CREDIT AND SECURITY AGREEMENT by and among KITARA MEDIA, LLC, as a Borrower, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Lender Dated as of November 1, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule 1.1	Definitions
Schedule 2.12	Fees
Schedule 6.1	Financial Statement, Reports, Certificates
Schedule 6.2	Collateral Reporting
Exhibit A	Form of Compliance Certificate
Exhibit B	Conditions Precedent
Exhibit C	Conditions Subsequent
Exhibit D	Representations and Warranties
Exhibit E	Information Certificate
Exhibit F	Form of Pledged Interests Addendum
Schedule A-1	Collection Account
Schedule A-2	Authorized Person
Schedule D-1	Designated Account
Schedule P-1	Permitted Investments
Schedule P-2	Permitted Liens

 

 

 

1.	DEFINITIONS AND CONSTRUCTION.

 

1.1

Definitions, Code Terms, Accounting Terms and Construction.  Capitalized terms used in this Agreement shall have the meanings specified therefor on Schedule 1.1.  Additionally, matters of (i) interpretation of terms defined in the Code, (ii) interpretation of accounting terms and (iii) construction are set forth in Schedule 1.1.

 

2.	LOANS AND TERMS OF PAYMENT.

 

2.1

Revolving Loan Advances.

 

 

 

 

 

 

2.2

Accordion.

 

 

 

 

 

 

2.3

Borrowing Procedures.

 

 

 

 

 

 

 

 

 

 

(c)

Automatic Conversion.

 

 

 

 

 

 

 

2.4

Payments; Prepayments.

 

 

 

 

 

 

 

 

 

2.6

Interest Rates: Rates, Payments, and Calculations.

 

 

 

 

 

 

 

 

 

 

 

 

 

2.11

Termination or Reduction by Borrowers.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.14

Special Provisions Applicable to LIBOR and Daily Three Month LIBOR Interest Rate.

 

 

 

 

 

2.16

Extent of Each Borrower’s Liability, Contribution.

 

 

 

 

3.	SECURITY INTEREST.

 

 

 

 

 

 

4.	CONDITIONS.

 

 

 

 

 

 

 

 

5.	REPRESENTATIONS AND WARRANTIES.

 

 

6.	AFFIRMATIVE COVENANTS.

 

 

6.1

Financial Statements, Reports, Certificates.

 

 

6.2

Collateral Reporting.

 

 

6.3

Existence.

 

 

 

6.4

Maintenance of Properties.

 

 

6.5

Taxes.

 

 

 

6.6

Insurance.

 

 

6.7

Inspections, Exams, Collateral Exams and Appraisals.

 

 

6.8

Account Verification.

 

 

6.9

Compliance with Laws.

 

 

6.10

Environmental.

 

 

 

 

 

6.11

Disclosure Updates.

 

 

 

 

 

 

 

 

 

 

6.12

Collateral Covenants.

 

(a)

Possession of Collateral.

 

 

 

 

 

(c)

Control Agreements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(j)

Controlled Accounts.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6.15

Further Assurances.

 

 

 

 

 

 

7.	NEGATIVE COVENANTS.

 

 

 

 

7.3

Restrictions on Fundamental Changes.

 

 

 

 

 

 

 

 

7.7

Payments, Prepayments, and Amendments.

 

(a)

Except in connection with Refinancing Indebtedness permitted by Section 7.1,

 

 

 

 

 

(b)

Directly or indirectly, amend, modify, or change any of the terms or provisions of:

 

 

 

 

 

 

 

 

 

7.11

Investments; Controlled Investments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8.	FINANCIAL COVENANTS.

 

 

 

Minimum Required EBITDA		Measurement Period
$431,000		July 1, 2013 through October 31, 2013
$591,000		July 1, 2013 through November 30, 2013
$706,000		July 1, 2013 through December 31, 2013
$576,000		July 1, 2013 through January 31, 2014
$370,000		July 1, 2013 through February 28, 2014
$490,000		July 1, 2013 through March 31, 2014
$300,000		July 1, 2013 through April 30, 2014
$345,000		July 1, 2013 through May 31, 2014
$544,000		July 1, 2013 through June 30, 2014
$676,000		Twelve-month period ending July 31, 2014
$595,000		Twelve-month period ending August 31, 2014
$608,000		Twelve-month period ending September 30, 2014
$708,000		Twelve-month period ending October 31, 2014
$909,000		Twelve-month period ending November 30, 2014
$1,149,000		Twelve-month period ending December 31, 2014

