Document:

Exhibit 10.1

 

INDEMNIFICATION AGREEMENT

 

THIS AGREEMENT (the “Agreement”) is made and entered into as of                                between Rocket Fuel Inc., a Delaware corporation (the “Company”) and [name] (“Indemnitee”).

 

WITNESSETH THAT:

 

WHEREAS, Indemnitee performs a valuable service for the Company; and

 

WHEREAS, the Board of Directors of the Company has adopted Bylaws (the “Bylaws”) providing for the indemnification of the officers and directors of the Company to the maximum extent authorized by Section 145 of the Delaware General Corporation Law, as amended (“Law”); and

 

WHEREAS, the Bylaws and the Law, by their nonexclusive nature, permit contracts between the Company and the officers or directors of the Company with respect to indemnification of such officers or directors; and

 

WHEREAS, in accordance with the authorization as provided by the Law, the Company may purchase and maintain a policy or policies of directors’ and officers’ liability insurance (“D & O Insurance”), covering certain liabilities which may be incurred by its officers or directors in the performance of their obligations to the Company; and

 

WHEREAS, in order to induce Indemnitee to continue to serve as an officer or director of the Company, the Company has determined and agreed to enter into this contract with Indemnitee;

 

NOW, THEREFORE, in consideration of Indemnitee’s service as an officer or director after the date hereof, the parties hereto agree as follows:

 

1.                                      Indemnity of Indemnitee.  The Company hereby agrees to hold harmless and indemnify Indemnitee to the full extent authorized or permitted by the provisions of the Law, as such may be amended from time to time, and Article VII of the Bylaws, as such may be amended.  In furtherance of the foregoing indemnification, and without limiting the generality thereof:

 

(a)                                 Proceedings Other Than Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(a) if, by reason of his Corporate Status (as hereinafter defined), he is, or is threatened to be made, a party to or participant in any Proceeding (as hereinafter defined) other than a Proceeding by or in the right of the Company.  Pursuant to this Section 1(a), Indemnitee shall be indemnified against all Expenses (as hereinafter defined), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if he acted in good faith and in a manner he reasonably

 

 

believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful.

 

(b)                                 Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(b) if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding brought by or in the right of the Company.  Pursuant to this Section 1(b), Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by him, or on his behalf, in connection with such Proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company; provided, however, if applicable law so provides, no indemnification against such Expenses shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and to the extent that the Court of Chancery of the State of Delaware shall determine that such indemnification may be made.

 

(c)                                  Indemnification for Expenses of a Party Who is Wholly or Partly Successful.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on the merits or otherwise, in any Proceeding, he shall be indemnified to the maximum extent permitted by law against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.  If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter.  For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

2.                                      Additional Indemnity.  In addition to, and without regard to any limitations on, the indemnification provided for in Section 1 of this Agreement, the Company shall and hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including a Proceeding by or in the right of the Company), including, without limitation, all liability arising out of the negligence or active or passive wrongdoing of Indemnitee.  The only limitation that shall exist upon the Company’s obligations pursuant to this Agreement shall be that the Company shall not be obligated to make any payment to Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof) to be unlawful under Delaware law.

 

3.                                      Contribution in the Event of Joint Liability.

 

(a)                                 Whether or not the indemnification provided in Sections 1 and 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or

 

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settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee.  The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

 

(b)                                 Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which the Law may require to be considered.  The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

 

(c)                                  The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

 

4.                                      Indemnification for Expenses of a Witness.  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

 

5.                                      Advancement of Expenses.  Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Corporate Status within ten (10) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding.  Such statement or statements shall reasonably evidence the Expenses incurred by

 

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Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses.  Any advances and undertakings to repay pursuant to this Section 5 shall be unsecured and interest free.  Notwithstanding the foregoing, the obligation of the Company to advance Expenses pursuant to this Section 5 shall be subject to the condition that, if, when and to the extent that the Company determines that Indemnitee would not be permitted to be indemnified under applicable law, the Company shall be entitled to be reimbursed, within thirty (30) days of such determination, by Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that Indemnitee should be indemnified under applicable law, any determination made by the Company that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding and Indemnitee shall not be required to reimburse the Company for any advance of Expenses until a final judicial determination is made with respect thereto (and as to which all rights of appeal therefrom have been exhausted or lapsed).

 

6.                                      Procedures and Presumptions for Determination of Entitlement to Indemnification.  It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as favorable as may be permitted under the Law and public policy of the State of Delaware.  Accordingly, the parties agree that the following procedures and presumptions shall apply in the event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:

 

(a)                                 To obtain indemnification (including, but not limited to, the advancement of Expenses and contribution by the Company) under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification.  The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification.

 

(b)                                 Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 6(a) hereof, a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case by one of the following three methods, which shall be at the election of Indemnitee: (1) by a majority vote of the disinterested directors, even though less than a quorum, (2) by independent legal counsel in a written opinion or (3) by the stockholders.

 

(c)                                  If the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6(b) hereof, the Independent Counsel shall be selected as provided in this Section 6(c).  The Independent Counsel shall be selected by Indemnitee (unless Indemnitee requests that such selection be made by the Board of Directors).  Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the

 

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ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 14 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the person so selected shall act as Independent Counsel.  If a written objection is made and substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit.  If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 6(b) hereof.  The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to Section 6(b) hereof, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of the manner in which such Independent Counsel was selected or appointed.

 

(d)                                 In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(e)                                  Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise (as hereinafter defined) in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise.  In addition, the knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.  Whether or not the foregoing provisions of this Section 6(e) are satisfied, it shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

(f)                                   If the person, persons or entity empowered or selected under Section 6 to determine whether Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not

 

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materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 30-day period may be extended for a reasonable time, not to exceed an additional fifteen (15) days, if the person, persons or entity making such determination with respect to entitlement to indemnification in good faith requires such additional time to obtain or evaluate documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 6(g) shall not apply if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination, the Board of Directors or the Disinterested Directors, if appropriate, resolve to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat.

 

(g)                                  Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any Independent Counsel, member of the Board of Directors or stockholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement.  Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

(h)                                 The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty.  In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

 

7.                                      Remedies of Indemnitee.

 

(a)                                 In the event that (i) a determination is made pursuant to Section 6 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no determination of entitlement to indemnification is made pursuant to Section 6(b) of this Agreement within 90 days after receipt by the Company of the request for indemnification,

 

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(iv) payment of indemnification is not made pursuant to this Agreement within ten (10) days after receipt by the Company of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or such determination is deemed to have been made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of his entitlement to such indemnification.  Indemnitee shall commence such proceeding seeking an adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 7(a).  The Company shall not oppose Indemnitee’s right to seek any such adjudication.

 

(b)                                 In the event that a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse determination under Section 6(b).

 

(c)                                  If a determination shall have been made pursuant to Section 6(b) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding commenced pursuant to this Section 7, absent a prohibition of such indemnification under applicable law.

 

(d)                                 In the event that Indemnitee, pursuant to this Section 7, seeks a judicial adjudication of his rights under, or to recover damages for breach of, this Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall pay on his behalf, in advance, any and all expenses (of the types described in the definition of Expenses in Section 13 of this Agreement) actually and reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of expenses or insurance recovery.

 

(e)                                  The Company shall be precluded from asserting in any judicial proceeding commenced pursuant to this Section 7 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court that the Company is bound by all the provisions of this Agreement.

 

8.                                      Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

 

(a)                                 The rights of indemnification as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the certificate of incorporation of the Company, the Bylaws, any agreement, a vote of stockholders, a resolution of directors or otherwise.  No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.  To the extent that a change in the Law, whether by statute or judicial decision, permits greater indemnification than would be afforded

 

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currently under the Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

(b)                                 To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents or fiduciaries of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any director, officer, employee, agent or fiduciary under such policy or policies.

 

(c)                                  In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(d)                                 The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

 

9.                                      Exception to Right of Indemnification.  Notwithstanding any other provision of this Agreement, Indemnitee shall not be entitled to indemnification under this Agreement with respect to any Proceeding brought by Indemnitee, or any claim therein, unless (a) the bringing of such Proceeding or making of such claim shall have been approved by the Board of Directors of the Company or (b) such Proceeding is being brought by Indemnitee to assert, interpret or enforce his rights under this Agreement

 

10.                               [Primacy of Company’s Obligations.  Notwithstanding anything to the contrary, to the extent Indemnitee is serving as a director on the Board of Directors of the Company at the request or direction of a venture capital fund or other entity, the Company acknowledges that, to the extent that Indemnitee has certain rights to indemnification and advancement of expenses from such entity and/or certain affiliates thereof (collectively, the “Secondary Indemnitors”), the Company agrees that, as between the Company and the Secondary Indemnitors, the Company is primarily responsible for amounts required to be indemnified or advanced under the Company’s certificate of incorporation or bylaws or this Agreement and any obligation of the Secondary Indemnitors to provide indemnification or advancement for the same amounts is secondary to those Company obligations.  In the event of any payment by the Secondary Indemnitors of amounts otherwise required to be indemnified or advanced by the Company under the Company’s certificate of incorporation or bylaws or this Agreement, the Secondary Indemnitors

 

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shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee for indemnification or advancement of expenses under the Company’s certificate of incorporation or bylaws or this Agreement or, to the extent such subrogation is unavailable and contribution is found to be the applicable remedy, shall have a right of contribution with respect to the amounts paid.]

 

11.                               Duration of Agreement.  All agreements and obligations of the Company contained herein shall continue during the period Indemnitee is an officer or director of the Company (or is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise) and shall continue thereafter so long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under Section 7 hereof) by reason of his Corporate Status, whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement.  This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), assigns, spouses, heirs, executors and personal and legal representatives.

 

12.                               Security.  To the extent requested by Indemnitee and approved by the Board of Directors of the Company, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral.  Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

 

13.                               Enforcement.

 

(a)                                 The Company expressly confirms and agrees that it has entered into this Agreement and assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer or director of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as an officer or director of the Company.

 

(b)                                 This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

 

14.                               Definitions.  For purposes of this Agreement:

 

(a)                                 “Corporate Status” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving at the express written request of the Company.

 

(b)                                 “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

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(c)                                  “Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, officer, employee, agent or fiduciary.

 

(d)                                 “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding.

 

(e)                                  “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.  The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

(f)                                   “Proceeding” includes any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought by or in the right of the Company or otherwise and whether civil, criminal, administrative or investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that Indemnitee is or was an officer or director of the Company, by reason of any action taken by him or of any inaction on his part while acting as an officer or director of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other Enterprise; in each case whether or not he is acting or serving in any such capacity at the time any liability or expense is incurred for which indemnification can be provided under this Agreement; including one pending on or before the date of this Agreement, but excluding one initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights under this Agreement.

 

15.                               Severability.  If any provision or provisions of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, illegal or otherwise unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain

 

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enforceable to the fullest extent permitted by law; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.  Without limiting the generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by applicable laws.  In the event any provision hereof conflicts with any applicable law, such provision shall be deemed modified, consistent with the aforementioned intent, to the extent necessary to resolve such conflict.

 

16.                               Modification and Waiver.  No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

17.                               Notice By Indemnitee.  Indemnitee agrees promptly to notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder.  The failure to so notify the Company shall not relieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company.

 

18.                               Notices.  All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

 

(a)                                 If to Indemnitee, to the address set forth below Indemnitee signature hereto.

 

(b)                                 If to the Company, to:

 

Rocket Fuel Inc.

350 Marine Parkway

Marina Park Center, Suite 220

Redwood City, CA 94065

Attention: Chief Executive Officer

 

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

 

19.                               Identical Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which

 

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together shall constitute one and the same Agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

20.                               Headings.  The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

21.                               Governing Law.  The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware without application of the conflict of laws principles thereof.

 

22.                               Gender.  Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and year first above written.

 

	
 
    	
 
    	
ROCKET   FUEL INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
George   H. John, Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
INDEMNITEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[name]
    
	
 
    	
 
    	
 
    
	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(Please type or print)Exhibit 10.3

 

 

ROCKET FUEL INC.

 

LOAN AND SECURITY AGREEMENT

 

 

 

This LOAN AND SECURITY AGREEMENT is entered into as of April 7, 2010, by and between COMERICA BANK (“Bank”) and ROCKET FUEL INC. (“Borrower”).

 

RECITALS

 

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

 

AGREEMENT

 

The parties agree as follows:

 

1.                                      DEFINITIONS AND CONSTRUCTION.

 

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

 

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

 

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

 

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

 

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

 

“Borrower State” means Delaware, the state under whose laws Borrower is organized.

 

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

 

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

 

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

 

“Cash” means unrestricted cash and cash equivalents.

 

“Cash Burn” means an amount equal to the prior month’s Cash minus the current month’s ending Cash that has been adjusted for any changes to Cash as a result of borrowings and repayments of

 

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borrowings, proceeds from the sale of equity and the exercise of stock options or warrants, paid-in-capital and minority interest, financial debt, stock and/or paid-in-capital and capital expenditures financed under a capital lease.

 

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

 

“Chief Executive Office State” means California, where Borrower’s chief executive office is located.

 

“Closing Date” means the date of this Agreement.

 

“Code” means the California Uniform Commercial Code, as amended or supplemented from time to time.

 

“Collateral” means the property described on Exhibit A attached hereto and all Negotiable Collateral and Intellectual Property Collateral to the extent not described on Exhibit A, except to the extent any such property (i) is nonassignable by its terms without the consent of the licensor thereof or another party (but only to the extent such prohibition on transfer is enforceable under applicable law, including, without limitation, Sections 9406 and 9408 of the Code), or (ii) the granting of a security interest therein is contrary to applicable law, provided that upon the cessation of any such restriction or prohibition, such property shall automatically become part of the Collateral; provided that in no case shall the definition of “Collateral” exclude any Accounts, proceeds of the disposition of any property, or general intangibles consisting of rights to payment, (iii) constitutes the capital stock of a controlled foreign corporation (as defined in the IRC), in excess of 65% of the voting power of all classes of capital stock of such controlled foreign corporations entitled to vote, or (iv) is subject to a lien described in clause (c) of the definition of Permitted Liens in which the granting of a security interest therein is prohibited by or would constitute a default under any agreement or document governing such property (but only to the extent such prohibition is enforceable under applicable law); provided that upon the termination of lapsing of any such prohibition, such property shall automatically be part of the Collateral.

 

“Collateral State” means the state or states where the Collateral is located, which is California, New York and Illinois.

 

“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any indebtedness, lease, dividend, letter of credit or other obligation of another, including, without limitation, any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards, or merchant services issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.

 

“Copyrights” means any and all copyright rights, copyright applications, copyright registrations and like protections in each work or authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret, now or hereafter existing, created, acquired or held.

 

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“Credit Extension” means each Advance or any other extension of credit by Bank to or for the benefit of Borrower hereunder.

 

“Eligible Accounts” means those Accounts that arise in the ordinary course of Borrower’s business that comply with all of Borrower’s representations and warranties to Bank set forth in Section 5.3; provided, that Bank may change the standards of eligibility by giving Borrower thirty (30) days prior written notice. Unless otherwise agreed to by Bank, Eligible Accounts shall not include the following:

 

(a)                                         Accounts that the account debtor has failed to pay in full within ninety (90) days of invoice date;

 

(b)                                         Credit balances over ninety (90) days;

 

(c)                                          Accounts with respect to an account debtor, twenty-five percent (25%) of whose Accounts the account debtor has failed to pay within ninety (90) days of invoice date;

 

(d)                                         Accounts with respect to an account debtor, including Subsidiaries and Affiliates, whose total obligations to Borrower exceed twenty five percent (25%) of all Accounts, to the extent such obligations exceed the aforementioned percentage, except as approved in writing by Bank;

 

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

 

(f)                                           Accounts with respect to which the account debtor is the United States or any department, agency, or instrumentality of the United States, except for Accounts of the United States if the payee has assigned its payment rights to Bank and the assignment has been acknowledged under the Assignment of Claims Act of l940 (31 U.S.C. 3727);

 

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

 

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

 

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

 

(j)                                            Accounts that have not yet been billed to the account debtor or that relate to deposits (such as good faith deposits) or other property of the account debtor held by Borrower for the performance of services or delivery of goods which Borrower has not yet performed or delivered;

 

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

 

(1)                                         Accounts the collection of which Bank reasonably determines after inquiry and consultation with Borrower to be doubtful; and

 

(m)                                     Retentions and hold-backs.

 

“Eligible Foreign Accounts” means Accounts with respect to which the account debtor does not have its principal place of business in the United States and that are (i) supported by one or more letters of

 

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credit in an amount and of a tenor, and issued by a financial institution, acceptable to Bank, (ii) insured by the Export Import Bank of the United States, (iii) generated by an account debtor with its principal place of business in Canada, or (iv) approved by Bank on a case-by-case basis. All Eligible Foreign Accounts must be calculated in U.S. Dollars.

 

“Environmental Laws” means all laws, rules, regulations, orders and the like issued by any federal state, local foreign or other governmental or quasi-governmental authority or any agency pertaining to the environment or to any hazardous materials or wastes, toxic substances, flammable, explosive or radioactive materials, asbestos or other similar materials.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Intellectual Property Collateral” means all of Borrower’s right, title, and interest in and to the following:

 

(a)                                         Copyrights, Trademarks and Patents;

 

(b)                                         Any and all trade secrets, and any and all intellectual property rights in computer software and computer software products now or hereafter existing, created, acquired or held;

 

(c)                                          Any and all design rights which may be available to Borrower now or hereafter existing, created, acquired or held;

 

(d)                                         Any and all claims for damages by way of past, present and future infringement of any of the rights included above, 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;

 

(e)                                          All licenses or other rights to use any of the Copyrights, Patents or Trademarks, and all license fees and royalties arising from such use to the extent permitted by such license or rights;

 

(f)                                           All amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents; and

 

(g)                                          All proceeds and products of the foregoing, including without limitation all payments under insurance or any indemnity or warranty payable in respect of any of the foregoing.

 

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“Inventory” means all present and future inventory in which Borrower has any interest.

 

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

 

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

 

“Letter of Credit” means a letter of credit issued by Bank at Borrower’s request.

 

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

 

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

 

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

 

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

 

“Net Loss” means net loss after taxes, determined in accordance with GAAP.

 

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

 

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

 

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

 

“Permitted Indebtedness” means:

 

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

 

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

 

(c)                                          Indebtedness not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year of Borrower secured by a lien described in clause (c) of the defined term “Permitted Liens;” provided such Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness;

 

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(d)                                         Indebtedness with respect to Borrower’s American Express corporate credit cards in an amount not to exceed One Hundred Thousand Dollars ($100,000);

 

(e)                                          Subordinated Debt;

 

(f)                                           The WTI Indebtedness, subject to the WTI Intercreditor Agreement;

 

(g)                                          Indebtedness consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;

 

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

 

(i)                                             Other unsecured Indebtedness in an amount not to exceed One Hundred Thousand Dollars ($100,000) at any time; and

 

(j)                                            Extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.

 

“Permitted Investment” means:

 

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

 

(b)                                         (i) Marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) Bank’s certificates of deposit maturing no more than one year from the date of investment therein, and (iv) Bank’s money market accounts;

 

(c)                                          Investments permitted by Section 7.3 hereof;

 

(d)                                         Investments accepted in connection with Permitted Transfers;

 

(e)                                          Investments of Subsidiaries in or to other Subsidiaries or Borrower and Investments by Borrower in Subsidiaries not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year;

 

(f)                                           Investments not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plan agreements approved by Borrower’s Board of Directors;

 

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

 

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

 

(i)                                             Other Investments in an aggregate amount not to exceed Fifty Thousand Dollars ($50,000) in any fiscal year; and

 

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(j)                                            Joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash Investments by Borrower do not exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year.

 

“Permitted Liens” means the following:

 

(a)                                         Any Liens existing on the Closing Date and disclosed in the Schedule (excluding Liens to be satisfied with the proceeds of the Advances) or arising under this Agreement or the other Loan Documents;

 

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

 

(c)                                          Liens not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate (i) upon or in any Equipment (other than Equipment financed by an Equipment Advance) acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such Equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such Equipment, or (ii) existing on such Equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such Equipment;

 

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

 

(e)                                          Statutory and common law rights of set-off and other similar rights;

 

(f)                                           Non-exclusive licenses or sublicenses and exclusive licenses granted in the ordinary course of Borrower’s business limited to geographic location, fields of use, and customized products for specific customers in the ordinary course of Borrower’s business and with respect to any licenses where Borrower is the licensee, any interest or title of a licensor or under any such license or sublicense;

 

(g)                                          Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the applicable Person;

 

(h)                                         Liens securing Subordinated Debt;

 

(i)                                             Deposits or Liens in the ordinary course of business under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, trade contracts (other than for the repayment of borrowed money), or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money), or to secure contracts for the purchase of property, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case, incurred in the ordinary course of business and not representing an obligation for borrowed money;

 

(j)                                            Liens in favor of WTI subject to the WTI Intercreditor Agreement;

 

(k)                                         Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Sections 8.5 or 8.9; and

 

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(l)                                             Liens in favor of other financial institutions arising in connection with Borrower’s deposit accounts held at such institutions to secured standard fees for deposit services charged by, but not financing made available by such institutions, provided that Bank has a perfected security interest in the amounts held in such deposit accounts.

 

“Permitted Transfer” means the conveyance, sale, lease, transfer or disposition by Borrower or any Subsidiary of:

 

(a)                                         Inventory in the ordinary course of business;

 

(b)                                         licenses and similar arrangements for the use of the property of Borrower or its Subsidiaries in the ordinary course of business;

 

(c)                                          worn-out or obsolete Equipment not financed with the proceeds of Equipment Advances;

 

(d)                                         Transfers that are otherwise explicitly permitted under Section 7; or

 

(e)                                          other assets of Borrower or its Subsidiaries that do not in the aggregate exceed One Hundred Thousand Dollars ($100,000) during any fiscal year.

 

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

 

“Prime Rate” means the variable rate of interest, per annum, most recently announced by Bank, as its “prime rate,” whether or not such announced rate is the lowest rate available from Bank.

 

“Responsible Officer” means each of the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer and the Controller of Borrower.

 

“Revolving Line” means a Credit Extension of up to Three Million Dollars ($3,000,000).

 

“Revolving Maturity Date” means October 7, 2011.

 

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

 

“SOS Reports” means the official reports from the Secretaries of State of each Collateral State, Chief Executive Office State and the Borrower State and other applicable federal, state or local government offices identifying all current security interests filed in the Collateral and Liens of record as of the date of such report.

 

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

 

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

 

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

 

“WTI” means Venture Lending and Leasing V, Inc.

 

“WTI Indebtedness” means up to One Million Dollars ($1,000,000) in principal amount of Indebtedness owing from Borrower to WTI.

 

“WTI Intercreditor Agreement” means that certain Intercreditor Agreement by and among WTI and Bank dated as of April 7, 2010.

 

1.2                       Accounting Terms. Any accounting term not specifically defined herein shall be construed in accordance with GAAP and all calculations shall be made in accordance with GAAP. The term “financial statements” shall include the accompanying notes and schedules.

 

2                                         LOAN AND TERMS OF PAYMENT.

 

2.1                       Credit Extensions.

 

(a)                                         Promise to Pay. Borrower promises to pay to Bank, in lawful money of the United States of America, the aggregate unpaid principal amount of all Credit Extensions made by Bank to Borrower, together with interest on the unpaid principal amount of such Credit Extensions at rates in accordance with the terms hereof.

 

(b)                                         Advances Under Revolving Line.

 

(i)                                     Amount. Subject to and upon the terms and conditions of this Agreement (1) Borrower may request Advances in an aggregate outstanding amount not to exceed the lesser of (A) the Revolving Line or (B) the Borrowing Base and (2) amounts borrowed pursuant to this Section 2.1(b) may be repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances under this Section 2.1(b) shall be immediately due and payable. Borrower may prepay any Advances without penalty or premium.

 

(ii)                                  Form of Request. Whenever Borrower desires an Advance, Borrower will notify Bank by facsimile transmission or telephone no later than 3:00 p.m. Pacific time (1:00 p.m. Pacific time for wire transfers), on the Business Day that the Advance is to be made. Each such notification shall be promptly confirmed by a Payment/Advance Form in substantially the form of Exhibit B hereto. Bank is authorized to make Advances under this Agreement, based upon instructions received from a Responsible Officer or a designee of a Responsible Officer, or without instructions if in Bank’s discretion such Advances are necessary to meet Obligations which have become due and remain unpaid. Bank shall be entitled to rely on any telephonic notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance. Bank will credit the amount of Advances made under this Section 2.1(b) to Borrower’s deposit account.

 

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

 

2.3                       Interest Rates, Payments, and Calculations.

 

(a)                                         Interest Rate for Advances. Except as set forth in Section 2.3(b), the Advances shall bear interest, on the outstanding daily balance thereof, as set forth in the Prime Referenced Rate Addendum to Loan & Security Agreement attached as Exhibit E.

 

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(b)                                 Late Fee; Default Rate. If any payment is not made within ten (10) days after the date such payment is due, Borrower shall pay Bank a late fee equal to the lesser of (i) five percent (5%) of the amount of such unpaid amount or (ii) the maximum amount permitted to be charged under applicable law. All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate equal to five (5) percentage points above the interest rate applicable immediately prior to the occurrence of the Event of Default.

 

(c)                                  Payments. Interest hereunder shall be due and payable on the first calendar day of each month during the term hereof. Bank shall, at its option, charge such interest, all Bank Expenses, and all Periodic Payments against any of Borrower’s deposit accounts or against the Revolving Line, in which case those amounts shall thereafter accrue interest at the rate then applicable hereunder. Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder.

