[LOGO] SILICON VALLEY BANK
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: TRUEVISION, INC.
ADDRESS: 0000 XXXXX XXXXXX
XXXXX XXXXX, XXXXXXXXXX 00000
DATE: FEBRUARY 21, 1997
THIS SCHEDULE is an integral part of the Loan and Security Agreement
between Silicon Valley Bank ("Silicon") and the above-named borrower
("Borrower") of even date.
EXIM AGREEMENT;
CROSS-COLLATERALIZATION;
CROSS-DEFAULT: Silicon and Borrower are parties to that certain
Loan and Security Agreement (Exim Program) dated
February 21, 1997 (as amended from time to time,
the "Exim Agreement"). This Agreement and the
Exim Agreement shall continue in full force and
effect, and all rights and remedies under this
Agreement and the Exim Agreement are cumulative.
The term "Obligations" as used in this Agreement
and the Exim Agreement shall include without
limitation the obligation to pay when due all
Loans made pursuant to this Agreement (sometimes
referred to herein as the "Silicon Loans") and all
interest thereon and the obligation to pay when
due all Loans made pursuant to the Exim Agreement
(the "Exim Loans") and all interest thereon.
Without limiting the generality of the foregoing,
all "Collateral" as defined in this Agreement and
the Exim Agreement shall secure all Exim Loans,
all Silicon Loans, all interest thereon, and all
other Obligations. Any Event of Default under
this Agreement shall also constitute an Event of
Default under the Exim Agreement, and any Event of
Default under the Exim Agreement shall also
constitute an Event of Default under this
Agreement.
CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of:
(i) $5,000,000 at any one time outstanding; or
(ii) the sum of
(a) 75% of the Net Amount of Borrower's
Eligible Accounts (defined below) which
arise from sales to entities which are not
distributors; plus
(b) 50% of the Net Amount of Borrower's
Eligible Accounts (defined below) which
arise from sales to distributors.
"Net Amount" of an account means the gross amount
of the account, minus all applicable sales, use,
excise and other similar taxes and
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minus all discounts, credits and allowances of any
nature granted or claimed.
"Eligible Accounts" means accounts which Silicon
in its discretion deems eligible for borrowing.
Without limiting the generality of the foregoing,
the following accounts will not be deemed Eligible
Accounts: (a) accounts outstanding for more than
90 days from the invoice date, (b) accounts
subject to any contingencies, or arising from a
consignment, guaranteed sale, xxxx and hold, sale
on approval or other transaction in which payment
by the account debtor is conditional, (c)
accounts owing from the United States or any
department, agency or instrumentality of the
United States or any state, city or municipality,
(d) accounts owing from an account debtor whose
chief executive office or principal place of
business is outside the United States, except for
any account which is pre-approved by Silicon in
its discretion, in writing, or backed by a letter
of credit satisfactory to Silicon, or FCIA insured
satisfactory to Silicon, (e) accounts owing from
one account debtor to the extent they exceed 25%
of the total eligible accounts outstanding, except
that accounts owing from Avid shall only be deemed
ineligible to the extent they exceed 35% of the
total eligible accounts outstanding and are
otherwise considered eligible hereunder, (f)
accounts owing from an affiliate of Borrower, and
(g) accounts owing from an account debtor to whom
Borrower is or may be liable for goods purchased
from, or services received from, such account
debtor or otherwise (to the extent of the amount
owing to such account debtor). In addition, if
more than 50% of the accounts owing from an
account debtor are outstanding more than 90 days
from the invoice date or are otherwise not
eligible for borrowing, then all accounts owing
from that account debtor will be deemed ineligible
for borrowing.
OVERALL LIMIT: In addition to the foregoing, the total unpaid
principal balance of all Silicon Loans and all
Exim Loans, and all accrued and unpaid interest
thereon, and all other Obligations relating to any
of the foreging at any time outstanding may not
exceed $7,000,000.
INTEREST RATE (Section 1.2): On all Loans, a rate equal to the "Prime Rate" in
effect from time to time, plus 1.50% per annum,
PROVIDED that the interest rate with respect to
Exim Loans shall be as is set forth in the Exim
Agreement.
Interest shall be calculated on the basis of a
360-day year for the actual number of days
elapsed. "Prime Rate" means the rate announced
from time to time by Silicon as its "prime rate;"
it is a base rate upon which other rates charged
by Silicon are based, and it is not necessarily
the best rate available at Silicon. The interest
rate applicable to the Obligations shall change on
each date there is a change in the Prime Rate.
LOAN ORIGINATION FEE
(Section 1.3): See Amendment to Loan Agreement of even date
herewith.
LETTER OF CREDIT SUBLIMIT
(Section 1.4): $4,000,000
FOREIGN EXCHANGE
CONTRACT SUBLIMIT Up to $4,000,000 of the Credit Limit (the
"Contract Limit") may be utilized for spot and
future foreign exchange contracts (the "Exchange
Contracts"). The Credit Limit available at any
time shall be reduced by the following amounts
(the "Foreign Exchange Reserve") on each
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day (the "Determination Date"): (i) on all
outstanding Exchange Contracts on which delivery
is to be effected or settlement allowed more than
two business days from the Determination Date, 10%
of the gross amount of the Exchange Contracts;
plus (ii) on all outstanding Exchange Contracts on
which delivery is to be effected or settlement
allowed within two business days after the
Determination Date, 100% of the gross amount of
the Exchange Contracts. In lieu of the Foreign
Exchange Reserve for 100% of the gross amount of
any Exchange Contract, the Borrower may request
that Silicon debit the Borrower's bank account
with Silicon for such amount, provided Borrower
has immediately available funds in such amount in
its bank account.
Silicon may, in its discretion, terminate the
Exchange Contracts at any time (a) that an Event
of Default occurs or (b) that there is not
sufficient availability under the Credit Limit and
Borrower does not have available funds in its bank
account to satisfy the Foreign Exchange Reserve.
If either Silicon or Borrower terminates the
Exchange Contracts, and without limitation of the
FX Indemnity Provisions (as defined below),
Borrower agrees to reimburse Silicon for any and
all fees, costs and expenses relating thereto or
arising in connection therewith.
Borrower shall not permit the total gross amount
of all Exchange Contracts on which delivery is to
be effected and settlement allowed in any two
business day period to be more than $2,000,000
(the "Settlement Limit"), nor shall Borrower
permit the total gross amount of all Exchange
Contracts to which Borrower is a party,
outstanding at any one time, to exceed the
Contract Limit.
Notwithstanding the above, however, the amount
which may be settled in any two (2) business day
period may, in Silicon's sole discretion, be
increased above the Settlement Limit up to, but in
no event to exceed, the amount of the Contract
Limit (the "Discretionary Settlement Amount")
under either of the following circumstances (the
"Discretionary Settlement Circumstances"):
(i) if there is sufficient availability under
the Credit Limit in the amount of the Foreign
Exchange Reserve as of each Determination
Date, and Silicon in advance shall reserve
the full amount of the Foreign Exchange
Reserve against the Credit Limit; or
(ii) if there is insufficient availability
under the Credit Limit as to settlements
within any two (2) business day period, and
if Silicon is able to: (A) verify good funds
overseas prior to crediting Borrower's
deposit account with Silicon (in the case of
Borrower's sale of foreign currency); or (B)
debit Borrower's deposit account with Silicon
prior to delivering foreign currency overseas
(in the case of Borrower's purchase of
foreign currency);
PROVIDED that it is expressly understood that
Silicon's willingness to adopt the Discretionary
Settlement Amount is a matter of Silicon's sole
discretion and the existence of the Discretionary
Settlement Circumstances in no way means or
implies that Silicon shall be obligated to permit
the Borrower to exceed the Settlement Limit in any
two business day period.
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In the case of Borrower's purchase of foreign
currency, Borrower shall instruct Silicon in
advance upon settlement either to treat the
settlement amount as an advance under the Credit
Limit or to debit Borrower's account for the
amount settled.
The Borrower shall execute all standard form
applications and agreements of Silicon in
connection with the Exchange Contracts, and
without limiting any of the terms of such
applications and agreements, the Borrower will pay
all standard fees and charges of Silicon in
connection with the Exchange Contracts.
Without limiting any of the other terms of this
Loan Agreement or any such standard form
applications and agreements of Silicon, Borrower
agrees to indemnify Silicon and hold it harmless,
from and against any and all claims, debts,
liabilities, demands, obligations, actions, costs
and expenses (including, without limitation,
attorneys' fees of counsel of Silicon's choice),
of every nature and description, which it may
sustain or incur, based upon, arising out of, or
in any way relating to any of the Exchange
Contracts or any transactions relating thereto or
contemplated thereby (collectively referred to as
the "FX Indemnity Provisions").
The Exchange Contracts shall have maturity dates
no later than the Maturity Date.
MATURITY DATE
(Section 5.1): AUGUST 20, 1997
SUBSIDIARIES OF BORROWER
(Section 3.1): TRUE VISION, INC., AN INDIANA CORPORATION
SHADELAND ROAD, INDIANAPOLIS, INDIANA
PRIOR NAMES OF BORROWER
(Section 3.2): RASTEROPS
PRESENT TRADE NAMES OF BORROWER
(Section 3.2): NONE
PRIOR TRADE NAMES OF BORROWER
(Section 3.2): NONE
OTHER LOCATIONS AND ADDRESSES
(Section 3.3): NONE
MATERIAL ADVERSE LITIGATION
(Section 3.10): NONE
FINANCIAL COVENANTS
(Section 4.1): Borrower shall comply with all of the following
covenants effective as of December 28, 1996.
Compliance shall be determined as of the end of
each fiscal quarter, except as otherwise
specifically provided below:
QUICK ASSET RATIO: Borrower shall maintain a ratio of "Quick Assets"
to current liabilities of not less than .70 to 1
effective for the period ending December 28, 1996.
Thereafter, Borrower shall maintain a ratio of
"Quick Assets" to current liabilities of not less
than 1.00 to 1.
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TANGIBLE NET WORTH: As of December 28, 1996, and as of the end of each
succeeding quarter, Borrower shall maintain a
tangible net worth of not less than the sum of:
(a) $17,500,000, as of December 28, 1996;
plus
(b) 80% of the sum of all equity
contributions received by Borrower
subsequent to December 28, 1996; plus
(c) 80% of all net income (but without
deductions for any net losses) earned in
each fiscal quarter ending after December
28, 1996.
DEBT TO TANGIBLE
NET WORTH RATIO: Borrower shall maintain a ratio of total
liabilities to tangible net worth of not more than
1.0 to 1.
PROFITABILITY Effective with the period ending March 31, 1997,
Borrower shall not incur a loss (after taxes) for
any fiscal quarter or fiscal year during the term
of this Agreement.
DEFINITIONS: "Tangible net worth" means the excess of total
assets over total liabilities, determined in
accordance with generally accepted accounting
principles, excluding however all assets which
would be classified as intangible assets under
generally accepted accounting principles,
including without limitation goodwill, licenses,
patents, trademarks, trade names, copyrights,
capitalized software and organizational costs,
licences and franchises.
"Quick Assets" means cash on hand or on
deposit in banks, readily marketable
securities issued by the United States,
readily marketable commercial paper rated
"A-1" by Standard & Poor's Corporation (or a
similar rating by a similar rating
organization), certificates of deposit and
banker's acceptances, and accounts receivable
(net of allowance for doubtful accounts).
DEFERRED REVENUES: For purposes of the above quick asset ratio,
deferred revenues shall not be counted as current
liabilities. For purposes of the above debt to
tangible net worth ratio, deferred revenues shall
not be counted in determining total liabilities
but shall be counted in determining tangible net
worth for purposes of such ratio. For all other
purposes deferred revenues shall be counted as
liabilities in accordance with generally accepted
accounting principles.
SUBORDINATED DEBT: "Liabilities" for purposes of the foregoing
covenants do not include indebtedness which is
subordinated to the indebtedness to Silicon under
a subordination agreement in form specified by
Silicon or by language in the instrument
evidencing the indebtedness which is acceptable to
Silicon.
OTHER COVENANTS
(Section 4.1): Borrower shall at all times comply with all of the
following additional covenants:
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1. BANKING RELATIONSHIP. Borrower shall at all
times maintain its primary banking relationship
with Silicon.
2. MONTHLY BORROWING BASE CERTIFICATE AND OTHER
REPORTS. Subject to the final paragraph of this
Section 2, within 15 days after the end of each
month, Borrower shall provide Silicon with:
a. a Borrowing Base Certificate in such
form as Silicon shall specify;
b. an aged listing of Borrower's accounts
receivable;
c. an aged listing of Borrower's accounts
payable;
d. a report of all distributor
sell-throughs and return sales; and
e. an inventory status report regarding of
Borrower's inventory, in such form as
Silicon shall reasonably request.
BORROWER:
TRUEVISION, INC.
BY_______________________________
PRESIDENT OR VICE PRESIDENT
BY_______________________________
SECRETARY OR ASS'T SECRETARY
SILICON:
SILICON VALLEY BANK
BY_______________________________
TITLE______________________________
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