Loan Modification Agreement - Rentrak Corp. and Silicon Valley Bank
LOAN MODIFICATION AGREEMENT
AMONG: Rentrak Corporation ("Borrower"), whose address is One
Airport Center, 7227 N.E. 55th Avenue, Portland, Oregon
97218;
AND: Silicon Valley Bank ("Silicon") whose address is
3003 Tasman Drive, Santa Clara, California 95054;
DATE: December _____, 1997.
This Loan Modification Agreement is entered into on the
above date by Borrower and Silicon.
1. Background. Borrower entered into a loan and security
agreement with Silicon dated as of October 12, 1993, which was
subsequently modified (as amended, the "Loan Agreement").
Capitalized terms used in this Loan Modification Agreement shall,
unless otherwise defined in this Agreement, have the meaning
given to such terms in the Loan Agreement.
Silicon and Borrower are entering into this Agreement to
state the terms and conditions of certain modifications to the
Loan Agreement and the Schedule, as modified prior to the date of
this Agreement. Silicon and Borrower are also entering into an
Interest Rate Supplement to Agreement, the terms of which shall
control in the event of any inconsistency with the Loan Agreement
or the Schedule.
2. Modifications to Loan Agreement and Schedule.
(a) The Schedule attached to this Loan Modification
Agreement is a revised and restated Schedule, which modifies
certain terms contained in the Schedule attached to the Loan
Agreement. The Schedule attached to this Loan Modification
supersedes in its entirety the Schedule attached to the Loan
Agreement.
(b) Section 3.7 of the Loan Agreement is deleted and
replaced with the following:
"3.7 Financial Condition and Statements. All
financial statements now or in the future delivered to
Silicon have been, and will be, prepared in conformity
with generally accepted accounting principles and now
and in the future will completely and accurately
reflect the financial condition of the Borrower, at the
times and for the periods therein stated. Since the
last date covered by any such statement there has been
no material adverse change in the financial condition
or business of the Borrower. The Borrower is now and
will continue to be solvent. The Borrower will provide
Silicon: (i) within 45 days after the end of each
quarter (except the fourth fiscal quarter), a quarterly
financial statement (consisting of company-prepared 10Q
reports), including consolidated financial statement
details as determined by Silicon to support
calculations of the financial covenants contained in
the Schedule as prepared by the Borrower and certified
as correct to the best knowledge and belief by the
Borrower's chief financial officer or other officer or
person acceptable to Silicon; (ii) within 20 days after
the end of each month, an accounts receivable report
and an accounts payable report in such form as Silicon
shall reasonably specify; (iii) within 20 days after
the end of each month, a Borrowing Base Certificate in
the form attached to this Agreement as Exhibit A, as
Silicon may reasonably modify such Certificate from
time to time, signed by the Chief Financial Officer of
the Borrower; (iv) within 45 days after the end of the
first three calendar quarters of each year and within
90 days after the end of the last calendar quarter of
each year, a Compliance Certificate in such form as
Silicon shall reasonably specify, signed by the Chief
Financial Officer of the Borrower, certifying that
throughout such quarter the Borrower was in full
compliance with all of the terms and conditions of this
Agreement, and setting forth calculations showing
compliance with the financial covenants set forth on
the Schedule hereto and such other information as
Silicon shall reasonably request; and (v) within 90
days following the end of the Borrower's fiscal year,
complete annual CPA audited financial statements, such
audit being conducted by independent certified public
accountants reasonably acceptable to Silicon."
3. No Other Modifications. Except as expressly modified
by this Loan Modification Agreement, the terms of the Loan
Agreement and Schedule, as amended prior to the date of this
Agreement, shall remain unchanged and in full force and effect.
Silicon's agreement to modify the Loan Agreement pursuant to this
Loan Modification Agreement shall not obligate Silicon to make
any future modifications to the Loan Agreement or any other loan
document. Nothing in this Loan Modification Agreement shall
constitute a satisfaction of any indebtedness of any Borrower to
Silicon. It is the intention of Silicon and Borrower to retain
as liable parties all makers and endorsers of the Loan Agreement
or any other loan document. No maker, endorser, or guarantor
shall be released by virtue of this Loan Modification Agreement.
The terms of this paragraph shall apply not only to this Loan
Modification Agreement, but also to all subsequent loan
modification agreements.
