Document:

exhibit101

      SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT  THIS SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this  “Agreement”), is dated as of November 2, 2021, by and among SILICON VALLEY BANK, a California corporation  (“Bank”), OUTBRAIN INC., a Delaware corporation (“Outbrain” or “Lead Borrower”), ZEMANTA HOLDING  USA INC., a Delaware corporation (“Zemanta Holding”) and ZEMANTA INC., a Delaware corporation (together,  with Lead Borrower and Zemanta Holding, collectively, “Borrowers”, and each, a “Borrower”).  This Agreement  amends and restates, in its entirety, the Prior Loan Agreement.  The parties agree as follows:  1 LOAN AND TERMS OF PAYMENT  1.1 Revolving Line.  (a) Availability.  Subject to the terms and conditions of this Agreement and to deduction of  Reserves, Bank shall make Advances not exceeding the Availability Amount.  Amounts borrowed under the  Revolving Line may be prepaid or repaid as set forth on Schedule I hereto.  (b) Termination; Repayment.  The Revolving Line terminates on the Revolving Line Maturity  Date, when the outstanding principal amount of all Advances, the accrued and unpaid interest thereon, and all other  outstanding Obligations relating to the Revolving Line shall be immediately due and payable (other than inchoate  indemnity obligations and any other obligations which, by their express terms, are to survive the termination of this  Agreement and the repayment of all Obligations).  1.2 Letters of Credit Sublimit.  (a) As part of the Revolving Line, Bank shall issue or have issued Letters of Credit  denominated in Dollars or a Foreign Currency for the account of the applicable Borrower or, at Bank’s discretion and  subject to completion of required know-your-customer requirements, any of its Subsidiaries.  The aggregate Dollar  Equivalent of the face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit  and any Letter of Credit Reserve) may not exceed the lesser of (i) the Revolving Line or (ii) the Borrowing Base,  minus the sum of all outstanding principal amounts of any Advances.  In addition, the aggregate Dollar Equivalent of  the face amount of Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit  Reserve) which may be outstanding is as set forth on Schedule I hereto.  Any amounts required hereunder to reimburse  Bank for any amounts not paid by the applicable Borrower in connection with Letters of Credit will be treated as an  Advance under the Revolving Line and will accrue interest at the interest rate applicable to Prime Rate Advances.  (b) If, on the Revolving Line Maturity Date (or the effective date of any termination of this  Agreement), there are any outstanding Letters of Credit, then on such date Borrower shall provide to Bank cash  collateral in an amount equal to at least (i) 103.0% of the face amount of all such Letters of Credit denominated in  Dollars and (ii) 108.0% of the Dollar Equivalent of the face amount of all such Letters of Credit denominated in a  Foreign Currency, plus, in each case, all interest, fees, and costs due or estimated by Bank to become due in connection  therewith, to secure all of the Obligations relating to such Letters of Credit (other than inchoate indemnity obligations  and any other obligations which, by their express terms, are to survive the termination of this Agreement and the  repayment of all Obligations).   (c) All Letters of Credit shall be in form and substance acceptable to Bank, in its sole  discretion, and shall be subject to the terms and conditions of Bank’s standard Application and Letter of Credit  Agreement (the “Letter of Credit Application”).  The applicable Borrower shall execute any further documentation  in connection with the Letters of Credit as Bank may reasonably request.  Borrowers shall be bound by the regulations  and interpretations of the issuer of any Letters of Credit guaranteed by Bank and issued for the applicable account or  by Bank’s interpretations of any Letter of Credit issued by Bank for such account.  Bank shall not be liable for any  error, or mistake, whether of omission or commission, in following a Borrower’s instructions or those contained in  the Letters of Credit or any modifications, amendments, or supplements thereto other than to the extent resulting from  gross negligence or willful misconduct of Bank.  

 

2    (d) The obligation of Borrowers to immediately reimburse Bank for drawings made under  Letters of Credit shall be absolute, unconditional, and irrevocable, and shall be performed strictly in accordance with  the terms of this Agreement, such Letters of Credit, and the Letter of Credit Application.    (e) Each Borrower may request that Bank issue a Letter of Credit payable in a Foreign  Currency.  If a demand for payment is made under any such Letter of Credit, Bank shall treat such demand as an  Advance to Borrowers (including, for the avoidance of doubt, for Letters of Credit issued hereunder for the account  of their Subsidiaries) of the Dollar Equivalent of the amount thereof (plus fees and charges in connection therewith  such as wire, cable, SWIFT or similar charges).  (f) To guard against fluctuations in currency exchange rates, upon the issuance of any Letter  of Credit payable in a Foreign Currency, Bank shall create a reserve (the “Letter of Credit Reserve”) under the  Revolving Line in an amount equal to a percentage (which percentage shall be determined by Bank in its sole  discretion) of the Dollar Equivalent of the face amount of such Letter of Credit.  The amount of the Letter of Credit  Reserve may be adjusted by Bank from time to time to account for fluctuations in the exchange rate.  The availability  of funds under the Revolving Line shall be reduced by the amount of such Letter of Credit Reserve for as long as such  Letter of Credit remains outstanding.  1.3 Overadvances.  If, at any time, the sum of (a) the aggregate outstanding principal amount of any  Advances, plus (b) the aggregate Dollar Equivalent of the face amount of outstanding Letters of Credit (including  drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve), exceeds the lesser of (i) the Revolving  Line or (ii) the Borrowing Base, Borrowers shall pay to Bank in cash the amount of such excess (such excess, the  “Overadvance”).  1.4 Payment of Interest on the Credit Extensions.  (a) Interest Payments.  Interest on the principal amount of each Advance is payable as set forth  on Schedule I hereto.    (b) Interest Rate.  Subject to Section 1.4(c), the outstanding principal amount of any Advance  shall accrue interest as set forth on Schedule I hereto. Notwithstanding any terms in this Agreement to the contrary, if  at any time the interest rate applicable to any Obligations is less than zero percent (0.0%), such interest rate shall be  deemed to be zero percent (0.0%) for all purposes of this Agreement.  (c) Default Rate.  Immediately upon the occurrence and during the continuance of a Specified  Event of Default, and at the election of Bank with respect to any other Event of Default, the outstanding Obligations  shall bear interest at a rate per annum which is two percent (2.0%) above the rate that is otherwise applicable thereto  (the “Default Rate”).  Fees and expenses which are required to be paid by Borrowers pursuant to the Loan Documents  but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations.   Payment or acceptance of the increased interest rate provided in this Section 1.4(c) is not a permitted alternative to  timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or  remedies of Bank.  (d) Adjustment to Interest Rate.  Each change in the interest rate applicable to any amounts  payable under the Loan Documents based on changes to the Prime Rate shall be effective on the effective date of any  change to the Prime Rate and to the extent of such change.  (e) Interest Computation.  Interest shall be computed as set forth on Schedule I hereto.  In  computing interest, the date of the making of any Credit Extension shall be included and the date of payment shall be  excluded; provided, however, that if any Credit Extension is repaid on the same day on which it is made, such day  shall be included in computing interest on such Credit Extension.    (f) LIBOR Advances.  The interest rate applicable to each LIBOR Advance shall be  determined in accordance with Section 1.10(a).  Subject to Sections 1.9 and 1.10, such rate shall apply during the  

 

3    entire Interest Period applicable to such LIBOR Advance, and interest calculated thereon shall be payable on the  Interest Payment Date applicable to such LIBOR Advance.  1.5 Fees.  Borrowers shall pay to Bank:  (a) Facility Fee.  A fully earned, non-refundable facility fee as set forth on Schedule I hereto;  (b) Letter of Credit Fee.  Bank’s customary fees and expenses for the issuance or renewal of  Letters of Credit, including, without limitation, a Letter of Credit Fee with respect to each Letter of Credit payable  upon the issuance, each anniversary of such issuance and any renewal thereof, which shall be fully earned and non- refundable as of such date;  (c) Unused Revolving Line Facility Fee. Payable quarterly in arrears on the last calendar day  of each calendar quarter occurring thereafter prior to the Revolving Line Maturity Date, and on the Revolving Line  Maturity Date, a fee (the “Unused Revolving Line Facility Fee”), in an amount equal to Unused Revolving Line  Facility Fee Percentage of the average unused portion of the Revolving Line, as reasonably determined by Bank,  computed on the basis of a year with the applicable number of days as set forth in Section 1.4(e), which shall be fully  earned and non-refundable as of such date.  The unused portion of the Revolving Line, for purposes of this calculation,  shall be calculated on a calendar year basis and shall equal the difference between (i) the Revolving Line, and (ii) the  average for the period of the daily closing balance of the Revolving Line outstanding plus the sum of the aggregate  Dollar Equivalent of the face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of  Credit and any Letter of Credit Reserve);  (d) Bank Expenses.  All Bank Expenses incurred through and after the Effective Date, when  due (or, if no stated due date, within ten (10) days of demand by Bank).  Unless otherwise provided in this Agreement or in a separate writing by Bank, Borrowers shall not be entitled  to any credit, rebate, or repayment of any fees earned by Bank pursuant to this Agreement notwithstanding any  termination of this Agreement or the suspension or termination of Bank’s obligation to make loans and advances  hereunder.  Bank may deduct amounts owing by Borrowers under the clauses of this Section 1.5 pursuant to the terms  of Section 1.6(c).  Bank shall provide Lead Borrower written notice of deductions made pursuant to the terms of the  clauses of this Section 1.5.  1.6 Payments; Application of Payments; Debit of Accounts.    (a) All payments (including prepayments) to be made by Borrowers under any Loan Document  shall be made in immediately available funds in Dollars, without setoff, counterclaim, or deduction, before 12:00 p.m.  Eastern time on the date when due.  Payments of principal and/or interest received after 12:00 p.m. Eastern time are  considered received at the opening of business on the next Business Day.  When a payment is due on a day that is not  a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall  continue to accrue until paid.    (b) Bank has the exclusive right to determine the order and manner in which all payments with  respect to the Obligations may be applied.  Borrowers shall have no right to specify the order or the accounts to which  Bank shall allocate or apply any payments required to be made by Borrowers to Bank or otherwise received by Bank  under this Agreement when any such allocation or application is not specified elsewhere in this Agreement.  (c) Bank may debit the Designated Deposit Account (or, if funds in the Designated Deposit  Account are insufficient or if an Event of Default has occurred and is continuing, any other account of any Borrower  maintained with Bank), for principal and interest payments or any other amounts Borrower owes Bank when due  under the Loan Documents.  These debits shall not constitute a set-off.  1.7 Change in Circumstances.  

 

4    (a) Increased Costs.  If any Change in Law shall: (i) impose, modify or deem applicable any  reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or  for the account of, or advances, loans or other credit extended or participated in by, Bank, (ii) subject Bank to any  Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded  Taxes, and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitment, or other  obligations, or its deposits, reserves, other liabilities or capital attributable thereto, or (iii) impose on Bank any other  condition, cost or expense (other than Taxes) affecting this Agreement or Credit Extensions made by Bank, and the  result of any of the foregoing shall be to increase the cost to Bank of making, converting to, continuing or maintaining  any Credit Extension (or of maintaining its obligation to make any such Credit Extension), or to reduce the amount of  any sum received or receivable by Bank hereunder (whether of principal, interest or any other amount) then, upon  written request of Bank, Borrowers shall promptly pay to Bank such additional amount or amounts as will compensate  Bank for such additional costs incurred or reduction suffered.  (b) Capital Requirements.  If, prior to the termination of this Agreement, Bank determines that  any Change in Law affecting Bank regarding capital or liquidity requirements, has or would have the effect of reducing  the rate of return on Bank’s capital as a consequence of this Agreement, the Revolving Line, any term loan facility,  or the Credit Extensions made by Bank to a level below that which Bank would have achieved but for such Change  in Law (taking into consideration Bank’s policies with respect to capital adequacy and liquidity), then from time to  time upon written request of Bank, Borrowers shall promptly pay to Bank such additional amount or amounts as will  compensate Bank for any such reduction suffered.  (c) Delay in Requests.  Failure or delay on the part of Bank to demand compensation pursuant  to this Section 1.11 shall not constitute a waiver of Bank’s right to demand such compensation; provided that  Borrowers shall not be required to compensate Bank pursuant to subsection (a) for any increased costs incurred or  reductions suffered more than nine (9) months prior to the date that Bank notifies Lead Borrower of the Change in  Law giving rise to such increased costs or reductions (except that if the Change in Law giving rise to such increased  costs or reductions is retroactive, then the nine (9) month period shall be extended to include the period of retroactive  effect).  1.8 Taxes.    (a) Payments Free of Taxes.  Any and all payments by or on account of any obligation of  Borrowers under any Loan Document shall be made without deduction or withholding for any Taxes, except as  required by Applicable Law.  If any Applicable Law (as determined in the good faith discretion of Lead Borrower)  requires the deduction or withholding of any Tax from any such payment by Borrowers, then (i)  Borrowers shall be  entitled to make such deduction or withholding, (ii)  Lead Borrower shall timely pay the full amount deducted or  withheld to the relevant Governmental Authority in accordance with Applicable Law, and (iii) if such Tax is an  Indemnified Tax, the sum payable by Borrowers shall be increased as necessary so that after such deduction or  withholding has been made (including such deductions and withholdings applicable to additional sums payable under  this Section 1.8) Bank receives an amount equal to the sum it would have received had no such deduction or  withholding been made.  (b) Payment of Other Taxes by Borrowers.  Without limiting the provisions of subsection (a)  above, Borrowers shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with  Applicable Law.  (c) Tax Indemnification.  Without limiting the provisions of subsections (a) and (b) above,  Lead Borrower shall, and does hereby, indemnify Bank, within ten (10) days after demand therefor, for the full amount  of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable  under this Section 1.8) payable or paid by Bank or required to be withheld or deducted from a payment to Bank and  any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were  correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of  such payment or liability delivered to Lead Borrower by Bank shall be conclusive absent manifest error.  (d) Evidence of Payments.  As soon as practicable after any payment of Taxes by Borrowers  to a Governmental Authority pursuant to this Section 1.8, Lead Borrower shall deliver to Bank a certified copy of a  

 

5    receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment  or other evidence of such payment reasonably satisfactory to Bank.  (e) Status of Bank.  If Bank (including any assignee or successor) is entitled to an exemption  from or reduction of withholding tax with respect to payments made under any Loan Document, it shall deliver to  Borrowers, at the time or times reasonably requested by Lead Borrower, such properly completed and executed  documentation reasonably requested by Lead Borrower as will permit such payments to be made without withholding  or at a reduced rate of withholding.  In addition, Bank, if reasonably requested by Lead Borrower, shall deliver such  other documentation prescribed by Applicable Law or reasonably requested by Lead Borrower as will enable  Borrowers to determine whether or not Bank is subject to backup withholding or information reporting requirements.   Without limiting the generality of the foregoing, Bank shall deliver whichever of IRS Form W-9, IRS Form W-8BEN- E, IRS Form W-8ECI or W-8IMY is applicable, as well as any applicable supporting documentation or certifications.  (f) Treatment of Certain Refunds.  If Bank determines, in its sole discretion exercised in good  faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including  by the payment of additional amounts pursuant to this Section), it shall pay to Borrower an amount equal to such  refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to  such refund), net of all out-of-pocket expenses (including Taxes) of Bank and without interest (other than any interest  paid by the relevant Governmental Authority with respect to such refund). Borrower, upon the request of Bank, shall  repay to Bank the amount paid over pursuant to this paragraph (f) (plus any penalties, interest or other charges imposed  by the relevant Governmental Authority) in the event that Bank is required to repay such refund to such Governmental  Authority. Notwithstanding anything to the contrary in this paragraph (f), in no event will Bank be required to pay  any amount to Borrower pursuant to this paragraph (f) the payment of which would place Bank in a less favorable net  after-Tax position than Bank would have been in if the Tax subject to indemnification and giving rise to such refund  had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with  respect to such Tax had never been paid. This paragraph shall not be construed to require Bank to make available its  Tax returns (or any other information relating to its Taxes that it deems confidential) to Borrower or any other Person.  1.9 Procedures for Borrowing.  (a) Subject to the prior satisfaction of all other applicable conditions to the making of an  Advance set forth in this Agreement, an Advance shall be made upon Lead Borrower’s (via an individual duly  authorized by an Administrator) irrevocable written notice delivered to Bank in the form of a Notice of Borrowing or  without instructions if any Advances are necessary to meet Obligations which have become due; provided, however,  that any such notice may state that it is conditioned upon the occurrence or non-occurrence of any event specified  therein, in which case such notice may be revoked by the Lead Borrower (by written notice to Bank on or prior to the  specified effective date) if such condition is not satisfied. The Notice of Borrowing shall be made by Lead Borrower  through Bank’s online banking program, provided, however, if Lead Borrower is not utilizing Bank’s online banking  program, then such Notice of Borrowing shall be in the form attached hereto as Exhibit B and shall be executed by an  Authorized Signer.  The Notice of Borrowing must be received by Bank prior to 12:00 p.m. Eastern time, (i) at least  three (3) Business Days prior to the requested Funding Date, in the case of any LIBOR Advance, and (ii) on the  requested Funding Date, in the case of a Prime Rate Advance, and in each case specifying: (1) the amount of the  Advance; (2) the requested Funding Date; and (3) whether the Advance is to be comprised of LIBOR Advance or  Prime Rate Advance.  Notwithstanding any terms in this Agreement to the contrary, each LIBOR Advance shall not  be less than One Million Dollars ($1,000,000.00) and shall be in a multiple of One Hundred Thousand Dollars  ($100,000.00).  In addition to such Notice of Borrowing, Lead Borrower shall promptly deliver to Bank by electronic  mail or through Bank’s online banking program accounts receivable aging reports, as Bank may reasonably request.  (b) Bank shall credit proceeds of a Credit Extension to the Designated Deposit Account.  Bank  may make Advances under this Agreement based on instructions from an Authorized Signer or without instructions  if such Advances are necessary to meet Obligations which have become due.   1.10 Conversion and Continuation Elections.  (a) So long as (i) no Event of Default exists; (ii) Borrowers shall not have sent any notice of  termination of this Agreement; and (iii) Borrowers shall have complied with such customary procedures as Bank has  

 

6    established from time to time for Borrowers’ requests for LIBOR Advances, Lead Borrower may, upon irrevocable  written notice to Bank:  (1) elect to convert on any Business Day, Prime Rate Advances into LIBOR  Advances;  (2) elect to continue on any Interest Payment Date any LIBOR Advances  maturing on such Interest Payment Date; or  (3) elect to convert on any Interest Payment Date any LIBOR Advances  maturing on such Interest Payment Date into Prime Rate Advances.  (b) Lead Borrower shall deliver a Notice of Conversion/Continuation by electronic mail via  Bank’s online banking program, provided, however, if Lead Borrower is not utilizing Bank’s online banking program,  then such Notice of Conversion/Continuation shall be in the form attached hereto as Exhibit C and shall be executed  by an Authorized Signer. The Notice of Conversion/Continuation is to be received by Bank prior to 12:00 p.m. Eastern  time (i) at least three (3) Business Days in advance of the Conversion Date or Continuation Date, if any Advances are  to be converted into or continued as LIBOR Advances; and (ii) on the Conversion Date, if any Advances are to be  converted into Prime Rate Advances, in each case specifying the:  (1) proposed Conversion Date or Continuation Date;  (2) aggregate amount of the Advances to be converted or continued;  (3) nature of the proposed conversion or continuation; and  (4) if the resulting Advance is to be a LIBOR Advance, the duration of the  requested Interest Period.  (c) If upon the expiration of any Interest Period applicable to any LIBOR Advances, Lead  Borrower shall have timely failed to select a new Interest Period to be applicable to such LIBOR Advances or request  to convert a LIBOR Advance into a Prime Rate Advance, Lead Borrower shall be deemed to have elected to renew  such Advance as a one (1) month LIBOR Advance.  (d) Any LIBOR Advances shall, at Bank’s option, convert into Prime Rate Advances in the  event that (i) an Event of Default exists, or (ii) the aggregate principal amount of the Prime Rate Advances which have  been previously converted to LIBOR Advances, or the aggregate principal amount of existing LIBOR Advances  continued, as the case may be, at the beginning of an Interest Period shall at any time during such Interest Period  exceeds the lesser of the Revolving Line or the Borrowing Base.  Borrowers agree to pay Bank, upon demand by Bank  (or Bank may, at its option, debit the Designated Deposit Account (or, if funds in the Designated Deposit Account are  insufficient or if an Event of Default has occurred and is continuing, any other account of any Borrower maintained  with Bank)) any amounts required to compensate Bank for any loss (including loss of anticipated profits), cost, or  expense incurred by Bank, as a result of the conversion of LIBOR Advances to Prime Rate Advances pursuant to this  Section 1.10(d).  (e) Notwithstanding anything to the contrary contained herein, Bank shall not be required to  purchase Dollar deposits in the London interbank market or other applicable LIBOR market to fund any LIBOR  Advances, but the provisions hereof shall be deemed to apply as if Bank had purchased such deposits to fund the  LIBOR Advances.  1.11 Special Provisions Governing LIBOR Advances.   Notwithstanding any other provision of this  Agreement to the contrary, the following provisions shall govern with respect to LIBOR Advances as to the matters  covered:  

 

7    (a) Determination of Applicable Interest Rate.  As soon as practicable on each Interest Rate  Determination Date, Bank shall determine (which determination shall, absent manifest error in calculation, be final,  conclusive and binding upon all parties) the interest rate that shall apply to the LIBOR Advances for which an interest  rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or  by telephone confirmed in writing) to Lead Borrower.  (b) Inability to Determine Applicable Interest Rate.   (i) In the event that Bank shall have determined (which determination shall be final and  conclusive and binding upon all parties hereto), on any Interest Rate Determination Date with respect to any LIBOR  Advance, that by reason of circumstances affecting the London interbank market adequate and fair means do not exist  for ascertaining the interest rate applicable to such LIBOR Advance on the basis provided for in the definition of  LIBOR, Bank shall on such date give notice to Lead Borrower of such determination, whereupon (A) no Advances  may be made as, or converted to, LIBOR Advances until such time as Bank notifies Lead Borrower that the  circumstances giving rise to such notice no longer exist, and (B) any Notice of Borrowing or Notice of  Conversion/Continuation given by Lead Borrower with respect to LIBOR Advances in respect of which such  determination was made shall be deemed to be Prime Rate Advances unless such Notice of Borrowing or Notice of  Conversion/Continuation shall be rescinded by Lead Borrower in writing within one (1) Business Day of Bank’s  giving of notice of its inability to determine the applicable interest rate for LIBOR Advances pursuant to this Section  1.11(b)(i).   (ii) If at any time Bank determines (which determination shall be conclusive absent manifest  error) that (A) the circumstances set forth in Section 1.11(b)(i) have arisen and such circumstances are unlikely to be  temporary; or (B) the circumstances set forth in Section 1.11(b)(i) have not arisen but the supervisor for the  administrator of the LIBOR reporting system or a Governmental Authority having jurisdiction over Bank has made a  public statement announcing that such administrator has ceased or will cease to provide LIBOR, permanently or  indefinitely, or that LIBOR is no longer representative, then Bank shall determine an alternate rate of interest to  LIBOR and a spread adjustment mechanism that gives due consideration to (1) any selection or recommendation of a  replacement rate or the mechanism for determining such a rate or spread adjustment mechanism by the Federal Reserve  Board of Governors and/or a committee officially endorsed or convened by the Federal Reserve Board of Governors,  or any successor thereto and/or (2) any evolving or then-prevailing market convention for determining a rate of interest  as a replacement to LIBOR for similarly situated loans in the United States at such time, and Bank shall amend this  Agreement to reflect such alternate rate of interest, such spread adjustment, and such other related changes to this  Agreement as may be applicable; provided that if such alternate rate of interest shall be less than zero, such rate shall  be deemed to be zero for the purposes of this Agreement. Bank shall provide Lead Borrower with notice of such  amendment. Notwithstanding anything to the contrary in Section 11.6, such amendment shall become effective at 5:00  p.m. Eastern time on the tenth (10th) Business Day after Bank has provided such amendment to Lead Borrower  without any further action or consent of Lead Borrower, so long as Bank has not received, by such time, written notice  of objection to such amendment from Lead Borrower. In the event that Lead Borrower objects to such amendment,  Bank and Lead Borrower shall endeavor to agree on an alternate rate of interest that is mutually acceptable. Until an  alternate rate of interest shall be determined in accordance with this Section 1.11(b)(ii) (but in the case of the  circumstances described in clause (B) of the first sentence of this Section 1.11(b)(ii), only to the extent that LIBOR  for such Interest Period is not available or published at such time on a current basis), (x) any LIBOR Advances  requested to be made shall be made as Prime Rate Advances, and (y) any outstanding LIBOR Advances shall be  converted, on the last day of the then-current Interest Period, to Prime Rate Advances.   (c) Compensation for Breakage or Non-Commencement of Interest Periods.  If (i) for any  reason, other than a default by Bank or any failure of Bank to fund LIBOR Advances due to impracticability or  illegality under Sections 1.12(c) and 1.12(d) of this Agreement, a borrowing or a conversion to or continuation of any  LIBOR Advance does not occur on a date specified in a Notice of Borrowing or a Notice of Conversion/Continuation,  including, for the avoidance of doubt, if such Notice of Borrowing was conditioned and was revoked prior to the  borrowing date specified therein as the case may be, or (ii) any complete or partial principal payment or reduction of  a LIBOR Advance, or any conversion of any LIBOR Advance, occurs on a date prior to the last day of an Interest  Period applicable to that LIBOR Advance, including due to voluntary or mandatory prepayment or acceleration, then,  in each case, Borrowers shall compensate Bank, upon written request by Bank, for all losses and expenses incurred  by Bank in an amount equal to the excess, if any, of:  

 

8    (A) the amount of interest that would have accrued on the amount (1) not borrowed,  converted or continued as provided in clause (i) above, or (2) paid, reduced or converted as provided  in clause (ii) above, for the period from (y) the date of such failure to borrow, convert or continue  as provided in clause (i) above, or the date of such payment, reduction or conversion as provided in  clause (ii) above, as the case may be, to (z) in the case of a failure to borrow, convert or continue as  provided in clause (i) above, the last day of the Interest Period that would have commenced on the  date of such borrowing, conversion or continuing but for such failure, and in the case of a payment,  reduction or conversion prior to the last day of an Interest Period applicable to a LIBOR Advance  as provided in clause (ii) above, the last day of such Interest Period, in each case at the applicable  rate of interest or other return for such LIBOR Advance(s) provided for herein (excluding, however,  the LIBOR Rate Margin included therein, if any), over   (B) the interest which would have accrued to Bank on the applicable amount provided  in clause (A) above through the purchase of a Eurodollar deposit bearing interest at the rate obtained  pursuant to the definition of LIBOR Rate on the date of such failure to borrow, convert or continue  as provided in clause (i) above, or the date of such payment, reduction or conversion as provided in  clause (ii) above, as the case may be, for a period equal to the remaining period of such applicable  Interest Period provided in clause (A) above.    Bank’s request shall set forth the manner and method of computing such compensation and such determination as to  such compensation shall be conclusive absent manifest error.    (d) Assumptions Concerning Funding of LIBOR Advances.  Calculation of all amounts  payable to Bank under this Section 1.11 and under Section 1.12 shall be made as though Bank had actually funded  each relevant LIBOR Advance through the purchase of a Eurodollar deposit bearing interest at the rate obtained  pursuant to the definition of LIBOR Rate in an amount equal to the amount of such LIBOR Advance and having a  maturity comparable to the relevant Interest Period; provided, however, that Bank may fund each of its LIBOR  Advances in any manner it sees fit and the foregoing assumptions shall be utilized only for the purposes of calculating  amounts payable under this Section 1.11 and under Section 1.12.  (e) LIBOR Advances After an Event of Default.  After the occurrence and during the  continuance of an Event of Default, (i) Lead Borrower may not elect to have an Advance be made or continued as, or  converted to, a LIBOR Advance after the expiration of any Interest Period then in effect for such Advance and (ii)  subject to the provisions of Section 1.11(c), any Notice of Conversion/Continuation given by Lead Borrower with  respect to a requested conversion/continuation that has not yet occurred shall, at Bank’s option, be deemed to be  rescinded by Lead Borrower and be deemed a request to convert or continue Advances referred to therein as Prime  Rate Advances.  1.12 Additional Requirements/Provisions Regarding LIBOR Advances.  (a) Without duplication of amounts paid pursuant to Section 1.7(a), Borrowers shall pay Bank,  upon demand by Bank, from time to time such amounts as Bank may determine to be necessary to compensate it for  any costs incurred by Bank that Bank determines are attributable to its making or maintaining of any amount receivable  by Bank hereunder in respect of any LIBOR Advances relating thereto (such increases in costs and reductions in  amounts receivable being herein called “Additional Costs”), in each case resulting from any Regulatory Change  which:  (i) changes the basis of taxation of any amounts payable to Bank under this Agreement in  respect of any LIBOR Advances (other than changes which affect taxes measured by or imposed on the overall net  income of Bank by the jurisdiction in which Bank has its principal office);  (ii) imposes or modifies any reserve, special deposit or similar requirements relating to any  extensions of credit or other assets of, or any deposits with, or other liabilities of Bank (including any LIBOR  Advances or any deposits referred to in the definition of LIBOR); or  

 

9    (iii) imposes any other condition affecting this Agreement (or any of such extensions of credit  or liabilities).   Bank will notify Lead Borrower of any event occurring after the Effective Date which will entitle  Bank to compensation pursuant to this Section 1.12(a) as promptly as practicable after it obtains knowledge thereof  and determines to request such compensation.  Bank will furnish Lead Borrower with a statement setting forth the  basis and amount of each request by Bank for compensation under this Section 1.12(a).  Determinations and allocations  by Bank for purposes of this Section 1.12(a) of the effect of any Regulatory Change on its costs of maintaining its  obligations to make LIBOR Advances, of making or maintaining LIBOR Advances, or on amounts receivable by it in  respect of LIBOR Advances, and of the additional amounts required to compensate Bank in respect of any Additional  Costs, shall be conclusive absent manifest error.  (b) Without duplication of amounts paid pursuant to Section 1.7(b), if, prior to the termination  of this Agreement, Bank shall determine that the adoption or implementation of any applicable law, rule, regulation,  or treaty regarding capital adequacy, or any change therein, or any change in the interpretation or administration  thereof by any governmental authority, central bank, or comparable agency charged with the interpretation or  administration thereof, or compliance by Bank (or its applicable lending office) with any request or directive regarding  capital adequacy (whether or not having the force of law) of any such authority, central bank, or comparable agency,  has or would have the effect of reducing the rate of return on capital of Bank or any person or entity controlling Bank  (a “Parent”) as a consequence of its obligations hereunder to a level below that which Bank (or its Parent) could have  achieved but for such adoption, change, or compliance (taking into consideration policies with respect to capital  adequacy) by an amount deemed by Bank to be material, then from time to time, within ten (10) days after demand  by Bank, Borrowers shall pay to Bank such additional amount or amounts as will compensate Bank for such reduction.   A statement of Bank claiming compensation under this Section 1.12(b) and setting forth the additional amount or  amounts to be paid to it hereunder shall be conclusive absent manifest error.  Notwithstanding anything to the contrary in this Section 1.12, Borrowers shall not be required to compensate  Bank pursuant to this Section 1.12(b) for any amounts incurred more than nine (9) months prior to the date that Bank  notifies Lead Borrower of Bank’s intention to claim compensation therefor; provided that if the circumstances giving  rise to such claim have a retroactive effect, then such nine-month period shall be extended to include the period of  such retroactive effect.  (c) [Reserved].  (d) If it shall become unlawful for Bank to continue to fund or maintain any LIBOR Advances,  or to perform its obligations hereunder, upon written notice from Bank, Lead Borrower shall be deemed to have elected  to convert such LIBOR Advance to a Prime Rate Advance and shall be obligated to pay amounts set forth in Section  1.11(c)(ii) in connection therewith.  Notwithstanding the foregoing, to the extent a determination by Bank as described  above relates to a LIBOR Advance then being requested by Lead Borrower pursuant to a Notice of Borrowing or a  Notice of Conversion/Continuation, Lead Borrower shall have the option, subject to the provisions of Section  1.11(c)(ii), to (i) rescind such Notice of Borrowing or Notice of Conversion/Continuation by giving notice (by  electronic means or by telephone confirmed in writing) to Bank of such rescission on the date on which Bank gives  notice of its determination as described above, or (ii) modify such Notice of Borrowing or Notice of  Conversion/Continuation to obtain a Prime Rate Advance or to have outstanding Advances converted into or  continued as Prime Rate Advances by giving notice (by electronic means or by telephone confirmed in writing) to  Bank of such modification on the date on which Bank gives notice of its determination as described above.  2 CONDITIONS OF EFFECTIVENESS AND CREDIT EXTENSIONS  2.1 Conditions Precedent to Effectiveness of Agreement.  The effectiveness of this Agreement is  subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such  documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate, including,  without limitation:  (a) duly executed Loan Documents;  

 

10    (b) the Operating Documents of each Borrower and long-form good standing certificates of  each Borrower certified by the Secretary of State of the State of Delaware and the Secretary of State (or equivalent  agency) of each other jurisdiction where the failure to be so qualified or in good standing would reasonably be expected  to have a Material Adverse Effect, in each case as of a date no earlier than 30 days prior to the Effective Date;  (c) certificate duly executed by a Responsible Officer or secretary of each Borrower with  respect to such Borrower’s (i) Operating Documents and (ii) Borrowing Resolutions;  (d) certified copies, dated as of a recent date, of searches for financing statement filed in the  central filing office of the State of Delaware, accompanied by written evidence (including any UCC termination  statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been  or, in connection with the initial Credit Extension, will be terminated or released;  (e) duly executed Perfection Certificates of Lead Borrower;  (f) a legal opinion of Borrowers’ counsel dated as of the Effective Date;  (g) evidence satisfactory to Bank that the insurance policies required by Section 5.8 hereof are  in full force and effect;  (h) with respect to the initial Advance, a completed Borrowing Base Statement (and any  schedules related thereto and including any other information requested by Bank with respect to Borrowers’  Accounts); and  (i) payment of the fees and Bank Expenses then due as specified in Section 1.5 hereof.  2.2 Conditions Precedent to all Credit Extensions.  Bank’s obligation to make each Credit Extension,  including the initial Credit Extension, is subject to the following conditions precedent:  (a) receipt of Lead Borrower’s Credit Extension request and the related materials and  documents as required by and in accordance with Section 1.9; and  (b) the representations and warranties in this Agreement shall be true and correct in all material  respects as of the date of any Credit Extension request  and as of the Funding Date of each Credit Extension; provided,  however, that such materiality qualifier shall not be applicable to any representations and warranties that already are  qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties  expressly referring to a specific date shall be true and correct in all material respects as of such date, and no Default  or Event of Default shall have occurred and be continuing or result from the Credit Extension.  Each Credit Extension  is Borrowers’ representation and warranty on that date that the representations and warranties in this Agreement  remain true and correct in all material respects; provided, however, that such materiality qualifier shall not be  applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof;  and provided, further that those representations and warranties expressly referring to a specific date shall be true and  correct in all material respects as of such date.  3 CREATION OF SECURITY INTEREST  3.1 Grant of Security Interest.    (a) Each Borrower hereby grants Bank, to secure the payment and performance in full of all  of the Obligations, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether  now owned or hereafter acquired or arising, and all proceeds and products thereof.    (b) Each Borrower acknowledges that it previously has entered, or may in the future enter, into  Bank Services Agreements with Bank.  Regardless of the terms of any Bank Services Agreement, such Borrower  agrees that any amounts such Borrower owes Bank thereunder shall be deemed to be Obligations hereunder and that  

 

11    it is the intent of such Borrower and Bank to have all such Obligations secured by the first priority perfected security  interest in the Collateral granted herein (subject to Permitted Liens).  3.2 Authorization to File Financing Statements.  Each Borrower hereby authorizes Bank to file  financing statements, without notice to Borrower, with all jurisdictions deemed necessary or appropriate by Bank to  perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either  Borrower or any other Person, shall be deemed to violate the rights of Bank under the Code.  Such financing statements  may indicate the Collateral as “all assets of the Debtor” or words of similar effect.  3.3 Termination.  If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until  the Obligations (other than inchoate indemnity obligations and any other obligations which, by their express terms,  are to survive the termination of this Agreement and the repayment of all Obligations) are repaid in full in cash.  Upon  payment in full in cash of the Obligations (other than inchoate indemnity obligations and any other obligations which,  by their express terms, are to survive the termination of this Agreement and the repayment of all Obligations) and at  such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at Borrowers’ sole cost and  expense, terminate its security interest in the Collateral and all rights therein shall revert to Borrowers.  In the event  (a) all Obligations (other than inchoate indemnity obligations and any other obligations which, by their express terms,  are to survive the termination of this Agreement and the repayment of all Obligations), except for Bank Services, are  satisfied in full, and (b) this Agreement is terminated, Bank shall terminate the security interest granted herein upon  Lead Borrower providing cash collateral acceptable to Bank in its sole discretion for Bank Services, if any.  In the  event such Bank Services consist of outstanding Letters of Credit, Borrower shall provide to Bank cash collateral in  an amount equal to at least (x) 103.0% of the face amount of all such outstanding Letters of Credit denominated in  Dollars and (y) 108.0% of the Dollar Equivalent of the face amount of all such Letters of Credit denominated in a  Foreign Currency, plus, in each case, all interest, fees, and costs due or estimated by Bank to become due in connection  therewith, to secure all of the Obligations relating to such outstanding Letters of Credit.  4 REPRESENTATIONS AND WARRANTIES  Each Borrower represents and warrants, which representations and warranties shall be deemed made on the  Effective Date and on the date of the making of each Credit Extension and at any other time specified in any Loan  Documents, as follows:   4.1 Due Organization, Authorization; Power and Authority.    (a) Each Borrower and each of its Subsidiaries are each duly existing and in good standing as  a Registered Organization in their respective jurisdiction of formation and are qualified and licensed to do business  and is in good standing in any jurisdiction in which the conduct of their respective business or their ownership of  property requires that they be qualified except where the failure to do so would  not reasonably be expected to have a  Material Adverse Effect.    (b) All information set forth on the Perfection Certificate pertaining to Borrowers and each of  their Subsidiaries is true and correct in all material respects (it being understood and agreed that Borrowers may from  time to time, after the Effective Date, update certain information in the Perfection Certificate and the Perfection  Certificate shall be deemed to be updated when such updated Perfection Certificate is delivered to Bank).    (c) The execution, delivery and performance by each Borrower and each of its Subsidiaries of  the Loan Documents to which it is a party have been duly authorized, and do not (i) conflict with any of Borrower’s  or any such Subsidiary’s organizational documents, (ii) contravene, conflict with, constitute a default under or violate  any material Applicable Law, (iii) contravene, conflict with or violate any applicable order, writ, judgment, injunction,  decree, determination or award of any Governmental Authority by which such Borrower or such Subsidiary or any of  their property or assets may be bound or affected, (iv) require any action by, filing, registration, or qualification with,  or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have  already been obtained and are in full force and effect), or (v) conflict with, contravene, constitute a default or breach  under, or result in or permit the termination or acceleration of, any material agreement by which such Borrower or  such Subsidiary is bound.  Neither Borrower nor any of its Subsidiaries are in default under any agreement to which  

 

12    it is a party or by which it is bound in which the default would reasonably be expected to have a Material Adverse  Effect.    4.2 Collateral.    (a) The security interest granted herein is and shall at all times continue to be a first priority  perfected security interest in the Collateral (subject to Permitted Liens).  Each Borrower has good title to, rights in,  and the power to transfer each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear  of any and all Liens except Permitted Liens.   (b) Each Borrower has no Collateral Accounts at or with any bank or financial institution other  than Bank or Bank’s Affiliates except for the Collateral Accounts described in the Perfection Certificate on the  Effective Date or as to which Lead Borrower has provided written notice in accordance with Section 5.9(b) and which  such Borrower has taken such actions as are necessary to give Bank a perfected security interest therein, pursuant to  the terms of Section 5.9(c).  The Accounts are bona fide, existing obligations of the Account Debtors.    (c) The Collateral is not in the possession of any third party bailee (such as a warehouse) except  as otherwise provided in the Perfection Certificate.  None of the components of the Collateral shall be maintained at  locations other than as provided in the Perfection Certificate.  (d) All Inventory is in all material respects of good and marketable quality, free from material  defects.  (e) Each Borrower owns, or possesses the right to use to the extent necessary in its business,  all Intellectual Property, licenses and other intangible assets that are used in the conduct of its business as now  operated, except to the extent that such failure to own or possess the right to use such asset would not reasonably be  expected to have a Material Adverse Effect, and no such asset, to the best knowledge of such Borrower, conflicts with  the valid Intellectual Property, license, or intangible asset of any other Person to the extent that such conflict would  reasonably be expected to have a Material Adverse Effect.  (f) Except as noted on the Perfection Certificate on the Effective Date or for which notice has  been given to Bank pursuant to and in accordance with Section 5.11(a), each Borrower is not a party to, nor is it bound  by, any Restricted License.  4.3 Accounts Receivable.    (a) For each Account included in the most recent Borrowing Base Statement, on the date each  Advance is requested and made, such Account shall be an Eligible Account.  (b) All statements made and all unpaid balances appearing in all invoices, instruments and  other documents evidencing the Eligible Accounts are and shall be true and correct and all such invoices, instruments  and other documents, and all of Borrowers’ Books are genuine and in all respects what they purport to be.  All sales  and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all  Applicable Law.  Each Borrower has no knowledge of any actual or imminent Insolvency Proceeding of any Account  Debtor whose accounts are Eligible Accounts in any Borrowing Base Statement.  To the best of each Borrower’s  knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all Eligible  Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with  their express terms.  4.4 Litigation; Indictments. There are no actions, investigations or proceedings pending or, to the  knowledge of any Responsible Officer, threatened in writing by or against each Borrower or any of its Subsidiaries  which would reasonably be expected to have a Material Adverse Effect. No Borrower or any of its Subsidiaries has  been indicted, or threatened in writing with indictment, under any criminal statute, and no criminal or civil proceedings  have been commenced against any Borrower or any of its Subsidiaries, pursuant to which statute or proceedings the  

 

13    penalties or remedies sought or available include forfeiture to any Governmental Authority of any material portion of  the property of Lead Borrower and its Subsidiaries.  4.5 Financial Statements; Financial Condition.  All consolidated financial statements for Lead  Borrower and any of its Subsidiaries delivered to Bank by submission to the Financial Statement Repository or  otherwise submitted to Bank fairly present in all material respects Lead Borrower’s consolidated financial condition  and Lead Borrower’s consolidated results of operations for the periods covered thereby, subject, in the case of  unaudited financial statements, to normal year-end adjustments and the absence of footnote disclosures.  4.6 Solvency.  The fair salable value of Borrowers’ and their Subsidiaries’ consolidated assets  (including goodwill minus disposition costs) exceeds the fair value of Borrowers’ and their Subsidiaries’ consolidated  liabilities; Borrowers and their Subsidiaries, collectively, are not left with unreasonably small capital after the  transactions in this Agreement; and Borrowers and their Subsidiaries, collectively, are able to pay its debts (including  trade debts) as they mature.  4.7 Regulatory Compliance.  Each Borrower is not an “investment company” or a company  “controlled” by an “investment company” under the Investment Company Act of 1940, as amended.  Each Borrower  is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of  the Federal Reserve Board of Governors).  Each Borrower and each of its Subsidiaries (a) has complied in all material  respects with all Applicable Law, and (b) have not violated any Applicable Law the violation of which would  reasonably be expected to have a Material Adverse Effect.  Each Borrower and each of its Subsidiaries have duly  complied with, and their respective facilities, business, assets, property, leaseholds, real property and Equipment are  in compliance with, Environmental Laws, except where the failure to do so would not reasonably be expected to have  a Material Adverse Effect; there have been no outstanding citations, notices or orders of non-compliance issued to  each Borrower or any of its Subsidiaries or relating to their respective facilities, businesses, assets, property,  leaseholds, real property or Equipment under such Environmental Laws.  Each Borrower and each of its Subsidiaries  have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices  to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted,  except where the failure to obtain or make or file the same would not reasonably be expected to have a Material  Adverse Effect.  4.8 Subsidiaries; Investments.  No Borrower owns any stock, partnership, or other ownership interest  or other equity securities except for Permitted Investments.    4.9 Tax Returns and Payments; Pension Contributions.    (a) Other than as set forth in the Perfection Certificate on the Effective Date, each Borrower  and each of its Subsidiaries have timely filed, or submitted extensions for, all required tax returns and reports, and  each Borrower and each of its Subsidiaries have timely paid all applicable foreign, federal, state and local taxes,  assessments, deposits and contributions owed by such Borrower and each of its Subsidiaries except (a) to the extent  such taxes are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted,  so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have  been made therefor, or (b) if such taxes, assessments, deposits and contributions do not, individually or in the  aggregate, exceed Five Hundred Thousand Dollars ($500,000).  Other than as set forth in the Perfection Certificate on  the Effective Date, no Borrower is aware of any claims or adjustments proposed for any of such Borrower’s or any of  its Subsidiary’s prior tax years which would result in additional taxes becoming due and payable by such Borrower or  any of its Subsidiaries in excess of Five Hundred Thousand Dollars ($500,000) in the aggregate.    (b) Each Borrower and each of its Subsidiaries have paid all amounts necessary to fund all  present pension, profit sharing and deferred compensation plans in accordance with their express terms and in  accordance with the requirements of Applicable Law, and neither Borrower nor any of its Subsidiaries has withdrawn  from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of any  other event with respect to, any such plan which would reasonably be expected to result in any liability of such  Borrower or any of its Subsidiaries, including any liability to the Pension Benefit Guaranty Corporation or its  successors or any other Governmental Authority.  

 

14    4.10 Full Disclosure.  No written representation, warranty or other statement of a Borrower or any of its  Subsidiaries in any report, certificate or written statement submitted to the Financial Statement Repository or  otherwise submitted to Bank, as of the date such representation, warranty, or other statement was made, taken together  with all such reports, certificates and written statements submitted to the Financial Statement Repository or otherwise  submitted to Bank, contains any untrue statement of a material fact or omits to state a material fact necessary to make  the statements contained in the reports, certificates or written statements not misleading in light of the circumstances  under which they were made (it being recognized by Bank that the projections and forecasts provided by a Borrower  or any of its Subsidiaries in good faith and based upon reasonable assumptions are not viewed as facts, and that actual  results during the period or periods covered by such projections and forecasts may differ from the projected or  forecasted results and such differences may be material).  4.11 Sanctions.  Neither Borrower nor any of their Subsidiaries is: (a) in violation of any Sanctions; or  (b) a Sanctioned Person.  Neither Borrower nor any of its Subsidiaries, nor, to any Borrower’s knowledge, any of its  directors, officers, employees, agents or Affiliates: (i) conducts any business or engages in any transaction or dealing  with any Sanctioned Person, including making or receiving any contribution of funds, goods or services to or for the  benefit of any Sanctioned Person; (ii) deals in, or otherwise engages in any transaction relating to, any property or  interests in property blocked pursuant to any Sanctions; (iii) engages in or conspires to engage in any transaction that  evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in  any Sanctions; or (iv) otherwise engages in any transaction that would cause Bank to violate any Sanctions.  4.12 No Material Adverse Effect.  Since December 31, 2020, there has been no development or event  that has had or would reasonably be expected to have a Material Adverse Effect.  5 AFFIRMATIVE COVENANTS  Each Borrower shall do all of the following (unless waived, modified or extended by Bank, in its sole  discretion), which shall be taken together with, and subject to, the Perfection Certificate:  5.1 Use of Proceeds.  Cause the proceeds of the Credit Extensions to be used solely (a) as working  capital or (b) to fund its general business purposes, and other purposes permitted under this Agreement.  5.2 Government Compliance.    (a) (i) Maintain its and all of its Subsidiaries’ legal existence (except as permitted under  Section 6.3 with respect to Subsidiaries only) and good standing in their respective jurisdictions of formation and  maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a  Material Adverse Effect and (ii) comply, and have all of its Subsidiaries comply, in all material respects, with all laws,  ordinances and regulations to which it is subject.  (b) Obtain all of the Governmental Approvals necessary for the performance by such Borrower  and each of its Subsidiaries of their obligations under the Loan Documents to which it is a party, including any grant  of a security interest to Bank.  Each Borrower shall promptly provide copies of any such obtained Governmental  Approvals to Bank.  5.3 Financial Statements, Reports, Certificates.  Lead Borrower shall deliver to Bank by submitting  to the Financial Statement Repository:  (a) Borrowing Base Statement.  A Borrowing Base Statement (and any schedules related  thereto, including without limitation a detailed accounts receivable ledger, and including any other information  requested by Bank with respect to Lead Borrower’s Accounts) (i) when a Streamline Period is not in effect, on a  weekly basis and no later than Monday of each week with respect to the immediately preceding week, (ii) when a  Streamline Period is in effect, on a monthly basis and no later than the last day of each month with respect to the  immediately preceding month;  

 

15    (b) Accounts Receivable.  By the last day of the subsequent month after the end of each month,  (A) monthly accounts receivable agings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice  date, and (C) monthly reconciliations of accounts receivable agings (aged by invoice date), detailed debtor listing,  transaction reports, and general ledger; provided that, notwithstanding the foregoing, the items listed in subclause (C)  shall only be required to be provided hereunder solely if and to the extent otherwise prepared by a Borrower for  internal or other purposes;  (c) Monthly Financial Statements.  As soon as available, but no later than the last day of each  month, a company prepared consolidated balance sheet and income statement covering Lead Borrower’s consolidated  operations with respect to the immediately preceding month in a form reasonably acceptable to Bank;  (d) Compliance Statement.  No later than the last day of each month and together with the  statements set forth in Section Error! Reference source not found.(c), a duly completed Compliance Statement with  respect to the immediately preceding month, confirming that as of the end of such month, each Borrower was in full  compliance with all of the terms and conditions of this Agreement, and setting forth calculations showing compliance  with the financial covenant set forth in this Agreement and such other information as Bank may reasonably request;  (e) Annual Operating Budget and Financial Projections.  Within 45 days after the end of each  fiscal year of Lead Borrower, (A) annual operating budgets for the upcoming fiscal year of Lead Borrower, and (B)  annual financial projections for the upcoming fiscal year of Lead Borrower, in each case as approved by the Board,  together with any related business forecasts used in the preparation of such annual financial projections;  (f) Annual Audited Financial Statements.  As soon as available, and in any event within 180  days following the end of Lead Borrower’s fiscal year, audited consolidated financial statements prepared under  GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent  certified public accounting firm reasonably acceptable to Bank;  (g) SEC Filings.  Within five (5) days of filing, notification of the filing and copies of all  periodic and other reports, proxy statements and other materials filed by Lead Borrower and/or any of its Subsidiaries  with the SEC, any Governmental Authority succeeding to any or all of the functions of the SEC or with any national  securities exchange, or distributed to its shareholders, as the case may be.  Documents required to be delivered pursuant  to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be  delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which any Borrower  or any of its Subsidiaries posts such documents, or provides a link thereto, on such Borrower’s or any of its  Subsidiaries’ website on the internet at such Borrower’s or any of its Subsidiaries’ website address; provided, however,  Lead Borrower shall promptly notify Bank in writing (which may be by electronic mail) of the posting of any such  document;  (h) Security Holder and Subordinated Debt Holder Reports.  Within ten (10) Business Days of  delivery, copies of all material statements, reports and notices made available to any Borrower’s security holders or  to any holders of Subordinated Debt (solely in their capacities as security holders or holders of Subordinated Debt and  not in any other role);  (i) Beneficial Ownership Information.  Within ten (10) days after the end of each fiscal quarter  of Lead Borrower, written notice of any changes to the beneficial ownership information set out in Section 14 of the  Perfection Certificate.  Borrowers understand and acknowledge that Bank relies on such true, accurate and up-to-date  beneficial ownership information to meet Bank’s regulatory obligations to obtain, verify and record information about  the beneficial owners of its legal entity customers;  (j) Legal Action Notice and Updates.  (i) Prompt written notice of any legal actions,  investigations or proceedings pending or threatened in writing, following the Effective Date, against any Borrower or  any of its Subsidiaries that would reasonably be expected to result in damages or costs to any Borrower or any of its  Subsidiaries of, individually or in the aggregate, Five Million Dollars ($5,000,000); and (ii) at the reasonable request  of Bank, conference calls between Bank and/or its representatives and Lead Borrower’s officers with knowledge of  any such legal actions, investigations or proceedings regarding developments therein; provided however, that  

 

16    Borrowers shall not be required to disclose any information that Borrowers reasonably deem to be subject to attorney- client privilege;  (k) Tort Claim Notice.  If any Borrower shall acquire a commercial tort claim in excess of One  Million Dollars ($1,000,000), such Borrower shall promptly notify Bank in a writing signed by such Borrower of the  general details thereof and grant to Bank in such writing a security interest therein and in the proceeds thereof, all  upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Bank;  (l) Government Filings.  Within five (5) days after the same are sent or received, copies of all  correspondence, reports, documents and other filings by any Borrower or any of its Subsidiaries with any  Governmental Authority regarding compliance with or maintenance of Governmental Approvals or Applicable Law  or that would reasonably be expected to have a material effect on any of the Governmental Approvals or otherwise a  Material Adverse Effect;   (m) Registered Organization.  If any Borrower is not a Registered Organization as of the  Effective Date but later becomes one, promptly notify Bank of such occurrence and provide Bank with such  Borrower’s organizational identification number;   (n) Default.  Prompt written notice of the occurrence of a Default or an Event of Default; and  (o) Other Information.  Promptly, from time to time, such other information regarding any  Borrower or any of its Subsidiaries or compliance with the terms of any Loan Documents as reasonably requested by  Bank.  Any submission by any Borrower of a Compliance Statement, a Borrowing Base Statement or any other financial  statement submitted to the Financial Statement Repository pursuant to this Section 5.3 or otherwise submitted to Bank  shall be deemed to be a representation by such Borrower that (i) as of the date of such Compliance Statement,  Borrowing Base Statement or other financial statement, the information and calculations set forth therein are true and  correct, (ii) as of the end of the compliance period set forth in such submission, such Borrower is in complete  compliance with all required covenants except as noted in such Compliance Statement, Borrowing Base Statement or  other financial statement, as applicable.  Any documents required to be delivered under this Agreement may be delivered electronically, and to the extent any  such document is filed with the SEC, shall be deemed to have been delivered under this Agreement on the date on  which such document is filed electronically with the SEC’s EDGAR system.  5.4 Accounts Receivable.    (a) Schedules and Documents Relating to Accounts.  Lead Borrower shall deliver to Bank  transaction reports and schedules of collections, as provided in Section Error! Reference source not found., on  Bank’s standard forms; provided, however, that Lead Borrower’s failure to execute and deliver the same shall not  affect or limit Bank’s Lien and other rights in all of Borrowers’ Accounts, nor shall Bank’s failure to advance or lend  against a specific Account affect or limit Bank’s Lien and other rights therein.  If requested by Bank, Lead Borrower  shall furnish Bank with copies (or, at Bank’s reasonable request, originals) of all contracts, orders, invoices, and other  similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for  any goods the sale or disposition of which gave rise to such Accounts.  In addition, Lead Borrower shall deliver to  Bank, on its request, the originals of all instruments, chattel paper, security agreements, guarantees and other  documents and property evidencing or securing any Accounts in excess of $1,000,000, in the same form as received,  with all necessary indorsements, and copies of all credit memos.  (b) Disputes.  At any time when any Credit Extension is outstanding or a pending Notice of  Borrowing has been submitted to Bank, Lead Borrower shall promptly notify Bank of all disputes or claims relating  to Accounts in excess of $500,000 individually or $1,500,000 in the aggregate per month for all such disputes or  claims.  Each Borrower may forgive (completely or partially), compromise, or settle any Account for less than  payment in full, or agree to do any of the foregoing so long as (i) such Borrower does so in good faith, in a  

 

17    commercially reasonable manner, in the ordinary course of business, in arm’s-length transactions; (ii) no Event of  Default has occurred and is continuing; and (iii) there shall not be an Overadvance after taking into account all such  discounts, settlements and forgiveness; provided further that at any time when any Credit Extension is outstanding or  a pending Notice of Borrowing has been submitted to Bank, and such compromises, reductions or settlements exceed  $500,000 individually or $1,500,000 in the aggregate per month, Lead Borrower shall notify Bank of such  compromise, reduction, or settlement.    (c) Collection of Accounts.  Each Borrower shall direct Account Debtors to deliver or transmit  all proceeds of Accounts into a lockbox account, or such other “blocked accounts” as specified by Bank (any such  account, the “Cash Collateral Account”).  Whether or not an Event of Default has occurred and is continuing, each  Borrower shall promptly deliver all payments on and proceeds of Accounts to the Cash Collateral Account.  Subject  to Bank’s right to maintain a reserve pursuant to Section 5.4(d), all amounts received in the Cash Collateral Account  shall be (i) when a Streamline Period is not in effect, applied to immediately reduce the Obligations under the  Revolving Line (unless Bank, in its sole discretion, at times when an Event of Default exists, elects not to so apply  such amounts), or (ii) when a Streamline Period is in effect, transferred on a daily basis to such Borrower’s operating  account with Bank. Each Borrower hereby authorizes Bank to transfer to the Cash Collateral Account any amounts  that Bank reasonably determines are proceeds of the Accounts (provided that Bank is under no obligation to do so and  this allowance shall in no event relieve any Borrower of its obligations hereunder).  (d) Reserves.  Notwithstanding any terms in this Agreement to the contrary, at times when a  an Event of Default exists and any Credit Extension is outstanding, Bank may hold any proceeds of the Accounts and  any amounts in the Cash Collateral Account that are not applied to the Obligations pursuant to Section 5.4(c) above  (including amounts otherwise required to be transferred to Lead Borrower’s operating account with Bank) up to the  amount of all outstanding Credit Extensions and any interest and fees accrued and unpaid thereon as a reserve to be  applied to such Credit Extensions regardless of whether such Credit Extensions are then due and payable.  (e) Returns.  Provided no Specified Event of Default has occurred and is continuing, if any  Account Debtor returns any Inventory to any Borrower, Lead Borrower shall promptly (i) determine the reason for  such return, (ii) issue a credit memorandum to the Account Debtor in the appropriate amount in accordance with such  Borrower’s customary business practices and (iii) upon reasonable request from Bank,  provide a copy of such credit  memorandum to Bank.  In the event any attempted return occurs after the occurrence and during the continuance of  any Specified Event of Default, each Borrower shall hold the returned Inventory in trust for Bank, and immediately  notify Bank of the return of the Inventory.    (f) Verifications; Confirmations; Credit Quality; Notifications.  Bank may, from time to time,  (i) upon prior written notice to Lead Borrower, verify and confirm directly with the respective Account Debtors the  validity, amount and other matters relating to the Accounts, either in the name of Borrower or Bank or such other  name as Bank may choose, and notify any Account Debtor of Bank’s security interest in such Account and/or (ii) in  Bank’s Permitted Discretion conduct a credit check of any Account Debtor to approve any such Account Debtor’s  credit.  (g) No Liability.  Bank shall not be responsible or liable for any shortage or discrepancy in,  damage to, or loss or destruction of, any goods, the sale or other disposition of which gives rise to an Account, or for  any error, act, omission, or delay of any kind occurring in the settlement, failure to settle, collection or failure to collect  any Account, or for settling any Account in good faith for less than the full amount thereof, nor shall Bank be deemed  to be responsible for any of Borrowers’ obligations under any contract or agreement giving rise to an Account.   Nothing herein shall, however, relieve Bank from liability for its own gross negligence or willful misconduct.  5.5 Remittance of Proceeds.  Except as otherwise provided in Section 5.4(c), deliver, in kind, all  proceeds arising from the disposition of any Collateral to Bank in the original form in which received by any Borrower  not later than the following Business Day after receipt by such Borrower, to be applied to the Obligations (a) prior to  an Event of Default, pursuant to the terms of Section 5.4(c) hereof, and (b) after the occurrence and during the  continuance of an Event of Default, pursuant to the terms of Section 8.4 hereof; provided that, if no Specified Event  of Default has occurred and is continuing, no Borrower shall be obligated to remit to Bank the proceeds of the sale of  worn out or obsolete Equipment disposed of by such Borrower in good faith in an arm’s length transaction.  Each  Borrower agrees that it will not commingle proceeds of Collateral with any of such Borrower’s other funds or property,  

 

18    but will hold such proceeds separate and apart from such other funds and property and in an express trust for Bank.   Nothing in this Section 5.5 limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement.  5.6 Taxes; Pensions.  Timely file, and require each of its Subsidiaries to timely file (in each case, unless  subject to a valid extension), all required tax returns and reports and timely pay, and require each of its Subsidiaries  to timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions owed by such  Borrower and each of its Subsidiaries, except (i) if such taxes, assessments, deposits and contributions do not,  individually or in the aggregate, exceed Five Hundred Thousand Dollars ($500,000), (ii) for deferred payment of any  taxes contested pursuant to the terms of Section 4.9(a) hereof or (iii) with respect for matters set forth in the Perfection  Certificate on the Effective Date, and shall deliver to Bank, on demand, appropriate certificates attesting to such  payments, and pay, and require each of its Subsidiaries to pay, all amounts necessary to fund all present pension, profit  sharing and deferred compensation plans in accordance with their express terms and any requirements of Applicable  Law.   5.7 Access to Collateral; Books and Records.  At reasonable times, on five (5) Business Days’ written  notice (provided no notice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall  have the right to inspect the Collateral and the right to audit and copy Borrowers’ Books; provided that Borrowers  shall not be required to disclose any information that Borrowers reasonably deem to be subject to attorney-client  privilege and any such inspection and audit shall be restricted in respect thereof.  Such inspections and audits shall be  conducted no more often than once every twelve (12) months (or more frequently as Bank in its reasonable discretion  determines that conditions warrant) unless an Event of Default has occurred and is continuing in which case such  inspections and audits shall occur as often as Bank shall determine is necessary.  The foregoing inspections and audits  shall be conducted at Borrowers’ expense and the charge therefor shall be $1,000.00 per person per day (or such higher  amount as shall represent Bank’s then-current standard charge for the same), plus out-of-pocket expenses.  In the  event, Borrowers and Bank schedule an audit more than eight (8) days in advance, and Borrowers cancel or seek to or  reschedules the audit with less than eight (8) days written notice to Bank, then (without limiting any of Bank’s rights  or remedies) Borrowers shall pay Bank a fee of $2,000.00 plus any out-of-pocket expenses incurred by Bank to  compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling.    5.8 Insurance.    (a) Keep its business and the Collateral insured for risks and in amounts standard for  companies in Borrowers’ industry and location and as Bank may reasonably request.  Insurance policies shall be in a  form, with financially sound and reputable insurance companies that are not Affiliates of Borrowers, and in amounts  that are reasonably satisfactory to Bank.  (b) All property policies shall have a lender’s loss payable endorsement showing Bank as  lender loss payee.  All liability policies shall show, or have endorsements showing, Bank as an additional insured.   Bank shall be named as lender loss payee and/or additional insured with respect to any such insurance providing  coverage in respect of any Collateral.   (c) Ensure that proceeds payable under any property policy are, at Bank’s option, payable to  Bank on account of the Obligations.  (d) At Bank’s reasonable request, each Borrower shall deliver copies of insurance policies and  evidence of all premium payments.  Each provider of any such insurance required under this Section 5.8 shall agree,  by endorsement upon the policy or policies issued by it or by independent instruments furnished to Bank, that it will  give Bank 30 days prior written notice before any such policy or policies shall be canceled or altered in any material  respect.  If any Borrower fails to obtain insurance as required under this Section 5.8 or to pay any amount or furnish  any required proof of payment to third persons and Bank, Bank may make all or part of such payment or obtain such  insurance policies required in this Section 5.8, and take any action under the policies Bank deems prudent.  5.9 Accounts.  

 

19    (a) Maintain all of such Borrower’s and any of its Subsidiaries’ operating accounts and  depository accounts with Bank or Bank’s Affiliates, with the exception of the Offshore Accounts.  (b) In addition to the foregoing, Borrowers and any Domestic Subsidiary of any Borrower shall  obtain any domestic business credit card, letter of credit and cash management services exclusively from Bank so long  as Bank offers on materially comparable terms, conditions and pricing offered by any provider other than Bank.  Lead  Borrower shall give Bank written notice of any proposal from any provider for any domestic business credit card,  letter of credit or cash management services with respect to any Borrower or any of their Domestic Subsidiaries, which  notice shall (i) identify the provider offering such domestic business credit card, letter of credit or cash management  services and summarize the terms, conditions and pricing thereof, and (ii) be delivered on the terms set forth in Section  10 hereof (such notice described in (i) and (ii), the “Bank Services Notice”).  Upon receipt of such Bank Services  Notice, Bank shall have the right (but not the obligation) within ten (10) Business Days to agree to provide such  domestic business credit card, letter of credit or cash management services to any Borrower or any of its Domestic  Subsidiaries on materially comparable terms, or, other terms that Bank may propose and any Borrower or any of its  Domestic Subsidiaries may agree to, in their sole discretion.  If Bank agrees to provide such domestic business credit  card, letter of credit and cash management services as set forth in the immediately preceding sentence, the applicable  Borrower or Domestic Subsidiary shall be required to enter into such domestic business credit card, letter of credit or  cash management services with Bank and not the other provider.  (c) In addition to and without limiting the restrictions in (a), each Borrower shall provide Bank  a written notice before establishing any Collateral Account at or with any bank or financial institution other than Bank  or Bank’s Affiliates.  Subject to Section 5.18, for each Collateral Account that any Borrower at any time maintains  (other than Offshore Accounts), such Borrower shall cause the applicable bank or financial institution (other than  Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other  appropriate instrument with respect to such Collateral Account to perfect Bank’s Lien in such Collateral Account in  accordance with the terms hereunder which Control Agreement may not be terminated without the prior written  consent of Bank.  The provisions of the previous sentence shall not apply (i) to Collateral Accounts exclusively used  for payroll, payroll taxes, and other employee wage and benefit payments to or for the benefit of Borrowers’ employees  and identified to Bank by Lead Borrower as such, or (ii) to Collateral Accounts with an average monthly balance not  in excess of $500,000 for each such deposit account or $2,500,000 for all such Collateral Accounts (collectively, the  “Excluded Accounts”).  5.10 Financial Covenants.  Lead Borrower shall maintain at all times, as of the last day of each month  when a Streamline Period is not in effect, on a consolidated basis with respect to Lead Borrower and its Subsidiaries,  measured as of the end of each fiscal month on a trailing twelve (12) month basis, a Fixed Charge Coverage Ratio of  at least 1.00 to 1.00.  For the avoidance of doubt, as soon a Streamline Period terminates, the Fixed Charge Coverage  Ratio shall automatically be tested as of the last day of the most recent month end for which financial statements were  required to be delivered hereunder or have been delivered hereunder even if a Streamline Period was in effect as of  such month end.   5.11 Protection of Intellectual Property Rights.    (a) (i) Protect, defend and maintain the validity and enforceability of each Borrower’s and each  Subsidiary’s Intellectual Property, except to the extent that such failure to do so would not reasonably be expected to  have a Material Adverse Effect; (ii) promptly advise Bank in writing of infringements or any other event that would  reasonably be expected to materially and adversely affect the value of such Borrower’s and each Subsidiary’s  Intellectual Property; and (iii) not allow any Intellectual Property material to Lead Borrower and its Subsidiaries’  business (taken as a whole) to be abandoned, forfeited or dedicated to the public without Bank’s written consent.  (b) Provide written notice to Bank within ten (10) days of entering or becoming bound by any  Restricted License (other than over-the-counter software that is commercially available to the public).  Each Borrower  shall take such steps as Bank reasonably requests to obtain the consent of, or waiver by, any person whose consent or  waiver is necessary for (i) any such Restricted License to be deemed “Collateral” and for Bank to have a security  interest in it that might otherwise be restricted or prohibited by law or by the terms of any such Restricted License,  whether now existing or entered into in the future, and (ii) Bank to have the ability in the event of a liquidation of any  

 

20    Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies under this Agreement and the  other Loan Documents.  5.12 Litigation Cooperation.  From the date hereof and continuing through the termination of this  Agreement, make available to Bank, without expense to Bank, such Borrower and its officers and employees and such  Borrower’s books and records, to the extent that Bank may deem them reasonably necessary to prosecute or defend  any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrowers.  5.13 Online Banking.    (a) Utilize Bank’s online banking platform for all matters reasonably requested by Bank which  shall include, without limitation (and without request by Bank for the following matters), uploading information  pertaining to Accounts and Account Debtors, requesting approval for exceptions, requesting Credit Extensions, and  uploading financial statements and other reports required to be delivered by this Agreement (including, without  limitation, those described in Section Error! Reference source not found.).  (b) Comply with the terms of Bank’s Online Banking Agreement as in effect from time to time  and ensure that all persons utilizing Bank’s online banking platform are duly authorized to do so by an Administrator.   Bank shall be entitled to assume the authenticity, accuracy and completeness of any information, instruction or request  for a Credit Extension submitted via Bank’s online banking platform and to further assume that any submissions or  requests made via Bank’s online banking platform have been duly authorized by an Administrator.  5.14 Formation or Acquisition of Subsidiaries.  Notwithstanding and without limiting the negative  covenants contained in Sections 6.3 and 6.7, at the time that any Borrower forms any Subsidiary or acquires any  Subsidiary after the Effective Date (including, without limitation, pursuant to a Division) or any Dormant Subsidiary  of any Borrower commences operations after the Effective Date, such Borrower shall (a) cause such Subsidiary, if a  Domestic Subsidiary, to provide to Bank a joinder to this Agreement to become a co-borrower hereunder without any  need to amend this Agreement by any party hereto, together with documentation and subject to conditions set forth in  the joinder, all in form and substance satisfactory to Bank (including being sufficient to grant Bank a first priority  Lien (subject to Permitted Liens) in and to the assets of such Domestic Subsidiary), (b) pledge to Bank all of the direct  or beneficial ownership interest in such Subsidiary, in form and substance reasonably satisfactory to Bank; provided,  that with respect to the pledge by any Borrower of a perfected security interest in the stock, units or other evidence of  ownership of each Foreign Subsidiary, such Borrower shall only be required to grant and pledge to Bank a perfected  security interest in up to sixty-five percent (65%) of the stock, units or other evidence of ownership of such Foreign  Subsidiary; and (c) provide to Bank all other documentation in form and substance reasonably satisfactory to Bank,  including one or more opinions of counsel satisfactory to Bank, which in its opinion is appropriate with respect to the  execution and delivery of the applicable documentation referred to above.  Any document, agreement, or instrument  executed or issued pursuant to this Section 5.14 shall be a Loan Document.  Any Domestic Subsidiary that is not a  wholly-owned Subsidiary shall not be required to become a Borrower hereunder to the extent its organizational  documents or other binding agreements prohibit or restrict (including by any requirement to obtain governmental or  regulatory authority or third party consent, approval, license or authorization) such Subsidiary from becoming a  Borrower hereunder at the time it becomes a Subsidiary and such prohibition or restriction was not entered in  contemplation of avoiding such Subsidiary’s obligations hereunder.  5.15 [Reserved].  5.16 Further Assurances.  Execute any further instruments and take such further action as Bank  reasonably requests to perfect, protect, ensure the priority of or continue Bank’s Lien on the Collateral or to effect the  purposes of this Agreement.  5.17 Sanctions.  (a) Not, and not permit any of its Subsidiaries to, engage in any of the activities  described in Section 4.11 in the future; (b) not, and not permit any of its Subsidiaries to, become a Sanctioned Person;  and (c) ensure that the proceeds of the Obligations are not used to violate any Sanctions.  In addition, have  implemented, and will consistently apply while this Agreement is in effect, procedures to ensure that the  representations and warranties in Section 4.11 remain true and correct in all material respects while this Agreement is  in effect.  

 

21    5.18 Post-Closing Matters.  Deliver to or establish with Bank, as applicable, each of the following, in  form and substance acceptable to Bank:   (a) within sixty (60) days of the Effective Date (or such later date as may be agreed by Bank  in its sole discretion), duly executed Control Agreements with respect to all Collateral Accounts other than Excluded  Accounts and Collateral Accounts maintained with Bank;  (b) within sixty (60) days of the Effective Date (or such later date as may be agreed by Bank  in its sole discretion), a Cash Collateral Account with Bank for each multicurrency account maintained with Bank;  (c) within forty-five (45) days of the Effective Date (or such later date as may be agreed by  Bank in its sole discretion), evidence satisfactory to Bank that the insurance policies and endorsements required by  Section 5.8 hereof are in full force and effect, together with appropriate evidence showing lender loss payable and  additional insured clauses or endorsements in favor of Bank; and  (d) within ninety (90) days after the Effective Date (or such later date as may be agreed by  Bank in its sole discretion), all of the existing and outstanding original shares of capital stock of any Subsidiary directly  held by each Borrower and pledged to Bank hereunder, together with an original undated stock power for each such  certificate executed in blank by an Authorized Signer of such Borrower.  6 NEGATIVE COVENANTS  Each Borrower shall not do any of the following (unless waived, modified or extended by Bank, in its sole  discretion):  6.1 Dispositions.  Convey, sell, lease, transfer, assign, or otherwise dispose of (including, without  limitation, pursuant to a Division) (collectively, “Transfer”), or permit any of its Subsidiaries to Transfer, all or any  part of its business or property, except for Permitted Transfers.  6.2 Changes in Business, Management, Control, or Business Locations.  (a) Engage in or permit any  of its Subsidiaries to engage in any business other than the businesses currently engaged in by such Borrower and such  Subsidiary, as applicable, or reasonably related or ancillary thereto and logical extensions thereof; (b) liquidate or  dissolve unless permitted under Section 6.3; (c) permit, allow or suffer to occur any Change in Control; or (d) without  a written notice to Bank (i) change its jurisdiction of organization, (ii) change its organizational structure or type, or  (iii) change its legal name.  6.3 Mergers or Acquisitions.  Merge or consolidate, or permit any of its Subsidiaries to merge or  consolidate, with any other Person, except that a Subsidiary may merge or consolidate into another Subsidiary or a  Borrower, provided that if such merger or consolidation involves a Borrower, such Borrower is the surviving entity,  or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the stock, partnership, membership,  or other ownership interest or other equity securities or property of another Person (including, without limitation, by  the formation of any Subsidiary or pursuant to a Division) other than Permitted Acquisitions.  6.4 Indebtedness.  Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary  to do so, other than Permitted Indebtedness.  6.5 Encumbrance.  Create, incur, allow, or suffer to exist any Lien on any of its property or permit any  of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the first priority  security interest granted herein (except Permitted Liens that are permitted pursuant to the terms of this Agreement to  have superior priority to Bank’s Lien under this Agreement) or enter into any agreement, document, instrument or  other arrangement (except with or in favor of Bank) with any Person which directly or indirectly prohibits or has the  effect of prohibiting such Borrower or any Subsidiary required to become a Borrower hereunder from assigning,  mortgaging, pledging, granting a security interest in or upon, or encumbering any of such Borrower’s or Subsidiary’s  Intellectual Property, except as is otherwise permitted in Section 6.1 hereof and the definition of “Permitted Liens”  herein.  

