FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

Exhibit 10.7

FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT

This First Amendment to Loan and Security Agreement is entered into as of February 17, 2017 (the "Amendment"), by and between SellPoints, Inc. ("Borrower"), Montage Capital II, L.P. ("Montage") and Partners for Growth IV, L.P. ("PFG"). Each of Montage and PFG are also referred to as a "Lender" and collectively referred to as the "Lenders".

RECITALS

Borrower and Lender are parties to that certain Loan and Security Agreement dated as of September 28, 2016 and as amended from time to time (the "Agreement"). The parties desire to amend the Agreement in accordance with the terms of this Amendment.

NOW, THEREFORE, the parties agree as follows:

Section 1.1 of the Agreement is amended and restated in its entirety to read as follows:

1.1 Advances. Subject to the terms and conditions of this Agreement, Lenders will make its Pro Rata Share of Advances to Borrower in the aggregate principal amount of $5,000,000.

(a) On or around the date of this Agreement, an Advance in the principal amount of $3,600,000 (the "First Tranche Advance") shall be made to Borrower.

(b) An additional Advance in the principal amount of $400,000 (the "Second Tranche Advance") shall be made to Borrower on or after February 17, 2017.

(c) A third Advance of up to $500,000 may be made to Borrower on or after March 31, 2017 but before June 30, 2017 (the "Third Tranche Advance") upon Borrower's request and subject to the terms of this Agreement, so long as no Event of Default has occurred and is continuing, and Borrower's Total Net Revenue for the three month period ending March 31, 2017 is at least 85% of its projected Total Net Revenue for such period as set forth in Borrower's board approved financial projections attached hereto as Exhibit C.

(d) A fourth Advance of up to $500,000 may be made to Borrower on or after June 30, 2017 but before August 31, 2017 (the "Fourth Tranche Advance") upon Borrower's request and subject to the terms of this Agreement, so long as no Event of Default has occurred and is continuing, and Borrower's Total Net Revenue for the six month period ending June 30, 2017 is at least 85% of its projected Total Net Revenue for such period as set forth in Borrower's board approved financial projections attached hereto as Exhibit C and Borrower has received at least $500,000 in cash proceeds from the sale and issuance of its equity securities or convertible notes that constitute Subordinated Debt.

(e) To request any Advance after the Closing Date, Borrower shall notify Lenders by 3:00 p.m. Pacific time at least three business days before the date of the Advance, which will be a business day. Lenders will transfer the amount of each Advance to Borrower's account subject to a control agreement in favor of Lenders. The proceeds of the initial Advance shall be used to repay all outstanding amounts under Borrower's existing secured loan facility owing to Pacific Western Bank (successor by acquisition of Square 1 Bank); with any remaining Advances used for general corporate purposes and working capital purposes.

2. The third sentence in Section 1.2(a) of the Agreement is amended and restated in its entirety to read as follows:

In addition to such interest payments, beginning on the earlier of (i) September 1, 2017 or (ii) the first day of the first month following the Amortization Trigger, Borrower shall make principal payments to Lenders in an amount equal to $117,000, plus (y) $19,230.77 if Borrower has received the Third Tranche Advance, and plus (z) $19,230.77, if Borrower has received the Fourth Tranche Advance.

3. The following is added to the end of Section 1.3 of the Agreement:

On the date the Third Tranche Advance is loaned to Borrower, Borrower shall pay to Lenders a fee in the amount of $12,500, to be allocated between the Lenders in accordance with their respective Pro Rata Share.

4. Section 5.3(b) of the Agreement is amended and restated in its entirety to read as follows

(b) Adjusted EBITDA. Borrower's maximum Adjusted EBITDA loss for the trailing three month period ending on March 31, 2017 and April 30, 2017 shall not exceed $130,000 and $30,000 respectively. Borrower's minimum trailing three month Adjusted EBITDA (measured as of the last day of each month beginning with period ending May 31, 2017) shall be at least $1.

