Document:

Exhibit 10.26

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO CERTAIN PORTIONS OF THIS AGREEMENT. 
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.

MIVA,
INC.

 

BRIDGE
BANK, NATIONAL ASSOCIATION

 

LOAN
AND SECURITY AGREEMENT

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

 

This LOAN AND SECURITY
AGREEMENT is entered into as of November 7, 2008, by and
between Bridge Bank, NATIONAL ASSOCIATION (“Bank”)
and MIVA, INC. (“Borrower”).

 

RECITALS

 

Borrower wishes to obtain credit from time to time
from Bank, and Bank desires to extend credit to Borrower.  This Agreement sets forth the terms on which
Bank will advance credit to Borrower, and Borrower will repay the amounts owing
to Bank.

 

AGREEMENT

 

The parties agree as follows:

 

1.                                      DEFINITIONS
AND CONSTRUCTION.

 

1.1                               Definitions.  As used in this Agreement, the following
terms shall have the following definitions:

 

“Accounts” means all presently existing and hereafter
arising accounts, contract rights, payment intangibles, and all other forms of
obligations owing to Borrower arising out of the sale or lease of goods
(including, without limitation, the licensing of software and other technology)
or the rendering of services by Borrower, whether or not earned by performance,
and any and all credit insurance, guaranties, and other security therefor, as
well as all merchandise returned to or reclaimed by Borrower and Borrower’s
Books relating to any of the foregoing.

 

“Adjustments” means all discounts, allowances,
disputes, offsets, defenses, rights of recoupment, rights of return, warranty
claims, or short payments, asserted by or on behalf of any account debtor with
respect to any Account.

 

“Advance” or “Advances” means a cash advance or cash
advances under the Revolving Facility.

 

“AEBITDA” means earnings before interest, taxes,
depreciation and amortization, one-time restructuring costs and non-cash compensation
and expenses, with restructuring costs not to exceed *** annually and expenses
incurred in connection with litigation matters as disclosed in accordance with Section 5.8
not to exceed *** annually.

 

“Affiliate” means, with respect to any Person, any
Person that owns or controls directly or indirectly such Person, any Person
that controls or is controlled by or is under common control with such Person,
and each of such Person’s senior executive officers, directors, and partners.

 

“Asset Coverage Ratio”
means (a) all unrestricted cash and cash equivalents in which Bank has a
perfected security interest plus (b) Eligible Accounts, divided by (x) all
Obligations owed to Bank plus (y) employee-related accruals plus (z) accounts
payable over *** days from invoice date (excluding those accounts payable that
are materially aged resulting from the inability to make such payment because
the account debtor has ceased operations).

 

“Bank Expenses” means all:  reasonable costs or expenses (including
reasonable attorneys’ fees and expenses) incurred in connection with the
preparation, negotiation, administration, and enforcement of the Loan
Documents; reasonable Collateral audit fees; and Bank’s reasonable attorneys’
fees and expenses incurred in amending, enforcing or defending the Loan
Documents (including fees and expenses of appeal), incurred before, during and
after an Insolvency Proceeding, whether or not suit is brought.

 

“Borrower’s Books” means all of Borrower’s books and
records including:  ledgers; records
concerning Borrower’s assets or liabilities, the Collateral, business
operations or financial condition; and all computer programs, or tape files,
and the equipment, containing such information.

 

“Borrowing Base” means an amount equal to (a) eighty
percent (80%) of Eligible Accounts plus (b) UK Eligible Accounts as
determined by Bank with reference to the most recent Borrowing Base Certificate
delivered by Borrower.

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

1

 

“Business Day” means any day that is not a Saturday,
Sunday, or other day on which banks in the State of California are authorized
or required to close.

 

“Cash” means unrestricted cash and cash equivalents.

 

“Capital Stock” means (i) with respect to any
Person that is a corporation, any and all shares, interests, participations or
other equivalents (however designated and whether or not voting) of corporate
stock, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership or other equity interests of such Person.

 

“Change in Control” shall mean a transaction in which
any “person” or “group” (within the meaning of Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Securities Exchange Act of
1934), directly or indirectly, of a sufficient number of shares of all classes
of stock then outstanding of Borrower ordinarily entitled to vote in the
election of directors, empowering such “person” or “group” to elect a majority
of the Board of Directors of Borrower, who did not have such power before such
transaction.

 

“Closing Date” means the date of this Agreement.

 

“Code” means the California Uniform Commercial Code.

 

“Collateral” means the property described on Exhibit A attached hereto.

 

“Collections” means all payments from or on behalf of
an account debtor with respect to Accounts.

 

“Contingent Obligation” means, as applied to any
Person, any direct or indirect liability, contingent or otherwise, of that
Person with respect to (i) any indebtedness, lease, dividend, letter of
credit or other obligation of another; (ii) any obligations with respect
to undrawn letters of credit, corporate credit cards, or merchant services
issued or provided for the account of that Person; and (iii) all
obligations arising under any agreement or arrangement designed to protect such
Person against fluctuation in interest rates, currency exchange rates or
commodity prices; provided, however, that the term “Contingent Obligation”
shall not include endorsements for collection or deposit in the ordinary course
of business.  The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determined amount of the primary obligation in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by Bank in good faith;
provided, however, that such amount shall not in any event exceed the maximum
amount of the obligations under the guarantee or other support arrangement.

 

“Copyrights” means any and all copyright rights,
copyright applications, copyright registrations and like protections in each
work or authorship and derivative work thereof.

 

“Credit Extension” means each Advance, Letter of
Credit, use of Cash Management Services or Foreign Exchange Facility or any
other extension of credit by Bank for the benefit of Borrower hereunder.

 

“Daily Balance” means the amount of the Obligations
owed at the end of a given day.

 

“Domestic Subsidiaries” means the following wholly
owned subsidiaries of Borrower: MIVA Direct, Inc. and B&B Advertising, Inc.
(fka B&B Enterprises, Inc.).

 

“Eligible Accounts” means those Accounts that arise in
the ordinary course of Borrower’s business that comply with all of Borrower’s
representations and warranties to Bank set forth in Section 5.4; provided,
that standards of eligibility may be fixed and revised from time to time by
Bank in Bank’s reasonable judgment and upon discussion with Borrower prior to
the effectiveness of such revisions, in accordance with the provisions
hereof.  Unless otherwise agreed to by
Bank, Eligible Accounts shall not include the following:

 

(a)                                  Accounts
that the account debtor has failed to pay within *** days of invoice date;

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

2

 

(b)                                  Accounts
with respect to an account debtor, *** percent (***%) of whose Accounts the
account debtor has failed to pay within *** days of invoice date;

 

(c)                                  Accounts
with respect to which the account debtor is an officer, employee, or agent of
Borrower;

 

(d)                                  Accounts
with respect to which goods are placed on consignment, guaranteed sale, sale or
return, sale on approval, bill and hold, pre-billed, or other terms by reason
of which the payment by the account debtor may be conditional;

 

(e)                                  Accounts
with respect to which the account debtor is an Affiliate of Borrower;

 

(f)                                    Accounts
with respect to which the account debtor does not have its principal place of
business in the United States, except for Eligible Foreign Accounts and
Eligible UK Accounts;

 

(g)                                 Accounts
with respect to which the account debtor is the United States or any
department, agency, or instrumentality of the United States, except for
Accounts of the United States if the payee has assigned its payment rights to
Bank and the assignment has been acknowledged under the Assignment of Claims
Act of 1940 (31 U.S.C. 3727);

 

(h)                                 Accounts
with respect to which Borrower is liable to the account debtor for goods sold
or services rendered by the account debtor to Borrower or for deposits or other
property of the account debtor held by Borrower, but only to the extent of any
amounts owing to the account debtor against amounts owed to Borrower;

 

(i)                                    Accounts
with respect to an account debtor, including Subsidiaries and Affiliates, whose
total obligations to Borrower exceed *** percent (***%) of all Accounts (“Concentration
Limit”), to the extent such obligations exceed the aforementioned percentage,
except as approved in writing by Bank; provided, however,
the Concentration Limit with respect to Accounts in which the account debtor is
***shall be *** percent (***%) ;

 

(j)                                    Accounts
with respect to which the account debtor disputes liability or makes any claim
with respect thereto as to which Bank believes, in its sole discretion, that
there may be a basis for dispute (but only to the extent of the amount subject
to such dispute or claim), or is subject to any Insolvency Proceeding, or
becomes insolvent, or goes out of business; and

 

(k)                                Progress
and retention billings; and

 

(l)                                    Accounts
the collection of which Bank reasonably determines to be doubtful.

 

“Eligible Foreign Accounts” means Accounts with
respect to which the account debtor does not have its principal place of
business in the United States or United Kingdom, and that (i) are
supported by one or more letters of credit in an amount and of a tenor, and
issued by a financial institution, acceptable to Bank, or (ii) that Bank
reasonably approves on a case-by-case basis.

 

“Eligible UK Accounts” means the lesser of $***or
***percent (***%) of UK Accounts; provided, that
Bank has perfected its first priority security interest in the assets of MIVA
UK, and provided further that the standards of
eligibility may be fixed and revised from time to time by Bank in Bank’s
reasonable judgment and upon notification thereof to Borrower in accordance
with the provisions hereof.  Unless
otherwise agreed to by Bank, Eligible UK Accounts shall not include the
following:

 

(a)                                  UK Accounts that the account debtor has
failed to pay within ***days of invoice date;

 

(b)                                  UK
Accounts with respect to an account debtor, ***of whose Accounts the account
debtor has failed to pay within ***days of invoice date;

 

(c)                                  UK
Accounts with respect to which the account debtor is an officer, employee, or
agent of 

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

3

 

Borrower;

 

(d)                                  UK
Accounts with respect to which goods are placed on consignment, guaranteed
sale, sale or return, sale on approval, bill and hold, pre-billed or other
terms by reason of which the payment by the account debtor may be conditional;

 

(e)                                  UK
Accounts with respect to which the account debtor is an Affiliate of Borrower
or MIVA UK;

 

(f)                                    UK
Accounts with respect to which the account debtor has its principal place of
business in the United States;

 

(g)                                 UK
Accounts with respect to which Borrower is liable to the account debtor for
goods sold or services rendered by the account debtor to Borrower or for
deposits or other property of the account debtor held by Borrower, but only to
the extent of any amounts owing to the account debtor against amounts owed to
Borrower;

 

(h)                                 UK
Accounts with respect to an account debtor, including Subsidiaries and
Affiliates, whose total obligations to Borrower exceed ***of all UK Accounts,
to the extent such obligations exceed the aforementioned percentage, except as
approved in writing by Bank;

 

(i)                                    UK
Accounts with respect to which the account debtor disputes liability or makes
any claim with respect thereto as to which Bank believes, in its sole
discretion, that there may be a basis for dispute (but only to the extent of
the amount subject to such dispute or claim), or is subject to any Insolvency
Proceeding, or becomes insolvent, or goes out of business; and

 

(j)                                    Progress
and retention billings; and

 

(k)                                UK
Accounts the collection of which Bank reasonably determines to be doubtful.

 

“Equipment” means all present and future machinery,
equipment, tenant improvements, furniture, fixtures, vehicles, tools, parts and
attachments in which Borrower has any interest.

 

 “ERISA” means
the Employee Retirement Income Security Act of 1974, as amended, and the
regulations thereunder.

 

“Event of Default” has the meaning assigned in Article 8.

 

“GAAP” means generally accepted accounting principles
as in effect from time to time.

 

“Guarantor” means MIVA UK.

 

“Indebtedness” means (a) all indebtedness for
borrowed money or the deferred purchase price of property or services,
including without limitation reimbursement and other obligations with respect
to surety bonds and letters of credit, (b) all obligations evidenced by
notes, bonds, debentures or similar instruments, (c) all capital lease
obligations and (d) all Contingent Obligations.