 

22    6.6 Maintenance of Collateral Accounts.  Maintain any Collateral Account except pursuant to the  terms of Section 5.9(c).  6.7 Restricted Payments; Investments.  (a) Make, or permit any of its Subsidiaries to make, any  Restricted Payment other than Permitted Restricted Payments; provided that, notwithstanding anything set forth  herein, any Restricted Payment that would have been permitted to be made hereunder if paid on the date such  Restricted Payment was declared, shall be permitted to be made hereunder so long as such Restricted Payment is paid  within sixty (60) days of the date it was declared; or (b) directly or indirectly make, or permit any Subsidiary to make,  any Investment (including, without limitation, by the formation of any Subsidiary or pursuant to a Division) other than  Permitted Investments.  6.8 Transactions with Affiliates.  Directly or indirectly enter into or permit to exist any material  transaction with any Affiliate of any Borrower, except for transactions that are in the ordinary course of such  Borrower’s business, upon fair and reasonable terms that are no less favorable to such Borrower than would be  obtained in an arm’s length transaction with a non-affiliated Person.  6.9 Subordinated Debt.  Except as expressly permitted under the terms of the subordination,  intercreditor, or other similar agreement to which any Subordinated Debt is subject: (a) make or permit any payment  on such Subordinated Debt; or (b) amend any provision in any document relating to such Subordinated Debt which  would increase the amount thereof, provide for earlier or greater principal, interest, or other payments thereon, or  materially adversely affect the subordination thereof to Obligations owed to Bank.  6.10 Compliance.  (a) Become an “investment company” or a company controlled by an “investment  company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities  extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the  Federal Reserve System), or use the proceeds of any Credit Extension for that purpose; (b) in each case, except as  could not reasonably be expected to result in a material liability of Borrower or any Subsidiary, (i) fail to meet the  minimum funding requirements of ERISA, (ii) permit a Reportable Event (as defined in Section 4043(c) of ERISA)  or Prohibited Transaction, (as defined in Section 406 of ERISA or Section 4975 of the Code) to occur with respect to  an “employee benefit plan” as defined in Section 3(3) of ERISA that is sponsored, maintained or contributed to by the  Borrower or any Subsidiary (a “Plan”), (iii) fail to comply with the Federal Fair Labor Standards Act, (iv) incur any  other liability under Title IV of ERISA or (v) violate applicable requirements of ERISA or the Code with respect to a  Plan; or (c) withdraw or permit any Subsidiary to withdraw from participation in, or permit partial or complete  termination of any pension, profit sharing and deferred compensation plan which would reasonably be expected to  result in any material liability of such Borrower, including any liability to the Pension Benefit Guaranty Corporation  or its successors or any other Governmental Authority.  6.11   PubCo Notes.  Make, or permit any of its Subsidiaries to make, any PubCo Notes Payments,  except for Permitted PubCo Notes Payments.  7 EVENTS OF DEFAULT  Any one of the following (unless waived, modified or extended by Bank, in its sole discretion) shall constitute  an event of default (an “Event of Default”) under this Agreement:  7.1 Payment Default.  Any Borrower fails to (a) make any payment of principal on any Credit  Extension on its due date, or (b) pay any interest or any other Obligations within three (3) Business Days after such  Obligations are due and payable (which three (3) Business Day cure period shall not apply to payments due on the  Revolving Line Maturity Date);  7.2 Covenant Default.   (a) Any Borrower fails or neglects to perform any obligation in Section 5 (other than Sections  5.2 (Government Compliance), 5.3 (Financial Statements, Reports, Certificates), 5.9(a) and (b) (Accounts), 5.12  

 

23    (Litigation Cooperation), 5.15 (Inventory; Returns) and 5.16 (Further Assurances)) or violates any covenant in Section  6; or  (b) Any Borrower fails or neglects to perform, keep, or observe any other term, provision,  condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other  than those specified in this Section 7) under such other term, provision, condition, covenant or agreement that can be  cured, has failed to cure the default within thirty (30) days after the occurrence thereof, or in the case of the obligations  in Section 5.3 only, within ten (10) days after the occurrence thereof.  Cure periods provided under this section shall  not apply to any covenants set forth in clause (a) above;  7.3 [Reserved].  7.4 Attachment; Levy; Restraint on Business.    (a) (i) The service of process seeking to attach, by trustee or similar process, funds of any  Borrower or any Subsidiary, in each case in excess of $5,000,000 in the aggregate or (ii) a notice of lien or levy is  filed against any of Borrower’s or any of its Subsidiaries’ material assets by any Governmental Authority, and the  same under subclauses (i) and (ii) hereof are not, within fifteen (15) days after the occurrence thereof, discharged or  stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made  during any fifteen (15) day cure period; or   (b) (i) any material portion of Borrower’s or any of its Subsidiaries’ assets is attached, seized,  levied on, or comes into possession of a trustee or receiver, or (ii) any court order enjoins, restrains, or prevents any  Borrower or any of its Subsidiaries from conducting all or any material part of its business;  7.5 Insolvency.  (a) Any Borrower or any of its Subsidiaries is unable to pay its debts (including trade  debts) as they become due or otherwise becomes insolvent; (b) any Borrower or any of its Subsidiaries begins an  Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against any Borrower or any of its Subsidiaries and  is not dismissed or stayed within 45 days (but no Credit Extensions shall be made while any of the conditions described  in clause (a) exist or until any Insolvency Proceeding is dismissed);  7.6 Other Agreements.  There is, under any agreement to which any Borrower, any of Borrower’s  Subsidiaries is a party with a third party or parties, any default resulting in a right by such third party or parties,  whether or not exercised, to accelerate the maturity of any Indebtedness in an amount individually or in the aggregate  in excess of Five Million Dollars ($5,000,000.00);   7.7 Judgments; Penalties.  One or more fines, penalties or final judgments, orders or decrees for the  payment of money in an amount, individually or in the aggregate, of at least Five Million Dollars ($5,000,000.00) (not  covered by independent third-party insurance as to which liability has been accepted by such insurance carrier) shall  be rendered against any Borrower or any of its Subsidiaries by any Governmental Authority, and the same are not,  within ten (10) days after the entry, assessment or issuance thereof, discharged, or after execution thereof, or stayed  pending appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that no Credit  Extensions will be made prior to the discharge, or stay of such fine, penalty, judgment, order or decree);  7.8 Misrepresentations.  Any Borrower or any of its Subsidiaries or any Person acting for any  Borrower or any of its Subsidiaries makes any representation, warranty, or other statement now or later in this  Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any  Loan Document, and such representation, warranty, or other statement is incorrect in any material respect when made  (it being agreed and acknowledged by Bank that the projections and forecasts provided by any Borrower or any of its  Subsidiaries in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during  the period or periods covered by such projections and forecasts may differ from the projected or forecasted results and  such differences may be material);  7.9 Subordinated Debt.  If the Obligations shall for any reason be subordinated or shall not have the  priority contemplated by this Agreement or any applicable subordination or intercreditor agreement;  

 

24    7.10 Lien Priority.  There is a material impairment in the perfection or priority of Bank’s security interest  in a material portion of the Collateral;  7.11 [Reserved]; or  7.12 Governmental Approvals.  Any Governmental Approval shall have been (a) revoked, rescinded,  suspended, modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any  decision by a Governmental Authority that designates a hearing with respect to any applications for renewal of any of  such Governmental Approval or that could result in the Governmental Authority taking any of the actions described  in clause (a) above, and such decision or such revocation, rescission, suspension, modification or non-renewal (i)  causes, or could reasonably be expected to cause, a Material Adverse Effect, or (ii) adversely affects the legal  qualifications of any Borrower or any of its Subsidiaries to hold such Governmental Approval in any applicable  jurisdiction and such revocation, rescission, suspension, modification or non-renewal could reasonably be expected to  affect the status of or legal qualifications of any Borrower or any of its Subsidiaries to hold any Governmental  Approval in any other jurisdiction.  8 BANK’S RIGHTS AND REMEDIES  8.1 Rights and Remedies.  Upon the occurrence and during the continuance of an Event of Default,  Bank may, without notice or demand, do any or all of the following:  (a) declare all Obligations immediately due and payable (but if an Event of Default described  in Section 7.5 occurs all Obligations are immediately due and payable without any action by Bank);  (b) stop advancing money or extending credit for any Borrower’s benefit under this  Agreement;  (c) demand that each Borrower (i) deposit cash with Bank in an amount equal to at least (A)  103.0% of the aggregate face amount of any Letters of Credit denominated in Dollars remaining undrawn, and (B)  108.0% of the Dollar Equivalent of the aggregate face amount of any Letters of Credit denominated in a Foreign  Currency remaining undrawn (plus, in each case, all interest, fees, and costs due or estimated by Bank to become due  in connection therewith), to secure all of the Obligations relating to such Letters of Credit, as collateral security for  the repayment of any future drawings under such Letters of Credit, and Borrower shall forthwith deposit and pay such  amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of  any Letters of Credit;  (d) [reserved];  (e) verify the amount of, demand payment of and performance under, and collect any Accounts  and General Intangibles, settle or adjust disputes and claims directly with Account Debtors for amounts on terms and  in any order that Bank considers advisable, and notify any Person owing any Borrower money of Bank’s security  interest in such funds.  Each Borrower shall collect all payments in trust for Bank and, if requested by Bank,  immediately deliver the payments to Bank in the form received from the Account Debtor, with proper endorsements  for deposit;  (f) make any payments and do any acts it considers necessary or reasonable to protect the  Collateral and/or its security interest in the Collateral.  Each Borrower shall assemble the Collateral if Bank requests  and make it available as Bank designates.  Bank may enter premises where the Collateral is located, take and maintain  possession of any part of the Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior  or superior to its security interest and pay all expenses incurred. Each Borrower grants Bank a license to enter and  occupy any of its premises, without charge, to exercise any of Bank’s rights or remedies;  (g) apply to the Obligations any (i) balances and deposits of any Borrower it holds, or (ii)  amount held by Bank owing to or for the credit or the account of each Borrower;  

 

25    (h) ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale,  and sell the Collateral.  For use solely upon the occurrence and during the continuation of an Event of Default, Bank  is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrowers’ labels, Patents,  Copyrights, mask works, rights of use of any name, trade secrets, trade names, Trademarks, and advertising matter,  or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling  any Collateral and, in connection with Bank’s exercise of its rights under this Section 8.1, each Borrower’s rights  under all licenses and all franchise agreements inure to Bank’s benefit;  (i) place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive  control, any entitlement order, or other directions or instructions pursuant to any Control Agreement or similar  agreements providing control of any Collateral;  (j) demand and receive possession of each Borrower’s Books; and  (k) exercise all rights and remedies available to Bank under the Loan Documents or at law or  equity, including all remedies provided under the Code or any Applicable Law (including disposal of the Collateral  pursuant to the terms thereof).  8.2 Power of Attorney.  Each Borrower hereby irrevocably appoints Bank as its true and lawful  attorney-in-fact, (a) exercisable upon the occurrence and during the continuance of an Event of Default, to: (i) endorse  such Borrower’s name on any checks, payment instruments, or other forms of payment or security; (ii) sign such  Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors; (iii) demand,  collect, sue, and give releases to any Account Debtor for monies due, settle and adjust disputes and claims about the  Accounts directly with Account Debtors, and compromise, prosecute, or defend any action, claim, case, or proceeding  about any Collateral (including filing a claim or voting a claim in any bankruptcy case in Bank’s or such Borrower’s  name, as Bank chooses); (iv) make, settle, and adjust all claims under such Borrower’s insurance policies; (v) pay,  contest or settle any Lien, charge, encumbrance, security interest, or other claim in or to the Collateral, or any judgment  based thereon, or otherwise take any action to terminate or discharge the same; and (vi) transfer the Collateral into the  name of Bank or a third party as the Code permits; and (b) regardless of whether an Event of Default has occurred, to  sign such Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security  interest in the Collateral.  Bank’s foregoing appointment as such Borrower’s attorney in fact, and all of Bank’s rights  and powers, coupled with an interest, are irrevocable until such time as all Obligations (other than inchoate indemnity  obligations and any other obligations which, by their express terms, are to survive the termination of this Agreement  and the repayment of all Obligations) have been satisfied in full, Bank is under no further obligation to make Credit  Extensions and the Loan Documents have been terminated. Bank shall not incur any liability in connection with or  arising from the exercise of such power of attorney and shall have no obligation to exercise any of the foregoing rights  and remedies.  8.3 Protective Payments.  If Lead Borrower fails to obtain the insurance called for by Section 5.8 or  fails to pay any premium thereon or fails to pay any other amount which a Borrower is obligated to pay under this  Agreement or any other Loan Document or which may be required to preserve the Collateral, Bank may obtain such  insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and  payable, bearing interest at the then highest rate applicable to the Obligations, and secured by the Collateral.  Bank  will make reasonable efforts to provide such Borrower with notice of Bank obtaining such insurance at the time it is  obtained or within a reasonable time thereafter.  No payments by Bank are deemed an agreement to make similar  payments in the future or Bank’s waiver of any Event of Default.  8.4 Application of Payments and Proceeds.  Bank may apply any funds in its possession, whether  from any Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other  disposition of the Collateral, or otherwise, to the Obligations in such order as Bank shall determine in its sole  discretion.  Any surplus shall be paid to any Borrower or other Persons legally entitled thereto; such Borrower shall  remain liable to Bank for any deficiency.  If Bank, in its commercially reasonable discretion, directly or indirectly,  enters into a deferred payment or other credit transaction with any purchaser at any sale of Collateral, Bank shall have  the option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price  or deferring the reduction of the Obligations until the actual receipt by Bank of cash therefor.  

 

26    8.5 Bank’s Liability for Collateral.  Bank’s sole duty with respect to the custody, safekeeping and  physical preservation of the Collateral in its possession or under its control, under Section 9-207 of the Code or  otherwise, shall be to deal with it in the same manner as Bank deals with its own property consisting of similar  instruments or interests.  Each Borrower bears all risk of loss, damage or destruction of the Collateral.  8.6 No Waiver; Remedies Cumulative.  Bank’s failure, at any time or times, to require strict  performance by each Borrower of any provision of this Agreement or any other Loan Document shall not waive,  affect, or diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith.   No waiver hereunder shall be effective unless signed by the party granting the waiver and then is only effective for  the specific instance and purpose for which it is given.  Bank’s rights and remedies under this Agreement and the other  Loan Documents are cumulative.  Bank has all rights and remedies provided under the Code, by law, or in equity.   Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy  under this Agreement or other remedy available at law or in equity, and Bank’s waiver of any Event of Default is not  a continuing waiver.  Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence.    8.7 Demand Waiver.  Each Borrower waives demand, notice of default or dishonor, notice of payment  and nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or  renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which such Borrower is  liable.  8.8 Borrower Liability.  Each Borrower (other than Lead Borrower) hereby appoints Lead Borrower  as agent for all purposes hereunder, including with respect to requesting Credit Extensions hereunder.  Each Borrower  hereunder shall be liable for the Credit Extensions and Obligations as set forth on Schedule I hereto.  Each Borrower  waives (a) any suretyship defenses available to it under the Code or any other Applicable Law, and (b) any right to  require Bank to: (i) proceed against any Borrower or any other person; (ii) proceed against or exhaust any security; or  (iii) pursue any other remedy.  Bank may exercise or not exercise any right or remedy it has against any Borrower or  any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting any Borrower’s  liability.  Notwithstanding any other provision of this Agreement or other related document, each Borrower  irrevocably waives all rights that it may have at law or in equity (including, without limitation, any law subrogating  Borrower to the rights of Bank under this Agreement) to seek contribution, indemnification or any other form of  reimbursement from any other Borrower, or any other Person now or hereafter primarily or secondarily liable for any  of the Obligations, for any payment made by any Borrower with respect to the Obligations in connection with this  Agreement or otherwise and all rights that it might have to benefit from, or to participate in, any security for the  Obligations as a result of any payment made by any Borrower with respect to the Obligations in connection with this  Agreement or otherwise.  Any agreement providing for indemnification, reimbursement or any other arrangement  prohibited under this Section 8.8 shall be null and void.  If any payment is made to a Borrower in contravention of  this Section 8.8, 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.  9 NOTICES  All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement  or any other Loan Document must be in writing and shall be deemed to have been validly served, given, or delivered:  (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered  or certified mail return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by electronic  mail; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or (d) when  delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the  address or email address indicated below; provided that, for clause (b), if such notice, consent, request, approval,  demand or other communication is not sent during the normal business hours of the recipient, it shall be deemed to  have been sent at the opening of business on the next Business Day of the recipient.  Bank or Lead Borrower may  change its mailing or electronic mail address by giving the other party written notice thereof in accordance with the  terms of this Section 9.   If to any Borrower: Outbrain Inc.      111 West 19th Street      New York, New York 10011  

 

27        Attn: Barry Schofield; Veronica Gonzalez      Email: bschofield@outbrain.com; vgonzalez@outbrain.com    with a copy to (which          shall not constitute          notice):   Mayer Brown LLP      1221 Avenue of the Americas      New York, NY 10020      Attn: Adam C. Wolk      Email: awolk@mayerbrown.com          If to Bank:  Silicon Valley Bank             387 Park Avenue South, 2nd Floor           New York, NY 10016            Attn: Dylan Wong            Email: DWong@svb.com     with a copy to (which          shall not constitute          notice):   Morrison & Foerster LLP      200 Clarendon, Floor 20      Boston, Massachusetts 20116      Attn: Charles W. Stavros, Esquire      Email: cstavros@mofo.com    10 CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER  Except as otherwise expressly provided in any of the Loan Documents, New York law governs the Loan  Documents without regard to principles of conflicts of law that would require the application of the laws of another  jurisdiction.  Each of the parties hereto irrevocably and unconditionally submit to the exclusive jurisdiction of the  State and Federal courts in New York, New York; provided, however, that nothing in this Agreement shall be deemed  to operate to preclude Bank from bringing suit or taking other legal action in any other jurisdiction with respect to the  Loan Documents or to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or  other court order in favor of Bank.  Each of the parties hereto expressly, irrevocably and unconditionally submits and  consents in advance to such jurisdiction in any action or suit commenced in any such court, and each of the parties  hereto hereby irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection  that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby  irrevocably and unconditionally consents to the granting of such legal or equitable relief as is deemed appropriate by  such court.  Each of the parties hereto hereby waives personal service of the summons, complaints, and other process  issued in such action or suit and agrees that service of such summons, complaints, and other process may be made by  registered or certified mail addressed to such party at the address set forth in, or subsequently provided by such party  in accordance with, Section 9 of this Agreement and that service so made shall be deemed completed upon the earlier  to occur of such party’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES  HERETO WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING  OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED  TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS.  THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS  AGREEMENT.  EACH PARTY HERETO HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.  

 

28    This Section 10 shall survive the termination of this Agreement and the repayment of all Obligations.  11 GENERAL PROVISIONS  11.1 Termination Prior to Maturity Date; Survival.  All covenants, representations and warranties  made in this Agreement shall continue in full force until this Agreement has terminated pursuant to its terms and all  Obligations (other than inchoate indemnity obligations and any other obligations which, by their express terms, are to  survive the termination of this Agreement and the repayment of all Obligations) have been satisfied.  So long as  Borrowers have satisfied the Obligations (other than inchoate indemnity obligations, and any other obligations which,  by their express terms, are to survive the termination of this Agreement and the repayment of all Obligations, and any  Obligations under Bank Services Agreements that are cash collateralized in accordance with Section 3.3 of this  Agreement), this Agreement may be terminated prior to the Revolving Line Maturity Date by Borrowers, effective  three (3) Business Days after written notice of termination is given to Bank. All notices of termination shall be  irrevocable; provided, however, that any such notice may state that it is conditioned upon the occurrence or non- occurrence of any event specified therein, in which case such notice may be revoked by the Lead Borrower (by written  notice to Bank on or prior to the specified effective date) if such condition is not satisfied. Those obligations that are  expressly specified in this Agreement as surviving this Agreement’s termination and the repayment of all Obligations  shall continue to survive notwithstanding this Agreement’s termination and the repayment of all Obligations.   11.2 Successors and Assigns.  This Agreement binds and is for the benefit of the successors and  permitted assigns of each party.  No Borrower may assign or transfer this Agreement or any rights or obligations under  it without Bank’s prior written consent (which may be granted or withheld in Bank’s sole discretion) and any other  attempted assignment or transfer by such Borrower shall be null and void.  Bank has the right, with the prior written  consent of the Lead Borrower (such consent not to be unreasonably withheld or delayed), to sell, transfer, assign,  negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under  this Agreement and the other Loan Documents; provided that, the prior written consent of Lead Borrower shall not be  required if (1) a Specified Event of Default has occurred and is continuing at the time of such assignment, or (2) such  assignment is to an Affiliate of Bank; provided that Lead Borrower shall be deemed to have consented to any such  assignment unless it shall object thereto by written notice to Bank within ten (10) Business Days after having received  notice thereof. Notwithstanding anything to the contrary set forth in this Agreement, Bank and Borrowers hereby  agree that prior to any sale, transfer, assignment of any interest in, Bank’s obligations, rights, and benefits under this  Agreement and the other Loan Documents that results in more than one lender being party to this Agreement, they  shall use commercially reasonably efforts to amend this Agreement to include customary syndicated-credit facilities  voting provisions and customary yank-a-bank provisions; provided that such actions to amend this Agreement shall  not be required to be taken prior to any sale, transfer or assignment if a Specified Event of Default has occurred and  is continuing.   11.3 Indemnification.   (a) General Indemnification.  Each Borrower shall indemnify, defend and hold Bank and its  Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and  representatives of Bank and its Affiliates (each, an “Indemnified Person”) harmless against: all losses, claims,  damages, liabilities and related expenses (including Bank Expenses and the reasonable and documented out-of-pocket  fees, charges and disbursements of a single counsel for all Indemnified Persons (in addition to a single local counsel  in each relevant jurisdiction)) (collectively, “Claims”) arising out of, in connection with, or as a result of (i) the  execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated  hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the  consummation of the transactions contemplated hereby or thereby, (ii) any Credit Extension or the use or proposed  use of the proceeds therefrom, (iii) any actual or alleged presence or release of hazardous materials on or from any  property owned or operated by any Borrower or any of its Subsidiaries, or any environmental liability related in any  way to any Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or  proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a  third party or by any Borrower, and regardless of whether any Indemnified Person is a party thereto; provided that  such indemnity shall not, as to any Indemnified Person, be available to the extent that such losses, claims, damages,  liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment  

 

29    to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnified Person.  All amounts  due under this Section 11.3 shall be payable promptly after demand therefor.  (b) Waiver of Consequential Damages, Etc.  To the fullest extent permitted by Applicable  Law, no Borrower shall assert, and hereby waives, any claim against any Indemnified Person, on any theory of  liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) or any loss  of profits arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any  agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Credit Extension,  or the use of the proceeds thereof.  No Indemnified Person shall be liable for any damages arising from the use by  unintended recipients of any information or other materials distributed by it through telecommunications, electronic  or other information transmission systems in connection with this Agreement or the other Loan Documents or the  transactions contemplated hereby or thereby, except to the extent such damages are determined by a court of competent  jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful  misconduct of such Indemnified Person.  (c) Judgment Currency; Currency Indemnification.  If, for the purposes of obtaining judgment  in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another  currency, the rate of exchange used shall be that at which in accordance with normal banking procedures Bank could  purchase the first currency with such other currency on the Business Day preceding that on which final judgment is  given.  The obligation of any Borrower with respect to any such sum due from it to Bank hereunder or under any other  Loan Document shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in  which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement  Currency”), be discharged only to the extent that on the Business Day following receipt by Bank of any sum adjudged  to be so due in the Judgment Currency, Bank may in accordance with normal banking procedures purchase the  Agreement Currency with the Judgment Currency.  If the amount of the Agreement Currency so purchased is less than  the sum originally due to Bank from Borrower in the Agreement Currency, each Borrower agrees, as a separate  obligation and notwithstanding any such judgment, to indemnify Bank against such loss.  If the amount of the  Agreement Currency so purchased is greater than the sum originally due to Bank in such currency, Bank agrees to  return the amount of any excess to such Borrower (or to any other Person who may be entitled thereto under Applicable  Law).  This Section 11.3 shall survive the termination of this Agreement and the repayment of all Obligations until  all statutes of limitation with respect to the Claims, losses, and expenses for which indemnity is given shall have run.  11.4 Time of Essence.  Time is of the essence for the performance of all Obligations in this Agreement.  11.5 Severability of Provisions.  Each provision of this Agreement is severable from every other  provision in determining the enforceability of any provision.  11.6 Amendments in Writing; Waiver; Integration.  No purported amendment or modification of any  Loan Document, or waiver, discharge or termination of any obligation under any Loan Document, shall be effective  unless, and only to the extent, expressly set forth in a writing signed by each party hereto.  Without limiting the  generality of the foregoing, no oral promise or statement, nor any action, inaction, delay, failure to require performance  or course of conduct shall operate as, or evidence, an amendment, supplement or waiver or have any other effect on  any Loan Document.  Any waiver granted shall be limited to the specific circumstance expressly described in it, and  shall not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or evidence, any  obligation or commitment to grant any further waiver.  The Loan Documents represent the entire agreement about this  subject matter and supersede prior negotiations or agreements.  All prior agreements, understandings, representations,  warranties, and negotiations between the parties about the subject matter of the Loan Documents merge into the Loan  Documents.  11.7 Counterparts.  This Agreement may be executed in any number of counterparts and by different  parties on separate counterparts, each of which, when executed and delivered, is an original, and all taken together,  constitute one Agreement.  Delivery of an executed signature page of this Agreement by electronic mail transmission  shall be effective as delivery of a manually executed counterpart hereof.  

 

30    11.8 Confidentiality.  Bank agrees to maintain the confidentiality of Information (as defined below),  except that Information may be disclosed (a) to Bank’s Subsidiaries and Affiliates and their respective employees,  directors, agents, attorneys, accountants and other professional advisors (collectively, “Representatives” and,  together with Bank, collectively, “Bank Entities”) on a need to know basis and who have agreed to be bound by the  confidentiality provisions herein; (b) to prospective transferees, assignees, credit providers or purchasers of Bank’s  interests under or in connection with this Agreement and their Representatives (provided, however, Bank shall obtain  any such prospective transferee’s, assignee’s, credit provider’s, purchaser’s or their Representatives’ agreement to the  terms of this provision); (c) following prior written notice thereof by Bank to Lead Borrower (to the extent permitted  by law and practical), as required by law, regulation, subpoena, or other order; (d) following prior written notice  thereof by Bank to Lead Borrower (to the extent permitted by law and practical), to Bank’s regulators or as otherwise  required or requested in connection with Bank’s examination or audit other than routine examinations or audits; (e) in  connection with the exercise of remedies under the Loan Documents or any action or proceeding relating to this  Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; and (f) to third-party  service providers of Bank so long as such service providers have executed a confidentiality agreement with Bank with  terms no less restrictive than those contained herein.  “Information” means all information received from, or on behalf  of, any Borrower regarding any Borrower, its Subsidiaries or their business, in each case other than information that  is either: (i) in the public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public  domain (other than as a result of its disclosure by Bank in violation of this Agreement) after disclosure to Bank; or (ii)  disclosed to Bank by a third party, if Bank does not know that the third party is prohibited from disclosing the  information.  11.9 Electronic Execution of Documents.  The words “execution,” “signed,” “signature” and words of  like import in any Loan Document shall be deemed to include electronic signatures, including any Electronic Signature  as defined in the Electronic Transactions Law (2003 Revision) of the Cayman Islands (the “Cayman Islands  Electronic Signature Law”), if applicable, or the keeping of records in electronic form, including any Electronic  Record, as defined in Cayman Islands Electronic Signature Law, each of which shall be of the same legal effect,  validity and enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the  case may be, to the extent and as provided for in any Applicable Law, including, without limitation, any state law  based on the Uniform Electronic Transactions Act or the Cayman Islands Electronic Signature Law; provided,  however that sections 8 and 19(3) of the Cayman Islands Electronic Signature Law shall not apply to this Agreement  or the execution or delivery thereof.  11.10 Right of Setoff.   Each Borrower hereby grants to Bank a Lien and a right of setoff as security for  all Obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits, collateral and  property, now or hereafter in the possession, custody, safekeeping or control of Bank or any entity under the control  of Bank (including a subsidiary of Bank) or in transit to any of them, and other obligations owing to Bank or any such  entity.  At any time after the occurrence and during the continuance of an Event of Default, without demand or notice,  Bank may setoff the same or any part thereof and apply the same to any liability or Obligation of such Borrower even  though unmatured and regardless of the adequacy of any other collateral securing the Obligations.  ANY AND ALL  RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER  COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF  WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF ANY BORROWER, ARE  HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.  11.11 Captions and Section References.  The headings used in this Agreement are for convenience only  and shall not affect the interpretation of this Agreement.  Unless indicated otherwise, section references herein are to  sections of this Agreement.  11.12 Construction of Agreement.  The parties hereto mutually acknowledge that they and their attorneys  have participated in the preparation and negotiation of this Agreement.  In cases of uncertainty this Agreement shall  be construed without regard to which of the parties caused the uncertainty to exist.  11.13 Relationship.  The relationship of the parties to this Agreement is determined solely by the  provisions of this Agreement.  The parties do not intend to create any agency, partnership, joint venture, trust, fiduciary  or other relationship with duties or incidents different from those of parties to an arm’s-length contract.  

 

31    11.14 Third Parties.  Nothing in this Agreement, whether express or implied, is intended to: (a) confer  any benefits, rights or remedies under or by reason of this Agreement on any Persons other than the express parties to  it and their respective permitted successors and assigns; (b) relieve or discharge the obligation or liability of any Person  not an express party to this Agreement; or (c) give any Person not an express party to this Agreement any right of  subrogation or action against any party to this Agreement.  11.15 Anti-Terrorism Law.  Bank hereby notifies each Borrower that, pursuant to the requirements of  Anti-Terrorism Law, Bank may be required to obtain, verify and record information that identifies such Borrower,  which information may include the name and address of such Borrower and other information that will allow Bank to  identify Borrower in accordance with Anti-Terrorism Law. Borrower hereby agrees to take any action necessary to  enable Bank to comply with the requirements of Anti-Terrorism Law.  11.16  No Novation.  Each Borrower and Bank hereby agree that, effective upon the execution and  delivery of this Agreement by each such party, the terms and provisions of the Prior Loan Agreement shall be and  hereby are amended, restated and superseded in their entirety by the terms and provisions of this Agreement.  Nothing  herein contained shall be construed as a substitution or novation of the obligations of such Borrower outstanding under  the Prior Loan Agreement or instruments securing the same, which obligations shall remain in full force and effect,  except to the extent that the terms thereof are modified hereby or by instruments executed concurrently herewith.   Nothing expressed or implied in this Agreement shall be construed as a release or other discharge of any Borrower  from any of the Obligations or any liabilities under the Prior Loan Agreement or any of the security agreements,  pledge agreements, mortgages, guaranties or other Loan Documents executed in connection therewith.  Each Borrower  hereby (i) confirms and agrees that each Loan Document to which it is a party is, and shall continue to be, in full force  and effect and is hereby ratified and confirmed in all respects except that on and after the Effective Date all references  in any such Loan Document to the “Loan and Security Agreement”, the “Loan Agreement” the “Agreement”,  “thereto”, “thereof”, “thereunder” or words of like import referring to the Prior Loan Agreement shall mean the Prior  Loan Agreement as amended and restated by this Agreement; and (ii) confirms and agrees that to the extent that the  Prior Loan Agreement or any Loan Document executed in connection therewith purports to assign or pledge to the  Bank, or to grant to the Bank a Lien on, any collateral as security for the Obligations of any Borrower from time to  time existing in respect of the Prior Loan Agreement, such pledge, assignment or grant of the Lien is hereby ratified  and confirmed in all respects and shall remain effective as of the first date it became effective.  12 ACCOUNTING TERMS AND OTHER DEFINITIONS  12.1 Accounting and Other Terms.    (a) Accounting terms not defined in this Agreement shall be construed following GAAP.   Calculations and determinations must be made following GAAP (except for with respect to unaudited financial  statements for the absence of footnotes and subject to year-end audit adjustments), provided that if at any time any  change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document,  and either Borrower or Bank shall so request, each Borrower and Bank shall negotiate in good faith to amend such  ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided, further, that,  until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such  change therein and (ii) each Borrower shall provide Bank financial statements and other documents required under  this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio  or requirement made before and after giving effect to such change in GAAP.  Notwithstanding any other provision  contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations  of amounts and ratios referred to herein, and the determination of Indebtedness hereunder, shall be made without  giving effect to Financial Accounting Standards Board (FASB) Standard ASC 842 (Leases) (or any other applicable  financial accounting standard having a similar result or effect) and related interpretations, in each case, to the extent  any lease (or similar arrangement conveying the right to use) would be required to be treated as a capital lease  thereunder where such lease (or similar arrangement) would have been treated as an operating lease under GAAP as  in effect immediately prior to the effectiveness of the ASC 842.  Notwithstanding any terms in this Agreement to the  contrary, for purposes of any financial covenant and other financial calculations in this Agreement (other than for  purposes of updating the Borrowing Base) which are made in whole or in part based upon the Availability Amount as  of the last day of a particular month, calculations relying on information from a Borrowing Base Statement shall be  derived from the Borrowing Base Statement most recently delivered.  If and prior to the termination of this Agreement,  

 

32    as a result of any restatement of or other adjustment to the Borrowing Base Statement or for any other reason, Bank  determines that (x) the Net Availability Percentage as calculated by any Borrower as of any applicable date was  inaccurate and (y) a proper calculation of the Net Availability Percentage would have resulted in different pricing for  any period, then (i) if the proper calculation of the Net Availability Percentage would have resulted in higher pricing  for such period, Borrower shall automatically and retroactively be obligated to pay to Bank promptly on demand by  Bank, an amount equal to the excess of the amount of interest and fees (including, without limitation, the Unused  Revolving Line Facility Fee) that should have been paid for such period over the amount of interest and fees actually  paid for such period; and (ii) if the proper calculation of the Net Availability Percentage would have resulted in lower  pricing for such period, Bank shall not have any obligation to repay any interest or fees to Borrowers.  (b) As used in the Loan Documents: (i) the words “shall” or “will” are mandatory, the word  “may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting, the singular  includes the plural, and numbers denoting amounts that are set off in brackets are negative; (ii) the term “continuing”  in the context of an Event of Default means that the Event of Default has not been remedied (if capable of being  remedied) or waived; and (iii) whenever a representation or warranty is made to Borrower’s knowledge or awareness,  to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual  knowledge, after reasonable investigation, of any Responsible Officer.  12.2 Definitions.  Capitalized terms not otherwise defined in this Agreement shall have the meanings set  forth in this Section 12.2.  All other terms contained in this Agreement, unless otherwise indicated, shall have the  meaning provided by the Code to the extent such terms are defined therein.  As used in this Agreement, the following  capitalized terms have the following meanings:  “Account” is, as to any Person, any “account” of such Person as “account” is defined in the Code with such  additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other  sums owing to such Person.  “Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may  hereafter be made.  “Acquisition” is the purchase or other acquisition (whether by merger, consolidation or otherwise) by any  Borrower of all or substantially all of the assets, stock or other equity interests of a Person.  “Administrator” is an individual that is named:  (a)  as an “Administrator” in the “SVB Online Services” form completed by Lead Borrower  with the authority to determine who will be authorized to use SVB Online Services (as defined in Bank’s  Online Banking Agreement as in effect from time to time) on behalf of any Borrower; and   (b)  as an Authorized Signer of any Borrower in an approval by the Board.  “Advance” or “Advances” is a revolving credit loan (or revolving credit loans) under the Revolving Line.  “Affiliate” is, with respect to any Person, each other Person that owns or controls directly or indirectly the  Person, any Person that controls or is controlled by or is under common control with the Person, and each of that  Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that  Person’s managers and members.  For purposes of the definition of Eligible Accounts, Affiliate shall include a  Specified Affiliate.  “Agreement” is defined in the preamble hereof.  “Agreement Currency” is defined in Section 11.3.  “Anti-Terrorism Law” is any law relating to terrorism or money-laundering, including Executive Order No.  13224 and the USA Patriot Act.  

 

33    “Applicable Law” are all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties,  regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all  orders and decrees of all courts and arbitrators.  “Authorized Signer” is, with respect to each Borrower, any individual listed in such Borrower’s Borrowing  Resolution who is authorized to execute the Loan Documents, including making (and executing if applicable) any  Credit Extension request, on behalf of such Borrower.  “Availability Amount” is the lesser of (a) the Revolving Line or (b) the Borrowing Base, minus the sum of  (i) all outstanding principal amounts of any Advances, and (ii) the aggregate Dollar Equivalent of the face amount of  outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve).  “Bank” is defined in the preamble hereof.  “Bank Entities” is defined in Section 11.8.   “Bank Expenses” are all audit fees, costs and reasonable expenses (including reasonable, out-of-pocket and  documented attorneys’ fees and expenses for a single counsel plus, if applicable, local or specialist counsel) for  preparing, amending, negotiating, administering, defending and enforcing the Loan Documents (including, without  limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to  any Borrower.  “Bank Services”  are any products, credit services, and/or financial accommodations previously, now, or  hereafter provided to any Borrower or any of its Subsidiaries by Bank or any Bank Affiliate, including, without  limitation, any letters of credit, cash management services (including, without limitation, merchant services, direct  deposit of payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign  exchange services as any such products or services may be identified in Bank’s various agreements related thereto  (each, a “Bank Services Agreement”) and shall include, without limitation, any Letters of Credit pursuant to Section  1.2.  “Bank Services Agreement” is defined in the definition of Bank Services.  “Bank Services Notice” is defined in Section 5.9(b).  “Board” is Borrower’s board of directors or equivalent governing body.  “Borrower” or “Borrowers” is set forth on Schedule I hereto.  “Borrowers’ Books” are all Borrowers’ books and records including ledgers, federal and state tax returns,  records regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all  computer programs or storage or any equipment containing such information.  “Borrowing Base” is eighty-five percent (85%) of Eligible Accounts, as determined by Bank from Lead  Borrower’s most recent Borrowing Base Statement (and as may subsequently be reasonably updated by Bank based  upon information received by Bank including, without limitation, Accounts that are paid and/or billed following the  date of the Borrowing Base Statement).  “Borrowing Base Statement” is that certain statement of the value of certain Collateral in the form specified  by Bank to Borrower from time to time.  “Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such Person’s board  of directors (and, if required under the terms of such Person’s Operating Documents, stockholders) and delivered by  such Person to Bank approving the Loan Documents to which such Person is a party and the transactions contemplated  thereby, together with a certificate executed by its secretary on behalf of such Person certifying (a) such Person has  the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party,  

 

34    (b) that set forth as a part of or attached as an exhibit to such certificate is a true, correct, and complete copy of the  resolutions then in full force and effect authorizing and ratifying the execution, delivery, and performance by such  Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan  Documents, including making (and executing if applicable) any Credit Extension request, on behalf of such Person,  together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such  certificate unless and until such Person shall have delivered to Bank a further certificate canceling or amending such  prior certificate.  “Business Day” is a day other than a Saturday, Sunday or other day on which commercial banks in the State  of California or the State of New York are authorized or required by law to close, except that if any determination of  a “Business Day” shall relate to a LIBOR Advance, the term “Business Day” shall also mean a day on which dealings  are carried on in the London interbank market.  “Cash Collateral Account” is defined in Section 5.4(c)  “Cash Equivalents” are  Investments made in accordance with the investment policy of Lead Borrower,  which policy was disclosed to Bank on or prior to the Effective Date and may be updated from time to time by Lead  Borrower and disclosed to Bank; provided that such investment policy and any updates thereto have been approved  by Bank, which approval shall not be unreasonably withheld, conditioned or delayed.  “Cash Management Services” is defined in Section 1.4.  “Cayman Islands Electronic Signature Law” is defined in Section 11.9.  “Change in Control” is (a) at any time, any “person” or “group” (as such terms are used in Sections 13(d)  and 14(d) of the Exchange Act or any comparable successor provisions (excluding any employee benefit plan, or  related trust, sponsored or maintained by the Lead Borrower or any of its Subsidiaries), shall become, or obtain rights  (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3  and 13(d)-5 under the Exchange Act), directly or indirectly, of 45.0% or more of the ordinary voting power for the  election of directors, partners, managers and members, as applicable, of Lead Borrower (determined on a fully diluted  basis) other than by the sale of Borrower’s equity securities in a public offering or to venture capital or private equity  investors so long as Borrower identifies to Bank the venture capital or private equity investors at least seven (7)  Business Days prior to the closing of the transaction and provides to Bank a description of the material terms of the  transaction; (b) during any period of 12 consecutive months, a majority of the members of the Board of Lead Borrower  cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first  day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by  individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of  that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent  governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such  election or nomination at least a majority of that board or equivalent governing body; (c) at any time, Outbrain shall  cease to own and control, of record and beneficially, directly or indirectly, 100.0% of each class of outstanding stock,  partnership, membership, or other ownership interest or other equity securities of Zemanta Holding free and clear of  all Liens (except Permitted Liens); or (d) at any time, Zemanta Holding shall cease to own and control, of record and  beneficially, directly or indirectly, 100.0% of each class of outstanding stock, partnership, membership, or other  ownership interest or other equity securities of Zemanta free and clear of all Liens (except Permitted Liens).  “Change in Law” is the occurrence, after the Effective Date, of:  (a) the adoption or taking effect of any law,  rule, regulation or treaty; (b) any change in Applicable Law or in the administration, interpretation, implementation  or application thereof by any Governmental Authority; or (c) the making or issuance of any request, rule, guideline or  directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding  anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,  rules, guidelines or directives thereunder or issued in connection therewith and (ii) all requests, rules, guidelines or  directives promulgated by Bank for International Settlements, the Basel Committee on Banking Supervision (or any  successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel  III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.  

 

35    “Claims” is defined in Section 11.3.  “Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in  the State of New York; provided, that, to the extent that the Code is used to define any term herein or in any Loan  Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such  term contained in Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory  provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on  any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of New  York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction  solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for  purposes of definitions relating to such provisions.  “Collateral” consists of all of Borrowers’ right, title and interest in and to the following personal property:  (a) all goods, Accounts (including health-care receivables), Equipment, Inventory, contract  rights or rights to payment of money, leases, license agreements, franchise agreements, General Intangibles (except  as provided below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper  (whether tangible or electronic), cash, deposit accounts, certificates of deposit, fixtures, letters of credit rights (whether  or not the letter of credit is evidenced by a writing), securities, securities accounts, securities entitlements and all other  investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired, wherever  located; and (ii) all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of  the above and all substitutions for, additions, attachments, accessories, accessions and improvements to and  replacements, products, proceeds and insurance proceeds of any or all of the foregoing.  (b) Notwithstanding the foregoing, the Collateral does not include any of the following:  (i) more than 65% of the presently existing and hereafter arising issued and outstanding shares of  capital stock owned by any Borrower of any Foreign Subsidiary which shares entitle the holder  thereof to vote for directors or any other matter; (ii) rights held under a license that are not assignable  by their terms without the consent of the licensor thereof (but only to the extent such restriction on  assignment is enforceable under applicable law); (iii) any interest of any Borrower as a lessee or  sublessee under a real property lease or an Equipment lease if Borrower is prohibited by the terms  of such lease from granting a security interest in such lease or under which such an assignment or  Lien would cause a default to occur under such lease (other than to the extent that any such term  would be rendered ineffective pursuant to Section 9-407(a) of Article/Division 9 of the Code);  provided, however, that upon termination of such prohibition, such interest shall immediately  become Collateral without any action by Borrowers or Bank; (iv) any intent-to-use trademarks at  all times prior to the first use thereof, whether by the actual use thereof in commerce, the recording  of a statement of use with the United States Patent and Trademark Office or otherwise; (v) any fee  interest of any Borrower in any real property having a value of less than Two Million Five Hundred  Thousand Dollars ($2,500,000.00) or as a lessee or sublessee under a real property lease or an  equipment lease, or (vi) Intellectual Property; provided, however, the Collateral shall include all  Accounts and all proceeds of Intellectual Property.  If a judicial authority (including a U.S.  Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is  necessary to have a security interest in such Accounts and such property that are proceeds of  Intellectual Property, then the Collateral shall automatically, and effective as of the Effective Date,  include the Intellectual Property to the extent necessary to permit perfection of Bank’s security  interest in such Accounts and such other property of any Borrower that are proceeds of the  Intellectual Property.  (c) Pursuant to the terms of a certain negative pledge arrangement with Bank, Borrowers have  agreed not to encumber any of its Intellectual Property without Bank’s prior written consent.  “Collateral Account” is any Deposit Account, Securities Account, or Commodity Account.  

 

36    “Commodity Account” is any “commodity account” as defined in the Code with such additions to such term  as may hereafter be made.  “Compliance Statement” is that certain statement in the form attached hereto as Exhibit A.  “Connection Income Taxes” are Other Connection Taxes that are imposed on or measured by net income  (however denominated) or that are franchise Taxes or branch profits Taxes.  “Contingent Obligation” is, for any Person, any direct or indirect liability of that Person for (a) any direct  or indirect guaranty by such Person of any indebtedness, lease, dividend, letter of credit, credit card or other obligation  of another, (b) any other obligation endorsed, co-made, discounted or sold with recourse by that Person, or for which  that Person is directly or indirectly liable; (c) any obligations for undrawn letters of credit for the account of that  Person; and (d) all obligations from any interest rate, currency or commodity swap agreement, interest rate cap or  collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates,  currency exchange rates or commodity prices; but “Contingent Obligation” does not include endorsements in the  ordinary course of business.  The amount of a Contingent Obligation is the stated or determined amount of the primary  obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably anticipated  liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations  under any guarantee or other support arrangement.  “Continuation Date” is any date on which Lead Borrower continues a LIBOR Advance into another Interest  Period.  “Control Agreement” is any control agreement entered into among the depository institution at which  Borrower maintains a Deposit Account or the securities intermediary or commodity intermediary at which such  Borrower maintains a Securities Account or a Commodity Account, such Borrower, and Bank pursuant to which Bank  obtains control (within the meaning of the Code) over such Deposit Account, Securities Account, or Commodity  Account.  “Conversion Date” is any date on which Lead Borrower converts a Prime Rate Advance to a LIBOR  Advance or a LIBOR Advance to a Prime Rate Advance.  “Copyrights” are any and all copyright rights, copyright applications, copyright registrations and like  protections in each work of authorship and derivative work thereof, whether published or unpublished and whether or  not the same also constitutes a trade secret.  “Credit Extension” is any Advance, Overadvance, Letter of Credit, or any other extension of credit by Bank  for a Borrower’s benefit requested by any Borrower or any of its Subsidiaries.  “Currency” is coined money and such other banknotes or other paper money as are authorized by law and  circulate as a medium of exchange.  “Default” is any event which with notice or passage of time or both, would constitute an Event of Default.  “Default Rate” is defined in Section 1.4(c).  “Deposit Account” is any “deposit account” as defined in the Code with such additions to such term as may  hereafter be made.  “Designated Deposit Account” is the deposit account established by Borrower with Bank for purposes of  receiving Credit Extensions.  “Division” is in reference to any Person which is an entity, the division of such Person into two (2) or more  separate Persons, with the dividing Person either continuing or terminating its existence as part of such division,  including, without limitation, as contemplated under Section 18-217 of the Delaware Limited Liability Company Act  

 

37    for limited liability companies formed under Delaware law, Section 17-220 of the Delaware Revised Uniform Limited  Partnership Act for limited partnerships formed under Delaware law, or any analogous action taken pursuant to any  other Applicable Law with respect to any corporation, limited liability company, partnership or other entity.  “Dollars,” “dollars” and the use of the sign “$” are only lawful money of the United States and not any other  currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into  lawful money of the United States.  “Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars, such amount,  and (b) with respect to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as  determined by Bank at such time on the basis of the then-prevailing rate of exchange in San Francisco, California, for  sales of the Foreign Currency for transfer to the country issuing such Foreign Currency.  “Dormant Subsidiary” is any Domestic Subsidiary of any Borrower that exists on the Effective Date that  has no assets (other than de minimis assets) or activities and is not a Borrower hereunder on the Effective Date.  “Domestic Subsidiary” is a Subsidiary organized under the laws of the United States or any state or territory  thereof or the District of Columbia.  “EBITDA” is, for any measurement period, the sum, without duplication, of (i) Net Income, plus, with  respect to clauses (ii) through (xi), to the extent deducted in the calculation of Net Income, (ii) Interest Expense, plus  (iii) depreciation expense and amortization expense, plus (iv) federal, state and local income taxes, whether paid,  payable or accrued, plus (v) all non-cash expenses reflected in Net Income in an amount not to exceed $2,500,000 in  any fiscal year, plus (vi) non-cash stock compensation expense, plus (vii) costs, fees, expenses and reserves associated  with (A) any equity offerings, Investments (including Acquisitions), Transfers, recapitalization, restructurings, and  the incurrence or refinancings of Indebtedness, in each case as permitted herein; provided that the amount of such  costs, fees, and expenses associated with non-successful transactions added back shall not exceed $5,000,000 in any  fiscal year and (B) this Agreement and the other Loan Documents (including any amendments), whether or not  successful; plus (viii) costs and expenses pursuant to employee or management equity or stock plans in an amount not  to exceed $2,500,000 in any fiscal year; plus (ix) extraordinary, unusual, or nonrecurring non-cash charges; plus (x)  litigations, investigations, damages, settlements, claims, and fines; plus (xi) losses on Transfers of assets outside the  ordinary course of business; plus (xii) without duplication of any other pro forma adjustment to Net Income or  EBITDA, the amount of “run rate” cost savings, operating expense reductions and synergies realized or expected to  be realized as a result of mergers, consolidations, amalgamations and other business combinations, Acquisitions and  other Investments, Transfers, divestitures, recapitalizations, restructurings, integration initiatives, insourcing  initiatives, operating improvements, cost savings initiatives and other business optimization initiatives, actions or  events (including, for the avoidance of doubt, any of the foregoing occurring prior to the Effective Date); provided  that (A) such cost savings, operating expense reduction and synergies are reasonably identifiable, factually supportable  and have been realized or are projected by Lead Borrower in good faith to be realized from such actions, and (B)  actions resulting in such cost savings, operating expense reduction and synergies have been taken or are reasonably  anticipated to be taken within twelve (12) months following the end of such period, net of the amount of actual benefits  realized during such period therefrom (which cost savings, operating expense reductions and synergies shall be  calculated on a pro forma basis as though such cost savings, operating expense reductions or synergies had been  realized on the first day of such period), and Lead Borrower shall have provided a reasonably detailed statement or  schedule of such cost savings, operating expense reductions and synergies and a certification in respect of the  requirements set forth in this proviso, (B) no cost savings, operating expense reductions or synergies shall be added  pursuant to this addback to the extent duplicative of any expenses or charges relating to such cost savings that are  otherwise added back in the calculation of EBITDA for such period and (C) the aggregate amounts added back  pursuant to clauses (x) and (xii) shall not exceed twenty percent (20.0%) of EBITDA (calculated prior to giving effect  to such addbacks) in the aggregate for any four consecutive fiscal quarter periods; plus (xiii) other add-backs to  EBITDA approved by Bank on a case-by-case basis (such approval in its sole discretion); minus to the extent  increasing Net Income, gains on Transfers of assets outside the ordinary course of business.  “Effective Date” is set forth on Schedule I hereto.  