5. The following definition is added to Section 14 of the Agreement:

"Adjusted EBITDA" means Borrower's earnings before interest, taxes, depreciation and amortization expenses, less capitalized software development expenses, as determined in accordance with GAAP, provided that the following shall be added back to Borrower's earnings: (i) all non-cash charges and expenses, including employee stock compensation expenses and (ii) all non-recurring expenses of Borrower as approved by Lenders on a case by case basis.

6. Exhibit A to the Agreement is replaced in its entirety with the Exhibit A attached hereto.

7. The Exhibit C attached hereto, which the parties acknowledge and agree are Borrower's board approved financial projections for 2017, is incorporated in its entirety as the Exhibit C to the Agreement.

8. 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 Lender under the Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Agreement.

9. Borrower represents and warrants that the representations and warranties contained in the Agreement are true and correct as of the date of this Amendment, and that no Event of Default has occurred and is continuing.

10. 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 the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf' format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf' signature page were an original hereof.

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

(a) this Amendment, duly executed by Borrower;

(b) warrants to purchase Borrower's stock issued to Lenders and its affiliates;

(c) an amendment fee equal to $12,500 (to be allocated between the Lenders in accordance with their respective Pro Rata Share), plus an amount equal to all Lender Expenses incurred through the date of this Amendment; and

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

[SIGNATURE PAGE FOLLOWS]

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

	SELLPOINTS, INC.

	By:	/s/ Xxxxx X’ Xxxxx

	Name:	Xxxxx X’ Xxxxx

	Title:	CEO

	MONTAGE CAPITAL II, L.P.

	By:	/s/ Xxxxxxx X. Xxxx

	Name:	Xxxxxxx X. Xxxx

	Title:	Managing Director

	PARTNERS FOR GROWTH IV, L.P.

	By:	/s/ Xxxxxx Xxxx

	Name:	Xxxxxx Xxxx

	Title:

EXHIBIT A
COMPLIANCE CERTIFICATE

Note: Please send all required reporting to:

Montage Capital II, L.P.	and	Partners For Growth IV, L.P.
000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000		000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000		Xxx Xxxxxxxxx, XX 00000
Fax: (000) 000-0000		Attn: Chief Financial Officer
Email: xxxxx@xxxxxxxxxxxxxx.xxx		Fax (000) 000-0000; email: xxxxxxx@xxxxxxxx.xxx

BORROWER: SellPoints Inc.

The undersigned authorized officer of SellPoints Inc. hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between Borrower and Lenders (the “Agreement”). Borrower is in complete compliance for the period ending __________________ with all required covenants, except as noted below; and all representations and warranties of Borrower stated in the Agreement are true and correct in all material respects as of the date hereof (provided that any representations and warranties expressly referring to a specific date shall be true and correct in all material respects as of such specific date), except as noted below.

Attached herewith are the required documents supporting the above certification. The authorized 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 audit adjustments.

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

REPORTING COVENANT	REQUIRED	COMPLIES
Monthly financial statements	Monthly within 30 days	Yes	No
A/R & A/P Agings	Monthly within 30 days	Yes	No
Deferred revenue schedule	Monthly within 30 days	Yes	No
Compliance Certificate	Monthly within 30 days	Yes	No
Annual financial statements (CPA Audited)	FYE within 180 days	Yes	No
Annual financial projections for upcoming year	Within 30 days of FYE	Yes	No
Tax returns	Within 15 days of filing	Yes	No

FINANCIAL COVENANTS	REQUIRED			ACTUAL	COMPLIES

Minimum Unrestricted Cash	$	500,000		$		Yes	No

Maximum Adjusted EBITDA Loss for trailing three months ending 3/31/17	$	(130,000	)	$		Yes	No
Maximum Adjusted EBITDA Loss for trailing three months ending 4/30/17	$	(30,000	)	$		Yes	No
Minimum trailing 3 month Adjusted EBITDA (measured monthly) beginning with period ending 5/31/17	$	1		$		Yes	No

Please attach any comments as additional pages.