4. Representations and Warranties.
(a) The Borrower represents and warrants to Silicon that
the execution, delivery and performance of this Agreement are
within the Borrower's corporate powers, and have been duly
authorized and are not in contravention of law or the terms of
the Borrower's charter, bylaws or other incorporation papers, or
of any undertaking to which the Borrower is a party or by which
it is bound.
(b) The Borrower understands and agrees that in entering
into this Agreement, Silicon is relying upon the Borrower's
representations, warranties and agreements as set forth in the
Loan Agreement and other loan documents. Borrower hereby
reaffirms all representations and warranties in the Loan
Agreement, all of which are true as of the date of this
Agreement.
Borrower:
RENTRAK CORPORATION
By:
Title:
Silicon:
SILICON VALLEY BANK
By:
Title:
AMENDED AND RESTATED SCHEDULE TO LOAN AND SECURITY AGREEMENT
Borrower: Rentrak Corporation
Address: 7227 N.E. 55th Avenue
Portland, OR 97218
Date: December _____, 1997
Secured Operating Line of Credit
Credit Limit: An amount not to exceed the lesser of: (i)
$12,500,000.00 at any one time outstanding; or
(ii) 80% of the Net Amount of Borrower's eligible
accounts receivable. "Net Amount" means the gross
amount of the account, minus all applicable sales,
use, excise and other similar taxes and minus all
discounts, credits and allowances of any nature
granted or claimed.
The following accounts will not be
deemed eligible for borrowing: accounts
outstanding for more than 60 days from the invoice
date (except as provided below), accounts subject
to any contingencies (such as payments due only
upon acceptance), accounts owing from governmental
agencies, accounts owing from an account debtor
outside the United States or Canada (except for
those described on the attached Exhibit B or
otherwise pre-approved in writing by Silicon in
its discretion, or backed by a letter of credit
satisfactory to Silicon, or FCIA insured
satisfactory to Silicon), accounts owing from one
account debtor to the extent they exceed 25% of
the total eligible accounts outstanding, accounts
owing from an affiliate of the Borrower, and
accounts owing from an account debtor to whom the
Borrower is or may be liable for goods purchased
from such account debtor or otherwise. In
addition, if more than 25% of the accounts owing
from an account debtor are outstanding more than
60 days from the invoice date or are otherwise not
eligible accounts, then all accounts owing from
that account debtor will be deemed ineligible for
borrowing. All other accounts shall be deemed
eligible accounts unless Silicon, in its
reasonable discretion, deems the account to be
ineligible for valid credit reasons. Accounts
owing from the following customers of Borrower
shall not be deemed ineligible merely because such
accounts may be more than 60 days from the date of
invoice, but shall be ineligible based on age
according to the following eligibility periods:
Customer Eligibility Period
Moovies (Tonight's Feature 0 to 90 days
Super Movie Exchange 0 to 90 days
Bradley Video 0 to 90 days
1 Hr Photo & Video 0 to 105 days
Sulpizio One 0 to 120 days
Hollywood Entertainment 0 to 120 days
Interest Rate: The interest rate applicable to the Secured
Operating Line of Credit shall be (a) a rate equal
to the "Prime Rate" in effect from time to time,
calculated on the basis of a 360-day year for the
actual number of days elapsed; or (b) a rate equal
to the LIBOR Rate, all as set forth in the
Interest Rate Supplement to Agreement.
Commitment
Fee: $15,625, which is fully earned and
payable at closing and which is non-refundable.
Borrower shall pay a second commitment fee in the
amount of $15,625 for the second year of this
facility on or before that date which is one year
from the date of execution of this Amended and
Restated Schedule to Loan and Security Agreement.
Unused
Commitment Fee:Borrower shall pay an Unused Commitment Fee on the
unused portion of the Secured Operating Line of
Credit equivalent to one-eighth of one percent
(0.125%) of the unused amount. This amount shall
be measured quarterly, and the fee shall be due
and payable each quarter in arrears.
Maturity Date: December 18, 1999, at which time all unpaid
principal and accrued but unpaid interest shall be
due and payable.
Prior Names of
Borrower: National Video, Inc.
Trade Names of
Borrower: See attached Exhibit C
Trademarks of
Borrower: See attached Exhibit C
Other Locations
and Addresses: Rentrak Corporation
3512 State Route 735
Wilmington, Ohio 45177
Material Adverse
Litigation: None.
Financial
Covenants: Borrower shall at all times comply with all of the
following covenants:
Quick Ratio: Borrower shall at all times maintain a ratio of
cash plus accounts receivable to current
liabilities less deferred revenue of not less than
0.60:1.00, increasing to not less than 0.75:1.00
following the dissolution of the remaining reserve
for discontinued operations.