 

38    “Eligible Accounts” are Accounts owing to a Borrower which arise in the ordinary course of such  Borrower’s business that meet all such Borrower’s representations and warranties in Section 4.3, that have been, at  the option of Bank, confirmed in accordance with Section 5.4(f) of this Agreement, and are due and owing from  Account Debtors deemed creditworthy by Bank in its Permitted Discretion.  Bank reserves the right at any time after  the Effective Date, upon advance written notice to Borrower, to adjust any of the criteria set forth below and to  establish new criteria in its Permitted Discretion.  Unless Bank otherwise agrees in writing, Eligible Accounts shall  not include:  (a) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or  agent;  (b) Accounts that the Account Debtor has not paid within one hundred twenty (120) days of  invoice date regardless of invoice payment period terms;  (c) Accounts with credit balances over one hundred twenty (120) days from invoice date;  (d) Accounts owing from an Account Debtor if fifty percent (50%) or more of the Accounts  owing from such Account Debtor have not been paid within one hundred twenty (120) days of invoice date;  (e) Accounts owing from an Account Debtor which does not have its principal place of  business in the United States (except for Eligible Foreign Accounts), unless otherwise approved by Bank in writing  on a case-by-case basis in its sole and absolute discretion;  (f) Accounts billed from and/or payable to Borrower outside of the United States unless Bank  has a first priority, perfected security interest or other enforceable Lien in such Accounts under all applicable laws,  including foreign laws (sometimes called foreign invoiced accounts);  (g) Accounts in which Bank does not have a first priority, perfected security interest under  all applicable laws;  (h) Accounts billed and/or payable in a Currency other than Dollars (except for Eligible  Foreign Currency Accounts);  (i) Accounts owing from an Account Debtor to the extent that a Borrower is indebted or  obligated in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra”  accounts, accounts payable, customer deposits or credit accounts), but only to the extent of such Borrower’s  indebtedness or obligation to such Account Debtor;   (j) Accounts with or in respect of accruals for marketing allowances, incentive rebates, price  protection, cooperative advertising and other similar marketing credits, unless otherwise approved by Bank in writing;  (k) Accounts owing from an Account Debtor which is a United States government entity or  any department, agency, or instrumentality thereof unless Borrower has assigned its payment rights to Bank and the  assignment has been acknowledged under the Federal Assignment of Claims Act of 1940, as amended;  (l) Accounts with customer deposits and/or with respect to which a Borrower has received an  upfront payment, to the extent of such customer deposit and/or upfront payment;  (m) Accounts for demonstration or promotional equipment, or in which goods are consigned,  or sold on a “sale guaranteed”, “sale or return”, “sale on approval”, or other terms if Account Debtor’s payment may  be conditional;  (n) Accounts owing from an Account Debtor where goods or services have not yet been  rendered to the Account Debtor (sometimes called memo billings or pre-billings);  

 

39    (o) Accounts subject to contractual arrangements between a Borrower and an Account Debtor  where payments shall be scheduled or due according to completion or fulfillment requirements where the Account  Debtor has a right of offset for damages suffered as a result of Borrower’s failure to perform in accordance with the  contract (sometimes called contracts accounts receivable, progress billings, milestone billings, or fulfillment  contracts);  (p) Accounts owing from an Account Debtor the amount of which may be subject to  withholding based on the Account Debtor’s satisfaction of a Borrower’s complete performance (but only to the extent  of the amount withheld; sometimes called retainage billings);  (q) Accounts subject to trust provisions, subrogation rights of a bonding company, or a  statutory trust;  (r) Accounts owing from an Account Debtor that has been invoiced for goods that have not  been shipped to the Account Debtor unless Bank, applicable Borrower, and the Account Debtor have entered into an  agreement acceptable to Bank wherein the Account Debtor acknowledges that (i) it has title to and has ownership of  the goods wherever located, (ii) a bona fide sale of the goods has occurred, and (iii) it owes payment for such goods  in accordance with invoices from such Borrower (sometimes called “bill and hold” accounts);  (s) Accounts for which the Account Debtor has not been invoiced;  (t) Accounts that represent non-trade receivables or that are derived by means other than in  the ordinary course of a Borrower’s business;  (u) Accounts for which a Borrower has changed the invoice date;  (v) Accounts arising from chargebacks, debit memos or other payment deductions taken by an  Account Debtor;  (w) Accounts arising from product returns and/or exchanges (sometimes called “warranty” or  “RMA” accounts);  (x) Accounts in which the Account Debtor disputes liability or makes any claim (but only up  to the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding, or becomes  insolvent, or goes out of business;  (y) Accounts owing from an Account Debtor, whose total obligations to Borrower exceed  twenty-five percent (25%) of all Accounts, for the amounts that exceed that percentage, unless Bank approves in  writing; and  (z) Accounts for which Bank in its Permitted Discretion determines collection to be doubtful,  including, without limitation, accounts represented by “refreshed” or “recycled” invoices.  “Eligible Foreign Accounts” are Accounts which are billed from and payable to a Borrower in the United  States related to products sold or services rendered by such Borrower to the Account Debtor, but which are owing  from an Account Debtor which has its principal place of business in Canada, the United Kingdom, Japan, Italy, France,  Germany, Hong Kong, Australia, Israel or Singapore, and are otherwise Eligible Accounts; provided, in no event shall  the aggregate amount of such Eligible Foreign Accounts included in the Borrowing Base together with Eligible  Foreign Currency Accounts included in the Borrowing Base constitute more than thirty-five percent (35%) of all  Eligible Accounts included in the Borrowing Base.  “Eligible Foreign Currency Accounts” are Accounts billed and/or payable in a Currency other than Dollars,  and are otherwise Eligible Accounts; provided, in no event shall the aggregate amount of such Eligible Foreign  Currency Accounts included in the Borrowing Base constitute more than twenty-five percent (25%) of all Eligible  Accounts included in the Borrowing Base.  

 

40    “Environmental Laws” are any Applicable Law (including any permits, concessions, grants, franchises,  licenses, agreements or governmental restrictions) relating to pollution or the protection of health, safety or the  environment or the release of any materials into the environment (including those related to hazardous materials, air  emissions, discharges to waste or public systems and health and safety matters).  “Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter  be made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and  trailers), and any interest in any of the foregoing.  “ERISA” is the Employee Retirement Income Security Act of 1974, as amended, and its regulations.  “Event of Default” is defined in Section 7.  “Exchange Act” is the Securities Exchange Act of 1934, as amended.  “Excluded Accounts” is defined in Section 5.9(c).  “Excluded Taxes” are any of the following Taxes imposed on or with respect to Bank or required to be  withheld or deducted from a payment to Bank, (a) Taxes imposed on or measured by net income (however  denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of Bank being organized  under the laws of, or having its principal office or its applicable lending office located in, the jurisdiction imposing  such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) U.S. federal withholding  Taxes imposed on amounts payable to or for the account of Bank with respect to an applicable interest in a Credit  Extension or the Revolving Line pursuant to a law in effect on the date on which (i) Bank acquires such interest in the  Credit Extensions or Revolving Line or (ii) Bank changes its lending office, except in each case to the extent that,  pursuant to Section 1.8, amounts with respect to such Taxes were payable either to Bank’s assignor immediately  before Bank became a party hereto or to Bank immediately before it changed its lending office, (c) Taxes attributable  to Bank’s failure to comply with Section 1.8(b), and (d) any withholding Taxes imposed under FATCA.  “FATCA” are Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement  (or any amended or successor version that is substantively comparable and not materially more onerous to comply  with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to  Section 1471(b)(1) of the Internal Revenue Code and any fiscal or regulatory legislation, rules or practices adopted  pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and  implementing such Sections of the Internal Revenue Code.  “Financial Statement Repository” is dwong@svb.com of collecting information approved and designated  by Bank after providing notice thereof to Borrower from time to time.  “Fixed Charge Coverage Ratio” is, as calculated on a consolidated basis for Outbrain and its Subsidiaries,  and for the relevant measurement period, the ratio of (a) the sum of (i) EBITDA; minus (ii) the portion of taxes actually  paid in cash during such period,  minus (iii) consolidated capital expenditures (excluding the principal amount funded  with Permitted Indebtedness, other than Advances, incurred in connection with such expenditures net of sales proceeds  of equipment), minus (iv) capitalized software expenses minus (v) Restricted Payments made in cash during such  period; divided by (b) the sum of (without duplication) of (i) cash payments of Interest Expense for such period, plus  (ii) scheduled payments made in cash during such period on account of principal of Indebtedness of Outbrain and its  consolidated Subsidiaries plus (iii) capital lease payments made in cash during such period.  “Foreign Currency” is the lawful money of a country other than the United States.  “Foreign Subsidiary” is any Subsidiary which is not a Domestic Subsidiary.  “Funding Date” is any date on which a Credit Extension is made to or for the account of a Borrower which  shall be a Business Day.  

 

41    “FX Contract” is any foreign exchange contract by and between a Borrower and Bank under which such  Borrower commits to purchase from or sell to Bank a specific amount of Foreign Currency at a set price or on a  specified date.  “GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the  Accounting Principles Board of the American Institute of Certified Public Accountants and statements and  pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as  may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as  of the date of determination.  “General Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with  such additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims,  income and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or  sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or  otherwise), insurance policies (including without limitation key man, property damage, and business interruption  insurance), payments of insurance and rights to payment of any kind.  “Governmental Approval” is any consent, authorization, approval, order, license, franchise, permit,  certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any  Governmental Authority.  “Governmental Authority” is any nation or government, any state or other political subdivision thereof,  any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,  legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities  exchange and any self-regulatory organization.  “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of property or services, such  as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes,  bonds, debentures or similar instruments, (c) capital lease obligations, (d) Contingent Obligations (other than any  contingent earn-out obligation or other Contingent Obligation related to a Permitted Acquisition or an Investment or  other acquisition permitted hereunder (in each case unless required to be reflected as liabilities on the balance sheet  of the applicable Person in accordance with GAAP)) and (e) other short- and long-term obligations under debt  agreements, lines of credit and extensions of credit.  “Indemnified Person” is defined in Section 11.3.  “Indemnified Taxes” are (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment  made by or on account of any obligation of Borrower under any Loan Document and (b) to the extent not otherwise  described in clause (a), Other Taxes.  “Information” is defined in Section 11.8.  “Insolvency Proceeding” is any proceeding by or against any Person under the United States Bankruptcy  Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions,  extensions generally with its creditors, or proceedings seeking reorganization, arrangement, receivership or other  relief.  “Intellectual Property” is, with respect to any Person, all of such Person’s right, title, and interest in and to  the following:  (a) its Copyrights, Trademarks and Patents;   (b) any and all trade secrets and trade secret rights, including, without limitation, any rights to  unpatented inventions, know-how and operating manuals;  

 

42    (c) any and all source code;  (d) any and all design rights which may be available to such Person;  (e) any and all claims for damages by way of past, present and future infringement of any of  the foregoing, with the right, but not the obligation, to sue for and collect such damages for said use or infringement  of the Intellectual Property rights identified above; and  (f) all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents.  “Interest Expense” is, for any measurement period, interest expense determined in accordance with GAAP  for the relevant period ending on such date, including, in any event, interest expense with respect to any Credit  Extension and other Indebtedness of Outbrain and its Subsidiaries, including, without limitation or duplication, all  commissions, discounts, amortization of debt discounts, or related amortization and other fees and charges with respect  to letters of credit and bankers’ acceptance financing and the net costs associated with interest rate swap, cap, and  similar arrangements, and the interest portion of any deferred payment obligation (including leases of all types);  provided however, any interest expense incurred or accrued prior to the Effective Date as a result of the exchange of  notes into PubCo Notes shall not constitute Interest Expense under this Agreement.  “Interest Payment Date” is, with respect to (a) any LIBOR Advance having an Interest Period of three  months or less, the last day of each Interest Period applicable to such LIBOR Advance, (b) any LIBOR Advance  having an Interest Period longer than three months, each day that is three months after the first day of such Interest  Period and the last day of such Interest Period, and (c) any Prime Rate Advance, the Payment Date.  “Interest Period” is, as to any LIBOR Advance, the period commencing on the date of such LIBOR  Advance, or on the conversion/continuation date on which the LIBOR Advance is converted into or continued as a  LIBOR Advance, and ending on the date that is one (1), three (3), or six (6) months thereafter, in each case as Lead  Borrower may elect in the applicable Notice of Borrowing or Notice of Conversion/Continuation; provided, however,  that (a) no Interest Period with respect to any LIBOR Advance shall end later than the Revolving Line Maturity Date,  (b) the last day of an Interest Period shall be determined in accordance with the practices of the LIBOR interbank  market as from time to time in effect, (c) if any Interest Period would otherwise end on a day that is not a Business  Day, that Interest Period shall be extended to the following Business Day unless, in the case of a LIBOR Advance,  the result of such extension would be to carry such Interest Period into another calendar month, in which event such  Interest Period shall end on the preceding Business Day, (d) any Interest Period pertaining to a LIBOR Advance that  begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day  in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at  the end of such Interest Period, and (e) interest shall accrue from and include the first Business Day of an Interest  Period but exclude the last Business Day of such Interest Period.  “Interest Rate Determination Date” is each date for calculating the LIBOR for purposes of determining  the interest rate in respect of an Interest Period.  The Interest Rate Determination Date shall be the second Business  Day prior to the first day of the related Interest Period for a LIBOR Advance.  “Internal Revenue Code” is the U.S. Internal Revenue Code of 1986, and the rules and regulations  promulgated thereunder, each as amended or modified from time to time.  “Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to such  term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing  and shipping materials, work in process and finished products, including without limitation such inventory as is  temporarily out of a Borrower’s custody or possession or in transit and including any returned goods and any  documents of title representing any of the above.  “Investment” is any beneficial ownership interest in any Person (including stock, partnership, membership,  or other ownership interest or other equity securities), and any loan, advance or capital contribution to any Person.  

 

43    “Judgment Currency” is defined in Section 11.3.  “Lead Borrower” is Outbrain Inc.  “Letter of Credit” is a standby or commercial letter of credit issued by Bank upon request of a Borrower  based upon an application, guarantee, indemnity, or similar agreement on the part of Bank as set forth in Section 1.2.  “Letter of Credit Application” is defined in Section 1.2(c).  “Letter of Credit Reserve” is defined in Section 1.2(f).  “LIBOR” is for any Interest Rate Determination Date with respect to an Interest Period for any Advance to  be made, continued as or converted into a LIBOR Advance, the rate of interest per annum determined by Bank to be  the per annum rate of interest at which deposits in Dollars are offered to Bank in the London interbank market (rounded  upward, if necessary, to the nearest 0.00001%) in which Bank customarily participates at 11:00 a.m. (local time in  such interbank market) two (2) Business Days prior to the first day of such Interest Period for a period approximately  equal to such Interest Period and in an amount approximately equal to the amount of such Advance; provided that, in  the event such rate of interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement.  “LIBOR Advance” is an Advance that bears interest based at the LIBOR Rate.  “LIBOR Rate” is, for each Interest Period in respect of LIBOR Advances comprising part of the same  Advances, an interest rate per annum (rounded upward, if necessary, to the nearest 0.00001%) equal to LIBOR for  such Interest Period divided by one (1) minus the Reserve Requirement for such Interest Period.  “LIBOR Rate Margin” is set forth on Schedule I hereto.  “Lien” is a claim, mortgage, deed of trust, levy, attachment charge, pledge, hypothecation, security interest  or other encumbrance of any kind, whether voluntarily incurred or arising by operation of law or otherwise against  any property.  “Loan Documents” are, collectively, this Agreement and any schedules, exhibits, certificates, notices, and  any other documents related to this Agreement, the Perfection Certificate, Control Agreements, any Bank Services  Agreement, any subordination agreement, any note, or notes or guaranties executed by any Borrower, landlord waivers  and consents, bailee waivers and consents, and any other present or future agreement by Borrower with or for the  benefit of Bank in connection with this Agreement or Bank Services, all as amended, restated, or otherwise modified  in accordance with the terms thereof.  “Material Adverse Effect” is (a) a material adverse effect on the rights and remedies of Bank under this  Agreement, (b) a material adverse effect on the business, operations, or financial condition of the Lead Borrower and  its Subsidiaries, taken as a whole, or (c) a material adverse effect on the ability of the Borrowers and their Subsidiaries,  taken as a whole, to perform their obligations under this Agreement.  “Net Availability Percentage” is, at any time, the result of (expressed as a percentage) (a) the Availability  Amount at such time, divided by (b) the lesser of (i) the Revolving Line at such time or (ii) the Borrowing Base at  such time.  “Net Income” is, as calculated on a consolidated basis in accordance with GAAP for Outbrain and its  Subsidiaries for any period as at any date of determination, the net profit (or loss), after provision for taxes, of Outbrain  and its Subsidiaries for such period taken as a single accounting period.  “Notice of Borrowing” is a notice given by Lead Borrower to Bank in accordance with Section 1.9(a),  substantially in the form of Exhibit B, with appropriate insertions.  

 

44    “Notice of Conversion/Continuation” is a notice given by Lead Borrower to Bank in accordance with  Section 1.10, substantially in the form of Exhibit C, with appropriate insertions.  “Obligations” are Borrowers’ obligations to pay when due any debts, principal, interest, fees, Bank  Expenses, the Unused Revolving Line Facility Fee, and other amounts any Borrower owes Bank now or later, whether  under this Agreement, the other Loan Documents, or otherwise, including, without limitation, all obligations relating  to Bank Services and interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of any  Borrower assigned to Bank, and to perform each Borrower’s duties under the Loan Documents.  “OFAC” is the Office of Foreign Assets Control of the United States Department of the Treasury and any  successor thereto.  “Offshore Accounts” are accounts maintained by a Borrower’s Subsidiaries outside the United States with  financial institutions other than Bank or Bank’s Affiliates, provided that the maximum balance maintained in such  accounts does not exceed the aggregate amount of Sixty-Five Million Dollars ($65,000,000.00) at any time.  “Operating Documents” are, for any Person, such Person’s formation documents, as certified by the  Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than  30 days prior to the Effective Date, and, (a) if such Person is a corporation, its bylaws in current form, (b) if such  Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such  Person is a partnership or limited partnership, its partnership agreement or limited partnership agreement (or similar  agreement), each of the foregoing with all current amendments or modifications thereto.  “Other Connection Taxes” are, with respect to Bank, Taxes imposed as a result of a present or former  connection between Bank and the jurisdiction imposing such Tax (other than connections arising from Bank having  executed, delivered, become a party to, performed its obligations under, received payments under, received or  perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or  sold or assigned an interest in any Credit Extension or Loan Document).  “Other Taxes” are all present or future stamp, court, documentary, intangible, recording, filing or similar  Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration  of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except  any such Taxes that are Other Connection Taxes imposed with respect to an assignment.  “Overadvance” is defined in Section 1.3.  “Parent” is defined in Section 1.12(b).  “Patents” are all patents, patent applications and like protections including without limitation improvements,  divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same.  “Payment Conditions” are, with respect to any payment or Investment, the following conditions (i) if at the  time of and immediately after the contemplated payment or Investment, Borrowers are utilizing greater than or equal  to seventy-five percent (75%) of the lesser of (A) the Revolving Line or (B) the Borrowing Base, as determined by  Bank, Lead Borrower shall have delivered to Bank at least five (5) days before the closing of the contemplated payment  or Investment, financial statements and a written confirmation, supported by reasonably detailed calculations, that on  a pro forma basis (after giving effect to such payment or Investment), Lead Borrower shall be in compliance with the  financial covenant set forth in Section 5.10 as of the most recently ended month for which financial statements were  required to be delivered hereunder or have been delivered hereunder, (ii) at the time of and immediately after the  contemplated payment or Investment, Borrowers are utilizing less than eighty percent (80%) of the lesser of (A) the  Revolving Line or (B) the Borrowing Base, as determined by Bank, and (iii) no Event of Default has occurred and is  continuing or would exist after giving effect to such payment or Investment.  “Payment Date” is set forth on Schedule I hereto.  

 

45    “Perfection Certificate” is the most recent Perfection Certificate delivered by the Lead Borrower in  connection with this Agreement.  “Permitted Acquisition” or “Permitted Acquisitions” is any Acquisition by any Borrower, provided, that  each of the following shall be applicable to each such Acquisition:  (a) no Event of Default shall have occurred and be continuing or would result from the consummation  of the proposed Acquisition;  (b) the assets acquired in such Acquisition are in the same or similar line of business as any Borrower  or any of its Subsidiaries is in as of the Effective Date or reasonably related or ancillary thereto and logical extensions  thereof;  (c) the amount of the consideration paid by any Borrower in connection with (i)  acquisitions of Targets,  if such Acquisitions are Acquisitions of stock or other equity interests of entities that are not organized under the laws  of the United States or any state or territory thereof or the District of Columbia or (ii) Targets which do not become  Borrowers, shall not exceed Fifty Million Dollars ($50,000,000) in the aggregate;  (d) if the Acquisition includes a merger of Borrower, Borrower shall remain a surviving entity after  giving effect to such Acquisition;  (e) Lead Borrower shall provide Bank with written notice of the proposed Acquisition at least five (5)  Business Days prior to the anticipated closing date of the proposed Acquisition, and not less than five (5) Business  Days prior to the anticipated closing date of the proposed Acquisition, with copies of the acquisition agreement and  all other material documents relative to the proposed Acquisition (or if such acquisition agreement and other material  documents are not in final form, drafts of such acquisition agreement and other material documents; provided, that  Lead Borrower shall deliver final forms of such acquisition agreement and other material documents promptly upon  completion);  (f) at least five (5) days before the closing of the proposed Acquisition, Lead Borrower shall deliver to  Bank financial statements and a written confirmation, supported by reasonably detailed calculations, that on a pro  forma basis (after giving effect to such Acquisition), Lead Borrower will have a Senior Leverage Ratio of less than or  equal to 2.50:1.00 as of the most recently ended fiscal quarter for which financial statements were required to be  delivered hereunder or have been delivered hereunder;  (g) at least five (5) days before the closing of the proposed Acquisition, Lead Borrower shall deliver to  Bank financial statements and a written confirmation, supported by reasonably detailed calculations, if on a pro forma  basis (after giving effect to such Acquisition), Borrowers’ utilization will equal or exceed the Streamline Threshold,  that on a pro forma basis (after giving effect to such Acquisition), Borrowers shall be in compliance with the financial  covenant set forth in Section 5.10 as of the most recently ended month for which financial statements were required  to be delivered hereunder or have been delivered hereunder;  (h) the Acquisition shall not constitute an Unfriendly Acquisition; and  (i) the entity or assets acquired in such Acquisition shall not be subject to any Lien other than (x) the  first-priority Liens granted in favor of Bank, if applicable and (y) Permitted Liens.  “Permitted Discretion” is Bank’s reasonable credit judgment (from the perspective of a secured asset-based  lender) exercised in good faith in accordance with customary business practices for comparable asset-based lending  transactions.  “Permitted Indebtedness” is:  (a) Each Borrower’s Indebtedness to Bank under this Agreement, the other Loan Documents  and Bank Services;  

 

46    (b) Indebtedness existing on the Effective Date and shown on the Perfection Certificate on the  Effective Date;  (c) Subordinated Debt;  (d) unsecured Indebtedness to trade creditors incurred in the ordinary course of business;   (e) Indebtedness incurred as a result of endorsing negotiable instruments received in the  ordinary course of business;  (f) Indebtedness secured by Liens permitted under clauses (a) and (c) of the definition of  “Permitted Liens” hereunder;  (g) Indebtedness consisting of the financing of insurance premiums arising in the ordinary  course of business not to exceed Two Hundred and Fifty Thousand Dollars ($250,000) in the aggregate at any time;    (h) deferred compensation due to employees not to exceed Five Hundred Thousand Dollars  ($500,000) in the aggregate at any time;   (i) [reserved];   (j) Indebtedness of a Person (other than the Borrower or a Subsidiary) existing at the time  such Person is merged with or into a Borrower or a Subsidiary or becomes a Subsidiary, provided that (i) such  Indebtedness was not, in any case, incurred by such other Person in connection with, or in contemplation of, such  merger or acquisition, (ii) such merger or acquisition constitutes a Permitted Acquisition, (iii) with respect to any such  Person who becomes a Subsidiary, (A) such Subsidiary is the only obligor in respect of such Indebtedness, and (B) to  the extent such Indebtedness is permitted to be secured hereunder, only the assets of such Subsidiary secure such  Indebtedness, and (iv) the aggregate principal amount of such Indebtedness shall not exceed $10,000,000 at any time  outstanding;   (k) Indebtedness of (i) any Borrower owing to any other Borrower, (ii) any Subsidiary (which  is not a Borrower) owing to any other Subsidiary (which is not a Borrower) and (iii) any Subsidiary (which is not a  Borrower) owing to any Borrower so long as such Indebtedness is a Permitted Investment;  (l) Indebtedness of Subsidiary that is not a Borrower not exceeding $10,000,000.00 in the  aggregate outstanding at any time;  (m) Indebtedness incurred in connection with the repurchase of the stock, partnership,  membership, or other ownership interest or other equity securities of former employees or directors pursuant to stock  repurchase agreements not exceeding $2,500,000.00 in the aggregate outstanding at any time;   (n) Indebtedness consisting of earn outs, deferred compensation, or other arrangements  representing acquisition consideration or deferred payments of a similar nature incurred in connection with Permitted  Acquisitions;  (o) other Indebtedness not otherwise permitted by Section 6.4 not exceeding $10,000,000.00  in the aggregate outstanding at any time;  (p) other unsecured Indebtedness not otherwise permitted by Section 6.4 not exceeding  $10,000,000.00 in the aggregate outstanding at any time; and  (q) extensions, refinancings, modifications, amendments and restatements of any items of  Permitted Indebtedness (a) through (p) above, provided that the principal amount thereof is not increased (except by  an amount equal to the accrued and unpaid interest and premium, fees and expenses reasonably incurred in connection  

 

47    therewith and existing commitments utilized thereunder) or the terms thereof are not modified to impose more  burdensome terms upon any Borrower or its Subsidiary, as the case may be.  “Permitted Investments” are:  (a) Investments (including, without limitation, Subsidiaries) existing on the Effective Date and  shown on the Perfection Certificate on the Effective Date;  (b) Investments consisting of Cash Equivalents;  (c) Investments by any Borrower in Foreign Subsidiaries not to exceed Thirty Million Dollars  ($30,000,000.00) in the aggregate in any fiscal quarter;  (d) Investments constituting Permitted Acquisitions;   (e) any Investment, so long as the Payment Conditions are satisfied at the time such Investment  is consummated;   (f) intercompany Investments by (i) any Borrower in any other Borrower and (ii) any  Subsidiary (which is not a Borrower) in any other Subsidiary or in a Borrower;   (g) loans and advances to directors, officers and employees of a Borrower or a Subsidiary in  the ordinary course of business (including, without limitation, for travel, entertainment and relocation expenses) in an  aggregate amount for all Borrowers and Subsidiaries not to exceed $2,500,000.00 at any one time outstanding;   (h) payroll advances to officers and employees of a Borrower or a Subsidiary, in an aggregate  amount for all Borrowers and Subsidiaries not to exceed $2,500,000.00 at any one time outstanding;   (i) Investments held by any Person as of the date such Person is acquired in connection with  a Permitted Acquisition, provided that (A) such Investments were not made, in any case, by such Person in connection  with, or in contemplation of, such Permitted Acquisition, and (B) with respect to any such Person which becomes a  Subsidiary as a result of such Permitted Acquisition, such Subsidiary remains the only holder of such Investment;   (j) non-cash Investments accepted in connection with Transfers permitted by Section 6.1; and  (k) Investments consisting of notes receivable of, or prepaid royalties, loans, advances and  other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business; and  (l) other Investments not otherwise permitted by Section 6.7 not exceeding $10,000,000 in the  aggregate in any fiscal year.  “Permitted Liens” are:  (a) Liens existing on the Effective Date and shown on the Perfection Certificate on the  Effective Date or arising under this Agreement and the other Loan Documents;  (b) Liens for taxes, fees, assessments or other government charges or levies, either (i) not due  and payable or (ii) being contested in good faith and for which a Borrower or a Subsidiary maintains adequate reserves  on its Books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code of  1986, as amended, and the Treasury Regulations adopted thereunder;  (c) purchase money Liens or capital leases (i) on Equipment acquired or held incurred for  financing the acquisition of the Equipment securing no more than Twenty-Five Million Dollars ($25,000,000) in the  aggregate amount outstanding, or (ii) existing on Equipment when acquired, if the Lien is confined to the property  and improvements and the proceeds of the Equipment;  

