Document:

Exhibit 10.5

 

Anything herein to the contrary notwithstanding, the Liens and security
interests securing the obligations evidenced by this revolving credit note, the exercise of any right or remedy with respect hereto and
certain of the rights of the holder hereof are subject to the provisions of the Intercreditor Agreement, dated as of September 30,
2020 (as amended, restated, supplemented, substituted, replaced or otherwise modified from time to time, the “Intercreditor
Agreement”), by and between Silverpeak Credit Partners, LP (in its capacity as agent for the Silverpeak Facility Lenders
and together with its successors and assigns, the “Silverpeak Facility Agent”), for and on behalf of the Silverpeak
Facility Creditors and each other Silverpeak Facility Claimholder (each as defined in the Intercreditor Agreement) from time to time,
and East West Bank (“EWB”), acting on behalf of each A/R Facility Claimholder (as defined in the Intercreditor
Agreement). In the event of any conflict between the terms of the Intercreditor Agreement and this revolving credit note, the terms of
the Intercreditor Agreement shall govern and control.

 

REVOLVING CREDIT NOTE

 

	$4,500,000
	 	September 30, 2020

 

FOR VALUE RECEIVED, Direct Digital Holdings, LLC,
a Texas limited liability company (“Direct Digital”), Colossus Media, LLC, a Delaware limited liability company
(“Colossus”), Huddled Masses LLC, a Delaware limited liability company (“HM”), Orange142,
LLC, a Delaware limited liability company (“Orange”) and Universal Standards for Digital Marketing, LLC, a Delaware
limited liability company (“USDM” and together with Direct Digital, Colossus, HM, and Orange, collectively,
“Borrower”), hereby unconditionally, jointly and severally, promise to pay to the order of EAST WEST BANK,
a California state bank (“Lender”), in accordance with the provisions of the Credit Agreement (as hereinafter
defined), the principal sum of Four Million Five Hundred Thousand Dollars ($4,500,000), or such other amount as may from time to time
be advanced by Lender as Revolving Credit Advance to or for the benefit or account of Borrower pursuant to the terms of that certain Credit
Agreement, dated as of the date hereof (as amended, restated, extended, supplemented or otherwise modified in writing from time to time,
the “Credit Agreement;” the terms defined therein being used herein as therein defined), between Borrower and
Lender.

 

Borrower promises to pay interest on the unpaid
principal amount of this Note from the date hereof until the Revolving Credit Advances made by Lender are paid in full, at such interest
rates and at such times as provided in the Credit Agreement. All payments of principal and interest shall be made to Lender in Dollars
in immediately available funds at Lender’s Principal Office. If any amount is not paid in full when due hereunder, then such unpaid
amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Credit Agreement.

 

This Note is the Revolving Credit Note referred
to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions
provided therein. This Note is also entitled to the benefits of the Guaranty. Upon the occurrence and continuation of one or more of the
Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable all as provided in the Credit Agreement. Lender may also attach schedules to this Note and endorse thereon
the date, amount and maturity of its Revolving Credit Advances and payments with respect thereto.

 

Borrower, for itself, its successors and assigns,
hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

 

     

     

    

 

THIS NOTE, AND ANY CLAIM, CONTROVERSY, OR DISPUTE
ARISING OUT OF OR IN CONNECTION WITH THIS NOTE, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

 

[Remainder of Page Intentionally Left
Blank; 

Signature Page Follows.]

 

     

     

    

 

IN WITNESS WHEREOF, Borrower, intending
to be legally bound hereby, has duly executed this Note as of the day and year first written above.

 

	 	BORROWER:
	 	 
	 	DIRECT DIGITAL HOLDINGS, LLC
	 	 
	 	By:	/s/ Keith W. Smith
	 	 	Name: Keith W. Smith
	 	 	Title: President

 

	 	COLOSSUS MEDIA, LLC
	 	 	 
	 	By:	/s/ Keith W. Smith
	 	 	Name: Keith W. Smith
	 	 	Title: President

 

	 	HUDDLED MASSES LLC
	 	 	 
	 	By:	/s/ Keith W. Smith
	 	 	Name: Keith W. Smith
	 	 	Title: President

 

	 	ORANGE142, LLC
	 	 	 
	 	By:	/s/ Keith W. Smith
	 	 	Name: Keith W. Smith
	 	 	Title: President

 

	 	UNIVERSAL STANDARDS FOR DIGITAL MARKETING, LLC
	 	 	 
	 	By:	/s/ Keith W. Smith
	 	 	Name: Keith W. Smith 
	 	 	Title: President

 

Signature Page to

Revolving Credit NoteExhibit 10.6

 

PREFERRED EQUITY SUBORDINATION AGREEMENT

 

THIS PREFERRED EQUITY SUBORDINATION AGREEMENT
(this “Subordination Agreement”) is entered into as of September 30, 2020, among EAST WEST BANK,
a California state bank (“Senior Lender”), USDM HOLDINGS, INC., a Texas corporation (“Preferred
Unit Holder”), and DIRECT DIGITAL HOLDINGS, LLC, a Texas limited liability company (the “Company”).