Tangible Net
Worth: Borrower shall at all times maintain a
Tangible Net Worth (defined below) of not less
than $10,500,000 for the quarter ending
December 31, 1997, and not less than $10,500,000
plus 50% of Borrower's cumulative quarterly net
income, beginning with the quarter ending
March 31, 1998, and continuing for each quarter
thereafter. Borrower's Tangible Net Worth shall
be measured on a quarterly basis.
Debt to Tangible
Net Worth Ratio:
Borrower shall at all times maintain a
ratio of total liabilities (excluding deferred
revenues and subordinated debt) to Tangible Net
Worth (defined below) of not more than 2.75:1.00,
decreasing to not more than 2.00:1.00 following
the dissolution of the remaining reserve for
discontinued operations. To be excluded from
liabilities, subordinated debt must be
subordinated to the Obligations pursuant to a
written agreement in form and substance acceptable
to Silicon.
Profitability: Borrower shall not incur a loss in excess of
$350,000 for any fiscal quarter, and shall not
incur any loss in two consecutive quarters.
Borrower shall not incur a loss, in the aggregate,
for any fiscal year. For purposes of this
paragraph, "loss" means net income, after taxes,
of less than $0.00, determined based on Borrower's
financial statements.
Definitions: "Current Liabilities" shall have the meaning
ascribed to that term in accordance with generally
accepted accounting principles (excluding deferred
revenues).
"Tangible Net Worth" means stockholders'
equity plus debt subordinated to Silicon's debt,
less goodwill, patents, capitalized software
costs, deferred organizational costs, trade names,
trademarks, and all other assets which would be
classified as intangible assets under generally
accepted accounting principles.
Other Covenants:
Borrower shall at all times comply with all of the
following additional covenants:
Banking Relationship. Borrower shall at
all times maintain its primary banking
relationship with Silicon. Borrower shall not
establish any deposit accounts of any type with
any bank or other financial institution other than
Silicon without Silicon's prior written consent.
Conditions to
Closing: Without in any way limiting the discretionary
nature of advances under this Agreement, before
requesting any such advance, the Borrower shall
satisfy each of the following conditions:
1. Loan
Documents: Silicon shall have received the
Loan Modification Agreement, this Amended and
Restated Schedule to Loan and Security Agreement,
a Security Agreement in Copyrighted Works, an
Interest Rate Supplement to Agreement, and such
other loan documents as Silicon shall require,
each duly executed and delivered by the Borrower.
2. Documents
Relating to
Authority,
Etc.: Silicon shall have received each of
the following in form and substance satisfactory
to it:
(a) Certified Copies of the Articles of
Incorporation and Bylaws of the Borrower;
(b) A Certificate of Good Standing
issued by the Oregon Secretary of State with
respect to the Borrower;
(c) A certified copy of a Resolution
adopted by the Board of Directors of the Borrower
authorizing the execution, delivery and
performance of this Schedule and any other
documents or certificates to be executed by the
Borrower in connection with this transaction;
(d) Incumbency Certificates describing
the office and identifying the specimen signatures
of the individuals signing all such loan documents
on behalf of the Borrower; and
3.Perfection
and Priority
of Security: Silicon shall have received
evidence satisfactory to it that its security
interest in the Collateral has been duly perfected
and that such security interest is prior to all
other liens, charges, security interests,
encumbrances and adverse claims in or to the
Collateral other than Permitted Liens, which
evidence shall include, without limitation, a
certificate from the Oregon State Secretary of
State showing the due filing and first priority of
the UCC Financing Statements to be signed by the
Borrower covering the Collateral, and evidence of
the due filing of the Security Agreement in
Copyrighted Works with the United States Copyright
Office.
4. Insurance: Silicon shall have received
evidence satisfactory to it that all insurance
required by this Agreement is in full force and
effect, with loss payee designations and
additional insured designations as required by
this Agreement.
5. Other
Information: Silicon shall have received such
other statements, opinions, certificates,
documents and information with respect to matters
contemplated by this Agreement as it may
reasonably request.
Silicon and the Borrower agree that the terms of this Schedule
supplement the Loan and Security Agreement between Silicon and
the Borrower and agree to be bound by the terms of this Schedule.
Borrower:
RENTRAK CORPORATION
By:
Title:
Silicon:
SILICON VALLEY BANK
By:
Title: