Streamline Facility Agreement
(Exim Program)
September 24, 1998
TrueVision, Inc.
0000 Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
Gentlemen:
Reference is made to the Loan and Security Agreement (Exim Program) between
you ("Borrower") and us ("Silicon") dated September 19, 1997 (as amended, the
"Loan Agreement"). (This letter agreement, the Loan Agreement, and all other
written documents and agreements between us are referred to herein collectively
as the "Loan Documents". Capitalized terms used but not defined in this
agreement, shall have the meanings set forth in the Loan Agreement.)
This will confirm our agreement that the following provisions shall apply,
effective on the date hereof:
1. MONTHLY BORROWING BASE. Prior to the initial Loan hereunder and at
all times when any Obligations remain outstanding, within 30 days after the end
of each month, Borrower shall deliver to Silicon a Borrowing Base Certificate
signed by the Chief Executive Officer, President, Chief Financial Officer or
Controller of Borrower in substantially the form of Exhibit A hereto, together
with aged listings of accounts receivable and accounts payable.
2. DAILY DELIVERY OF PROCEEDS OF RECEIVABLES NOT REQUIRED. Borrower
shall not be required to deliver the proceeds of Receivables to Silicon upon
receipt as provided in Section 4.4 of the Loan Agreement; provided that if any
Event of Default has occurred and is continuing, without limiting its other
rights and remedies, Silicon shall have the right to require that all proceeds
of all Receivables be delivered to Silicon upon receipt and in the form
received.
3. CHANGES TO REPORTING REQUIREMENTS.
(a) Daily delivery to Silicon of transaction reports, schedules and
assignments of Receivables, and schedules of collections, and delivery to
Silicon of copies of credit memos within two days after the date issued, as
called for by Section 4.3 of the Loan Agreement, will not be required.
(b) The first sentence of Section 4.6, which requires that Borrower
promptly notify Silicon of all disputes or claims relating to Receivables, is
replaced by the following: "Borrower shall promptly notify Silicon of all
returns and recoveries and of all disputes and claims, where the return,
recovery, dispute or claim involves more than $50,000".
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(c) Borrower shall provide to Silicon, within five (5) days of filing,
copies of all reports on Form 10-K and 10-Q filed with the Securities and
Exchange Commission.
(d) Borrower's Compliance Certificate and report of all distributor
sell-throughs and return sales, set forth in Section 5.3 of the Loan
Agreement, shall be required within 30 days of each fiscal quarter ending
after the date hereof.
(e) Collateral audits, as provided for in Section 5.4 of the Loan
Agreement, shall be conducted as follows: (i) annually if no Loans have been
made to Borrower or (ii) semi-annually if Loans have been made to Borrower.
If Borrower requests a Loan and no Loans have been made to Borrower in the
six (6) months preceding Borrower's request, a collateral audit shall be
conducted within 30 days of the Borrower's request and must be completed with
results satisfactory to Silicon in its sole discretion prior to any Loans
being made by Silicon to Borrower.
4. CHANGE IN CREDIT LIMIT. The Credit Limit set forth in the Loan
Agreement is hereby amended to read as follows (provided, no changes are being
made to the remaining provisions of the Credit Limit, including, without
limitation, the definition of "Value"):
"The unpaid principal balance of all Exim Loans and all accrued
interest thereon from time to time outstanding may not exceed the lesser of
(i) or (ii) as follows:
(i) $2,000,000 at any one time outstanding; or
(ii) the sum of (a), (b) and (c):
(a) 80% of the value of Borrower's eligible export
Receivables, which Silicon in its discretion deems eligible for borrowing,
that constitute Foreign non-Distributor Receivables; plus
(b) 65% of the value of Borrower's eligible export
Receivables, which Silicon in its discretion deems eligible for borrowing,
that constitute Foreign Distributor Receivables; plus
(c) up to 60% of the Value of Borrower's export inventory
which Silicon in its discretion deems eligible for borrowing, up to a maximum
of $1,000,000 total at any one time outstanding.
The term "Foreign Distributor Receivables" shall mean those
Receivables arising in the ordinary course of Borrower's business from the
sale of goods or rendition of services to any customer located outside of the
United States and who is identified by the Bank as a distributor of the
Borrower due to, among other things, such customer's rights of product
return, price protection credits and/or cooperative advertising credits."
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5. CHANGE IN INTEREST RATE. The Interest Rate set forth in the Loan
Agreement is hereby amended to read as follows:
"A rate equal to the "Prime Rate" in effect from time to time, plus
0.25% per annum. 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."