 

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

 

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

 

2.5                               Fees. Borrower shall pay to Bank the following:

 

(a)                                 Facility Fee. Borrower has paid a fee equal to Fifteen Thousand Dollars ($15,000), which shall be nonrefundable; and

 

(b)                                 Bank Expenses. On the Closing Date, all Bank Expenses incurred through the Closing Date, and, after the Closing Date, all Bank Expenses as and when they become due.

 

2.6                               Term. This Agreement shall become effective on the Closing Date and, subject to Section 13.7, shall continue in full force and effect for so long as any Obligations (other than inchoate indemnity obligations) remain outstanding or Bank has any obligation to make Credit Extensions under this Agreement. Notwithstanding the foregoing, Bank shall have the right to terminate its obligation to make Credit Extensions under this Agreement immediately and without notice upon the occurrence and during the continuance of an Event of Default.

 

3.                                      CONDITIONS OF LOANS.

 

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

 

(a)                                 this Agreement;

 

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(b)                                 an officer’s certificate of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Agreement;

 

(c)                                  UCC National Form Financing Statement;

 

(d)                                 an intellectual property security agreement;

 

(e)                                  a warrant to purchase stock;

 

(f)                                   current SOS Reports indicating that except for Permitted Liens, there are no other security interests or Liens of record in the Collateral;

 

(g)                                  securities and/or deposit account control agreements with respect to any accounts permitted hereunder to be maintained outside Bank;

 

(h)                                 the WTI Intercreditor Agreement;

 

(i)                                     agreement to furnish insurance;

 

(j)                                    payment of the fees and Bank Expenses then due specified in Section 2.5 hereof;

 

(k)                                 current financial statements, including audited statements for Borrower’s most recently ended fiscal year, together with an unqualified opinion, company prepared consolidated and consolidating balance sheets and income statements for the most recently ended month in accordance with Section 6.2, and such other updated financial information as Bank may reasonably request;

 

(l)                                     current Compliance Certificate in accordance with Section 6.2;

 

(m)                             an audit of the Collateral, the results of which shall be satisfactory to Bank;

 

(n)                                 a Collateral Information Certificate; and

 

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

 

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

 

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

 

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

 

4.                                      CREATION OF SECURITY INTEREST.

 

4.1                               Grant of Security Interest. Borrower grants and pledges to Bank a continuing security interest in the Collateral to secure prompt repayment of any and all Obligations and to secure prompt performance by Borrower of each of its covenants and duties under the Loan Documents. Except as set forth in the Schedule and for Permitted Liens, such security interest constitutes a valid, first priority security interest in the presently existing

 

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Collateral, and will constitute a valid, first priority security interest in later-acquired Collateral. Notwithstanding any termination, Bank’s Lien on the Collateral shall remain in effect for so long as any Obligations are outstanding.

 

4.2                               Perfection of Security Interest. Borrower authorizes Bank to file at any time financing statements, continuation statements, and amendments thereto that (i) either specifically describe the Collateral or describe the Collateral as all assets of Borrower of the kind pledged hereunder, and (ii) contain any other information required by the Code for the sufficiency of filing office acceptance of any financing statement, continuation statement, or amendment, including whether Borrower is an organization, the type of organization and any organizational identification number issued to Borrower, if applicable. Borrower shall from time to time endorse and deliver to Bank, at the request of Bank, all Negotiable Collateral and other documents that Bank may reasonably request, in form satisfactory to Bank, to perfect and continue perfected Bank’s security interests in the Collateral and in order to fully consummate all of the transactions contemplated under the Loan Documents. Borrower shall have possession of the Collateral, except where expressly otherwise provided in this Agreement or where Bank chooses to perfect its security interest by possession in addition to the filing of a financing statement. Where Collateral is in possession of a third party bailee, Borrower shall take such steps as Bank reasonably requests for Bank to (i) obtain an acknowledgment, in form and substance satisfactory to Bank, of the bailee that the bailee holds such Collateral for the benefit of Bank, and (ii) obtain “control” of any Collateral consisting of investment property, deposit accounts, letter-of-credit rights or electronic chattel paper (as such items and the term “control” are defined in Revised Article 9 of the Code) by causing the securities intermediary or depositary institution or issuing bank to execute a control agreement in form and substance satisfactory to Bank. Borrower will not create any chattel paper without placing a legend on the chattel paper acceptable to Bank indicating that Bank has a security interest in the chattel paper. Borrower from time to time may deposit with Bank specific cash collateral to secure specific Obligations; Borrower authorizes Bank to hold such specific balances in pledge and to decline to honor any drafts thereon or any request by Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the specific Obligations are outstanding.

 

4.3                               Right to Inspect. Bank (through any of its officers, employees, or agents) shall have the right, upon reasonable prior notice, from time to time during Borrower’s usual business hours but no more than twice a year (unless an Event of Default has occurred and is continuing), to inspect Borrower’s Books and to make copies thereof and to check, test, and appraise the Collateral in order to verify Borrower’s financial condition or the amount, condition of, or any other matter relating to, the Collateral.

 

4.4                               Lock Box Account

 

(a)                                 Borrower shall direct all customers to mail or deliver all checks or other forms of payment for amounts owing to Borrower to a post office box designated by Bank (the “Lockbox”), over which Bank shall have exclusive and unrestricted access. As of the Closing Date, Borrower shall open the Lockbox, and thereafter Borrower shall at all times maintain the Lockbox with Bank in accordance with the terms hereof. All funds received by Borrower from any source shall immediately be directed to the Lockbox. Bank shall collect the mail delivered to such post office box, open such mail, and endorse and credit all items to the Lockbox. Borrower shall hold in trust for Bank all amounts that Borrower receives despite the directions to make payments to the post office box or Lockbox, and immediately deliver such payments to Bank in their original form as received from the customer, with proper endorsements for processing through the Lockbox. Borrower irrevocably authorizes Bank to transfer to the Lockbox any funds that have been deposited into any other accounts or that Bank has received by wire transfer, check, cash, or otherwise.

 

(b)                                 All funds flowing through the Lockbox shall automatically be transferred into a cash collateral account at Bank in Borrower’s name (the “Cash Collateral Account”), over which Bank shall have exclusive and unrestricted access. Bank shall have all right, title and interest in all of the items from time to time flowing through the Lockbox and/or held in the Cash Collateral Account and their proceeds. Neither Borrower nor any Person claiming through Borrower shall have any right or control over the use of, or any right to withdraw any amount from, the Lockbox and/or the Cash Collateral Account, each of which shall be under the sole control of Bank. Borrower shall direct all customers or other persons owing money to Borrower who make payments by electronic transfer of funds to wire such funds directly to the Cash Collateral Account.

 

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(c)                                  Borrower shall open an operating account or operating accounts at Bank (collectively, the “Operating Account”), and, so long as no Event of Default has occurred which is continuing, any amounts in the Cash Collateral Account shall be transferred by Bank to the Operating Account. During the continuance of an Event of Default, Bank may apply all or any part of the amounts in the Cash Collateral Account to the Obligations as Bank may determine in its sole discretion.

 

5.                                      REPRESENTATIONS AND WARRANTIES.

 

Borrower represents and warrants as follows:

 

5.1                               Due Organization and Qualification. Borrower and each Subsidiary is duly existing under the laws of the state in which it is organized and qualified and licensed to do business in any state in which the conduct of its business or its ownership of property requires that it be so qualified, except where the failure to do so could not reasonably be expected to cause a Material Adverse Effect.

 

5.2                               Due Authorization: No Conflict. The execution, delivery, and performance of the Loan Documents are within Borrower’s powers, have been duly authorized, and are not in conflict with nor constitute a breach of any provision contained in Borrower’s Certificate of Incorporation or Bylaws, nor will they constitute an event of default under any material agreement by which Borrower is bound. Borrower is not in default under any agreement by which it is bound, except to the extent such default could not reasonably be expected to cause a Material Adverse Effect.

 

5.3                               Collateral. Borrower has rights in or the power to transfer the Collateral, and its title to the Collateral is free and clear of Liens, adverse claims, and restrictions on transfer or pledge except for Permitted Liens. All Collateral is located solely in the Collateral States. The Eligible Accounts are bona fide existing obligations. The property or services giving rise to such Eligible Accounts has been delivered or rendered to the account debtor or its agent for immediate shipment to and unconditional acceptance by the account debtor. Borrower has not received notice of actual or imminent Insolvency Proceeding of any account debtor whose accounts are included in any Borrowing Base Certificate as an Eligible Account. All Inventory is in all material respects of good and merchantable quality, free from all material defects, except for Inventory for which adequate reserves have been made. Except as set forth in the Schedule, none of the Collateral is maintained or invested with a Person other than Bank or Bank’s Affiliates.

 

5.4                               Intellectual Property Collateral. Borrower is the sole owner of the Intellectual Property Collateral, except for licenses granted by Borrower to its customers in the ordinary course of business. To the best of Borrower’s knowledge, each of the Copyrights, Trademarks and Patents is valid and enforceable, and no part of the Intellectual Property Collateral has been judged invalid or unenforceable, in whole or in part, and no claim has been made to Borrower that any part of the Intellectual Property Collateral violates the rights of any third party except to the extent such claim could not reasonably be expected to cause a Material Adverse Effect. Except as set forth in the Schedule, Borrower’s rights as a licensee of intellectual property do not give rise to more than five percent (5%) of its gross revenue in any given month, including without limitation revenue derived from the sale, licensing, rendering or disposition of any product or service.

 

5.5                               Name; Location of Chief Executive Office. Except as disclosed in the Schedule and except to the extent Borrower has notified Bank pursuant to Section 7.2, Borrower has not done business under any name other than that specified on the signature page hereof, and its exact legal name is as set forth in the first paragraph of this Agreement. The chief executive office of Borrower is located in the Chief Executive Office State at the address indicated in Section 10 hereof.

 

5.6                               Litigation. Except as set forth in the Schedule, there are no actions or proceedings pending by or against Borrower or any Subsidiary before any court or administrative agency in which a likely adverse decision could reasonably be expected to have a Material Adverse Effect.

 

5.7                               No Material Adverse Change in Financial Statements. All consolidated and consolidating financial statements related to Borrower and any Subsidiary that are delivered by Borrower to Bank

 

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fairly present in all material respects Borrower’s consolidated and consolidating financial condition as of the date thereof and Borrower’s consolidated and consolidating results of operations for the period then ended. There has not been a material adverse change in the consolidated or in the consolidating financial condition of Borrower since the date of the most recent of such financial statements submitted to Bank.

 

5.8                               Solvency, Payment of Debts. Borrower is able to pay its debts (including trade debts) as they mature; the fair saleable value of Borrower’s assets (including goodwill minus disposition costs) exceeds the fair value of its liabilities; and Borrower is not left with unreasonably small capital after the transactions contemplated by this Agreement.

 

5.9                               Compliance with Laws and Regulations. Borrower and each Subsidiary have met the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. No event has occurred resulting from Borrower’s failure to comply with ERISA that is reasonably likely to result in Borrower’s incurring any liability that could reasonably be expected to have a Material Adverse Effect. Borrower is not an “investment company” or a company “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940. Borrower is not engaged principally, or as one of the important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulations T and U of the Board of Governors of the Federal Reserve System). Borrower has complied in all material respects with all the provisions of the Federal Fair Labor Standards Act. Borrower is in compliance with all environmental laws, regulations and ordinances except where the failure to comply is not reasonably likely to have a Material Adverse Effect. Borrower has not violated any statutes, laws, ordinances or rules applicable to it, the violation of which could reasonably be expected to have a Material Adverse Effect. Borrower and each Subsidiary have filed or caused to be filed all tax returns required to be filed, and have paid, or have made adequate provision for the payment of, all taxes reflected therein except those being contested in good faith with adequate reserves under GAAP or where the failure to file such returns or pay such taxes could not reasonably be expected to have a Material Adverse Effect.

 

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

 

5.11                        Government Consents. Borrower and each Subsidiary 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 for the continued operation of Borrower’s business as currently conducted, except where the failure to do so could not reasonably be expected to cause a Material Adverse Effect.

 

5.12                        Inbound Licenses. Except as disclosed on the Schedule, Borrower is not a party to, nor is bound by, any material license agreement under which Borrower is the licensee other than for open-source technology that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license agreement.

 

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

 

6.                                      AFFIRMATIVE COVENANTS.

 

Borrower covenants and agrees that, until payment in full of all outstanding Obligations (other than inchoate indemnity obligations), and for so long as Bank may have any commitment to make a Credit Extension hereunder, Borrower shall do all of the following:

 

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6.1                               Good Standing and Government Compliance. Borrower shall maintain its and each of its Subsidiaries’ corporate existence and good standing in the Borrower State, shall maintain qualification and good standing in each other jurisdiction in which the failure to so qualify could have a Material Adverse Effect, and shall furnish to Bank the organizational identification number issued to Borrower by the authorities of the state in which Borrower is organized, if applicable. Borrower shall meet, and shall cause each Subsidiary to meet, the minimum funding requirements of ERISA with respect to any employee benefit plans subject to ERISA. Borrower shall comply in all material respects with all applicable Environmental Laws, and maintain all material permits, licenses and approvals required thereunder where the failure to do so could have a Material Adverse Effect. Borrower shall comply, and shall cause each Subsidiary to comply, with all statutes, laws, ordinances and government rules and regulations to which it is subject, and shall maintain, and shall cause each of its Subsidiaries to maintain, in force all licenses, approvals and agreements, the loss of which or failure to comply with which could reasonably be expected to have a Material Adverse Effect.

 

6.2                               Financial Statements, Reports, Certificates. Borrower shall deliver the following to Bank: (i) as soon as available, but in any event within twenty five (25) days after the end of each calendar month, a company prepared consolidated and consolidating balance sheet and income statement covering Borrower’s operations during such period, in a form reasonably acceptable to Bank and certified by a Responsible Officer; (ii) as soon as available, but in any event within one hundred fifty (150) days after the end of Borrower’s fiscal year (beginning with the 2010 fiscal year), audited consolidated and consolidating financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an opinion which is unqualified or otherwise consented to in writing by Bank on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank; (iii) if applicable, copies of all statements, reports and notices sent or made available generally by Borrower to its security holders or to any holders of Subordinated Debt and all reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission; (iv) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened against Borrower or any Subsidiary that could reasonably be expected to result in damages or costs to Borrower or any Subsidiary of One Hundred Thousand Dollars ($100,000) or more; (v) promptly upon receipt, each management letter prepared by Borrower’s independent certified public accounting firm regarding Borrower’s management control systems; (vi) no later than twenty five (25) days prior to the end of each fiscal year of Borrower, an annual business plan including a monthly operating budget; (vii) such other budgets, sales projections, operating plans or other financial information generally prepared by Borrower in the ordinary course of business as Bank may reasonably request from time to time; and (viii) within thirty (30) days of the last day of each fiscal quarter, a report signed by Borrower, in form reasonably acceptable to Bank, listing any applications or registrations that Borrower has made or filed in respect of any Patents, Copyrights or Trademarks and the status of any outstanding applications or registrations, as well as any material change in Borrower’s Intellectual Property Collateral, including but not limited to any subsequent ownership right of Borrower in or to any Trademark, Patent or Copyright not specified in Exhibits A, B, and C of any Intellectual Property Security Agreement delivered to Bank by Borrower in connection with this Agreement.

 

(a)                                 Within twenty five (25) days after the last day of each month, Borrower shall deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in substantially the form of Exhibit C hereto, together with aged listings by invoice date of accounts receivable and accounts payable.

 

(b)                                 Within twenty five (25) days after the last day of each month, Borrower shall deliver to Bank with the monthly financial statements, a Compliance Certificate certified as of the last day of the applicable month and signed by a Responsible Officer in substantially the form of Exhibit D hereto.

 

(c)                                  As soon as possible and in any event within three (3) calendar days after becoming aware of the occurrence or existence of an Event of Default hereunder, a written statement of a Responsible Officer setting forth details of the Event of Default, and the action which Borrower has taken or proposes to take with respect thereto.

 

(d)                                 Bank shall have a right from time to time hereafter to audit Borrower’s Accounts and appraise Collateral at Borrower’s expense, provided that such audits will be conducted no more often than every six (6) months unless an Event of Default has occurred and is continuing.

 

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Borrower may deliver to Bank on an electronic basis any certificates, reports or information required pursuant to this Section 6.2, and Bank shall be entitled to rely on the information contained in the electronic files, provided that Bank in good faith believes that the files were delivered by a Responsible Officer. If Borrower delivers this information electronically, it shall also deliver to Bank by U.S. Mail, reputable overnight courier service, hand delivery, facsimile or .pdf file within five (5) Business Days of submission of the unsigned electronic copy the certification of monthly financial statements, the intellectual property report, the Borrowing Base Certificate and the Compliance Certificate, each bearing the physical signature of the Responsible Officer.

 

6.3                               Inventory; Returns. Borrower shall keep all Inventory in good and merchantable condition, free from all material defects except for Inventory for which adequate reserves have been made. Returns and allowances, if any, as between Borrower and its account debtors shall be on the same basis and in accordance with the usual customary practices of Borrower, as they exist on the Closing Date. Borrower shall promptly notify Bank of all returns and recoveries and of all disputes and claims involving more than One Hundred Thousand Dollars ($100,000).

 

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

 

6.5                               Insurance.

 

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

 

(b)                                 All such policies of insurance shall be in such form, with such companies, and in such amounts as reasonably satisfactory to Bank. All policies of property insurance shall contain a lender’s loss payable endorsement, in a form satisfactory to Bank, showing Bank as an additional loss payee, and all liability insurance policies shall show Bank as an additional insured and specify that the insurer must give at least 20 days notice to Bank before canceling its policy for any reason. Upon Bank’s request, Borrower shall deliver to Bank certified copies of the policies of insurance and evidence of all premium payments. If no Event of Default has occurred and is continuing, proceeds payable under any casualty policy will, at Borrower’s option, be payable to Borrower to replace the property subject to the claim or otherwise acquire property useful to the business of Borrower, provided that any such replacement property shall be deemed Collateral in which Bank has been granted a first priority security interest, subject to Permitted Liens. If an Event of Default has occurred and is continuing, all proceeds payable under any such policy shall, at Bank’s option, be payable to Bank to be applied on account of the Obligations.

 

6.6                               Accounts. Borrower shall maintain its primary depository and investment relationship with Bank or Bank’s Affiliates in checking, money market or Comerica Securities accounts.

 

6.7                               Financial Covenants. Borrower shall at all times maintain the following financial ratios and covenants:

 

(a)                                 Net Loss. Net Loss, measured monthly on a trailing three (3) monthly basis, shall not exceed one hundred twenty percent (120%) of the monthly Net Loss projections that have been approved by Borrower’s Board of Directors and attached to the Schedule hereto for each monthly measuring period through September 2010. Net Loss, measured monthly on a trailing three (3) month basis, shall not be more than One Hundred Fifty Thousand Dollars ($150,000) more than the monthly Net Loss projections that have been approved

 

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by Borrower’s Board of Directors and attached to the Schedule hereto for each monthly measuring period beginning with October 2010. Bank and Borrower shall mutually agree to reset the Net Loss covenant for 2011 based on Borrower’s 2011 board approved operating plan.

 

(b)                                 Minimum Cash, Term Sheet, New Equity. Borrower shall maintain a balance of unrestricted cash at Bank of not less than Seven Hundred Fifty Thousand Dollars ($750,000) at all times. Prior to Borrower’s unrestricted cash at Bank falling below such level, Borrower shall provide Bank with a signed, written, term sheet for a new round of equity from investors and on terms and conditions reasonably acceptable to Bank and in an amount not less than the greater of (i) One Million Dollars ($1,000,000) or (ii) six (6) months of net Cash Burn, measured on a trailing three (3) month basis and such new round of equity shall have closed no later than forty five (45) days after the date of such term sheet.

 

6.8                               Intellectual Property Rights.

 

(a)                                 Borrower shall register or cause to be registered (to the extent not already registered) with the United States Patent and Trademark Office or the United States Copyright Office, as the case may be, those registrable intellectual property rights now owned or hereafter developed or acquired by Borrower, to the extent that Borrower, in its reasonable business judgment, deems it appropriate to so protect such intellectual property rights.

 

(b)                                 Borrower shall give Bank written notice of any applications or registrations of intellectual property rights filed with the United States Patent and Trademark Office, including the date of such filing and the registration or application numbers, if any, in accordance with 6.2(viii).

 

(c)                                  Borrower shall (i) give Bank not less than thirty (30) days prior written notice of the filing of any applications or registrations with the United States Copyright Office, including the title of such intellectual property rights to be registered, as such title will appear on such applications or registrations, and the date such applications or registrations will be filed; (ii) prior to the filing of any such applications or registrations, execute such documents as Bank may reasonably request for Bank to maintain its perfection in such intellectual property rights to be registered by Borrower; (iii) upon the request of Bank, either deliver to Bank or file such documents simultaneously with the filing of any such applications or registrations; (iv) upon filing any such applications or registrations, promptly provide Bank with a copy of such applications or registrations together with any exhibits, evidence of the filing of any documents requested by Bank to be filed for Bank to maintain the perfection and priority of its security interest in such intellectual property rights, and the date of such filing.

 

(d)                                 Borrower shall execute and deliver such additional instruments and documents from time to time as Bank shall reasonably request to perfect and maintain the perfection and priority of Bank’s security interest in the Intellectual Property Collateral.

 

(e)                                  Borrower shall (i) protect, defend and maintain the validity and enforceability of the trade secrets, Trademarks, Patents and Copyrights, (ii) use commercially reasonable efforts to detect infringements of the Trademarks, Patents and Copyrights and promptly advise Bank in writing of material infringements detected and (iii) not allow any material Trademarks, Patents or Copyrights to be abandoned, forfeited or dedicated to the public without the written consent of Bank, which shall not be unreasonably withheld.

 

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

 

6.9                               Consent of Inbound Licensors. Prior to entering into or becoming bound by any material license agreement other than a license agreement regarding open-source technology, Borrower shall: (i) provide written notice to Bank of the material terms of such license or agreement with a description of its likely impact on

 

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Borrower’s business or financial condition; and (ii) in good faith use commercially reasonable efforts to obtain the consent of, or waiver by, any person whose consent or waiver is necessary for Borrower’s interest in such licenses or contract rights to be deemed Collateral and for Bank to have a security interest in it that might otherwise be restricted by the terms of the applicable license or agreement, whether now existing or entered into in the future, provided, however, that the failure to obtain any such consent or waiver shall not constitute a default under this Agreement.

 

6.10                        Creation/Acquisition of Subsidiaries. In the event Borrower or any Subsidiary creates or acquires any Subsidiary, Borrower and such Subsidiary shall promptly notify Bank of the creation or acquisition of such new Subsidiary and take all such action as may be reasonably required by Bank to cause such Subsidiary to guarantee the Obligations of Borrower under the Loan Documents and grant a continuing pledge and security interest in and to the collateral of such Subsidiary (substantially as described on Exhibit A hereto), and Borrower shall grant and pledge to Bank a perfected security interest in the stock, units or other evidence of ownership of such Subsidiary.

 

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

 

7.                                      NEGATIVE COVENANTS.

 

Borrower covenants and agrees that, so long as any credit hereunder shall be available and until the outstanding Obligations (other than inchoate indemnity obligations) are paid in full or for so long as Bank may have any commitment to make any Credit Extensions, Borrower will not do any of the following without Bank’s prior written consent, which shall not be unreasonably withheld:

 

7.1                               Dispositions. Convey, sell, lease, license, transfer or otherwise dispose of (collectively, to “Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, or move cash balances on deposit with Bank to accounts opened at another financial institution, other than Permitted Transfers.

 

7.2                               Change in Name, Location, Executive Office, or Executive Management; Change in Business; Change in Fiscal Year; Change in Control. Change its name or the Borrower State or relocate its chief executive office without ten (10) days’ prior written notification to Bank; replace its chief executive officer or chief financial officer without prompt written notification to Bank; engage in any business, or permit any of its Subsidiaries to engage in any business, other than or reasonably related or incidental to the businesses currently engaged in by Borrower; change its fiscal year end; suffer or permit a Change in Control.

 

7.3                               Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or consolidate, with or into any other business organization (other than mergers or consolidations of a Subsidiary into another Subsidiary or into Borrower), or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person except where (i) the cash consideration paid by Borrower or its Subsidiaries in connection with such transactions do not in the aggregate exceed One Hundred Thousand Dollars ($100,000) during any fiscal year, (ii) no Event of Default has occurred, is continuing or would exist after giving effect to such transactions, (iii) such transactions do not result in a Change in Control, and (iv) Borrower is the surviving entity.

 

7.4                               Indebtedness. Create, incur, assume, guarantee or be or remain liable with respect to any Indebtedness, or permit any Subsidiary so to do, other than Permitted Indebtedness, or prepay any Indebtedness or take any actions which impose on Borrower an obligation to prepay any Indebtedness, except Indebtedness to Bank.

 

7.5                               Encumbrances. Create, incur, assume or allow any Lien with respect to any of its property, or assign or otherwise convey any right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries so to do, except for Permitted Liens, or covenant to any other Person (other than (i) Bank, (ii) WTI, (iii) licensors of in-licensed property with respect to such property, (iv) lessors of specific equipment or lenders financing specific equipment with respect to such leased or financed equipment, and (v) Persons with which

 

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Borrower or its Subsidiaries have entered into a contract of sale with respect to property that is otherwise allowed as a Permitted Transfer) that Borrower in the future will refrain from creating, incurring, assuming or allowing any Lien with respect to any of Borrower’s property.

 

7.6                               Distributions. Pay any dividends or make any other distribution or payment on account of or in redemption, retirement or purchase of any capital stock, except that Borrower may (i) repurchase the stock of former employees, consultants or directors pursuant to stock repurchase agreements as long as an Event of Default does not exist prior to such repurchase or would not exist after giving effect to such repurchase, and (ii) repurchase the stock of former employees, consultants or directors pursuant to stock repurchase agreements by the cancellation of indebtedness owed by such former employees to Borrower regardless of whether an Event of Default exists, (iii) pay dividends in capital stock, and (iv) pay cash in lieu of fractional shares.

 

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

 

7.8                               Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower except for (i) transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person, and (ii) equity security or Subordinated Debt issuances to existing stockholders of the Company.

 

7.9                               Subordinated Debt. Make any payment in respect of any Subordinated Debt, or permit any of its Subsidiaries to make any such payment, except in compliance with the terms of such Subordinated Debt, or amend any provision affecting Bank’s rights contained in any documentation relating to the Subordinated Debt without Bank’s prior written consent.

 

7.10                        Inventory and Equipment. Store the Inventory or the Equipment with a value in excess of Fifty Thousand Dollars ($50,000) with a bailee, warehouseman, or similar third party unless the third party has been notified of Bank’s security interest and Bank (a) has received an acknowledgment from the third party that it is holding or will hold the Inventory or Equipment for Bank’s benefit or (b) is in possession of the warehouse receipt, where negotiable, covering such Inventory or Equipment. Except for Inventory sold in the ordinary course of business and movable items of personal property such as laptop computers, and except for such other locations as Bank may approve in writing, Borrower shall keep the Inventory and Equipment only at the location set forth in Section 10 and such other locations of which Borrower gives Bank prior written notice and as to which Bank files a financing statement, or takes other action, where needed to perfect its security interest.

 

7.11                        No Investment Company: Margin Regulation. Become or be controlled by an “investment company,” within the meaning of the Investment Company Act of 1940, or become principally engaged in, or undertake as one of its important activities, the business of extending credit for the purpose of purchasing or carrying margin stock, or use the proceeds of any Credit Extension for such purpose.

 

7.12                        Negative Pledge Agreements. Permit the inclusion in any contract to which it or a Subsidiary becomes a party of any provisions that could restrict or invalidate the creation of a security interest in any of Borrower’s or such Subsidiary’s property.

 

8.                                      EVENTS OF DEFAULT.

 

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

 

8.1                               Payment Default. If Borrower fails to pay any of the Obligations when due;

 

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8.2                               Covenant Default.

 

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

 

(b)                                 If Borrower fails or neglects to perform or observe any other material term, provision, condition, covenant contained in this Agreement, in any of the Loan Documents, or in any other present or future agreement between Borrower and Bank and as to any default under such other term, provision, condition or covenant that can be cured, has failed to cure such default within ten (10) days after Borrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional reasonable period (which shall not in any case exceed thirty (30) days) to attempt to cure such default, and within such reasonable time period the failure to have cured such default shall not be deemed an Event of Default but no Credit Extensions will be made;

 

8.3                               Defective Perfection. If Bank shall receive at any time following the Closing Date an SOS Report indicating that except for Permitted Liens, Bank’s security interest in the Collateral is not prior to all other security interests or Liens of record reflected in such SOS Report;

 

8.4                               Investor Support If Borrower fails to deliver to Bank within fourteen (14) days of Bank’s request, written evidence from Borrower’s existing and current equity investors, which evidence and investors shall be satisfactory to Bank, that such investors shall provide capital to Borrower in an amount not less than the greater of (i) One Million Dollars ($1,000,000) or (ii) six (6) months of net Cash Burn, measured on a trailing three (3) month basis, following the date of Bank’s request and/or if Borrower’s investors fail to comply with the terms of such written evidence. Borrower and Bank agree that Bank shall have the right to request such evidence of investor support at any time Borrower’s Cash is less than or equal to four (4) months of net Cash Burn, measured on a trailing three (3) month basis.

 

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

 

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

 

8.7                               Other Agreements. If there is a default or other failure to perform in any agreement to which Borrower is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of One Hundred Thousand Dollars ($100,000) or that could have a Material Adverse Effect;

 

8.8                               Subordinated Debt. If Borrower makes any payment on account of Subordinated Debt, except to the extent such payment is allowed under any subordination agreement entered into with Bank;

 

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8.9                               Judgments. If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least One Hundred Thousand Dollars ($100,000) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of ten (10) days (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment); or

 

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

 

9.                                      BANK’S RIGHTS AND REMEDIES.

 

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

 

(a)                                 Declare all Obligations, whether evidenced by this Agreement, by any of the other Loan Documents, or otherwise, immediately due and payable (provided that upon the occurrence of an Event of Default described in Section 8.6, all Obligations shall become immediately due and payable without any action by Bank);

 

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

 

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

 

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

 

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

 

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

 

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

 

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(h)                                 Sell the Collateral at either a public or private sale, or both, by way of one or more contracts or transactions, for cash or on terms, in such manner and at such places (including Borrower’s premises) as Bank determines is commercially reasonable, and apply any proceeds to the Obligations in whatever manner or order Bank deems appropriate. Bank may sell the Collateral without giving any warranties as to the Collateral. Bank may specifically disclaim any warranties of title or the like. This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. If Bank sells any of the Collateral upon credit, Borrower will be credited only with payments actually made by the purchaser, received by Bank, and applied to the indebtedness of the purchaser. If the purchaser fails to pay for the Collateral, Bank may resell the Collateral and Borrower shall be credited with the proceeds of the sale;

 

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

 

(j)                                    Apply for the appointment of a receiver, trustee, liquidator or conservator of the Collateral, without notice and without regard to the adequacy of the security for the Obligations and without regard to the solvency of Borrower, any guarantor or any other Person liable for any of the Obligations; and

 

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

 

Bank may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral.

 

9.2                               Power of Attorney. Effective only upon the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably appoints Bank (and any of Bank’s designated officers, or employees) as Borrower’s true and lawful attorney to: (a) send requests for verification of Accounts or notify account debtors of Bank’s security interest in the Accounts; (b) endorse Borrower’s name on any checks or other forms of payment or security that may come into Bank’s possession; (c) sign Borrower’s name on any invoice or bill of lading relating to any Account, drafts against account debtors, schedules and assignments of Accounts, verifications of Accounts, and notices to account debtors; (d) dispose of any Collateral; (e) make, settle, and adjust all claims under and decisions with respect to Borrower’s policies of insurance; (f) settle and adjust disputes and claims respecting the accounts directly with account debtors, for amounts and upon terms which Bank determines to be reasonable; (g) to modify, in its sole discretion, any intellectual property security agreement entered into between Borrower and Bank without first obtaining Borrower’s approval of or signature to such modification by amending Exhibits A, B, and C, thereof, as appropriate, to include reference to any right, title or interest in any Copyrights, Patents or Trademarks acquired by Borrower after the execution hereof or to delete any reference to any right, title or interest in any Copyrights, Patents or Trademarks in which Borrower no longer has or claims to have any right, title or interest; and (h) to file, in its sole discretion, one or more financing or continuation statements and amendments thereto, relative to any of the Collateral without the signature of Borrower where permitted by law; provided Bank may exercise such power of attorney to sign the name of Borrower on any of the documents described in clauses (g) and (h) above, regardless of whether an Event of Default has occurred. The appointment of Bank as Borrower’s attorney in fact, and each and every one of Bank’s rights and powers, being coupled with an interest, is irrevocable until all of the Obligations (other than inchoate indemnity obligations) have been fully repaid and performed and Bank’s obligation to provide Credit Extensions hereunder is terminated.

 

9.3                               Accounts Collection. At any time after the occurrence and during the continuance of an Event of Default, Bank may notify any Person owing funds to Borrower of Bank’s security interest in such funds and verify the amount of such Account. Borrower shall collect all amounts owing to Borrower for Bank, receive in trust all payments as Bank’s trustee, and immediately deliver such payments to Bank in their original form as received from the account debtor, with proper endorsements for deposit.

 

9.4                               Bank Expenses. If Borrower fails to pay any amounts or furnish any required proof of payment due to third persons or entities, as required under the terms of this Agreement, then Bank may do any or all of the following after reasonable notice to Borrower: (a) make payment of the same or any part thereof; (b) set up such reserves under the Revolving Line as Bank deems necessary to protect Bank from the exposure created by such failure; or (c) obtain and maintain insurance policies of the type discussed in Section 6.5 of this Agreement, and take

 

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any action with respect to such policies as Bank deems prudent. Any amounts so paid or deposited by Bank shall constitute Bank Expenses, shall be immediately due and payable, and shall bear interest at the then applicable rate hereinabove provided, and shall be secured by the Collateral. Any payments made by Bank shall not constitute an agreement by Bank to make similar payments in the future or a waiver by Bank of any Event of Default under this Agreement.

 

9.5                               Bank’s Liability for Collateral. Bank has no obligation to clean up or otherwise prepare the Collateral for sale. All risk of loss, damage or destruction of the Collateral shall be borne by Borrower.

 

9.6                               No Obligation to Pursue Others. Bank has no obligation to attempt to satisfy the Obligations by collecting them from any other Person liable for them and Bank may release, modify or waive any collateral provided by any other Person to secure any of the Obligations, all without affecting Bank’s rights against Borrower. Borrower waives any right it may have to require Bank to pursue any other Person for any of the Obligations.

 

9.7                               Remedies Cumulative. Bank’s rights and remedies under this Agreement, the Loan Documents, and all other agreements shall be cumulative. Bank shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by Bank of one right or remedy shall be deemed an election, and no waiver by Bank of any Event of Default on Borrower’s part shall be deemed a continuing waiver. No delay by Bank shall constitute a waiver, election, or acquiescence by it. No waiver by Bank shall be effective unless made in a written document signed on behalf of Bank and then shall be effective only in the specific instance and for the specific purpose for which it was given. Borrower expressly agrees that this Section may not be waived or modified by Bank by course of performance, conduct, estoppel or otherwise.

 

9.8                               Demand; Protest. Except as otherwise provided in this Agreement, Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment and any other notices relating to the Obligations.

 

10.                               NOTICES.

 

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

 

	
If   to Borrower: 
    	
ROCKET   FUEL INC.
    
	
 
    	
350   Marine Parkway, Suite 220
    
	
 
    	
Redwood   Shores, CA 94065
    
	
 
    	
Attn:
    
	
 
    	
FAX:   (       )
    
	
 
    	
 
    
	
If   to Bank: 
    	
Comerica   Bank
    
	
 
    	
39200   Six Mile Road, M/C 7578
    
	
 
    	
Livonia,   Michigan 48152
    
	
 
    	
Attn:   National Documentation Services
    
	
 
    	
 
    
	
with   a copy to: 
    	
Comerica   Bank
    
	
 
    	
250   Lytton Ave, 3rd Floor
    
	
 
    	
Palo   Alto, CA 94301
    
	
 
    	
Attn:   Dennis Rapoport
    
	
 
    	
FAX:   650-462-6049
    

 

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

 

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

 

This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of California, without regard to principles of conflicts of law. Each of Borrower and Bank hereby submits to the exclusive jurisdiction of the state and Federal courts located in the State of California. THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT BETWEEN THE UNDERSIGNED PARTIES.

 

12.                               REFERENCE PROVISION.

 

In the event the Jury Trial Waiver set forth above is not enforceable, the parties elect to proceed under this Judicial Reference Provision.

 

12.1                        Mechanics.

 

(a)                                 With the exception of the items specified in clause (b), below, any controversy, dispute or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement or any other document, instrument or agreement between the undersigned parties (collectively in this Section, the “Comerica Documents”), will be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in the Comerica Documents, venue for the reference proceeding will be in the state or federal court in the county or district where the real property involved in the action, if any, is located or in the state or federal court in the county or district where venue is otherwise appropriate under applicable law (the “Court”).

 

(b)                                 The matters that shall not be subject to a reference are the following: (i) foreclosure of any security interests in real or personal property, (ii) exercise of self-help remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv) temporary, provisional or ancillary remedies (including, without limitation, writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions). This reference provision does not limit the right of any party to exercise or oppose any of the rights and remedies described in clauses (i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does not waive the right of any party to a reference pursuant to this reference provision as provided herein.

 

(c)                                  The referee shall be a retired judge or justice selected by mutual written agreement of the parties. If the parties do not agree within ten (10) days of a written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the Court (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to the referee selected by the Presiding Judge of the Court (or his or her representative).

 

(d)                                 The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, subject to change in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within fifteen (15) days after the date of selection of the referee, (ii) if practicable, try all issues of law or fact within one hundred twenty (120) days after the date of the conference and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision.

 

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(e)                                  The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or cutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shown, no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding.

 

12.2                        Procedures. Except as expressly set forth herein, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript. The party making such a request shall have the obligation to arrange for and pay the court reporter. Subject to the referee’s power to award costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter at trial.

 

12.3                        Application of Law. The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a court proceeding, including without limitation motions for summary judgment or summary adjudication. The referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court and any such decision will be final, binding and conclusive. The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order entered by the referee. The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provision.

 

12.4                        Repeal. If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge or justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.

 

12.5                        THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER COMERICA DOCUMENTS.

 

13.                               GENERAL PROVISIONS.

 

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

 

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13.2                        Indemnification. Borrower shall defend, indemnify and hold harmless Bank and its officers, employees, and agents against: (a) all obligations, demands, claims, and liabilities claimed or asserted by any other party in connection with the transactions contemplated by this Agreement; and (b) all losses or Bank Expenses in any way suffered, incurred, or paid by Bank, its officers, employees and agents as a result of or in any way arising out of, following, or consequential to transactions between Bank and Borrower whether under this Agreement, or otherwise (including without limitation reasonable attorneys’ fees and expenses), except for losses caused by Bank’s gross negligence or willful misconduct.

 

13.3                        Time of Essence. Time is of the essence for the performance of all obligations set forth in this Agreement.

 

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

 

13.5                        Amendments in Writing, Integration. All amendments to or terminations of this Agreement or the other Loan Documents must be in writing. All prior agreements, understandings, representations, warranties, and negotiations between the parties hereto with respect to the subject matter of this Agreement and the other Loan Documents, if any, are merged into this Agreement and the Loan Documents.

 

13.6                        Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.

 

13.7                        Survival. All covenants, representations and warranties made in this Agreement shall continue in full force and effect so long as any Obligations remain outstanding or Bank has any obligation to make any Credit Extension to Borrower. The obligations of Borrower to indemnify Bank with respect to the expenses, damages, losses, costs and liabilities described in Section 13.2 shall survive until all applicable statute of limitations periods with respect to actions that may be brought against Bank have run.

 

[Balance of Page Intentionally Left Blank]

 

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

 

	
 
    	
ROCKET   FUEL INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   George John
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
COMERICA   BANK
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ramesh Bart
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
VP
    

 

[Signature Page to Loan and Security Agreement]

 

 

	
DEBTOR:
    	
ROCKET FUEL INC.
    
	
 
    	
 
    
	
SECURED PARTY:
    	
COMERICA BANK
    

 

EXHIBIT A

 

COLLATERAL DESCRIPTION ATTACHMENT

TO UCC NATIONAL FORM FINANCING STATEMENT

 

All personal property of Borrower (herein referred to as “Borrower” or “Debtor”) whether presently existing or hereafter created or acquired, and wherever located, including, but not limited to:

 

(a)                                         all accounts (including health-care-insurance receivables), chattel paper (including tangible and electronic chattel paper), deposit accounts, documents (including negotiable documents), equipment (including all accessions and additions thereto), general intangibles (including payment intangibles and software), goods (including fixtures), instruments (including promissory notes), inventory (including all goods held for sale or lease or to be furnished under a contract of service, and including returns and repossessions), investment property (including securities and securities entitlements), letter of credit rights, money, and all of Debtor’s books and records with respect to any of the foregoing, and the computers and equipment containing said books and records;

 

(b)                                         all common law and statutory copyrights and copyright registrations, applications for registration, now existing or hereafter arising, in the United States of America or in any foreign jurisdiction, obtained or to be obtained on or in connection with any of the foregoing, or any parts thereof or any underlying or component elements of any of the foregoing, together with the right to copyright and all rights to renew or extend such copyrights and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name of the Debtor for past, present and future infringements of copyright;

 

(c)                                          all trademarks, service marks, trade names and service names and the goodwill associated therewith, together with the right to trademark and all rights to renew or extend such trademarks and the right (but not the obligation) of Secured Party to sue in its own name and/or in the name of the Debtor for past, present and future infringements of trademark;

 

(d)                                         all (i) patents and patent applications filed in the United States Patent and Trademark Office or any similar office of any foreign jurisdiction, and interests under patent license agreements, including, without limitation, the inventions and improvements described and claimed therein, (ii) licenses pertaining to any patent whether Debtor is licensor or licensee, (iii) income, royalties, damages, payments, accounts and accounts receivable now or hereafter due and/or payable under and with respect thereto, including, without limitation, damages and payments for past, present or future infringements thereof, (iv) right (but not the obligation) to sue in the name of Debtor and/or in the name of Secured Party for past, present and future infringements thereof, (v) rights corresponding thereto throughout the world in all jurisdictions in which such patents have been issued or applied for, and (vi) reissues, divisions, continuations, renewals, extensions and continuations-in-part with respect to any of the foregoing; and

 

(e)                                          any and all cash proceeds and/or noncash proceeds of any of the foregoing, including, without limitation, insurance proceeds, and all supporting obligations and the security therefor or for any right to payment. All terms above have the meanings given to them in the California Uniform Commercial Code, as amended or supplemented from time to time, including revised Division 9 of the Uniform Commercial Code-Secured Transactions, added by Stats. 1999, c.991 (S.B. 45), Section 35, operative July 1, 2001.

 

Notwithstanding the foregoing, the Collateral shall not include any property that property that: (i) is nonassignable by its terms without the consent of the licensor thereof or another party (but only to the extent such prohibition on transfer is enforceable under applicable law, including, without limitation, Sections 9406 and 9408 of the Code), or (ii) the granting of a security interest therein is contrary to applicable law, provided that upon the cessation of any such restriction or prohibition, such property shall automatically become part of the Collateral; provided that in no case shall the definition of “Collateral” exclude any Accounts, proceeds of the

 

 

disposition of any property, or general intangibles consisting of rights to payment, (iii) constitutes the capital stock of a controlled foreign corporation (as defined in the IRC), in excess of 65% of the voting power of all classes of capital stock of such controlled foreign corporations entitled to vote, or (iv) is subject to a lien described in clause (c) of the definition of Permitted Liens in which the granting of a security interest therein is prohibited by or would constitute a default under any agreement or document governing such property (but only to the extent such prohibition is enforceable under applicable law); provided that upon the termination of lapsing of any such prohibition, such property shall automatically be part of the Collateral.

 

 

EXHIBIT B

 

TECHNOLOGY & LIFE SCIENCES DIVISION

LOAN ANALYSIS

LOAN ADVANCE/PAYDOWN REQUEST FORM

DEADLINE FOR SAME DAY PROCESSING IS [3:00* P.M., Pacific Time/ 3:30 P.M. Eastern Time]

FORMULA BASED LINES: DEADLINE FOR NEXT DAY PROCESSING IS [3:00* P.M., Pacific Time/ 3:30 P.M. Eastern Time]

DEADLINE FOR EQUIPMENT ADVANCES IS [3:00 P.M., Pacific Time/ 3:30 P.M. Eastern Time ]**

DEADLINE FOR WIRE TRANSFERS IS [1:30 P.M., Pacific Time/ 3:30 P.M. Eastern Time]

[*At month end and the day before a holiday, the cut off time is 1:30 P.M., Pacific Time]

**Subject to 3 day advance notice.

 

	
To:   Loan Analysis
    	
 
    	
DATE:
    	
 
    	
 
    	
TIME:
    	
 
    
	
FAX   #: (650) 846-6840
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
FROM:
    	
ROCKET   FUEL INC.
    	
 
    	
TELEPHONE   REQUEST (For Bank Use Only):
    
	
 
    	
Borrower’s   Name
    	
 
    	
 
    
	
FROM:
    	
 
    	
 
    	
The   following person is authorized to request the loan payment transfer/loan   advance on the designated account and is known to me.
    
	
 
    	
Authorized   Signer’s Name
    
	
FROM:
    	
 
    	
 
    	
 
    
	
 
    	
Authorized   Signer’s Name
    	
 
    	
Authorized   Request & Phone #
    
	
PHONE   #:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Received   by (Bank) & Phone #
    
	
FROM   ACCOUNT#:
    	
 
    
	
(please   include Note number, if applicable)
    	
 
    
	
TO   ACCOUNT #:
    	
Authorized   Signature (Bank)
    
	
(please   include Note number, if applicable)
    	
 
    

 

	
REQUESTED TRANSACTION TYPE 
    	
 
    	
REQUESTED   DOLLAR AMOUNT
    	
 
    	
For   Bank Use Only
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
PRINCIPAL   INCREASE* (ADVANCE) 
    	
 
    	
$
    	
 
    	
Date   Rec’d:
    
	
PRINCIPAL   PAYMENT (ONLY) 
    	
 
    	
$
    	
 
    	
Time:
    
	
 
    	
 
    	
 
    	
 
    	
Comp.   Status: 
    	
YES
    	
NO   
    
	
OTHER   INSTRUCTIONS:
    	
 
    	
 
    	
 
    	
Status   Date:
    
	
 
    	
 
    	
 
    	
 
    	
Time:
    
	
 
    	
 
    	
 
    	
 
    	
Approval:
    

 

All representations and warranties of Borrower stated in the Loan Agreement are true, correct and complete in all material respects as of the date of the telephone request for and advance confirmed by this Borrowing Certificate; provided, however, that those representations and warranties the date expressly referring to another date shall be true, correct and complete in all material respects as of such date.

 

*IS THERE A WIRE REQUEST TIED TO THIS LOAN ADVANCE? (PLEASE CIRCLE ONE       YES       NO

 

If YES, the Outgoing Wire Transfer Instructions must be completed below.

 

	
OUTGOING WIRE TRANSFER INSTRUCTIONS 
    	
Fed   Reference Number 
    	
Bank   Transfer Number
    
	
 
    	
 
    	
 
    
	
The items marked with an asterisk (*) are   required to be completed.
    
	
 
    
	
*Beneficiary   Name
    	
 
    	
 
    
	
*Beneficiary   Account Number
    	
 
    	
 
    
	
*Beneficiary   Address
    	
 
    	
 
    
	
Currency   Type 
    	
US DOLLARS ONLY
    
	
*ABA   Routing Number (9 Digits)
    	
 
    	
 
    
	
*Receiving   Institution Name
    	
 
    	
 
    
	
*Receiving   Institution Address
    	
 
    	
 
    
	
*Wire   Account 
    	
$
    	
 
    
					

 

 

EXHIBIT C

 

BORROWING BASE CERTIFICATE

 

	
Borrower:   ROCKET FUEL INC.
    	
 
    	
Lender: Comerica Bank
    
	
 
    	
 
    	
 
    
	
Commitment   Amount: $3,000,000
    	
 
    	
 
    

 

	
ACCOUNTS RECEIVABLE
    	
 
    
	
1.
    	
 
    	
Accounts   Receivable Book Value as of
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
2.
    	
 
    	
Additions   (please explain on reverse)
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
3.
    	
 
    	
TOTAL   ACCOUNTS RECEIVABLE
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
ACCOUNTS RECEIVABLE DEDUCTIONS (without   duplication)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.
    	
 
    	
Amounts   over 90 days due
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    
	
5.
    	
 
    	
Balance   of 25% over 90 day accounts
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    
	
6.
    	
 
    	
Concentration   Limits
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    
	
7.
    	
 
    	
Foreign   Accounts
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    
	
8.
    	
 
    	
Governmental   Accounts
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    
	
9.
    	
 
    	
Contra   Accounts
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    
	
10.
    	
 
    	
Demo   Accounts
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    
	
11.
    	
 
    	
Intercompany/Employee   Accounts
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    
	
12.
    	
 
    	
Other   (please explain on reverse)
    	
 
    	
$
    	
 
    	
 
    	
 
    	
 
    
	
13.
    	
 
    	
TOTAL   ACCOUNTS RECEIVABLE DEDUCTIONS
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
14.
    	
 
    	
Eligible   Accounts (#3 minus #13)
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
15.
    	
 
    	
LOAN   VALUE OF ACCOUNTS (80% of #14)
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
BALANCES
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
16.
    	
 
    	
Maximum   Loan Amount
    	
 
    	
 
    	
 
    	
$
    	
3,000,000
    	
 
    
	
17.
    	
 
    	
Total   Funds Available [Lesser of #16 or #15]
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
18.
    	
 
    	
Present   balance owing on Line of Credit
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
19.
    	
 
    	
Outstanding   under Sublimits (e.g., Letters of Credit)
    	
 
    	
 
    	
 
    	
N/A
    	
 
    
	
20.
    	
 
    	
RESERVE   POSITION (#17 minus #18 and #19)
    	
 
    	
 
    	
 
    	
$
    	
 
    	
 
    

 

The undersigned represents and warrants that the foregoing is true, complete and correct, and that the information reflected in this Borrowing Base Certificate complies with the representation and warranties set forth in the Loan and security Agreement between the undersigned and Comerica Bank.

 

ROCKET FUEL INC.

