Fourth Amendment to Loan and Security Agreement between Limelight Networks, Inc. and Silicon Valley Bank dated February 27, 2018

This Fourth Amendment to Loan and Security Agreement (this “Amendment”) is entered into this 27^th day of February, 2018, by and between SILICON VALLEY BANK (“Bank”) and LIMELIGHT NETWORKS, INC., a Delaware corporation (“Borrower”) whose address is 222 South Mill Avenue, 8^th Floor, Tempe, Arizona 85281.

1.Definitions. Capitalized terms used but not defined in this Amendment shall have the meanings given to them in the Loan Agreement.

2.    Amendments to Loan Agreement.

2.1    Section 2.4 (Payment of Interest on the Credit Extensions). Section 2.4 is deleted in its entirety and replaced with the following:

2.2    Section 2.5 (Fees). Subsection (b) of Section 2.5 is deleted in its entirety and replaced with the following:

2.3    Section 3.2 (Conditions Precedent to all Credit Extensions). Subsection (a) of Section 3.2 is deleted in its entirety and replaced with the following:

2.4    Section 3.4 (Procedures for Borrowing). Section 3.4 is deleted in its entirety and replaced with the following:

“    3.4    Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the making of an Advance set forth in this Agreement, to obtain an Advance, Borrower (via an individual duly authorized by an Administrator) shall notify Bank (which notice shall be irrevocable) by electronic mail by 12:00 p.m. Pacific time on the Funding Date of the Advance. Such notice shall be made by Borrower through Bank’s online banking program, provided, however, if Borrower is not utilizing Bank’s online banking program, then such notice shall be in a written format acceptable to Bank that is executed by an Authorized Signer. Bank shall have received satisfactory evidence that the Board has approved that such Authorized Signer may provide such notices and request Advances. In connection with any such notification, Borrower must promptly deliver to Bank by electronic mail or through Bank’s online banking program such reports and information, including without limitation, a Borrowing Base Report, sales journals, cash receipts journals, accounts receivable aging reports, as Bank may request in its sole discretion. Bank shall credit proceeds of an Advance to the Designated Deposit Account. Bank may make Advances under this Agreement based on instructions from an Authorized Signer or without instructions if the Advances are necessary to meet Obligations which have become due.”

2.5    Sections 3.5 (Conversion and Continuation Elections), 3.6 (Special Provisions Governing LIBOR Advances) and 3.7 (Additional Requirements/Provisions Regarding LIBOR Advances). Sections 3.5, 3.6 and 3.7 are hereby deleted in their entirety and replaced with the following:

2.6    Section 6.6 (Access to Collateral; Books and Records). Section 6.6 is hereby amended by deleting the following sentence appearing therein:

2.7    Section 6.9 (Financial Covenants). Subsection (c) of Section 6.9 is deleted in its entirety and replaced with the following:

“    (c)    Minimum Liquidity. Maintain at all times, until the date that is immediately preceding the Fourth Amendment Effective Date, to be tested (i) as of the last day of each month in which Advances are outstanding at any time or an Advance request has been made and (ii) as of the last day of each quarter to the extent not tested pursuant to (i) during any month in such quarter, Liquidity of at least Ten Million Dollars ($10,000,000.00), of which at least Five Million Dollars ($5,000,000.00) shall be unrestricted and unencumbered (other than Liens in favor of Bank pursuant to the general security interest granted in this Agreement) cash and Cash Equivalents held by Borrower in Deposit Accounts or Securities Accounts in Borrower’s name maintained with Bank or Bank’s Affiliates.

2.8    Section 13 (Definitions). The following terms and their respective definitions set forth in Section 13.1 are deleted in their entirety and replaced with the following:

“    “Authorized Signer” is any individual listed in Borrower’s Borrowing Resolution who is authorized to execute the Loan Documents, including making (and executing if applicable) any Credit Extension request, on behalf of Borrower.”

“    “Availability Amount” is (a) the lesser of (i) (A) prior to the completion of the Initial Audit, an aggregate principal amount not to exceed Five Million Dollars ($5,000,000.00) outstanding at any time and (B) after the completion of the Initial Audit, the Revolving Line or (ii) the amount available under the Borrowing Base minus (b) the outstanding principal balance of any Advances.”