 

“Insolvency Proceeding” means any proceeding commenced
by or against any person or entity under any provision of the United States
Bankruptcy Code, as amended, or under any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, formal or informal
moratoria, compositions, extension generally with its creditors, or proceedings
seeking reorganization, arrangement, or other relief.

 

“Intellectual
Property Collateral” means all of Borrower’s right, title, and interest in and
to the following: Copyrights, Trademarks and Patents; all trade secrets, all
design rights, claims for damages by way of past, present and future
infringement of any of the rights included above, all licenses or other rights
to use any of the Copyrights, Patents or Trademarks, and all license fees and
royalties arising from such use to the extent permitted by such license or
rights; 

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

4

 

all amendments, renewals
and extensions of any of the Copyrights, Trademarks or Patents; and all
proceeds and products of the foregoing, including without limitation all
payments under insurance or any indemnity or warranty payable in respect of any
of the foregoing.

 

“Inventory” means all inventory in which Borrower has
or acquires any interest, including work in process and finished products
intended for sale or lease or to be furnished under a contract of service, of
every kind and description now or at any time hereafter owned by or in the
custody or possession, actual or constructive, of Borrower, including such
inventory as is temporarily out of its custody or possession or in transit and
including any returns upon any accounts or other proceeds, including insurance
proceeds, resulting from the sale or disposition of any of the foregoing and
any documents of title representing any of the above, and Borrower’s Books
relating to any of the foregoing.

 

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

 

“IRC” means the Internal Revenue Code of 1986, as
amended, and the regulations thereunder.

 

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

 

“Loan Documents” means, collectively, this Agreement,
any note or notes executed by Borrower, and any other agreement entered into in
connection with this Agreement, all as amended or extended from time to time.

 

“Material Adverse Effect” means a material adverse
effect on (i) the business operations, condition (financial or otherwise)
of Borrower and its Subsidiaries taken as a whole or (ii) the ability of
Borrower to repay the Obligations or otherwise perform its obligations under
the Loan Documents or (iii) the value or priority of Bank’s security
interests in the Collateral.

 

“Minimum Cash Ratio” means a ratio of (a) all
Cash maintained at Bank plus (b) ***% of Cash held in an account in the
United Kingdom under the name of MIVA UK in which Bank has a perfected first
priority security interest (in any event not to exceed the lesser of *** of
such account’s balance or ***) to all Obligations owed to Bank.

 

“MIVA UK” means MIVA (UK) Limited., a company
incorporated under the laws of England and Wales.

 

“Negotiable Collateral” means all letters of credit of
which Borrower is a beneficiary, notes, drafts, instruments, securities,
documents of title, and chattel paper, and Borrower’s Books relating to any of
the foregoing.

 

“Obligations” means all debt, principal, interest,
Bank Expenses and other amounts owed to Bank by Borrower pursuant to this
Agreement or any other agreement, whether absolute or contingent, due or to
become due, now existing or hereafter arising, including any interest that
accrues after the commencement of an Insolvency Proceeding and including any
debt, liability, or obligation owing from Borrower to others that Bank may have
obtained by assignment or otherwise.

 

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

 

“Periodic Payments” means all installments or similar
recurring payments that Borrower may now or hereafter become obligated to pay
to Bank pursuant to the terms and provisions of any instrument, or agreement
now or hereafter in existence between Borrower and Bank.

 

“Permitted Indebtedness” means:

 

(a)                                  Indebtedness
of Borrower in favor of Bank arising under this Agreement or any other Loan
Document;

 

(b)                                 Indebtedness
existing on the Closing Date and disclosed in the Schedule;

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

5

 

(c)                                  Indebtedness
secured by a lien described in clause (c) of the defined term “Permitted
Liens,” provided (i) such Indebtedness does not exceed the lesser of the
cost or fair market value of the equipment financed with such Indebtedness and (ii) such
Indebtedness does not exceed $***in the aggregate at any given time;

 

(d)                                 Subordinated
Debt;

 

(e)                                  Indebtedness to trade creditors, trade
payables, accruals and accounts payable incurred in the ordinary course of
business, and contingent liabilities arising out of endorsements of checks and
other negotiable instruments for deposit or collection in the ordinary course
of business;

 

(f)                                    Guaranties of any Indebtedness permitted
hereunder;

 

(g)                                 Indebtedness in respect of intercompany
loans between Borrower and any Subsidiary of Borrower which Bank has a
perfected first priority security interest in such Subsidiary’s assets;

 

(h)                                 Indebtedness of any Subsidiary to
Borrower or another Subsidiary and Indebtedness of Borrower to any Subsidiary
not to exceed $***in aggregate principal amount at any time (including any
amounts considered as investment into such entities under in clause (i) of
Permitted Investment);

 

(i)                                     Obligations to pay rentals; and

 

(j)                                     Obligations of Borrower under interest
rate swap agreements, interest rate cap agreements and interest rate collar
agreements, or any other agreements or arrangements designed to protect
Borrower against fluctuations in interest rates, currency exchange rates or
commodity prices.

 

“Permitted Investment” means:

 

(a)                                  Investments
existing on the Closing Date disclosed in the Schedule;

 

(b)                                 Property
to be used in the ordinary course of business;

 

(c)                                  Assets
arising from the sale of goods and services in the ordinary course of business
of Borrower or any of its Subsidiaries;

 

(d)                                 Investments
in direct obligations of the United States of America, or any agency thereof or
obligations guaranteed by the United States of America; provided that
such obligations mature within one year from the date of acquisition thereof;

 

(e)                                  Investments
in certificates of deposit maturing within one year from the date of
acquisition and fully insured by the Federal Deposit Insurance Corporation;

 

(f)                                    Investments
in commercial paper maturing not more than 270 days from the date of creation
thereof and currently having rating of at least A-2 or P-2 from either
Standard & Poor’s Corporation or Moody’s Investors Service;

 

(g)                                 Investments
in money market, mutual or similar funds having assets in excess of $100,000,000
and the investments of which are limited to investment grade securities;

 

(h)                                 Investments
by Borrower in any Subsidiary of Borrower in which Bank has a perfected first
priority security interest; and

 

(i)                                     Investments
of Subsidiaries in or to other Subsidiaries or Borrower and Investments by
Borrower in Subsidiaries not to exceed $***in the aggregate at any time
(including amounts considered as indebtedness of entities under clause (h) of
Permitted Indebtedness).

 

“Permitted Liens” means
the following:

 

(a)                                  Any
Liens existing on the Closing Date and disclosed in the Schedule or arising
under this Agreement or the other Loan Documents;

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

 

6

 

(b)                                 Liens
for taxes, fees, assessments or other governmental charges or levies, either
not delinquent or being contested in good faith by appropriate proceedings,
provided the same have no priority over any of Bank’s security interests;

 

(c)                                  Liens
(i) upon or in any equipment which was not financed by Bank acquired or
held by Borrower or any of its Subsidiaries to secure the purchase price of
such equipment or indebtedness incurred solely for the purpose of financing the
acquisition of such equipment, or (ii) existing on such equipment at the
time of its acquisition, provided that the Lien is confined solely to the
property so acquired and improvements thereon, and the proceeds of such
equipment;

 

(d)                                 Liens
incurred in connection with the extension, renewal or refinancing of the
indebtedness secured by Liens of the type described in clauses (a) through
(c) above, provided that any extension, renewal or replacement Lien shall
be limited to the property encumbered by the existing Lien and the principal
amount of the indebtedness being extended, renewed or refinanced does not
increase

 

(e)                                  Liens
arising in the ordinary course of the business of Borrower or any of its
Subsidiaries by operation of law or regulation (including without limitation,
Liens of mechanics and materialmen), if payment in respect of any such Lien is
not at the time required and such Liens do not, in the aggregate, materially
detract from the value of the Property of Borrower or any of its Subsidiaries
or materially impair the use thereof in the operation of the business of
Borrower or any of its Subsidiaries;

 

(f)                                    Liens
securing hedging obligations issued on terms permitted by this Agreement;

 

(g)                                 Liens
incurred or deposits made in the ordinary course of business in connection with
(1) worker’s compensation, social security, unemployment insurance and
other like laws or (2) sales contracts, leases, statutory obligations,
work in progress advances and other similar obligations not incurred in
connection with the borrowing of money or the payment of the deferred purchase
price of property;

 

(h)                                 Reservations,
covenants, zoning and other land use regulations, title exceptions or
encumbrances granted in the ordinary course of business, affecting real
property owned or leased by Borrower or one of its Subsidiaries; provided
that such exceptions do not in the aggregate materially interfere with the use
of such property in the ordinary course of Borrower’s or such Subsidiary’s
business;

 

(i)                                     Liens
arising from judgments that do not give rise to an Event of Default, including
under Section 8.7; and

 

(j)                                     Liens
securing Subordinated Debt.

 

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

 

“Prime Rate” means
the greater of ***% or the Prime Rate published in the Money Rates section of
the Western Edition of The Wall Street Journal, or such other rate of interest
publicly announced from time to time by Lender as its Prime Rate.  Lender may price loans to its customers at,
above or below the Prime Rate.   Any
change in the Prime Rate shall take effect at the opening of business on the
day specified in the public announcement of a change in Prime Rate.

 

“Responsible Officer” means each of the Chief
Executive Officer, the Chief Operating Officer, the Chief Financial Officer,
the General Counsel, Senior Vice President of Finance, and the Controller of
Borrower.

 

“Revolving Facility” means the facility under which
Borrower may request Bank to issue Advances, as specified in Section 2.1(a) hereof.

 

“Revolving Line” means a credit extension of up to Ten
Million Dollars ($10,000,000).

 

“Revolving Maturity Date” means the second anniversary
of the Closing Date.

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

7

 

“Schedule” means the schedule of exceptions attached
hereto and approved by Bank, if any.

 

“Shares” means securities representing 65% of the
aggregate voting power of the issued and outstanding Capital Stock and
ownership interests of MIVA UK. 
Notwithstanding the foregoing, the term “Shares” shall not include
securities representing at any time more than 65% of the aggregate voting power
of the Capital Stock of a “controlled foreign corporation,” as defined in Section 957
of the Code.

 

“Subordinated Debt” means any debt incurred by
Borrower that is subordinated to the debt owing by Borrower to Bank in a manner
reasonably acceptable to Bank (and identified as being such by Borrower and
Bank).

 

“Subsidiary” means any corporation, company or
partnership in which (i) any general partnership interest or (ii) more
than 50% of the stock or other units of ownership which by the terms thereof
has the ordinary voting power to elect the Board of Directors, managers or
trustees of the entity, at the time as of which any determination is being
made, is owned by Borrower, either directly or through an Affiliate.

 

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

 

“UK Accounts” means those means all presently existing
and hereafter arising accounts, contract rights, payment intangibles, and all
other forms of obligations owing to MIVA UK arising out of the sale or lease of
goods (including, without limitation, the licensing of software and other
technology) or the rendering of services by MIVA UK, whether or not earned by
performance, and any and all credit insurance, guaranties, and other security
therefor, as well as all merchandise returned to or reclaimed by MIVA UK and
MIVA UK’s Books relating to any of the foregoing, that (a) arise in the
ordinary course of MIVA UK’s business, (b) are bona fide existing
obligations, (c) the property and services giving rise to such Accounts
has been delivered or rendered to the account debtor or to the account debtor’s
agent for immediate and unconditional acceptance by the account debtor, and (d) neither
Borrower nor MIVA UK has received notice of actual or imminent Insolvency
Proceeding of any account debtor that is included in any Borrowing Base
Certificate as an Eligible UK Account.

