in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or otherwise) of Borrower; (c) a material impairment of the prospect of repayment of any portion of the

 

12.

 

Obligations, or (d) after the occurrence of the Equity Event, Bank determines, based upon information available to it and in its reasonable judgment, that there is a reasonable likelihood that Borrower shall fail to comply with one or more of the financial covenants in Section 6 during the next succeeding financial reporting period.”

 

“                                        “Permitted Investments” are: (i) marketable direct obligations issued or unconditionally guaranteed by the United States or its agency or any state maturing within 1 year from its acquisition, (ii) commercial paper maturing no more than 1 year after its creation and having the highest rating from either Standard & Poor’s Corporation or Moody’s Investors Service, Inc., (iii) Bank’s certificates of deposit issued maturing no more than 1 year after issue, (iv) any other investments administered through Bank, (v) Investments shown on the Perfection Certificate which are existing on the Effective Date, and (vi) as of January 1, 2009 and thereafter, Investments in Tremor Media Europe GmbH (Borrower’s Subsidiary) and Tremor Media UK Limited (a Subsidiary of Tremor Media Europe GmbH) for the ordinary and necessary operating expenses of such entities in an aggregate amount not to exceed Four Million Dollars ($4,000,000.00) per calendar year.”

 

17                                The Loan Agreement shall be amended by inserting the following new definitions, appearing in appropriate alphabetical order, in Section 13.1 thereof:

 

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

 

“                                        “Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base, minus (b) the amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit) plus an amount equal to the Letter of Credit Reserve, minus (c) the FX Reduction Amount, minus (d) any amounts used for Cash Management Services, and minus (e) the outstanding principal balance of any Advances.”

 

“                                        “Borrowing Base” is eighty percent (80.0%) of Eligible Accounts, as reasonably determined by Bank from Borrower’s most recent Borrowing Base Certificate; provided, however, that Bank may decrease the foregoing percentage in its good faith business judgment based on events, conditions, contingencies, or risks which, as determined by Bank, may adversely affect Collateral.”

 

“                                        “Borrowing Base Certificate” is that certain certificate in the form attached hereto as Exhibit D.”

 

“                                        “Cash Management Services” is defined in Section 2.1.6.”

 

13.

 

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

 

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

 

“                                        “Eligible Accounts” means billed Accounts in the ordinary course of Borrower’s business that meet all Borrower’s representations and warranties in Section 5.11. Bank reserves the right at any time after the 2008 Effective Date to adjust any of the criteria set forth below and to establish new criteria in its good faith business judgment. Without limiting the foregoing, unless Bank agrees otherwise in writing, Eligible Accounts shall not include the following Accounts:

 

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

 

(b)                              Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have not been paid within ninety (90) days of invoice date;

 

(c)                               Accounts owing from an Account Debtor which does not have its principal place of business in the United States;

 

(d)                             Accounts billed and/or payable outside of the United States;

 

(e)                               Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the ordinary course of its business;

 

(f)                                Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or agent;

 

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

 

(h)                              Accounts owing from an Account Debtor, including Affiliates, whose total obligations to Borrower exceed twenty-five (25%) of all Accounts, for the amounts that exceed that percentage, unless Bank approves in writing;

 

14.

 

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

 

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

 

(k)                              Accounts owing from an Account Debtor that has not been invoiced or where goods or services have not yet been rendered to the Account Debtor (sometimes called memo billings or pre-billings);

 

(1)                              Accounts subject to contractual arrangements between Borrower and an Account Debtor where payments shall be scheduled or due according to completion or fulfillment requirements where the Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to perform in accordance with the contract (sometimes called contracts accounts receivable, progress billings, milestone billings, or fulfillment contracts);

 

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

 

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

 

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

 

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

 

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

 

15.

 

(r)                                 Accounts for which Borrower has permitted Account Debtor’s payment to extend beyond 90 days;

 

(s)                                Accounts subject to chargebacks or others payment deductions taken by an Account Debtor;

 

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

 

(v)                              Accounts for which Bank in its good faith business judgment determines collection to be doubtful; and

 

(w)                          other Accounts Bank deems ineligible in the exercise of its good faith business judgment.”

 

“                                         “Equity Event” is (a) the receipt of unrestricted net cash proceeds by Borrower, after the 2008 Effective Date, in an amount equal to at least Ten Million Dollars ($10,000,000.00), from the closing of an equity round of financing, and (b) the termination of the 2008 Loan Agreement.”

 

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

 

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

 

“                                         “FX Forward Contract” is defined in Section 2.1.5.” “FX Reduction Amount” is defined in Section 2.1.5.” “FX Reserve” is defined in Section 2.1.5.” i4                “Letter of Credit” means a standby letter of credit issued by Bank or another institution based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set forth in Section 2.1.4.”

 

“                                         “Letter of Credit Application” is defined in Section 2.1.4(a).”

 

“                                         “Letter of Credit Reserve” has the meaning set forth in Section 2.1.4(d).”

 

“                                         “Maturity Date” is the Venture Term Loan Maturity Date, the 2008 Venture Term Loan Maturity Date, or the Revolving Line Maturity Date, as applicable.”

 

“                                         “Prepayment Fee” shall be an additional fee payable to Bank in an amount equal to:

 

16.

 

(i)                                  for a prepayment made after the 2008 Effective Date and on or prior to December 8, 2009 two percent (2.0%) of the principal amount of the 2008 Venture Term Loan prepaid;

 

(ii)                              for a prepayment made after December 9, 2009, and on or prior to December 9, 2010, one percent (1.0%) of the principal amount of the 2008 Venture Term Loan prepaid; and

 

(iii)                          for a prepayment made after December 9, 2010, zero percent (0.0%).”

 

“                                         “Quick Assets” is, on any date, Borrower’s unrestricted cash and Cash Equivalents maintained at Bank, plus net billed accounts receivable.”

 

“                                         “Revolving Line” is an Advance or Advances in an amount equal to Three Million Dollars ($3,000,000.00).”

 

“                                         “Revolving Line Maturity Date” is December 7, 2009.”

 

“                                         “Settlement Date” is defined in Section 2.1.5.”

 

“                                         “Tangible Net Worth” is, on any date, the consolidated total assets of Borrower and its Subsidiaries minus (a) any amounts attributable to (i) goodwill, (ii) intangible items including unamortized debt discount and expense, patents, trade and service marks and names, copyrights and research and development expenses except prepaid expenses, (iii) notes, accounts receivable and other obligations owing to Borrower from its officers or other Affiliates, and (iv) reserves not already deducted from assets, minus (b) Total Liabilities, plus (c) Subordinated Debt.”

 

“                                         “Total Liabilities” is on any day, obligations that should, under GAAP, be classified as liabilities on Borrower’s consolidated balance sheet, including all Indebtedness, but excluding the current portion of Subordinated Debt.”

 

“                                         “2008 Amortization Date” is July 1, 2009.”

 

“                                         “2008 Draw Period” is the period of time from the 2008 Effective Date through the earliest to occur of (a) June 30, 2009, or (b) an Event of Default.”

 

“                                         “2008 Effective Date” is December 8, 2008.”

 

“                                         “2008 Loan Agreement” is that certain Loan and Security Agreement (Working Capital Line of Credit) between Borrower and Bank dated as of the 2008 Effective Date, together with all documents delivered in connection therewith, as amended from time to time.”

 

17.

 

“                                         “2008 Term Loan Advance” and “2008 Term Loan Advances” are defined in Section 2.1.2(a).”

 

“                                         “2008 Venture Term Loan” is an amount equal to Two Million Five Hundred Thousand Dollars ($2,500,000.00).”

 

“                                         “2008 Venture Term Loan Maturity Date” is the earliest to occur of (a) June 1, 2012, (b) an Event of Default, or (c) the termination of this Agreement.”

 

18                                The Loan Agreement shall be amended by inserting the Borrowing Base Certificate attached as Exhibit A hereto, to appear as Exhibit D to thereof.

 

19                                The Loan Payment/Advance Request Form appearing as Exhibit B to the Loan Agreement is hereby replaced with the Loan Payment/Advance Request Form attached is Exhibit B hereto.

 

20                                The Compliance Certificate appearing as Exhibit C to the Loan Agreement is hereby replaced with the Compliance Certificate attached as Exhibit C hereto.

 

4.                                    FEES. Borrower shall reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

 

5.                                    RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated as of December 8, 2008, between Borrower and Bank, and acknowledges, confirms and agrees the disclosures and information above Borrower provided to Bank in the Perfection Certificate have not changed as of the date hereof.

 

6.                                    CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

 

7.                                    RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

 

8.                                    NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

 

9.                                    CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain

 

18.

 

unchanged and in full force and effect. Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing. No maker will be released by virtue of this Loan Modification Agreement.

 

10.                            COUNTERSIGNATURE. This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.

 

[The remainder of this page is intentionally left blank]

 

19.

 

This Loan Modification Agreement is executed as of the date first written above.

 

	
 
    	
 
    	
 
    	
 
    
	
BORROWER:
    	
 
    	
 
    	
BANK:
    
	
 
    	
 
    	
 
    	
 
    
	
TREMOR MEDIA, INC.
    	
 
    	
 
    	
SILICON VALLEY BANK
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/Jason Glickman
    	
 
    	
 
    	
 
    	
By:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Jason Glickman
    	
 
    	
 
    	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
President and Chief   Executive Officer
    	
 
    	
 
    	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
												

 

20.

 

This Loan Modification Agreement is executed as of the date first written above.

 

	
 
    	
 
    	
 
    	
 
    
	
BORROWER:
    	
 
    	
 
    	
BANK:
    
	
 
    	
 
    	
 
    	
 
    
	
TREMOR MEDIA, INC.
    	
 
    	
 
    	
SILICON VALLEY BANK
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
 
    	
By:
    	
/s/ Melissa Stepanis
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    	
 
    	
Name:
    	
Melissa Stepanis
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    	
Title:
    	
Vice President
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
												

 

21.

 

EXHIBIT A

 

BORROWING BASE CERTIFICATE

 

	
Borrower:
    	
Tremor Media, Inc.
    
	
 
    	
 
    
	
Lender:
    	
Silicon Valley Bank   Commitment
    
	
 
    	
 
    
	
Amount:
    	
$3,000,000.00
    

 

	
ACCOUNTS   RECEIVABLE
    	
 
    	
 
    
	
1.
    	
Accounts Receivable   (invoiced) Book Value as of
    	
$                          
    	
 
    
	
2.
    	
Additions (please   explain on reverse)
    	
$                          
    	
 
    
	
3.
    	
TOTAL ACCOUNTS   RECEIVABLE
    	
$                          
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
ACCOUNTS   RECEIVABLE DEDUCTIONS (without duplication)
    	
 
    	
 
    
	
4.
    	
Amounts over 90 days   due
    	
$                          
    	
 
    
	
5.
    	
Balance of 50% over 90   day accounts
    	
$                          
    	
 
    
	
6.
    	
Foreign Accounts
    	
$                          
    	
 
    
	
7.
    	
Foreign Invoiced   Accounts
    	
$                          
    	
 
    
	
8.
    	
Contra/Customer Deposit   Accounts
    	
$                          
    	
 
    
	
9.
    	
Intercompany/Employee   Accounts
    	
$                          
    	
 
    
	
10.
    	
Credit balances over 90   days
    	
$                          
    	
 
    
	
11.
    	
Concentration Limits
    	
$                          
    	
 
    
	
12.
    	
U.S. Governmental   Accounts
    	
$                          
    	
 
    
	
13.
    	
Promotion or Demo   Accounts; Guaranteed Sale or Consignment Sale Accounts
    	
$                          
    	
 
    
	
14.
    	
Accounts with   Progress/Milestone/Pre-billings; Contract Accounts
    	
$                          
    	
 
    
	
15.
    	
Accounts for Retainage   Billings
    	
$                          
    	
 
    
	
16.
    	
Trust Accounts
    	
$                          
    	
 
    
	
17.
    	
Bill and Hold Accounts
    	
$                          
    	
 
    
	
18.
    	
Unbilled Accounts
    	
$                          
    	
 
    
	
19.
    	
Non-Trade Accounts
    	
$                          
    	
 
    
	
20.
    	
Accounts with Extended   Term Invoices
    	
$                          
    	
 
    
	
21.
    	
Accounts subject to   Chargebacks
    	
$                          
    	
 
    
	
22.
    	
Disputed Accounts
    	
$                          
    	
 
    
	
23.
    	
Other (please explain   on reverse)
    	
$                          
    	
 
    
	
24.
    	
TOTAL ACCOUNTS   RECEIVABLE DEDUCTIONS
    	
$                          
    	
 
    
	
25.
    	
Eligible Accounts (#3   minus #24)
    	
$                          
    	
 
    
	
26.
    	
ELIGIBLE AMOUNT OF   ACCOUNTS (80% of #25)
    	
$                          
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
BALANCES
    	
 
    	
 
    	
 
    
	
27.
    	
Maximum Loan Amount
    	
$3,000,000.00
    	
 
    
	
28.
    	
Total Funds Available   (Lesser of #27 or #26)
    	
$                          
    	
 
    
	
29.
    	
Present balance owing   on Line of Credit
    	
$                          
    	
 
    
	
30.
    	
Outstanding under   Sublimits
    	
$                          
    	
 
    
	
31.
    	
RESERVE POSITION (#28   minus #29 and #30)
    	
$                          
    	
 
    

 

[Continued on following page.]

 

22.

 

The undersigned represents and warrants that this is true, accurate and complete, and that the information in this Borrowing Base Certificate complies with the representations and warranties in the Loan and Security Agreement between the undersigned and Silicon Valley Bank.

 

	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
BANK USE ONLY
    
	
COMMENTS:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
TREMOR   MEDIA, INC.
    	
 
    	
 
    	
Received by:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
     AUTHORIZED   SIGNER
    
	
By:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Authorized Signer
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    	
 
    	
Verified:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
     AUTHORIZED   SIGNER
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Compliance Status     Yes     No
    
	
 
    	
 
    	
 
    	
 
    
											

 

23.

 

EXHIBIT B

 

LOAN PAYMENT/ADVANCE REQUEST FORM

 

DEADLINE FOR SAME DAY PROCESSING IS NOON E.S.T.

 

	
 
    	
 
    	
 
    
	
LOAN   PAYMENT:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
TREMOR MEDIA, INC.
    
	
 
    	
 
    	
 
    
	
From Account #
    	
 
    	
 
    	
To Account #
    	
 
    	
 
    
	
 
    	
(Deposit Account   #)
    	
 
    	
 
    	
(Loan Account #)
    	
 
    
	
 
    	
 
    	
 
    
	
Principal $
    	
 
    	
 
    	
and/or Interest $
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Authorized   Signature:
    	
 
    	
 
    	
Phone Number.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Print Name/Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
												

 

 

 

	
 
    	
 
    	
 
    
	
LOAN   ADVANCE:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Complete Outgoing Wire Request section below if all or a portion of   the funds from this loan advance are for an outgoing wire.
    
	
 
    	
 
    	
 
    
	
From Account #
    	
 
    	
 
    	
To Account #
    	
 
    	
 
    
	
 
    	
(Loan Account #)
    	
 
    	
 
    	
(Deposit Account   #)
    	
 
    
	
 
    	
 
    	
 
    
	
Amount of Advance $
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
All   Borrower’s representations and warranties in the Loan and Security Agreement   are true, correct and complete in all material respects on the date of the   request for an advance; provided, however, that such materiality qualifier   shall not be applicable to any representations and warranties that already   are qualified or modified by materiality in the text thereof; and provided,   further that those representations and warranties expressly referring to a   specific date shall be true, accurate and complete in all material respects   as of such date:
    	
 
    
	
 
    	
 
    	
 
    
	
Authorized   Signature:
    	
 
    	
 
    	
Phone Number.
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Print Name/Title:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
												

 

 

 

	
 
    	
 
    	
 
    
	
OUTGOING   WIRE REQUEST:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Complete   only if all or a portion of funds from the loan advance above is to he wired.
    
	
 
    	
 
    	
 
    
	
Deadline for same day   processing is noon, E.S.T.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Beneficiary Name:
    	
 
    	
 
    	
Amount of Wire: $
    	
 
    	
 
    
	
Beneficiary Bank:
    	
 
    	
 
    	
Account Number:
    	
 
    	
 
    
	
City and State:
    	
 
    	
 
    	
 
    
	
Beneficiary Bank Transit   (ABA) #:
    	
 
    	
 
    	
Beneficiary Bank Code   (Swift, Sort, Chip, etc.):
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
  (For International   Wire Only)
    
	
 
    	
 
    	
 
    
	
Intermediary Bank:
    	
 
    	
 
    	
Transit (ABA) #:
    	
 
    	
 
    
	
For Further Credit to:
    	
 
    	
 
    
	
Special Instruction:
    	
 
    	
 
    
	
By   signing below, I (we) acknowledge and agree that my (our) fluids   transfer request shall he processed in accordance with and subject to the   terms and conditions set forth in the agreements( s) covering funds transfer   service(s), which agreements(s) were previously received and executed by   me (us).
    	
 
    
	
 
    	
 
    	
 
    
	
Authorized Signature:
    	
 
    	
 
    	
2nd Signature (if   required):
    	
 
    	
 
    
	
Print Name/Title:
    	
 
    	
 
    	
Print Name/Title:
    	
 
    	
 
    
	
Telephone #:
    	
 
    	
 
    	
Telephone #:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
																					

 

24.

 

EXHIBIT C

COMPLIANCE CERTIFICATE

 

	
TO:
    	
SILICON VALLEY BANK
    	
 
    	
Date:
    	
 
    	
 
    
	
FROM:
    	
TREMOR MEDIA. INC.
    	
 
    	
 
    

 

The undersigned authorized officer of Tremor Media, Inc. (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending _______ with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.8 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents as appropriate supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

 

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

 

	
Reporting   Covenant
    	
 
    	
 
    	
Required
    	
 
    	
 
    	
Complies
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Monthly financial   statements with Compliance Certificate
    	
 
    	
 
    	
Monthly within 30 days
    	
 
    	
 
    	
Yes        No
    
	
Annual financial   statement (CPA Audited)
    	
 
    	
 
    	
FYE within 150 days
    	
 
    	
 
    	
Yes        No
    
	
10-Q, 10-K and 8-K
    	
 
    	
 
    	
Within 5 days after   filing with SEC
    	
 
    	
 
    	
Yes        No
    
	
Borrowing Base   Certificate, with A/P & A/R Agings
    	
 
    	
 
    	
Monthly within 30 days
    	
 
    	
 
    	
Yes        No
    
	
Board approved   projections
    	
 
    	
 
    	
Annually, within 10   days of approval
    	
 
    	
 
    	
Yes        No
    

 

 

	
Financial   Covenant
    	
 
    	
 
    	
Required
    	
 
    	
 
    	
Actual
    	
 
    	
 
    	
Complies
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Maintain on a Monthly   Basis
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Tangible net Worth*
    	
 
    	
 
    	
$                                 
    	
 
    	
 
    	
$                                 
    	
 
    	
 
    	
Yes        No
    
	
Adjusted Quick Ratio
    	
 
    	
 
    	
1.15:1.0
    	
 
    	
 
    	
                 :1.0
    	
 
    	
 
    	
Yes        No
    

 

* As set forth in Section 6.10

 

25.