“    “Borrowing Base” is eighty percent (80.0%) of Eligible Accounts, as determined by Bank from Borrower’s most recent Borrowing Base Report; provided, however, that Bank has the right, after consultation and prior notice to Borrower, to decrease the foregoing percentage in its good faith business judgment to mitigate the impact of events, conditions, contingencies, or risks which may adversely affect the Collateral or its value.”

“    “Borrowing Resolutions” are, with respect to any Person, those resolutions adopted by such Person’s board of directors (and, if required under the terms of such Person’s Operating Documents, stockholders) and delivered by such Person to Bank approving the Loan Documents to which such Person is a party and the transactions contemplated thereby, together with a certificate executed by its secretary on behalf of such Person certifying (a) such Person has the authority to execute, deliver, and perform its obligations under each of the Loan Documents to which it is a party, (b) that set forth as a part of or attached as an exhibit to such certificate is a true, correct, and complete copy of the resolutions then in full force and effect authorizing and ratifying the execution, delivery, and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents, including making (and executing if applicable) any Credit Extension request, on behalf of such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such Person shall have delivered to Bank a further certificate canceling or amending such prior certificate.”

“    “Business Day” is any day that is not a Saturday, Sunday or a day on which Bank is closed.”

“    “Initial Audit” is Bank’s inspection of Borrower’s Accounts, the Collateral, and Borrower’s Books, completed after the Fourth Amendment Effective Date, with results satisfactory to Bank in its sole and absolute discretion.”

“    “Default Rate” is defined in Section 2.4(b).”

“    “Permitted Distributions” means:

(a)    purchases of capital stock from former employees, consultants and directors pursuant to repurchase agreements or other similar agreements, so long as an Event of Default does not exist and would not exist after the purchase;

(b)    distributions or dividends consisting solely of Borrower's capital stock or rights under any stockholder rights plan;

(c)    purchases for value of any rights distributed in connection with any stockholder rights plan adopted by Borrower;

(d)    purchases of capital stock or options to acquire such capital stock with the proceeds received from a substantially concurrent issuance of capital stock or convertible securities;

(e)     purchases of capital stock in connection with the exercise of stock options or stock appreciation rights by way of cashless exercise or in connection with the satisfaction of withholding tax obligations;

(f)    the issuance of cash in lieu of fractional shares;

(g)     other payments, distributions, redemptions, retirements or purchases in an aggregate amount not to exceed One Million Dollars ($1,000,000.00) in a fiscal year, inclusive of subsections (a) and (f) hereof;

(h)    repurchases of capital stock from Goldman Sachs made on or prior to December 31, 2018 so long as (i) the aggregate amount of such repurchases does not exceed Ten Million Dollars ($10,000,000.00) and (ii) an Event of Default does not exist and would not exist after giving effect to any such repurchase; and

(i)    repurchases of capital stock from investors made on or after April 1, 2018 so long as (i) the aggregate amount of such repurchases does not exceed Ten Million Dollars ($10,000,000.00) in any rolling twelve (12) month period, (ii) at the time of each such repurchase and after giving effect thereto, Bank has received satisfactory evidence that Borrower has and will have an Adjusted Ratio of greater than 1.20 to 1.0, (iii) at the time of each such repurchase and after giving effect thereto, Bank has received satisfactory evidence that Borrower has and will have Free Cash Flow, measured on a trailing twelve (12) month basis, of at least One Dollar ($1.00), and (iv) an Event of Default does not exist and would not exist after giving effect to any such repurchase.”

“    “Revolving Line” is an aggregate principal amount not to exceed Twenty Million Dollars ($20,000,000.00) outstanding at any time.”

“    “Revolving Line Maturity Date” is November 2, 2020.”    