 

R E C I T A L S

 

A.           The
Company desires that Senior Lender extend credit to the Company and certain of its affiliates, on a revolving basis as set forth in the
Credit Agreement (as defined herein) and has entered into a Security Agreement in favor of Senior Lender in connection therewith. The
Company and Preferred Unit Holder have entered into that certain Amended and Restated Limited Liability Company Agreement dated as of
September 30, 2020 (the “Company Agreement”).

 

B.           It
is the agreement of the parties that the payment obligations owed by the Company to Preferred Unit Holder shall be subordinate to the
indebtedness owed by the Borrowers (as defined below) to Senior Lender, all as hereafter provided.

 

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

 

1.             Definitions.
The following terms shall have the respective meanings specified below or in the Section or Recital referred to below:

 

“Bankruptcy
Proceeding” means any proceeding by or against any party for relief under any bankruptcy, reorganization or insolvency law
or laws relating to the relief of debtors, or any receivership, insolvency or assignment for the benefit of creditors, or any proceeding
for any liquidation, liquidating distribution, dissolution or other winding up of such party, voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings.

 

“Credit
Agreement” means that certain Credit Agreement by and among the Company, Colossus Media, LLC, a Delaware limited liability
company (“Colossus”), Huddled Masses LLC, a Delaware limited liability company (“HM”),
Orange142, LLC, a Delaware limited liability company (“Orange”), and Universal Standard for Digital Marketing,
LLC, a Delaware limited liability company (“USDM” and together with the Company, Colossus, HM, and Orange, “Borrowers”
and each individually a “Borrower”), and Senior Lender dated of even date herewith, as amended, restated, supplemented
or otherwise modified from time to time.

 

“Enforcement
Action” means any judicial, arbitral or other proceeding, or any collection or enforcement action of any kind, to enforce
or attempt to enforce any right or remedy available to Preferred Unit Holder to collect the Junior Obligations, including any judicial,
arbitral or proceeding or any collection action against the Company or the Company’s assets seeking, directly or indirectly, to
enforce any rights or remedies, or to enforce any of the obligations incurred by the Company, under or in connection with the Junior Obligations
(but excluding demand notices and other similar notices); provided, however, that (1) the imposition of surcharges as contemplated
by Sections 3.1, 8.8, 8.9, or 8.10 of the Company Agreement, (2) the submission to mediation or arbitration as contemplated by Sections
8.8, 8.9, 8.10 or Section 12.16 of the Company Agreement and/or (3) specific performance, injunctive or other equitable relief
as contemplated by Sections 8.11 or 12.16 of the Company Agreement (but still subject to Section 3 hereof) shall not be an “Enforcement
Action” hereunder.

 

     

     

    

 

“Junior
Obligations” means the obligation of Company to pay distributions of available cash, to allocate profits, to redeem preferred
units, or make any other payments to Preferred Unit Holder in accordance with Sections 3.1, 4.1, 8.8, and 8.9 of the Company
Agreement.

 

“Loan
Documents” has the meaning given such term in the Credit Agreement.

 

“Obligated
Party” has the meaning given such term in the Credit Agreement.

 

“Senior
Debt” has the meaning given such term in Section 2 herein.

 

“Subordination
Event” means the occurrence and continuance of an Event of Default (as defined in the Credit Agreement).

 

2.           Subordination.
The Junior Obligations shall be subordinate and junior in right of payment and collection to the payment and collection in full of all
present and future indebtedness, obligations and liabilities of the Borrowers and the other Obligated Parties to Senior Lender under the
Loan Documents (the “Senior Debt”).

 

3.            Limitations
on Distributions, Payments and Redemption. Except as is hereinafter set forth in this Section 3, no payment shall
be made by or on behalf of the Company on account of or for application against the Junior Obligations, whether as a result of setoff,
realization upon collateral or otherwise, and no distribution (other than Permitted Tax Distributions as defined in the Credit Agreement
and Tax Distributions as defined in the Term Loan Agreement) of any kind shall be received by Preferred Unit Holder from the Company,
and no redemption shall be made by Preferred Unit Holder any of the Preferred Units (as defined in the Company Agreement) until the Senior
Debt shall have been fully paid in cash and satisfied (other than contingent indemnification obligations as to which no claim has been
asserted). The provisions of the first sentence of this Section 3 notwithstanding, for so long as (i) no Subordination
Event shall have occurred and be continuing and (ii) after giving effect to the payment or distribution with respect to the Preferred
Units or the redemption of the Preferred Units, the Borrowers would be in pro forma compliance with the financial covenants set forth
in Article IX of the Credit Agreement, the Company may make payments or distributions to the Preferred Unit Holder permitted by the
Company Agreement and the Company may pay the Preferred Unit Holder and the Preferred Unit Holder may receive the distributions and redemption
price set forth in the Company Agreement with respect to such Preferred Units (the “Permitted Payments”). Upon
the occurrence and during the continuation of a Subordination Event, all further payments of Permitted Payments to Preferred Unit Holder
shall immediately cease; provided, that such Permitted Payments may continue to accrue and at such time as there shall be no continuing
Subordination Event such accrued Permitted Payments may be paid in full and payments of Permitted Payments may resume hereunder. Senior
Lender shall use commercially reasonable efforts to provide Preferred Unit Holder with notice of the occurrence of a Subordination Event.

 

4.           Certain
Distributions. Preferred Unit Holder agrees that in the event of any distribution, division or any application, partial or
complete, voluntary or involuntary, by operation of law or otherwise, of all or any part of the assets of the Company or the
proceeds thereof to creditors of the Company, in any case for reason of the liquidation, dissolution or winding up of the Company or
the Company’s business, or in the event of any sale, receivership, insolvency or Bankruptcy Proceeding or assignment for the
benefit of creditors, or any proceeding by or against the Company for any relief under any bankruptcy or insolvency law or laws
relating to the relief of debtors, the adjustment of indebtedness, reorganizations, compositions or extensions, then and in any such
event any payment or distribution of any kind or character, either in cash, property, securities or otherwise, which shall
thereafter be paid or delivered by the Company upon or with respect to the Junior Obligations shall be turned over by Preferred Unit
Holder to Senior Lender (without liability for interest thereon) for application on the Senior Debt, until the Senior Debt shall
have been fully paid in cash and satisfied (other than contingent indemnification obligations as to which no claim has been
asserted).

 

    2 

     

    

 

5.          Remedies
Standstill. Unless Senior Lender otherwise consents in writing, Preferred Unit Holder will not commence any Enforcement Action prior
to the earliest of:

 

(a)          the
date all Senior Debt is fully paid in cash and satisfied (other than contingent indemnification obligations as to which no claim has been
asserted); or

 

(b)          the
occurrence of a Bankruptcy Proceeding involving the Company.

 

For the avoidance of doubt, nothing contain herein
shall be deemed to limit Preferred Unit Holder’s ability to enforce or attempt to enforce any right or remedy available to Preferred
Unit Holder under that certain Membership Interest Purchase and Contribution Agreement, dated on or about the date hereof, by and among
Preferred Unit Holder, the Company, and Orange.

 

6.          Additional
Agreements. Preferred Unit Holder agrees (a) that it will not commence or pursue in any action of any kind (including any Enforcement
Action or Bankruptcy Proceeding) to prohibit, limit or impair the commencement or pursuit by Senior Lender of any of its rights or remedies
under or in connection with the Senior Debt, the Credit Agreement, the Loan Documents, or otherwise available to Senior Lender under applicable
law; (b) that Preferred Unit Holder will not assign or otherwise transfer the Junior Obligations unless such assignment is made expressly
subject to this Subordination Agreement; and (c) not to amend in any material respects the terms of the payment of the Junior Obligations,
or to increase the distribution or other payments constituting Junior Obligations without the consent of Senior Lender (other than the
imposition of surcharges as contemplated by Sections 3.1, 8.8, 8.9, or 8.10 of the Company Agreement).

 

7.            Treatment
of Payments. In the event that notwithstanding the provisions of this Subordination Agreement, any cash or distribution of assets
of the Company, whether in cash, property, securities or otherwise, which, under the provisions of this Subordination Agreement should
not have been paid to Preferred Unit Holder, is received by Preferred Unit Holder or any person on its behalf, or provision is made for
such payment or distribution, such payment or distribution shall be held for the benefit of and shall immediately be paid or delivered
directly to Senior Lender, with any necessary endorsement, for application to the payment of the Senior Debt; until the Senior Debt shall
have been fully paid cash and satisfied (other than contingent indemnification obligations as to which no claim has been asserted); provided,
however, the Senior Lender must provide written notice to the Preferred Unit Holder within 10 days of such distribution that such distribution
must be returned.

 

8.          Modification
to Senior Debt. Senior Lender may, at any time and from time to time, without the consent of or notice to Preferred Unit Holder, without
incurring any responsibility to Preferred Unit Holder, and without impairing or releasing the obligations of Preferred Unit Holder to
Senior Lender (a) change the manner, place or terms of payment of, or change or extend the time of payment of, or renew, alter or
increase the Senior Debt; (b) extend, modify or amend any agreement or any other document related to the Senior Debt or the Senior
Liens; (c) sell, exchange, release or otherwise deal with any property by whomsoever at any time pledged or mortgaged to secure or
howsoever securing, any of the Senior Debt; (d) release anyone liable in any manner for the payment or collection of any of the Senior
Debt, (e) exercise or refrain from exercising any rights against the Company, any Borrower or any other person; or (f) take
or refrain from taking any other action whatsoever.

 

    3 

     

    

 

9.         No
Impairment. The provisions of this Subordination Agreement are intended solely for the purpose of defining the relative rights
of Preferred Unit Holder or any holder of the Junior Obligations, on one hand, and Senior Lender or any holder of the Senior Debt,
on the other hand, and nothing contained in this Subordination Agreement is intended to or shall impair, as between the Company,
other creditors, and Preferred Unit Holder or any holder of the Junior Obligations, all amounts due and payable in accordance with
the Junior Obligations, or to affect the relative rights of Preferred Unit Holder or any holder of the Junior Obligations and
creditors of the Company other than Senior Lender or holders of the Senior Debt, nor shall anything herein or therein prevent
Preferred Unit Holder or any holders of the Junior Obligations from exercising all remedies against the Company otherwise permitted
by applicable law, subject to the rights of Senior Lender under the provisions of this Subordination Agreement.

 

10.          Obligations
Hereunder Not Affected. No action or inaction of Senior Lender or any other person, and no change of law or circumstances, shall release
or diminish the obligations, liabilities, agreements or duties hereunder of Preferred Unit Holder or the Company, or affect this Subordination
Agreement in any way or provide any party any recourse against Senior Lender.

 

11.         Specific
Performance. Senior Lender is hereby authorized to demand specific performance of this Subordination Agreement at any time when any
other party shall have failed to comply with any of the provisions of this Subordination Agreement applicable to it. The Company and Preferred
Unit Holder hereby irrevocable waive any defense based upon the adequacy of a remedy at law which might be asserted as a bar to such remedy
of specific performance and waive any requirement of the posting of any bond which might otherwise be required before such remedy of specific
performance granted.

 

12.          Subrogation.
No payment or distribution to Senior Lender pursuant to the provisions of this Subordination Agreement shall entitle Preferred Unit Holder
to exercise any rights of subrogation in respect thereof until the Senior Debt shall have been paid in cash and satisfied in full (other
than contingent indemnification obligations as to which no claim has been asserted) or the Senior Lender shall have consented in writing
to the exercise of such rights. After the payment of the Senior Debt in cash in full (other than contingent indemnification obligations
as to which no claim has been asserted) and provided no payments are voidable, Preferred Unit Holder shall be subrogated to the rights
of Senior Lender to receive payments or distributions applicable to the Senior Debt to the extent the distributions otherwise payable
to Preferred Unit Holder have been applied to the payment of the Senior Debt.

 

13.          Choice
of Law. THIS SUBORDINATION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS APPLICABLE
TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

 

14.          Representations.
Preferred Unit Holder represents and warrants that it has full power and authority to execute this Subordination Agreement and that this
Subordination Agreement constitutes the valid and binding obligation of Preferred Unit Holder enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness
and general principles of equity, regardless of whether considered in a proceeding in equity or at law. Preferred Unit Holder represents
and warrants that it has furnished Senior Lender with true and complete copies of all documents which evidence the Junior Obligations.

 

15.        Waivers
and Amendments. Until the Senior Debt shall have been fully paid or satisfied, this Subordination Agreement may not be amended, waived,
terminated or otherwise modified except with the consent of Senior Lender and Preferred Unit Holder.