 

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

 

	
 
    
	
 
    
	
 
    
	
 
    
	
 
    

 

	
TREMOR MEDIA, INC.
    	
 
    	
BANK USE ONLY
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
Received by:
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
 
    	
 
    	
AUTHORIZED SIGNER
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
 
    	
Verified:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
AUTHORIZED SIGNER
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    	
 
    
	
 
    	
 
    	
Compliance Status          Yes         No
    
	
 
    	
 
    	
 
    
											

 

26.

 

Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

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

 

Dated:____________

 

I.          Tangible Net Worth (Section 6.10(a))

 

Required:        $8,000,000.00 (to increase to 75% of quarterly Net Income, plus 50% of new equity, as set forth in Section 6.10(a))

 

Actual:

 

	
A.
    	
Aggregate value   of liabilities that should, under GAAP, be classified as liabilities on   Borrower’s balance sheet, including all Indebtedness
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
B.
    	
Aggregate value   of Indebtedness of Borrower subordinated to Borrower’s Indebtedness to Bank
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
C.
    	
Debt (line A   minus line B)
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
D.
    	
Aggregate value   of total assets of Borrower
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
E.
    	
Aggregate value   of goodwill of Borrower
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
F.
    	
Aggregate value   of intangible assets of Borrower
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
G.
    	
Aggregate value   of any reserves not already deducted from assets
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
H.
    	
Value of line C
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
I.
    	
Tangible Net   Worth (line D minus line E minus line F minus line G minus line C)
    	
 
    	
$              
    

 

Is line I equal to or greater than $8,000,000.00 (to increase by 75% of quarterly Net Income, plus 50% of new equity, as set forth in Section 6.10(a))?

 

	
_________ No, not in   compliance
    	
 
    	
_________ Yes,   in compliance
    

 

II.        Adjusted Quick Ratio (Section 6.10(b))

 

Required:        1.25:1.00

 

Actual:

 

	
A.
    	
Aggregate value   of the unrestricted cash and cash equivalents of 
    	
 
    	
$          
    

 

27.

 

	
 
    	
Borrower   maintained at Bank
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
B.
    	
Aggregate value   of net billed accounts receivable of Borrower
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
C.
    	
Quick Assets   (sum of lines A and B)
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
D.
    	
Aggregate value   of Obligations to Bank
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
E.
    	
Aggregate value   of liabilities that should, under GAAP, be classified as liabilities on   Borrower’s consolidated balance sheet, including all Indebtedness, and not   otherwise reflected in line D above, that matures within one (1) year,   but excluding the current portion of Subordinated Debt
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
F.
    	
Current   Liabilities (the sum of lines E and F)
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
G.
    	
Aggregate value   of the current portion of amounts received or invoiced by Borrower in advance   of performance under contracts and not yet recognized as revenue
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
H.
    	
Line F minus   line G
    	
 
    	
$              
    
	
 
    	
 
    	
 
    	
 
    
	
I.
    	
Adjusted Quick   Ratio (line C divided by line H)
    	
 
    	
$              
    

 

Is line I equal to or greater than 1.25:1:00?

 

	
_________ No, not in   compliance
    	
 
    	
_________ Yes, in compliance
    

 

28.

 

SECOND LOAN MODIFICATION AGREEMENT

 

 

This Second Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of December 7, 2009, by and between SILICON VALLEY BANK, a California corporation, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at 535 Fifth Avenue, 27th Floor, New York, New York 10017 (“Bank”) and TREMOR MEDIA, INC., a Delaware corporation with its chief executive office located at 122 West 26th Street, 8th Floor, New York 10001(“Borrower”).

 

1.                                    DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of June 7, 2007, evidenced by, among other documents, a certain Loan and Security Agreement dated as of June 7, 2007, between Borrower and Bank, as amended by a certain First Loan Modification Agreement dated as of December 8, 2008 (as amended from time to time, the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

 

2.                                    DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement (together with any other collateral security granted to Bank, the “Security Documents”). Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”.

 

3.                                    DESCRIPTION OF CHANGE IN TERMS.

 

A.                                Modifications to Loan Agreement.

 

1                                        Borrower and Bank each hereby acknowledge and agree that the Equity Event has occurred, and, accordingly, pursuant to the terms of the 2008 Loan Agreement, (a) the 2008 Loan Agreement has terminated, and (b) all Obligations (as defined in the 2008 Loan Agreement) outstanding under the 2008 Loan Agreement are now Obligations under Section 2.1.3 of the Loan Agreement.

 

2                                        The Loan Agreement shall be amended by deleting the following definition appearing in Section 13.1 thereof:

 

“Revolving Line Maturity Date” is December 7, 2009.”

 

and inserting in lieu thereof the following:

 

“Revolving Line Maturity Date” is February 7, 2010.”

 

4.                                    FEES. Borrower shall pay to Bank a modification fee equal to Two Thousand Five Hundred Dollars ($2,500.00), which fee shall be due on the date hereof and shall be deemed fully earned as of the date hereof. Borrower shall also reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

 

1.

 

5.                                    RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate (the “Updated Perfection Certificate”) dated as of December __, 2009, between Borrower and Bank (which Updated Perfection Certificate shall supersede in all respects that certain Perfection Certificate dated as of December 8, 2008, between Borrower and Bank), and acknowledges, confirms and agrees the disclosures and information above Borrower provided to Bank in the Updated Perfection Certificate have not changed as of the date hereof. Borrower agrees that all references in the Loan Agreement to “Perfection Certificate” shall hereinafter be deemed to be a reference to the Updated Perfection Certificate.

 

6.                                    CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

 

7.                                    RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

 

8.                                    NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

 

9.                                    CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect. Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing. No maker will be released by virtue of this Loan Modification Agreement.

 

10.                            COUNTER SIGNATURE. This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.

 

[The remainder of this page is intentionally left blank]

 

2.

 

This Loan Modification Agreement is executed as of the date first written above.

 

 

 

	
BORROWER:
    	
 
    	
BANK:
    
	
 
    	
 
    	
 
    
	
TREMOR MEDIA, INC.
    	
 
    	
SILICON VALLEY BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Mark Pinney
    	
 
    	
By:
    	
/s/ Michael Moretti
    
	
 
    	
 
    	
 
    
	
Name:
    	
Mark Pinney
    	
 
    	
Name:
    	
Michael Moretti
    
	
 
    	
 
    	
 
    
	
Title:
    	
CFO
    	
 
    	
Title:
    	
SVP
    
									

 

3.

 

THIRD LOAN MODIFICATION AGREEMENT

 

This Third Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of February 7, 2010, by and between SILICON VALLEY BANK, a California corporation, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at 535 Fifth Avenue, 27th Floor, New York, New York 10017 (“Bank”) and TREMOR MEDIA, INC., a Delaware corporation with its chief executive office located at 122 West 26th Street, 8th Floor, New York 10001(“Borrower”).

 

1.                                    DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of June 7, 2007, evidenced by, among other documents, a certain Loan and Security Agreement dated as of June 7, 2007, between Borrower and Bank, as amended by a certain First Loan Modification Agreement dated as of December 8, 2008, and as further amended by a certain Second Loan Modification Agreement dated as of December 7, 2009 (as amended from time to time, the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

 

2.                                    DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement (together with any other collateral security granted to Bank, the “Security Documents”). Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”.

 

3.                                    DESCRIPTION OF CHANGE IN TERMS.

 

A.                                Modifications to Loan Agreement.

 

1                                        As a condition precedent to the effectiveness of this Loan Modification Agreement, all Obligations relating to Term Loan Advances and 2008 Term Loan Advances shall be paid in full. Bank hereby waives Borrower’s obligation to pay the Prepayment Fee pursuant to Section 2.1.2(e) of the Loan Agreement in connection with such prepayment.

 

2                                        The Loan Agreement shall be amended by deleting the following text, appearing in Section 2.1.4(a) thereof:

 

“The face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed Three Million Dollars ($3,000,000.00), inclusive of Credit Extensions relating to Sections 2.1.5 and 2.1.6.”

 

and inserting in lieu thereof the following:

 

“The face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit 

 

1.

 

Reserve) may not exceed Seven Million Dollars ($7,000,000.00), inclusive of Credit Extensions relating to Sections 2.1.5 and 2.1.6.”

 

3                                        The Loan Agreement shall be amended by deleting the following text, appearing in Section 2.1.5 thereof:

 

“The aggregate amount of FX Forward Contracts at any one time may not exceed Three Million Dollars ($3,000,000.00).”

 

and inserting in lieu thereof the following:

 

“The aggregate amount of FX Forward Contracts at any one time may not exceed Seven Million Dollars ($7,000,000.00).”

 

4                                        The Loan Agreement shall be amended by deleting the following text, appearing in Section 2.1.6 thereof:

 

“Borrower may use up to Three Million Dollars ($3,000,000.00), inclusive of Credit Extensions relating to Sections 2.1.4 and 2.1.5 and the FX Reduction Amount, of the Revolving Line for Bank’s cash management services which may include merchant services, direct deposit of payroll, business credit card, and check cashing services identified in Bank’s various cash management services agreements (collectively, the “Cash Management Services”).”

 

and inserting in lieu thereof the following:

 

“Borrower may use up to Seven Million Dollars ($7,000,000.00), inclusive of Credit Extensions relating to Sections 2.1.4 and 2.1.5 and the FX Reduction Amount, of the Revolving Line for Bank’s cash management services which may include merchant services, direct deposit of payroll, business credit card, and check cashing services identified in Bank’s various cash management services agreements (collectively, the “Cash Management Services”).”

 

5                                        The Loan Agreement shall be amended by deleting the following text, appearing in Section 2.2(a) thereof:

 

“(iii)                   Advances. Subject to Section 2.2(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to one percentage point (1.0%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.2(f) below.”

 

and inserting in lieu thereof the following:

 

“(iii)                   Advances. Subject to Section 2.2(b), the principal amount outstanding under the Revolving Line shall accrue interest at a 

 

2.

 

floating per annum rate equal to one and one-half of one percentage point (1.50%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.2(f) below.”

 

6                                        The Loan Agreement shall be amended by deleting the following, appearing as Section 6.10 thereof:

 

“6.10             Financial Covenants.

 

After the occurrence of the Equity Event, Borrower shall maintain at all times, to be tested as of the last day of each month, unless otherwise noted (all calculations shall be computed with respect to the Borrower only, and not on a consolidated basis):

 

(a)                               Tangible Net Worth. A Tangible Net Worth of at least Eight Million Dollars ($8,000,000.00). Notwithstanding the foregoing, the amount required in the prior sentence shall increase by an amount equal to (i) seventy-five percent (75.0%) of any positive quarterly Net Income earned by Borrower, or its Affiliates, during any of Borrower’s fiscal quarters ending after the occurrence of the Equity Event, plus (ii) fifty percent (50.0%) of net proceeds received by Borrower from the sale of its equity, other than with respect to the Equity Event, after the occurrence of the Equity Event.

 

(b)                              Adjusted Quick Ratio. A ratio of (i) Quick Assets, to (ii) Current Liabilities minus Current Deferred Revenue of at least 1.15 to 1.0.”

 

and inserting in lieu thereof the following:

 

“6.10             Financial Covenants.

 

Borrower shall maintain at all times, to be tested as of the last day of each month, unless otherwise noted (all calculations shall be computed on a consolidated basis):

 

(a)                               Tangible Net Worth. A Tangible Net Worth of at least (i) Eight Million Dollars ($8,000,000.00) through and including December 31, 2009, (ii) Seven Million Dollars ($7,000,000.00) for the months ending January 31, 2010, February 28, 2010, March 31, 2010 and April 30, 2010, (iii) Six Million Dollars ($6,000,000.00) for the months ending May 31, 2010, June 30, 2010, July 31, 2010, August 31, 2010 and September 30, 2010, (iv) Seven Million Dollars ($7,000,000.00) for the months ending October 31, 2010 and November 30, 2010, and (v) Eight Million Dollars ($8,000,000.00) for the month ending December 31, 2010, and for each month thereafter. Notwithstanding the foregoing, the 

 

3.

 

amount required in the prior sentence shall increase by an amount equal to (i) seventy-five percent (75.0%) of any positive quarterly Net Income earned by Borrower, or its Affiliates, plus (ii) fifty percent (50.0%) of net proceeds received by Borrower from the sale of its equity.

 

(b)                              Adjusted Quick Ratio. A ratio of (i) Quick Assets, to (ii) Current Liabilities minus Current Deferred Revenue of at least 1.25 to 1.0.”

 

7                                        The Loan Agreement shall be amended by deleting the following text, appearing in the definition of “Eligible Accounts” in Section 13.1 thereof:

 

“(w)                   other Accounts Bank deems ineligible in the exercise of its good faith business judgment.”

 

and inserting in lieu thereof the following:

 

“(w)                   Accounts owing from an Account Debtor with respect to which Borrower has received deferred revenue (but only to the extent of such deferred revenue); and

 

(x)                              other Accounts Bank deems ineligible in the exercise of its good faith business judgment.”

 

8                                        The Loan Agreement shall be amended by deleting the following definitions appearing in Section 13.1 thereof:

 

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

 

“Revolving Line” is an Advance or Advances in an amount equal to Three Million Dollars ($3,000,000.00).”

 

“Revolving Line Maturity Date” is February 7, 2010.”

 

“Tangible Net Worth” is, on any date, the consolidated total assets of Borrower and its Subsidiaries minus (a) any amounts attributable to (i) goodwill, (ii) intangible items including unamortized debt discount and expense, patents, trade and service marks and names, copyrights and research and development expenses except prepaid expenses, (iii) notes, accounts receivable and other obligations owing to Borrower from its officers or other Affiliates, and (iv) reserves not already deducted from assets, minus (b) Total Liabilities, plus (c) Subordinated Debt.”

 

“Warrant” is that certain Warrant to Purchase Stock dated as of the Effective Date executed by Borrower in favor of Bank.”

 

4.

 

and inserting in lieu thereof the following:

 

“Prime Rate” is the greater of (a) four percent (4.0%) and (b) Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest rate.”

 

“Revolving Line” is an Advance or Advances in an amount equal to Seven Million Dollars ($7,000,000.00).”

 

“Revolving Line Maturity Date” is February 7, 2011.”

 

“Tangible Net Worth” is, on any date, the consolidated total assets of Borrower and its Subsidiaries minus (a) any amounts attributable to (i) goodwill, (ii) intangible items including unamortized debt discount and expense, patents, trade and service marks and names, copyrights and research and development expenses except prepaid expenses, (iii) notes, accounts receivable and other obligations owing to Borrower from its officers or other Affiliates, and (iv) reserves not already deducted from assets, minus (b) consolidated Total Liabilities, plus (c) consolidated Subordinated Debt.”

 

“Warrant” is, collectively, (a) that certain Warrant to Purchase Stock dated as of the Effective Date executed by Borrower in favor of Bank, (b) that certain Warrant to Purchase Stock dated as of December 8, 2008 executed by Borrower in favor of Bank, and (c) that certain Warrant to Purchase Stock dated as of February 7, 2010 executed by Borrower in favor of Bank.”

 

9                                        The Compliance Certificate attached as Exhibit C to the Loan Agreement shall be deleted in its entirety and replaced with the Compliance Certificate set forth on Schedule 1 hereto.

 

10                                The Borrowing Base Certificate attached as Exhibit D to the Loan Agreement shall be deleted in its entirety and replaced with the Borrowing Base Certificate set forth on Schedule 2 hereto.

 

4.                                    FEES. Borrower shall pay to Bank a modification fee equal to Seventeen Thousand Five Hundred Dollars ($17,500.00), which fee shall be due on the date hereof and shall be deemed fully earned as of the date hereof. Borrower shall also reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

 

5.                                    PERFECTION CERTIFICATE. Borrower has delivered an updated Perfection Certificate in connection with this Loan Modification Agreement (the “Updated Perfection Certificate”) dated as of February 7, 2010, which Updated Perfection Certificate shall supersede in all respects that certain Perfection Certificate dated as of December 7, 2009. Borrower agrees that all references in the Loan Agreement to “Perfection Certificate” shall hereinafter be deemed to be a reference to the Updated Perfection Certificate.

 

5.

 

6.                                    CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

 

7.                                    RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

 

8.                                    NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

 

9.                                    CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect. Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing. No maker will be released by virtue of this Loan Modification Agreement.

 

10.                            COUNTERSIGNATURE. This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.

 

[The remainder of this page is intentionally left blank]

 

6.

 

This Loan Modification Agreement is executed as of the date first written above.

 

 

 

	
BORROWER:
    	
 
    	
BANK:
    
	
 
    	
 
    	
 
    
	
TREMOR MEDIA, INC.
    	
 
    	
SILICON VALLEY BANK
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Jason Glickman
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Jason Glickman
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
CEO
    	
 
    	
Title:
    	
 
    
									

 

7.

 

This Loan Modification Agreement is executed as of the date first written above.

 

 

 

	
BORROWER:
    	
 
    	
BANK:
    
	
 
    	
 
    	
 
    
	
TREMOR MEDIA, INC.
    	
 
    	
SILICON VALLEY BANK
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
/s/ Michael   Moretti               
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
 
    	
Name:
    	
 Michael Moretti           
    
	
 
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    	
Title:
    	
 SVP
    
									

 

8.

 

Schedule 1

 

EXHIBIT C

 

COMPLIANCE CERTIFICATE

 

	
TO:
    	
SILICON VALLEY BANK
    	
Date:                               
    
	
FROM:
    	
TREMOR MEDIA, INC.
    	
 
    

 

The undersigned authorized officer of Tremor Media, Inc. (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (as amended, the “Agreement”), (1) Borrower is in complete compliance for the period ending                    with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.8 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents as appropriate supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

 

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

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
Reporting   Covenant
    	
 
    	
Required
    	
 
    	
Complies
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Monthly   financial statements with Compliance Certificate
    	
 
    	
Monthly   within 30 days
    	
 
    	
Yes
    	
 
    	
No
    
	
Annual   financial statement (CPA Audited)
    	
 
    	
FYE   within 180 days
    	
 
    	
Yes
    	
 
    	
No
    
	
10-Q,   10-K and 8-K
    	
 
    	
Within   5 days after filing with SEC
    	
 
    	
Yes
    	
 
    	
No
    
	
Borrowing   Base Certificate, with A/P & A/R Agings
    	
 
    	
Monthly   within 30 days
    	
 
    	
Yes
    	
 
    	
No
    
	
Board-approved   projections
    	
 
    	
Annually,   within 10 days of approval
    	
 
    	
Yes
    	
 
    	
No
    
	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Financial   Covenant
    	
 
    	
Require
    	
 
    	
Actual
    	
 
    	
Complies
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Maintain on a Monthly   Basis
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Tangible Net Worth*
    	
 
    	
$           *
    	
 
    	
$                  
    	
 
    	
Yes
    	
 
    	
No
    
	
Adjusted Quick Ratio
    	
 
    	
1.25:1.0
    	
 
    	
                :1.0
    	
 
    	
Yes
    	
 
    	
No
    
											

 

* As set forth in Section 6.10(a) of the Agreement.