 

1.2                               Accounting
Terms.  All accounting terms not
specifically defined herein shall be construed in accordance with GAAP and all
calculations made hereunder shall be made in accordance with GAAP.  When used herein, the terms “financial
statements” shall include the notes and schedules thereto.

 

2.                                      LOAN
AND TERMS OF PAYMENT.

 

2.1                               Credit
Extensions.

 

Borrower promises
to pay to the order of Bank, in lawful money of the United States of America,
the aggregate unpaid principal amount of all Credit Extensions made by Bank to
Borrower hereunder.  Borrower shall also
pay interest on the unpaid principal amount of such Credit Extensions at rates
in accordance with the terms hereof.

 

(a)                                  Revolving
Advances.

 

(i)                                    Subject to and
upon the terms and conditions of this Agreement, Borrower may request Advances
in an aggregate outstanding amount not to exceed the lesser of (i) the
Revolving Line or (ii) the Borrowing Base, less any outstanding Letter of
Credit Outstandings, Cash Management Outstandings, and Foreign Exchange
Outstandings (all as defined below). Subject to the terms and conditions of
this Agreement, amounts borrowed pursuant to this Section 2.1(a) may
be repaid and reborrowed at any time prior to the Revolving Maturity Date, at
which time all Advances under this Section 2.1(a) shall be
immediately due and payable.  Borrower
may prepay any Advances without penalty or premium, including in case of
overadvances pursuant to Section 2.2.

 

(ii)                                Whenever Borrower
desires an Advance, Borrower will notify Bank by facsimile transmission or
telephone no later than 3:00 p.m. Pacific time, on the Business Day that
the Advance is to be made.  Each such
notification shall be promptly confirmed by a Payment/Advance Form in
substantially the form of 

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

8

 

Exhibit B
hereto.  Bank is authorized to make
Advances under this Agreement, based upon instructions received from a
Responsible Officer or a designee of a Responsible Officer, or without
instructions if in Bank’s discretion such Advances are necessary to meet
Obligations which have become due and remain unpaid.  Bank shall be entitled to rely on any
telephonic notice given by a person who Bank reasonably believes to be a
Responsible Officer or a designee thereof, and Borrower shall indemnify and
hold Bank harmless for any damages or loss suffered by Bank as a result of such
reliance.  Bank will credit the amount of
Advances made under this Section 2.1(a) to Borrower’s deposit
account.

 

(b)                                  Letter of Credit Sublimit. 
Subject to the terms and conditions of this Agreement, at any time prior
to the Revolving Maturity Date, Bank agrees to issue letters of credit for the
account of Borrower (each, a “Letter of Credit” and collectively, the “Letters
of Credit”) in an aggregate outstanding face amount (the “Letter of Credit
Outstandings”) not to exceed the lesser of the Revolving Line or the Borrowing
Base minus, in each case, the aggregate amount of the outstanding Advances,
Cash Management Outstandings and the Foreign Exchange Outstandings at any time,
provided that the Letter of Credit Advances Outstandings shall not exceed $***.  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 form of standard application and letter of
credit agreement (the “Application”), which Borrower hereby agrees to execute,
including payment of Bank’s standard fees based on the face amount of each
Letter of Credit.  On any drawn but
unreimbursed Letter of Credit, the unreimbursed amount shall be deemed an
Advance under Section 2.1(a).  Prior
to the Revolving Maturity Date, Borrower shall secure in cash all obligations
under any outstanding Letters of Credit on terms acceptable to Bank.  The obligation of Borrower to 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, the Application, and such Letters of Credit, under all
circumstances whatsoever.  Borrower shall
indemnify, defend, protect, and hold Bank harmless from any loss, cost, expense
or liability, including, without limitation, reasonable attorneys’ fees,
arising out of or in connection with any Letters of Credit, except for expenses
caused by Bank’s gross negligence or willful misconduct.

 

(c)                                  Cash Management Services. 
Subject to the terms and conditions of this Agreement, Bank agrees to
make available to Borrower up to $***for Bank’s cash management services, which
may include merchant services, direct deposit of payroll, business credit card,
and check cashing services identified in various cash management services
agreements related to such services (the “Cash Management Services”).  All amounts Bank pays for any Cash Management
Services will be treated as Advances under Section 2.1(a) and the
outstanding amount thereof at any time (collectively, the “Cash Management
Outstandings”) shall reduce, on a dollar-for-dollar basis, the amount available
for other Advances.  The Cash Management
Services shall be subject to additional terms set forth in applicable cash
management services agreements.

 

(d)                                  Foreign Exchange Facility. 
Subject to the terms and conditions of this Agreement, Borrower may, at
its option from time to time, enter into foreign exchange forward contracts
(collectively, the “Foreign Exchange Facility”) with Bank, under which Borrower
commits to purchase from or sell to Bank a set amount of foreign currency more
than one Business Day after the contract date (each such contract a “FX Forward
Contract”).  Bank will subtract ***%, or
such greater amount as determined by Bank, of each outstanding FX Forward
Contract from a  foreign exchange
sublimit of $*** (the “FX Reserve”). The total FX Forward Contracts at any one
time may not exceed *** times the amount of the FX Reserve.  ***of the amount of each outstanding FX Forward
Contract shall be treated as Advances under Section 2.1(a) and shall
reduce, so long as outstanding, on a dollar-for-dollar basis, the amount
available for other Advances.  Bank may
terminate the FX Forward Contracts if an Event of Default occurs.  Each FX Forward Contract shall be subject to
additional terms set forth in the applicable FX Forward Contract or other
agreements executed in connection with the Foreign Exchange Facility.

 

(e)                                  Total Availability of Letter of Credit Sublimit, Cash Management
Services, and Foreign Exchange Facility. The aggregate amount of (i) Letter
of Credit Outstandings, (ii) Cash Management Outstandings, and (iii) ten
(10) times the amount of Foreign Exchange Outstandings, shall not exceed
the lesser of ***or the Borrowing Base.

 

2.2                               Overadvances.  If the aggregate amount of the outstanding
Advances plus the aggregate face amount of all outstanding Letters of
Credit, outstanding amounts under the Cash Management Services, and
outstsanding amounts under the Foreign Exchange Facility exceeds the lesser of
the Revolving Line or the Borrowing Base at any time, Borrower shall
immediately pay to Bank, in cash, the amount of such excess.

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

9

 

2.3                               Interest
Rates, Payments, and Calculations.

 

(a)                                  Interest
Rates.

 

(i)                                    Advances.  Except as set forth in Section 2.3(b),
the Advances shall bear interest, on the outstanding Daily Balance thereof, at
a rate equal to one and one half of one percent (1.50%) above the Prime Rate,
provided however, in no event shall the rate be less than 6.5%.

 

(b)                                  Late
Fee; Default Rate.  If any payment is
not made within ten (10) days after the date such payment is due, Borrower
shall pay Bank a late fee equal to the lesser of (i) five percent (5%) of
the amount of such unpaid amount or (ii) the maximum amount permitted to
be charged under applicable law.  No late
fee shall be charged on any payments not timely made to Bank solely due to Bank’s
clerical or administrative error.  All
Obligations shall bear interest, from and after the occurrence and during the
continuance of an Event of Default, at a rate equal to five (5) percentage
points above the interest rate applicable immediately prior to the occurrence
of the Event of Default.

 

(c)                                  Payments.  Interest hereunder shall be due and payable
on the tenth calendar day of each month during the term hereof.  Bank shall, at its option, charge such
interest, all Bank Expenses, and all Periodic Payments against any of Borrower’s
deposit accounts or against the Revolving Line, in which case those amounts
shall thereafter accrue interest at the rate then applicable hereunder.  Any interest not paid when due shall be
compounded by becoming a part of the Obligations, and such interest shall
thereafter accrue interest at the rate then applicable hereunder.  All payments shall be free and clear of any
taxes, withholdings, duties, impositions or other charges, to the end that Bank
will receive the entire amount of any Obligations payable hereunder, regardless
of source of payment.  Payments will
initially be made via auto debit from the Borrower’s account at Bank.

 

(d)                                  Computation.  In the event the Prime Rate is changed from
time to time hereafter, the applicable rate of interest hereunder shall be
increased or decreased, effective as of the day the Prime Rate is changed, by
an amount equal to such change in the Prime Rate.  All interest chargeable under the Loan
Documents shall be computed on the basis of a three hundred sixty (360) day year
for the actual number of days elapsed.

 

2.4                               Lockbox.  Borrower shall enter into a remittance
processing services agreement (the “Lockbox Agreement”) acceptable to
Bank.  Borrower shall instruct account
debtors on all invoices dated or sent 30 days or more after the Closing Date to
make payments only to the lockbox address. 
Bank or the lockbox administrator is authorized to collect all envelopes
delivered to the lockbox, and endorse and deposit all checks into a cash
collateral account managed by Borrower. 
At any time that the Minimum Cash Ratio falls below ***, (a) such
cash collateral account shall be managed and controlled solely by Bank and
Borrower will not have access to that account; (b) Bank shall have the
exclusive right to receive all Collections on the Accounts and no Adjustments
will be made without the Bank’s consent; (c) Bank shall have, with respect
to any goods related to the Accounts, all the rights and remedies of an unpaid
seller under the California Uniform Commercial Code and other applicable law,
including the rights of replevin, claim and delivery, reclamation and stoppage in
transit; (d) if Borrower receives any payment from any Person, Borrower
will hold that payment in trust for Bank and immediately deliver it in the form
received to Bank; and (e) Bank may request that account debtors pay (by
wire transfer or otherwise) Collections to Bank directly.

 

2.5                               Crediting
Payments.  Subject to the foregoing Section 2.4,
prior to the occurrence of an Event of Default, Bank shall credit a wire
transfer of funds, check or other item of payment to such deposit account or
Obligation as Borrower specifies.  After
the occurrence of an Event of Default, the receipt by Bank of any wire transfer
of funds, check, or other item of payment shall be immediately applied to
conditionally reduce Obligations, but shall not be considered a payment on
account unless such payment is of immediately available federal funds or unless
and until such check or other item of payment is honored when presented for payment.  Notwithstanding anything to the contrary
contained herein, any wire transfer or payment received by Bank after
12:00 noon Pacific time shall be deemed to have been received by Bank as
of the opening of business on the immediately following Business Day.  Whenever any payment to Bank under the Loan
Documents would otherwise be due (except by reason of acceleration) on a date
that is not a Business Day, such payment shall instead be due on the next
Business Day, and additional fees or interest, as the case may be, shall accrue
and be payable for the period of such extension.

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

10

 

2.6                               Fees.  Borrower shall pay to Bank the following:

 

(a)                                  Commitment
Fee.  On the Closing Date and
annually thereafter, a Facility Fee equal to ***, which shall be nonrefundable;

 

(b)                                  ***;
and

 

(c)                                  Bank
Expenses.  On the Closing Date, all
Bank Expenses incurred through the Closing Date, including reasonable attorneys’
fees and expenses; provided, however, that such Bank Expenses shall not exceed
Thirty-Five Thousand and 00/100 Dollars and, after the Closing Date, all Bank
Expenses, including reasonable attorneys’ fees and expenses, as and when they
are incurred by Bank.

 

2.7                               Term.  This Agreement shall become effective on the
Closing Date and, subject to Section 12.7, shall continue in full force
and effect for so long as any Obligations remain outstanding or Bank has any
obligation to make Credit Extensions under this Agreement.  Notwithstanding the foregoing, Bank shall
have the right to terminate its obligation to make Credit Extensions under this
Agreement immediately and without notice upon the occurrence and during the
continuance of an Event of Default. 
Notwithstanding termination, Bank’s Lien on the Collateral shall remain
in effect for so long as any Obligations are outstanding.

 

3.                                      CONDITIONS
OF LOANS.

 

3.1                               Conditions
Precedent to Initial Credit Extension. 
The obligation of Bank to make the initial Credit Extension is subject
to the condition precedent that Bank shall have received, in form and substance
satisfactory to Bank, the following:

 

(a)                                  this
Agreement;

 

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

 

(c)                                  UCC
National Form Financing Statement;

 

(d)                                  an
intellectual property security agreement;

 

(e)                                  a
lockbox agreement;

 

(f)                                    side
letter regarding the judgment set forth in the Memorandum Opinion issued by the
Court of Chancery of the State of Delaware decided on October 22, 2008, as
previously provided to Bank;

 

(g)                                 a
fee of $***;

 

(h)                                 agreement
to provide insurance or certificate(s) of insurance naming Bank as loss
payee and additional insured;

 

(i)                                    executed
stock powers and share certificates representing Borrower’s interest in
Guarantor;

 

(j)                                    UCC-3
Financing Statement with respect to Fifth Third Bank;

 

(k)                                Guaranty,
Debenture and Charge Over Shares executed by Guarantor, perfecting Bank’s
security interest in Guarantor’s assets;

 

(l)                                    payment
of the fees and Bank Expenses then due specified in Section 2.6 hereof;

 

(m)                              current
financial statements of Borrower;

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

11

 

(n)                                 an
audit of the Collateral and UK Accounts, the results of which have been
provided and are satisfactory to Bank; and

 

(o)                                  such
other documents, and completion of such other matters, as Bank may reasonably
deem necessary or appropriate.

 

3.2                               Conditions
Precedent to all Credit Extensions. 
The obligation of Bank to make each Credit Extension, including the
initial Credit Extension, is further subject to the following conditions:

 

(a)                                  timely
receipt by Bank of the Payment/Advance Form as provided in Section 2.1;
and

 

(b)                                  the
representations and warranties contained in Section 5 shall be true and
correct in all material respects on and as of the date of such Payment/Advance Form and
on the effective date of each Credit Extension as though made at and as of each
such date, and no Event of Default shall have occurred and be continuing, or
would exist after giving effect to such Credit Extension.  The making of each Credit Extension shall be
deemed to be a representation and warranty by Borrower on the date of such
Credit Extension as to the accuracy of the facts referred to in this Section 3.2.

 

4.                                      CREATION
OF SECURITY INTEREST.

 

4.1                               Grant
of Security Interest.  Borrower
grants and pledges to Bank a continuing security interest in all presently
existing and hereafter acquired or arising Collateral in order to secure prompt
repayment of any and all Obligations and in order to secure prompt performance
by Borrower of each of its covenants and duties under the Loan Documents.  Except as set forth in the Schedule, such
security interest constitutes a valid, first priority security interest in the
presently existing Collateral, and will constitute a valid, first priority
security interest in Collateral acquired after the date hereof.

 

4.2                               Delivery
of Additional Documentation Required. 
Borrower shall from time to time execute and deliver to Bank, at the
request of Bank, all Negotiable Collateral, all financing statements and other
documents that Bank may reasonably request, in form satisfactory to Bank and
Borrower, to perfect and continue the perfection of Bank’s security interests
in the Collateral and in order to fully consummate all of the transactions
contemplated under the Loan Documents. 
Borrower from time to time may deposit with Bank specific time deposit
accounts to secure specific Obligations. Borrower authorizes Bank to hold such
balances in pledge and to decline to honor any drafts thereon or any request by
Borrower or any other Person to pay or otherwise transfer any part of such
balances for so long as the Obligations are outstanding.

 

4.3                               Pledge
of Shares.  Borrower pledges, assigns
and grants to Bank a security interest in all the Shares held or owned of
record by Borrower, together with all proceeds and substitutions thereof, all
cash, stock and other moneys and property paid thereon, all rights to subscribe
for securities declared or granted in connection therewith, and all other cash
and noncash proceeds of the foregoing, as security for the performance of the
Obligations.  On the Closing Date, the
certificate or certificates for the Shares will be delivered to Bank,
accompanied by an instrument of assignment duly executed in blank by
Borrower.  To the extent required by the
terms and conditions governing the Shares, Borrower shall cause the books of
each entity whose Shares are part of the Collateral and any transfer Bank to
reflect the pledge of the Shares.  Unless
an Event of Default shall have occurred and be continuing, Borrower shall be
entitled to receive and exercise any benefits accruing to the owner of the
Shares, including receive any proceeds from the Shares, exercise any voting
rights with respect to the relevant Shares and to give consents, waivers and
ratifications in respect thereof, provided that no vote shall be cast or
consent, waiver or ratification given or action taken which would be inconsistent
with any of the terms of this Agreement or which would constitute or create any
violation of any of such terms.  All such
rights to vote and give consents, waivers and ratifications shall be suspended
upon the occurrence and continuance of an Event of Default.

 

4.4                               Right
to Inspect.  Bank (through any of its
officers, employees, or agents) shall have the right, upon reasonable prior
notice, from time to time during Borrower’s usual business hours but no more
than once a year (unless an Event of Default has occurred and is continuing),
to inspect Borrower’s Books and to make copies 

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

12

 

thereof and to
check, test, and appraise the Collateral in order to verify Borrower’s
financial condition or the amount, condition of, or any other matter relating
to, the Collateral.

 

5.                                      REPRESENTATIONS
AND WARRANTIES.

 

Borrower represents and
warrants as follows:

 

5.1                               Due
Organization and Qualification. 
Borrower and each Subsidiary is a corporation duly existing under the
laws of its state of incorporation and qualified and licensed to do business in
any state in which the conduct of its business or its ownership of property
requires that it be so qualified or in which the failure of Borrower or any of
its Subsidiaries to be so qualified could reasonably be expected to have a
material adverse effect.

 

5.2                               Due
Authorization; No Conflict.  The
execution, delivery, and performance of the Loan Documents are within Borrower’s
powers, have been duly authorized, and are not in conflict with nor constitute
a breach of any provision contained in Borrower’s Articles of Incorporation or
Bylaws, nor will they constitute an event of default under any material
agreement to which Borrower is a party or by which Borrower is bound.  Borrower is not in default under any material
agreement to which it is a party or by which it is bound.

 

5.3                               No
Prior Encumbrances.  Borrower has
good and marketable title to its property (excluding Equipment subject to Liens
permitted under subsection (c) of the definition of Permitted Liens), free
and clear of Liens, except for Permitted Liens.

 

5.4                               Bona
Fide Eligible Accounts.  The Eligible
Accounts are bona fide existing obligations. 
The property and services giving rise to such Eligible Accounts has been
delivered or rendered to the account debtor or to the account debtor’s agent
for immediate and unconditional acceptance by the account debtor.  Borrower has not received notice of actual or
imminent Insolvency Proceeding of any account debtor that is included in any
Borrowing Base Certificate as an Eligible Account.

 

5.5                               Merchantable
Inventory.  All Inventory is in all
material respects of good and marketable quality, free from all material
defects, except for Inventory for which adequate reserves have been made.

 

5.6                               Intellectual
Property Collateral.  Borrower is the
sole owner of the Intellectual Property Collateral, except for non-exclusive
licenses granted by Borrower to its customers in the ordinary course of
business.  To the best of Borrower’s
knowledge, each of the Patents is valid and enforceable.  No part of the Intellectual Property
Collateral has been judged invalid or unenforceable, in whole or in part, and
no claim has been made that any part of the Intellectual Property Collateral
violates the rights of any third party. 
Except as set forth in the Schedule, Borrower’s rights as a licensee of
intellectual property do not give rise to more than five percent (5%) of its
gross revenue in any given month, including without limitation revenue derived
from the sale, licensing, rendering or disposition of any product or
service.  Except as set forth in the
Schedule, Borrower is not a party to, or bound by, any agreement that restricts
the grant by Borrower of a security interest in Borrower’s rights under such
agreement.

 

5.7                               Name;
Location of Chief Executive Office. 
Except as disclosed in the Schedule, Borrower has not done business
under any name other than that specified on the signature page hereof.  The chief executive office of Borrower is
located at the address indicated in Section 10 hereof.  All Borrower’s Inventory and Equipment is
located only at the locations set forth in the Schedule.

 

5.8                               Litigation.  Except as set forth in the Schedule, there
are no actions or proceedings pending by or against Borrower or any Subsidiary
before any court or administrative agency in which an adverse decision could
have a Material Adverse Effect, or a material adverse effect on Borrower’s
interest or Bank’s security interest in the Collateral.

 

5.9                               No
Material Adverse Change in Financial Statements.  All consolidated and consolidating financial
statements related to Borrower and any Subsidiary that Bank has received from
Borrower fairly present in all material respects Borrower’s financial condition
as of the date thereof and Borrower’s consolidated and consolidating results of
operations for the period then ended. 
There has not been a material adverse change in the consolidated or the 

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

13

 

consolidating
financial condition of Borrower since the date of the most recent of such
financial statements submitted to Bank.

 

5.10                        Solvency,
Payment of Debts.  Borrower is
solvent and able to pay its debts (including trade debts) as they mature.

 

5.11                        Regulatory
Compliance.  Borrower and each
Subsidiary have met the minimum funding requirements of ERISA with respect to
any employee benefit plans subject to ERISA, and no event has occurred
resulting from Borrower’s failure to comply with ERISA that could result in
Borrower’s incurring any material liability. 
Borrower is not an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940.  Borrower is not engaged principally, or as
one of the important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations T and U of the Board of Governors of the Federal Reserve
System).  Borrower has complied with all
the provisions of the Federal Fair Labor Standards Act.  Borrower has not violated any statutes, laws,
ordinances or rules applicable to it, violation of which could have a
Material Adverse Effect.

 

5.12                        Environmental
Condition.  Except as disclosed in
the Schedule, none of Borrower’s or any Subsidiary’s properties or assets has
ever been used by Borrower or any Subsidiary or, to the best of Borrower’s
knowledge, by previous owners or operators, in the disposal of, or to produce,
store, handle, treat, release, or transport, any hazardous waste or hazardous
substance other than in accordance with applicable law; to the best of Borrower’s
knowledge, none of Borrower’s properties or assets has ever been designated or
identified in any manner pursuant to any environmental protection statute as a
hazardous waste or hazardous substance disposal site, or a candidate for
closure pursuant to any environmental protection statute; no lien arising under
any environmental protection statute has attached to any revenues or to any
real or personal property owned by Borrower or any Subsidiary; and neither
Borrower nor any Subsidiary has received a summons, citation, notice, or
directive from the Environmental Protection Agency or any other federal, state
or other governmental agency concerning any action or omission by Borrower or
any Subsidiary resulting in the releasing, or otherwise disposing of hazardous
waste or hazardous substances into the environment.

 

5.13                        Taxes.  Borrower and each Subsidiary have filed or
caused to be filed all tax returns required to be filed, and have paid, or have
made adequate provision for the payment of, all taxes reflected therein, except
where such failure to file or pay could not have a material adverse effect on
the Company.

 

5.14                        Subsidiaries.  Borrower does not own any stock, partnership
interest or other equity securities of any Person, except for Permitted
Investments.

 

5.15                        Government
Consents.  Borrower and each
Subsidiary have obtained all material consents, approvals and authorizations
of, made all declarations or filings with, and given all notices to, all
governmental authorities that are necessary for the continued operation of
Borrower’s business as currently conducted.

 

5.16                        Accounts.  Except as set forth on the Schedule, none of
Borrower’s nor any domestic Subsidiary’s property is maintained or invested
with a Person other than Bank.

 

5.17                        Shares.  Borrower has full power and authority to
create a first lien on the Shares and no disability or contractual obligation exists
that would prohibit Borrower from pledging the Shares pursuant to this
Agreement.  There are no subscriptions,
warrants, rights of first refusal or other restrictions on transfer relative
to, or options exercisable with respect to the Shares.  The Shares have been and will be duly
authorized and validly issued, and are fully paid and non-assessable.  The Shares are not the subject of any present
or threatened suit, action, arbitration, administrative or other proceeding,
and Borrower knows of no reasonable grounds for the institution of any such
proceedings.

 

5.18                        Full
Disclosure.  No representation,
warranty or other statement made by Borrower in any certificate or written
statement furnished to Bank contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained in such certificates or statements not misleading.

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

14

 

6.                                      AFFIRMATIVE
COVENANTS.

 

Borrower shall do all of the following:

 

6.1                               Good
Standing.  Borrower shall maintain
its and each of its Subsidiaries’ corporate existence and good standing in its
jurisdiction of incorporation and maintain qualification in each jurisdiction
in which it is required under applicable law. 
Borrower shall maintain, and shall cause each of its Subsidiaries to maintain,
in force all licenses, approvals and agreements, the loss of which could have a
Material Adverse Effect.

 

6.2                               Government
Compliance.  Borrower shall meet, and
shall cause each Subsidiary to meet, the minimum funding requirements of ERISA
with respect to any employee benefit plans subject to ERISA.  Borrower shall comply, and shall cause each
Subsidiary to comply, with all statutes, laws, ordinances and government rules and
regulations to which it is subject, noncompliance with which could have a
Material Adverse Effect.

 

6.3                               Financial
Statements, Reports, Certificates. 
Borrower shall deliver the following to Bank:  (a) as soon as available, but in any
event within thirty (30) days after the end of each calendar month, a company
prepared consolidated balance sheet, income, and cash flow statement covering
Borrower’s consolidated operations during such period, prepared in accordance
with GAAP, consistently applied, in a form acceptable to Bank and certified by
a Responsible Officer; (b) as soon as available, but in any event within
one hundred and twenty (120) days after the end of Borrower’s fiscal year,
consolidated financial statements of Borrower prepared in accordance with GAAP,
consistently applied, together with an unqualified opinion on such financial
statements of an independent certified public accounting firm reasonably
acceptable to Bank; (c) copies of all statements, reports and notices sent
or made available generally by Borrower to its security holders or to any
holders of Subordinated Debt and, if applicable, all reports on Forms 10-K
and 10-Q filed with the Securities and Exchange Commission; (d) promptly
upon receipt of notice thereof, a 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 ***or more; (e) within fifteen (15)
days prior to Borrower’s fiscal year end, an annual operating budget for the
upcoming fiscal year approved by Borrower’s board of directors, and in a form
acceptable to Bank, and (f) such budgets, sales projections, operating
plans or other financial information as Bank may reasonably request from time
to time.

 

(g)                                 Within
thirty (30) days after the last day of each month, Borrower shall deliver to
Bank a Borrowing Base Certificate signed by a Responsible Officer in
substantially the form of Exhibit C-1 and Exhibit C-2 hereto, together with aged listings of
accounts receivable and accounts payable; provided however,
that at all times when the Minimum Cash Ratio falls below ***, Borrower shall
deliver the Borrowing Base Certificate and aged listings of accounts receivable
and accounts payable twice per month, no later than five days following the 1st and the 15th of each month.

 

(h)                                 Borrower
shall deliver to Bank with the monthly financial statements a Compliance
Certificate signed by a Responsible Officer in substantially the form of Exhibit D hereto.

 

(i)                                     Bank
shall have a right from time to time hereafter to audit Borrower’s Accounts and
appraise Collateral at Borrower’s expense, provided that such audits will be
conducted at least every twelve (12) months (and no more than once per year)
unless an Event of Default has occurred and is continuing. Notwithstanding the
foregoing, at all times that the Minimum Cash Ratio falls below ***, Bank shall
have a right to (i) audit and appraise Borrower’s Collateral at Borrower’s
expense twice per year and (ii) independently verify Borrower’s Accounts
as Bank deems reasonably necessary, including the review of any and all records
pertaining to the Accounts, contacting account debtors and other persons
obligated or knowledgeable in respect of Accounts to confirm the receivable
amount of such Accounts, to determine whether Accounts constitute Eligible
Accounts, and for any other purpose in connection with this Agreement.

 

6.4                               Inventory;
Returns.  Borrower shall keep all
Inventory in good and marketable condition, free from all material defects
except for Inventory for which adequate reserves have been made.  Returns and allowances, if any, as between
Borrower and its account debtors shall be on the same basis and in accordance
with the usual customary practices of Borrower, as they exist at the time of
the execution and delivery of this Agreement. 
Borrower shall promptly notify Bank of all returns and recoveries and of
all disputes and claims, where the return, recovery, dispute or claim involves
more than ***.

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

15

 

6.5                               Taxes.  Borrower shall make, and shall cause each
Subsidiary to make, due and timely payment or deposit of all material federal,
state, and local taxes, assessments, or contributions required of it by law,
and will execute and deliver to Bank, on demand, appropriate certificates
attesting to the payment or deposit thereof; and Borrower will make, and will
cause each Subsidiary to make, timely payment or deposit of all material tax
payments and withholding taxes required of it by applicable laws, including,
but not limited to, those laws concerning F.I.C.A., F.U.T.A., state disability,
and local, state, and federal income taxes, and will, upon request, furnish
Bank with proof satisfactory to Bank indicating that Borrower or a Subsidiary
has made such payments or deposits; provided that Borrower or a Subsidiary need
not make any payment if the amount or validity of such payment is contested in
good faith by appropriate proceedings and is reserved against (to the extent required
by GAAP) by Borrower.

 

6.6                               Insurance.

 

(a)                                  Borrower,
at its expense, shall keep the Collateral insured against loss or damage by
fire, theft, explosion, sprinklers, and all other hazards and risks, and in
such amounts, as ordinarily insured against by other owners in similar
businesses conducted in the locations where Borrower’s business is conducted on
the date hereof.  Borrower shall also
maintain insurance relating to Borrower’s business, ownership and use of the
Collateral in amounts and of a type that are customary to businesses similar to
Borrower’s.

 

(b)                                  All
such policies of insurance shall be in such form, with such companies, and in
such amounts as are reasonably satisfactory to Bank.  All such policies of property insurance shall
contain a lender’s loss payable endorsement, in a form satisfactory to Bank,
showing Bank as an additional loss payee thereof, and all liability insurance
policies shall show the Bank as an additional insured and shall specify that
the insurer must give at least twenty (20) days notice to Bank before canceling
its policy for any reason.  Upon Bank’s
request, Borrower shall deliver to Bank certificates evidencing such policies
of insurance and evidence of the payments of all premiums therefor.  All proceeds payable under any such policy
shall, at the option of Bank, be payable to Bank to be applied on account of
the Obligations.

 

6.7                               Accounts.  Within 60 days of the Closing Date, Borrower
shall transfer and maintain, and shall cause each of its domestic Subsidiaries
to transfer and maintain, all of its primary depository and investment accounts
with Bank.  Any deposit, operating or
short-term investment accounts not held at Bank or Bank’s affiliates shall be
subject to an account control agreement or other appropriate instrument
satisfactory to Bank to perfect Bank’s Lien in such account in accordance with
the terms hereunder.

 

6.8                               Asset
Coverage Ratio.  Borrower shall
maintain at all times an Asset Coverage Ratio of at least ***, to be measured
on a monthly basis.

 

6.9                               AEBITDA.  Borrower shall maintain a maximum AEBITDA
loss of ***for the quarter ending March 31, 2009, and for each quarter
thereafter, a minimum AEBITDA of ***.

 

6.10                        Intellectual
Property Rights.

 

(a)                                  Borrower
shall promptly give Bank written notice of any applications or registrations of
intellectual property rights filed with the United States Patent and Trademark
Office, including the date of such filing and the registration or application
numbers, if any.  Borrower shall (i) give
Bank not less than 30 days prior written notice of the filing of any
applications or registrations with the United States Copyright Office,
including the title of such intellectual property rights to be registered, as
such title will appear on such applications or registrations, and the date such
applications or registrations will be filed, and (ii) prior to the filing
of any such applications or registrations, shall execute such documents as Bank
may reasonably request for Bank to maintain its perfection in such intellectual
property rights to be registered by Borrower, and upon the request of Bank,
shall file such documents simultaneously with the filing of any such
applications or registrations.  Upon
filing any such applications or registrations with the United States Copyright
Office, Borrower shall promptly provide Bank with (i) a copy of such
applications or registrations, without the exhibits, if any, thereto, (ii) evidence
of the filing of any documents requested by Bank to be filed for Bank to
maintain the perfection and priority of its security interest in such
intellectual property rights, and (iii) the date of such filing.

 

(b)                                  Bank
may audit Borrower’s Intellectual Property Collateral to confirm compliance 

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

16

 

with this Section,
provided such audit may not occur more often than twice per year, unless an
Event of Default has occurred and is continuing.  Bank shall have the right, but not the
obligation, to take, at Borrower’s sole expense, any actions that Borrower is
required under this Section to take but which Borrower fails to take,
after 15 days’ notice to Borrower.  Borrower
shall reimburse and indemnify Bank for all reasonable costs and reasonable
expenses incurred in the reasonable exercise of its rights under this Section.

 

6.11                        Domestic
Subsidiary Guarantees.  Within thirty
(30) days of the Closing Date, Borrower shall cause its Domestic Subsidiaries
to enter into secured guarantees for the benefit of Bank, in form and substance
previously provided to Borrower and acceptable to Bank.

 

6.12                        Further
Assurances.  At any time and from
time to time Borrower shall execute and deliver such further instruments and
take such further action as may reasonably be requested by Bank to effect the
purposes of this Agreement.

 

7.                                      NEGATIVE
COVENANTS.

 

Borrower will not do any of the following:

 

7.1                               Dispositions.  Convey, sell, lease, transfer or otherwise
dispose of (collectively, a “Transfer”), or permit any of its Subsidiaries to
Transfer, all or any part of its business or property, other than:  (i) Transfers of Inventory in the
ordinary course of business; (ii) Transfers between Borrower and its
Subsidiaries, provided that Bank maintains a perfected security interest in
such Subsidiary’s assets; (iii) Transfers of web properties or domain
names in the ordinary course of business not in excess of ***, provided that
Bank maintains its perfected security interest in the proceeds of such
Transfers;
(iv) Transfers of non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; or (v) Transfers of worn-out or obsolete
Equipment which was not financed by Bank.

 

7.2                               Change
in Business; Change in Control or Executive Office.  Engage in any business, or permit any of its
Subsidiaries to engage in any business, other than the businesses currently
engaged in by Borrower and any business substantially similar or related
thereto (or incidental thereto); or cease to conduct business in the manner
conducted by Borrower as of the Closing Date; or suffer or permit a Change in
Control; or without thirty (30) days prior written notification to Bank,
relocate its chief executive office or state of incorporation or change its
legal name; or without Bank’s prior written consent, change the date on which
its fiscal year ends.

 

7.3                               Mergers
or Acquisitions.  Merge or
consolidate, or permit any of its Subsidiaries to merge or consolidate, with or
into any other business organization, or acquire, or permit any of its
Subsidiaries to acquire, all or substantially all of the capital stock or
property of another Person, except mergers of any Subsidiary of Borrower into
another wholly-owned Subsidiary of Borrower.