	SellPoints Inc.

	Signature

	Name

	Title

	Date

EXHIBIT C

2017 Financial Projections

Sellpoints, Inc.

Financial Statements 2017 ———

	Jan			Feb			Mar			April			May			June			July			Aug			Sep			Oct			Nov			Dec			2017
	Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst

Total Gross Revenue		3,473			3,482			3,490			3,504			3,517			3,530			3,543			3,556			3,568			3,579			3,590			3,601			42,433
Syndication Revenue		205			206			206			206			206			207			207			207			207			208			208			208			2,481
Retargeter		383			386			389			398			407			415			423			431			439			446			454			461			5,032
PMA		145			150			155			160			164			169			173			177			181			185			189			192			2,039
Recurring Revenues		733			742			750			764			777			790			803			816			828			839			850			861			9,553

Creative Services		70			70			70			70			70			70			70			70			70			70			70			70			840
ReTargeter Legacy		-			-			-			-			-			-			-			-			-			-			-			-			-
PEEPs		170			170			170			170			170			170			170			170			170			170			170			170			2,040
Hotelier Programs		300			300			300			300			300			300			300			300			300			300			300			300			3,600
Total Net Revenues		1,273			1,282			1,290			1,304			1,317			1,330			1,343			1,356			1,368			1,379			1.390			1,401			16,033

Syndication		140			139			137			135			133			132			130			128			126			125			123			121			1,569
Retargeter		172			174			175			179			183			187			191			194			198			201			204			207			2,265
PMA		138			143			147			152			156			160			164			168			172			176			179			183			1,938
Creative Services		33			34			34			34			40			40			40			40			40			40			40			40			454
Retailer Programs		290			290			290			290			290			290			290			290			290			290			290			290			3,480
Gross Profit		773			779			783			790			802			809			815			820			826			832			837			841			9,706

Sales		130			116			120			116			115			114			114			116			114			114			113			114			1,397
Marketing		30			10			10			10			10			10			10			10			10			10			10			10			140
PMA		105			104			106			107			107			108			109			111			108			108			108			111			1,291
Engineering		63			61			56			44			44			44			44			44			44			43			43			44			573
Creative Services		23			22			22			22			16			16			16			16			16			16			16			16			218
Account Management		177			171			166			163			163			162			162			164			162			163			162			163			1,977
Retargeter		85			85			96			98			98			99			102			110			109			111			112			114			1,21B
G&A		136			116			118			142			118			153			118			120			133			117			117			126			1,514
Total SG&A Expenses		750			684			694			703			671			705			674			691			695			682			681			698			8,328

EBITDA		23			95			89			87			131			104			141			130			131			149			155			143			1,378

Interest Expense		(45	)		(45	)		(49	)		(53	)		(55	)		(53	)		(60	)		(60	)		(57	)		(57	)		(53	)		(53	)		(641	)
Depreciation and Amortization		(28	)		(26	)		(26	)		(28	)		(28	)		(28	)		(29	)		(29	)		(29	)		(30	)		(30	)		(30	)		(339	)
Other / Extraordinary		(25	)		(75	)																																(100	)
Net Income		(73)			(5T	)		14			6			49			23			52			41			46			62			71			59			298

*Headcount*		59			58			52			51			50			50			50			51			51			51			51			51

Administration		4			4			3			3			3			3			3			3			3			3			3			3
Engineering		12			12			8			7			7			7			7			7			7			7			7			7
Perf Mktg & Analytics		10			11			11			11			11			11			11			11			11			11			11			11
Sales & Marketing		11			10			9			9			9			9			9			9			9			9			9			9
Creative Services		4			4			4			4			3			3			3			3			3			3			3			3
Retargeter		4			4			5			5			5			5			5			6			6			6			6			6
Account Management		14			13			12			12			12			12			12			12			12			12			12			12
Total		59			58			52			51			50			50			50			51			51			51			51			51