2.9    Section 13 (Definitions). Subsection (v) in the definition of “Eligible Accounts” set forth in Section 13.1 is hereby deleted in its entirety and replaced with the following:

“    (v)    Accounts owing from an Account Debtor, whose total obligations to Borrower exceed twenty-five percent (25.0%) (or forty percent (40.0%) for Accounts for which the Account Debtor is Amazon, Microsoft, or Apple) of all Accounts, for the amounts that exceed that percentage, unless otherwise approved by Bank in writing on a case by case basis in its sole discretion; and”

2.10    Section 13 (Definitions). The following new defined terms are hereby inserted alphabetically in Section 13.1:

“    “Adjusted Quick Ratio” is the ratio of (a) Quick Assets to (b) Current Liabilities minus the current portion of Deferred Revenue.”

2.11    Section 13 (Definitions). The following defined terms and their definitions set forth in Section 13.1 are deleted in their entirety: Additional Costs, Continuation Date, Conversion Date, Interest Payment Date, Interest Period, Interest Rate Determination Date, LIBOR, LIBOR Advance, LIBOR Rate, LIBOR Rate Margin, Notice of Borrowing, Notice of Conversion/Continuation, Prime Rate Advance, Prime Rate Margin, Regulatory Change, and Reserve Requirement.

2.12    Exhibit B (Compliance Certificate). The Compliance Certificate appearing as Exhibit B to the Loan Agreement is deleted in its entirety and replaced with the Compliance Certificate attached as Schedule 1 attached hereto.

2.13    Exhibit C (Notice of Borrowing). The Notice of Borrowing (as defined in the Loan Agreement until the date of this Amendment) appearing as Exhibit C to the Loan Agreement is deleted in its entirety and replaced with the following: “Exhibit C – Intentionally Omitted”.

2.14    Exhibit D (Notice of Conversion/Continuation). The Notice of Conversion/Continuation (as defined in the Loan Agreement until the date of this Amendment) appearing as Exhibit D to the Loan Agreement is deleted in its entirety and replaced with the following: “Exhibit D – Intentionally Omitted”.

3.    Post-Closing Conditions. Borrower hereby acknowledges and agrees that Borrower will deliver to Bank, on or before the date that is thirty (30) days from the date of this Amendment, in form and substance satisfactory to Bank, an endorsement to Borrower’s property insurance policy that names Bank as a loss payee with respect to each of Borrower’s leased locations and each location where Borrower maintains assets with a third party. Borrower acknowledges and agrees that the failure of Borrower to satisfy any requirements set forth in the immediately preceding sentence within thirty (30) days from the date of this Amendment shall result in an immediate Event of Default under the Loan Agreement for which there shall be no grace or cure period.

4.    Limitation of Amendments.

4.1    The amendments set forth in Section 2, above, are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document.

4.2    This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect.

5.    Representations and Warranties. To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

5.1    Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

5.2    Borrower has the power and authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

5.3    The organizational documents of Borrower delivered to Bank on the Effective Date remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

5.4    The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, have been duly authorized;

5.5    The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower;

5.6    The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and

5.7    This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.

6.    Ratification of Perfection Certificate. Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated as of November 2, 2015, and acknowledges, confirms and agrees that the disclosures and information Borrower provided to Bank in such Perfection Certificate have not changed, as of the date hereof.

7.    Integration. This Amendment and the Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations, warranties, and negotiations between the parties about the subject matter of this Amendment and the Loan Documents merge into this Amendment and the Loan Documents.

8.    Counterparts. This Amendment may be executed in any number of counterparts and all of such counterparts taken together shall be deemed to constitute one and the same instrument.

9.    Effectiveness. This Amendment shall be deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto, and (b) Borrower’s payment to Bank of (i) a fully-earned, non-refundable amendment fee in an amount equal to Fifty Thousand Dollars ($50,000.00) and (ii) Bank’s legal fees and expenses incurred in connection with this Amendment.

TO:    SILICON VALLEY BANK                Date:                 

FROM: LIMELIGHT NETWORKS, INC.

The undersigned authorized officer of LIMELIGHT NETWORKS, INC. (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (as amended, the “Agreement”), (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries, if any, relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.

The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.

The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)

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In the event of a conflict between this Schedule and the Agreement, the terms of the Agreement shall govern.

Dated:    ____________________

I.    Adjusted Quick Ratio (Section 6.9(d))