 

9.

 

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

 

 

 

 

	
TREMOR MEDIA, INC.
    	
 
    	
BANK USE ONLY
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    	
Received by:                                                                        
    
	
Name:
    	
 
    	
 
    	
 
    	
                                AUTHORIZED   SIGNER
    
	
Title:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:                                                                                      
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Verified:                                                                               
    
	
 
    	
 
    	
                                AUTHORIZED   SIGNER
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:                                                                                     
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Compliance Status:
    	
Yes
    	
No
    
									

 

10.

 

Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

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

 

Dated:                         

 

NOTE — All calculations below are on a consolidated basis with respect to Borrower and its subsidiaries.

 

I.          Tangible Net Worth (Section 6.10(a))

 

Required:        $                    *

 

* As set forth in Section 6.10(a) of the Agreement (to increase by 75.0% of quarterly Net Income, plus 50.0% of new equity)

 

Actual:

	
A.
    	
 
    	
Aggregate value of   liabilities that should, under GAAP, be classified as liabilities on   Borrower’s balance sheet, including all Indebtedness
    	
 
    	
$               
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
B.
    	
 
    	
Aggregate value of   Indebtedness of Borrower subordinated to Borrower’s Indebtedness to Bank
    	
 
    	
$               
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
C.
    	
 
    	
Debt (line A minus line   B)
    	
 
    	
$               
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
D.
    	
 
    	
Aggregate value of   total assets of Borrower
    	
 
    	
$               
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
E.
    	
 
    	
Aggregate value of   goodwill of Borrower
    	
 
    	
$               
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
F.
    	
 
    	
Aggregate value of   intangible assets of Borrower
    	
 
    	
$               
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
G.
    	
 
    	
Aggregate value of any   reserves not already deducted from assets
    	
 
    	
$               
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
H.
    	
 
    	
Value of line C
    	
 
    	
$               
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
I.
    	
 
    	
Tangible Net Worth   (line D minus line E minus line F minus line G minus line C)
    	
 
    	
$               
    

 

Is line I equal to or greater than $               * (to increase by 75.0% of quarterly Net Income, plus 50.0% of new equity)?

 

*As set forth in Section 6.10(a) of the Agreement

 

	
                       No, not in compliance
    	
                    Yes, in compliance
    

 

11.

 

II.        Adjusted Quick Ratio (Section 6.10(b))

 

Required:        1.25:1.00

 

Actual:

 

	
A.
    	
 
    	
Aggregate value   of the unrestricted cash and cash equivalents of Borrower maintained at Bank
    	
 
    	
$                
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
B.
    	
 
    	
Aggregate value   of net billed accounts receivable of Borrower
    	
 
    	
$                
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
C.
    	
 
    	
Quick Assets   (sum of lines A and B)
    	
 
    	
$                
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
D.
    	
 
    	
Aggregate value   of Obligations to Bank
    	
 
    	
$                
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
E.
    	
 
    	
Aggregate value   of liabilities that should, under GAAP, be classified as liabilities on   Borrower’s consolidated balance sheet, including all Indebtedness, and not   otherwise reflected in line D above, that matures within one (1) year,   but excluding the current portion of Subordinated Debt
    	
 
    	
$                
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
F.
    	
 
    	
Current   Liabilities (the sum of lines E and F)
    	
 
    	
$                
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
G.
    	
 
    	
Aggregate value   of the current portion of amounts received or invoiced by Borrower in advance   of performance under contracts and not yet recognized as revenue
    	
 
    	
$                
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
H.
    	
 
    	
Line F minus   line G
    	
 
    	
$                
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
I.
    	
 
    	
Adjusted Quick   Ratio (line C divided by line H)
    	
 
    	
$                
    

 

Is line I equal to or greater than 1.25:1:00?

 

	
                    No, not in compliance
    	
                    Yes, in compliance
    

 

12.

 

Schedule 2

 

EXHIBIT D

 

BORROWING BASE CERTIFICATE

 

	
Borrower:
    	
Tremor Media, Inc.
    
	
Lender:
    	
Silicon Valley Bank
    
	
Commitment Amount:
    	
$7,000,000.00
    

 

	
ACCOUNTS   RECEIVABLE
    	
 
    
	
1.
    	
Accounts Receivable   (invoiced) Book Value as of __________
    	
$                         
    
	
2.
    	
Additions (please   explain on reverse)
    	
$                         
    
	
3.
    	
TOTAL ACCOUNTS   RECEIVABLE
    	
$                         
    
	
 
    	
 
    	
 
    
	
ACCOUNTS   RECEIVABLE DEDUCTIONS (without duplication)
    	
 
    
	
4.
    	
Amounts over 90 days   due
    	
$                         
    
	
5.
    	
Balance of 50% over 90   day accounts
    	
$                         
    
	
6.
    	
Foreign Accounts
    	
$                         
    
	
7.
    	
Foreign Invoiced   Accounts
    	
$                         
    
	
8.
    	
Contra/Customer Deposit   Accounts
    	
$                         
    
	
9.
    	
Intercompany/Employee   Accounts
    	
$                         
    
	
10.
    	
Credit balances over 90   days
    	
$                         
    
	
11.
    	
Concentration Limits
    	
$                         
    
	
12.
    	
U.S. Governmental   Accounts
    	
$                         
    
	
13.
    	
Promotion or Demo   Accounts; Guaranteed Sale or Consignment Sale Accounts
    	
$                         
    
	
14.
    	
Accounts with   Progress/Milestone/Pre-billings; Contract Accounts
    	
$                         
    
	
15.
    	
Accounts for Retainage   Billings
    	
$                         
    
	
16.
    	
Trust Accounts
    	
$                         
    
	
17.
    	
Bill and Hold Accounts
    	
$                         
    
	
18.
    	
Unbilled Accounts
    	
$                         
    
	
19.
    	
Non-Trade Accounts
    	
$                         
    
	
20.
    	
Accounts with Extended   Term Invoices
    	
$                         
    
	
21.
    	
Accounts subject to   Chargebacks
    	
$                         
    
	
22.
    	
Disputed Accounts
    	
$                         
    
	
23.
    	
Deferred Revenue
    	
$                         
    
	
24.
    	
Other (please explain   on reverse)
    	
$                         
    
	
25.
    	
TOTAL ACCOUNTS   RECEIVABLE DEDUCTIONS
    	
$                         
    
	
26.
    	
Eligible Accounts (#3   minus #25)
    	
$                         
    
	
27.
    	
ELIGIBLE AMOUNT OF   ACCOUNTS (80% of #26)
    	
$                         
    
	
 
    	
 
    	
 
    
	
BALANCES
    	
 
    
	
28.
    	
Maximum Loan Amount
    	
$ 7,000,000.00
    
	
29.
    	
Total Funds Available   (Lesser of #28 or #27)
    	
$                         
    
	
30.
    	
Present balance owing   on Line of Credit
    	
$                         
    
	
31.
    	
Outstanding under   Sublimits (LC/FX/Cash Management)
    	
$                         
    
	
32.
    	
RESERVE POSITION (#29   minus #30 and #31)
    	
$                         
    

 

[Continued on following page.]

 

13.

 

 

The undersigned represents and warrants that this is true, accurate and complete, and that the information in this Borrowing Base Certificate complies with the representations and warranties in the Loan and Security Agreement between the undersigned and Silicon Valley Bank.

 

	
 
    	
 
    	
 
    	
BANK   USE ONLY
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
COMMENTS:
    	
 
    	
 
    	
Received by:                                                                  
    	
 
    
	
 
    	
 
    	
 
    	
                       AUTHORIZED   SIGNER
    	
 
    
	
TREMOR MEDIA, INC.
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date:                                                                               
    	
 
    
	
By:                                                                     
    	
 
    	
 
    	
 
    	
 
    
	
                    Authorized   Signer
    	
 
    	
 
    	
Verified:                                                                         
    	
 
    
	
 
    	
 
    	
 
    	
                      AUTHORIZED   SIGNER
    	
 
    
	
Date:                                                                  
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date:                                                                               
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Compliance Status:        Yes       No
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

14.

 

FOURTH LOAN MODIFICATION AGREEMENT

 

 

This Fourth Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of March 7, 2011 and is effective as of February 7, 2011, by and between SILICON VALLEY BANK, a California corporation, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at 535 Fifth Avenue, 27th Floor, New York, New York 10017 (“Bank”) and TREMOR MEDIA, INC., a Delaware corporation with its chief executive office located at 53 West 23rd Street, 12th Floor, New York, New York 10010 (“Borrower”).

 

1.            DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of June 7, 2007, evidenced by, among other documents, a certain Loan and Security Agreement dated as of June 7, 2007, between Borrower and Bank, as amended by a certain First Loan Modification Agreement dated as of December 8, 2008, as further amended by a certain Second Loan Modification Agreement dated as of December 7, 2009, and as further amended by a certain Third Loan Modification Agreement dated as of February 7, 2010 (as amended from time to time, the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

 

2.            DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement (together with any other collateral security granted to Bank, the “Security Documents”). Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”.

 

3.            DESCRIPTION OF CHANGE IN TERMS.

 

A.           Modifications to Loan Agreement.

 

1                                        The Loan Agreement shall be amended by deleting the following text, appearing in Section 2.2(a) thereof:

 

“(iii)      Advances. Subject to Section 2.2(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to one and one-half of one percentage point (1.50%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.2(f) below.”

 

and inserting in lieu thereof the following:

 

“(iii)      Advances. Subject to Section 2.2(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to one percentage point (1.0%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.2(f) below.”

 

1.

 

2                                        The Loan Agreement shall be amended by deleting the following text appearing in Section 6.10 thereof:

 

“(a)        Tangible Net Worth. A Tangible Net Worth of at least (i) Eight Million Dollars ($8,000,000.00) through and including December 31, 2009, (ii) Seven Million Dollars ($7,000,000.00) for the months ending January 31, 2010, February 28, 2010, March 31, 2010 and April 30, 2010, (iii) Six Million Dollars ($6,000,000.00) for the months ending May 31, 2010, June 30, 2010, July 31, 2010, August 31, 2010 and September 30, 2010, (iv) Seven Million Dollars ($7,000,000.00) for the months ending October 31, 2010 and November 30, 2010, and (v) Eight Million Dollars ($8,000,000.00) for the month ending December 31, 2010, and for each month thereafter. Notwithstanding the foregoing, the amount required in the prior sentence shall increase by an amount equal to (i) seventy-five percent (75.0%) of any positive quarterly Net Income earned by Borrower, or its Affiliates, plus (ii) fifty percent (50.0%) of net proceeds received by Borrower from the sale of its equity.”

 

and inserting in lieu thereof the following:

 

“(a)        Tangible Net Worth. A Tangible Net Worth of at least:

 

(i)           (A) Eight Million Dollars ($8,000,000.00) through and including December 31, 2009, (B) Seven Million Dollars ($7,000,000.00) for the months ending January 31, 2010, February 28, 2010, March 31, 2010 and April 30, 2010, (C) Six Million Dollars ($6,000,000.00) for the months ending May 31, 2010, June 30, 2010, July 31, 2010, August 31, 2010 and September 30, 2010, (D) Seven Million Dollars ($7,000,000.00) for the months ending October 31, 2010 and November 30, 2010, and (E) Eight Million Dollars ($8,000,000.00) for the months ending December 31, 2010 and January 31, 2011. Notwithstanding the foregoing, the amount required in the immediately prior sentence shall increase by an amount equal to (A) seventy-five percent (75.0%) of any positive quarterly Net Income earned by Borrower, or its Affiliates, plus (B) fifty percent (50.0%) of net proceeds received by Borrower from the sale of its equity.

 

(ii)          Twenty-Three Million Dollars ($23,000,000.00) for the month ending February 28, 2011 and for each month thereafter. Notwithstanding the foregoing, the amount required in the immediately prior sentence shall increase by an amount equal to (A) seventy-five percent (75.0%) of any positive quarterly Net Income earned by Borrower, or its Affiliates, on and after February 1, 2011, plus (B) fifty percent (50.0%) of net proceeds received by Borrower from the sale of its equity on and after February 1, 2011.”

 

2.

 

3                                        The Loan Agreement shall be amended by deleting the following definition appearing in Section 13.1 thereof:

 

“Revolving Line Maturity Date” is February 7, 2011.”

 

and inserting in lieu thereof the following:

 

“Revolving Line Maturity Date” is March 8, 2012.”

 

4.            FEES. Borrower shall pay to Bank a modification fee equal to Seventeen Thousand Five Hundred Dollars ($17,500.00), which fee shall be due on the date hereof and shall be deemed fully earned as of the date hereof. Borrower shall also reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

 

5.            PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate of Borrower dated as of March 7, 2011, and acknowledges, confirms and agrees that the disclosures and information Borrower provided to Bank in such Perfection Certificate have not changed, as of the date hereof. Borrower hereby acknowledges and agrees that all references in the Loan Agreement to Perfection Certificate shall mean and include the Perfection Certificate as described herein.

 

6.            CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

 

7.            RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

 

8.            NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

 

9.            CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect. Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing. No maker will be released by virtue of this Loan Modification Agreement.

 

3.

 

10.         COUNTER SIGNATURE. This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.

 

[The remainder of this page is intentionally left blank]

 

4.

 

This Loan Modification Agreement is executed as of the date first written above.

 

 

	
BORROWER:
    	
 
    	
BANK:
    
	
 
    	
 
    	
 
    
	
TREMOR MEDIA, INC.
    	
 
    	
SILICON VALLEY BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ William Day
    	
 
    	
By:                                                                                  
    
	
 
    	
 
    	
 
    
	
Name:  William Day
    	
 
    	
Name:                                                                             
    
	
 
    	
 
    	
 
    
	
Title:     Chief Executive Officer
    	
 
    	
Title:                                                                               
    
				

 

5.

 

This Loan Modification Agreement is executed as of the date first written above.

 

 

 

	
BORROWER:
    	
 
    	
BANK:
    
	
 
    	
 
    	
 
    
	
TREMOR MEDIA, INC.
    	
 
    	
SILICON VALLEY BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:                                                                          
    	
 
    	
By:
    	
/s/ A. Bonnie Ryan
    
	
 
    	
 
    	
 
    
	
Name:                                                                     
    	
 
    	
Name:
    	
A. Bonnie Ryan
    
	
 
    	
 
    	
 
    
	
Title:                                                                       
    	
 
    	
Title:
    	
Vice President
    
						

 

6.

 

FIFTH LOAN MODIFICATION AGREEMENT

 

This Fifth Loan Modification Agreement (this “Loan Modification Agreement”) is entered into as of December 30, 2011, by and between SILICON VALLEY BANK, a California corporation, with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at 505 Fifth Avenue, 11th Floor, New York, New York 10017 (“Bank”) and TREMOR VIDEO, INC. (f.k.a. Tremor Media, Inc.), a Delaware corporation with its chief executive office located at 53 West 23rd Street, 12th Floor, New York, New York 10010 (“Borrower”).

 

1.            DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of June 7, 2007, evidenced by, among other documents, a certain Loan and Security Agreement dated as of June 7, 2007, between Borrower and Bank, as amended by a certain First Loan Modification Agreement dated as of December 8, 2008, as further amended by a certain Second Loan Modification Agreement dated as of December 7, 2009, as further amended by a certain Third Loan Modification Agreement dated as of February 7, 2010, and as further amended by a certain Fourth Loan Modification Agreement dated as of March 7, 2011 (as amended from time to time, the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.

 

2.            DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement (together with any other collateral security granted to Bank, the “Security Documents”). Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations shall be referred to as the “Existing Loan Documents”.

 

3.            DESCRIPTION OF CHANGE IN TERMS.

 

A.           Modifications to Loan Agreement.

 

1                                        The Loan Agreement shall be amended by deleting the following, appearing as Section 2.1.4 thereof:

 

“2.1.4   Letters of Credit Sublimit.

 

(a)          As part of the Revolving Line, Bank shall issue or have issued Letters of Credit for Borrower’s account. Such aggregate amounts utilized hereunder shall at all times reduce the amount otherwise available for Advances under the Revolving Line. The face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may not exceed Seven Million Dollars ($7,000,000.00), inclusive of Credit Extensions relating to Sections 2.1.5 and 2.1.6. The aggregate amount available to be used for the issuance of Letters of Credit may not exceed (i) the lesser of (A) the Revolving 

 

1.

 

Line, or (B) the Borrowing Base, minus (ii) the outstanding principal amount of any Advances (including any amounts used for Cash Management Services and the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve), and minus (iii) the FX Reduction Amount. If, on the Revolving Line Maturity Date, or the effective date of any termination of this Agreement by Borrower, there are any outstanding Letters of Credit, then on such date Borrower shall provide to Bank cash collateral in an amount equal to 105% of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating to said Letters of Credit. All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s standard Application and Letter of Credit Agreement (the “Letter of Credit Application”). Borrower agrees to execute any further documentation in connection with the Letters of Credit as Bank may reasonably request. Borrower further agrees to be bound by the regulations and interpretations of the issuer of any Letters of Credit guaranteed by Bank and opened for Borrower’s account or by Bank’s interpretations of any Letter of Credit issued by Bank for Borrower’s account, and Borrower understands and agrees that Bank shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments, or supplements thereto.

 

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

 

(c)          Borrower may request that Bank issue a Letter of Credit payable in a Foreign Currency. If a demand for payment is made under any such Letter of Credit, Bank shall treat such demand as an Advance to Borrower of the equivalent of the amount thereof (plus fees and charges in connection therewith such as wire, cable, SWIFT or similar charges) in Dollars at the then prevailing rate of exchange in San Francisco, California, for sales of the Foreign Currency for transfer to the country issuing such Foreign Currency.

 

(d)          To guard against fluctuations in currency exchange rates, upon the issuance of any Letter of Credit payable in a 

 

2.

 

Foreign Currency, Bank shall create a reserve (the “Letter of Credit Reserve”) under the Revolving Line in an amount equal to ten percent (10%) of the face amount of such Letter of Credit. The amount of the Letter of Credit Reserve may be adjusted by Bank from time to time to account for fluctuations in the exchange rate. The availability of funds under the Revolving Line shall be reduced by the amount of such Letter of Credit Reserve for as long as such Letter of Credit remains outstanding.”

 

and inserting in lieu thereof the following:

 

“2.1.4   Intentionally omitted.”

 

2                                        The Loan Agreement shall be amended by deleting the following, appearing as Section 2.1.5 thereof:

 

“2.1.5   Foreign Exchange Sublimit. As part of the Revolving Line, Borrower may enter into foreign exchange contracts with Bank under which Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency (each, a “FX Forward Contract”) on a specified date (the “Settlement Date”). Each FX Forward Contract shall have a Settlement Date of at least one (1) FX Business Day after the contract date and shall be subject to a reserve of ten percent (10%) of the outstanding amount of the FX Forward Contract (the “FX Reserve”). The aggregate amount of FX Forward Contracts at any one time may not exceed Seven Million Dollars ($7,000,000.00). The amount otherwise available for Credit Extensions under the Revolving Line shall be reduced by an amount equal to the aggregate FX Reserves for all outstanding FX Forward Contracts (the “FX Reduction Amount”). Any amounts needed to fully reimburse Bank will be treated as Advances under the Revolving Line and will accrue interest at the interest rate applicable to Advances.”

 

and inserting in lieu thereof the following:

 

“2.1.5   Intentionally omitted.”

 

3                                        The Loan Agreement shall be amended by deleting the following, appearing as Section 2.1.6 thereof:

 

“2.1.6   Cash Management Services Sublimit. Borrower may use up to Seven Million Dollars ($7,000,000.00), inclusive of Credit Extensions relating to Sections 2.1.4 and 2.1.5 and the FX Reduction Amount, of the Revolving Line for Bank’s cash management services which may include merchant services, direct deposit of payroll, business credit card, and check cashing services identified in Bank’s various cash management services agreements (collectively, the “Cash Management Services”). Any amounts Bank pays on behalf of Borrower for any Cash Management Services will be treated as Advances under the Revolving 

 

3.

 

Line and will accrue interest at the interest rate applicable to Advances.”

 

and inserting in lieu thereof the following:

 

“2.1.6   Intentionally omitted.”

 

4                                        The Loan Agreement shall be amended by deleting the following, appearing as Section 2.1.7 thereof:

 

“2.1.7   Overadvances.  If, at any time, the sum of (a) the outstanding principal amount of any Advances (including any amounts used for Cash Management Services), plus (b) the face amount of any outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve), plus (c) the FX Reduction Amount exceeds the lesser of either the Revolving Line or the Borrowing Base, Borrower shall immediately pay to Bank in cash such excess.”

 

and insert in lieu thereof the following:

 

“2.1.7   Overadvances.  If, at any time, the outstanding principal amount of any Advances exceeds the lesser of either the Revolving Line or the Borrowing Base, Borrower shall immediately pay to Bank in cash such excess.”

 

5                                        The Loan Agreement shall be amended by deleting the following text, appearing in Section 2.2(a) thereof:

 

“(iii)      Advances. Subject to Section 2.2(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to one percentage point (1.0%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.2(f) below.”

 

and inserting in lieu thereof the following:

 

“(iii)      Advances. Subject to Section 2.2(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to one-half of one percentage point (0.50%) above the Prime Rate, which interest shall be payable monthly in accordance with Section 2.2(f) below.”

 

6                                        The Loan Agreement shall be amended by inserting the following new text, to appear immediately following Section 2.3(c) thereof:

 

“(d)       Unused Revolving Line Facility Fee. A fee (the “Unused Revolving Line Facility Fee”), payable quarterly, in arrears, on a calendar year basis, in an amount equal to one-fifth of one percent (0.20%) per annum of the unused portion of the Revolving Line. The unused 

 

4.

 

portion of the Revolving Line, for purposes of this calculation, shall equal the difference between (i) the Revolving Line amount (as it may be reduced from time to time) and (ii) the average for the period of the daily closing balance of the Revolving Line outstanding. Notwithstanding the foregoing, there shall be no Unused Revolving Line Facility Fee for a particular quarter if the average principal amount of Advances outstanding during such quarter was more than Ten Million Dollars ($10,000,000.00). Borrower shall not be entitled to any credit, rebate or repayment of any Unused Revolving Line Facility Fee previously earned by Bank pursuant to this Section 2.3(d) notwithstanding any termination of the Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder.”

 

7                                        The Loan Agreement shall be amended by deleting the following text, appearing in Section 4.1 thereof:

 

“If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at Borrower’s sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower.”

 

and inserting in lieu thereof the following:

 

“Borrower acknowledges that it may have previously entered, and/or may in the future enter, into Bank Services with Bank. Regardless of the terms of any Bank Services Agreement, Borrower agrees that any amounts Borrower owes Bank thereunder shall be deemed to be Obligations hereunder and that it is the intent of Borrower and Bank to have all such Obligations secured by the first priority security interest granted herein.

 

If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at Borrower’s sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower. In the event (a) all Obligations (other than inchoate indemnity obligations), except for Bank Services, are satisfied in full, and (b) this Agreement is terminated, Bank shall terminate the security interest granted herein upon Borrower providing cash collateral acceptable to Bank in its good faith business judgment consistent with Bank’s then current practice for Bank Services, if any. In the event such Bank Services 

 

5.

 

consist of outstanding Letters of Credit, Borrower shall provide to Bank cash collateral in an amount equal to one hundred five percent (105%) for Letters of Credit denominated in Dollars and one hundred ten percent (110%) for Letters of Credit denominated in a currency other than Dollars, in each case of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating to such Letters of Credit.”

 

8                                        The Loan Agreement shall be amended by deleting the following, appearing as Section 6.10 thereof:

 

“6.10    Financial Covenants.

 

Borrower shall maintain at all times, to be tested as of the last day of each month, unless otherwise noted (all calculations shall be computed on a consolidated basis):

 

(a)          Tangible Net Worth. A Tangible Net Worth of at least:

 

a.            (A) Eight Million Dollars ($8,000,000.00) through and including December 31, 2009, (B) Seven Million Dollars ($7,000,000.00) for the months ending January 31, 2010, February 28, 2010, March 31, 2010 and April 30, 2010, (C) Six Million Dollars ($6,000,000.00) for the months ending May 31, 2010, June 30, 2010, July 31, 2010, August 31, 2010 and September 30, 2010, (D) Seven Million Dollars ($7,000,000.00) for the months ending October 31, 2010 and November 30, 2010, and (E) Eight Million Dollars ($8,000,000.00) for the months ending December 31, 2010 and January 31, 2011. Notwithstanding the foregoing, the amount required in the immediately prior sentence shall increase by an amount equal to (A) seventy-five percent (75.0%) of any positive quarterly Net Income earned by Borrower, or its Affiliates, plus (B) fifty percent (50.0%) of net proceeds received by Borrower from the sale of its equity.

 

b.            Twenty-Three Million Dollars ($23,000,000.00) for the month ending February 28, 2011 and for each month thereafter. Notwithstanding the foregoing, the amount required in the immediately prior sentence shall increase by an amount equal to (A) seventy-five percent (75.0%) of any positive quarterly Net Income

 

6.

 

earned by Borrower, or its Affiliates, on and after February 1, 2011, plus (B) fifty percent (50.0%) of net proceeds received by Borrower from the sale of its equity on and after February 1, 2011.

 

(b)          Adjusted Quick Ratio. A ratio of (i) Quick Assets, to (ii) Current Liabilities minus Current Deferred Revenue of at least 1.25 to 1.0.”

 

and inserting in lieu thereof the following:

 

“6.10    Financial Covenant. Borrower shall maintain at all times, to be tested as of the last day of each month, to be computed on a consolidated basis, a ratio of (a) Quick Assets, to (b) Current Liabilities minus Current Deferred Revenue of at least 1.50 to 1.0.”

 

9                                        The Loan Agreement shall be amended by deleting the following text, appearing in Section 12.7 thereof:

 

“The obligation of Borrower in Section 12.2 to indemnify Bank shall survive until the statute of limitations with respect to such claim or cause of action shall have run.”

 

and inserting in lieu thereof the following:

 

“Without limiting the foregoing, except as otherwise provided in Section 4.1, the grant of a security interest by Borrower in Section 4.1 shall survive until the termination of this Agreement and all Bank Services Agreements. The obligation of Borrower in Section 12.2 to indemnify Bank shall survive until the statute of limitations with respect to such claim or cause of action shall have run.”

 

10                                The Loan Agreement shall be amended by deleting the following definitions, appearing in Section 13.1 thereof: Cash Management Services, FX Business Day, FX Forward Contract, FX Reduction Amount, FX Reserve, Letter of Credit Application, Letter of Credit Reserve, Settlement Date, and Tangible Net Worth.

 

11                                The Loan Agreement shall be amended by deleting the following definitions appearing in Section 13.1 thereof:

 

“              “Availability Amount” is (a) the lesser of (i) the Revolving Line or (ii) the amount available under the Borrowing Base, minus (b) the amount of all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit) plus an amount equal to the Letter of Credit Reserve, minus (c) the FX Reduction Amount, minus (d) any amounts used for Cash Management Services, and minus (e) the outstanding principal balance of any Advances.”

 

7.

 

“              “Eligible Accounts” means billed Accounts in the ordinary course of Borrower’s business that meet all Borrower’s representations and warranties in Section 5.11. Bank reserves the right at any time after the 2008 Effective Date to adjust any of the criteria set forth below and to establish new criteria in its good faith business judgment. Without limiting the foregoing, unless Bank agrees otherwise in writing, Eligible Accounts shall not include the following Accounts:

 

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

 

(b)          Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have not been paid within ninety (90) days of invoice date;

 

(c)          Accounts owing from an Account Debtor which does not have its principal place of business in the United States;

 

(d)          Accounts billed and/or payable outside of the United States;

 

(e)          Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the ordinary course of its business;

 

(f)           Accounts for which the Account Debtor is Borrower’s

 

(g)          Affiliate, officer, employee, or agent; Accounts with credit balances over ninety (90) days from invoice date;

 

(h)          Accounts owing from an Account Debtor, including Affiliates, whose total obligations to Borrower exceed twenty-five (25%) of all Accounts, for the amounts that exceed that percentage, unless Bank approves in writing;

 

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

 

8.

 

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

 

(k)          Accounts owing from an Account Debtor that has not been invoiced or where goods or services have not yet been rendered to the Account Debtor (sometimes called memo billings or pre-billings);

 

(l)           Accounts subject to contractual arrangements between Borrower and an Account Debtor where payments shall be scheduled or due according to completion or fulfillment requirements where the Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to perform in accordance with the contract (sometimes called contracts accounts receivable, progress billings, milestone billings, or fulfillment contracts);

 

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

 

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

 

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

 

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

 

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

 

(r)          Accounts for which Borrower has permitted Account Debtor’s payment to extend beyond 90 days;

 

9.

 

(s)           Accounts subject to chargebacks or others payment deductions taken by an Account Debtor;

 

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

 

(u)          Accounts for which Bank in its good faith business judgment determines collection to be doubtful; and

 

(v)          Accounts owing from an Account Debtor with respect to which Borrower has received deferred revenue (but only to the extent of such deferred revenue); and

 

(w)         other Accounts Bank deems ineligible in the exercise of its good faith business judgment.”

 

“              “Letter of Credit” means a standby letter of credit issued by Bank or another institution based upon an application, guarantee, indemnity or similar agreement on the part of Bank as set forth in Section 2.1.4.”

 

“              “Loan Documents” are, collectively, this Agreement, the Warrant, the Perfection Certificate, any note, or notes executed by Borrower, and any other present or future agreement between Borrower and/or for the benefit of Bank in connection with this Agreement, all as amended, restated, or otherwise modified.”

 

“              “Prime Rate” is the greater of (a) four percent (4.0%) and (b) Bank’s most recently announced “prime rate,” even if it is not Bank’s lowest rate.”

 

“              “Revolving Line” is an Advance or Advances in an amount equal to Seven Million Dollars ($7,000,000.00).”

 

“              “Revolving Line Maturity Date” is March 8, 2012.”

 

and inserting in lieu thereof the following:

 

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

 

“              “Eligible Accounts” means billed Accounts in the ordinary course of Borrower’s business that meet all Borrower’s representations and warranties in Section 5.11. Bank reserves the right at any time after the 2008 Effective Date to adjust any of the criteria set forth below and to establish new criteria in its good faith business judgment. Without limiting 

 

10.

 

the foregoing, unless Bank agrees otherwise in writing, Eligible Accounts shall not include the following Accounts:

 

(a)          Accounts that the Account Debtor has not paid within one hundred twenty (120) days of invoice date regardless of invoice payment period terms;

 

(b)          Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have not been paid within one hundred twenty (120) days of invoice date;

 

(c)          Accounts owing from an Account Debtor which does not have its principal place of business in the United States;

 

(d)          Accounts billed and/or payable outside of the United States;

 

(e)          Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the ordinary course of its business;

 

(f)           Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or agent;

 

(g)          Accounts with credit balances over one hundred twenty (120) days from invoice date;

 

(h)          Accounts owing from an Account Debtor, including Affiliates, whose total obligations to Borrower exceed twenty-five percent (25%) of all Accounts, for the amounts that exceed that percentage, unless Bank approves in writing;

 

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

 

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

 

11.

 

(k)          Accounts owing from an Account Debtor that has not been invoiced or where goods or services have not yet been rendered to the Account Debtor (sometimes called memo billings or pre-billings);

 

(l)           Accounts subject to contractual arrangements between Borrower and an Account Debtor where payments shall be scheduled or due according to completion or fulfillment requirements where the Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to perform in accordance with the contract (sometimes called contracts accounts receivable, progress billings, milestone billings, or fulfillment contracts);

 

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

 

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

 

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

 

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

 

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

 

(r)          Accounts for which Borrower has permitted Account Debtor’s payment to extend beyond one hundred twenty (120) days;

 

(s)           Accounts subject to chargebacks or others payment deductions taken by an Account Debtor;

 

12.

 

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

 

(u)          Accounts for which Bank in its good faith business judgment determines collection to be doubtful;

 

(v)          Accounts owing from an Account Debtor with respect to which Borrower has received deferred revenue (but only to the extent of such deferred revenue); and

 

(w)         other Accounts Bank deems ineligible in the exercise of its good faith business judgment.”

 

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

 

“              “Loan Documents” are, collectively, this Agreement, the Warrant, the Perfection Certificate, any Bank Services Agreement, any note, or notes executed by Borrower, and any other present or future agreement between Borrower and/or for the benefit of Bank in connection with this Agreement or any Bank Services Agreement, all as amended, restated, or otherwise modified.”

 

“              “Prime Rate” is the “Prime Rate” as quoted in the Wall Street Journal print edition on such day (or, if such day is not a day on which the Wall Street Journal is published, the immediately preceding day on which the Wall Street Journal was published).”

 

“              “Revolving Line” is an Advance or Advances in an amount equal to Twenty-Five Million Dollars ($25,000,000.00).”

 

“              Revolving Line Maturity Date” is December 30, 2014.”

 

12                                The Loan Agreement shall be amended by inserting the following new definitions, appearing alphabetically in Section 13.1 thereof:

 

“              “Bank Services” are any products and/or credit services facilities provided to Borrower by Bank, including, without limitation, all letters of credit, guidance facilities, cash management services (including, without limitation, merchant services, direct deposit of payroll, business credit cards, and check cashing services) and foreign exchange services as any such products or services may be identified in Bank’s various agreements related thereto (each, a “Bank Services Agreement”).”

 

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

 

13.

 

Services.”

 

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

 

“              “Unused Revolving Line Facility Fee” is defined in Section 2.3(d).”

 

13                                The Compliance Certificate attached as Exhibit C to the Loan Agreement shall be deleted in its entirety and replaced with the Compliance Certificate set forth on Schedule 1 hereto.

 

14                                `The Borrowing Base Certificate attached as Exhibit D to the Loan Agreement shall be deleted in its entirety and replaced with the Borrowing Base Certificate set forth on Schedule 2 hereto.

 

4.            ANNUAL AUDITED FINANCIAL STATEMENTS. Notwithstanding Section 6.2 of the Loan Agreement to the contrary, Borrower shall have until February 15, 2012 to deliver its annual audited financial statements with respect to its fiscal year ended December 31, 2010.

 

5.            LEGAL FEES AND EXPENSES. Borrower shall reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.

 

6.            PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate of Borrower dated as of December 30, 2011, and acknowledges, confirms and agrees that the disclosures and information Borrower provided to Bank in such Perfection Certificate have not changed, as of the date hereof. Borrower hereby acknowledges and agrees that all references in the Loan Agreement to Perfection Certificate shall mean and include the Perfection Certificate as described herein.

 

7.            CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.

 

8.            RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to the Bank, and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.

 

9.            NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of 

 

14.

 

them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.

 

10.         CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as Set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect. Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing. No maker will be released by virtue of this Loan Modification Agreement.

 

11.         COUNTERSIGNATURE. This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.

 

[The remainder of this page is intentionally left blank]

 

15.

 

This Loan Modification Agreement is executed as of the date first written above.

 

 

	
BORROWER:
    	
 
    	
BANK:
    
	
 
    	
 
    	
 
    
	
TREMOR VIDEO, INC.
    	
 
    	
SILICON VALLEY BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ William C. Day
    	
 
    	
By:                                                                     
    
	
 
    	
 
    	
 
    
	
Name: 
    	
William C. Day
    	
 
    	
Name:                                                                
    
	
 
    	
 
    	
 
    
	
Title: 
    	
Chief Executive Officer
    	
 
    	
Title:                                                                  
    
						

 

16.

 

This Loan Modification Agreement is executed as of the date first written above.

 

 

	
BORROWER:
    	
 
    	
BANK:
    
	
 
    	
 
    	
 
    
	
TREMOR VIDEO, INC.
    	
 
    	
SILICON VALLEY BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:                                                                          
    	
 
    	
By:
    	
/s/ A. Bonnie Ryan
    	
 
    
	
 
    	
 
    	
 
    
	
Name:                                                                     
    	
 
    	
Name:
    	
A. Bonnie Ryan
    	
 
    
	
 
    	
 
    	
 
    
	
Title:                                                                       
    	
 
    	
Title:
    	
Vice President
    	
 
    
							

 

17.

 

Schedule 1

 

EXHIBIT C

 

COMPLIANCE CERTIFICATE

 

	
TO:
    	
SILICON   VALLEY BANK
    	
Date:                                    
    
	
FROM:
    	
TREMOR   VIDEO, INC.
    	
 
    

 

The undersigned authorized officer of Tremor Video, Inc. (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (as amended, the “Agreement”), (1) Borrower is in complete compliance for the period ending _____________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.8 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents as appropriate supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

 

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

 

	
Reporting Covenant

 
    	
Required
    	
Complies
    
	
Monthly financial statements with Compliance   Certificate
    	
Monthly within 30 days
    	
Yes  No
    
	
Annual financial statement (CPA Audited)
    	
FYE within 180 days
    	
Yes  No
    
	
10-Q, 10-K and 8-K
    	
Within 5 days after filing with SEC
    	
Yes  No
    
	
Borrowing Base Certificate, with A/P &   A/R Agings
    	
Monthly within 30 days
    	
Yes  No
    
	
Board-approved projections
    	
Annually, within 10 days of approval
    	
Yes  No
    
	
 
    	
 
    	
 
    
	
Financial Covenant

 
    	
Required
    	
Actual
    	
Complies
    
	
Maintain on a Monthly Basis:
    	
 
    	
 
    	
 
    
	
Adjusted Quick Ratio
    	
1.50:1.0
    	
______:1.0
    	
Yes  No
    

 

18.

 

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

 

	
 
    
	
 
    

 

	
TREMOR   VIDEO, INC.
    	
BANK   USE ONLY
    
	
 
    	
 
    
	
By:                                                                               
    	
Received   by:                                                                          
    
	
Name:                                                                          
    	
                           AUTHORIZED   SIGNER
    
	
Title:                                                                            
    	
 
    
	
 
    	
Date:                                                                                         
    
	
 
    	
 
    
	
 
    	
Verified:                                                                                   
    
	
 
    	
                          AUTHORIZED   SIGNER
    
	
 
    	
 
    
	
 
    	
Date:                                                                                         
    
	
 
    	
 
    
	
 
    	
Compliance   Status:                                       Yes         No
    

 

19.

 

Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

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

 

Dated:                                             

 

NOTE — All calculations below are on a consolidated basis with respect to Borrower and its subsidiaries.

 

I.             Adjusted Quick Ratio (Section 6.10)

 

Required:              1.5:1.00

 

Actual:

 

	
A.   
    	
Aggregate value of the unrestricted cash and cash equivalents of   Borrower maintained at Bank
    	
 
    	
$__________
    
	
 
    	
 
    	
 
    	
 
    
	
B.   
    	
Aggregate value of net billed accounts receivable of Borrower
    	
 
    	
$__________
    
	
 
    	
 
    	
 
    	
 
    
	
C.   
    	
Quick Assets (sum of lines A and B)
    	
 
    	
$__________
    
	
 
    	
 
    	
 
    	
 
    
	
D.   
    	
Aggregate value of Obligations to Bank
    	
 
    	
$__________
    
	
 
    	
 
    	
 
    	
 
    
	
E.   
    	
Aggregate value of liabilities that should, under GAAP, be classified   as liabilities on Borrower’s consolidated balance sheet, including all   Indebtedness, and not otherwise reflected in line D above, that matures   within one (1) year, but excluding the current portion of Subordinated   Debt
    	
 
    	
$__________
    
	
 
    	
 
    	
 
    	
 
    
	
F.   
    	
Current Liabilities (the sum of lines D and E)
    	
 
    	
$__________
    
	
 
    	
 
    	
 
    	
 
    
	
G.   
    	
Aggregate value of the current portion of amounts received or   invoiced by Borrower in advance of performance under contracts and not yet   recognized as revenue
    	
 
    	
$__________
    
	
 
    	
 
    	
 
    	
 
    
	
H.   
    	
Line F minus line G
    	
 
    	
$__________
    
	
 
    	
 
    	
 
    	
 
    
	
I.   
    	
Adjusted Quick Ratio (line C divided by line H)
    	
 
    	
$__________
    

 

 

Is line I equal to or greater than 1.50:1:00?

 

 

	
                         No, not in   compliance
    	
                      Yes, in   compliance
    

 

20.

 

Schedule 2

 

EXHIBIT D

 

BORROWING BASE CERTIFICATE

 

	
Borrower:
    	
Tremor   Video, Inc.
    
	
Lender:
    	
Silicon   Valley Bank
    
	
Commitment   Amount:
    	
$25,000,000.00
    

 

	
ACCOUNTS RECEIVABLE
    	
 
    
	
1.
    	
Accounts   Receivable (invoiced) Book Value as of _________________
    	
$____________
    
	
2.
    	
Additions   (please explain on reverse)
    	
$____________
    
	
3.
    	
TOTAL   ACCOUNTS RECEIVABLE
    	
$____________
    
	
 
    	
 
    	
 
    
	
ACCOUNTS RECEIVABLE DEDUCTIONS (without   duplication)
    	
 
    
	
4.
    	
Amounts   over 120 days due
    	
$____________
    
	
5.
    	
Balance   of 50% over 120 day accounts
    	
$____________
    
	
6.
    	
Foreign   Accounts
    	
$____________
    
	
7.
    	
Foreign   Invoiced Accounts
    	
$____________
    
	
8.
    	
Contra/Customer   Deposit Accounts
    	
$____________
    
	
9.
    	
Intercompany/Employee/Agent/Affiliate   Accounts
    	
$____________
    
	
10.
    	
Credit   balances over 120 days
    	
$____________
    
	
11.
    	
Concentration   Limits
    	
$____________
    
	
12.
    	
U.S.   Governmental Accounts
    	
$____________
    
	
13.
    	
Promotion   or Demo Accounts; Guaranteed Sale or Consignment Sale Accounts
    	
$____________
    
	
14.
    	
Accounts   with Progress/Milestone/Pre-billings; Contract Accounts
    	
$____________
    
	
15.
    	
Accounts   for Retainage Billings
    	
$____________
    
	
16.
    	
Trust   Accounts
    	
$____________
    
	
17.
    	
Bill   and Hold Accounts
    	
$____________
    
	
18.
    	
Unbilled   Accounts
    	
$____________
    
	
19.
    	
Non-Trade   Accounts
    	
$____________
    
	
20.
    	
Accounts   with Extended Term Invoices
    	
$____________
    
	
21.
    	
Accounts   subject to Chargebacks
    	
$____________
    
	
22.
    	
Disputed   Accounts
    	
$____________
    
	
23.
    	
Deferred   Revenue
    	
$____________
    
	
24.
    	
Other   (please explain on reverse)
    	
$____________
    
	
25.
    	
TOTAL   ACCOUNTS RECEIVABLE DEDUCTIONS
    	
$____________
    
	
26.
    	
Eligible   Accounts (#3 minus #25)
    	
$____________
    
	
27.
    	
ELIGIBLE   AMOUNT OF ACCOUNTS (80% of #26)
    	
$____________
    
	
 
    	
 
    	
 
    
	
BALANCES
    	
 
    
	
28.
    	
Maximum   Loan Amount
    	
$ 25,000,000.00
    
	
29.
    	
Total   Funds Available (Lesser of #28 or #27)
    	
$____________
    
	
30.
    	
Present   balance owing on Line of Credit
    	
$____________
    
	
31.
    	
RESERVE   POSITION (#29 minus #30)
    	
$____________
    

 

 

[Continued on following page.]

 

21.

 

The undersigned represents and warrants that this is true, accurate and complete, and that the information in this Borrowing Base Certificate complies with the representations and warranties in the Loan and Security Agreement between the undersigned and Silicon Valley Bank.

 

	
 
    	
 
    	
 
    	
 
    
	
COMMENTS:
    	
 
    	
 
    	
BANK   USE ONLY
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TREMOR VIDEO, INC.
    	
 
    	
 
    	
Received by:                                                                             
    	
 
    
	
 
    	
 
    	
 
    	
                          AUTHORIZED   SIGNER
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:                                                                     
    	
 
    	
 
    	
Date:                                                                                         
    	
 
    
	
                                Authorized   Signer
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Verified:                                                                                   
    	
 
    
	
Date:                                                                  
    	
 
    	
 
    	
                          AUTHORIZED   SIGNER
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Date:                                                                                         
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Compliance Status:   Yes      No
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

22.Exhibit 10.3

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 

STANDARD   FORM OF LOFT LEASE

The Real   Estate Board of New York, Inc.

 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Agreement of Lease, made as of this 26th day of July in the year 2010, between TWENTY-THREE R.P. ASSOCIATES c/o Adams & Company Real Estate, LLC, 411 Fifth Avenue, New York, NY 10016 - - - - - - party of the first part, hereinafter referred to as OWNER, and TREMOR MEDIA, INC., a                  corporation (I.D. #20-548034B authorized to do business in the State of New York - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - party of the second part, hereinafter referred to as TENANT,

 

Witnesseth: Owner hereby leases to Tenant and Tenant hereby hires from Owner the ENTIRE TWELFTH (12TH) FLOORS as shown on the floor plans attached  - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - in the building known as    buildings known as 53-7 WEST 23RD STREET thru to 34 WEST 24TH STREET and 30-2 WEST 24TH STREET in the Borough of      MANHATTAN       , City of New York, for the term of    TEN (10) YEARS and SIX (6) MONTHS - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (or until such term shall sooner cease an expire as hereinafter provided) to commence on the

	
1ST
    	
day of
    	
NOVEMBER
    	
in the year
    	
two thousand and   TEN
    	
, and to end on   the
    
	
30TH
    	
day of
    	
APRIL
    	
in the year
    	
two thousand and   TWENTY-ONE
    	
, and
    

both dates inclusive, at the annual rental         rates hereinafter set forth in Article #47 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

 

which Tenant agrees to pay in lawful money of the United States which shall be legal tender in payment of all debts and dues, public and private, at the time of payment, in equal monthly installments in advance on the first day of each month during said term, at the office of Owner or such other place as Owner may designate, without any setoff or deduction whatsoever, except that Tenant shall pay the first                                                                          monthly installment(s) on the execution hereof (unless this lease be a renewal).

In the event that, at the commencement of the term of this lease, or thereafter, Tenant shall be in default in the payment of rent to Owner pursuant to the terms of another lease with Owner or with Owner’s predecessor in interest, Owner may at Owner’s option and without notice to Tenant add the amount of such arrears to any monthly installment of rent payable hereunder and the same shall be payable to Owner as additional rent.

The parties hereto, for themselves, their heirs, distributes, executors, administrators, legal representative, successors and assigns, hereby covenant as follows:

	
Rent:
    	
 
    	
1.  Tenant shall pay the rent as above and as   hereinafter provided.
    
	
Occupancy:
    	
 
    	
2.  Tenant shall use and occupy the demised   premises for general, executive and administrative offices in connection with   Tenant’s business - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -   - - - - - - - - - - - - - - - - - - - - - - provided such use is in   accordance with the certificate of occupancy for the building, if any, and   for no other purpose.
    
	
 
    	
 
    	
 
    
	
Alterations:
    	
 
    	
3. Tenant shall   make no changes in or to the demised premises of any nature without Owner’s   prior written consent. Subject to the prior written consent of Owner, which   shall not be unreasonably withheld, conditioned or delayed, and to the   provisions of this article, Tenant, at Tenant’s expense, may make   alterations, installations, additions or improvements which are nonstructural   and which do not affect utility services or plumbing and electrical lines, in   or to the interior of the demised premises, using contractors or mechanics   first approved in each instance by Owner. Tenant shall, at its expense,   before making any alterations, additions, installations or improvements   obtain all permits, approvals and certificates required by any governmental   or quasi-governmental bodies and (upon completion) certificates of final   approval thereof, and shall deliver promptly duplicates of all such permits,   approvals and certificates to Owner. Tenant agrees to carry, and will cause   Tenant’s contractors and sub-contractors to carry, such worker’s   compensation, commercial general liability, personal and property damage   insurance as Owner may require. If any mechanic’s lien is filed against the   demised
    

 

	
 
    	
 
    	
premises, or the   building of which the same forms a part, for work claimed to have been done   for, or materials furnished to, Tenant, whether or not done pursuant to this   article, the same shall be discharged by Tenant within thirty (30) days   thereafter, at Tenant’s expense, by payment or filing a bond as permitted by   law. All fixtures and all paneling, partitions, railings and like   installations, installed in the demised premises at any time, either by   Tenant or by Owner on Tenant’s behalf, shall, upon installation, become the   property of Owner and shall remain upon and be surrendered with the demised   premises unless Owner, by notice to Tenant no later than twenty (20) days   prior to the date fixed as the termination of this lease, elects to   relinquish Owner’s right thereto and to have them removed by Tenant, in which   event the same shall be removed from the demised premises by Tenant prior to   the expiration of the lease, at Tenant’s expense. Nothing in this article   shall be construed to give Owner title to, or to prevent Tenant’s removal of,   trade fixtures, moveable office furniture and equipment, but upon removal of   same from the demised premises, or upon removal of other installations as may   be required by Owner, Tenant shall immediately, and at its expense, repair   and restore the demised premises to the condition existing prior to any such   installations, and repair any damage to the demised premises or the building   due to such removal. All property permitted or required to be removed by   Tenant at the end of the term remaining in the demised premises after   Tenant’s removal shall be deemed abandoned and may, at the election of Owner,   either be retained as Owner’s property or removed from
    

 

1.

	
 
    	
 
    	
the demised   premises by Owner, at Tenant’s expense.
    
	
 
    	
 
    	
 
    
	
Repairs:
    	
 
    	
4.  Owner shall maintain and repair the   exterior of and the public portions of the building. Tenant shall, throughout   the term of this lease, take good care of the demised premises including the   bathrooms and lavatory facilities (if the demised premises encompass the   entire floor of the building), the windows and window frames, and the   fixtures and appurtenances therein, and at Tenant’s sole cost and expense   promptly make all repairs thereto and to the building, whether structural or   non-structural in nature, caused by, or resulting from, the carelessness,   omission, neglect or improper conduct of Tenant, Tenant’s servants,   employees, invitees, or licensees, and whether or not arising from Tenant’s   conduct or omission, when required by other provisions of this lease,   including article 6. Tenant shall also repair all damage to the building and   the demised premises caused by the moving of Tenant’s fixtures, furniture or   equipment. All the aforesaid repairs shall be of quality or class equal to   the original work or construction. If Tenant fails, after ten (10) days   notice, to proceed with due diligence to make repairs required to be made by   Tenant, the same may be made by Owner at the expense of Tenant, and the   expenses thereof incurred by Owner shall be collectible, as additional rent,   after rendition of a bill or statement therefore. If the demised premises be   or become infested with vermin, Tenant shall, at its expense, cause the same   to be exterminated. Tenant shall give Owner prompt notice of any defective   condition in any plumbing, heating system or electrical lines located in the   demised premises and following such notice, Owner shall remedy the condition   with due diligence, but at the expense of Tenant, if repairs are necessitated   by damage or injury attributable to Tenant, Tenant’s servants, agents,   employees, invitees or licensees as aforesaid. Except as specifically   provided in Article 9 or elsewhere in this lease, there shall be no   allowance to Tenant for a diminution of rental value and no liability on the   part of Owner by reason of inconvenience, annoyance or injury to business   arising from Owner, Tenant or others making or failing to make any repairs,   alterations, additions or improvements in or to any portion of the building   or the demised premises, or in and to the fixtures, appurtenances or   equipment thereof. It is specifically agreed that Tenant shall not be   entitled to any setoff or reduction of rent by reason of any failure of Owner   to comply with the covenants of this or any other article of this lease.   Tenant agrees that Tenant’s sole remedy at law in such instance will be by   way of an action for damages for breach of contract. The provisions of this   Article 4 with respect to the making of repairs shall not apply in the   case of fire or other casualty with regard to which Article 9 hereof   shall apply.
    
	
 
    	
 
    	
 
    
	
Window
   Cleaning:
    	
 
    	
5.  Tenant will not clean nor require, permit,   suffer or allow any window in the demised premises to be cleaned from the   outside in violation of Section 202 of the New York State Labor Law or   any other applicable law, or of
    

 

	
 
    	
 
    	
the Rules of   the Board of Standards and Appeals, or of any other Board or body having or   asserting jurisdiction. 
    
	
 
    	
 
    	
 
    
	
Requirements of Law,
   Fire Insurance, Floor Loads:
    	
 
    	
6.  Prior to the commencement of the lease   term, if Tenant is then in possession, and at all times thereafter, Tenant   shall at Tenant’s sole cost and expense, promptly comply with all present and   future laws, orders and regulations of all state, federal, municipal and   local governments, departments, commissions and boards and any direction of   any public officer pursuant to law, and all orders, rules and   regulations of the New York Board of Fire Underwriters, Insurance   Services Office, or any similar body which shall impose any violation, order   or duty upon Owner or Tenant with respect to the demised premises, whether or   not arising out or Tenant’s use or manner of use thereof, or, with respect to   the building, if arising out of Tenant’s use or manner of use of the demised   premises of the building (including the use permitted under the lease).   Except as provided in Article 30 hereof, nothing herein shall require   Tenant to make structural repairs or alterations unless Tenant has, by its   manner of use of the demised premises or method of operation therein, violated   any such laws, ordinances, orders, rules, regulations or requirements with   respect thereto. Tenant shall not do or permit any act or thing to be done in   or to the demised premises which is contrary to law, or which will invalidate   or be in conflict with public liability, fire or other policies of insurance   at any time carried by or for the benefit of Owner, or which shall or might   subject Owner to any liability or responsibility to any person, or for   property damage. Tenant shall not keep anything in the demised premises   except as now or hereafter permitted by the Fire Department, Board of Fire   Underwriters, Fire Insurance Rating Organization and other authority having   jurisdiction, and then only in such manner and such quantity so as not to   increase the rate for fire insurance applicable to the building, nor use the   demised premises in a manner which will increase the insurance rate for the   building or any property located therein over that in effect prior to the   commencement of Tenant’s occupancy. If by reason of failure to comply with   the foregoing the fire insurance rate shall, at the beginning of this lease   or at any time thereafter, be higher than it otherwise would be, then Tenant   shall reimburse Owner, as additional rent hereunder, for that portion of all   fire insurance premiums thereafter paid by Owner which shall have been   charged because of such failure by Tenant. In any action or proceeding   wherein Owner and Tenant are parties, a schedule or “make-up” or rate for the   building or demised premises issued by a body making fire insurance rates   applicable to said premises shall be conclusive evidence of the facts therein   stated and of the several items and charges in the fire insurance rates then   applicable to said premises. Tenant shall not place a load upon any floor of   the demised premises exceeding the floor load per square foot area which it   was designed to carry and which is allowed by law. Owner reserves the right   to prescribe the weight and position of all safes, business machines and   mechanical
    

 

2.

	
 
    	
 
    	
equipment. Such   installations shall be placed and maintained by Tenant, at Tenant’s expense,   in settings sufficient, in Owner’s judgment, to absorb and prevent vibration,   noise and annoyance. 
    
	
 
    	
 
    	
 
    
	
Subordination:
    	
 
    	
7.  This lease is subject and subordinate to   all ground or underlying leases and to all mortgages which may now or   hereafter affect such leases or the real property of which the demised   premises are a part, and to all renewals, modifications, consolidations,   replacements and extensions of any such underlying leases and mortgages. This   clause shall be self-operative and no further instrument or subordination   shall be required by any ground or underlying lessor or by any mortgagee,   affecting any lease or the real property of which the demised premises are a   part. In confirmation of such subordination, Tenant shall from time to time   execute promptly any certificate that Owner may request. [SEE   ADDENDUM]
    
	
 
    	
 
    	
 
    
	
Tenant’s   Liability Insurance Property
   Loss,
   Damage, Indemnity:
    	
 
    	
8.  Owner or its agents shall not be liable for   any damage to property of Tenant or of others entrusted to employees of the   building, nor for loss of, or damage to, any property of Tenant by theft or   otherwise, nor for any injury or damage to persons or property resulting from   any cause of whatsoever nature, unless caused by, or due to, the negligence   of Owner, its agents, servants or employees; Owner or its agents shall not be   liable for any damage caused by other tenants or persons in, upon or about   said building or caused by operations in connection of any private, public or   quasi public work. If at any time any windows of the demised premises are   temporarily closed, darkened or bricked up (or permanently closed, darkened   or bricked up, if required by law) for any reason whatsoever including, but   not limited to, Owner’s own acts, Owner shall not be liable for any damage   Tenant may sustain thereby, and Tenant shall not be entitled to any   compensation therefore nor abatement or diminution of rent, nor shall the   same release Tenant from its obligations hereunder nor constitute an   eviction. Tenant shall indemnify and save harmless Owner against and from all   liabilities, obligations, damages, penalties, claims, costs and expenses for which   Owner shall not be reimbursed by insurance, including reasonable attorney’s   fees, paid, suffered or incurred as a result of any breach by Tenant,   Tenant’s agents, contractors, employees, invitees, or licensees, of any   covenant or condition of this lease, or the carelessness, negligence or   improper conduct of Tenant, Tenant’s agents, contractors, employees, invitees   or licensees. Tenant’s liability under this lease extends to the acts and   omissions of any subtenant, and any agent, contractor, employee, invitee or   licensee of any subtenant. In case any action or proceeding is brought   against Owner by reason of any such claim, Tenant, upon written notice from   Owner, will, at Tenant’s expense, resist or defend such action or proceeding   by counsel approved by Owner in writing, such approval not to be unreasonably   withheld.
    

 

	
Destruction, Fire, and
   Other
   Casualty:
    	
 
    	
9.  (a) If the demised premises or any   part thereof shall be damaged by fire or other casualty, Tenant shall give   immediate notice thereof to Owner and this lease shall continue in full force   and effect except as hereinafter set forth. (b) If the demised premises   are partially damaged or rendered partially unusable by fire or other   casualty, the damages thereto shall be repaired by, and at the expense of,   Owner, and the rent and other items of additional rent, until such repair   shall be substantially completed, shall be apportioned from the day following   the casualty according to the part of the demised premises which is usable.   (c) If the demised premises are totally damaged or rendered wholly   unusable by fire or other casualty, then the rent and other items of   additional rent as hereinafter expressly provided shall be proportionately   paid up to the time of the casualty and thenceforth shall cease until the   date when the demised premises shall have been repaired and restored by Owner   (or sooner reoccupied in part by Tenant then rent shall be apportioned as   provided in subsection (b) above), subject to Owner’s right to elect not   to restore the same as hereinafter provided. (d) If the demised premises   are rendered wholly unusable or (whether or not the demised premises are   damaged in whole or in part) if the building shall be so damaged that Owner   shall decide to demolish it or to rebuild it, then, in any of such events,   Owner may elect to terminate this lease by written notice to Tenant, given   within ninety (90) days after such fire or casualty, or thirty (30) days   after adjustment of the insurance claim for such fire or casualty, whichever   is sooner, specifying a date for the expiration of the lease, which date   shall not be more than sixty (60) days after the giving of such notice, and   upon the date specified in such notice the term of this lease shall expire as   fully and completely as if such date were the date set forth above for the   termination of this lease, and Tenant shall forthwith quit, surrender and   vacate the demised premises without prejudice however, to Owner’s rights and   remedies against Tenant under the lease provisions in effect prior to such   termination, and any rent owing shall be paid up to such date, and any   payments of rent made by Tenant which were on account of any period   subsequent to such date shall be returned to Tenant. Unless Owner shall serve   a termination notice as provided for herein, Owner shall make the repairs and   restorations under the conditions of (b) and (c) hereof, with all   reasonable expedition, subject to delays due to adjustment of insurance   claims, labor troubles and causes beyond Owner’s control. After any such casualty,   Tenant shall cooperate with Owner’s restoration by removing from the demised   premises as promptly as reasonably possible, all of Tenant’s salvageable   inventory and movable equipment, furniture, and other property. Tenant’s   liability for rent shall resume five (5) days after written notice from   Owner that the demised premises are substantially ready for Tenant’s   occupancy. (e) Nothing contained hereinabove shall relieve Tenant from   liability that may exist as a result of damage from fire or other casualty.   Notwithstanding anything contained to the contrary in subdivisions   (a) through (e) hereof,
    

 

3.

	
 
    	
 
    	
including Owner’s   obligation to restore under subparagraph (b) above, each party shall   look first to any insurance in its favor before making any claim against the   other party for recovery for loss or damage resulting from fire or other   casualty, and to the extent that such insurance is in force and collectible,   and to the extent permitted by law, Owner and Tenant each hereby releases and   waives all right of recovery with respect to subparagraphs (b), (d) and   (e) above, against the other or any one claiming through or under each   of them by way of subrogation or otherwise. The release and waiver herein   referred to shall be deemed to include any loss or damage to the demised   premises and/or to any personal property, equipment, trade fixtures, goods   and merchandise located therein. The foregoing release and waiver shall be in   force only if both releasors’ insurance policies contain a clause providing   that such a release or waiver shall not invalidate the insurance. lf, and to   the extent, that such waiver can be obtained only by the payment of   additional premiums, then the party benefiting from the waiver shall pay such   premium within ten (10) days after written demand or shall be deemed to   have agreed that the party obtaining insurance coverage shall be free of any   further obligation under the provisions hereof with respect to waiver of   subrogation. Tenant acknowledges that Owner will not carry insurance on   Tenant’s furniture and/or furnishings or any fixtures or equipment,   improvements, or appurtenances removable by Tenant, and agrees that Owner   will not be obligated to repair any damage thereto or replace the same.   (f) Tenant hereby waives the provisions of Section 227 of the Real   Property Law and agrees that the provisions of this article shall govern and   control in lieu thereof.
    
	
 
    	
 
    	
 
    
	
Eminent   Domain:
    	
 
    	
10.  If the whole or any part of’ the demised   premises shall be acquired or condemned by Eminent Domain for any public or   quasi public use or purpose, then and in that event, the term of this lease   shall cease and terminate from the date of title vesting in such proceeding   and Tenant shall have no claim for the value of any unexpired term of said   lease. Tenant shall have the right to make an independent claim to the   condemning authority for the value of Tenant’s moving expenses and personal   property, trade fixtures and equipment, provided Tenant is entitled pursuant to   the terms of the lease to remove such property, trade fixtures and equipment   at the end of the term, and provided further such claim does not reduce   Owner’s award.
    
	
 
    	
 
    	
 
    
	
Assignment,   Mortgage,
   Etc.:
    	
 
    	
11.  Tenant, for itself, its heirs,   distributees, executors, administrators, legal representatives, successors   and assigns, expressly covenants that it shall not assign, mortgage or   encumber this agreement, nor underlet, or suffer or permit the demised   premises or any part thereof to be used by others, without the prior written   consent of Owner in each instance. Transfer of the majority of the stock of a   corporate Tenant or the majority interest in any partnership or other legal   entity which is Tenant shall be deemed an assignment. If this lease be   assigned, or if the demised premises or any part thereof be
    

 

	
 
    	
 
    	
underlet or   occupied by anybody other than Tenant, Owner may, after default by Tenant,   collect rent from the assignee, undertenant or occupant, and apply the net   amount collected to the rent herein reserved, but no such assignment,   underletting, occupancy or collection shall be deemed a waiver of this   covenant, or the acceptance of the assignee, undertenant or occupant as   tenant, or a release of Tenant from the further performance by Tenant of   covenants on the part of Tenant herein contained. The consent by Owner to an   assignment or underletting shall not in any way be construed to relieve   Tenant from obtaining the express consent in writing of Owner to any further   assignment or underletting.
    
	
 
    	
 
    	
 
    
	
Electric Current:
    	
 
    	
12.  Rates and conditions in respect to   submetering or rent inclusion, as the case may be, to be added in RIDER* attached hereto. Tenant covenants and agrees   that at all times its use of electric current shall not exceed the capacity   of existing feeders to the building or the risers or wiring installation, and   Tenant may not use any electrical equipment which, in Owner’s opinion,   reasonably exercised, will overload such installations or interfere with the   use thereof by other tenants of the building. The change at any time of the   character of electric service shall in no way make Owner liable or   responsible to Tenant, for any loss, damages or expenses which Tenant may   sustain.
    
	
 
    	
 
    	
 
    
	
Access to Premises:
    	
 
    	
13.  Owner or Owner’s agents shall have the right   (but shall not be obligated) to enter the demised premises in any emergency   at any time, and, at other reasonable times, to examine the same and to make   such repairs, replacements and improvements as Owner may deem necessary and   reasonably desirable to any portion of the building, or which Owner may elect   to perform in the demised premises after Tenant’s failure to make repairs, or   perform any work which Tenant is obligated to perform under this lease, or   for the purpose of complying with laws, regulations and other directions of   governmental authorities. Tenant shall permit Owner to use, maintain and   replace pipes, ducts, and conduits in and through the demised premises, and   to erect new pipes, ducts, and conduits therein provided, wherever possible, that   they are within walls or otherwise concealed. Owner may, during the progress   of any work in the demised premises, take all necessary materials and   equipment into said premises without the same constituting an eviction, nor   shall Tenant be entitled to any abatement of rent while such work is in   progress, nor to any damages by reason of loss or interruption of business or   otherwise. Throughout the term hereof Owner shall have the right to enter the   demised premises at reasonable hours for the purpose of showing the same to   prospective purchasers or mortgagees of the building, and during the last six   (6) months of the term for the purpose of showing the same to   prospective tenants, and may, during said six (6) months period, place   upon the demised premises the usual notices “To Let”
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
* Rider to be added if necessary 
    

 

4.

	
 
    	
 
    	
and “For Sale”   which notices Tenant shall permit to remain thereon without molestation. If   Tenant is not present to open and permit an entry into the demised premises,   Owner or Owner’s agents may enter the same whenever such entry may be   necessary or permissible by master key or forcibly, and provided reasonable   care is exercised to safeguard Tenant’s property, such entry shall not render   Owner or its agents liable therefore, nor in any event shall the obligations   of Tenant hereunder be affected. If during the last month of the term Tenant   shall have removed all or substantially all of Tenant’s property therefrom,   Owner may immediately enter, alter, renovate or redecorate the demised   premises without limitation or abatement of rent, or incurring liability to   Tenant for any compensation, and such act shall have no effect on this lease   or Tenant’s obligation hereunder.
    
	
 
    	
 
    	
 
    
	
Vault,
   Vault Space, Area:
    	
 
    	
14.  No vaults, vault space or area, whether or   not enclosed or covered, not within the property line of the building is   leased hereunder, anything contained in or indicated on any sketch, blue   print or plan, or anything contained elsewhere in this lease to the contrary   notwithstanding. Owner makes no representation as to the location of the   property line of the building. All vaults and vault space and all such areas   not within the property line of the building, which Tenant may be permitted   to use and/or occupy, is to be used and/or occupied under a revocable   license, and if any such license be revoked, or if the amount of such space   or area be diminished or required by any federal, state or municipal   authority or public utility, Owner shall not be subject to any liability, nor   shall Tenant be entitled to any compensation or diminution or abatement of   rent, nor shall such revocation, diminution or requisition be deemed   constructive or actual eviction. Any tax, fee or charge of municipal authorities   for such vault or area shall be paid by Tenant, if used by Tenant, whether or   not specifically leased hereunder.
    
	
 
    	
 
    	
 
    
	
Occupancy:
    	
 
    	
15.  Tenant will not at any time use or occupy   the demised premises in violation of the certificate of occupancy issued for   the building of which the demised premises are a part. Tenant has inspected   the demised premises and accepts them as is, subject to the riders annexed   hereto with respect to Owner’s work, if any. In any event, Owner makes no   representation as to the condition of the demised premises and Tenant agrees   to accept the same subject to violations, whether or not of record. If any   governmental license or permit shall be required for the proper and lawful   conduct of Tenant’s business, Tenant shall be responsible for, and shall   procure and maintain, such license or permit.    [SEE ADDENDUM]
    
	
 
    	
 
    	
 
    
	
Bankruptcy:
    	
 
    	
16.  (a) Anything elsewhere in this lease   to the contrary notwithstanding, this lease may be cancelled by Owner by   sending of a written notice to Tenant within a reasonable time after the   happening of any one or more of the following events: (1) the   commencement of a case in bankruptcy or under the laws of any state naming   Tenant (or a guarantor of any of 
    

 

	
 
    	
 
    	
Tenant’s   obligations under this lease) as the debtor; or (2) the making by Tenant   (or a guarantor of any of Tenant’s obligations under this lease) of an   assignment or any other arrangement for the benefit of creditors under any   state statute. Neither Tenant nor any person claiming through or under Tenant,   or by reason of any statute or order of court, shall thereafter be entitled   to possession of the premises demised, but shall forthwith quit and surrender   the demised premises. If this lease shall be assigned in accordance with its   terms, the provisions of this Article 16 shall be applicable only to the   party then owning Tenant’s interest in this lease.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b) It   is stipulated and agreed that in the event of the termination of this lease   pursuant to (a) hereof, Owner shall forthwith, notwithstanding any other   provisions of this lease to the contrary, be entitled to recover from Tenant,   as and for liquidated damages, an amount equal to the difference between the   rental reserved hereunder for the unexpired portion of the term demised and   the fair and reasonable rental value of the demised premises for the same   period. In the computation of such damages the difference between any   installment of rent becoming due hereunder after the date of termination and   the fair and reasonable rental value of the demised premises for the period   for which such installment was payable shall be discounted to the date of   termination at the rate of four percent (4%) per annum. If the demised   premises or any part thereof be relet by Owner for the unexpired term of said   lease, or any part thereof, before presentation of proof of such liquidated   damages to any court, commission or tribunal, the amount of rent reserved   upon such reletting shall be deemed to be the fair and reasonable rental   value for the part or the whole of the demised premises so re-let during the   term of the re-letting. Nothing herein contained shall limit or prejudice the   right of the Owner to prove for and obtain as liquidated damages by reason of   such termination, an amount equal to the maximum allowed by any statute or   rule of law in effect at the time when, and governing the proceedings in   which, such damages are to be proved, whether or not such amount be greater,   equal to, or less than the amount of the difference referred to above.
    
	
 
    	
 
    	
 
    
	
Default:
    	
 
    	
17.  (1) If Tenant defaults in fulfilling   any of the covenants of this lease other than the covenants for the payment   of rent or additional rent; or if the demised premises becomes vacant or   deserted, or if this lease be rejected under §365 of Title 11 of the U.S. Code   (Bankruptcy Code); or if any execution or attachment shall be issued against   Tenant or any of Tenant’s property whereupon the demised premises shall be   taken or occupied by someone other than Tenant; or if Tenant shall be in   default with respect to any other lease between Owner and Tenant; or if   Tenant shall have failed, after five (5) days written notice, to   redeposit with Owner any portion of the security deposited hereunder which   Owner has applied to the payment of any rent and additional rent due and   payable hereunder; or if Tenant fails to move into or take possession of the   demised premises within thirty (30) days after the commencement of the
    

 

5.

	
 
    	
 
    	
term of this   lease, of which fact Owner shall be the sole judge; then in any one or more   of such events, upon Owner serving a written fifteen (15) days notice upon   Tenant specifying the nature of said default, and upon the expiration of said   fifteen (15) days, if Tenant shall have failed to comply with or remedy such   default, or if the said default or omission complained of shall be of a   nature that the same cannot be completely cured or remedied within said   fifteen (15) day period, and if Tenant shall not have diligently commenced   during such default within such fifteen (15) day period, and shall not   thereafter with reasonable diligence and in good faith, proceed to remedy or   cure such default, then Owner may serve a written five (5) days notice   of cancellation of this lease upon Tenant, and upon the expiration of said   five (5) days this lease and the term thereunder shall end and expire as   fully and completely as if the expiration of such five (5) day period   were the day herein definitely fixed for the end and expiration of this lease   and the term thereof, and Tenant shall then quit and surrender the demised   premises to Owner, but Tenant shall remain liable as hereinafter provided.
    
	
 
    	
 
    	
(2) If   the notice provided for in (1) hereof shall have been given, and the   term shall expire as aforesaid; or if Tenant shall be in default in the   payment of the rent reserved herein or any item of additional rent herein   mentioned, or any part of either, or in making any other payment herein   required; then, and in any of such events, Owner may without notice, re-enter   the demised premises either by force or otherwise, and dispossess Tenant by   summary proceedings or otherwise, and the legal representative of Tenant or   other occupant of the demised premises, and remove their effects and hold the   demised premises as if this lease had not been made, and Tenant hereby waives   the service of notice of intention to re-enter or to institute legal   proceedings to that end. If Tenant shall make default hereunder prior to the   date fixed as the commencement of any renewal or extension of this lease,   Owner may cancel and terminate such renewal or extension agreement by written   notice.
    
	
 
    	
 
    	
 
    
	
Remedies of Owner and Waiver of   Redemption:
    	
 
    	
18.  In case of any such default, re-entry,   expiration and/or dispossess by summary proceedings or otherwise, (a) the   rent, and additional rent, shall become due thereupon and be paid up to the   time of such re-entry, dispossess and/or expiration, (b) Owner may   re-let the demised premises or any part or parts thereof, either in the name   of Owner or otherwise, for a term or terms, which may at Owner’s option be   less than or exceed the period which would otherwise have constituted the   balance of the term of this lease, and may grant concessions or free rent or   charge a higher rental than that in this lease, (c) Tenant or the legal   representatives of Tenant shall also pay to Owner as liquidated damages for   the failure of Tenant to observe and perform said Tenant’s covenants herein   contained, any deficiency between the rent hereby reserved and or covenanted   to be paid and the net amount, if any, of the rents collected on account of   the subsequent lease or leases of the demised premises for each month of the   period which
    

 

	
 
    	
 
    	
would otherwise   have constituted the balance of the term of this lease. The failure of Owner   to re-let the demised premises or any part or parts thereof shall not release   or affect Tenant’s liability for damages. In computing such liquidated   damages there shall be added to the said deficiency such expenses as Owner   may incur in connection with re-letting, such as legal expenses, reasonable   attorneys’ fees, brokerage, advertising, and for keeping the demised premises   in good order or for preparing the same for re-letting. Any such liquidated   damages shall be paid in monthly installments by Tenant on the rent day   specified in this lease, and any suit brought to collect the amount of the   deficiency for any month shall not prejudice in any way the rights of Owner   to collect the deficiency for any subsequent month by a similar proceeding.   Owner, in putting the demised premises in good order or preparing the same   for re-rental may, at Owner’s option, make such alterations, repairs,   replacements, and/or decorations in the demised premises as Owner, in Owner’s   sole judgment, considers advisable and necessary or the purpose of re-letting   the demised premises, and the making of such alterations, repairs,   replacements, and/or decorations shall not operate or be construed to release   Tenant from liability hereunder as aforesaid. Owner shall in no event be   liable in any way whatsoever for failure to re-let the devised premises, or   in the event that the demised premises are re-let, for failure to collect the   rent thereof under such re-letting, and in no event shall Tenant be entitled   to receive any excess, if any, of such net rents collected over the sums   payable by Tenant to Owner hereunder. In the event of a breach or threatened   breach by Tenant of any of the covenants or provisions hereof, Owner shall   have the right of injunction and the right to invoke any remedy allowed at   law or in equity as if re-entry, summary proceedings and other remedies were   not herein provided for. Mention in this lease of any particular remedy,   shall not preclude Owner from any other remedy, in law or in equity. Tenant   hereby expressly waives any and all rights of redemption granted by or under   any present or future laws.
    
	
 
    	
 
    	
 
    
	
Fees and Expenses:
    	
 
    	
19.  If Tenant shall default in the observance   or performance of any term or covenant on Tenant’s part to be observed or   performed under, or by virtue of, any of the terms or provisions in any   article of this lease, after notice if required, and upon expiration of the   applicable grace period, if any, (except in an emergency), then, unless   otherwise provided elsewhere in this lease, Owner may immediately, or at any   time thereafter, and without notice, perform the obligation of Tenant   thereunder. If Owner, in connection with the foregoing, or in connection with   any default by Tenant in the covenant to pay rent hereunder makes any   expenditures or incurs any obligations for the payment of money, including   but not limited to reasonable attorneys’ fees, in instituting, prosecuting or   defending any action or proceeding, and prevails in any such action or   proceeding, then Tenant will reimburse Owner for such sums so paid or   obligations incurred with interest and
    

 

6.

	
 
    	
 
    	
costs. The   foregoing expenses incurred by reason of Tenant’s default shall be deemed to   be additional rent hereunder and shall be paid by Tenant to Owner within ten   (10) days of rendition of any bill or statement to Tenant therefore. If   Tenant’s lease term shall have expired at the time of making of such   expenditures or incurring of such obligations, such sums shall be recoverable   by Owner as damages.
    
	
 
    	
 
    	
 
    
	
Building Alterations
   and Management:
    	
 
    	
20.  Owner shall have the right, at any time,   without the same constituting an eviction and without incurring liability to   Tenant therefore, to change the arrangement and or location of public   entrances, passageways, doors, doorways, corridors, elevators, stairs toilets   or other public parts of the building, and to change the name, number or   designation by which the building may be known. There shall be no allowance   to Tenant for diminution of rental value and no liability on the part of   Owner by reason of inconvenience, annoyance or injury to business arising   from Owner or other Tenant making any repairs in the building or any such   alterations, additions and improvements. Furthermore, Tenant shall not have   any claim against Owner by reason of Owner’s imposition of any controls of   the manner of access to the building by Tenant’s social or business visitors,   as Owner may deem necessary, for the security of the building and its   occupants.  [SEE   ADDENDUM]
    
	
 
    	
 
    	
 
    
	
No Repre-
   sentations
   by Owner:
    	
 
    	
21.  Neither Owner nor Owner’s agents have made   any representations or promises with respect to the physical condition of the   building, the land upon which it is erected, the demised premises, the rents,   leases, expenses of operation, or any other matter or thing affecting or   related to the demised premises or the building, except as herein expressly   set forth, and no rights, easements or licenses are acquired by Tenant by   implication or otherwise except as expressly set forth in the provisions of   this lease. Tenant has inspected the building and the demised premises and is   thoroughly acquainted with their condition and agrees to take the same   “as-is” on the date possession is tendered, and acknowledges that the taking   of possession of the demised premises by Tenant shall be conclusive evidence   that the said premises, and the building of which the same form a part, were   in good and satisfactory condition at the time such possession was so taken,   except as to latent defects. All understandings and agreements heretofore   made between the parties hereto are merged in this contract, which alone   fully and completely expresses the agreement between Owner and Tenant, and   any executory agreement hereafter made shall be ineffective to change, modify,   discharge or effect an abandonment of it in whole or in part, unless such   executory agreement is in writing and signed by the party against whom   enforcement of the change, modification, discharge or abandonment is sought.
    
	
 
    	
 
    	
 
    
	
End of
    	
 
    	
22.  Upon the expiration or other termination of   the term of this lease, Tenant shall quit and
    

 

	
Term:
    	
 
    	
surrender to   Owner the demised premises, “broom-clean”, in good order and condition,   ordinary wear and damages which Tenant is not required to repair as provided   elsewhere in this lease excepted, and Tenant shall remove all its property   from the demised premises. Tenant’s obligation to observe or perform this   covenant shall survive the expiration or other termination of this lease. If   the last day of the term of this lease, or any renewal thereof, falls on   Sunday, this lease shall expire at noon on the preceding Saturday, unless it   be a legal holiday, in which case it shall expire at noon on the preceding   business day.
    
	
 
    	
 
    	
 
    
	
Quiet Enjoyment:
    	
 
    	
23.  Owner covenants and agrees with Tenant that   upon Tenant paying the rent and additional rent and observing and performing   all the terms, covenants and conditions, on Tenant’s part to be observed and   performed, Tenant may peaceably and quietly enjoy the premises hereby   demised, subject, nevertheless, to the terms and conditions of this lease   including, but not limited to, Article 34 hereof, and to the ground   leases, underlying leases and mortgages hereinbefore mentioned.
    
	
 
    	
 
    	
 
    
	
Failure to
   Give Possession:
    	
 
    	
24.  If Owner is unable to give possession of   the demised premises on the date of the commencement of the term hereof   because of the holding-over or retention of possession of any tenant,   undertenant or occupants, or if the demised premises are located in a   building being constructed, because such building has not been sufficiently   completed to make the premises ready for occupancy or because of the fact   that a certificate of occupancy has not been procured, or if Owner has not   completed any work required to be performed by Owner, or for any other   reason, Owner shall not be subject to any liability for failure to give   possession on said date and the validity of the lease shall not be impaired   under such circumstances, nor shall the same be construed in any way to   extend the term of this lease, but the rent payable hereunder shall be abated   (provided Tenant is not responsible for Owner’s inability to obtain   possession or complete any work required) until after Owner shall have given   Tenant notice that Owner is able to deliver possession in the condition   required by this lease. If permission is given to Tenant to enter into   possession of the demised premises, or to occupy premises other than the   demised premises, prior to the date specified as the commencement of the term   of this lease, Tenant covenants and agrees that such possession and/or   occupancy shall be deemed to be under all the terms, covenants, conditions   and provisions of this lease, except the obligation to pay the fixed annual   rent set forth in page one of this lease. The provisions of this article   are intended to constitute “an express provision to the contrary” within the   meaning of Section 223-a of the New York Real Property Law.
    
	
 
    	
 
    	
 
    
	
No Waiver:
    	
 
    	
25.  The failure of Owner to seek redress for   violation of, or to insist upon the strict performance of, any covenant or   condition of this lease, or of any of the Rules or Regulations, set   forth or hereafter adopted by Owner, shall 
    

 

7.

 

	
 
    	
 
    	
not prevent a   subsequent act, which would have originally constituted a violation, from   having all the force and effect of an original violation. The receipt by   Owner of rent with knowledge of the breach of any covenant of this lease   shall not be deemed a waiver of such breach, and no provision of this lease   shall be deemed to have been waived by Owner unless such waiver be in writing   signed by Owner. No payment by Tenant, or receipt by Owner, of a lesser   amount than the monthly rent herein stipulated shall be deemed to be other   than on account of the earliest stipulated rent, nor shall any endorsement or   statement of any check or any letter accompanying any check or payment as   rent be deemed an accord and satisfaction, and Owner may accept such check or   payment without prejudice to Owner’s right to recover the balance of such   rent or pursue any other remedy in this lease provided. All checks tendered   to Owner as and for the rent of the demised premises shall be deemed payments   for the account of Tenant. Acceptance by Owner of rent from anyone other than   Tenant shall not be deemed to operate as an attornment to Owner by the payor   of such rent, or as a consent by Owner to an assignment or subletting by   Tenant of the demised premises to such payor, or as a modification of the   provisions of this lease. No act or thing done by Owner or Owner’s agents   during the term hereby demised shall be deemed an acceptance of a surrender   of said premises, and no agreement to accept such surrender shall be valid   unless in writing signed by Owner. No employee of Owner or Owner’s agent   shall have any power to accept the keys of said premises prior to the   termination of the lease, and the delivery of keys to any such agent or   employee shall not operate as a termination of the lease or a surrender of   the demised premises.
    
	
 
    	
 
    	
 
    
	
Waiver of
   Trial by Jury:
    	
 
    	
26.  It is mutually agreed by and between Owner   and Tenant that the respective parties hereto shall, and they hereby do,   waive trial by jury in any action, proceeding or counterclaim brought by   either of the parties hereto against the other (except for personal injury or   property damage) on any matters whatsoever arising out of or in any way   connected with this lease, the relationship of Owner and Tenant, Tenant’s use   of or occupancy of demised premises, and any emergency statutory or any other   statutory remedy. It is further mutually agreed that in the event Owner   commences any proceeding or action for possession, including a summary   proceeding for possession of the demised premises, Tenant will not interpose   any counterclaim, of whatever nature or description, in any such proceeding,   including a counterclaim under Article 4, except for statutory mandatory   counterclaims.
    
	
 
    	
 
    	
 
    
	
Inability to Perform:
    	
 
    	
27.  This lease and the obligation of Tenant to   pay rent hereunder and perform all of the other covenants and agreements   hereunder on part of Tenant to be performed shall in no way be affected,   impaired or excused because Owner is unable to fulfill any of its obligations   under this lease, or to supply, or is delayed in supplying, any service   expressly or impliedly to be supplied, or is unable to make, or is delayed in   
    

 

	
 
    	
 
    	
making, any   repairs, additions, alterations or decorations, or is unable to supply, or is   delayed in supplying, any equipment, fixtures or other materials, if Owner is   prevented or delayed from doing so by reason of strike or labor troubles, or   any cause whatsoever beyond Owner’s sole control including, but not limited   to, government preemption or restrictions, or by reason of any rule, order or   regulation of any department or subdivision thereof of any government agency,   or by reason of the conditions which have been or are affected, either   directly or indirectly, by war or other emergency.
    
	
 
    	
 
    	
 
    
	
Bills and Notices:
    	
 
    	
28.  Except as otherwise in this lease provided,   any notice, statement, demand or other communication required or permitted to   be given, rendered or made by either party to the other, pursuant to this   lease or pursuant to any applicable law or requirement of public authority,   shall be in writing (whether or not so stated elsewhere in this lease) and   shall be deemed to have been properly given, rendered or made, if sent by   registered or certified mail (express mail, if available), return receipt   requested, or by courier guaranteeing overnight delivery and furnishing a   receipt in evidence thereof, addressed to the other party at the address   hereinabove set forth (except that after the date specified as the   commencement of the term of this lease, Tenant’s address, unless Tenant shall   give notice to the contrary, shall be the building), and shall be deemed to   have been given, rendered or made (a) on the date delivered, if   delivered to Tenant personally, (b) on the date delivered, if delivered   by overnight courier or (c) on the date which is two (2) days after   being mailed. Either party may, by notice as aforesaid, designate a different   address or addresses for notices, statements, demand or other communications   intended for it. Notices given by Owner’s managing agent shall be deemed a   valid notice if addressed and set in accordance with the provisions of this   Article. At Owner’s option, notices and bills to Tenant may be sent by hand   delivery.
    
	
 
    	
 
    	
 
    
	
Water
   Charges:
    	
 
    	
29.  If Tenant requires, uses or consumes water   for any purpose in addition to ordinary lavatory purposes (of which fact   Owner shall be the sole judge) Owner may install a water meter and thereby   measure Tenant’s water consumption for all purposes. Tenant shall pay Owner   for the cost of the meter and the cost of the installation. Throughout the   duration of Tenant’s occupancy, Tenant shall keep said meter and installation   equipment in good working order and repair at Tenant’s own cost and expense.   In the event Tenant fails to maintain the meter and installation equipment in   good working order and repair (of which fact Owner shall be the sole judge)   Owner may cause such meter and equipment to be replaced or repaired, and   collect the cost thereof from Tenant as additional rent. Tenant agrees to pay   for water consumed, as shown on said meter as and when bills are rendered,   and in the event Tenant defaults in the making of such payment, Owner may pay   such charges and collect the same from Tenant as additional rent. Tenant   covenants and agrees to pay, as additional rent, 
    

 

8.

 

	
 
    	
 
    	
the sewer rent,   charge or any other tax, rent or levy which now or hereafter is assessed,   imposed or a lien upon the demised premises, or the realty of which they are   a part, pursuant to any law, order or regulation made or issued in connection   with the use, consumption, maintenance or supply of water, the water system   or sewage or sewage connection or system. If the building, the demised   premises, or any part thereof, is supplied with water through a meter through   which water is also supplied to other premises, Tenant shall pay to Owner, as   additional rent, on the first day of each month*,             % ($300.00) of the total meter   charges as Tenant’s portion. Independently of, and in addition to, any of the   remedies reserved to Owner hereinabove or elsewhere in this lease, Owner may   sue for and collect any monies to be paid by Tenant, or paid by Owner, for   any of the reasons or purposes hereinabove set forth.
    
	
 
    	
 
    	
 
    
	
Sprinklers:
    	
 
    	
30.  Anything elsewhere in this lease to the   contrary notwithstanding, if the New York Board of Fire Underwriters or the   New York Fire Insurance Exchange or any bureau, department or official of the   federal, state or city government recommend or installation of a sprinkler system,   or that any changes, modifications, alterations, or additional sprinkler   heads or other equipment be made or supplied in an existing sprinkler system   by reason of Tenant’s business, the location partitions, trade fixtures, or   other contents of the demised premises, or for any other reason, or if any   such sprinkler system installations, modifications, alterations, additional   sprinkler heads or other such equipment, become necessary to prevent the   imposition of a penalty or charge against the full allowance for a sprinkler   system in the fire insurance rate set by said Exchange or any other body   making fire insurance rates, or by any fire insurance company, Tenant shall,   at Tenant’s expense, promptly make such sprinkler system installations,   changes, modifications, alterations, and supply additional sprinkler heads or   other equipment as required, whether the work involved shall be structural or   non-structural in nature. Tenant shall pay to Owner as additional rent the   sum of $300.00*, on the first day of each month during   the term of this lease, as Tenant’s portion of the contract price for   sprinkler supervisory service.
    
	
 
    	
 
    	
 
    
	
Elevators, Heat, Cleaning:
    	
 
    	
31.  As long as Tenant is not in default under   any the covenants of this lease, beyond the applicable grace period provided   in this lease for the curing of such defaults, Owner shall: (a) provide   necessary passenger elevator facilities on business days from 8 a.m. to   6 p.m. and on Saturdays from 8 a.m. to 1 p.m.; (b) if   freight elevator service is provided, same shall be provided only on regular   business days, Monday through Friday inclusive, and on those days only   between the hours of 9 a.m. and 12 noon and between 1 p.m. and   5 p.m.; (c) furnish heat, water and other services supplied by   Owner to the demised premises,

 
    

 

	
 
    	
 
    	
when and as   required by law, on business days from 8 am. to 6 p.m. and on Saturdays   from 8 a.m. to 1 p.m.; (d) clean the public halls and public   portions of the building which are used in common by all tenants. Tenant   shall, at tenant’s expense, keep the demised premises, including the windows,   clean and in order, to the reasonable satisfaction of Owner, and for that   purpose shall employ person or persons, or corporations approved by Owner.   Tenant shall pay to Owner the cost of removal of any of Tenant’s refuse and   rubbish from the building. Bills for the same shall be rendered by Owner to   Tenant at such time as Owner may elect, and shall be due and payable   hereunder, and the amount of such bills shall be deemed to be, and be paid as   additional rent. Tenant shall, however, have the option of independently   contracting for the removal of such rubbish and refuse in the event that   Tenant does not wish to have same done by employees of Owner. Under such   circumstances, however, the removal of such refuse and rubbish by others   shall be subject to such rules and regulations as, in the judgment of   Owner, are necessary for the proper operation of the building. Owner reserves   the right to stop service of the heating, elevator, plumbing and electric   systems, when necessary, by reason of accident or emergency, or for repairs,   alterations, replacements or improvements, which in the judgment of Owner are   desirable or necessary to be made, until said repairs, alterations,   replacements or improvements shall have been completed. If the building of   which the demised premises are a part supplies manually operated elevator   service, Owner may proceed diligently with alterations necessary to   substitute automatic control elevator service without in any way affecting the   obligations of Tenant hereunder.  [SEE ARTICLE #59]
    
	
 
    	
 
    	
 
    
	
Security:*
    	
 
    	
32.  Tenant has deposited with Owner the sum of   $1,200,000.00 as security for the faithful performance and observance by   Tenant of the terms, provisions and conditions of this lease. It is agreed   that in the event Tenant defaults in respect of any of the terms, provisions   and conditions of this lease, including, but not limited to, the payment of   rent and additional rent, Owner may use, apply or retain the whole or any   part of the security so deposited to the extent required for the payment of   any rent and additional rent, or any other sum as to which Tenant is in   default, or for any sum which Owner may expend, or may be required to expend,   by reason of Tenant’s default in respect of any of the terms, covenants and   conditions of this lease, including but not limited to, any damages or   deficiency in the re-letting of the demised premises, whether such damages or   deficiency accrued before or after summary proceedings or other re-entry by Owner.   In the case of every such use, application or retention, Tenant shall, within   five (5) days after demand, pay to Owner the sum so used, applied or   retained which shall be added to the security deposit so that the same shall   be replenished to its former amount. In the event that Tenant shall fully and   faithfully comply with all of the terms, provisions, covenants and conditions   of this lease, the security shall be returned to
    

* Rider to be added if necessary

 

9.

 

	
 
    	
 
    	
Tenant after the   date fixed as the end of the lease, and after delivery of entire possession   of the demised premises to Owner. In the event of a sale of the land and   building or leasing of the building, of which the demised premises form a part,   Owner shall have the right to transfer the security to the vendee or lessee,   and Owner shall thereupon be released by Tenant from all liability for the   return of such security; and Tenant agrees to look to the new Owner solely   for the return of said security, and it is agreed that the provisions hereof   shall apply to every transfer or assignment made of the security to a new   Owner. Tenant further covenants that it will not assign or encumber, or   attempt to assign or encumber, the monies deposited herein as security, and   that neither Owner nor its successors or assigns shall be bound by any such   assignment, encumbrance, attempted assignment or attempted encumbrance.  [SEE ARTICLE #56]
    
	
 
    	
 
    	
 
    
	
Captions:
    	
 
    	
33.  The Captions are inserted only as a matter   of convenience and for reference, and in no way define, limit or describe the   scope of this lease nor the intent of any provision thereof.
    