6. CHANGE IN MATURITY DATE. Section 6.1 of the Loan Agreement is
hereby amended in its entirety to read as follows: "This Agreement shall
continue in effect until SEPTEMBER 24, 1999."
7. CHANGES IN FINANCIAL COVENANTS.
(a) TANGIBLE NET WORTH. Borrower shall not be required to comply
with the Tangible Net Worth financial covenant set forth in the Loan
Agreement.
(b) QUICK RATIO. Borrower shall maintain, as of the last day of
the fiscal quarter ending September 30, 1998, a ratio of quick assets to
current liabilities of at least 0.80 TO 1.0; and Borrower shall maintain, as
of the last day of each fiscal quarter ending thereafter, a ratio of quick
assets to current liabilities of at least 1.0 TO 1.0.
(c) DEBT-NET WORTH RATIO. Borrower shall maintain, as of the last
day of each calendar month, a ratio of total liabilities to tangible net
worth of not more than 1.0 TO 1.0.
(d) PROFITABILITY. Borrower shall be profitable for the fiscal
quarter ending September 30, 1998 and for each fiscal quarter and each fiscal
year ending thereafter; provided, however, Borrower shall be permitted to
incur a loss (after taxes) for one fiscal quarter in each fiscal year
provide, further, that such loss (after taxes) does not exceed $500,000.
(e) The term "quick assets" means, as of any applicable date, the
consolidated cash, cash equivalents, accounts receivable and investments with
maturities of fewer than 90 days of Borrower determined in accordance with
generally accepted accounting principles.
8. LOAN FEE. Borrower shall pay Silicon a loan fee in the amount of
$30,000, which fee shall be in addition to all interest and other sums
payable to Silicon and shall be nonrefundable.
This Agreement, the Loan Agreement, and the other Loan Documents set forth
in full all of the representations and agreements of the parties with respect to
the subject matter hereof and supersede all prior discussions, oral
representations, oral agreements and oral understandings between the parties
with respect to the subject hereof. Except
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as herein expressly amended, all of the terms and provisions of the Loan
Agreement, and all other Loan Documents shall continue in full force and effect
and the same are hereby ratified and confirmed.
If the foregoing correctly sets forth our agreement, please sign the
enclosed copy of this Agreement and return it to us.
Sincerely yours,
Silicon Valley Bank
By [ILLEGIBLE]
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Title [ILLEGIBLE]
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Accepted and agreed:
Borrower:
TRUEVISION, INC.
By [ILLEGIBLE]
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President or Vice President
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EXHIBIT A
BORROWING BASE CERTIFICATE
Borrower: TrueVision, Inc. Bank: Silicon Valley Bank
ACCOUNTS RECEIVABLE
1. Accounts Receivable Book Value as of ___ $__________
2. Additions (please explain on reverse) $__________
3. TOTAL ACCOUNTS RECEIVABLE $__________
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
4. Amounts over 90 days due $__________
5. Balance of 50% over 90 day accounts $__________
6. Concentration Limits $__________
7. Foreign Accounts $__________
8. Governmental Accounts $__________
9. Contra Accounts $__________
10. Promotion or Demo Accounts $__________
11. Intercompany/Employee Accounts $__________
12. Other (please explain on reverse) $__________
13. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS $__________
14. Eligible Accounts (#3 minus #13) $__________
15. LOAN VALUE OF ACCOUNTS (__% of #14) $__________
INVENTORY
16. Inventory Value as of ________ $__________
17. LOAN VALUE OF INVENTORY (__% of #16) $__________
BALANCES
18. Maximum Loan Amount $__________
19. Total Funds Available [Lesser of #18 or (#15 plus #17)] $__________
20. Present balance owing on Line of Credit $__________
21. Outstanding under Sublimits ( ) $__________
22. RESERVE POSITION (#19 minus #20 and #21) $__________
THE UNDERSIGNED REPRESENTS AND WARRANTS THAT THE FOREGOING IS TRUE, COMPLETE AND
CORRECT, AND THAT THE INFORMATION REFLECTED IN THIS BORROWING BASE CERTIFICATE
COMPLIES WITH THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THE LOAN AND
SECURITY AGREEMENT BETWEEN THE UNDERSIGNED AND SILICON VALLEY BANK.
COMMENTS:
BANK USE ONLY
RECEIVED BY:__________________
DATE:__________________
REVIEWED BY:__________________
COMPLIANCE STATUS: YES / NO
TRUEVISION, INC.
By:
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Authorized Signer