Net Change
Administration		-						(1	)		(1	)		(1	)		(1	)		(1	)		(1	)		(1	)		(1	)		(1	)		(1	)
Engineering		-			-			(4	)		(5	)		(5	)		(5	)		(5	)		(5	)		(5	)		(5	)		(5	)		(5	)
Perf Mktg & Analytics		2			3			3			3			3			3			3			3			3			3			3			3
Sales & Marketing		(2	)		(3	)		(0	)		(4	)		(4	)		(4	)		(4	)		(4	)		(4	)		(4	)		(4	)		(4	)
Creative Services														(1	)		(1	)		(1	)		(1	)		(1	)		(1	)		(1	)		(1	)
Retargeter		-			-			1			1			1			1			1			2			2			2			2			2
Account Management		-			(1	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)
Total					(1	)		(7	)		(8	)		(9	)		(9	)		(9	)		(8	)		(8	)		(8	)		(8	)		(8	)

	Jan			Feb			Mar			April			May			June			Jul			Aug			Sept			Oct			Nov			Dec
	Feet			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcsl			Fcst			Fcst			Fcst

ASSETS
Cash		750			805			615			1,158			1,075			1,120			2,111			2,114			2,018			1,873			1,766			1,667
Accounts receivable		1,834			2,022			2,182			2,200			2,226			2,253			2,279			2,304			2,328			2,352			2,374			2,397
Other		462			461			433			390			430			391			353			350			306			281			273			229
Total Current Assets		3,046			3,288			3,230			3,748			3,732			3,764			4,742			4,767			4,652			4,506			4,413			4,293

Fixed Assets		132			132			132			132			132			132			132			132			132			132			132			132
Accumulated Depreciation		87			90			93			96			99			102			105			108			111			114			117			120
Fixed Assets, Net		45			42			39			36			33			30			27			24			21			18			15			12

Intangible Assets, net		737			730			722			715			707			700			692			685			677			670			662			654
Software Development Costs		2,879			2,969			3,038			3,105			3,172			3,238			3,303			3,368			3,433			3,495			3,558			3,621
Deposits & other assets		20			20			20			20			20			20			20			20			20			20			20			20
TOTAL ASSETS		6,727			7,048			7,049			7,623			7,663			7,752			8,784			8,864			8,802			8,708			8,667			8600

LIABILITIES
Accounts payable		972			917			927			959			941			983			954			971			983			974			980			1,001
Accrued Liabilities		360			348			364			380			396			412			428			444			460			476			492			508
Deferred Rent		56			54			52			50			48			46			44			42			40			38			36			33
Accrued Interest Payable		37			37			37			37			37			37			37			37			37			37			37			37
Montage Financing		3,515			3,905			3,907			4,409			4,411			4,401			4,903			4,906			4,752			4,599			4,446			4,293
New Equity/sub-Debt (Montage)		0			0			0			0			0			0			500			500			500			500			500			500
Deferred Revenue		422			467			423			437			424			439			425			425			440			427			441			428
Total Current Liabilities		5,362			5,729			5,710			6,273			6,258			6,318			7,292			7,325			7,213			7,050			6,932			6,800

Promissory Note on Bridge Loan		2,258			2,264			2,270			2,276			2,282			2,288			2,293			2,299			2,305			2,311			2,317			2,323
Warrant Liability		231			231			231			231			231			231			231			231			231			231			231			231
Total Long Term Liabilities		2,489			2,495			2,501			2,507			2,513			2,519			2,525			2,530			2,536			2,542			2,548			2,554
TOTAL LIABILITIES		7,851			8,224			8,211			8,780			8,770			8,836			9,817			9,856			9,749			9,593			9,480			9,354