 

	
By:
    	
 
    	
 
    
	
 
    	
Authorized Signer
    	
 
    

 

 

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

Please send all Required Reporting to:                        Comerica Bank

Technology & Life Sciences Division

Loan Analysis Department

Five Palo Alto Square, Suite 800

3000 El Camino Real

Palo Alto, CA 94306

Phone: (650) 846-6820

Fax: (650) 846-6840

 

FROM:                             ROCKET FUEL INC.

 

The undersigned authorized Officer of ROCKET FUEL INC. (“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending                                          with all required covenants, including without limitation the ongoing registration of intellectual property rights in accordance with Section 6.8, except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.

 

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

 

	
REPORTING COVENANTS
    	
 
    	
REQUIRED
    	
 
    	
COMPLIES
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Company   Prepared Monthly F/S
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Compliance   Certificate
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
CPA   Audited, Unqualified F/S
    	
 
    	
Annually,   within 150 days of FYE
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Borrowing   Base Cert., A/R & A/P Agings
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Annual   Business Plan (incl. operating budget)
    	
 
    	
25   days prior to FYE
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Intellectual   Property Report
    	
 
    	
Quarterly   within 30 days
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Audit
    	
 
    	
Semi-annual
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
If   Public:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10-Q
    	
 
    	
Quarterly,   within 5 days of SEC filing (50 days)
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
10-K
    	
 
    	
Annually,   within 5 days of SEC filing (95 days)
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total   amount of Borrower’s cash and investments
    	
 
    	
Amount:   $
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Total   amount of Borrower’s cash and investments maintained with Bank
    	
 
    	
Amount:   $
    	
 
    	
YES
    	
 
    	
NO
    	
 
    

 

	
REPORTING   COVENANTS
    	
 
    	
DESCRIPTION
    	
 
    	
APPLICABLE
    	
 
    
	
Legal   Action > $100,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Inventory   Disputes > $100,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Mergers &   Acquisitions > $100,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Cross   default with other agreements > $100,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Judgment   > $100,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    	
 
    

 

 

	
FINANCIAL
    	
 
    	
REQUIRED
    	
 
    	
ACTUAL
    	
 
    	
COMPLIES
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TO BE TESTED MONTHLY, UNLESS   OTHERWISE NOTED):
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net   Loss to Plan (through October 2010)
    	
 
    	
Not   more than 120% of Plan
    	
 
    	
 
    	
%
    	
YES
    	
 
    	
NO
    	
 
    
	
Net   Loss to Plan (beginning November 2010)
    	
 
    	
Less   than $150,000 more than Plan
    	
 
    	
$
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Minimum Cash
    	
 
    	
$750,000
    	
 
    	
$
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Term Sheet
    	
 
    	
Prior   to cash falling below $750,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
New Equity Received
    	
 
    	
45   days after the date of the term sheet
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    

 

	
OTHER COVENANTS
    	
 
    	
REQUIRED
    	
 
    	
ACTUAL
    	
 
    	
COMPLIES
    	
 
    
	
Permitted   Indebtedness for equipment leases
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Permitted   Investments for stock repurchase
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Permitted   Investments for subsidiaries
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Permitted   Investments for employee loans
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Permitted   Investments for joint ventures
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Permitted   Liens for equipment leases
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    
	
Permitted   Transfers
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    	
 
    

 

Please Enter Below Comments Regarding Violations:

 

The Officer further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement, including, without limitation, the financial covenants, no credit extensions will be made.

 

	
Very truly yours,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Authorized Signer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Title:
    	
 
    

 

 

EXHIBIT E

 

 

FPrime Referenced Rate Addendum To
 Loan and Security Agreement

 

This Prime Referenced Rate Addendum to Loan and Security Agreement (this “Addendum”) is entered into as of April 7, 2010, by and between Comerica Bank (“Bank”) and ROCKET FUEL INC. (“Borrower”). This Addendum supplements the terms of the Loan and Security Agreement dated as of April 7, 2010 (as the same may be amended, modified, supplemented, extended or restated from time to time, collectively, the “Agreement”).

 

1.             Definitions. As used in this Addendum, the following terms shall have the following meanings. Initially capitalized terms used and not defined in this Addendum shall have the meanings ascribed thereto in the Agreement.

 

a.         “Applicable Margin” means three percent (3.00%) per annum.

 

b.         “Business Day” means any day, other than a Saturday, Sunday or any other day designated as a holiday under Federal or applicable State statute or regulation, on which Bank is open for all or substantially all of its domestic and international business (including dealings in foreign exchange) in San Jose, California, and, in respect of notices and determinations relating the Daily Adjusting LIBOR Rate, also a day on which dealings in dollar deposits are also carried on in the London interbank market and on which banks are open for business in London, England.

 

c.          “Daily Adjusting LIBOR Rate” means, for any day, a per annum interest rate which is equal to the quotient of the following:

 

(1)                                 for any day, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to one (1) month appearing on Page BBAM of the Bloomberg Financial Markets Information Service as of 8:00 a.m. (California time) (or as soon thereafter as practical) on such day, or if such day is not a Business Day, on the immediately preceding Business Day. In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service) on any day, the “Daily Adjusting LIBOR Rate” for such day shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be reasonably selected by Bank, or in the absence of such other service, the “Daily Adjusting LIBOR Rate” for such day shall, instead, be determined based upon the average of the rates at which Bank is offered dollar deposits at or about 8:00 a.m. (California time) (or as soon thereafter as practical), on such day, or if such day is not a Business Day, on the immediately preceding Business Day, in the interbank eurodollar market in an amount comparable to the outstanding principal amount of the Obligations and for a period equal to one (1) month;

 

divided by

 

(2)                                 1.00 minus the maximum rate (expressed as a decimal) on such day at which Bank is required to maintain reserves on “Euro-currency Liabilities” as defined in and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category.

 

d.         “LIBOR Lending Office” means Bank’s office located in the Cayman Islands, British West Indies, or such other branch of Bank, domestic or foreign, as it may hereafter designate as its LIBOR Lending Office by notice to Borrower.

 

e.          “Prime Rate” means the per annum interest rate established by Bank as its prime rate for its borrowers, as such rate may vary from time to time, which rate is not necessarily the lowest rate on loans made by Bank at any such time.

 

e.          “Prime Referenced Rate” means, for any day, a per annum interest rate which is equal to the Prime Rate in effect on such day, but in no event and at no time shall the Prime Referenced Rate be less than the sum of the Daily Adjusting LIBOR Rate for such day plus two and one-half percent (2.50%) per annum. If, at any time, Bank determines that it is unable to determine or ascertain

 

1

 

the Daily Adjusting LIBOR Rate for any day, the Prime Referenced Rate for each such day shall be the Prime Rate in effect at such time, but not less than two and one-half percent (2.50%) per annum.

 

2.             Interest Rate. Subject to the terms and conditions of this Addendum, the Obligations under the Agreement shall bear interest at the Prime Referenced Rate plus the Applicable Margin.

 

3.             Payment of Interest. Accrued and unpaid interest on the unpaid balance of the Obligations outstanding under the Agreement shall be payable monthly, in arrears, on the first day of each month, until maturity (whether as stated herein, by acceleration, or otherwise). In the event that any payment under this Addendum becomes due and payable on any day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, to the extent applicable, interest shall continue to accrue and be payable thereon during such extension at the rates set forth in this Addendum. Interest accruing hereunder shall be computed on the basis of a year of 360 days, and shall be assessed for the actual number of days elapsed, and in such computation, effect shall be given to any change in the applicable interest rate as a result of any change in the Prime Referenced Rate on the date of each such change.

 

4.             Bank’s Records. The amount and date of each advance under the Agreement, its applicable interest rate, and the amount and date of any repayment shall be noted on Bank’s records, which records shall be conclusive evidence thereof, absent manifest error; provided, however, any failure by Bank to make any such notation, or any error in any such notation, shall not relieve Borrower of its obligations to repay Bank all amounts payable by Borrower to Bank under or pursuant to this Addendum and the Agreement, when due in accordance with the terms hereof.

 

5.             Default Interest Rate. From and after the occurrence of any Event of Default, and so long as any such Event of Default remains unremedied or uncured thereafter, the Obligations outstanding under the Agreement shall bear interest at a per annum rate of five percent (5%) above the otherwise applicable interest rate hereunder, which interest shall be payable upon demand. In addition to the foregoing, a late payment charge equal to five percent (5%) of each late payment hereunder may be charged on any payment not received by Bank within ten (10) calendar days after the payment due date therefor, but acceptance of payment of any such charge shall not constitute a waiver of any Event of Default under the Agreement, In no event shall the interest payable under this Addendum and the Agreement at any time exceed the maximum rate permitted by law.

 

6.             Prepayment. Borrower may prepay all or part of the outstanding balance of any Obligations at any time without premium or penalty. Any prepayment hereunder shall also be accompanied by the payment of all accrued and unpaid interest on the amount so prepaid. Borrower hereby acknowledges and agrees that the foregoing shall not, in any way whatsoever, limit, restrict, or otherwise affect Bank’s right to make demand for payment of all or any part of the Obligations under the Agreement due on a demand basis in Bank’s sole and absolute discretion.

 

7.             Regulatory Developments or Other Circumstances Relating to the Daily Adjusting LIBOR Rate.

 

a.         If the adoption after the date hereof, or any change after the date hereof in, any applicable law, rule or regulation (whether domestic or foreign) of any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Bank with any request or directive (whether or not having the force of law) made by any such authority, central bank or comparable agency after the date hereof: (a) shall subject Bank to any tax, duty or other charge with respect to this Addendum or any Obligations under the Agreement, or shall change the basis of taxation of payments to Bank of the principal of or interest under this Addendum or any other amounts due under this Addendum in respect thereof (except for changes in the rate of tax on the overall net income of Bank or its LIBOR Lending Office imposed by the jurisdiction in which Bank’s principal executive office or LIBOR Lending Office is located); or (b) shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by Bank, or shall impose on Bank or the foreign exchange and interbank markets any other condition affecting this Addendum or the Obligations hereunder; and the result of any of the foregoing is to increase the cost to Bank of maintaining any part of the Obligations hereunder or to reduce the amount of any sum received or receivable by Bank under this Addendum by an amount deemed by the Bank to be material, then Borrower shall pay to Bank, within fifteen (15) days of Borrower=s receipt of written notice from Bank demanding such compensation, such additional amount or amounts as will compensate Bank for such increased cost or reduction. A certificate of Bank, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, setting forth the basis for determining such additional amount or amounts necessary to compensate Bank shall be conclusive and binding for all purposes, absent manifest error.

 

2

 

b.         In the event that any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not presently applicable to Bank, or any interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by Bank with any guideline, request or directive of any such authority (whether or not having the force of law), including any risk-based capital guidelines, affects or would affect the amount of capital required or expected to be maintained by Bank (or any corporation controlling Bank), and Bank determines that the amount of such capital is increased by or based upon the existence of any obligations of Bank hereunder or the maintaining of any Obligations hereunder, and such increase has the effect of reducing the rate of return on Bank’s (or such controlling corporation’s) capital as a consequence of such obligations or the maintaining of such Obligations hereunder to a level below that which Bank (or such controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy), then Borrower shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such compensation, additional amounts as are sufficient to compensate Bank (or such controlling corporation) for any increase in the amount of capital and reduced rate of return which Bank reasonably determines to be allocable to the existence of any obligations of the Bank hereunder or to maintaining any Obligations hereunder. A certificate of Bank as to the amount of such compensation, prepared in good faith and in reasonable detail by the Bank and submitted by Bank to the undersigned, shall be conclusive and binding for all purposes absent manifest error.

 

8.             Legal Effect. Except as specifically modified hereby, all of the terms and conditions of the Agreement remain in full force and effect.

 

9.             Conflicts. As to the matters specifically the subject of this Addendum, in the event of any conflict between this Addendum and the Agreement, the terms of this Addendum shall control.

 

IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date first set forth above.

 

	
COMERICA BANK
    	
ROCKET FUEL INC.
    
	
 
    	
 
    
	
By:
    	
/s/ Ramesh Bart
    	
 
    	
By:
    	
/s/ George John
    
	
Name:
    	
Ramesh Bart
    	
 
    	
Name:
    	
George John
    
	
Title:
    	
VP
    	
 
    	
Title:
    	
Chief Executive Officer
    

 

3

 

SCHEDULE OF EXCEPTIONS

 

Permitted Indebtedness (Section 1.1)

 

None.

 

Permitted Investments (Section 1.1)

 

None.

 

Permitted Liens (Section 1.1)

 

None.

 

Prior Names (Section 5.5)

 

None.

 

Litigation (Section 5.6)

 

None.

 

Inbound Licenses (Section 5.12)

 

None.

 

 

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This First Amendment to Loan and Security Agreement (the “Amendment”) is entered into as of August 20, 2010, by and between COMERICA BANK (“Bank”) and ROCKET FUEL INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of April 9, 2010 (as amended from time to time, the “Agreement”). All indebtedness owing by Borrower to Bank pursuant to the Agreement shall hereinafter be referred to as the “Indebtedness.” The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

AGREEMENT

 

I.                                        Incorporation by Reference. The Recitals and the documents referred to therein are incorporated herein by this reference. Except as otherwise noted, the terms not defined herein shall have the meaning set forth in the Agreement.

 

II.                                   Amendment to the Agreement. Subject to the satisfaction of the conditions precedent as set forth in Article IV hereof, the Agreement is hereby amended as set forth below.

 

A.                          Section (a) of the defined term “Eligible Accounts” in Section 1.1 of the Agreement is hereby amended and restated in its entirety to read as follows:

 

“(a)     Accounts that the account debtor has failed to pay in full within ninety (90) days of invoice date, provided however, the Accounts of Morpheus Media, Razorfish, Studiocom, Universal McCann, and LevelWing Media shall be excluded only if such account debtors fail to pay in full within one hundred twenty (120) days of invoice date.”

 

III.                              Legal Effect.

 

A.                               The Agreement is hereby amended wherever necessary to reflect the changes described above. Borrower agrees that it has no defenses against the obligations to pay any amounts under the Indebtedness.

 

B.                               Borrower understands and agrees that in modifying the existing Indebtedness, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Agreement and the other Loan Documents. Except as expressly modified pursuant to this Amendment, the terms of the Agreement and the other Loan Documents remain unchanged, and in full force and effect. Bank’s agreement to modifications to the existing Indebtedness pursuant to this Amendment in no way shall obligate Bank to make any future modifications to the Indebtedness. Nothing in this Amendment shall constitute a satisfaction of the Indebtedness. It is the intention of Bank and Borrower to retain as liable parties, all makers and endorsers of the Agreement and the other Loan Documents, unless the party is expressly released by Bank in writing. No maker, endorser, or guarantor will be released by virtue of this Amendment. The terms of this paragraph apply not only to this Amendment, but also to all subsequent loan modifications, unless otherwise provided therein.

 

AMENDMENT

 

1

 

C.                               This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. This is an integrated Amendment and supersedes all prior negotiations and agreements regarding the subject matter hereof. All modifications hereto must be in writing and signed by the parties.

 

IV.                               Conditions Precedent.     Except as specifically set forth in this Amendment, all of the terms and conditions of the Agreement and the other Loan Documents remain in full force and effect. The effectiveness of this Amendment is conditioned upon receipt by Bank of:

 

A.                                    This Amendment, duly executed by Borrower;

 

B.                                    A legal fee from Borrower in the amount of $350; and

 

C.                                    Such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

 

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

 

	
 
    	
ROCKET FUEL, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ George John
    
	
 
    	
Name:
    	
George H. John
    
	
 
    	
Title:
    	
CEO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
COMERICA BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ramesh Bart
    
	
 
    	
Name:
    	
Ramesh Bart
    
	
 
    	
Title:
    	
VP
    

 

2

 

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This Second Amendment to Loan and Security Agreement (the “Amendment”) is entered into as of December 15, 2010, by and between COMERICA BANK (“Bank”) and ROCKET FUEL INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of April 9, 2010 (as amended from time to time, including without limitation, that certain First Amendment to Loan and Security Agreement dated as of August 20, 2010, the “Agreement”). All indebtedness owing by Borrower to Bank pursuant to the Agreement shall hereinafter be referred to as the “Indebtedness.” The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

AGREEMENT

 

I.                                Incorporation by Reference. The Recitals and the documents referred to therein are incorporated herein by this reference. Except as otherwise noted, the terms not defined herein shall have the meaning set forth in the Agreement.

 

II.                           Amendment to the Agreement. Subject to the satisfaction of the conditions precedent as set forth in Article IV hereof, the Agreement is hereby amended as set forth below.

 

A.                             The following defined terms are hereby alphabetically added to Section 1.1 of the Agreement or amended and restated in their entirety to read as follows:

 

“Letter of Credit Sublimit” means a sublimit for Letters of Credit under the Revolving Line not to exceed Fifty Thousand Dollars ($50,000).

 

“Revolving Line” means a Credit Extension of up to Three Million Dollars ($3,000,000)(inclusive of the aggregate face amount of Letters of Credit issued under the Letter of Credit Sublimit).

 

B.                             The first sentence of Section 2.1(b)(i) of the Agreement is hereby amended and restated in its entirety to read as follows:

 

“Subject to and upon the terms and conditions of this Agreement (1) Borrower may request Advances in an aggregate outstanding amount not to exceed the lesser of (A) the Revolving Line or (B) the Borrowing Base, less the aggregate face amount of Letters of Credit issued under the Letter of Credit Sublimit, and (2) amounts borrowed pursuant to this Section 2.1(b) may be repaid and reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances under this Section 2.1(b) shall be immediately due and payable.”

 

C.                             Sections 2.1(b)(iii) and 2.1(b)(iv) are hereby added to the Agreement to read as follows:

 

“(iii)     Letter of Credit Sublimit. Subject to the availability under the Revolving Line, and in reliance on the representations and warranties of Borrower set forth herein, at any time and from time to time from the date hereof through the Business Day immediately prior to the Revolving Maturity Date, Bank shall issue for the account of Borrower such Letters of Credit as Borrower may request by delivering to Bank a duly executed letter of credit application on Bank’s standard form; provided, however, that the outstanding and undrawn amounts under all such Letters of Credit (i) shall not at any time exceed the Letter of Credit Sublimit, and (ii) shall be

 

AMENDMENT

 

1

 

deemed to constitute Advances for the purpose of calculating availability under the Revolving Line. Any drawn but unreimbursed amounts under any Letters of Credit shall be charged as Advances against the Revolving Line. All Letters of Credit shall be in form and substance acceptable to Bank in its sole discretion and shall be subject to the terms and conditions of Bank’s form application and letter of credit agreement. Borrower will pay any standard issuance and other fees that Bank notifies Borrower it will charge for issuing and processing Letters of Credit.

 

(iv)     Collateralization of Obligations Extending Beyond Maturity. Any Letters of Credit that may extend beyond the Revolving Maturity Date, then, effective as of the Revolving Maturity Date, the balance in any deposit accounts held by Bank and the certificates of deposit or time deposit accounts issued by Bank in Borrower’s name (and any interest paid thereon or proceeds thereof, including any amounts payable upon the maturity or liquidation of such certificates or accounts), shall automatically secure such obligations to the extent of the then continuing or outstanding and undrawn Letters of Credit; provided, however, that if there are insufficient balances in such accounts to secure such obligations, Borrower shall immediately deposit such additional funds as are necessary to fully secure such obligations. Borrower authorizes Bank to hold such balances in pledge and to decline to honor any drafts thereon or any requests by Borrower or any other Person to pay or otherwise transfer any part of such balances for so long as the Letters of Credit are outstanding or continue.”

 

III.                      Legal Effect.

 

A.                             The Agreement is hereby amended wherever necessary to reflect the changes described above. Borrower agrees that it has no defenses against the obligations to pay any amounts under the Indebtedness.

 

B.                             Borrower understands and agrees that in modifying the existing Indebtedness, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Agreement and the other Loan Documents. Except as expressly modified pursuant to this Amendment, the terms of the Agreement and the other Loan Documents remain unchanged, and in full force and effect. Bank’s agreement to modifications to the existing Indebtedness pursuant to this Amendment in no way shall obligate Bank to make any future modifications to the Indebtedness. Nothing in this Amendment shall constitute a satisfaction of the Indebtedness. It is the intention of Bank and Borrower to retain as liable parties, all makers and endorsers of the Agreement and the other Loan Documents, unless the party is expressly released by Bank in writing. No maker, endorser, or guarantor will be released by virtue of this Amendment. The terms of this paragraph apply not only to this Amendment, but also to all subsequent loan modifications, unless otherwise provided therein.

 

C.                             This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. This is an integrated Amendment and supersedes all prior negotiations and agreements regarding the subject matter hereof. All modifications hereto must be in writing and signed by the parties.

 

IV.                     Conditions Precedent. Except as specifically set forth in this Amendment, all of the terms and conditions of the Agreement and the other Loan Documents remain in full force and effect. The effectiveness of this Amendment is conditioned upon receipt by Bank of:

 

A.                                    This Amendment, duly executed by Borrower;

 

B.                                    A legal fee from Borrower in the amount of $350; and

 

C.                                    Such other documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

 

2

 

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

 

	
 
    	
ROCKET FUEL, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ainslie J. Mayberry
    
	
 
    	
Name:
    	
Ainslie Mayberry
    
	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
COMERICA BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Rod Werner
    
	
 
    	
Name:
    	
Rod Werner
    
	
 
    	
Title:
    	
SVP
    

 

3

 

THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This Third Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of July 26, 2011, by and between COMERICA BANK (“Bank”) and ROCKET FUEL INC, (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of April 9, 2010 (as amended from time to time, including by that certain First Amendment to Loan and Security Agreement dated as of August 20, 2010 and that certain Second Amendment to Loan and Security Agreement dated as of December 15, 2010, collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                      The following defined terms in Section 1.1 of the Agreement hereby are added, amended or restated as follows:

 

“Borrowing Base” means an amount equal to eighty five percent (85%) of Eligible Accounts, as determined by Bank with reference to the most recent Borrowing Base Certificate delivered by Borrower.

 

“Daily Adjusting LIBOR Addendum” means that certain Daily Adjusting LIBOR Addendum to Loan and Security Agreement dated as of the Third Amendment Effective Date.

 

“Net Profit” means net profits after taxes, determined in accordance with GAAP.

 

“Permitted Indebtedness” means:

 

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

 

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

 

(c)                                          Indebtedness not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate in any fiscal year of Borrower secured by a lien described in clause (c) of the defined term “Permitted Liens;” provided such Indebtedness does not exceed the lesser of the cost or fair market value of the equipment financed with such Indebtedness;

 

(d)                                         Indebtedness with respect to Borrower’s American Express corporate credit cards in an amount not to exceed Two Hundred Fifty Thousand Dollars ($250,000);

 

(e)                                          Subordinated Debt;

 

(f)                                           The WTI Indebtedness, subject to the WTI Intercreditor Agreement;

 

(g)                                          Indebtedness consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;

 

(h)                                         Indebtedness to trade creditors incurred in the ordinary course of business; and

 

(i)                                             Other unsecured Indebtedness in an amount not to exceed One Hundred Thousand Dollars ($100,000) at any time;

 

1

 

(j)                                            Extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that the principal amount is not increased or the terms modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.”

 

“Permitted Investment” means:

 

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

 

(b)                                         (i) Marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one (1) year from the date of acquisition thereof, (ii) commercial paper maturing no more than one (1) year from the date of creation thereof and currently having rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) Bank’s certificates of deposit maturing no more than one year from the date of investment therein, and (iv) Bank’s money market accounts;

 

(c)                                          Investments permitted by Section 7.3 hereof;

 

(d)                                         Investments accepted in connection with Permitted Transfers;

 

(e)                                          Investments of Subsidiaries in or to other Subsidiaries or Borrower and Investments by Borrower in Subsidiaries not to exceed Five Hundred Thousand Dollars ($500,000) in the aggregate in any fiscal year;

 

(f)                                           Investments not to exceed One Hundred Thousand Dollars ($100,000) in the aggregate in any fiscal year consisting of (i) travel advances and employee relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee stock purchase plan agreements approved by Borrower’s Board of Directors;

 

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

 

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

 

(i)                                             Other Investments in an aggregate amount not to exceed Fifty Thousand Dollars ($50,000) in any fiscal year; and

 

(j)                                            Joint ventures or strategic alliances in the ordinary course of Borrower’s business consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash Investments by Borrower do not exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate in any fiscal year.

 

“Permitted Liens” means the following:

 

(a)                                         Any Liens existing on the Closing Date and disclosed in the Schedule (excluding Liens to be satisfied with the proceeds of the Advances) or arising under this Agreement or the other Loan Documents;

 

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

 

2

 

(c)                                          Liens not to exceed Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate (i) upon or in any Equipment (other than Equipment financed by an Equipment Advance) acquired or held by Borrower or any of its Subsidiaries to secure the purchase price of such Equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease of such Equipment, or (ii) existing on such Equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such Equipment;

 

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

 

(e)                                          Statutory and common law rights of set-off and other similar rights;

 

(f)                                           Non-exclusive licenses or sublicenses and exclusive licenses granted in the ordinary course of Borrower’s business limited to geographic location, fields of use, and customized products for specific customers in the ordinary course of Borrower’s business and with respect to any licenses where Borrower is the licensee, any interest or title of a licensor or under any such license or sublicense;

 

(g)                                          Carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other tike Liens arising in the ordinary course of business which are not overdue for a period of more than 30 days or which are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the applicable Person;

 

(h)                                         Liens securing Subordinated Debt;

 

(i)                                             Deposits or Liens in the ordinary course of business under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, trade contracts (other than for the repayment of borrowed money), or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money), or to secure contracts for the purchase of property, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case, incurred in the ordinary course of business and not representing an obligation for borrowed money;

 

(j)                                            Liens in favor of WTI subject to the WTI Intercreditor Agreement;

 

(k)                                         Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Sections 8.5 or 8.9; and

 

(l)                                             Liens in favor of other financial institutions arising in connection with Borrower’s deposit accounts held at such institutions to secured standard fees for deposit services charged by, but not financing made available by such institutions, provided that Bank has a perfected security interest in the amounts held in such deposit accounts.