 

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

 

7.5                               Encumbrances.  Create, incur, assume or suffer to exist any
Lien with respect to any of its property, or assign or otherwise convey any
right to receive income, including the sale of any Accounts, or permit any of
its Subsidiaries so to do, except for Permitted Liens, or agree with any Person
other than Bank not to grant a security interest in, or otherwise encumber, any
of its property, including intellectual property, or permit any Subsidiary to
do so.

 

7.6                               Distributions.  Pay any dividends or make any other
distribution or payment on account of or in redemption, retirement or purchase
of any capital stock, or permit any of its Subsidiaries to do so, except that (i) Borrower
may repurchase the stock of former employees pursuant to stock repurchase
agreements, (ii) Borrower may repurchase the stock of employees or
directors upon vesting of restricted stock, restricted stock units or other
stock-based awards or upon exercise of stock options granted under equity
compensation plans maintained by the Borrower in the ordinary course of
business, as long as an Event of Default does not exist prior to such
repurchase or would not exist after giving effect to such repurchase.

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

17

 

7.7                               Investments.  Directly or indirectly acquire or own, or
make any Investment in or to any Person, or permit any of its Subsidiaries so
to do, other than Permitted Investments; or maintain or invest any of its
property with a Person other than Bank or permit any of its Subsidiaries to do
so unless such Person has entered into an account control agreement with Bank
in form and substance satisfactory to Bank; or suffer or permit any Subsidiary
to be a party to, or be bound by, an agreement that restricts such Subsidiary
from paying dividends or otherwise distributing property to Borrower.

 

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.  Anything
to the contrary in the foregoing notwithstanding, Borrower and Bank acknowledge
that Borrower has entered into and will continue to enter into certain transactions
with Steakmedia and Racepoint Group, entities in which certain members of
Borrower’s Board of Directors act as owners or executives; such transactions
are in the ordinary course of Borrower’s business, and are upon fair and
reasonable terms no less favorable to Borrower than would be obtained in an arm’s
length transaction with a non-affiliated Person.

 

7.9                               Subordinated
Debt.  Make any payment in respect of
any Subordinated Debt, or permit any of its Subsidiaries to make any such
payment, except in compliance with the terms of such Subordinated Debt, or
amend any provision contained in any documentation relating to the Subordinated
Debt without Bank’s prior written consent, not to be unreasonably withheld or
delayed.

 

7.10                        Inventory
and Equipment. Store the Inventory or the Equipment with a bailee,
warehouseman, or other third party unless the third party has been notified of
Bank’s security interest and Bank (a) has received an acknowledgment from
the third party that it is holding or will hold the Inventory or Equipment for
Bank’s benefit or (b) is in pledge possession of the warehouse receipt,
where negotiable, covering such Inventory or Equipment. Store or maintain any
Equipment or Inventory at a location other than the location set forth in Section 10
of this Agreement.

 

7.11                        Compliance.  Become an “investment company” or be
controlled by an “investment company,” within the meaning of the Investment
Company Act of 1940, or become principally engaged in, or undertake as one of
its important activities, the business of extending credit for the purpose of
purchasing or carrying margin stock, or use the proceeds of any Credit
Extension for such 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 law or regulation, which violation
could have a Material Adverse Effect, or a material adverse effect on the
Collateral or the priority of Bank’s Lien on the Collateral, or permit any of
its Subsidiaries to do any of the foregoing.

 

8.                                      EVENTS
OF DEFAULT.

 

Any one or more of the following events shall
constitute an Event of Default by Borrower under this Agreement:

 

8.1                               Payment
Default.  If Borrower fails to pay,
when due, any of the Obligations; provided however, Borrower’s failure to pay
due solely to Bank’s clerical or administrative error in executing the
auto-debit from Borrower’s account in a timely manner shall not be considered
an Event of Default under this Section 8.1;

 

8.2                               Covenant
Default.

 

(a)                                  If
Borrower fails to perform any obligation under Article 6 or violates any
of the covenants contained in Article 7 of this Agreement; or

 

(b)                                  If
Borrower fails or neglects to perform or observe any other material term, provision,
condition, covenant contained in this Agreement, in any of the Loan Documents,
or in any other present or future agreement between Borrower and Bank and as to
any default under such other term, provision, condition or covenant that can be
cured, has failed to cure such default within twenty days after Borrower
receives notice thereof or 

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

18

 

any officer of
Borrower becomes aware thereof; provided, however, that if the default cannot
by its nature be cured within the ten day period or cannot after diligent
attempts by Borrower be cured within such ten day period, and such default is
likely to be cured within a reasonable time, then Borrower shall have an
additional reasonable period (which shall not in any case exceed 40 days) to
attempt to cure such default, and within such reasonable time period the failure
to have cured such default shall not be deemed an Event of Default but no
Credit Extensions will be made.

 

8.3                               Material
Adverse Effect.  If there occurs any
circumstance or circumstances that could reasonably be expected to have a
Material Adverse Effect;

 

8.4                               Attachment.  If any portion of Borrower’s assets is
attached, seized, subjected to a writ or distress warrant, or is levied upon,
or comes into the possession of any trustee, receiver or person acting in a
similar capacity and such attachment, seizure, writ or distress warrant or levy
has not been removed, discharged or rescinded within ten (10) days, or if
Borrower is enjoined, restrained, or in any way prevented by court order from
continuing to conduct all or any material part of its business affairs, or if a
judgment or other claim becomes a lien or encumbrance upon any material portion
of Borrower’s assets, or if a notice of lien, levy, or assessment is filed of
record with respect to any of Borrower’s assets by the United States
Government, or any department, agency, or instrumentality thereof, or by any
state, county, municipal, or governmental agency, and the same is not paid
within ten (10) days after Borrower receives notice thereof, provided that
none of the foregoing shall constitute an Event of Default where such action or
event is stayed or an adequate bond has been posted pending a good faith
contest by Borrower (provided that no Credit Extensions will be required to be
made during such cure period);

 

8.5                               Insolvency.  If Borrower becomes insolvent, or if an
Insolvency Proceeding is commenced by Borrower, or if an Insolvency Proceeding
is commenced against Borrower and is not dismissed or stayed within thirty (30)
days (provided that no Credit Extensions will be made prior to the dismissal of
such Insolvency Proceeding);

 

8.6                               Other
Agreements.  If there is a default or
other failure to perform in any agreement to which Borrower is a party or by
which it is bound resulting in a right by a third party or parties, whether or
not exercised, to accelerate the maturity of any Indebtedness in an amount in
excess of ***or which could have a Material Adverse Effect;

 

8.7                               Judgments.  If a judgment or judgments for the payment of
money in an amount, individually or in the aggregate, of at least ***shall be
rendered against Borrower and shall remain unsatisfied and unstayed for a
period of thirty (30) days (provided that no Credit Extensions will be made
prior to the satisfaction or stay of such judgment);

 

8.8                               Misrepresentations.  If any material misrepresentation or material
misstatement exists now or hereafter in any warranty or representation set
forth herein or in any certificate delivered to Bank by any Responsible Officer
pursuant to this Agreement or to induce Bank to enter into this Agreement or
any other Loan Document; or

 

8.9                               Guaranty.  If any guaranty of all or a portion of the
Obligations (a “Guaranty”) ceases for any reason to be in full force and
effect, or any guarantor fails to perform any obligation under any Guaranty or
a security agreement securing any Guaranty (collectively, the “Guaranty
Documents”), or any event of default occurs under any Guaranty Document or any
guarantor revokes or purports to revoke a Guaranty, or any material
misrepresentation or material misstatement exists now or hereafter in any
warranty or representation set forth in any Guaranty Document or in any
certificate delivered to Bank in connection with any Guaranty Document, or if
any of the circumstances described in Sections 8.3 through 8.8 occur with
respect to any guarantor or any guarantor dies or becomes subject to any
criminal prosecution, or any circumstances arise causing Bank, in good faith,
to become insecure as to the satisfaction of any of any guarantor’s obligations
under the Guaranty Documents.

 

9.                                      BANK’S
RIGHTS AND REMEDIES.

 

9.1                               Rights
and Remedies.  Upon the occurrence
and during the continuance of an Event of Default, Bank may, at its election,
without notice of its election and without demand, do any one or more of the
following, all of which are authorized by Borrower:

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

19

 

(a)                                  Declare
all Obligations, whether evidenced by this Agreement, by any of the other Loan
Documents, or otherwise, immediately due and payable (provided that upon the
occurrence of an Event of Default described in Section 8.5, all
Obligations shall become immediately due and payable without any action by
Bank);

 

(b)                                  Demand
that Borrower  (i) deposit cash with
Bank in an amount equal to the amount of any Letters of Credit remaining
undrawn, as collateral security for the repayment of any future drawings under
such Letters of Credit, and (ii) pay in advance all Letter of Credit fees
scheduled to be paid or payable over the remaining term of the Letters of
Credit, and Borrower shall promptly deposit and pay such amounts;

 

(c)                                  Cease
advancing money or extending credit to or for the benefit of Borrower under
this Agreement or under any other agreement between Borrower and Bank;

 

(d)                                  Settle
or adjust disputes and claims directly with account debtors for amounts, upon
terms and in whatever order that Bank reasonably considers advisable;

 

(e)                                  Make
such payments and do such acts as Bank considers necessary or reasonable to
protect its security interest in the Collateral.  Borrower agrees to assemble the Collateral if
Bank so requires, and to make the Collateral available to Bank as Bank may
designate.  Borrower authorizes Bank to
enter the premises where the Collateral is located, to take and maintain
possession of the Collateral, or any part of it, and to pay, purchase, contest,
or compromise any encumbrance, charge, or lien which in Bank’s determination
appears to be prior or superior to its security interest and to pay all
expenses incurred in connection therewith. 
With respect to any of Borrower’s owned premises, Borrower hereby grants
Bank a license to enter into possession of such premises and to occupy the
same, without charge, in order to exercise any of Bank’s rights or remedies
provided herein, at law, in equity, or otherwise;

 

(f)                                    Set
off and apply to the Obligations any and all (i) balances and deposits of Borrower
held by Bank, or (ii) indebtedness at any time owing to or for the credit
or the account of Borrower held by Bank;

 

(g)                                 Ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise
for sale, and sell (in the manner provided for herein) the Collateral.  Bank is hereby granted a license or other
right, solely pursuant to the provisions of this Section 9.1, to use,
without charge, Borrower’s labels, patents, copyrights, rights of use of any
name, trade secrets, trade names, trademarks, service marks, and advertising
matter, or any property of a similar nature, as it pertains to the Collateral,
in completing production of, advertising for sale, and selling any Collateral
and, in connection with Bank’s exercise of its rights under this Section 9.1,
Borrower’s rights under all licenses and all franchise agreements shall inure
to Bank’s benefit;

 

(h)                                 Dispose
of the Collateral by way of one or more contracts or transactions, for cash or
on terms, in such manner and at such places (including Borrower’s premises) as
Bank determines is commercially reasonable, and apply any proceeds to the
Obligations in whatever manner or order Bank deems appropriate;

 

(i)                                    Bank
may credit bid and purchase at any public sale; and

 

(j)                                    Any
deficiency that exists after disposition of the Collateral as provided above
will be paid immediately by Borrower.

 

9.2                               Power
of Attorney.  Borrower irrevocably
appoints Bank and its successors and assigns as Borrower’s true and lawful
attorney in fact, and authorizes Bank, at Borrower’s sole expense, whether or
not there has been an Event of Default and at any time the Minimum Cash Ratio
is below ***, to (a) receive and open all mail addressed to Borrower for
the purpose of collecting the Accounts; (b) endorse Borrower’s name on any
checks or other forms of payment on the Accounts; (c) sign Borrower’s name
on any invoice or bill of lading relating to any Account, drafts against
account debtors, schedules and assignments of Accounts, verifications of
Accounts, and notices to account debtors; (d) execute on behalf of
Borrower any and all instruments, documents, financing statements and the like
to perfect Bank’s interests in the Accounts and Collections; (e) to notify
all account debtors with respect to the Accounts to pay Bank directly; (f) demand,
collect, receive, sue, and give releases to any account debtor for the monies
due or which may become due upon or with respect to the Accounts and to
compromise, prosecute, or defend any action, claim, case or proceeding relating
to the Accounts; and (g) do all acts and things necessary or expedient, in
furtherance of any such 

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

20

 

purposes.  Furthermore, effective only upon the
occurrence and during the continuance of an Event of Default, Borrower hereby
irrevocably appoints Bank (and any of Bank’s designated officers, or employees)
as Borrower’s true and lawful attorney to: 
(h) endorse Borrower’s name on any checks or other forms of payment
or security that may come into Bank’s possession; (i) sell, assign,
transfer, pledge, compromise, discharge or otherwise dispose the whole or any
part of the Collateral; (j) make, settle, and adjust all claims under and
decisions with respect to Borrower’s policies of insurance; (k) settle and
adjust disputes and claims respecting the accounts directly with account
debtors, for amounts and upon terms which Bank determines to be reasonable; and
(l) to file, in its sole discretion, one or more financing or continuation
statements and amendments thereto, relative to any of the Collateral.  The appointment of Bank as Borrower’s
attorney in fact, and each and every one of Bank’s rights and powers, being
coupled with an interest, is irrevocable until all of the Obligations have been
fully repaid and performed and Bank’s obligation to provide Credit Extensions
hereunder is terminated.

 

9.3                               Accounts
Collection.  At any time that the
Minimum Cash Ratio is below ***, Bank may notify any Person owing funds to
Borrower of Bank’s security interest in such funds and verify the amount of
such Account.  Borrower shall collect all
amounts owing to Borrower for Bank, receive in trust all payments as Bank’s
trustee, and immediately deliver such payments to Bank in their original form
as received from the account debtor, with proper endorsements for deposit.

 

9.4                               Bank
Expenses.  If Borrower fails to pay
any amounts or furnish any required proof of payment due to third persons or
entities, as required under the terms of this Agreement, then Bank may do any
or all of the following after reasonable notice to Borrower:  (a) make payment of the same or any part
thereof; (b) set up such reserves under a loan facility in Section 2.1
as Bank deems necessary to protect Bank from the exposure created by such
failure; or (c) obtain and maintain insurance policies of the type
discussed in Section 6.6 of this Agreement, and take any action with
respect to such policies as Bank deems prudent. 
Any amounts so paid or deposited by Bank shall constitute Bank Expenses,
shall be immediately due and payable, and shall bear interest at the then
applicable rate hereinabove provided, and shall be secured by the
Collateral.  Any payments made by Bank
shall not constitute an agreement by Bank to make similar payments in the
future or a waiver by Bank of any Event of Default under this Agreement.

 

9.5                               Bank’s
Liability for Collateral.  So long as
Bank complies with reasonable banking practices, Bank shall not in any way or
manner be liable or responsible for:  (a) the
safekeeping of the Collateral; (b) any loss or damage thereto occurring or
arising in any manner or fashion from any cause; (c) any diminution in the
value thereof; or (d) any act or default of any carrier, warehouseman,
bailee, forwarding agency, or other person whomsoever.  All risk of loss, damage or destruction of
the Collateral shall be borne by Borrower.

 

9.6                               Shares.  Borrower recognizes that Bank may be unable
to effect a public sale of any or all the Shares, by reason of certain
prohibitions contained in federal securities laws and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof.  Borrower acknowledges and agrees that any
such private sale may result in prices and other terms less favorable than if
such sale were a public sale and, notwithstanding such circumstances, agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner.  Bank shall be under
no obligation to delay a sale of any of the Shares for the period of time
necessary to permit the issuer thereof to register such securities for public
sale under federal securities laws or under applicable state securities laws,
even if such issuer would agree to do so. 
Upon the occurrence of an Event of Default which continues, Bank shall
have the right to exercise all such rights as a secured party under the
California Uniform Commercial Code as it, in its sole judgment, shall deem
necessary or appropriate, including without limitation the right to liquidate
the Shares and apply the proceeds thereof to reduce the Obligations.  Effective only upon the occurrence and during
the continuance of an Event of Default, Borrower hereby irrevocably appoints
Bank (and any of Bank’s designated officers, or employees) as Borrower’s true
and lawful attorney to enforce Borrower’s rights against any Subsidiary,
including the right to compel any Subsidiary to make payments or distributions
owing to Borrower.

 

9.7                               Remedies
Cumulative.  Bank’s rights and
remedies under this Agreement, the Loan Documents, and all other agreements
shall be cumulative.  Bank shall have all
other rights and remedies not inconsistent herewith as provided under the Code,
by law, or in equity.  No exercise by
Bank of one right or remedy shall be deemed an election, and no waiver by Bank
of any Event of Default on Borrower’s part shall be deemed a continuing
waiver.  No delay by Bank shall
constitute a waiver, election, or acquiescence by it.  No waiver by Bank shall be effective unless 

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

21

 

made in a written
document signed on behalf of Bank and then shall be effective only in the
specific instance and for the specific purpose for which it was given.

 

9.8                               Demand;
Protest.  Borrower waives demand,
protest, notice of protest, 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 at any time held by Bank on which
Borrower may in any way be liable.

 

10.                               NOTICES.

 

Unless otherwise provided
in this Agreement, all notices or demands by any party relating to this
Agreement or any other agreement entered into in connection herewith shall be
in writing and (except for financial statements and other informational
documents which may be sent by first-class mail, postage prepaid) shall be
personally delivered or sent by a recognized overnight delivery service,
certified mail, postage prepaid, return receipt requested, or by telefacsimile
to Borrower or to Bank, as the case may be, at its addresses set forth below:

 

	
  If to Borrower:

  	
   

  	
  MIVA, INC.

  
	
   

  	
   

  	
  5220 Summerlin
  Commons Blvd., Suite 500

  
	
   

  	
   

  	
  Fort Myers, FL
  33907

  
	
   

  	
   

  	
  Attn: John
  Pisaris

  
	
   

  	
   

  	
  FAX: (239)
  790-9556

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Baker &
  McKenzie LLP

  
	
   

  	
   

  	
  One Prudential
  Plaza

  
	
   

  	
   

  	
  130 East
  Randolph, Suite 3500

  
	
   

  	
   

  	
  Chicago,
  Illinois 60601

  
	
   

  	
   

  	
  Attn: Matthew C.
  Alshouse

  
	
   

  	
   

  	
  FAX: (312)
  698-2985

  
	
   

  	
   

  	
   

  
	
  If to Bank:

  	
   

  	
  Bridge Bank,
  National Association

  
	
   

  	
   

  	
  55 Almaden
  Boulevard

  
	
   

  	
   

  	
  San Jose,
  California 95113

  
	
   

  	
   

  	
  Attn: Technology
  Division

  
	
   

  	
   

  	
  FAX: (408)
  282-1681

  

 

The parties hereto may
change the address at which they are to receive notices hereunder, by notice in
writing in the foregoing manner given to the other.

 

11.                               CHOICE
OF LAW AND VENUE; JURY TRIAL WAIVER.

 

This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of California, without regard
to principles of conflicts of law.  Each
of Borrower and Bank hereby submits to the exclusive jurisdiction of the state
and Federal courts located in the County of Santa Clara, State of
California.  BORROWER AND BANK EACH
HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT.  EACH PARTY REPRESENTS AND
WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.

 

If the jury waiver set forth in Section is not
enforceable, then any dispute, controversy or claim arising out of or relating
to this Agreement, the Loan Documents or any of the transactions contemplated
therein shall be settled by judicial reference pursuant to Code of Civil
Procedure Section 638 et seq. before a referee sitting without a jury,
such 

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

22

 

referee to be mutually
acceptable to the parties or, if no agreement is reached, by a referee
appointed by the Presiding Judge of the California Superior Court for Santa
Clara County.  This Section shall
not restrict a party from exercising remedies under the Code or from exercising
pre-judgment remedies under applicable law.

 

12.                               GENERAL
PROVISIONS.

 

12.1                        Successors
and Assigns.  This Agreement shall
bind and inure to the benefit of the respective successors and permitted assigns
of each of the parties; provided, however, that neither this Agreement nor any
rights hereunder may be assigned by Borrower without Bank’s prior written
consent, which consent may be granted or withheld in Bank’s sole
discretion.  Bank shall have the right
without the consent of or notice to Borrower to sell, transfer, negotiate, or
grant participation in all or any part of, or any interest in, Bank’s
obligations, rights and benefits hereunder.

 

12.2                        Indemnification.  Borrower shall defend, indemnify and hold
harmless Bank and its officers, employees, and agents against:  (a)  all obligations, demands, claims,
losses, Bank Expenses and liabilities claimed or asserted by any other party in
connection with the transactions contemplated in this Agreement (including
without limitation reasonable attorneys’ fees and expenses)except to the extent
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 set forth in this Agreement.

 

12.4                        Severability
of Provisions.  Each provision of
this Agreement shall be severable from every other provision of this Agreement
for the purpose of determining the legal enforceability of any specific
provision.

 

12.5                        Amendments
in Writing, Integration.  Neither
this Agreement nor the Loan Documents can be amended or terminated orally.  All prior agreements, understandings,
representations, warranties, and negotiations between the parties hereto with
respect to the subject matter of this Agreement and the Loan Documents, if any,
are merged 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, shall be deemed to be an original, and all
of which, when taken together, shall constitute but one and the same Agreement.

 

12.7                        Survival.  All covenants, representations and warranties
made in this Agreement shall continue in full force and effect so long as any
Obligations remain outstanding or Bank has any obligation to make Credit
Extensions to Borrower.  The obligations
of Borrower to indemnify Bank with respect to the expenses, damages, losses,
costs and liabilities described in Section 12.2 shall survive until all
applicable statute of limitations periods with respect to actions that may be
brought against Bank have run.

 

12.8                        Confidentiality.  In handling any confidential information Bank
and all employees and agents of Bank, including but not limited to accountants
and attorneys, shall exercise the same degree of care that it exercises with
respect to its own proprietary information of the same types to maintain the
confidentiality of any non-public information thereby received or received pursuant
to this Agreement except that disclosure of such information may be made (i) to
the subsidiaries or affiliates of Bank in connection with their present or
prospective business relations with Borrower, (ii) to prospective
transferees or purchasers of any interest in the Loans, provided that they have
entered into a comparable confidentiality agreement in favor of Borrower and
have delivered a copy to Borrower, (iii) as required by law, regulations, rule or
order, subpoena, judicial order or similar order, (iv) as may be required
in connection with the examination, audit or similar investigation of Bank and (v) as
Bank may determine in connection with the enforcement of any remedies
hereunder.  Confidential information
hereunder shall not include information that either:  (a) is in the public domain or in the
knowledge or possession of Bank when disclosed to Bank, or becomes part of the
public domain after disclosure to Bank through no fault of Bank; or (b) is
disclosed to Bank by a third party, provided Bank does not have actual
knowledge that such third party is prohibited from disclosing such information.

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

23

 

12.9                        Patriot
Act.  To help the government fight
the funding of terrorism and money laundering activities, Federal law requires
all financial institutions to obtain, verify, and record information that identifies
each person who opens an account.  WHAT
THIS MEANS FOR YOU:  when you open an
account, we will ask your name, address, date of birth, and other information
that will allow us to identify you.  We
may also ask to see your driver’s license or other identifying documents.