 

 

 

 

9.	EVENTS OF DEFAULT.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9.10          If this Agreement or any other Loan Document that purports to create a Lien, shall, for any reason, fail or cease to create a valid and perfected and, except to the extent of Permitted Liens which are permitted purchase money Liens or the interests of lessors under Capital Leases, first priority Lien on the Collateral covered thereby, except (a) as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement, or (b) with respect to Collateral the aggregate value of which, for all such Collateral, does not exceed at any time, $100,000;

 

 

 

 

 

 

 

 

10.	RIGHTS AND REMEDIES.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.9

Voting and Other Rights in Respect of Pledged Interests.

 

 

 

11.	WAIVERS; INDEMNIFICATION.

 

 

 

 

12.

NOTICES.

 

 

 

13.	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; ARBITRATION.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16.

TAXES.

 

 

 

17.	GENERAL PROVISIONS.

 

 

 

 

 

 

 

 

 

(a)            Lender agrees that material, non-public information regarding the Loan Parties and their Subsidiaries, their operations, assets, and existing and contemplated business plans (“Confidential Information”) shall be treated by Lender in a confidential manner, and shall not be disclosed by Lender to Persons who are not parties to this Agreement, except:  (i) to attorneys for and other advisors, accountants, auditors, and consultants to Lender and to employees, directors and officers of Lender (the Persons in this clause (i), “Lender Representatives”) on a “need to know” basis in connection with this Agreement and the transactions contemplated hereby and on a confidential basis, (ii) to Subsidiaries and Affiliates of Lender, provided that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 17.8, (iii) as may be required by regulatory authorities, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation; provided that (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Borrowers with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Borrowers pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (y) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by Borrowers, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other legal process, provided, that, (x) prior to any disclosure under this clause (vi) the disclosing party agrees to provide Borrowers with prior written notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior written notice to Borrowers pursuant to the terms of the subpoena or other legal process and (y) any disclosure under this clause (vi) shall be limited to the portion of the Confidential Information as may be required by such Governmental Authority pursuant to such subpoena or other legal process, (vii) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Lender or Lender Representatives), (viii) in connection with any assignment, participation  or pledge of any Lender’s interest under this Agreement, provided that prior to receipt of Confidential Information any such assignee, participant, or pledgee shall have agreed in writing to receive such Confidential Information hereunder subject to the terms of this Section 17.8, (ix) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents; (x) to equity owners of each Loan Party, and (xi) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document.

 

 

 

 

 

 

 

 

 

 

 

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

 

	BORROWER:
	KITARA MEDIA, LLC
	By:	/s/ ▇▇▇▇▇▇ Regular
	Print Name: ▇▇▇▇▇▇ Regular Title: Chief Executive Officer Federal Employer ID No.:  ▇▇-▇▇▇▇▇▇▇ Organizational Identification No.:  4838493

 

	LENDER:
	▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION
	By:	/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
	Print Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
	Title: Authorized Signatory

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

85% of the amount of Eligible Accounts, plus

 

(b)

the lesser of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIBOR =	Base LIBOR
	1.00 - LIBOR Reserve Percentage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)

sales, abandonment, or other dispositions of Equipment that is substantially worn, damaged, or obsolete in the ordinary course of business;

 

(b)

the granting of Permitted Liens;

 

(c)

the making of a Restricted Junior Payment that is expressly permitted to be made pursuant to this Agreement, including Permitted Distributions;

 

(d)

the making of a Permitted Investment;

 

(e)

the use or transfer of money or Cash Equivalents in a manner that is not prohibited by the terms of the Agreement or the other Loan Documents;

 

(f)

the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business;

 

(g)

the sale or discount, in each case without recourse, of Accounts arising in the ordinary course of business, but only in connection with the compromise or collection thereof;

 

 

(h)

any involuntary loss, damage or destruction of property;

 

(i)

any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property;

 

(j)

the sale or issuance of Stock (other than Prohibited Preferred Stock) of any Borrower; and

 

(k)

the lapse of registered patents, trademarks and other intellectual property of any Loan Party or its Subsidiaries to the extent not economically desirable in the conduct of their business and so long as such lapse is not materially adverse to the interests of the Lender.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

e.              Schedules and Exhibits.  All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.