 

48    (d) Liens of carriers, warehousemen, suppliers, or other Persons that are possessory in nature  arising in the ordinary course of business so long as such Liens attach only to Inventory, securing liabilities in the  aggregate amount not to exceed One Hundred Thousand Dollars ($100,000) and which are not delinquent or remain  payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings  have the effect of preventing the forfeiture or sale of the property subject thereto;   (e) Liens to secure payment of workers’ compensation, employment insurance, old-age  pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens  imposed by ERISA);  (f) leases or subleases of real property granted in the ordinary course of business, and leases,  subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the  ordinary course of business, if the leases, subleases, licenses and sublicenses do not prohibit granting Bank a security  interest therein;  (g) Liens in favor of other financial institutions arising in connection with a Borrower’s or a  Subsidiary’s deposit and/or securities accounts held at such institutions, provided that Bank has a perfected security  interest in the amounts held in such deposit and/or securities accounts;  (h) Liens on insurance policies and the proceeds thereof securing the financing of premiums  with respect thereto;  (i) Liens on assets of any Foreign Subsidiary securing Permitted Indebtedness;  (j) Liens securing Indebtedness permitted under clauses (j), (k), (l) and (o) of the definition of  “Permitted Indebtedness” hereunder; and  (k) Liens incurred in the extension, renewal or refinancing of the Indebtedness secured by  Liens described in (a) through (j), but any extension, renewal or replacement Lien must be limited to the property  encumbered by the existing Lien and the principal amount of the indebtedness may not increase (except by an amount  equal to the accrued and unpaid interest and premium, fees and expenses reasonably incurred in connection therewith  and existing commitments utilized thereunder).  “Permitted PubCo Notes Payments” are:  (a) the repayment of the principal amount of the PubCo Notes at the stated maturity thereof;  (b) the payment of interest or accrued “original issue discount” (as determined for U.S. federal  income tax purposes) on the PubCo Notes;  (c) the mandatory settlement or mandatory conversion of the PubCo Notes in an amount up to  the principal amount of the PubCo Notes and accrued interest or accrued “original issue discount” (as determined for  U.S. federal income tax purposes) on the PubCo Notes, or a combination thereof; and   (d) any other cash payments so long as (i) at least five (5) days before such payment, Lead  Borrower shall deliver to Bank financial statements and a written confirmation, supported by reasonably detailed  calculations, that on a pro forma basis (after giving effect to such payment), Lead Borrower will have a Senior  Leverage Ratio of less than or equal to 2.50:1.00 as of the most recently ended fiscal quarter for which financial  statements were required to be delivered hereunder or have been delivered hereunder and (ii) the Payment Conditions  are satisfied.  “Permitted Restricted Payments” are:  (a) any Restricted Payments, so long as (i) the Payment Conditions are satisfied at the time  of such Restricted Payment and (ii) at least five (5) days prior to such Restricted Payment, Lead Borrower shall deliver  

 

49    to Bank financial statements and a written confirmation, supported by reasonably detailed calculations, that on a pro  forma basis (after giving effect to such Restricted Payment), Lead Borrower will have a Senior Leverage Ratio of less  than or equal to 2.50:1.00 as of the most recently ended fiscal quarter for which financial statements were required to  be delivered hereunder or have been delivered hereunder;  (b) any Restricted Payments made by (x) any Borrower to (directly or indirectly) any other  Borrower, and (y) any Subsidiary that is not a Borrower to any Borrower or any other Subsidiary;  (c) any Restricted Payments made with the proceeds received from the substantially  concurrent equity issuances; provided that any such equity issuances are not prohibited hereunder;  (d)  any conversion of any of its convertible securities into common stock of Lead Borrower  pursuant to the terms of such convertible securities or otherwise in exchange thereof;  (e) any Restricted Payment made solely in common stock of Lead Borrower;  (f) any repurchase of the stock, partnership, membership, or other ownership interest or other  equity securities of former officers, directors, employees or consultants pursuant to employee stock options, restricted  stock, incentive stock plans, or stock repurchase agreements, so long as an Event of Default does not exist at the time  of any such repurchase and would not exist after giving effect to any such repurchase, and provided that the aggregate  amount of all such repurchases does not exceed One Million Dollars ($1,000,000) per fiscal year; plus any unutilized  portion of such amount in the immediately preceding fiscal year (it being understood that such unutilized portion from  such preceding fiscal year shall be utilized first during the current fiscal year);  (g) any Restricted Payment consisting of the purchase or payment in lieu of fractional shares  of equity interest arising out of stock dividends, splits or business combinations pursuant to mergers, consolidations  or other acquisitions permitted by this Agreement;  (h) any Restricted Payment consisting of the payment in lieu of fractional shares upon the  exercise of warrants, options or other securities;   (i) any Restricted Payment consisting of Indebtedness set forth in clause (n) of the definition  of “Permitted Indebtedness” hereunder so long as the Payment Conditions are satisfied at the time of such Restricted  Payment, and  (j) other Restricted Payments not otherwise permitted by Section 6.7 not exceeding  $5,000,000 in the aggregate in any fiscal year.  “Permitted Transfers” are Transfers:  (a) of Inventory and equipment in the ordinary course of business;  (b) of worn-out, surplus, or obsolete property that is, in the reasonable judgment of such Borrower, no  longer economically practicable to maintain or useful in the ordinary course of business;   (c) consisting of Permitted Liens and Permitted Investments;   (d) consisting of the sale or issuance of any stock, partnership, membership, or other ownership interest  or other equity securities of such Lead Borrower;   (e) consisting of such Borrower’s or its Subsidiaries’ use or transfer of cash or Cash Equivalents in a  manner that is not prohibited by the terms of this Agreement or the other Loan Documents;  (f) of non-exclusive licenses or sublicenses for the use of the property of such Borrower or its  Subsidiaries in the ordinary course of business;   

 

50    (g) of property to the extent that such property is exchanged for credit against the purchase price of  similar replacement property;   (h) consisting of Restricted Payments permitted under Section Error! Reference source not found.;   (i) of account receivables in connection with the collection or compromise thereof in accordance with  Section 5.4(b); provided that the proceeds thereof are deposited in the Cash Collateral Account;   (j) (A) between Borrowers; (B) between Subsidiaries of Borrowers (other than a Borrower); (C) by  Subsidiaries that are not Borrowers to any Borrower and (D) by any Borrower to any Subsidiary  that is not a Borrower; provided that in the case of a Transfer made pursuant to clause (D), any  noncash consideration received in exchange for and/or the portion (if any) of any Transfer made for  less than fair market value shall constitute an Investment in such Subsidiary;   (k) leases, sub-leases, occupancy agreements or assignment of interests in real or leased property; and  (l) not otherwise permitted pursuant to Section 6.1; provided that (i) at the time of such Transfer, no  Event of Default shall exist or would result from such Transfer, (ii) such Transfer is made for fair  market value (as reasonably determined by the Lead Borrower and measured as of the date a legally  binding commitment for such Transfer was entered into), (iii) the consideration received shall be in  cash or Cash Equivalents, (iv) such Transfers do not include Eligible Accounts (unless the proceeds  thereof are deposited in the Cash Collateral Account) or material Intellectual Property; provided  that, if such Transfers include Eligible Accounts exceeding $500,000 individually or $1,500,000 in  the aggregate per month, Borrower shall promptly notify Bank and deliver to Bank an updated  Borrowing Base Statement, and (v) such Transfers do not exceed Five Million Dollars ($5,000,000)  in the aggregate in any fiscal year of Lead Borrower.  “Person” is any individual, sole proprietorship, partnership, limited liability company, joint venture,  company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm,  joint stock company, estate, entity or government agency.  “Plan” is defined in Section 6.10.  “Prior Loan Agreement” is that certain Amended and Restated Loan and Security Agreement, dated as of  September 15, 2014, as amended by that certain First Amendment to Amended and Restated Loan and Security  Agreement, by and between Outbrain and Bank, dated as of November 20, 2014, as further amended by that certain  Second Amendment to Amended and Restated Loan and Security Agreement, by and between Outbrain and Bank,  dated as of January 27, 2016, as further amended by that certain Third Amendment to Amended and Restated Loan  and Security Agreement, by and between Outbrain and Bank, dated as of August 25, 2016, as further amended by that  certain Fourth Amendment to Amended and Restated Loan and Security Agreement, by and between Outbrain and  Bank, dated as of October 6, 2016, as further amended by that certain Fifth Amendment to Amended and Restated  Loan and Security Agreement, by and between Outbrain and Bank, dated as of November 2, 2018, as further amended  by that certain Sixth Amendment to Amended and Restated Loan and Security Agreement, by and between Outbrain  and Bank, dated as of March 27, 2020, and as further amended by that certain Seventh Amendment to Amended and  Restated Loan and Security Agreement, by and between Outbrain and Bank, dated as of June 21, 2021, as amended.  “Prime Rate” is set forth on Schedule I hereto.   “Prime Rate Advance” is an Advance that bears interest based at the Prime Rate.  “Prime Rate Margin” is set forth on Schedule I hereto.  “PubCo Notes” are those notes outstanding as of the Effective Date pursuant to, and governed exclusively  by, the PubCo Notes Indenture dated as of July 27, 2021 by and between Outbrain Inc., as issuer, and The Bank of  New York Mellon, not in its individual capacity but solely as trustee.  

 

51    “PubCo Notes Payments” are cash payment of principal or interest of any of the PubCo Notes, or any cash  payment on account of the purchase, redemption, settlement on conversion, retirement, acquisition, cancellation or  termination of any such Indebtedness.   “Registered Organization” is any “registered organization” as defined in the Code with such additions to  such term as may hereafter be made.  “Representatives” is defined in Section 11.8.  “Reserve Requirement” is, for any Interest Period, the average maximum rate at which reserves (including  any marginal, supplemental, or emergency reserves) are required to be maintained during such Interest Period under  Regulation D against “Eurocurrency liabilities” (as such term is used in Regulation D) by member banks of the Federal  Reserve System.  Without limiting the effect of the foregoing, the Reserve Requirement shall reflect any other reserves  required to be maintained by Bank by reason of any Regulatory Change against (a) any category of liabilities which  includes deposits by reference to which the LIBOR Rate is to be determined as provided in the definition of LIBOR  or (b) any category of extensions of credit or other assets which include Advances.  “Reserves” are, as of any date of determination, such amounts as Bank may from time to time establish and  revise in its Permitted Discretion, reducing the amount of Advances and other financial accommodations which would  otherwise be available to any Borrower (a) to reflect events, conditions, contingencies or risks which, as determined  by Bank in its Permitted Discretion, do or may adversely affect (i) the Collateral or any other property which is security  for the Obligations or its value (including without limitation any increase in delinquencies of Accounts), (ii) the assets,  business or prospects of Borrower, or (iii) the security interests and other rights of Bank in the Collateral (including  the enforceability, perfection and priority thereof); or (b) to reflect Bank's reasonable belief that any collateral report  or financial information furnished by or on behalf of any Borrower to Bank is or may have been incomplete, inaccurate  or misleading in any material respect; or (c) in respect of any state of facts which Bank determines in its Permitted  Discretion constitutes a Default or an Event of Default.  “Responsible Officer” is any of the Chief Executive Officer, President, Chief Financial Officer, Treasurer,  and Controller of Lead Borrower.  “Restricted License” is any material license or other material agreement with respect to which Borrower is  the licensee (a) that prohibits or otherwise restricts a Borrower from granting a security interest in such Borrower’s  interest in such license or agreement or any other property, or (b) for which a default under or termination of could  interfere with Bank’s right to sell any Collateral.  “Restricted Payments” are purchase price adjustments, earn outs, deferred compensation, or other  arrangements representing acquisition consideration or deferred payments of a similar nature, and dividends and  distributions paid to any Person that is not a Borrower or other payments on, or on account of, or the setting apart of  assets for a sinking or other analogous fund for, the purchase, redemption, defeasance, retirement or other acquisition  of, any equity interest in a Borrower or its Subsidiaries whether now or hereafter outstanding, or any other distribution  in respect thereof, either directly or indirectly, whether in cash or property or in obligations of any Borrower or any  Subsidiary.  “Revolving Line” is set forth on Schedule I hereto.  “Revolving Line Maturity Date” is set forth on Schedule I hereto.  “Sanctioned Person” is a Person that: (a) is listed on any Sanctions list maintained by OFAC or any similar  Sanctions list maintained by any other Governmental Authority having jurisdiction over a Borrower; (b) is located,  organized, or resident in any country, territory, or region that is the subject or target of Sanctions; or (c) is 50.0% or  more owned or controlled by one (1) or more Persons described in clauses (a) and (b) hereof.  

 

52    “Sanctions” are the economic sanctions laws, regulations, embargoes or restrictive measures administered,  enacted or enforced by the United States government and any of its agencies, including, without limitation, OFAC  and the U.S. State Department, or any other Governmental Authority having jurisdiction over Borrower.  “SEC” is the Securities and Exchange Commission, any successor thereto, and any analogous Governmental  Authority.  “Securities Account” is any “securities account” as defined in the Code with such additions to such term as  may hereafter be made.  “Senior Leverage Ratio” is, as of any date of determination, a ratio equal to (a) the Obligations as of such  date, divided by (b) (i) EBITDA for the most recent completed twelve (12) month period.   “Specified Affiliate” is any Person (a) more than ten percent (10.0%) of whose aggregate issued and  outstanding equity or ownership securities or interests, voting, non-voting or both, are owned or held directly or  indirectly, beneficially or of record, by a Borrower, and/or (b) whose equity or ownership securities or interests  representing more than ten percent (10.0%) of such Person’s total outstanding combined voting power are owned or  held directly or indirectly, beneficially or of record, by Borrower.  “Specified Event of Default” is an Event of Default that has occurred and is continuing under Sections 7.1,  7.2(a) (solely as it relates to Section Error! Reference source not found.), and 7.5.  “Streamline Threshold” is defined in the definition of Streamline Period.  “Streamline Period” is, on and after the Effective Date, provided no Event of Default has occurred and is  continuing, the period (a) commencing on the first day of the month following the day that Lead Borrower provides  to Bank a written report that Borrowers have, for each consecutive day in the immediately preceding month utilized  less than eighty-five percent (85%) (the “Streamline Threshold”) of the lesser of (a) the Revolving Line or (b) the  Borrowing Base, as determined by Bank in its sole discretion; provided that utilization for purposes of this definition  shall be determined based on the daily closing balance of the Revolving Line outstanding plus the sum of the aggregate  Dollar Equivalent of the face amount of outstanding Letters of Credit (including drawn but unreimbursed Letters of  Credit and any Letter of Credit Reserve) and (b) terminating on the earlier to occur of (i) the occurrence of an Event  of Default, and (ii) the first day thereafter in which Borrowers fail to maintain utilization below the Streamline  Threshold, as determined by Bank in its sole discretion.  Upon the termination of a Streamline Period, Borrowers shall  maintain less than the Streamline Threshold each consecutive day for thirty (30) days as determined by Bank in its  sole discretion, prior to entering into a subsequent Streamline Period.  Lead Borrower shall give Bank prior written  notice of Borrowers’ election to enter into any such Streamline Period, and each such Streamline Period shall  commence on the first day of the monthly period following the date Bank determines, in its sole discretion, that  utilization is less than the Streamline Threshold.    “Subordinated Debt” is indebtedness incurred by any Borrower or any of its Subsidiaries subordinated to  all of such Borrower’s or any of its Subsidiaries’ now or hereafter indebtedness to Bank (pursuant to a subordination,  intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and  the other creditor), on terms acceptable to Bank. For the avoidance of doubt, the PubCo Notes do not constitute  Subordinated Debt under this Agreement.  “Subsidiary” is, as to any Person, a corporation, partnership, limited liability company or other entity of  which shares of stock, partnership, membership, or other ownership interest or other equity securities having ordinary  voting power (other than stock, partnership, membership, or other ownership interest or other equity securities having  such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other  managers of such corporation, partnership or other entity are at the time owned, or the management of which is  otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person.  Unless the  context otherwise requires, each reference to a Subsidiary herein shall be a reference to a Subsidiary of any Borrower.  

 

53    “Taxes” is all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup  withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest,  additions to tax or penalties applicable thereto.  “Trademarks” is, with respect to any Person, 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 such Person connected with and symbolized by such trademarks.  “Transfer” is defined in Section 6.1.   “Unused Revolving Line Facility Fee” is defined in Section 1.5(c).  “Unused Revolving Line Facility Fee Percentage” is (i) if the Net Availability Percentage is greater than  or equal to 66%, 0.30% per annum, (ii) if the Net Availability Percentage is less than 66% but greater than or equal to  33%, 0.25% per annum and (iii) if the Net Availability Ratio is less than 33%, 0.20% per annum, in each case as  determined on the basis of and adjusted promptly upon Bank’s determination of the Net Availability Ratio.  Subject  to Section 12.1, the Unused Revolving Line Facility Fee Percentage shall be determined on the basis of Lead  Borrower’s most recent Borrowing Base Statement, pursuant to Section 5.3(a), and such Unused Revolving Line  Facility Fee Percentage shall be adjusted promptly upon each receipt of such Borrowing Base Statement; provided  however, notwithstanding the foregoing, if the Borrowing Base Statement required by Section 5.3(a) is not delivered  by the respective date required thereunder, the Unused Revolving Line Facility Fee Percentage shall be 0.30% until  such Borrowing Base Statement is delivered.  “USA Patriot Act” is the “Uniting and Strengthening America by Providing Appropriate Tools Required to  Intercept and Obstruct Terrorism Act of 2001” (Public Law 107-56, signed into law on October 26, 2001), as amended  from time to time.  [Signature page follows]  

 

Signature Page to Second Amended and Restated Loan and Security Agreement    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective  Date.  BORROWER:    OUTBRAIN INC.      By: _______________________________________    Name: Yaron Galai    Title: Co-Chief Executive Officer & Co-Founder      ZEMANTA HOLDING USA INC.      By: _______________________________________    Name: Yaron Galai    Title: Chief Executive Officer      ZEMANTA INC.      By: _______________________________________    Name: Yaron Galai    Title: Chief Executive Officer      BANK:    SILICON VALLEY BANK      By: _______________________________________    Name: Dylan Wong    Title: Vice President      

 

  I-1  SCHEDULE I  LSA PROVISIONS    LSA Section LSA Provision  1.1(a) – Revolving Line –  Availability  Amounts borrowed under the Revolving Line may be prepaid or repaid  and, prior to the Revolving Line Maturity Date, reborrowed, subject to the  applicable terms and conditions precedent herein.  1.2(a) – Letter of Credit Sublimit The aggregate Dollar Equivalent of the face amount of outstanding Letters  of Credit (including drawn but unreimbursed Letters of Credit and any  Letter of Credit Reserve) may not exceed $15,000,000.  1.4(a) – Interest Payments –  Advances  Interest on the principal amount of each Advance is payable in arrears  monthly (A) on each Interest Payment Date, (B) on the date of any  prepayment and (C) on the Revolving Line Maturity Date.  1.4(b)(i) – Interest Rate – Advances The outstanding principal amount of any Advance shall accrue interest at  a floating rate per annum equal to (i) for Prime Rate Advances, the Prime  Rate minus the Prime Rate Margin, and (ii) for LIBOR Advances, the  LIBOR Rate plus the LIBOR Rate Margin, in each case which interest shall  be payable in accordance with Section 1.4(a).  1.4(f) – Interest Computation Interest shall be computed on the basis of the actual number of days elapsed  and a 360-day year for any Credit Extension outstanding.  1.5(a) – Facility Fee A fully earned, non-refundable commitment fee of $225,000 on the  Effective Date.  8.8 – Borrower Liability Each Borrower hereunder shall be jointly and severally obligated to repay  all Credit Extensions made hereunder and any other Obligations related  thereto, regardless of which such Borrower actually receives said Credit  Extension, as if each Borrower hereunder directly received all Credit  Extensions.  12.2 – “Borrower” “Borrower” is individually and ”Borrowers”  are collectively, as the  context requires, jointly and severally, each of OUTBRAIN INC., a  Delaware corporation, ZEMANTA HOLDING USA INC., a Delaware  corporation, and ZEMANTA INC., a Delaware corporation.  12.2 – “Effective Date” “Effective Date” is November 2, 2021.  12.2 – “LIBOR Rate Margin” “LIBOR Rate Margin” is (i) if the Net Availability Percentage is greater  than or equal to 66%, 1.50%, (ii) if the Net Availability Percentage is less  than 66% but greater than or equal to 33%, 1.75% and (iii) if the Net  Availability Ratio is less than 33%, 2.00%, in each case as determined on  the basis of and adjusted promptly upon Bank’s determination of the Net  Availability Ratio.  Subject to Section 12.1, the LIBOR Rate Margin  applicable to LIBOR Rate Advances shall be determined on the basis of  Lead Borrower’s most recent Borrowing Base Statement, pursuant to  Section 5.3(a), and such LIBOR Rate Margin shall be adjusted promptly  upon each receipt of such Borrowing Base Statement; provided however,  notwithstanding the foregoing, if the Borrowing Base Statement required  by Section 5.3(a) is not delivered by the respective date required  thereunder, the LIBOR Rate Margin shall be 2.00% until such Borrowing  Base Statement is delivered.  12.2 – “Payment Date” “Payment Date” is with respect to Advances, the last calendar day of each  month.  

 

I-2    12.2 – “Prime Rate” “Prime Rate” is the rate of interest per annum from time to time published  in the money rates section of The Wall Street Journal or any successor  publication thereto as the “prime rate” then in effect; provided that if such  rate of interest, as set forth from time to time in the money rates section of  The Wall Street Journal, becomes unavailable for any reason as determined  by Bank, the “Prime Rate” shall mean the rate of interest per annum  announced by Bank as its prime rate in effect at its principal office in the  State of California (such Bank announced Prime Rate not being intended  to be the lowest rate of interest charged by Bank in connection with  extensions of credit to debtors); provided that, in the event such rate of  interest is less than three and one quarter of one percent (3.25%) per  annum, such rate shall be deemed to be three and one quarter of one percent  (3.25%) per annum for purposes of this Agreement.  12.2 – “Prime Rate Margin” “Prime Rate Margin” is (i) if the Net Availability Percentage is greater  than or equal to 66%, 1.50%, (ii) if the Net Availability Percentage is less  than 66% but greater than or equal to 33%, 1.25% and (iii) if the Net  Availability Ratio is less than 33%, 1.00%, in each case as determined on  the basis of and adjusted promptly upon Bank’s determination of the Net  Availability Ratio.  Subject to Section 12.1, the Prime Rate Margin  applicable to Prime Rate Advances shall be determined on the basis of  Lead Borrower’s most recent Borrowing Base Statement, pursuant to  Section 5.3(a), and such Prime Rate Margin shall be adjusted promptly  upon each receipt of such Borrowing Base Statement; provided however,  notwithstanding the foregoing, if the Borrowing Base Statement required  by Section 5.3(a) is not delivered by the respective date required  thereunder, the Prime Rate Margin shall be one percent 1.00% until such  Borrowing Base Statement is delivered.  12.2 – “Revolving Line” “Revolving Line” is an aggregate principal amount equal to $75,000,000.  12.2 – “Revolving Line Maturity  Date”  “Revolving Line Maturity Date” is November 2, 2026; provided that,  notwithstanding the foregoing, the Revolving Line Maturity Date shall be  the date that is one hundred twenty (120) days prior to the earliest maturity  of the PubCo Notes, as they may be extended from time to time, in the  event that all of the PubCo Notes have not converted to common equity  securities of Outbrain Inc. prior to their stated maturity.      