 

16.         No
Implied Waiver. Any delay in the exercise of or any failure to exercise any right or remedy of Senior Lender shall not be deemed a
waiver of any such right or remedy.

 

    4 

     

    

 

17.         Binding
Effect. This Subordination Agreement shall be binding upon the parties and their respective successors, transferees and assigns. Each
reference in this Subordination Agreement to Preferred Unit Holder shall include any assignee or transferee of the Junior Obligations,
and each reference in this Subordination Agreement to Senior Lender shall include any assignee or transferee of the Senior Debt and the
Senior Liens.

 

18.          Invalid
Provisions. If any term or provision of this Subordination Agreement shall be determined to be illegal or unenforceable, all other
terms and provisions hereof shall nevertheless remain effective and shall be enforced to the fullest extent permitted by law.

 

19.          Further
Assurances. Preferred Unit Holder and the Company further agree to execute such subordinations and other documents that may be reasonably
requested by Senior Lender to more fully give effect to the provisions of this Subordination Agreement.

 

20.          Notices.
All notices, requests, consents, demands and other communications required or permitted under this Subordination Agreement shall be in
writing and, unless otherwise specifically provided in this Subordination Agreement, (i) shall be deemed sufficiently given or furnished
(a) if delivered by a commercial messenger service regularly retaining receipts for such delivery, effective on the date of delivery
by the commercial messenger service; (b) if sent by electronic mail, effective on the date of delivery if sent return receipt acknowledged;
(c) if sent by registered or certified mail, return receipt requested, effective forty-eight (48) hours after deposit; (d) if
sent by telephonic facsimile transmission with a copy sent by regular mail, effective on the date imprinted on the facsimile transmission
form; or (e) if delivered by the air courier services known as FedEx, Express Mail, Airborne or Emory Air, effective upon delivery
thereof to the courier, and (ii) shall be addressed to the parties as listed as follows:

 

Senior
Lender’s address:

 

East West Bank

5001 Spring Valley Road; Suite 825W

Dallas, Texas 75244

Attention: Hamilton LaRoe

email: Hamilton.Laroe@EastWestBank.com

 

Company’s
address:

 

Direct Digital Holdings, LLC

1233 West Loop South

Suite 1170

Houston, Texas 77027

Attention: Keith W. Smith

Email: ksmith@directdigitalholdings.com

Phone: 713.540.4545

 

Preferred
Unit Holder’s address:

 

USDM Holdings, Inc

5729 Krause Lane, Unit #13

Austin, Texas 78738

Attention: Leah Woolford and Jeff Woolford

Email:    leah@usdmholdings.com

jeff@usdmholdings.com

 

    5 

     

    

 

with a copy (not constituting notice) to:

 

Fredrikson & Byron, P.A.

200 South Sixth Street, Suite 4000

Attention: Jessica D. Manivasager

Email: jmanivasager@fredlaw.com

 

21.          Costs
and Expenses. The Company agrees to pay, upon demand to Senior Lender, all reasonable and documented out-of-pocket costs and expenses
(including court costs and reasonable attorneys’ fees for one primary counsel) incurred by Senior Lender in the enforcement of this
Subordination Agreement.

 

22.          Counterparts.
This Subordination Agreement may be executed in any number of identical counterparts, each of which when so executed constitutes an original
and all of which constitute, collectively, one agreement.

 

[Remainder of Page Intentionally Blank;
Signatures Begin on Next Page]

 

    6 

     

    

 

IN
WITNESS WHEREOF, this Subordination Agreement is executed as of the date first above written.

 

	 	PREFERRED UNIT HOLDER:
	 	 	 
	 	USDM HOLDINGS, INC.
	 	 	 
	 	 	 
	 	By:	/s/ Leah Woolford
	 	 	Name:	 Leah Woolford
	 	 	Title. 	Chief Executive Officer

 

Signature Page to

Preferred Equity Subordination Agreement

 

     

     

    

 

	 	COMPANY:
	 	 	 
	 	DIRECT DIGITAL HOLDINGS, LLC
	 	 	 
	 	 	 
	 	By:	/s/ Keith W. Smith
	 	 	Name:	Keith W. Smith
	 	 	Title: 	President

 

Signature Page to

Preferred Equity Subordination Agreement

 

     

     

    

 

	 	SENIOR LENDER:
	 	 	 
	 	EAST WEST BANK
	 	 	 
	 	 	 
	 	By:	/s/ Hamilton LaRoe
	 	 	Name:	 Hamilton LaRoe
	 	 	Title: 	First Vice President

 

Signature Page to

Preferred Equity Subordination Agreement

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