EQUITY
Common		2			2			2			2			2			2			2			2			2			2			2			2
Preferred		20,993			20,993			20,993			20,993			20,993			20,993			20,993			20,993			20,993			20,993			20,993			20,993
Warrants / APIC		1,814			1,814			1,814			1,814			1,814			1,814			1,814			1,814			1,814			1,814			1,814			1,814
Retained Earnings		(23,861	)		(23,861	)		(23,861	)		(23,861	)		(23,861	)		(23,861	)		(23,861	)		(23,861	)		(23,861	)		(23,861	)		(23,861	)		(23,861	)
Current Year		73			(124	)		(111	)		(105	)		(56	)		33			19			60			105			168			239			298
Total Equity		(1,125	)		(1,176	)		(1,162	)		(1,157	)		(1,108	)		(1,085	)		(1,033	)		(992	)		(947	)		(884	)		(813	)		(754	)
TOTAL LIABILITIES & EQUITY		8,727			7,048			7,049			7,623			7,663			7,752			8,784			8,864			8,802			8,708			8,667			8,600
Check		0			0			0			0			0			0			0			0			0			0			0			0
DSO		45			44			52			51			52			51			53			53			51			53			51			53

	Jan			Feb			Mar			April			May			June			Julne			July			Sept			Oct			Nov			Dec			2017
	Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst			Fcst

Cash Flow from Operating Activities:
Net income		(73	)		(51	)		14			6			49			23			52			41			46			62			71			59			298
Reconcile to cash used by operations:
Depreciation		26			26			26			28			28			28			29			29			29			30			30			30			339
Changes in assets and liabilities:
Accounts receivable		(240	)		(188	)		(160	)		(18	)		(26	)		(27	)		(26	)		(25	)		(24	)		(24	)		(23	)		(22	)		(803	)
Other assets		37			2			27			44			(40	)		39			38			4			44			25			9			44			270
Accounts payable		(6	)		(54	)		10			32			(18	)		42			(28	)		17			12			(9	)		6			21			23
Deferred Revenue		16			46			(45	)		15			(14	)		15			(14	)		1			15			(14	)		15			(14	)		22
Deferred Rent		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(2	)		(25	)
Accrued Interest Payable		-			-			-			-			-			-			-			-			-			-			-			-			-
Accrued liabilities		(19	)		(12	)		16			16			16			16			16			16			16			16			16			16			129
Software Development
Costs		(119	)		(105	)		(84	)		(84	)		(84	)		(84	)		(83	)		(84	)		(83	)		(83	)		(82	)		(83	)		(1,058	)
Net Cash From Operations		(380	)		(340	)		(199	)		35			(91	)		49			(18	)		(5	)		52			2			40			49			(805	)

Cash Flow from Investing Activities:
Acquisition excluding capital assets		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)
Caplet expenditures					-
Net Cash Used by Investing Activities		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)

Cash Flow from Financing Activities
Montage Financing		2			390			2			502			2			(10	)		502			2			(153	)		(153	)		(153	)		(153	)		780
Proceeds from New Equity					-			-			-			-			-			500			-			-						-			-			500
Proceeds from Convertible Bridge Loan		6			6			6			6			6			6			6			6			6			6			6			6			71
Proceeds from equity financing		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)		(0	)
Net Cash Prov. by Financing Activities		8			396			8			508			8			(4	)		1,008			8			(147	)		(147	)		(147	)		(147	)		1,351

Net Increase in Cash		(372	)		56			(191	)		543			(83	)		45			990			3			(96	)		(145	)		(107	)		(98	)		545
Cash at Beginning of Period		1,122			750			805			615			1,158			1,075			1,120			2,111			2,114			2,018			1,873			1,766			1,122
CASH AT END OF PERIOD		750			805			615			1,158			1,075			1,120			2,111			2,114			2,018			1,873			1,766			1,667			1,667

Document Metadata

Table of Contents

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

Document Metadata