 

[REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

[***] = Confidential treatment requested for redacted portion; redacted
portion has been filed separately with the Securities and Exchange Commission.

 

24

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the date first
above written.

 

	
   

  	
  MIVA,
  INC.  

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRIDGE
  BANK, NATIONAL ASSOCIATION  

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

25Exhibit 10.27

 

CONSENT AND AMENDMENT 

TO

LOAN AND SECURITY AGREEMENT

 

This Consent
and Amendment to Loan and Security Agreement is entered into as of March 12,
2009 (the “Amendment”), by and between BRIDGE BANK, N.A. (“Bank”), MIVA, INC.,
a Delaware corporation (“MIVA”), and MIVA DIRECT, INC., a Delaware corporation
(“MIVA Direct”).

 

RECITALS

 

MIVA and Bank
are parties to that certain Loan and Security Agreement dated as of November 7,
2008, as amended from time to time (collectively, the “Agreement”).  MIVA desires to dispose of certain of its
assets pursuant to the Asset Purchase Agreement dated as of March 12,
2009, between MIVA, certain of MIVA’s affiliates and Buyers (as defined
therein) (the “Purchase Agreement”), and seeks Bank’s consent to the disposition
of such assets.  In addition, MIVA and
Bank wish to add MIVA Direct, a wholly owned subsidiary to MIVA, as a “Borrower”
under the Agreement, and terminate that certain unconditional guaranty entered
into by MIVA Direct on November 7, 2008 for the benefit of Bank (“Guaranty”).  Each of the parties hereto desires to amend
the Agreement in accordance with the terms of this Amendment.

 

NOW,
THEREFORE, the parties agree as follows:

 

1.             MIVA Direct is
hereby deemed a Borrower under the Agreement. 
Each reference to “Borrower” in the Agreement shall mean and refer to
each of MIVA and MIVA Direct, both individually and collectively.  MIVA and MIVA Direct, collectively, shall
also be referred to as Borrowers. Without limiting the generality of the
foregoing, MIVA Direct grants Bank a security interest in the Collateral
described on Exhibit A attached hereto, to secure performance and payment
of all Obligations under the Agreement. 
Bank and MIVA Direct acknowledge and agree that the Guaranty is hereby
terminated and shall be of no further force or effect.

 

2.             Bank consents to
the disposition of assets in accordance with the terms of the Purchase
Agreement and such agreement(s) as MIVA may enter into in connection with
such disposition (the “Disposition”), provided that (a) out of the first
proceeds of the Disposition, MIVA shall immediately repay all outstanding
Advances plus any accrued interest under the Agreement in the amount of
$4,377,200.11 (the “Repayment”), and (b) no further Advances shall be made
available to Borrowers until Bank and Borrowers have agreed upon new terms and
conditions for borrowing based upon Borrowers’ operations and financial
condition after the Disposition. 
Effective upon the Closing (as defined in the Purchase Agreement), Bank
releases its security interests, rights and liens in the U.S. Media Assets (as
defined in the Purchase Agreement).  Bank
retains a security interest in any rights that MIVA or its affiliates retain or
acquire in the U.S. Media Assets, as well as a security interest in any
proceeds arising out of the transfer of the U.S. Media Assets in which a
Borrower may now or hereafter acquire any interest.  Bank shall file such amendment to financing
statement, and take such other actions, as MIVA reasonably requests to evidence
this release.  The Disposition will not
be a default under the Agreement. MIVA and any Person acquiring the assets set
forth in the Purchase Agreement may rely on this consent.

 

3.             Pursuant to Section 2.1(b) of
the Agreement, Bank has issued a Letter of Credit for the benefit of Perot
Systems, Ltd. in an aggregate outstanding face amount of $693,628 (the “Perot
Letter of Credit”).  The Perot Letter of
Credit shall be secured by a cash deposit at Bank, which shall be governed by a
standby letter of credit agreement for the benefit of Bank.  No further Letters of Credit may be issued
under Section 2.1(b) until Bank and Borrowers agree upon new terms
and conditions for this credit facility based upon Borrowers’ operations and
financial condition after the Disposition.

 

4.             A new Article 13
is hereby added to the Agreement to read as follows:

 

13.           CO-BORROWERS.

 

13.1         Co-Borrowers. 
Borrowers are jointly and severally liable for the Obligations and Bank
may proceed against one Borrower to enforce the Obligations

 

1

 

without
waiving its right to proceed against the other Borrower.  This Agreement and the Loan Documents are a
primary and original obligation of each Borrower and shall remain in effect
notwithstanding future changes in conditions, including any change of law or
any invalidity or irregularity in the creation or acquisition of any
Obligations or in the execution or delivery of any agreement between Bank and
any Borrower.  Each Borrower shall be
liable for existing and future Obligations as fully as if all of the Credit
Extensions were advanced to such Borrower. 
Bank may rely on any certificate or representation made by any Borrower
as made on behalf of, and binding on, all Borrowers, including without limitation
Advance Request Forms and Compliance Certificates.  Each Borrower appoints each other Borrower as
its agent with all necessary power and authority to give and receive notices,
certificates or demands for and on behalf of both Borrowers, to act as disbursing
agent for receipt of any Advances on behalf of each Borrower and to apply to
Bank on behalf of each Borrower for Advances, any waivers and any
consents.  This authorization cannot be
revoked, and Bank need not inquire as to one Borrower’s authority to act for or
on behalf of another Borrower.

 

13.2         Subrogation and Similar Rights.  Notwithstanding any other provision of this
Agreement or any other Loan Document, each Borrower irrevocably waives, until
all obligations are paid in full and Bank has no further obligation to make
Credit Extensions to Borrower, all rights that it may have at law or in equity
(including, without limitation, any law subrogating the Borrower to the rights
of Bank under the Loan Documents) to seek contribution, indemnification, or any
other form of reimbursement from any other Borrower, or any other Person now or
hereafter primarily or secondarily liable for any of the Obligations, for any
payment made by the Borrower with respect to the Obligations in connection with
the Loan Documents or otherwise and all rights that it might have to benefit
from, or to participate in, any security for the Obligations as a result of any
payment made by the Borrower with respect to the Obligations in connection with
the Loan Documents or otherwise.  Any
agreement providing for indemnification, reimbursement or any other arrangement
prohibited under this Section shall be null and void.  If any payment is made to a Borrower in
contravention of this Section, such Borrower shall hold such payment in trust
for Bank and such payment shall be promptly delivered to Bank for application
to the Obligations, whether matured or unmatured.

 

13.3         Waivers of Notice. 
Each Borrower waives, to the extent permitted by law, notice of
acceptance hereof; notice of the existence, creation or acquisition of any of
the Obligations; notice of an Event of Default except as set forth herein;
notice of the amount of the Obligations outstanding at any time; notice of any
adverse change in the financial condition of any other Borrower or of any other
fact that might increase the Borrower’s risk; presentment for payment; demand;
protest and notice thereof as to any instrument; and all other notices and
demands to which the Borrower would otherwise be entitled by virtue of being a
co-borrower or a surety.  Each Borrower
waives any defense arising from any defense of any other Borrower, or by reason
of the cessation from any cause whatsoever of the liability of any other
Borrower.  Bank’s failure at any time to
require strict performance by any Borrower of any provision of the Loan
Documents shall not waive, alter or diminish any right of Bank thereafter to
demand strict compliance and performance therewith.  Each Borrower also waives any defense arising
from any act or omission of Bank that changes the scope of the Borrower’s risks
hereunder.  Each Borrower hereby waives
any right to assert against Bank any defense (legal or equitable), setoff,
counterclaim, or claims that such Borrower individually may now or hereafter
have against another Borrower or any other Person liable to Bank with respect
to the Obligations in any manner or whatsoever.

 

13.4         Subrogation Defenses. 
Until all Obligations are paid in full and Bank has no further
obligation to make Credit Extensions to Borrower, each Borrower hereby waives
any defense based on impairment or destruction of its subrogation or other
rights against any other Borrower and waives all benefits which might otherwise
be available to

 

2

 

it under
California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849, 2850,
2899, and 3433 and California Code of Civil Procedure Sections 580a, 580b, 580d
and 726, as those statutory provisions are now in effect and hereafter amended,
and under any other similar statutes now and hereafter in effect.

 

13.5         Right
to Settle, Release.

 

(a)           The liability of Borrowers hereunder
shall not be diminished by (i) any agreement, understanding or
representation that any of the Obligations is or was to be guaranteed by
another Person or secured by other property, or (ii) any release or
unenforceability, whether partial or total, of rights, if any, which Bank may
now or hereafter have against any other Person, including another Borrower, or
property with respect to any of the Obligations.

 

(b)           Without notice to any given Borrower
and without affecting the liability of any given Borrower hereunder, Bank may (i) compromise,
settle, renew, extend the time for payment, change the manner or terms of
payment, discharge the performance of, decline to enforce, or release all or
any of the Obligations with respect to any other Borrower by written agreement
with such other Borrower, (ii) grant other indulgences to another Borrower
in respect of the Obligations, (iii) modify in any manner any documents
relating to the Obligations with respect to any other Borrower by written
agreement with such other Borrower, (iv) release, surrender or exchange
any deposits or other property securing the Obligations, whether pledged by a
Borrower or any other Person, or (v) compromise, settle, renew, or extend
the time for payment, discharge the performance of, decline to enforce, or
release all or any obligations of any guarantor, endorser or other Person who
is now or may hereafter be liable with respect to any of the Obligations.

 

13.6         Subordination.  All indebtedness of a Borrower now or
hereafter arising held by another Borrower, except as disclosed in the attached
Schedule, is subordinated to the Obligations and the Borrower holding the indebtedness
shall take all actions reasonably requested by Bank to effect, to enforce and
to give notice of such subordination.

 

5.             Unless
otherwise defined, all initially capitalized terms in this Amendment shall be
as defined in the Agreement.  The Agreement,
as amended hereby, shall be and remain in full force and effect in accordance
with its respective terms and hereby is ratified and confirmed in all
respects.  Except as expressly set forth
herein, the execution, delivery, and performance of this Amendment shall not
operate as a waiver of, or as an amendment of, any right, power, or remedy of
Bank under the Agreement, as in effect prior to the date hereof.  Each Borrower ratifies and reaffirms the
continuing effectiveness of all agreements entered into in connection with the
Agreement.

 

6.             Each
Borrower represents and warrants that the representations and warranties
contained in the Agreement are true and correct as of the date of this
Amendment, and that no Event of Default has occurred and is continuing.  MIVA acknowledges that Bank is relying, in
part, upon the pro forma financial estimates provided to Bank in connection
with the disposition of assets described in Section 2, and shall promptly
provide Bank with updated pro forma financial estimates as and when they are
available.

 

7.             This
Amendment may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one instrument.

 

8.             As
a condition to the effectiveness of this Amendment, Bank shall have received,
in form and substance satisfactory to Bank, the following:

 

(a)           this Amendment,
duly executed by Borrowers;

 

3

 

(b)           Intellectual
Property Security Agreement, duly executed by MIVA Direct;

 

(c)           Corporate
Resolutions to Borrow executed by MIVA Direct;

 

(d)           Standby Letter of
Credit Agreement;

 

(e)           amendments to UCC
financing statements;

 

(f)            the Repayment;

 

(g)           an amount equal to
$10,000 for all Bank Expenses incurred through the date of this Amendment
including all Bank Expenses incurred in connection with the Disposition; and

 

(h)           such other
documents, and completion of such other matters, as Bank may reasonably deem
necessary or appropriate.

 

[REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK]

 

4

 

IN WITNESS WHEREOF, the
undersigned have executed this Amendment as of the first date above written.

 

	
   

  	
  MIVA, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MIVA DIRECT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRIDGE BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

5

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