 

“Revolving Line” means a credit extension of up to Fifteen Million Dollars ($15,000,000) (inclusive of the aggregate face amount of Letters of Credit issued under the Letter of Credit Sublimit).

 

“Revolving Maturity Date” means July 26, 2014.

 

“Third Amendment Effective Date” means July 26, 2011.

 

“WTI Intercreditor Agreement” means that certain Intercreditor Agreement by and among WTI and Bank dated as of April 7, 2010, as amended, restated, modified or supplemented from time to time.

 

3

 

2.                                   Section 2.3(a) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(a)                           Interest Rate for Advances. Except as set forth in Section 2.3(b), the Advances shall bear interest, on the outstanding daily balance thereof, as set forth in the Daily Adjusting LIBOR Addendum attached as Exhibit E.”

 

3.                                      New Sections 2.5(c) and 2.5(d) hereby are added to the Agreement as follows:

 

“(c)                            Unused Facility Fee. A quarterly Unused Facility Fee equal to one quarter of one percent (0.25%) per annum of the difference between the Revolving Line and the average outstanding principal balance of Advances during the applicable quarter, which fee shall be payable within five (5) days of the last day of each such quarter and shall be nonrefundable; and

 

(d)                                 Annual Facility Fee. A fee equal to (i) Seventeen Thousand Five Hundred Dollars ($17,500) on the Third Amendment Effective Date, and (ii) Ten Thousand Dollars ($10,000) annually thereafter, each of which shall be nonrefundable.”

 

4.                                      Section 6.2(ii) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(ii) as soon as available, but in any event within one hundred fifty (150) days after the end of Borrower’s fiscal year, audited consolidated and consolidating financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an opinion which is unqualified or otherwise consented to in writing by Bank on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank (collectively, the “Audited Financials”); provided, however, that for the 2010 fiscal year, Borrower shall deliver to Bank such Audited Financials no later than October 31,2011;”

 

5.                                      Section 6.2(iv) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(iv) promptly upon receipt of notice thereof, a report of any legal actions pending or threatened in writing against Borrower or any Subsidiary that could reasonably be expected to result in damages or costs to Borrower or any Subsidiary of Two Hundred Fifty Thousand Dollars ($250,000) or more;”

 

6.                                      Section 6.3 of the Agreement hereby is amended and restated in its entirety to read as follows;

 

“6.3                         Inventory/Returns. Borrower shall keep all Inventory in good and merchantable condition, free from all material defects except for Inventory for which adequate reserves have been made. Returns and allowances, if any, as between Borrower and its account debtors shall be on the same basis and in accordance with the usual customary practices of Borrower, as they exist on the Closing Date. Borrower shall promptly notify Bank of all returns and recoveries and of all disputes and claims involving more than Two Hundred Fifty Thousand Dollars ($250,000);”

 

7.                                      Section 6.7 of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“6.7                         Net Loss/Profit. Borrower shall maintain, Net Loss/Profit, measured on a quarterly basis as of the end of each of Borrower’s fiscal quarter of not more, with respect to Net Loss, and not less, with respect to Net Profit, than the following amounts for the reporting periods indicated below:

 

	
Quarter Ending:
    	
 
    	
Net Loss/Profit
    	
 
    
	
June 30, 2011
    	
 
    	
$
    	
(3,500,000
    	
)
    
	
September 30, 2011
    	
 
    	
$
    	
(1,000,000
    	
)
    
	
December 31, 2011
    	
 
    	
$
    	
1.00
    	
 
    
	
March 31, 2012
    	
 
    	
$
    	
1.00
    	
 
    

 

4

 

	
June 30,   2012 and each quarter thereafter
    	
 
    	
$
    	
1,000,000
    	
 
    

 

”

 

8.                                      Section 7.8 of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“7.10                  Transactions with Affiliates. Directly or indirectly enter into or permit to exist any material transaction with any Affiliate of Borrower except for (i) transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person, (ii) equity security or Subordinated Debt issuances to existing stockholders of the Company, and (iii) transactions between Borrower and its Subsidiaries not otherwise prohibited by this Section 7.”

 

9.                                      Section 7.10 of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“7.10                  Inventory and Equipment. Store the Inventory or the Equipment with a value in excess of One Hundred Fifty Thousand Dollars ($150,000) with a bailee, warehouseman, or similar third party unless the third party has been notified of Bank’s security interest and Bank (a) has received an acknowledgment from the third party that it is holding or will hold the Inventory or Equipment for Bank’s benefit or (b) is in possession of the warehouse receipt, where negotiable, covering such Inventory or Equipment. Except for Inventory sold in the ordinary course of business and movable items of personal property such as laptop computers, and except for such other locations as Bank may approve in writing, Borrower shall keep the Inventory and Equipment only at the location set forth in Section 10 and such other locations of which Borrower gives Bank prior written notice and as to which Bank files a financing statement, or takes other action, where needed to perfect its security interest.”

 

10.                               Section 8.7 of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“8.7                         Other Agreements. If there is a default or other failure to perform in any agreement to which Borrower is a party with a third party or parties resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars ($250,000) or that could have a Material Adverse Effect;”

 

11.                               Section 8.9 of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“8.9                         Judgments. If a judgment or judgments for the payment of money in an amount, individually or in the aggregate, of at least Two Hundred Fifty Thousand Dollars ($250,000) shall be rendered against Borrower and shall remain unsatisfied and unstayed for a period of ten (10) days (provided that no Credit Extensions will be made prior to the satisfaction or stay of such judgment); or”

 

12.                               Bank hereby waives the existing Events of Default that have arisen from (i) Borrower’s failure to comply with Section 6.7(a) of the Agreement as in effect prior to the Third Amendment Effective Date for all measuring periods preceding such date, (ii) Borrower’s failure to comply with Section 6.2(i) of the Agreement for Borrower’s failure to timely deliver its audited financial statements for the fiscal year ending 2010, (iii) Borrower’s failure to comply with Section 7.10 of the Agreement for certain transactions between Borrower and its Subsidiaries and (iv) and cross-defaults resulting therefrom arising under the WTI Indebtedness.

 

13.                               Exhibit C of the Agreement hereby is replaced with Exhibit C attached hereto.

 

14.                               Exhibit D of the Agreement hereby is replaced with Exhibit D attached hereto.

 

15.                               Exhibit E of the Agreement hereby is replaced with Exhibit E attached hereto.

 

5

 

16.                               No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.

 

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

 

18.                               Borrower represents and warrants that the Representations and Warranties contained in the Agreement are true and correct in all material respects as of the date of this Amendment, and that no Event of Default has occurred and is continuing.

 

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

 

(a)                         this Amendment, duly executed by Borrower;

 

(b)                         the Daily Adjusting LIBOR Addendum, duly executed by Borrower;

 

(c)                          an amendment to the WTI Intercreditor Agreement, in form and substance acceptable to Bank;

 

(d)                         a Certificate of the Secretary of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Amendment;

 

(e)                          the Annual Facility Fee in the amount of Seventeen Thousand Five Hundred Dollars ($17,500), which may be debited from any of Borrower’s accounts;

 

(f)                           all reasonable Bank Expenses incurred through the date of this Amendment (provided however that legal fees will not exceed Five Thousand Dollars ($5,000) as of such date), which may be debited from any of Borrower’s accounts; and

 

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

 

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

 

6

 

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

 

	
 
    	
ROCKET   FUEL INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   George John
    
	
 
    	
Title:
    	
CEO
    
	
 
    	
 
    
	
 
    	
COMERICA   BANK
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ramesh Bart
    
	
 
    	
Title:
    	
VP
    

 

[Signature Page to Third Amendment to Loan & Security Agreement]

 

7

 

EXHIBIT C

 

BORROWING BASE CERTIFICATE

 

1

 

 

	
REPORT OF ACCOUNTS RECEIVABLE AND INVENTORY
    	
(Note:   Company should retain a copy of this report for its records.)
    
	
We   submit the following information in connection with the Loan and Security   Agreement(s) heretofore executed by the undersigned in favor of Comerica   Bank.
    	
 
    
	
This   report is dated:                          
    	
 
    
	
This   reports sequential transmittal number is:                       
    	
 
    

 

	
ACCOUNTS RECEIVABLE AND INVENTORY
    	
 
    	
 
    	
 
    
	
1. 
    	
Accounts Receivable Balance as of            
    	
 
    	
$
    	
 
    	
 
    
	
2. 
    	
Charges Billed This Period to Date (Dr to A/R)
    	
 
    	
+
    	
 
    
	
3. 
    	
Credits Period to Date (Cr to A/R)
    	
 
    	
 
    	
 
    
	
 
    	
A.   Payments ( - )         
    	
 
    	
 
    	
 
    
	
 
    	
B.   Adjustments ( +/- )          
    	
 
    	
–
    	
 
    
	
4. 
    	
New Accounts Receivable Balance as of               
    	
 
    	
$
    	
 
    	
 
    
	
5. 
    	
Ineligible Accounts (see detailed Worksheets)
    	
 
    	
–
    	
 
    
	
6. 
    	
Net Eligible Accounts Receivable (Line 4 less   Line 5)
    	
 
    	
$
    	
 
    	
 
    
	
7. 
    	
Accounts Receivable Loan Formula:              
    	
 
    	
$
    	
 
    	
 
    
	
8. 
    	
Inventory Loan Formula (Line 8, Inventory   BBC)
    	
 
    	
$
    	
 
    	
 
    
	
9. 
    	
A. Total Collateral Loan Formula (Line 7 + Line   8) or
    	
 
    	
$
    	
 
    	
 
    
	
 
    	
B.   Maximum Loan Amount
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
LOAN
    	
 
    	
 
    	
 
    
	
10. 
    	
Loan Balance Per Last Report dated:                 
    	
 
    	
$
    	
 
    	
 
    
	
11. 
    	
Less Loan Payments
    	
 
    	
 
    	
 
    
	
 
    	
(If submitting manually, attach tape to illustrate   calculation of payments total - since LAST REPORT)
    	
 
    	
–
    	
 
    
	
12. 
    	
Sub Total
    	
 
    	
$
    	
 
    	
 
    
	
13. 
    	
Plus Advances and Other Obligations
    	
 
    	
 
    	
 
    
	
 
    	
A. Advances Since Last Report (If sending   manually, attach tape to illustrate calculation)
    	
 
    	
 
    	
 
    
	
 
    	
B. This Advance
    	
 
    	
 
    	
 
    
	
 
    	
C. Other Obligations (e.g., LC’s, ACH Limits, Credit   Card Accounts, F/X Sublimit/Usage)
    	
 
    	
+
    	
 
    
	
14. 
    	
Current Loan Balance
    	
 
    	
$
    	
 
    	
 
    
	
15. 
    	
Net Loan Availability (The lesser of Lines 9 A or   8 B, less Line 14)
    	
 
    	
$
    	
 
    	
 
    

 

AS SECURITY FOR ALL OBLIGATIONS OF THE UNDERSIGNED, DIRECT OR CONTINGENT, WHICH ARE NOW OWING OR WHICH HEREAFTER MAY BE OWING TO COMERICA BANK. THE COMPANY HEREBY ASSIGNS AND GRANTS TO COMERICA BANK A SECURITY INTEREST IN THE ACCOUNTS LISTED IN THE ABOVE SCHEDULE. MONIES DUE UPON THE SAME AND ALL MERCHANDISE RETURNED OR REJECTED. THE COMPANY REPRESENTS THAT THE ABOVE SCHEDULE CORRECTLY SETS FORTH THE ACCOUNTS NOW OWING THE UNDERSIGNED FOR BONA FIDE SALES AND DELIVERIES OF MERCHANDISE; THAT THERE ARE NO OFFSETS OR COUNTER-CLAIMS OF ANY NATURE WHATSOEVER AGAINST ANY OF THE ACCOUNTS; THAT NONE OF THE SAID ACCOUNTS ARE PAST DUE (EXCEPT AS NOTED ON LINE 7); THAT PROPER ENTRIES HAVE BEEN MADE ON THE BOOKS OF THE COMPANY DISCLOSING THE ASSIGNMENT OF SUCH ACCOUNTS TO SAID BANK; THAT NONE OF SAID ACCOUNTS HAVE BEEN SOLD OR ASSIGNED TO ANY OTHER PARTY; THAT SAID ACCOUNTS ARE ASSIGNED PURSUANT TO AND IN ACCORDANCE WITH ALL THE TERMS AND PROVISIONS OF THE LOAN AND SECURITY AGREEMENT AND ANY OTHER AGREEMENT EXECUTED BY THE COMPANY AND COMERICA BANK RELATING TO ADVANCES TO BE MADE BY SAID BANK ON SUCH ACCOUNTS AND THE ASSIGNMENT THEREOF; AND THAT ALL SUCH ACCOUNTS ARE ELIGIBLE ACCOUNTS (EXCEPT AS NOTED ON LINE BY AS DEFINED IN SAID SECURITY AGREEMENTS.

 

 

	
 
    	
 
    	
 
    
	
Company Name
    	
 
    	
Authorized Signature
    

 

	
BANK   USE ONLY
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Received   by:
    	
 
    	
 
    	
Transmittal:
    	
 
    
	
Obligation   #:
    	
 
    	
 
    	
Date   Reviewed:
    	
 
    
	
Customer:
    	
 
    	
 
    	
Reviewer   Initials:
    	
 
    

 

 

INELIGIBLE BREAKDOWN (NOTE: Company should retain a copy of this report for its records)

 

	
 
    	
Customer Name:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Aging Date:
    	
 
    	
 
    

 

LIST TOTAL LESS THAN 90 DAYS FOR EACH CATEGORY(S) AND THE GRAND TOTAL OF OVER 90 DAY ACCOUNTS. USE INELIGIBLE WORKSHEET TO ITEMIZE LISTED CATEGORY(S) AS NEEDED.

 

	
 
    	
 
    	
PER CUSTOMER
    	
 
    	
BANK USE ONLY
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
FEDERAL GOVERNMENT A/R
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
FOREIGN ACCOUNTS
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CONTRA ACCOUNTS
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
AFFILIATE ACCOUNTS
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
25% RULE
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
CONCENTRATIONS
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
OLD CREDITS (Add Back as a +)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PRE-BILLED/ADVANCED BILLED
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
PROGRESS BILLED
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
OVER DAYS FROM INVOICE
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
OTHER (SPECIFY)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
INELIGIBLE GRAND TOTAL
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

Line five (5) of the Report of AR and Inventory contains a formula to transfer the Ineligible Grand Total.

 

The “Blue Tinted cells” indicate the fields to which you must provide the numbers and information.

 

The “Black Tinted cells” indicate the presents of formulas and should only be changed, if necessary.

 

To the best of my knowledge and belief, this information is correct and may be relied upon by you as a basis for advancing any credit to us.

 

 

	
 
    	
 
    
	
Authorized   Signature ( Please type name above)
    	
 
    

 

 

	
INELIGIBLE AR COLLATERAL WORKSHEET
    	
 
    	
 
    
	
Aging Date: _
    	
 
    	
 
    

 

	
Foreign   Accounts
    	
 
    	
 
    	
 
    	
Federal Government
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Customer Name
    	
 
    	
Amount
    	
 
    	
Customer Name
    	
 
    	
Amount
    	
 
    
	
1
    	
 
    	
 
    	
 
    	
1
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
 
    	
 
    	
2
    	
 
    	
 
    	
 
    
	
3
    	
 
    	
 
    	
 
    	
3
    	
 
    	
 
    	
 
    
	
4
    	
 
    	
 
    	
 
    	
4
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
 
    	
 
    	
5
    	
 
    	
 
    	
 
    
	
6
    	
 
    	
 
    	
 
    	
6
    	
 
    	
 
    	
 
    
	
7
    	
 
    	
 
    	
 
    	
7
    	
 
    	
 
    	
 
    
	
8
    	
 
    	
 
    	
 
    	
8
    	
 
    	
 
    	
 
    
	
9
    	
 
    	
 
    	
 
    	
9
    	
 
    	
 
    	
 
    
	
10
    	
 
    	
 
    	
 
    	
10
    	
 
    	
 
    	
 
    
	
Totals
    	
 
    	
 
    	
 
    	
Totals
    	
 
    	
 
    	
 
    

 

	
Contra Account
    	
 
    	
 
    	
 
    	
Affiliate Account
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Customer Name
    	
 
    	
Amount
    	
 
    	
Customer Name
    	
 
    	
Amount
    	
 
    
	
1
    	
 
    	
 
    	
 
    	
1
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
 
    	
 
    	
2
    	
 
    	
 
    	
 
    
	
3
    	
 
    	
 
    	
 
    	
3
    	
 
    	
 
    	
 
    
	
4
    	
 
    	
 
    	
 
    	
4
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
 
    	
 
    	
5
    	
 
    	
 
    	
 
    
	
6
    	
 
    	
 
    	
 
    	
6
    	
 
    	
 
    	
 
    
	
7
    	
 
    	
 
    	
 
    	
7
    	
 
    	
 
    	
 
    
	
8
    	
 
    	
 
    	
 
    	
8
    	
 
    	
 
    	
 
    
	
9
    	
 
    	
 
    	
 
    	
9
    	
 
    	
 
    	
 
    
	
10
    	
 
    	
 
    	
 
    	
10
    	
 
    	
 
    	
 
    
	
Totals
    	
 
    	
 
    	
 
    	
Totals
    	
 
    	
 
    	
 
    

 

	
Ineligible Category (Define)
    	
 
    	
 
    	
 
    	
Ineligible Category (Define)
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Customer   Name
    	
 
    	
Amount
    	
 
    	
Customer   Name
    	
 
    	
Amount
    	
 
    
	
1
    	
 
    	
 
    	
 
    	
1
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
 
    	
 
    	
2
    	
 
    	
 
    	
 
    
	
3
    	
 
    	
 
    	
 
    	
3
    	
 
    	
 
    	
 
    
	
4
    	
 
    	
 
    	
 
    	
4
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
 
    	
 
    	
5
    	
 
    	
 
    	
 
    
	
6
    	
 
    	
 
    	
 
    	
6
    	
 
    	
 
    	
 
    
	
7
    	
 
    	
 
    	
 
    	
7
    	
 
    	
 
    	
 
    
	
8
    	
 
    	
 
    	
 
    	
8
    	
 
    	
 
    	
 
    
	
9
    	
 
    	
 
    	
 
    	
9
    	
 
    	
 
    	
 
    
	
10
    	
 
    	
 
    	
 
    	
10
    	
 
    	
 
    	
 
    
	
Totals
    	
 
    	
 
    	
 
    	
Totals
    	
 
    	
 
    	
 
    

 

(Note: Company should retain a copy of this report for its records)

 

Ineligible Calculations: Multiple calculations should be prepared on this worksheet and the balances will be transferred to the Ineligibles sheet via formulas. Additional categories above can be redefined as needed.

 

The “Blue Tinted cells” indicate the fields to which you must provide the numbers and information.

 

The “Black Tinted cells” indicate the presents of formulas and should only be changed, if necessary.

 

 

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

	
Please send all Required Reporting to:  
    	
Comerica   Bank
    
	
 
    	
Technology &  Life   Sciences Division
    
	
 
    	
Loan   Analysis Department
    
	
 
    	
Five   Palo Alto Square, Suite 800
    
	
 
    	
3000   El Camino Real
    
	
 
    	
Palo   Alto, CA 94306
    
	
 
    	
Phone:   (650) 846-6820
    
	
 
    	
Fax:   (650) 846-6840
    

 

FROM:                   ROCKET FUEL INC.

 

The undersigned authorized Officer of ROCKET FUEL INC. (“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending                                 with all required covenants, including without limitation the ongoing registration of intellectual property rights in accordance with Section 6.8, except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except (i) as explained in an accompanying letter or footnotes and (ii) with respect to unaudited financial statements, for the absence of footnotes and subject to year-end adjustments.

 

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

 

	
REPORTING COVENANTS
    	
 
    	
REQUIRED
    	
 
    	
COMPLIES
    
	
Company   Prepared Monthly F/S
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    
	
Compliance   Certificate
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    
	
CPA   Audited, Unqualified F/S
    	
 
    	
Annually,   within 150 days of FYE*
    	
 
    	
YES
    	
 
    	
NO
    
	
Borrowing   Base Cert., A/R & A/P Agings
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    
	
Annual   Business Plan (incl. operating budget)
    	
 
    	
25 days   prior to FYE
    	
 
    	
YES
    	
 
    	
NO
    
	
Intellectual   Property Report
    	
 
    	
Quarterly   within 30 days
    	
 
    	
YES
    	
 
    	
NO
    
	
Audit
    	
 
    	
Semi-annual
    	
 
    	
YES
    	
 
    	
NO
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
If   Public:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10-Q
    	
 
    	
Quarterly,   within 5 days of SEC filing (50 days)
    	
 
    	
YES
    	
 
    	
NO
    
	
10-K
    	
 
    	
Annually,   within 5 days of SEC filing (95 days)
    	
 
    	
YES
    	
 
    	
NO
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total   amount of Borrower’s cash and investments
    	
 
    	
Amount:   $
    	
 
    	
YES
    	
 
    	
NO
    
	
Total   amount of Borrower’s cash and investments maintained with Bank
    	
 
    	
Amount:   $
    	
 
    	
YES
    	
 
    	
NO
    

 

	
REPORTING COVENANTS
    	
 
    	
DESCRIPTION
    	
 
    	
APPLICABLE
    
	
Legal   Action > $250,000
    	
 
    	
Notify promptly   upon notice
    	
 
    	
YES
    	
 
    	
NO
    
	
Inventory   Disputes > $250,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    
	
Mergers &   Acquisitions > $100,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    
	
Cross   default with other agreements > $250,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    
	
 
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Judgment   > $250,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    

 

* With respect to FYE 2010, by October 31, 2011

 

1

 

	
FINANCIAL
    	
 
    	
REQUIRED
    	
 
    	
ACTUAL
    	
 
    	
COMPLIES
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TO BE TESTED MONTHLY, UNLESS OTHERWISE NOTED:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Quarterly Net Loss/Profit
    	
 
    	
Refer   to Section 6,7(a)
    	
 
    	
$
    	
 
    	
 
    	
YES
    	
NO
    	
 
    
										

 

	
OTHER COVENANTS
    	
 
    	
REQUIRED
    	
 
    	
ACTUAL
    	
 
    	
COMPLIES
    	
 
    
	
Permitted Indebtedness for equipment leases or loans
    	
 
    	
<$250,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    	
 
    
	
Permitted Investments for stock repurchase
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    	
 
    
	
Permitted Investments for subsidiaries
    	
 
    	
<$500,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    	
 
    
	
Permitted Investments for employee loans
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    	
 
    
	
Permitted Investments for joint ventures
    	
 
    	
<$250,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    	
 
    
	
Permitted Liens for equipment leases or loans
    	
 
    	
<$250,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    	
 
    
	
Permitted Transfers
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    	
 
    

 

Please Enter Below Comments Regarding Violations:

 

The Officer further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement, including, without limitation, the financial covenants, no credit extensions will be made.

 

	
Very   truly yours,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Authorized   Signer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Title:
    	
 
    

 

2

 

EXHIBIT E

 

Daily Adjusting LIBOR Addendum To Loan and Security Agreement

 

This Daily Adjusting LIBOR Addendum to Loan and Security Agreement (this “Addendum”) is entered into as of July 26, 2011, by and between Comerica Bank (“Bank”) and ROCKET FUEL INC. (“Borrower”). This Addendum supplements the terms of the Loan and Security Agreement dated as of April 9, 2010 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Agreement”).

 

1.                                      Definitions. As used in this Addendum, the following terms shall have the following meanings. Initially capitalized terms used and not defined in this Addendum shall have the meanings ascribed thereto in the Agreement.

 

a.                                      “Applicable Margin” means two and three quarters percent (2.75%) per annum.

 

b.                                      “Business Day” means any day, other than a Saturday, Sunday or any other day designated as a holiday under Federal or applicable State statute or regulation, on which Bank is open for all or substantially all of its domestic and international business (including dealings in foreign exchange) in San Jose, California, and, in respect of notices and determinations relating the Daily Adjusting LIBOR Rate, also a day on which dealings in dollar deposits are also carried on in the London interbank market and on which banks are open for business in London, England.

 

c.                                       “Daily Adjusting LIBOR Rate” means, for any day, a per annum interest rate which is equal to the quotient of the following:

 

(1)                                 for any day, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to one (1) month appearing on Page BBAM of the Bloomberg Financial Markets Information Service as of 8:00 a.m. (California time) (or as soon thereafter as practical) on such day, or if such day is not a Business Day, on the immediately preceding Business Day. In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service) on any day, the “Daily Adjusting LIBOR Rate” for such day shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be reasonably selected by Bank, or in the absence of such other service, the “Daily Adjusting LIBOR Rate” for such day shall, instead, be determined based upon the average of the rates at which Bank is offered dollar deposits at or about 8:00 a.m. (California time) (or as soon thereafter as practical), on such day, or if such day is not a Business Day, on the immediately preceding Business Day, in the interbank eurodollar market in an amount comparable to the outstanding principal amount of the Obligations and for a period equal to one (1) month;

 

divided by

 

(2)                                 1.00 minus the maximum rate (expressed as a decimal) on such day at which Bank is required to maintain reserves on “Euro-currency Liabilities” as defined in and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category;

 

d.                                      “LIBOR Lending Office” means Bank’s office located in the Cayman Islands, British West Indies, or such other branch of Bank, domestic or foreign, as it may hereafter designate as its LIBOR Lending Office by notice to Borrower.

 

e.                                       “Prime Rate” means the per annum interest rate established by Bank as its prime rate for its borrowers, as such rate may vary from time to time, which rate is not necessarily the lowest rate on loans made by Bank at any such time.

 

f.                                        “Prime Referenced Rate” means a per annum interest rate which is equal to the Prime Rate, but in no event less than two and one-half percent (2.50%) per annum.

 

 

2.                                      Interest Rate Options. Subject to the terms and conditions of this Addendum, the Obligations under the Agreement shall bear interest at the Daily Adjusting LIBOR Rate plus the Applicable Margin, except during any period of time during which, in accordance with the terms and conditions of this Addendum, the Obligations under the Agreement shall bear interest on the basis of the Prime Referenced Rate plus the Applicable Margin.

 

3.                                      Payment of Interest. Accrued and unpaid interest on the unpaid balance of the Obligations outstanding under the Agreement shall be payable monthly, in arrears, on the first day of each month, until maturity (whether as stated herein, by acceleration, or otherwise). In the event that any payment under this Addendum becomes due and payable on any day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, to the extent applicable, interest shall continue to accrue and be payable thereon during such extension at the rates set forth in this Addendum. Interest accruing hereunder shall be computed on the basis of a year of 360 days, and shall be assessed for the actual number of days elapsed, and in such computation, effect shall be given to any change in the applicable interest rate as a result of any change in the Daily Adjusting LIBOR Rate or, to the extent applicable, the Prime Referenced Rate on the date of each such change.

 

4.                                      Bank’s Records. The amount and date of each advance under the Agreement, its applicable interest rate, and the amount and date of any repayment shall be noted on Bank’s records, which records shall be conclusive evidence thereof, absent manifest error; provided, however, any failure by Bank to make any such notation, or any error in any such notation, shall not relieve Borrower of its obligations to repay Bank all amounts payable by Borrower to Bank under or pursuant to this Addendum and the Agreement, when due in accordance with the terms hereof. For any advance under the Agreement bearing interest on the basis of the Daily Adjusting LIBOR Rate, if Bank shall designate a LIBOR Lending Office which maintains books separate from those of the rest of Bank, Bank shall have the option of maintaining and carrying such advance on the books of such LIBOR Lending Office.

 

5.                                      Default Interest Rate. From and after the occurrence of any Event of Default, and so long as any such Event of Default remains unremedied or uncured thereafter, the Obligations outstanding under the Agreement shall bear interest at a per annum rate of five percent (5%) above the otherwise applicable interest rate hereunder, which interest shall be payable upon demand. In addition to the foregoing, a late payment charge equal to five percent (5%) of each late payment hereunder may be charged on any payment not received by Bank within ten (10) calendar days after the payment due date therefor, but acceptance of payment of any such charge shall not constitute a waiver of any Event of Default under the Agreement. In no event shall the interest payable under this Addendum and the Agreement at any time exceed the maximum rate permitted by law.

 

6.                                      Prepayment. Borrower may prepay all or part of the outstanding balance of any Obligations at any time without premium or penalty. Any prepayment hereunder shall also be accompanied by the payment of all accrued and unpaid interest on the amount so prepaid. Borrower hereby acknowledges and agrees that the foregoing shall not, in any way whatsoever, limit, restrict, or otherwise affect Bank’s right to make demand for payment of all or any part of the Obligations under the Agreement when due in accordance with the terms of the Agreement.

 

7.                                      Regulatory Developments or Other Circumstances Relating to the Daily Adjusting LIBOR Rate.

 

a.                                      If, at any time, Bank determines that, (1) Bank is unable to determine or ascertain the Daily Adjusting LIBOR Rate, or (2) by reason of circumstances affecting the foreign exchange and interbank markets generally, deposits in eurodollars in the applicable amounts or for the relative maturities are not being offered to Bank, or (3) the Daily Adjusting LIBOR Rate plus the Applicable Margin will not accurately or fairly cover or reflect the cost to Bank of maintaining any of the Obligations under this Addendum based upon the Daily Adjusting LIBOR Rate, then Bank shall forthwith give notice thereof to Borrower. Thereafter, until Bank notifies Borrower that such conditions or circumstances no longer exist, the Prime Referenced Rate plus the Applicable Margin shall be the applicable interest rate for all Obligations during such period of time.

 

b.                                      If, after the date hereof, the introduction of, or any change in, any applicable law, rule or regulation or in the interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by Bank (or its LIBOR Lending Office) with any request or directive (whether or not having the force of law) of any such authority, shall make it unlawful or impossible for Bank (or its LIBOR Lending Office) to make or maintain any Obligations under the Agreement with interest based upon the Daily Adjusting LIBOR Rate, Bank shall forthwith give notice thereof to Borrower. Thereafter, until Bank notifies Borrower that such conditions or circumstances

 

 

no longer exist, the Prime Referenced Rate plus the Applicable Margin shall be the applicable interest rate for all Obligations during such period of time.

 

c.                                       If the adoption after the date hereof, or any change after the date hereof in, any applicable law, rule or regulation (whether domestic or foreign) of any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by Bank (or its LIBOR Lending Office) with any request or directive (whether or not having the force of law) made by any such authority, central bank or comparable agency after the date hereof: (a) shall subject Bank (or its LIBOR Lending Office) to any tax, duty or other charge with respect to this Addendum or any Obligations under the Agreement, or shall change the basis of taxation of payments to Bank (or its LIBOR Lending Office) of the principal of or interest under this Addendum or any other amounts due under this Addendum in respect thereof (except for changes in the rate of tax on the overall net income of Bank or its LIBOR Lending Office imposed by the jurisdiction in which Bank’s principal executive office or LIBOR Lending Office is located); or (b) shall impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by Bank (or its LIBOR Lending Office), or shall impose on Bank (or its LIBOR Lending Office) or the foreign exchange and interbank markets any other condition affecting this Addendum or the Obligations; and the result of any of the foregoing is to increase the cost to Bank of maintaining any part of the Obligations or to reduce the amount of any sum received or receivable by Bank under this Addendum by an amount deemed by Bank to be material, then Borrower shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such compensation, such additional amount or amounts as will compensate Bank for such increased cost or reduction. A certificate of Bank, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, setting forth the basis for determining such additional amount or amounts necessary to compensate Bank shall be conclusive and binding for all purposes, absent manifest error.

 

d.                                      In the event that any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not presently applicable to Bank, or any interpretation or administration thereof by any governmental authority charged with the interpretation or administration thereof, or compliance by Bank with any guideline, request or directive of any such authority (whether or not having the force of law), including any risk-based capital guidelines, affects or would affect the amount of capital required or expected to be maintained by Bank (or any corporation controlling Bank), and Bank determines that the amount of such capital is increased by or based upon the existence of any obligations of Bank hereunder or the maintaining of any Obligations, and such increase has the effect of reducing the rate of return on Bank’s (or such controlling corporation’s) capital as a consequence of such obligations or the maintaining of such Obligations to a level below that which Bank (or such controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy), then Borrower shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such compensation, additional amounts as are sufficient to compensate Bank (or such controlling corporation) for any increase in the amount of capital and reduced rate of return which Bank reasonably determines to be allocable to the existence of any obligations of Bank hereunder or to maintaining any Obligations. A certificate of Bank as to the amount of such compensation, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, shall be conclusive and binding for all purposes absent manifest error.

 

8.                                      Legal Effect. Except as specifically modified hereby, all of the terms and conditions of the Agreement remain in full force and effect.

 

9.                                      Conflicts. As to the matters specifically the subject of this Addendum, in the event of any conflict between this Addendum and the Agreement, the terms of this Addendum shall control.

 

 

IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date first set forth above.

 

	
COMERICA   BANK 
    	
 
    	
ROCKET   FUEL INC.
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/ Ramesh Bart
    	
 
    	
By:   
    	
/s/   George John
    
	
Name:   
    	
Ramesh Bart
    	
 
    	
Name:   
    	
George   H. John
    
	
Title:   
    	
VP   
    	
 
    	
Title:   
    	
CEO
    

 

 

FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This Fourth Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of November 18, 2011, by and between COMERICA BANK (“Bank”) and ROCKET FUEL INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of April 9, 2010 (as amended from time to time, including by that certain First Amendment to Loan and Security Agreement dated as of August 20, 2010, that certain Second Amendment to Loan and Security Agreement dated as of December 15, 2010 and that certain Third Amendment to Loan and Security Agreement dated as of July 26, 2011, collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                      Subsection (d) of the defined term “Permitted Indebtedness” in Section 1.1 of the Agreement hereby is amended and restated as follows:

 

“(d)                             Indebtedness with respect to Borrower’s American Express corporate credit cards in an amount not to exceed Five Hundred Thousand Dollars ($500,000);”

 

2.                                      Bank hereby waives the existing Event of Default that has arisen from Borrower’s failure to comply with Section 6.7 of the Agreement for the September 2011 measuring.

 

3.                                      No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.

 

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

 

5.                                      Borrower represents and warrants that the Representations and Warranties contained in the Agreement are true and correct in all material respects as of the date of this Amendment, and that except as explicitly waived hereby, no Event of Default has occurred and is continuing.

 

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

 

(a)                               this Amendment, duly executed by Borrower;

 

(b)                               all reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrower’s accounts; and

 

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

 

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

 

 

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

 

	
 
    	
ROCKET FUEL INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ J. Peter Bardwick 11-18-11
    
	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    
	
 
    	
COMERICA BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Ramesh Bart
    
	
 
    	
Title:
    	
VP
    

 

[Signature Page to Fourth Amendment to Loan & Security Agreement]

 

 

FIFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This Fifth Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of March 30, 2012, by and between COMERICA BANK (“Bank”) and ROCKET FUEL INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of April 9, 2010 (as amended from time to time, including by that certain First Amendment to Loan and Security Agreement dated as of August 20, 2010, that certain Second Amendment to Loan and Security Agreement dated as of December 15, 2010, that certain Third Amendment to Loan and Security Agreement dated as of July 26, 2011 and that certain Fourth Amendment to Loan and Security Agreement dated as of November 18, 2011, collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                      The following defined terms in Section 1.1 of the Agreement hereby are added, amended or restated as follows:

 

“Consolidated Net Income (or Deficit)” means the consolidated net income (or deficit) of any Person and its Subsidiaries, after deduction of all expenses, taxes, and other proper charges, determined in accordance with GAAP, after eliminating therefrom all extraordinary nonrecurring items of income.

 

“Consolidated Total Interest Expense” means with respect to any Person for any period, the aggregate amount of interest required to be paid or accrued by a Person and its Subsidiaries during such period on all Indebtedness of such Person and its Subsidiaries outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of any capitalized lease or any synthetic lease, and including commitment fees, agency fees, facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money.

 

“Credit Extension” means each Advance, Growth Capital Advance or any other extension of credit by Bank to or for the benefit of Borrower hereunder.

 

“EBITDA” means with respect to any fiscal period an amount equal to the sum of (a) Consolidated Net Income of the Borrower and its Subsidiaries for such fiscal period, plus (b) in each case to the extent deducted in the calculation of the Borrower’s Consolidated Net Income and without duplication, (i) depreciation and amortization for such period, plus (ii) income tax expense for such period, plus (iii) Consolidated Total Interest Expense paid or accrued during such period, plus (iv) non-cash expenses associated with granting stock options or related to employee benefit plans, and minus, to the extent added in computing Consolidated Net Income, and without duplication, all extraordinary and non-recurring revenue and gains (including income tax benefits) for such period, all as determined in accordance with GAAP.

 

“Equity Event” means the receipt by Borrower of not less than Fifteen Million Dollars ($15,000,000) in New Equity.

 

“Fifth Amendment Effective Date” is March 30, 2012.

 

“Growth Capital Advance(s)” means a cash advance or cash advances under the Growth Capital Line.

 

“Growth Capital Availability End Date” means March 30, 2013.

 

“Growth Capital Line” means a Credit Extension of up to Three Million Dollars ($3,000,000).

 

“Growth Capital Maturity Date” means March 30, 2015.

 

1

 

“Letter of Credit Sublimit” means a sublimit for Letters of Credit under the Revolving Line not to exceed Two Hundred Thousand Dollars ($200,000).

 

“New Equity” means net cash proceeds received by Borrower after the Fifth Amendment Effective Date from the sale of Borrower’s equity securities to investors and on terms and conditions reasonably acceptable to Bank.

 

“Term Sheet” means a signed, written commitment from investors to consummate the Equity Event.

 

2.                                      New Section 2.1(c) is hereby added to the Agreement as follows:

 

“(c)                            Growth Capital Advances.

 

(i)                                     Subject to and upon the terms and conditions of this Agreement, Bank agrees to make Growth Capital Advances to Borrower. Borrower may request Growth Capital Advances from the Fifth Amendment Effective Date through the Growth Capital Availability End Date. The aggregate outstanding amount of Growth Capital Advances shall not exceed the Growth Capital Line.

 

(ii)                                  Interest shall accrue from the date of each Growth Capital Advance at the rate specified in Section 2.3(a), and shall be payable in accordance with Section 2.3(c). Any Growth Capital Advances that are outstanding on the Growth Capital Availability End Date shall be payable in twenty four (24) equal monthly installments of principal, plus all accrued interest, beginning on April 30, 2013, and continuing on the same day of each month thereafter until paid in full. Growth Capital Advances, once repaid, may not be reborrowed. Borrower may prepay any Growth Capital Advances without penalty or premium.

 

(iii)                               When Borrower desires to obtain a Growth Capital Advance, Borrower shall notify Bank (which notice shall be irrevocable) by facsimile transmission to be received no later than 3:00 p.m. Pacific time three (3) Business Days before the day on which the Growth Capital Advance is to be made. Such notice shall be substantially in the form of Exhibit B. The notice shall be signed by a Responsible Officer or its designee. Bank shall be entitled to rely on any facsimile or telephonic notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance.”

 

3.                                      Section 2.3(a) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(a)                           Interest Rates

 

(i)                                     Advances. Except as set forth in Section 2.3(b), the Advances shall bear interest, on the outstanding daily balance thereof, as set forth in the Daily Adjusting LIBOR Addendum attached as Exhibit E.

 

(ii)                                  Growth Capital Advances. Except as set forth in Section 2.3(b), the Growth Capital Advances shall bear interest, on the outstanding daily balance thereof, as set forth in the Prime Referenced Rate Addendum to Loan and Security Agreement attached hereto as Exhibit F.”

 

4.                                      Section 6.7 of the Agreement is hereby amended and restated in its entirety as follows:

 

“6.7                         Financial/Milestone Covenants. Borrower shall maintain the following financial/milestone covenants:

 

(a)                                 EBITDA. EBITDA, measured on a quarterly basis as of the end of each of Borrower’s fiscal quarters of not less than (i) negative Three Million Five Hundred Thousand Dollars (-$3,500,000) for the quarter ending March 31, 2012, (ii) negative Three Million Eight Hundred Thousand Dollars (-$3,800,000) for the quarter ending June 30, 2012, (iii) negative One Million Dollars (-$1,000,000) for the quarter ending

 

2

 

September 30, 2012 and (iv) One Dollar ($1.00) for the quarter ending December 31, 2012 and each subsequent calendar quarter thereafter.

 

(b)                                         Term Sheet/Equity Event. Borrower shall have delivered a Term Sheet to Bank no later than May 15, 2012. Borrower shall have consummated the Equity Event no later than June 30, 2012.”

 

5.                                      Exhibit D is hereby replaced with Exhibit D attached hereto.

 

6.                                      The following defined term in Exhibit E of the Agreement is hereby amended and restated in its entirety as follows:

 

“Applicable Margin” means three and one quarter percent (3.25%) per annum.

 

7.                                      New Exhibit F is hereby added in the form attached hereto.

 

8.                                      Bank hereby waives the existing Events of Default that have arisen from cross-defaults arising under the WTI Indebtedness by virtue of Borrower failing to amend the documents governing the WTI Indebtedness to increase the amount of Indebtedness permitted pursuant to subsection (d) of the definition of Permitted Indebtedness in Section 1.1 of the Agreement.

 

9.                                      No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.

 

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

 

11.                               Borrower represents and warrants that the Representations and Warranties contained in the Agreement are true and correct in all material respects as of the date of this Amendment, and that except as explicitly waived hereby, no Event of Default has occurred and is continuing.

 

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

 

(a)                                         this Amendment, duly executed by Borrower;

 

(b)                                         an amendment to the WTI Intercreditor Agreement, in form and substance acceptable to Bank;

 

(c)                                          a Certificate of the Secretary of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Amendment;

 

(d)                                         a fee in the amount of Fifteen Thousand Dollars ($15,000), which may be debited from any of Borrower’s accounts;

 

(e)                                          all reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrower’s accounts; and

 

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

 

3

 

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

 

4

 

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

 

	
 
    	
ROCKET   FUEL INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   J. Peter Bardwick
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    
	
 
    	
COMERICA   BANK
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Rod Werner
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
SVP
    

 

[Signature Page to Fifth Amendment to Loan & Security Agreement]

 

 

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

	
Please send all Required Reporting to: 
    	
Comerica   Bank
    
	
 
    	
Technology &   Life Sciences Division
    
	
 
    	
Loan   Analysis Department
    
	
 
    	
Five   Palo Alto Square, Suite 800
    
	
 
    	
3000   El Camino Real
    
	
 
    	
Palo   Alto, CA 94306
    
	
 
    	
Phone:   (650) 846-6820
    
	
 
    	
Fax:   (650) 846-6840
    

 

FROM:       ROCKET FUEL  INC.

 

The undersigned authorized Officer of ROCKET FUEL INC. (“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending                                                                 with all required covenants, including without limitation the ongoing registration of intellectual property rights in accordance with Section 6.8, except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except (i) as explained in an accompanying letter or footnotes and (ii) with respect to unaudited financial statements, for the absence of footnotes and subject to year-end adjustments.

 

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

 

	
REPORTING COVENANTS
    	
 
    	
REQUIRED
    	
 
    	
COMPLIES
    
	
Company   Prepared Monthly F/S
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    
	
Compliance   Certificate
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    
	
CPA   Audited, Unqualified F/S
    	
 
    	
Annually,   within 150 days of FYE
    	
 
    	
YES
    	
 
    	
NO
    
	
Borrowing   Base Cert., A/R & A/P Agings
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    
	
Annual   Business Plan (incl. operating budget)
    	
 
    	
25 days   prior to FYE
    	
 
    	
YES
    	
 
    	
NO
    
	
Intellectual   Property Report
    	
 
    	
Quarterly   within 30 days
    	
 
    	
YES
    	
 
    	
NO
    
	
Audit
    	
 
    	
Semi-annual
    	
 
    	
YES
    	
 
    	
NO
    
	
If   Public:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10-Q
    	
 
    	
Quarterly,   within 5 days of SEC filing (50 days)
    	
 
    	
YES
    	
 
    	
NO
    
	
10-K
    	
 
    	
Annually,   within 5 days of SEC filing (95 days)
    	
 
    	
YES
    	
 
    	
NO
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total   amount of Borrower’s cash and investments
    	
 
    	
Amount:   $                                                       
    	
 
    	
YES
    	
 
    	
NO
    
	
Total   amount of Borrower’s cash and investments maintained with Bank
    	
 
    	
Amount:   $                                                       
    	
 
    	
YES
    	
 
    	
NO
    

 

	
REPORTING COVENANTS
    	
 
    	
DESCRIPTION
    	
 
    	
APPLICABLE
    
	
Legal   Action > $250,000
    	
 
    	
Notify   promptly upon notice            
    	
 
    	
YES
    	
 
    	
NO
    
	
Inventory   Disputes > $250,000
    	
 
    	
Notify   promptly upon notice            
    	
 
    	
YES
    	
 
    	
NO
    
	
Mergers &   Acquisitions > $100,000
    	
 
    	
Notify   promptly upon notice            
    	
 
    	
YES
    	
 
    	
NO
    
	
Cross   default with other agreements > $250,000
    	
 
    	
Notify   promptly upon notice            
    	
 
    	
YES
    	
 
    	
NO
    
	
 
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Judgment   > $250,000
    	
 
    	
Notify   promptly upon notice            
    	
 
    	
YES
    	
 
    	
NO
    

 

 

	
FINANCIAL
    	
 
    	
REQUIRED
    	
 
    	
ACTUAL
    	
 
    	
COMPLIES
    
	
TO BE TESTED MONTHLY, UNLESS OTHERWISE NOTED:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Quarterly   EBITDA
    	
 
    	
*
    	
 
    	
$                     
    	
 
    	
YES
    	
NO
    
	
Term   Sheet
    	
 
    	
5/15/12
    	
 
    	
                     
    	
 
    	
YES
    	
NO
    
	
Equity   Event
    	
 
    	
6/30/12
    	
 
    	
                     
    	
 
    	
YES
    	
NO
    

 

*not less than (i) negative Three Million Five Hundred Thousand Dollars (-$3,500,000) for the quarter ending March 31, 2012, (ii) negative Three Million Eight Hundred Thousand Dollars (-$3,800,000) for the quarter ending June 30, 2012, (iii) negative One Million Dollars (-$1,000,000) for the quarter ending September 30, 2012 and (iv) One Dollar ($1.00) for the quarter ending December 31, 2012 and each subsequent calendar quarter thereafter

 

	
OTHER COVENANTS
    	
 
    	
REQUIRED
    	
 
    	
ACTUAL
    	
 
    	
COMPLIES
    
	
Permitted   Indebtedness for equipment leases or loans
    	
 
    	
<$250,000
    	
 
    	
                           
    	
 
    	
YES
    	
NO
    
	
Permitted   Investments for stock repurchase
    	
 
    	
<$100,000
    	
 
    	
                           
    	
 
    	
YES
    	
NO
    
	
Permitted   Investments for subsidiaries
    	
 
    	
<$500,000
    	
 
    	
                           
    	
 
    	
YES
    	
NO
    
	
Permitted   Investments for employee loans
    	
 
    	
<$100,000
    	
 
    	
                           
    	
 
    	
YES
    	
NO
    
	
Permitted   Investments for joint ventures
    	
 
    	
<$250,000
    	
 
    	
                           
    	
 
    	
YES
    	
NO
    
	
Permitted   Liens for equipment leases or loans
    	
 
    	
<$250,000
    	
 
    	
                           
    	
 
    	
YES
    	
NO
    
	
Permitted   Transfers
    	
 
    	
<$100,000
    	
 
    	
                           
    	
 
    	
YES
    	
NO
    

 

Please Enter Below Comments Regarding Violations:

 

The Officer further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement, including, without limitation, the financial covenants, no credit extensions will be made.

 

	
Very   truly yours,
    	
 
    
	
 
    	
 
    
	
Authorized   Signer
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
 
    	
 
    
	
Title:
    	
 
    

 

 

EXHIBIT F

 

PRIME REFERENCED RATE ADDENDUM

 

[please see attached]

 

 

CORPORATION RESOLUTIONS AND INCUMBENCY CERTIFICATION

AUTHORITY TO PROCURE LOANS

 

I certify that I am the duly elected and qualified Secretary of ROCKET FUEL INC. (the “Corporation”); that the following is a true and correct copy of resolutions duly adopted by the Board of Directors of the Corporation in accordance with its bylaws and applicable statutes.

 

Copy of Resolutions:

 

Be it Resolved, That:

 

1.                                      Any one (1) of the following CEO, President, CFO (insert titles only) of the Corporation are/is authorized, for, on behalf of, and in the name of the Corporation to:

 

(a)                                 Negotiate and procure loans, letters of credit and other credit or financial accommodations from Comerica Bank (“Bank”), a Texas banking association, including, without limitation, that certain Loan and Security Agreement dated as of April 9, 2010, and also to execute and deliver to Bank one or more renewals, extensions, or modifications thereof, including but not limited to that certain Fifth Amendment to Loan and Security Agreement dated as of March 30, 2012.

 

(b)                                 Discount with the Bank, commercial or other business paper belonging to the Corporation made or drawn by or upon third parties, without limit as to amount;

 

(c)                                  Purchase, sell, exchange, assign, endorse for transfer and/or deliver certificates and/or instruments representing stocks, bonds, evidences of Indebtedness or other securities owned by the Corporation, whether or not registered in the name of the Corporation;

 

(d)                                 Give security for any liabilities of the Corporation to the Bank by grant, security interest, assignment, lien, deed of trust or mortgage upon any real or personal property, tangible or intangible of the Corporation; and

 

(e)                                  Execute and deliver in form and content as may be required by the Bank any and all notes, evidences of Indebtedness, applications for letters of credit, guaranties, subordination agreements, loan and security agreements, financing statements, assignments, liens, deeds of trust, mortgages, trust receipts and other agreements, instruments or documents to carry out the purposes of these Resolutions, any or all of which may relate to all or to substantially all of the Corporation’s property and assets.

 

2.                                      Said Bank be and it is authorized and directed to pay the proceeds of any such loans or discounts as directed by the persons so authorized to sign, whether so payable to the order of any of said persons in their individual capacities or not, and whether such proceeds are deposited to the individual credit of any of said persons or not;

 

3.                                      Any and all agreements, instruments and documents previously executed and acts and things previously done to carry out the purposes of these Resolutions are ratified, confirmed and approved as the act or acts of the Corporation.

 

4.                                      These Resolutions shall continue in force, and the Bank may consider the holders of said offices and their signatures to be and continue to be as set forth in a certified copy of these Resolutions delivered to the Bank, until notice to the contrary in writing is duly served on the Bank (such notice to have no effect on any action previously taken by the Bank in reliance on these Resolutions).

 

 

5.                                      Any person, corporation or other legal entity dealing with the Bank may rely upon a certificate signed by an officer of the Bank to effect that these Resolutions and any agreement, instrument or document executed pursuant to them are still in full force and effect and binding upon the Corporation.

 

6.                                      The Bank may consider the holders of the offices of the Corporation and their signatures, respectively, to be and continue to be as set forth in the Certificate of the Secretary of the Corporation until notice to the contrary in writing is duly served on the Bank.

 

I further certify that the above Resolutions are in full force and effect as of the date of this Certificate; that these Resolutions and any borrowings or financial accommodations under these Resolutions have been properly noted in the corporate books and records, and have not been rescinded, annulled, revoked or modified; that neither the foregoing Resolutions nor any actions to be taken pursuant to them are or will be in contravention of any provision of the articles of incorporation or bylaws of the Corporation or of any agreement, indenture or other instrument to which the Corporation is a party or by which it is bound; and that neither the articles of incorporation nor bylaws of the Corporation nor any agreement, indenture or other instrument to which the Corporation is a party or by which it is bound require the vote or consent of shareholders of the Corporation to authorize any act, matter or thing described in the foregoing Resolutions.

 

I further certify that the following named persons have been duly elected to the offices set opposite their respective names, that they continue to hold these offices at the present time, and that the signatures which appear below are the genuine, original signatures of each respectively:

 

(PLEASE SUPPLY GENUINE SIGNATURES OF AUTHORIZED SIGNERS BELOW)

 

	
NAME (Type or Print)
    	
 
    	
TITLE
    	
 
    	
SIGNATURE
    
	
George   John
    	
 
    	
CEO
    	
 
    	
/s/   George John
    
	
Richard   Frankel
    	
 
    	
President
    	
 
    	
/s/   Richard Frankel
    
	
J.   Peter Bardwick
    	
 
    	
CFO
    	
 
    	
/s/   J. Peter Bardwick
    

 

In Witness Whereof, I have affixed my name as Secretary and have caused the corporate seal (where available) of said Corporation to be affixed on March 30, 2012.

 

	
 
    	
/s/ Abhinav Gupta
    
	
 
    	
Secretary
    

 

	
The   Above Statements are Correct.
    	
/s/   J. Peter Bardwick
    
	
 
    	
SIGNATURE   OF OFFICER OR DIRECTOR OR, IF NONE, A SHAREHOLDER OTHER THAN SECRETARY   WHEN SECRETARY IS AUTHORIZED TO SIGN ALONE.
    

 

Failure to complete the above when the Secretary is authorized to sign alone shall constitute a certification by the Secretary that the Secretary is the sole Shareholder, Director and Officer of the Corporation.

 

 

COMERICA BANK

Member FDIC

 

ITEMIZATION OF AMOUNT FINANCED

DISBURSEMENT INSTRUCTIONS

(Growth Capital)

 

	
Name(s):   ROCKET FUEL INC.
    	
Date:   March 30, 2012
    

 

	
$3,000,000
    	
 
    	
credited   to deposit account No. 1894346012 when Growth Capital Advances are requested   or disbursed to Borrower by cashiers check or wire transfer
    

 

Amounts paid to others on your behalf:

 

	
$
    	
 
    	
to   Comerica Bank for Loan Fee
    
	
$
    	
 
    	
to   Comerica Bank for Document Fee
    
	
$
    	
 
    	
to   Comerica Bank for accounts receivable audit (estimate), if any
    
	
$
    	
 
    	
to   Bank counsel fees and expenses
    
	
$
    	
 
    	
to                        
    
	
$
    	
 
    	
to                        
    
	
$
    	
 
    	
TOTAL   (AMOUNT FINANCED)
    

 

Upon consummation of this transaction, this document will also serve as the authorization for Comerica Bank to disburse the loan proceeds as stated above.

 

	
/s/   J. Peter Bardwick
    	
 
    	
 
    
	
Signature
    	
 
    	
Signature
    
	
J.   Peter Bardwick
    	
 
    	
 
    
	
CFO
    	
 
    	
 
    

 

 

Prime Reference Rate Addendum

To Loan and Security Agreement

 

This Prime Reference Rate Addendum to Loan and Security Agreement (this “Addendum”) is entered into as of March 30, 2012 by and between Comerica Bank (“Bank”) and ROCKET FUEL INC. (“Borrower”). This Addendum supplements the terms of the Loan and Security Agreement dated as of April 9, 2010, as amended from time to time, including by that certain First Amendment to Loan and Security Agreement dated as of August 20, 2010, that certain Second Amendment to Loan and Security Agreement dated as of December 15, 2010, that certain Third Amendment to Loan and Security Agreement dated as of July 26, 2011 and that certain Fourth Amendment to Loan and Security Agreement dated as of November 18, 2011 (as the same may be further amended, modified, supplemented, extended or restated from time to time, the “Agreement”).

 

1.                                      Definitions. As used in this Addendum, the following terms shall have the following meanings. Initially capitalized terms used and not defined in this Addendum shall have the meanings ascribed thereto in the Agreement.

 

a.                                      “Applicable Margin” means two and one half percent (2.50%) per annum.

 

b.                                      “Business Day” means any day, other than a Saturday, Sunday or any other day designated as a holiday under Federal or applicable State statute or regulation, on which Bank is open for all or substantially all of its domestic and international business (including dealings in foreign exchange) in San Jose, California, and, in respect of notices and determinations relating the Daily Adjusting LIBOR Rate, also a day on which dealings in dollar deposits are also carried on in the London interbank market and on which banks are open for business in London, England.

 

c.                                       “Change in Law” means the occurrence, after the date hereof, of any of the following: (i) the adoption or introduction of, or any change in any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not applicable to Bank on such date, or (ii) any change in interpretation, administration or implementation thereof of any such law, treaty, rule or regulation by any Governmental Authority, or (iii) the issuance, making or implementation by any Governmental Authority of any interpretation, administration, request, regulation, guideline, or directive (whether or not having the force of law), including any risk-based capital guidelines. For purposes of this definition, (x) a change in law, treaty, rule, regulation, interpretation, administration or implementation shall include, without limitation, any change made or which becomes effective on the basis of a law, treaty, rule, regulation, interpretation administration or implementation then in force, the effective date of which change is delayed by the terms of such law, treaty, rule, regulation, interpretation, administration or implementation, and (y) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, H.R. 4173) and all requests, rules, regulations, guidelines, interpretations or directives promulgated thereunder or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or promulgated, whether before or after the date hereof, and (z) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall each be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

 

d.                                      “Daily Adjusting LIBOR Rate” means, for any day, a per annum interest rate which is equal to the quotient of the following:

 

1.                                      for any day, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to one (1) month appearing on Page BBAM of the Bloomberg Financial Markets Information Service as of 8:00 a.m. (California time) (or as soon thereafter as practical) on such day, or if such day is not a Business Day, on the immediately preceding Business Day. In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service) on any day, the “Daily Adjusting LIBOR Rate” for such day shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be reasonably selected by Bank, or in the absence of such other service, the “Daily Adjusting LIBOR Rate” for such day shall, instead, be determined based upon the average of the rates at which Bank is offered dollar deposits at or about 8:00 a.m. (California time) (or as soon thereafter as practical), on such day, or if such day is not a Business Day, on the immediately preceding Business Day, in the interbank eurodollar market in an amount comparable to the outstanding principal amount of the Obligations and for a period equal to one (1) month;

 

divided by

 

2.                                      1.00 minus the maximum rate (expressed as a decimal) on such day at which Bank is required to maintain reserves on “Euro-currency Liabilities” as defined in and pursuant to Regulation D of the Board of

 

1

 

Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category.

 

e.                                       “Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, any supranational bodies such as the European Union or the European Central Bank).

 

f.                                        “LIBOR Lending Office” means Bank’s office located in the Cayman Islands, British West Indies, or such other branch of Bank, domestic or foreign, as it may hereafter designate as its LIBOR Lending Office by notice to Borrower.

 

g.                                       “Prime Rate” means the per annum interest rate established by Bank as its prime rate for its borrowers, as such rate may vary from time to time, which rate is not necessarily the lowest rate on loans made by Bank at any such time.

 

h.                                      “Prime Referenced Rate” means, for any day, a per annum interest rate which is equal to the Prime Rate in effect on such day, but in no event and at no time shall the Prime Referenced Rate be less than the sum of the Daily Adjusting LIBOR Rate for such day plus two and one-half percent (2.50%) per annum. If, at any time, Bank determines that it is unable to determine or ascertain the Daily Adjusting LIBOR Rate for any day, the Prime Referenced Rate for each such day shall be the Prime Rate in effect at such time, but not less than two and one-half percent (2.50%) per annum.

 

2.                                      Interest Rate. Subject to the terms and conditions of this Addendum, the Obligations under the Agreement shall bear interest at the Prime Referenced Rate plus the Applicable Margin.

 

3.                                      Payment of Interest. Accrued and unpaid interest on the unpaid balance of the Obligations outstanding under the Agreement shall be payable monthly, in arrears, on the first calendar day of each month, until maturity (whether as stated herein, by acceleration, or otherwise). In the event that any payment under this Addendum becomes due and payable on any day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, to the extent applicable, interest shall continue to accrue and be payable thereon during such extension at the rates set forth in this Addendum. Interest accruing hereunder shall be computed on the basis of a year of 360 days, and shall be assessed for the actual number of days elapsed, and in such computation, effect shall be given to any change in the applicable interest rate as a result of any change in the Prime Referenced Rate on the date of each such change.

 

4.                                      Bank’s Records. The amount and date of each advance under the Agreement, its applicable interest rate, and the amount and date of any repayment shall be noted on Bank’s records, which records shall be conclusive evidence thereof, absent manifest error; provided, however, any failure by Bank to make any such notation, or any error in any such notation, shall not relieve Borrower of its obligations to repay Bank all amounts payable by Borrower to Bank under or pursuant to this Addendum and the Agreement, when due in accordance with the terms hereof.

 

5.                                      Default Interest Rate. From and after the occurrence of any Event of Default, and so long as any such Event of Default remains unremedied or uncured thereafter, the Obligations outstanding under the Agreement shall bear interest at a per annum rate of five percent (5%) above the otherwise applicable interest rate hereunder, which interest shall be payable upon demand. In addition to the foregoing, a late payment charge equal to five percent (5%) of each late payment hereunder may be charged on any payment not received by Bank within ten (10) calendar days after the payment due date therefor, but acceptance of payment of any such charge shall not constitute a waiver of any Event of Default under the Agreement. In no event shall the interest payable under this Addendum and the Agreement at any time exceed the maximum rate permitted by law.

 

6.                                      Prepayment. Borrower may prepay all or part of the outstanding balance of any Obligations at any time without premium or penalty. Any prepayment hereunder shall also be accompanied by the payment of all accrued and unpaid interest on the amount so prepaid. Borrower hereby acknowledges and agrees that the foregoing shall not, in any way whatsoever, limit, restrict, or otherwise affect Bank’s right to make demand for payment of all or any part of the Obligations when due in accordance with the terms of the Agreement.

 

7.                                      Regulatory Developments or Other Circumstances Relating to the Daily Adjusting LIBOR Rate.

 

a.                                      If any Change in Law shall: (a) subject Bank to any tax, duty or other charge with respect to this Addendum or any Obligations under the Agreement, or shall change the basis of taxation of payments to Bank of the principal of or interest under this Addendum or any other amounts due under this Addendum in respect thereof (except for changes in the rate of tax on the overall net

 

2

 

income of Bank or its LIBOR Lending Office imposed by the jurisdiction in which Bank’s principal executive office or LIBOR Lending Office is located); or (b) impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by Bank, or shall impose on Bank or the foreign exchange and interbank markets any other condition affecting this Addendum or the Obligations; and the result of any of the foregoing is to increase the cost to Bank of maintaining any part of the Obligations or to reduce the amount of any sum received or receivable by Bank under this Addendum by an amount deemed by Bank to be material, then Borrower shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such compensation, such additional amount or amounts as will compensate Bank for such increased cost or reduction. A certificate of Bank, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, setting forth the basis for determining such additional amount or amounts necessary to compensate Bank shall be conclusive and binding for all purposes, absent manifest error.

 

b.                                      In the event that any Change in Law affects or would affect the amount of capital required or expected to be maintained by Bank (or any corporation controlling Bank), and Bank determines that the amount of such capital is increased by or based upon the existence of any obligations of Bank hereunder or the maintaining of any Obligations, and such increase has the effect of reducing the rate of return on Bank’s (or such controlling corporation’s) capital as a consequence of such obligations or the maintaining of such Obligations to a level below that which Bank (or such controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy), then Borrower shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such compensation, additional amounts as are sufficient to compensate Bank (or such controlling corporation) for any increase in the amount of capital and reduced rate of return which Bank reasonably determines to be allocable to the existence of any obligations of Bank hereunder or to maintaining any Obligations. A certificate of Bank as to the amount of such compensation, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, shall be conclusive and binding for all purposes absent manifest error.

 

8.                                      Legal Effect. Except as specifically modified hereby, all of the terms and conditions of the Agreement remain in full force and effect.

 

9.                                      Conflicts. As to the matters specifically the subject of this Addendum, in the event of any conflict between this Addendum and the Agreement, the terms of this Addendum shall control.

 

IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date first set forth above.

 

	
COMERICABANK
    	
 
    	
ROCKET   FUEL INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Rod Werner
    	
 
    	
By:
    	
/s/   J. Peter Bardwick
    
	
Name:
    	
Rod   Werner
    	
 
    	
Name:
    	
J.   Peter Bardwick
    
	
Title:
    	
SVP
    	
 
    	
Its:
    	
CFO
    

 

3

 

SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This Sixth Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of June 26, 2012, by and between COMERICA BANK (“Bank”) and ROCKET FUEL INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of April 9, 2010 (as amended from time to time, including by that certain First Amendment to Loan and Security Agreement dated as of August 20, 2010, that certain Second Amendment to Loan and Security Agreement dated as of December 15, 2010, that certain Third Amendment to Loan and Security Agreement dated as of July 26, 2011, that certain Fourth Amendment to Loan and Security Agreement dated as of November 18, 2011 and that certain Fifth Amendment to Loan and Security Agreement dated as of March 30, 2012, collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.            The following defined terms in Section 1.1 of the Agreement hereby are added, amended or restated as follows:

 

“Growth Capital Line” means a Credit Extension of up to Five Million Dollars ($5,000,000).

 

“Funded Indebtedness” means the sum of all Indebtedness owing to Bank and WTI.

 

“Liquidity” means the sum of (i) Cash on deposit with Bank, plus (ii) eighty five percent (85%) of Eligible Accounts.

 

“Liquidity Ratio” means a ratio of (i) Liquidity divided by (ii) all Funded Indebtedness of Borrower.

 

“Revolving Line” means a credit extension of up to Twenty Five Million Dollars ($25,000,000) (inclusive of the aggregate face amount of Letters of Credit issued under the Letter of Credit Sublimit).

 

2.            Clause (a) of the defined term “Eligible Accounts” in Section 1.1 of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(a)       Accounts that the account debtor has failed to pay in full within ninety (90) days of invoice date; provided however, Accounts of Morpheus Media, Razorfish, Studiocom, Universal McCann, LevelWing Media, Mediavest, Media Storm, Publicis Modem and Starcom shall be excluded only if such account debtors fail to pay in full within one hundred twenty (120) days of invoice date;”

 

3.            Section 2.3(a)(ii) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(ii)       Growth Capital Advances. Except as set forth in Section 2.3(b), the Growth Capital Advances shall bear interest, on the outstanding daily balance thereof, as set forth in the Daily Adjusting LIBOR Addendum to Loan and Security Agreement attached hereto as Exhibit E.”

 

4.            Section 2.5(d) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(d)       Annual Facility Fee. A fee equal to (i) Twenty Two Thousand Five Hundred Dollars ($22,500) on July 1, 2012 and (ii) Twenty Thousand Dollars ($20,000) on July 1, 2013, each of which shall be nonrefundable.”

 

1

 

5.            Section 6.2(ii) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(ii) as soon as available, but in any event within one hundred fifty (150) days after the end of Borrower’s fiscal year, audited consolidated and consolidating financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an opinion which is unqualified or otherwise consented to in writing by Bank on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank (collectively, the “Audited Financials”); provided, however, that Borrower shall deliver to Bank its 2010 and 2011 Audited Financials by no later than November 30, 2012;”

 

6.            Section 6.2(a) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(a)      If the aggregate amount of Advances outstanding is equal to or greater than Three Million Dollars ($3,000,000), within twenty five (25) days after the last day of each month, Borrower shall deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in substantially the form of Exhibit C hereto, together with aged listings by invoice date of accounts receivable and accounts payable;”

 

7.            New Section 6.7(c) hereby is added to the Agreement to as follows:

 

“(c)       Minimum Liquidity Ratio. A Liquidity Ratio, measured on a monthly basis, of not less than 1.15 to 1.00.”

 

8.            Exhibit D to the Agreement hereby is replaced with Exhibit D attached hereto.

 

9.            The following defined term in Exhibit E of the Agreement is hereby amended and restated in its entirety as follows:

 

“Applicable Margin” means (i) with respect to Advances, two and three quarters percent (2.75%) per annum and (ii) with respect to Growth Capital Advances, four and three quarters percent (4.75%) per annum.

 

10.          Exhibit F of the Agreement hereby is deleted in its entirety.

 

11.          No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.

 

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

 

13.          Borrower represents and warrants that the Representations and Warranties contained in the Agreement are true and correct in all material respects as of the date of this Amendment and that no Event of Default has occurred and is continuing.

 

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

 

2

 

(a)        this Amendment, duly executed by Borrower;

 

(b)        an amendment to and affirmation of the WTI Intercreditor Agreement, in form and substance acceptable to Bank;

 

(c)         a Certificate of the Secretary of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Amendment;

 

(d)        all reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrower’s accounts; and

 

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

 

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

 

[Balance of Page Intentionally Left Blank]

 

3

 

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

 

	
 
    	
ROCKET FUEL INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ J. Peter Bardwick
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    	
 
    
	
 
    	
COMERICA BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Dennis Rappaport
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
VP
    

 

[Signature Page to Sixth Amendment to Loan & Security Agreement]

 

 

SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This Seventh Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of February 13, 2013, by and between COMERICA BANK (“Bank”) and ROCKET FUEL INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of April 9, 2010 (as amended from time to time, including by that certain First Amendment to Loan and Security Agreement dated as of August 20, 2010, that certain Second Amendment to Loan and Security Agreement dated as of December 15, 2010, that certain Third Amendment to Loan and Security Agreement dated as of July 26, 2011, that certain Fourth Amendment to Loan and Security Agreement dated as of November 18, 2011, that certain Fifth Amendment to Loan and Security Agreement dated as of March 30, 2012 and that Sixth Amendment to Loan and Security Agreement dated as of June 26, 2012, collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                   The following defined terms in Section 1.1 of the Agreement hereby are added or amended and restated as follows:

 

“EBITDA” means with respect to any fiscal, period an amount equal to the sum of (a) Consolidated Net Income of the Borrower and its Subsidiaries for such fiscal period, plus (b) in each case to the extent deducted in the calculation of the Borrower’s Consolidated Net Income and without duplication, (i) depreciation and amortization for such period, plus (ii) income tax expense for such period, plus (iii) Consolidated Total Interest Expense paid or accrued during such period, plus (iv) non-cash expenses associated with granting stock options or other convertible securities, including warrants, or related to employee benefit plans, and minus, to the extent added in computing Consolidated Net Income, and without duplication, all extraordinary and non-recurring revenue and gains (including income tax benefits) for such period, all as determined in accordance with GAAP

 

“Growth Capital Availability End Date” means February 13, 2014.

 

“Growth Capital Line” means a Credit Extension of up to Fifteen Million Dollars ($15,000,000).

 

“Growth Capital Maturity Date” means February 13, 2016.

 

“Seventh Amendment Effective Date” is February 13, 2013.

 

2.                                   Subsection (j) of the defined term “Eligible Accounts” in Section 1.1 of the Agreement hereby is amended and restated as follows:

 

“(j)                              Accounts that relate to deposits (such as good faith deposits) or other property of the account debtor held by Borrower for the performance of services or delivery of goods which Borrower has not yet performed or delivered;”

 

3.                                   Section 2.1(c) is hereby of the Agreement hereby is amended and restated as follows:

 

“(c)                      Growth Capital Advances.

 

(i)                           Subject to and upon the terms and conditions of this Agreement, Bank agrees to make Growth Capital Advances to Borrower. On the Seventh Amendment Effective Date, Bank shall be deemed to have made a Growth Capital Advance to Borrower to refinance all outstanding Growth Capital Advances outstanding as of such date.

 

1

 

Thereafter, Borrower may request Growth Capital Advances through the Growth Capital Availability End Date. The aggregate outstanding amount of Growth Capital Advances shall not exceed the Growth Capital Line.

 

(ii)                         Interest shall accrue from the date of each Growth Capital Advance at the rate specified in Section 2.3(a), and shall be payable in accordance with Section 2.3(c). Any Growth Capital Advances that are outstanding on the Growth Capital Availability End Date shall be payable in twenty four (24) equal monthly installments of principal, plus all accrued interest, beginning on March 13, 2014, and continuing on the same day of each month thereafter through the Growth Capital Maturity Date. Growth Capital Advances, once repaid, may not be reborrowed. Borrower may prepay any Growth Capital Advances without penalty or premium.

 

(iii)                               When Borrower desires to obtain a Growth Capital Advance, Borrower shall notify Bank (which notice shall be irrevocable) by facsimile transmission to be received no later than 3:00 p.m. Pacific time three (3) Business Days before the day on which the Growth Capital Advance is to be made. Such notice shall be substantially in the form of Exhibit B. The notice shall be signed by a Responsible Officer or its designee. Bank shall be entitled to rely on any facsimile or telephonic notice given by a person who Bank reasonably believes to be a Responsible Officer or a designee thereof, and Borrower shall indemnify and hold Bank harmless for any damages or loss suffered by Bank as a result of such reliance.”

 

4.                                   Section 6.2(ii) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(ii) as soon as available, but in any event within one hundred fifty (150) days after the end of Borrower’s fiscal year, audited consolidated and consolidating financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an opinion which is unqualified or otherwise consented to in writing by Bank on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank (collectively, the “Audited Financials”); provided, however, that Borrower shall deliver to Bank its 2010 Audited Financials by no later than November 30, 2012 and its 2011 Audited Financials by no later than April 30, 2013;”

 

5.                                   Section 6.2(vi) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(vi) no later than thirty (30) days after the beginning of each fiscal year of Borrower, an annual business plan including a monthly operating budget;”

 

6.                                   Section 6.2(a) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(a)                           Within twenty five (25) days after the last day of each month, Borrower shall deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in substantially the form of Exhibit C hereto, together with aged listings by invoice date of accounts receivable and accounts payable and provided further that the foregoing reports that were due for the November 2012 and December 2012 measuring periods shall be due no later than February 20, 2013.”

 

7.                                   Section 6.7(a) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(a)                           EBITDA.  EBITDA, measured on a quarterly basis as of the end of each of Borrower’s fiscal quarters of not less than (i) negative Eight Hundred Thousand Dollars (-$800,000) for the quarter ending December 31, 2012, (ii) negative Six Million One Hundred Thousand Dollars (-$6,100,000) for the quarter ending March 31, 2013, (iii) negative Three Million Three Hundred Thousand Dollars (-$3,300,000) for the quarter ending June 30, 2013, (iv) negative Five Million Eight Hundred Thousand Dollars (-$5,800,000) for the quarter ending September 30, 2013 and (v) One Dollar ($1.00) for the quarter ending December 31, 2013 and each subsequent calendar quarter thereafter. In addition, Borrower shall achieve cumulative

 

2

 

EBITDA for the 2013 calendar year of not less than negative Eleven Million Two Hundred Thousand Dollars (-$11,200,000).”

 

8.                                  Bank hereby waives the existing Events of Default under (i) Sections 6.2(ii) of the Agreement due to Borrower’s failure to timely deliver its audited financial statements for the fiscal year ending 2011 and its 2013 annual business plan (ii) Section 6.2(a) of the Agreement due to Borrower’s failure to timely deliver a Borrowing Base Certificate and aged listings by invoice date of accounts receivable and accounts payable for the measuring periods ending November 30, 2012 and December 31, 2012, (iii) Section 6.7(a) of the Agreement to Borrower’s failure to comply with such section for the measuring period ending December 31, 2012 and hereby waives the cross-defaults resulting therefrom with respect to the WTI Indebtedness (each of the foregoing, the “Existing Defaults”).

 

9.                                  Exhibit D  of the Agreement hereby is replaced with Exhibit D attached hereto.

 

10.                           Exhibit E of the Agreement hereby is replaced with Exhibit E attached hereto.

 

11.                           No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.

 

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

 

13.                           Borrower represents and warrants that the Representations and Warranties contained in the Agreement are true and correct in all material respects as of the date of this Amendment and that no Event of Default, other than the Existing Defaults, has occurred and is continuing.

 

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

 

(a)                                 this Amendment, duly executed by Borrower;

 

(b)                         an Amendment to and Affirmation of the WTI Intercreditor Agreement, in form and substance acceptable to Bank;

 

(c)                          a Certificate of the Secretary of Borrower with respect to incumbency and resolutions authorizing the execution and delivery of this Amendment;

 

(d)                         payment of a commitment fee in the amount of Twenty Thousand Dollars ($20,000);

 

(e)                          all reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrower’s accounts; and

 

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

 

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

 

[Balance of Page Intentionally Left Blank]

 

3

 

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

 

	
 
    	
ROCKET FUEL INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ J. Peter Bardwick
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
CFO
    
	
 
    	
 
    	
 
    
	
 
    	
COMERICA BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Dennis Rappaport
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
VP
    

 

[Signature Page to Seventh Amendment to Loan and Security Agreement]

 

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

	
Please   send all Required Reporting to:
    	
Comerica Bank
    
	
 
    	
Technology & Life   Sciences Division
    
	
 
    	
Loan Analysis   Department
    
	
 
    	
Five Palo Alto Square,   Suite 800
    
	
 
    	
3000 El Camino Real
    
	
 
    	
Palo Alto, CA 94306
    
	
 
    	
Phone: (650) 846-6820
    
	
 
    	
Fax: (650) 846-6840
    

 

FROM:                                                     ROCKET FUEL INC.

 

The undersigned authorized Officer of ROCKET FUEL INC. (“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending                                          with all required covenants, including without limitation the ongoing registration of intellectual property rights in accordance with Section 6.8, except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except (i) as explained in an accompanying letter or footnotes and (ii) with respect to unaudited financial statements, for the absence of footnotes and subject to year-end adjustments.

 

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

 

	
REPORTING COVENANTS
    	
 
    	
REQUIRED
    	
 
    	
COMPLIES
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Company Prepared   Monthly F/S
    	
 
    	
Monthly, within 25   days
    	
 
    	
YES
    	
 
    	
NO
    
	
Compliance Certificate
    	
 
    	
Monthly, within 25   days
    	
 
    	
YES
    	
 
    	
NO
    
	
CPA Audited,   Unqualified F/S
    	
 
    	
Annually, within 150   days of FYE*
    	
 
    	
YES
    	
 
    	
NO
    
	
Borrowing Base Cert.,   A/R & A/P Agings
    	
 
    	
Monthly, within 25   days
    	
 
    	
YES
    	
 
    	
NO
    
	
Annual Business Plan   (incl. operating budget)
    	
 
    	
30 days after FYE
    	
 
    	
YES
    	
 
    	
NO
    
	
Intellectual Property   Report
    	
 
    	
Quarterly within 30   days
    	
 
    	
YES
    	
 
    	
NO
    
	
Audit
    	
 
    	
Semi-annual
    	
 
    	
YES
    	
 
    	
NO
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
If Public:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10-Q
    	
 
    	
Quarterly, within 5   days of SEC filing (50 days)
    	
 
    	
YES
    	
 
    	
NO
    
	
10-K
    	
 
    	
Annually, within 5   days of SEC filing (95 days)
    	
 
    	
YES
    	
 
    	
NO
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total amount of   Borrower’s cash and investments
    	
 
    	
Amount: $
    	
 
    	
YES
    	
 
    	
NO
    
	
Total amount of   Borrower’s cash and investments maintained with Bank
    	
 
    	
Amount: $
    	
 
    	
YES
    	
 
    	
NO
    

 

* with respect to FYE 2011, by January 31, 2013

 

	
REPORTING COVENANTS
    	
 
    	
DESCRIPTION
    	
 
    	
APPLICABLE
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Legal Action >   $250,000
    	
 
    	
Notify promptly upon   notice
    	
 
    	
YES
    	
 
    	
NO
    
	
Inventory Disputes   > $250,000
    	
 
    	
Notify promptly upon   notice
    	
 
    	
YES
    	
 
    	
NO
    
	
Mergers &   Acquisitions > $100,000
    	
 
    	
Notify promptly upon   notice
    	
 
    	
YES
    	
 
    	
NO
    
	
Cross default with   other agreements > $250,000
    	
 
    	
Notify promptly upon   notice
    	
 
    	
YES
    	
 
    	
NO
    
	
 
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Judgment > $250,000
    	
 
    	
Notify promptly upon   notice
    	
 
    	
YES
    	
 
    	
NO
    

 

 

	
FINANCIAL
    	
 
    	
REQUIRED
    	
 
    	
ACTUAL
    	
 
    	
COMPLIES
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TO BE TESTED MONTHLY, UNLESS OTHERWISE NOTED:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Quarterly   EBITDA
    	
 
    	
*
    	
 
    	
$
    	
 
    	
YES
    	
 
    	
NO
    
	
Yearly   EBITDA
    	
 
    	
-$11,200,000
    	
 
    	
$
    	
 
    	
YES
    	
 
    	
NO
    
	
Minimum   Liquidity Ratio
    	
 
    	
1.15:1.00
    	
 
    	
            :            
    	
 
    	
YES
    	
 
    	
NO
    

 

* not less than (i) negative Eight Hundred Thousand Dollars (-$800,000) for the quarter ending December 31, 2012, (ii) negative Six Million One Hundred Thousand Dollars (-$6,100,000) for the quarter ending March 31, 2013, (iii) negative Three Million Three Hundred Thousand Dollars (-$3,300,000) for the quarter ending June 30, 2013, (iv) negative Five Million Eight Hundred Thousand Dollars (-$5,800,000) for the quarter ending September 30, 2013 and (v) One Dollar ($1.00) for the quarter ending December 31, 2013 and each subsequent calendar quarter thereafter

 

	
OTHER COVENANTS
    	
 
    	
REQUIRED
    	
 
    	
ACTUAL
    	
 
    	
COMPLIES
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Permitted Indebtedness   for equipment leases or loans
    	
 
    	
<$250,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Permitted Investments   for stock repurchase
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Permitted Investments   for subsidiaries
    	
 
    	
<$500,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Permitted Investments   for employee loans
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Permitted Investments   for joint ventures
    	
 
    	
<$250,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Permitted Liens for   equipment leases or loans
    	
 
    	
<$250,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Permitted Transfers
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    

 

Please Enter Below Comments Regarding Violations:

 

The Officer further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement, including, without limitation, the financial covenants, no credit extensions will be made.

 

	
Very truly yours,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Authorized Signer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Title:
    	
 
    

 

 

EXHIBIT E

 

Daily Adjusting LIBOR Rate Addendum

To Loan and Security Agreement

 

This Daily Adjusting LIBOR Addendum to Loan and Security Agreement (this “Addendum”) is entered into as of February 13, 2013, by and between Comerica Bank (“Bank”) and ROCKET FUEL INC. (“Borrower”). This Addendum supplements the terms of the Loan and Security Agreement dated as of April 9, 2010 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Agreement”).

 

1.                                      Definitions.  As used in this Addendum, the following terms shall have the following meanings. Initially capitalized terms used and not defined in this Addendum shall have the meanings ascribed thereto in the Agreement.

 

a.                                      “Applicable Margin” means (i) with respect to Advances, two and three quarters percent (2.75%) per annum and (ii) with respect to Growth Capital Advances, four and three quarters percent (4.75%) per annum.

 

b.                                      “Business Day” means any day, other than a Saturday, Sunday or any other day designated as a holiday under Federal or applicable State statute or regulation, on which Bank is open for all or substantially all of its domestic and international business (including dealings in foreign exchange) in San Jose, California, and, in respect of notices and determinations relating the Daily Adjusting LIBOR Rate, also a day on which dealings in dollar deposits are also carried on in the London interbank market and on which banks are open for business in London, England.

 

c.                                       “Change in Law” means the occurrence, after the date hereof, of any of the following: (i) the adoption or introduction of, or any change in any applicable law, treaty, rule or regulation (whether domestic or foreign) now or hereafter in effect and whether or not applicable to Bank on such date, or (ii) any change in interpretation, administration or implementation thereof of any such law, treaty, rule or regulation by any Governmental Authority, or (iii) the issuance, making or implementation by any Governmental Authority of any interpretation, administration, request, regulation, guideline, or directive (whether or not having the force of law), including any risk-based capital guidelines. For purposes of this definition, (x) a change in law, treaty, rule, regulation, interpretation, administration or implementation shall include, without limitation, any change made or which becomes effective on the basis of a law, treaty, rule, regulation, interpretation administration or implementation then in force, the effective date of which change is delayed by the terms of such law, treaty, rule, regulation, interpretation, administration or implementation, and (y) the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, H.R. 4173) and all requests, rules, regulations, guidelines, interpretations or directives promulgated thereunder or issued in connection therewith shall be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or promulgated, whether before or after the date hereof, and (z) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall each be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

 

d.                                      “Daily Adjusting LIBOR Rate” means, for any day, a per annum interest rate which is equal to the quotient of the following:

 

(1)                                       for any day, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to one (1) month appearing on Page BBAM of the Bloomberg Financial Markets Information Service as of 8:00 a.m. (California time) (or as soon thereafter as practical) on such day, or if such day is not a Business Day, on the immediately preceding Business Day. In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service) on any day, the “Daily Adjusting LIBOR Rate” for such day shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be reasonably selected by Bank, or in the absence of such other service, the “Daily Adjusting LIBOR Rate” for such day shall, instead, be determined based upon the average of the rates at which Bank is offered dollar deposits at or about 8:00 a.m. (California time) (or as soon thereafter as practical), on such day, or if such day is not a Business Day, on the immediately preceding Business Day, in the interbank eurodollar market in an amount comparable to the outstanding principal amount of the Obligations and for a period equal to one (1) month;

 

divided by

 

(2)                                       1.00 minus the maximum rate (expressed as a decimal) on such day at which Bank is required to maintain reserves on “Euro-currency Liabilities” as defined in and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Bank is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category.

 

e.                                       “Governmental Authority” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, any supranational bodies such as the European Union or the European Central Bank).

 

1

 

f.                                        “LIBOR Lending Office” means Bank’s office located in the Cayman Islands, British West Indies, or such other branch of Bank, domestic or foreign, as it may hereafter designate as its LIBOR Lending Office by notice to Borrower.

 

g.                                       “Prime Rate” means the per annum interest rate established by Bank as its prime rate for its borrowers, as such rate may vary from time to time, which rate is not necessarily the lowest rate on loans made by Bank at any such time.

 

h.                                      “Prime Referenced Rate” means a per annum interest rate which is equal to the Prime Rate, but in no event less than two and one-half percent (2.50%) per annum.

 

2.                                      Interest Rate Options.  Subject to the terms and conditions of this Addendum, the Obligations under the Agreement shall bear interest at the Daily Adjusting LIBOR Rate plus the Applicable Margin, except during any period of time during which, in accordance with the terms and conditions of this Addendum, the Obligations under the Agreement shall bear interest on the basis of the Prime Referenced Rate plus the Applicable Margin.

 

3.                                      Payment of Interest. Accrued and unpaid interest on the unpaid balance of the Obligations outstanding under the Agreement shall be payable monthly, in arrears, on the [first Business Day] of each month, until maturity (whether as stated herein, by acceleration, or otherwise). In the event that any payment under this Addendum becomes due and payable on any day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day, and, to the extent applicable, interest shall continue to accrue and be payable thereon during such extension at the rates set forth in this Addendum. Interest accruing hereunder shall be computed on the basis of a year of 360 days, and shall be assessed for the actual number of days elapsed, and in such computation, effect shall be given to any change in the applicable interest rate as a result of any change in the Daily Adjusting LIBOR Rate or, to the extent applicable, the Prime Referenced Rate on the date of each such change.

 

4.                                      Bank’s Records.  The amount and date of each advance under the Agreement, its applicable interest rate, and the amount and date of any repayment shall be noted on Bank’s records, which records shall be conclusive evidence thereof, absent manifest error; provided, however, any failure by Bank to make any such notation, or any error in any such notation, shall not relieve Borrower of its obligations to repay Bank all amounts payable by Borrower to Bank under or pursuant to this Addendum and the Agreement, when due in accordance with the terms hereof. For any advance under the Agreement bearing interest on the basis of the Daily Adjusting LIBOR Rate, if Bank shall designate a LIBOR Lending Office which maintains books separate from those of the rest of Bank, Bank shall have the option of maintaining and carrying such advance on the books of such LIBOR Lending Office.

 

5.                                      Default Interest Rate.  From and after the occurrence of any Event of Default, and so long as any such Event of Default remains unremedied or uncured thereafter, the Obligations outstanding under the Agreement shall bear interest at a per annum rate of five percent (5%) above the otherwise applicable interest rate hereunder, which interest shall be payable upon demand. In addition to (the foregoing, a late payment charge equal to five percent (5%) of each late payment hereunder may be charged on any payment not received by Bank within ten (10) calendar days after the payment due date therefor, but acceptance of payment of any such charge shall not constitute a waiver of any Event of Default under the Agreement. In no event shall the interest payable under this Addendum and the Agreement at any time exceed the maximum rate permitted by law.

 

6.                                      Prepayment. Borrower may prepay all or part of the outstanding balance of any Obligations at any time without premium or penalty. Any prepayment hereunder shall also be accompanied by the payment of all accrued and unpaid interest on the amount so prepaid. Borrower hereby acknowledges and agrees that the foregoing shall not, in any way whatsoever, limit, restrict, or otherwise affect Bank’s right to make demand for payment of all or any part of the Obligations under the Agreement due on a demand basis in Bank’s sole and absolute discretion.

 

7.                                      Regulatory Developments or Other Circumstances Relating to the Daily Adjusting LIBOR Rate.

 

a.                                      If, at any time, Bank determines that, (1) Bank is unable to determine or ascertain the Daily Adjusting LIBOR Rate, or (2) by reason of circumstances affecting the foreign exchange and interbank markets generally, deposits in eurodollars in the applicable amounts or for the relative maturities are not being offered to Bank, or (3) the Daily Adjusting LIBOR Rate plus the Applicable Margin will not accurately or fairly cover or reflect the cost to Bank of maintaining any of the Obligations under this Addendum based upon the Daily Adjusting LIBOR Rate, then Bank shall forthwith give notice thereof to Borrower. Thereafter, until Bank notifies Borrower that such conditions or circumstances no longer exist, the Prime Referenced Rate plus the Applicable Margin shall be the applicable interest rate for all Obligations during such period of time.

 

b.                                      If any Change in Law shall make it unlawful or impossible for Bank (or its LIBOR Lending Office) to make or maintain any Obligations under the Agreement with interest based upon the Daily Adjusting LIBOR Rate, Bank shall forthwith give notice thereof to Borrower. Thereafter, until Bank notifies Borrower that such conditions or circumstances no longer exist, the Prime Referenced Rate plus the Applicable Margin shall be the applicable interest rate for all Obligations during such period of time.

 

c.                                       If any Change in Law shall: (a) subject Bank (or its LIBOR Lending Office) to any tax, duty or other charge with respect to this Addendum or any Obligations under the Agreement, or shall change the basis of taxation of payments to Bank (or its LIBOR Lending Office) of the principal of or interest under this Addendum or any other amounts due under this Addendum in respect thereof (except for changes in the rate of tax on the overall net income of Bank or its LIBOR Lending Office imposed by the jurisdiction in which Bank’s principal executive office or LIBOR Lending Office is located); or (b) impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar

 

2

 

requirement against assets of, deposits with or for the account of, or credit extended by Bank (or its LIBOR Lending Office), or shall impose on Bank (or its LIBOR Lending Office) or the foreign exchange and interbank markets any other condition affecting this Addendum or the Obligations; and the result of any of the foregoing is to increase the cost to Bank of maintaining any part of the Obligations or to reduce the amount of any sum received or receivable by Bank under this Addendum by an amount deemed by Bank to be material, then Borrower shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such compensation, such additional amount or amounts as will compensate Bank for such increased cost or reduction. A certificate of Bank, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, setting forth the basis for determining such additional amount or amounts necessary to compensate Bank shall be conclusive and binding for all purposes, absent manifest error.

 

d.                                      In the event that any Change in Law affects or would affect the amount of capital required or expected to be maintained by Bank (or any corporation controlling Bank), and Bank determines that the amount of such capital is increased by or based upon the existence of any obligations of Bank hereunder or the maintaining of any Obligations, and such increase has the effect pf reducing the rate of return on Bank’s (or such controlling corporation’s) capital as a consequence of such obligations or the maintaining of such Obligations to a level below that which Bank (or such controlling corporation) could have achieved but for such circumstances (taking into consideration its policies with respect to capital adequacy), then Borrower shall pay to Bank, within fifteen (15) days of Borrower’s receipt of written notice from Bank demanding such compensation, additional amounts as are sufficient to compensate Bank (or such controlling corporation) for any increase in the amount of capital and reduced rate of return which Bank reasonably determines to be allocable to the existence of any obligations of Bank hereunder or to maintaining any Obligations. A certificate of Bank as to the amount of such compensation, prepared in good faith and in reasonable detail by Bank and submitted by Bank to Borrower, shall be conclusive and binding for all purposes absent manifest error.

 

8.                                      Legal Effect.  Except as specifically modified hereby, all of the terms and conditions of the Agreement remain in full force and effect.

 

9.                                      Conflicts. As to the matters specifically the subject of this Addendum, in the event of any conflict between this Addendum and the Agreement, the terms of this Addendum shall control.

 

IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date first set forth above.

 

 

	
COMERICA   BANK
    	
 
    	
ROCKET FUEL INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Dennis Rappaport  
    	
 
    	
By:
    	
/s/ J. Peter Bardwick
    
	
Name:
    	
Dennis Rappaport  
    	
 
    	
Name:
    	
J. Peter Bardwick
    
	
Title:
    	
VP
    	
 
    	
Its:
    	
CFO
    
							

 

3

 

EIGHTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This Eighth Amendment to Loan and Security Agreement (this “Amendment”) is entered into as of April 30, 2013, by and between COMERICA BANK (“Bank”) and ROCKET FUEL INC. (“Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of April 9, 2010 (as amended from time to time, including by that certain First Amendment to Loan and Security Agreement dated as of August 20, 2010, that certain Second Amendment to Loan and Security Agreement dated as of December 15, 2010, that certain Third Amendment to Loan and Security Agreement dated as of July 26, 2011, that certain Fourth Amendment to Loan and Security Agreement dated as of November 18, 2011, that certain Fifth Amendment to Loan and Security Agreement dated as of March 30, 2012, that certain Sixth Amendment to Loan and Security Agreement dated as of June 26, 2012 and that certain Seventh Amendment to Loan and Security Agreement dated as of February 13, 2013, collectively, the “Agreement”). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1.                                      Section 6.2(ii) of the Agreement hereby is amended and restated in its entirety to read as follows:

 

“(ii) as soon as available, but in any event within one hundred fifty (150) days after the end of Borrower’s fiscal year, audited consolidated and consolidating financial statements of Borrower prepared in accordance with GAAP, consistently applied, together with an opinion which is unqualified or otherwise consented to in writing by Bank on such financial statements of an independent certified public accounting firm reasonably acceptable to Bank (collectively, the “Audited Financials”); provided, however, that Borrower shall deliver to Bank its 2010 Audited Financials by no later than November 30, 2012 and its 2011 and 2012 Audited Financials by no later than May 22, 2013;”

 

2.                                      Exhibit D of the Agreement hereby is replaced with Exhibit D attached hereto.

 

3.                                      Borrower acknowledges and Bank hereby waives Borrower’s violation of Section 6.7(a) of the Agreement for failure to maintain the minimum EBITDA for the quarter ending December 31, 2012.

 

4.                                      No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.

 

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

 

6.                                      Borrower represents and warrants that the Representations and Warranties contained in the Agreement are true and correct in all material respects as of the date of this Amendment and that no Event of Default, other than the Existing Defaults, has occurred and is continuing.

 

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

 

(a)                                         this Amendment, duly executed by Borrower;

 

1

 

(b)                                         all reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrower’s accounts; and

 

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

 

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

 

[Balance of Page Intentionally Left Blank]

 

2

 

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

 

	
 
    	
ROCKET FUEL INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
/s/ Paul B. Dumas 
    	
4/30/13
    
	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
Vice President, Finance
    
	
 
    	
 
    
	
 
    	
COMERICA BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By: 
    	
[Illegible]
    
	
 
    	
 
    	
 
    
	
 
    	
Title: 
    	
VP
    

 

[Signature Page to Eighth Amendment to Loan and Security Agreement]

 

 

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

	
Please send all Required Reporting to: 
    	
Comerica Bank
    
	
 
    	
Technology & Life Sciences Division
    
	
 
    	
Loan Analysis Department
    
	
 
    	
Five Palo Alto Square, Suite 800
    
	
 
    	
3000 El Camino Real
    
	
 
    	
Palo Alto, CA 94306
    
	
 
    	
Phone: (650) 846-6820
    
	
 
    	
Fax: (650) 846-6840
    

 

FROM:        ROCKET FUEL INC.

 

The undersigned authorized Officer of ROCKET FUEL INC. (“Borrower”), hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for the period ending                                                       with all required covenants, including without limitation the ongoing registration of intellectual property rights in accordance with Section 6.8, except as noted below and (ii) all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except (i) as explained in an accompanying letter or footnotes and (ii) with respect to unaudited financial statements, for the absence of footnotes and subject to year-end adjustments.

 

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

 

	
REPORTING COVENANTS
    	
 
    	
REQUIRED
    	
 
    	
COMPLIES
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Company   Prepared Monthly F/S
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    
	
Compliance   Certificate
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    
	
CPA   Audited, Unqualified F/S
    	
 
    	
Annually,   within 150 days of FYE*
    	
 
    	
YES
    	
 
    	
NO
    
	
Borrowing   Base Cert., A/R & A/P Agings
    	
 
    	
Monthly,   within 25 days
    	
 
    	
YES
    	
 
    	
NO
    
	
Annual   Business Plan (incl. operating budget)
    	
 
    	
30   days after FYE
    	
 
    	
YES
    	
 
    	
NO
    
	
Intellectual   Property Report
    	
 
    	
Quarterly   within 30 days
    	
 
    	
YES
    	
 
    	
NO
    
	
Audit
    	
 
    	
Semi-annual
    	
 
    	
YES
    	
 
    	
NO
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
If   Public:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10-Q
    	
 
    	
Quarterly,   within 5 days of SEC filing (50 days)
    	
 
    	
YES
    	
 
    	
NO
    
	
10-K
    	
 
    	
Annually,   within 5 days of SEC filing (95 days)
    	
 
    	
YES
    	
 
    	
NO
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total   amount of Borrower’s cash and investments
    	
 
    	
Amount:   $                                
    	
 
    	
YES
    	
 
    	
NO
    
	
Total   amount of Borrower’s cash and investments maintained with Bank
    	
 
    	
Amount:   $                                
    	
 
    	
YES
    	
 
    	
NO
    

 

* with respect to FYE 2011 and 2012, by May 22, 2013

 

	
REPORTING   COVENANTS
    	
 
    	
DESCRIPTION
    	
 
    	
APPLICABLE
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Legal   Action > $250,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    
	
Inventory   Disputes > $250,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    
	
Mergers &   Acquisitions > $100,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    
	
Cross   default with other agreements > $250,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    
	
 
    	
 
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Judgment   > $250,000
    	
 
    	
Notify   promptly upon notice
    	
 
    	
YES
    	
 
    	
NO
    

 

 

	
FINANCIAL
    	
 
    	
REQUIRED
    	
 
    	
ACTUAL
    	
 
    	
COMPLIES
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TO BE TESTED MONTHLY, UNLESS OTHERWISE NOTED:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Quarterly   EBITDA
    	
 
    	
*
    	
 
    	
$
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Yearly   EBITDA
    	
 
    	
-$11,200,000
    	
 
    	
$
    	
 
    	
 
    	
YES
    	
 
    	
NO
    
	
Minimum   Liquidity Ratio
    	
 
    	
1.15:1.00
    	
 
    	
:
    	
 
    	
YES
    	
 
    	
NO
    

 

* not less than (i) negative Eight Hundred Thousand Dollars (-$800,000) for the quarter ending December 31, 2012, (ii) negative Six Million One Hundred Thousand Dollars (-$6,100,000) for the quarter ending March 31, 2013, (iii) negative Three Million Three Hundred Thousand Dollars (-$3,300,000) for the quarter ending June 30, 2013, (iv) negative Five Million Eight Hundred Thousand Dollars (-$5,800,000) for the quarter ending September 30, 2013 and (v) One Dollar ($1.00) for the quarter ending December 31, 2013 and each subsequent calendar quarter thereafter

 

	
OTHER COVENANTS
    	
 
    	
REQUIRED
    	
 
    	
ACTUAL
    	
 
    	
COMPLIES
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Permitted   Indebtedness for equipment leases or loans
    	
 
    	
<$250,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    
	
Permitted   Investments for stock repurchase
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    
	
Permitted   Investments for subsidiaries
    	
 
    	
<$500,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    
	
Permitted   Investments for employee loans
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    
	
Permitted   Investments for joint ventures
    	
 
    	
<$250,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    
	
Permitted   Liens for equipment leases or loans
    	
 
    	
<$250,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    
	
Permitted   Transfers
    	
 
    	
<$100,000
    	
 
    	
 
    	
 
    	
YES
    	
NO
    

 

Please Enter Below Comments Regarding Violations:

 

The Officer further acknowledges that at any time Borrower is not in compliance with all the terms set forth in the Agreement, including, without limitation, the financial covenants, no credit extensions will be made.

 

	
Very truly yours,
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Authorized Signer
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00220-of-00352.parquet"}]]