 

      EXHIBIT A  COMPLIANCE STATEMENT    TO:  SILICON VALLEY BANK     Date:        FROM:   OUTBRAIN INC., ZEMANTA HOLDING USA INC. and ZEMANTA INC.  Under the terms and conditions of the Second Amended and Restated Loan and Security Agreement between  Borrowers and Bank (as amended, modified, supplemented and/or restated from time to time, the “Agreement”), Lead  Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted  below.  Attached are the required documents evidencing such compliance, setting forth calculations prepared in accordance  with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes.   Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.  Please indicate compliance status by circling Yes/No under “Complies” column.  Reporting Covenants Required Complies  Monthly financial statements with   Compliance Statement  Monthly by the last day of the  subsequent month  Yes   No  Annual financial statements (CPA Audited) FYE within 180 days Yes   No  10-Q, 10-K and 8-K Within 5 days after filing with   SEC  Yes   No  A/R & A/P Agings Monthly by the last day of the  subsequent month  Yes   No  Borrowing Base Statements Weekly no later than Monday of each  week with respect to prior week when  a Streamline Period is not in effect,  monthly by the last day of the  subsequent month end when a  Streamline Period is in effect  Yes   No  Board approved projections FYE within 45 days Yes   No    Financial Covenant Required Actual Complies      Maintain as indicated:    Minimum Fixed Charge Ratio __1.00:1.00 _____:1.00 Yes   No   N/A          The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true  and correct as of the date of this Compliance Statement.     The following are the exceptions with respect to the statements above: (If no exceptions exist, state “No  exceptions to note.”)    -----------------------------------------------------------------------------------------------------------------------------------------------          

 

    Schedule 1 to Compliance Statement    Financial Covenants of Lead Borrower      In the event of a conflict between this Schedule and the Agreement, the terms of the Agreement shall govern.    Dated: ____________________    I. Minimum Fixed Charge Coverage Ratio (Section 5.10)    Required: Maintain at all times, as of the last day of each month when a Streamline Period is not effect, on a  consolidated basis with respect to Borrower and its Subsidiaries, measured as of the end of each  fiscal month on a trailing twelve (12) month basis, a Fixed Charge Coverage Ratio of at least 1.00  to 1.00.    Actual:    A. Net Income of Borrower $     B. To the extent included in the determination of Net Incomewith respect to clauses 1 through 11:      1. Interest Expense $      2. Depreciation expense $      3. Amortization expense $      4. To the extent deducted in the calculation of Net Income, federal, state and local  income taxes, whether paid, payable or accrued  $        5. Non-cash expenses reflected in Net Income in an amount not to exceed $2,500,000 in  any fiscal year    $        6.  Non-cash stock compensation expense    7.  Costs, fees, expenses and reserves associated with (A) any equity offerings,  Investments (including Acquisitions), Transfers, recapitalization, restructurings, and the  incurrence or refinancings of Indebtedness, in each case as permitted herein; provided that the  amount of such costs, fees, and expenses associated with non-successful transactions added  back shall not exceed $5,000,000 in any fiscal year and (B) this Agreement and the other Loan  Documents (including any amendments), whether or not successful    $    8.  Costs and expenses pursuant to employee or management equity or stock plans in an  amount not to exceed $2,500,000 in any fiscal year    $    9. Extraordinary, unusual, or nonrecurring non-cash charges    $    10. Litigations, investigations, damages, settlements, claims, and fines    $    11. Losses on Transfers of assets outside the ordinary course of business $      12.  Without duplication of any other pro forma adjustment to Net Income or EBITDA, the  amount of “run rate” cost savings, operating expense reductions and synergies realized or  expected to be realized as a result of mergers, consolidations, amalgamations and other business  combinations, Acquisitions and other Investments, Transfers, divestitures, recapitalizations,  $     

 

    restructurings, integration initiatives, insourcing initiatives, operating improvements, cost  savings initiatives and other business optimization initiatives, actions or events (including, for  the avoidance of doubt, any of the foregoing occurring prior to the Effective Date); provided  that (A) such cost savings, operating expense reduction and synergies are reasonably  identifiable, factually supportable and have been realized or are projected by Lead Borrower in  good faith to be realized from such actions, and (B) actions resulting in such cost savings,  operating expense reduction and synergies have been taken or are reasonably anticipated to be  taken within twelve (12) months following the end of such period, net of the amount of actual  benefits realized during such period therefrom (which cost savings, operating expense  reductions and synergies shall be calculated on a pro forma basis as though such cost savings,  operating expense reductions or synergies had been realized on the first day of such period), and  Lead Borrower shall have provided a reasonably detailed statement or schedule of such cost  savings, operating expense reductions and synergies and a certification in respect of the  requirements set forth in this proviso, (B) no cost savings, operating expense reductions or  synergies shall be added pursuant to this addback to the extent duplicative of any expenses or  charges relating to such cost savings that are otherwise added back in the calculation of  EBITDA for such period and (C) the aggregate amounts added back pursuant to clauses 10 and  12 shall not exceed twenty percent (20.0%) of EBITDA (calculated prior to giving effect to  such addbacks) in the aggregate for any four consecutive fiscal quarter periods     13.  Other add-backs to EBITDA approved by Bank on a case-by-case basis (such approval  in its sole discretion)    $      14.  The sum of lines 1 through 13 $      15.  To the extent increasing Net Income, gains on Transfers of assets outside the ordinary  course of business    $     C. EBITDA (line A plus line B.14 minus line B.15) $       D. Portion of taxes actually paid in cash during such period      E. Consolidated capital expenditures (excluding the principal amount funded with Advances or  other Permitted Indebtedness incurred in connection with such expenditures)    $     F. Capitalized software expenses $     G. Restricted Payments made during such period $         H. Line C minus line D minus line E minus line F minus line G $     I. Interest Expense for such period $     J. Scheduled payments made during such period on account of principal of Indebtedness of  Borrower and its consolidated Subsidiaries  $     K. Capital lease payments made during such period by Borrower $     L. Line I plus line J plus line K $     M. Fixed Charge Coverage Ratio (line C divided by line L)      Is line M equal to or greater than 1.00:1.00?    

 

       No, not in compliance        Yes, in compliance  

 

    EXHIBIT B  FORM OF NOTICE OF BORROWING  OUTBRAIN INC., ZEMANTA HOLDING USA INC. and ZEMANTA INC.   Date:  ______________  To: Silicon Valley Bank  3003 Tasman Drive  Santa Clara, CA  95054  Attention:  IMX Production  Email:  imxproduction@svb.com; dwong@svb.com  RE: Second Amended and Restated Loan and Security Agreement dated as of November 2, 2021 (as amended,  modified, supplemented or restated from time to time, the “Loan Agreement”), by and between OUTBRAIN INC.,  ZEMANTA HOLDING USA INC. and ZEMANTA INC. (collectively, “Borrowers”), and Silicon Valley Bank (the  “Bank”)  Ladies and Gentlemen:  The undersigned refers to the Loan Agreement, the terms defined therein and used herein as so defined, and  hereby gives you notice irrevocably, pursuant to Section 1.8(a) of the Loan Agreement, of the borrowing of an  Advance.  1. The Funding Date, which shall be a Business Day, of the requested borrowing is _______________.  2. The Currency of the requested borrowing is U.S. Dollars.  3. The aggregate amount of the requested Advance is $_____________.  4. The requested Advance shall consist of $___________ of Prime Rate Advances and [$]______ of  LIBOR Advances.  5. The duration of the Interest Period for the LIBOR Advances included in the requested Advance  shall be [one month][three months][six months].  The undersigned hereby certifies that the following statements are true on the date hereof, and will be true  on the date of the proposed Advance before and after giving effect thereto, and to the application of the proceeds  therefrom, as applicable:  (a) all representations and warranties of Borrower contained in the Loan Agreement are true,  accurate and complete in all material respects as of the date hereof; provided, however, that such materiality  qualifier shall not be applicable to any representations and warranties that already are qualified or modified  by materiality in the text thereof; and provided, further that those representations and warranties expressly  referring to a specific date shall be true, accurate and complete in all material respects as of such date;  (b) no Event of Default has occurred and is continuing, or would result from such proposed  Advance; and  (c) the requested Advance will not cause the aggregate principal amount of the outstanding  Advances to exceed, as of the designated Funding Date, the Availability Amount.        

 

      LEAD BORROWER       OUTBRAIN INC.      By: _______________________________________    Name: _____________________________________    Title: ______________________________________      For internal Bank use only  LIBOR Pricing Date LIBOR LIBOR Variance Maturity Date    ____%     

 

    EXHIBIT C  FORM OF NOTICE OF CONVERSION/CONTINUATION  OUTBRAIN INC., ZEMANTA HOLDING USA INC. and ZEMANTA INC.          Date:                       To: Silicon Valley Bank  3003 Tasman Drive  Santa Clara, CA  95054  Attention:  IMX Production  Email:  imxproduction@svb.com; dwong@svb.com  RE: Second Amended and Restated Loan and Security Agreement dated as of November 2, 2021 (as amended,  modified, supplemented or restated from time to time, the “Loan Agreement”), by and between OUTBRAIN INC.,  ZEMANTA HOLDING USA INC.  and ZEMANTA INC. (collectively, “Borrowers”), and Silicon Valley Bank (the  “Bank”)    Ladies and Gentlemen:  The undersigned refers to the Loan Agreement, the terms defined therein being used herein as therein defined,  and hereby gives you notice irrevocably, pursuant to Section 1.9 of the Loan Agreement, of the [conversion]  [continuation] of the [Advances] specified herein, that:  1. The date of the [conversion] [continuation] is                                            , 20___.  2. The aggregate amount of the proposed Advances to be [converted] is   $                          or [continued] is $                                  .  3. The Advances are to be [converted into] [continued as] [LIBOR] [Prime Rate] Advances.  4. The duration of the Interest Period for the LIBOR Advances included in the [conversion]  [continuation] shall be [one month][three months][six months].  The undersigned, on behalf of the Borrowers, hereby certifies that the following statements are true on the  date hereof, and will be true on the date of the proposed [conversion] [continuation], before and after giving effect  thereto and to the application of the proceeds therefrom:  (a) no Event of Default has occurred and is continuing, or would result from such proposed  [conversion] [continuation]; and  (b) the requested [conversion] [continuation] will not cause the aggregate principal amount of  the outstanding Advances to exceed, as of the designated Funding Date, (i) the lesser of (A) the Revolving  Line or (B) the Borrowing Base minus (ii) the amount of all outstanding Letters of Credit (including drawn  but unreimbursed Letters of Credit and any Letter of Credit Reserve).       

 

    LEAD BORROWER             OUTBRAIN INC.      By: _______________________________________    Name: _____________________________________    Title: ______________________________________          For internal Bank use only  LIBOR Pricing Date LIBOR LIBOR Variance Maturity Date    ____%sdmi-ex101_9.htm

Exhibit 10.1

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of November 5, 2021, by and among Stronghold Digital Mining, Inc., a Delaware corporation (the “Company”) and Panther Creek Reclamation Holdings, LLC  (the “Investor”).

WHEREAS, in connection with the closing of the Company’s acquisition of the waste coal-fired power station located near Nesquehoning, Pennsylvania (the “Panther Creek Acquisition”) pursuant to that Equity Capital Contribution Agreement, dated July 9, 2021 (as amended, the “ECCA”), by and between Stronghold Digital Mining Holdings LLC (“Stronghold LLC”) and the Investor, Stronghold LLC and the Company will issue to the Investor 1,152,000 common units of Stronghold LLC and 1,152,000 shares of Class V common stock of the Company, par value $0.0001 per share (collectively, the “Investor Shares”), as applicable, 

WHEREAS, in accordance with the terms of the ECCA, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws, with respect to the shares of Class A common stock of the Company, par value $0.0001 per share (“Common Stock”), that may be received upon redemption of the Investor Shares in accordance with their terms (the “Redemption Shares”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

1. Definitions. As used in this Agreement, the following terms have the respective meanings set forth in this Section 1 and other terms are defined throughout this Agreement:

“Business Day” means a day other than Saturday, Sunday or any other day which commercial banks in New York, New York are authorized or required by law to close.

“Commission” means the United States Securities and Exchange Commission.

“Effective Date” means, as to a Registration Statement, the date on which such Registration Statement is first declared effective by the Commission.

“Effectiveness Period” means, as to any Registration Statement required to be filed pursuant to this Agreement, the period commencing on the Effective Date of such Registration Statement and ending on (a) the date that all of the Registrable Securities covered by such Registration Statement have been publicly sold by the Holders of the Registrable Securities included therein, or (b) such time as all of the Registrable Securities covered by such Registration Statement may be sold by the Holders without restriction pursuant to Rule 144 as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company's transfer agent and the affected Holders.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“FINRA” means the Financial Industry Regulatory Authority, Inc.

 

 

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities and, if other than the Investor, a Person to whom the rights hereunder have been properly assigned pursuant to Section 7 hereof.

“New York Courts” means the state and federal courts sitting in the City of New York, Borough of Manhattan.

“Person” means any individual or entity, including any corporation, limited liability company, partnership (general or limited), joint venture, association, joint stock company, trust, incorporated organization, or governmental entity.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

“Registrable Securities” means: (i) the Redemption Shares; and (ii) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event, or any price adjustment as a result of such stock splits, reverse stock splits or similar events with respect to any of the securities referenced in clause (i) above. Notwithstanding the foregoing, a security shall cease to be a Registrable Security for purposes of this Agreement from and after such time as the Holder of such security may resell such security without restriction under Rule 144, as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected Holders.

“Registration Statement” means any registration statement of the Company filed or confidentially submitted with the Commission under the Securities Act that covers the resale of Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration statement.

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the 

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Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 

“Selling Holder Questionnaire” means the selling security holder notice and questionnaire attached as Annex B hereto.

“Trading Market” means any of the New York Stock Exchange, the NYSE American, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market, or any other national securities exchange on which the Common Stock is listed or quoted for trading on the date in question.

2.Registration.

(a)Within thirty (30) Business Days following November 2, 2021 (being the closing date of the Panther Creek Acquisition), the Company shall prepare and file or confidentially submit with the Commission a Registration Statement covering the resale of all Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 (a “Resale Shelf Registration Statement”). The Resale Shelf Registration Statement shall be filed on Form S-1 (or on such other form appropriate for such purpose) and contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such Resale Shelf Registration Statement, other than as to the characterization of any Holder as an underwriter, which shall not occur unless such characterization is consistent with written information provided by the Holder in the Selling Holder Questionnaire) a “Plan of Distribution” in substantially the form attached hereto as Annex A. The Company shall cause the Resale Shelf Registration Statement to be declared effective under the Securities Act as soon as reasonably practicable, and shall use its reasonable best efforts to keep each such Resale Shelf Registration Statement continuously effective during its entire Effectiveness Period. Following the Effective Date of the Resale Shelf Registration Statement, the Company shall file with the Commission in accordance with Rule 424 the final Prospectus to be used in connection with sales pursuant to such Resale Shelf Registration Statement (whether or not such filing is technically required under such Rule) in accordance with the requirements of Rule 424. 

(b)Following any date on which the Company becomes eligible to use a registration statement on Form S-3 (and provided it is not subject to any other restrictions from filing or otherwise using a registration statement on Form S-3) to register Registrable Securities for resale, the Company shall file a Registration Statement on Form S-3 covering all securities that are then deemed Registrable Securities (or a post-effective amendment on Form S-3 to the then effective Registration Statement) for an offering to be made on a continuous basis pursuant to Rule 415 (an “S-3 Resale Shelf Registration Statement”) and shall cause such S-3 Resale Shelf Registration Statement to be filed as soon as commercially reasonable and declared effective under the Securities Act as soon as reasonably possible thereafter. Such S-3 Resale Shelf Registration Statement shall contain (except if otherwise required pursuant to written comments received from the Commission upon a review of such S-3 Resale Shelf Registration Statement, other than as to the characterization of any Holder as an underwriter, which shall not occur unless such characterization is consistent with written information provided by the Holder in the Selling Holder Questionnaire) a “Plan of Distribution” in substantially the form attached hereto as Annex A. The Company shall use its commercially reasonable efforts to keep such S-3 Resale Shelf Registration Statement continuously 

3

 

 

effective under the Securities Act during the entire Effectiveness Period. Following the Effective Date of such S-3 Resale Shelf Registration Statement, the Company shall file with the Commission in accordance with Rule 424 the final Prospectus to be used in connection with sales pursuant to such S-3 Resale Shelf Registration Statement (whether or not such filing is technically required under such Rule) in accordance with the requirements of Rule 424.

(c)Each Holder agrees to furnish to the Company a completed Selling Holder Questionnaire in the form attached to this Agreement as Annex B. The Company shall not be required to include the Registrable Securities of a Holder in any Registration Statement if such Holder fails to furnish to the Company a fully completed Selling Holder Questionnaire at least two Business Days prior to the filing of the Resale Shelf Registration Statement or S-3 Resale Shelf Registration Statement (subject to the requirements set forth in Section 3(a)).

(d)Each Holder will deliver, upon execution of this Agreement, an executed lock-up agreement (the “Lock-Up Agreement”) in the form attached hereto as Annex C. 

3. Registration Procedures. In connection with the Company’s registration obligations hereunder:

(a) The Company shall not file a Registration Statement, any Prospectus or any amendments or supplements thereto in which the “Selling Stockholder” section thereof differs from the disclosure received from a Holder in its Selling Holder Questionnaire (as amended or supplemented). The Company shall not file a Registration Statement, any Prospectus or any amendments or supplements thereto in which it (i) characterizes any Holder as an underwriter, unless such characterization is consistent with written information provided by the Holder in the Selling Holder Questionnaire, (ii) excludes a particular Holder due to such Holder refusing to be named as an underwriter, or (iii) reduces the number of Registrable Securities being registered on behalf of a Holder without such Holder’s express written authorization. The Company shall also ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading.

(b)The Company shall (i) prepare and file with the Commission such amendments, including post-effective amendments, to each Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect to each Registration Statement or any amendment thereto, and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the Registration Statement(s) and the disposition of all Registrable Securities covered by each Registration Statement.

(c)The Company shall notify the Holders as promptly as reasonably possible (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a 

4

 

 

Registration Statement is proposed to be filed; and (B) with respect to each Registration Statement or any post-effective amendment, when the same has become effective; (ii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (iv) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(d)The Company shall use its commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Holders of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

(e)The Company shall promptly deliver to the Holders as many copies of each Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as the Holders may reasonably request. The Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.

(f)Prior to any public offering of Registrable Securities, the Company shall (i) register or qualify such Registrable Securities for offer and sale under the securities or Blue Sky laws of all jurisdictions within the United States as any Holder may request, (ii) keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and (iii) do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by the Registration Statements; provided, however, in connection with any such registration or qualification, the Company shall not be required to (A) qualify to do business in any jurisdiction where the Company would not otherwise be required to qualify, (B) subject itself to general taxation in any such jurisdiction, (C) file a general consent to service of process in any jurisdiction, or (D) make any change to the Company’s articles of incorporation or bylaws.

(g)The Company shall cooperate with the Holders who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and delivery of certificates or book-entry securities (not bearing any restrictive legend to the extent permitted by the ECCA, the Lock-Up Agreement, and the federal securities laws) representing the 

5

 

 

Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates or book-entry securities to be in such denominations or amounts, as the case may be, as the Holders may reasonably request and registered in such names as the Holders may request. 

(h)As promptly as reasonably possible upon the occurrence of any event contemplated by Section 3(c)(iv), the Company shall prepare a supplement or amendment, including a post-effective amendment, to the affected Registration Statements or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(i)For so long as the Registrable Securities that have been registered under a Registration Statement remain Registrable Securities, the Company shall notify the Holders thereof in writing of the happening of any event, as promptly as reasonably practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and shall promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission. The Company shall also notify the Holders of Registrable Securities that have been registered under a Registration Statement in writing as promptly as reasonably possible when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when the Registration Statement or any post-effective amendment relating to such Registrable Securities has become effective.

 

(j)If any Holder is required under applicable securities laws to be described in the Registration Statement as an underwriter, at the reasonable request of such Holder, the Company shall furnish to such Holder, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as a Holder may reasonably request: (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Holders, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance reasonably acceptable to such counsel and as is customarily given in an underwritten public offering, addressed to the Holders.

(k)Other than the information regarding a Holder provided by such Holder to the Company for inclusion in a Registration Statement, the Company shall hold in confidence and not make any disclosure of information concerning a Holder provided to the Company unless: (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon 

6

 

 

learning that disclosure of such information concerning a Holder is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Holder and allow such Holder, at the Holder’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

 

(l)The Company shall use its commercially reasonable efforts to cause all of the Registrable Securities covered by a Registration Statement to be listed on each national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(l).

 

(m)If requested by a Holder and to the extent legally required for the Holder to offer and sell Registrable Securities, the Company shall as soon as practicable: (i) incorporate in a prospectus supplement or post-effective amendment such information as a Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to any Registration Statement if reasonably requested by a Holder holding any Registrable Securities.

4.Registration Expenses. All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company. Notwithstanding the foregoing, whether or not any Registrable Securities are sold pursuant to a Registration Statement, the Holder will reimburse the Company for up to $75,000 of its reasonable out-of-pocket fees and expenses promptly following the Effective Date. Such fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed or quoted for trading, (B) with respect to filings with FINRA, and (C) in compliance with applicable state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by a Holder), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In no event shall the Company be responsible for any broker or similar commissions incurred by any Holder or, except to the extent provided for in this Agreement, any legal fees or other cost of the Holders in connection with this Agreement.

5.Indemnification.

(a)Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, 

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agents, investment advisors, partners, members and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable costs of preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of prospectus or in any amendment or supplement thereto. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement.

(b)Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon any untrue statement of a material fact contained in any Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent, but only to the extent that, such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of prospectus or in any amendment or supplement thereto. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder upon the sale of the Registrable Securities giving rise to such indemnification obligation.

(c)Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its 

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obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party); provided, that, the Indemnifying Party shall pay for no more than two separate sets of counsel for all Indemnified Parties and such legal counsel shall be selected by the Holders who are named as parties in the same Proceeding. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder).

(d) Contribution. If a claim for indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount 

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paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 5(d), (i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

6.Reports Under the Exchange Act. With a view to making available to the Holders the benefits of Rule 144 or any other similar rule or regulation of the SEC that may at any time permit the Holders to sell Registrable Securities of the Company to the public without registration, the Company agrees, for so long as Registrable Securities are outstanding and held by the Holders, to use its commercially reasonable efforts to:

(a)make and keep public information available, as those terms are understood, defined and required in Rule 144;

(b)file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

(c)furnish to each Holder so long as such Holder owns Registrable Securities, promptly upon request, such information as may be reasonably and customarily requested to permit the Holders to sell such securities pursuant to Rule 144 without registration.

7.Assignment of Registration Rights. Neither this Agreement nor any of the rights, interests, or obligations hereunder shall be assignable by a Holder without the prior written consent of the Company. Further, the rights under this Agreement may be assignable by the Investor to any permitted transferee of all or any portion of such Investor’s Registrable Securities (which, for the avoidance of doubt, shall include Olympus Power LLC) if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights and such transferee agrees to be bound by the terms of this Agreement, and a copy of such agreement is furnished to the Company within five (5) Business Days after such assignment; (ii) the Company is, within five (5) Business 

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Days after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act or applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements of the Lock-Up Agreement, if then in effect, and the Second Amended and Restated Certificate of Incorporation of the Company and, if applicable, the  Third Amended and Restated Limited Liability Company Operating Agreement of Stronghold Digital Mining Holdings LLC.

8.Miscellaneous.

(a)Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

(b)Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to the Registration Statement.

(c)Discontinued Disposition. Each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(ii), (iii) or (iv), such Holder will forthwith discontinue disposition of Registrable Securities under the Registration Statement until such Holder's receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

(d)Amendments and Waivers. Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Holders. Any amendment or waiver effected in accordance with this Section 8(d) shall be binding upon each Investor and the Company. No such amendment shall be effective to the extent that it applies to less than all of the Holders. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of certain Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to 

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which such waiver or consent relates.

(e)Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered to the Company if delivered to: Stronghold Digital Mining, Inc., 595 Madison Avenue, 29th Floor, New York, New York 10022, Attention: Chief Executive Officer, with a copy (which shall not constitute notice) to the Company’s counsel at Vinson & Elkins L.L.P., 1114 Avenue of the Americas, 32nd Floor, New York, New York 10036, Attention: Daniel M. LeBey and Shelley A. Barber, and if to the Holder, to the address indicated on the signature page of this Agreement, or such other address as the Holder shall provide to the Company.

(f)Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Lock-Up Agreement, if then in effect, and the Second Amended and Restated Certificate of Incorporation of the Company and, if applicable, the  Third Amended and Restated Limited Liability Company Operating Agreement of Stronghold Digital Mining Holdings LLC.

(g)Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile or email transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile or email signature were the original thereof.

(h)Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, employees or agents) will be commenced in the New York Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any Proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of this Agreement, 

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then the prevailing party in such Proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

(i)Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

(j)Entire Agreement. This Agreement and the instruments referenced herein and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

(k)Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(l)Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(m)Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder under this Agreement are several and not joint with the obligations of each other Holder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder under this Agreement. Nothing contained herein or in the ECCA, and no action taken by any Holder pursuant thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Holders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement or the ECCA. Each Holder acknowledges that no other Holder will be acting as agent of such Holder in enforcing its rights under this Agreement. Each Holder shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any Proceeding for such purpose. The Company acknowledges that each of the Holders has been provided with the same Agreement for the purpose of closing a transaction with multiple Holders and not because it was required or requested to do so by any Holder.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

COMPANY:

STRONGHOLD DIGITAL MINING, INC.

 

	
By:
	
 
	
/s/ Gregory A. Beard

	
 
	
 
	
 

	
Name:
	
 
	
Gregory A. Beard

	
Title:
	
 
	
Chief Executive Officer

	
 
	
 
	
 

 

 

14

 

 

 

INVESTOR:

PANTHER CREEK RECLAMATION HOLDINGS, LLC

 

	
By:
	
 
	
/s/ Sean P. Lane

	
 
	
 
	
 

	
Name:
	
 
	
Sean P. Lane

	
Title:
	
 
	
Authorized Representative

	
 
	
 
	
 

 

 

 

 

ADDRESS FOR NOTICE

c/o: Olympus Power, LLC 

Street: 19 Headquarters Plaza, West Tower, 8th Floor

City/State/Zip: Morristown, NJ 07969 

Attention: Sean P. Lane, EVP & General Counsel 

Tel: 

Fax: 

DELIVERY INSTRUCTIONS 
(if different from above)

c/o:

Street: 

City/State/Zip: 

Attention: 

Tel: 

 

15

 

 

 

Annex A

Plan of Distribution

 

 

 

 

Annex B

Selling Securityholder Notice and Questionnaire

 

 

Annex C 

Lock-up Agreement

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