	
 
    	
 
    	
 
    
	
Definitions:
    	
 
    	
34.  The term “Owner” as used in this lease   means only the owner of the fee or of the leasehold of the building, or the   mortgagee in possession for the time being, of the land and building (or the   owner of a lease of the building or of the land and building) of which the   demised premises form a part, so that in the event of any sale or sales or   conveyance, assignment or transfer of said land and building or of said   lease, or in the event of a lease of said building, or of the land and   building, the said Owner shall be and hereby is entirely freed and relieved   of all covenants and obligations of Owner hereunder, and it shall be deemed   and construed without further agreement between the parties or their   successors in interest, or between the parties and the purchaser, grantee,   assignee or transferee at any such sale, or the said lessee of the building,   or of the land and building, that the purchaser or the lessee of the building   has assumed and agreed to carry out any and all covenants and obligations of   Owner hereunder. The words “re-enter” and ‘‘re-entry” as used in this lease   are not restricted to their technical legal meaning. The term “rent” includes   the annual rental rate whether so expressed or expressed in monthly   installments, and “additional rent.” “Additional rent” means all sums which   shall be due to Owner from Tenant under this lease, in addition to the annual   rental rate. The term “business days” as used in this lease, shall exclude   Saturdays, Sundays and all days observed by the State or Federal Government   as legal holidays, and those designated as holidays by the applicable   building service union employees service contract, or by the applicable   Operating Engineers contract with respect to HVAC service. Wherever it is   expressly provided in this lease that consent shall not be unreasonably   withheld, such consent shall not be unreasonably delayed.
    

 

	
Adjacent   Excavation-Shoring:
    	
 
    	
35.  If an excavation shall be made upon land   adjacent to the demised premises, or shall be authorized to be made, Tenant   shall afford to the person causing or authorized to cause such excavation, a   license to enter upon the demised premises for the purpose of doing such work   as said person shall deem necessary to preserve the wall or the building, of   which demised premises form a part, from injury or damage, and to support the   same by proper foundations, without any claim for damages or indemnity   against Owner, or diminution or abatement of rent.
    
	
 
    	
 
    	
 
    
	
Rules and Regulation:
    	
 
    	
36.  Tenant and Tenant’s servants, employees,   agents, visitors, and licensees shall observe faithfully, and comply strictly   with, the Rules and Regulations annexed hereto and such other and further   reasonable Rules and Regulations as Owner or Owner’s agents may from time to   time adopt. Notice of any additional Rules or Regulations shall be given in   such manner as Owner may elect. In case Tenant disputes the reasonableness of   any additional Rules or Regulations hereafter made or adopted by Owner or   Owner’s agents, the parties hereto agree to submit the question of the   reasonableness of such Rules or Regulations for decision to the New York   office of the American Arbitration Association, whose determination shall be   final and conclusive upon the parties hereto. The right to dispute the   reasonableness of any additional Rules or Regulations upon Tenant’s part   shall be deemed waived unless the same shall be asserted by service of a   notice, in writing, upon Owner, within fifteen (15) days after the giving of   notice thereof. Nothing in this lease contained shall be construed to impose   upon Owner any duty or obligation to enforce the Rules and Regulations or   terms, covenants or conditions in any other lease, as against any other   tenant and Owner shall not be liable to Tenant far violation of the same by   any other tenant, its servants, employees, agents, visitors or licensees.
    
	
 
    	
 
    	
 
    
	
Glass:
    	
 
    	
37.  Owner shall replace, at the expense of   Tenant, any and all plate and other glass damaged or broken from any cause   whatsoever in and about the demised premises. Owner may insure, and keep   insured, at Tenant’s expense, all plate and other glass in the demised   premises for and in the name of Owner. Bills for the premiums therefore shall   be rendered by Owner to Tenant at such times as Owner may elect, and shall be   due from, and payable by Tenant when rendered, and the amount thereof shall   be deemed to be, and be paid as, additional rent.
    
	
 
    	
 
    	
 
    
	
Estoppel   Certificate:
    	
 
    	
38.  Tenant, at any time, and from time to time,   upon at least ten (10) days prior notice by Owner, shall execute, acknowledge   and deliver to Owner, and/or to any other person, firm or corporation   specified by Owner, a statement certifying that this lease is unmodified and   in full force and effect (or if there have been modifications, that the same   is in full force and effect as modified and stating the modifications),   stating the dates to which the rent and additional rent have been paid,   stating
    

 

10.

 

	
 
    	
 
    	
whether or not   there exists any default by Owner under this lease, and, if so, specifying   each such default and such other information as shall be required of Tenant.
    
	
 
    	
 
    	
 
    
	
Directory
   Board Listing:
    	
 
    	
39.  If, at the request of, and as accommodation   to, Tenant, Owner shall place upon the directory board in the lobby of the   building, one or more names of persons or entities other than Tenant, such   directory board listing shall not be construed as the consent by Owner to an   assignment or subletting by Tenant to such persons or entities. [SEE ADDENDUM]
    
	
 
    	
 
    	
 
    
	
Successors
   and Assigns:
    	
 
    	
40.  The covenants, conditions and agreements   contained in this lease shall bind and inure to the benefit of Owner and   Tenant and their respective heirs, distributees, executors, 
    

 

	
 
    	
 
    	
administrators,   successors, and except as otherwise provided in this lease, their assigns,   Tenant shall look only to Owner’s estate and interest in the land and   building for the satisfaction of Tenant’s remedies for the collection of a   judgment (or other judicial process) against Owner in the event of any   default by Owner hereunder, and no other property or assets of such Owner (or   any partner, member, officer or director thereof, disclosed or undisclosed),   shall be subject to levy, execution or other enforcement procedure for the   satisfaction of Tenant’s remedies under, or with respect to, this lease, the   relationship of Owner and Tenant hereunder, or Tenant’s use and occupancy of the   demised premises.
    

 

In Witness Whereof, Owner and Tenant have respectively signed and sealed this lease as of the day and year first above written.

 

 

 

	
Witness for Owner:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
N/A
    	
 
    	
TWENTY THIRD R.P.   ASSOCIATES
    
	
 
    	
 
    	
 
    
	
Witness for Owner:
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Member
    
	
N/A
    	
 
    	
BY:  Adams & Company Real Estate, LLC,   Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TREMOR MEDIA, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
BY: /s/ Jason Glickman
    
	
 
    	
 
    	
 
    	
/     /10
    

 

 

 

ACKNOWLEDGEMENT

 

STATE OF NEW YORK,

ss.:

COUNTY OF

 

On the 19th day of July in the year 2010, before me, the undersigned, a Notary Public in and for said State, personally appeared Jason Glickman, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

 

 

	
 
    	
 
    	
/s/ Stephanie E Gerst
    
	
 
    	
 
    	
NOTARY   PUBLIC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Stephanie   E Gerst
    
	
 
    	
 
    	
Notary   Public – State of New York
    
	
 
    	
 
    	
NO.   01GE6192772
    
	
 
    	
 
    	
Qualified   in New York County
    
	
 
    	
 
    	
My   Commission Expires 9/2/12
    

 

11.

 

IMPORTANT — PLEASE READ

 

 

RULES AND REGULATIONS ATTACHED TO AND
 MADE A PART OF THIS LEASE
 IN ACCORDANCE WITH ARTICLE 36.

 

1.     The sidewalks, entrances, driveways, passages, courts, elevators, vestibules, stairways, corridors or halls shall not be obstructed or encumbered by Tenant or used for any purpose other than for ingress or egress from the demised premises and for delivery of merchandise and equipment in a prompt and efficient manner, using elevators and passageways designated for such delivery by Owner. There shall not be used in any space, or in the public hall of the building, either by Tenant or by jobbers or others in the delivery or receipt of merchandise, any hand trucks, except those equipped with rubber tires and sideguards. If said premises are situated on the ground floor of the building, Tenant shall further, at Tenant’s expense, keep the sidewalk and curb in front of said premises clean and free from ice, snow, dirt and rubbish.

 

2.     The water and wash closest and plumbing fixtures shall not be used for any purposes other than those for which they were designed or constructed, and no sweepings, rubbish, rags, acids or other substance shall be deposited therein, and the expense of any breakage, stoppage, or damage resulting from the violation of this rule shall be borne by Tenant, whether or not caused by Tenant, its clerks, agents, employees or visitors.

 

3.     No carpet, rug or other article shall be hung or shaken out of any window of the building; and Tenant shall not sweep or throw, or permit to be swept or thrown substances from the demised premises, any dirt or other substance into any of the corridors of halls, elevators, or out of the doors or windows or stairways of the building, and Tenant shall not use, keep, or permit to be used or kept, any foul or noxious gas or substance in the demised premises, or permit or suffer the demised premises to be occupied or used in a manner offensive or objectionable to Owner or other occupants of the buildings by reason of noise, odors, and or vibrations, or interfere in any way, with other tenants or those having business therein, nor shall any bicycles, vehicles, animals, fish or birds be kept in or about the building. Smoking or carrying lighted cigars or cigarettes in the elevators of the building is prohibited.

 

4.     No awnings or other projections shall be attached to the outside walls of the building without the prior written consent of Owner.

 

5.     No sign, advertisement, notice or other lettering shall be exhibited, inscribed, painted or affixed by Tenant on any part of the outside of the demised premises or the building, or on the inside of the demised premises if the same is visible from the outside of the demised premises, without the prior written consent of Owner, except that the name of Tenant may appear on the entrance door of the demised premises. In the event of the violation of the foregoing by Tenant, Owner may remove same without any liability, and may charge the expense incurred by such removal to Tenant. Interior signs on doors and directory tablet shall be inscribed, painted, or affixed for Tenant by Owner at the expense of Tenant, and shall be of a size, color and style acceptable to Owner.

 

6.     Tenant shall not mark, paint, drill into, or in any way deface any part of the demised premises or the building of which they form a part. No boring, cutting, or stringing of wires shall be permitted, except with the prior written consent of Owner, and as

 

Owner may direct. Tenant shall not lay linoleum, or other similar floor covering, so that the same shall come in direct contact with the floor of the demised premises, and, if linoleum or other similar floor covering is desired to be used, an interlining of builder’s deadening felt shall be first affixed to the floor, by a paste or other material, soluble in water, the use of cement or other similar adhesive material being expressly prohibited.

 

7.     No additional locks or bolts of any kind shall be placed upon any of the doors or windows by Tenant, nor shall any changes be made in existing locks or mechanism thereof. Tenant must, upon the termination of his tenancy, restore to Owner all keys of stores, offices and toilet rooms, either furnished to, or otherwise procured by, Tenant, and in the event of the loss of any keys, so furnished, Tenant shall pay to Owner the cost thereof.

 

8.     Freight, furniture, business equipment, merchandise and bulky matter of any description shall be delivered to and removed from the demised premises only on the freight elevators and through the service entrances and corridors, and only during hours, and in a manner approved by Owner. Owner reserves the right to inspect all freight to be brought into the building, and to exclude from the building all freight which violates any of these Rules and Regulations of the lease, of which these Rules and Regulations are a part.

 

9.     Tenant shall not obtain for use upon the demised premises ice, drinking water, towel and other similar services, or accept barbering or bootblacking services in the demised premises, except from persons authorized by Owner, and at hours and under regulations fixed by Owner. Canvassing, soliciting and peddling in the building is prohibited and Tenant shall cooperate to prevent the same.

 

10.   Owner reserves the right to exclude from the building all persons who do not present a pass to the building signed by Owner. Owner will furnish passes to persons for whom any Tenant requests same in writing. Tenant shall be responsible for all persons for whom it requests such pass, and shall be liable to Owner for all acts of such persons. Notwithstanding the foregoing, Owner shall not be required to allow Tenant or any person to enter or remain in the building, except on business days from 8:00 a.m. to 6:00 p.m. and on Saturdays from 8:00 a.m. to 1:00 p.m. Tenant shall not have a claim against Owner by reason of Owner excluding from the building any person who does not present such pass.

 

11.   Owner shall have the right to prohibit any advertising by Tenant which in Owner’s opinion, tends to impair the reputation of the building or its desirability as a loft building, and upon written notice from Owner, Tenant shall refrain from or discontinue such advertising.

 

12.   Tenant shall not bring, or permit to be brought or kept, in or on the demised premises, any inflammable, combustible, explosive, or hazardous fluid, material, chemical or substance, or cause or permit any odors of cooking or other processes, or any unusual or other objectionable odors, to permeate in, or emanate from, the demised premises.

 

13.   Tenant shall not use the demised premises in a manner which disturbs or interferes with other tenants in the beneficial use of their premises.

 

 

14.   Refuse and Trash. (1) Compliance by Tenant. Tenant covenants and agrees, at its sole cost and expense, to comply with all present and future laws, orders, and regulations, of all state, federal, municipal, and local governments, departments, commissions and boards regarding the collection, sorting, separation and recycling of waste products, garbage, refuse and trash. Tenant shall sort and separate such waste products, garbage, refuse and trash into such categories as provided by law. Each separately sorted category of waste products, garbage, refuse and trash shall be placed in separate receptacles reasonably approved by Owner. Tenant shall remove, or cause to be removed by a contractor acceptable to Owner, at Owner’s sole discretion, such items as Owner may expressly designate. (2) Owner’s Rights in Event of Noncompliance. Owner has the option to refuse to collect or accept from Tenant waste products, garbage, refuse or trash

(a) that is not separated and sorted as required by law or (b) which consists of such items as Owner may expressly designate for Tenant’s removal, and to require Tenant to arrange for such collection at Tenant’s sole cost and expense, utilizing a contractor satisfactory to Owner. Tenant shall pay all costs, expenses, fines, penalties or damages that may be imposed on Owner or Tenant by reason of Tenant’s failure to comply with the provisions of this Building Rule 14, and, at Tenant’s sole cost and expense, shall indemnity, defend and hold Owner harmless including reasonable legal fees and expenses) from and against any actions, claims and suits arising from such noncompliance, utilizing counsel reasonably satisfactory to Owner.

 

	
Address
    	
53-7 WEST 23RD STREET thru to 34 WEST 24TH
   STREET and 30-2 WEST 24TH STREET
    	
 
    	
Tenant’s   Copy
    
	
Premises
    	
ENTIRE 12TH FLOORS
    	
 
    

 

	
 
    	
 
    	
 
    	
Dated July 26,
    	
in the year 2010
    
	
 
    	
TO   TREMOR   MEDIA, INC.
    	
 
    	
 
    	
 
    

 

	
 
    	
 
    	
 
    	
Rent Per   Year
    	
See Article #47
    
	
 
    	
STANDARD   FORM OF
    	
 
    	
 
    	
 
    
	
 
    	
Loft
    	
 
    	
Rent Per   Month
    	
See Article #47
    
	
 
    	
Lease
    	
 
    	
 
    	
 
    

 

	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Term
    	
10 yrs. 6 mos.
    
	
 
    	
The Real   Estate Board of New York, Inc.

Copyright 2004.  All rights Reserved.

Reproduction in whole or   in part prohibited
    	
 
    	
From
    	
11/1/10
    
	
 
    	
 
    	
To
    	
4/30/21
    
	
 
    	
 
    	
 
    	
 
    

 

	
 
    	
 
    	
 
    	
Drawn by
    	
mc
    

 

	
 
    	
 
    	
 
    	
Checked by
    	
 
    

 

	
 
    	
 
    	
 
    	
Entered by
    	
 
    

 

	
 
    	
 
    	
 
    	
Approved by
    	
 
    

 

	
 
    	
 
    	
 
    	
 
    

 

	
 

 
    	
 

Company:
    	
 

ADAMS &   COMPANY REAL ESTATE, LC
    	
 
    	
 
    	
 

 S/N:
    	
 

PCF5-03396
    	
 

 
    
	
 
    	
Provided by:
    	
LEASING   DEPARTMENT
    	
 
    	
 
    	
 Printed using   Software from Professional Computer Forms Co. v. 12/04
    
	
 
    	
 
    	
 
    
										

 

 

FIRST AMENDMENT TO LEASE

 

FIRST AMENDMENT TO LEASE (“First Amendment”), dated as of November 1, 2010, between TWENTY-THREE R.P. ASSOCIATES (“Landlord” or “Owner”), and TREMOR MEDIA, INC. (“Tenant”).

 

W I T N E S S E T H:

 

WHEREAS, by Agreement of Lease dated as of July 26, 2010 (“Lease”), Landlord leased to Tenant certain premises consisting of the entire twelfth (12th) floors (“Demised Premises”) of the buildings located at 53-7 West 23rd Street through to 34 West 24th Street, and 30-2 West 24th street, New York, New York (“Building”), which Demised Premises are more particularly described in the Lease; and

 

WHEREAS, Landlord and Tenant desire to modify the commencement date and other provisions of the Lease on the terms and conditions hereinafter set forth; and

 

WHEREAS, Landlord and Tenant desire to amend the Lease as set forth herein.

 

NOW, THEREFORE, in consideration of the mutual promises herein contained and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant agree as follows:

 

l.          All capitalized terms used but not otherwise defined in this First Amendment shall have the meanings ascribed to them in the Lease.

 

2.         The introductory paragraph to the Lease is hereby amended such that the commencement date of the lease of November 1, 2010, is hereby deleted and “December l, 2010” is hereby replaced in its stead, and the expiration date of the lease of April 30, 2021, is hereby deleted and “May 31, 2021” is hereby replaced in its stead.

 

3.         Section 47 of the Lease is hereby amended such that each reference therein to “November 1” shall be deleted and replaced with “December 1” in its stead, each reference to “October 31” shall be deleted and replaced with “November 30” in its stead, and “April 30, 2021” shall be deleted and replaced with “May 31, 2021” in its stead.

 

4.         Section 55 of the Lease is hereby amended such that “November 1, 2010” shall be deleted and “December 1, 2010” shall be replaced in its stead, and “April 30, 2011” shall be deleted and replaced with “May 31, 2011” in its stead.

 

5.         Section 56 of the Lease is hereby amended such that “April 30, 2013, April 30 2016 and October 31, 2018” shall be replaced with “May 31, 2013, May 31, 2016 and November 30, 2018” in its stead.

 

6.         Section 69 of the Lease is hereby amended such that “April 30, 2016” shall be deleted and “May 31, 2016” shall be replaced in its stead, and “April 1, 2015” shall be deleted and replaced with “May l, 2015” in its stead.

 

 

7.         Section 72 of the Lease is hereby amended such that ‘‘November l, 2010” is hereby deleted and “December 1, 2010” shall be replaced in its stead.

 

8.         Except as set forth in this First Amendment, the Lease remains unchanged and in full force and effect.  All references in the Lease to “Lease” shall be deemed to be references to the Lease, as amended by this First Amendment.

 

9.         This First Amendment constitutes the entire agreement between Landlord and Tenant regarding the subject matter herein and supersedes any and all prior agreements, representations and negotiations, whether written or oral.

 

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

 

11.       In the event of any inconsistency between the terms of the Lease and this First Amendment, the terms of this First Amendment shall control.

 

12.       Tenant acknowledges that Landlord has substantially completed the work set forth in the Work Order, dated July 26, 2010, attached to and forming a part of the Lease.

 

[Signatures appear on following page]

 

2.

 

IN WITNESS WHEREOF, the parties have executed this First Amendment as of the date and year first above written.

 

	
 
    	
 
    	
LANDLORD:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
ADAMS &   COMPANY RE LLC AS AGENT FOR
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TWENTY-THREE R.P.   ASSOCIATES
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ David Levy
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
David Levy
    
	
 
    	
 
    	
 
    	
Title:
    	
Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TENANT:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TREMOR MEDIA INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Mark Pinney
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    	
Mark Pinney
    
	
 
    	
 
    	
 
    	
Title:
    	
Chief Operating Officer

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