LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") dated October 21,
1999 between SILICON VALLEY BANK ("Bank") and ValueClick, Inc. ("Borrower"),
provides the terms on which Bank will lend to Borrower and Borrower will repay
Bank. The parties agree as follows:
1. ACCOUNTING AND OTHER TERMS
Accounting terms not defined in this Agreement will be construed
following GAAP. Calculations and determinations must be made following GAAP. The
term "financial statements" includes the notes and schedules. The terms
"including" and "includes" always mean "including (or includes) without
limitation" in this or any Loan Document. Capitalized terms in this Agreement
shall have the meanings set forth in Section 13.
2. LOAN AND TERMS OF PAYMENT
2.1 ADVANCES. Borrower will pay Bank the unpaid principal amount of all
Advances and interest on the unpaid principal amount of the Advances in
accordance with terms hereof.
2.1.1 REVOLVING ADVANCES.
(a) Bank will make Advances from time to time in an amount outstanding
at any one time not exceeding the Committed Revolving Line or the Borrowing
Base, whichever is less. Amounts borrowed under this Section may be repaid and
reborrowed during the term of this Agreement.
(b) To obtain an Advance, Borrower must notify Bank by facsimile or
telephone by 3:00 p.m. Pacific time on the Business Day the Advance is to be
made. Borrower must promptly confirm the notification by delivering to Bank the
Payment/Advance Form attached as Exhibit B. Bank will credit Advances to
Borrower's deposit account Account Number [________________]. Bank may make
Advances under this Agreement based on instructions from a Responsible Officer
or his or her designee or without instructions if the Advances are necessary to
meet Obligations which have become due. Bank may rely on any telephone notice
given by a person whom Bank believes is a Responsible Officer or designee.
Borrower will indemnify Bank for any loss Bank suffers due to that reliance.
(c) The Committed Revolving Line terminates on the Revolving Maturity
Date, when all Advances are immediately payable.
2.1.2 [Reserved]
2.1.3 [Reserved]
2.1.4 [Reserved]
2.1.5 [Reserved]
2.1.6 [Reserved]
2.1.7 [Reserved]
2.2 OVERADVANCES. If Borrower's Obligations under Section 2.1.1 exceed
the lesser of either (i) the Committed Revolving Line or (ii) the Borrowing
Base, Borrower must immediately pay in cash to Bank the excess.
2.3 INTEREST RATE; PAYMENTS.
(a) Interest Rate. Advances accrue interest on the outstanding
principal balance at a per annum rate one (1.0) percentage point above the
Prime Rate. After the occurrence and during the continuation of an Event of
Default, Obligations accrue interest at five (5.0) percent above the rate
effective immediately before the occurrence of such Event of Default. The
interest rate increases or decreases when the Prime Rate changes. Interest is
computed on a 360 day year for the actual number of days elapsed.
(b) Payments. Interest is payable on the first day of each month. Bank
may debit any of Borrower's deposit accounts including Account Number
[__________] for principal and interest payments or any amounts Borrower owes
Bank. Bank will notify Borrower when it debits Borrower's accounts. These debits
are not a set-off. Payments received after 12:00 noon Pacific time are
considered received at the opening of business on the next Business Day. When a
payment is due on a day that is not a Business Day, the payment is due the next
Business Day and additional fees or interest accrue.
2.4 FEES. Borrower will pay to Bank:
(a) Facility Fee. A fully earned, non-refundable facility fee of
$12,500 due on the Closing Date (Bank acknowledges receipt of $12,500 from
Borrower on July 12, 1999 as payment in full of the facility fee due to Bank
hereunder); and
(b) Bank Expenses. All Bank Expenses (including reasonable attorneys'
fees and expenses) incurred through and after the Closing Date when due.
(c) Unused Line Fee. An Unused Line Fee, in addition to all interest
and other fees payable hereunder. The amount of the Unused Line Fee shall be
0.50% per annum multiplied by an amount equal to the Committed Revolving Amount
minus the average daily balance of the outstanding Advances. The Unused Line Fee
shall be computed and paid quarterly, in arrears, and shall be due on the last
day of each fiscal quarter. Anything contained in the foregoing to the contrary
notwithstanding, during each quarter in which Borrower maintains Permitted
Investments in investment vehicles provided to Borrower by Bank in an average
aggregate amount of $15,000,000 or more, payment of the entire amount of any
Unused Line Fee otherwise due for such quarter in accordance with the foregoing
shall be waived by Bank, and no such fee shall be payable with respect to such
period.
3. CONDITIONS OF LOANS
3.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE. Bank's obligation to make
the initial Advance is subject to the condition precedent that it receive the
agreements, documents and fees it requires, including, without limitation,
the following:
(a) this Agreement;
(b) a certificate of the Secretary of Borrower with
respect to articles, bylaws, incumbency and resolutions authorizing the
execution and delivery of this Agreement;
(c) financing statements (Forms UCC-1);
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(d) insurance certificate;
(e) payment of the fees and Bank Expenses then due;
(f) [Reserved];
(g) Certificate of Foreign Qualification with respect to
Borrower (except from such jurisdictions where the
failure to do be so qualified or licensed could not
reasonably be expected to cause a Material Adverse
Change);
(h) an intellectual property security agreement; and
(i) such other documents, and completion of such other
matters, as Bank may reasonably deem necessary or appropriate.
3.2 CONDITIONS PRECEDENT TO ALL ADVANCES OR OTHER CREDIT EXTENSIONS.
Bank's obligations to make each Advance or other Credit Extension, including
the initial Advance, is subject to the following:
(a) timely receipt of any Payment/Advance Form to be delivered to Bank
in accordance with Section 2.1.1(b); and
(b) the representations and warranties in Section 5 must be materially
true on the date of any such Payment/Advance Form and on the effective date of
each Advance or other Credit Extension and no Event of Default may have occurred
and be continuing, or result from the Advance or other Credit Extension. Each
Advance or other Credit Extension is Borrower's representation and warranty on
that date that the representations and warranties in Section 5 remain true as of
that date.
4. CREATION OF SECURITY INTEREST
4.1 GRANT OF SECURITY INTEREST. Borrower grants Bank a continuing
security interest in all presently existing and later acquired Collateral to
secure all Obligations and performance of each of Borrower's duties under the
Loan Documents. Except for Permitted Liens, any security interest will be a
first priority security interest in the Collateral. Bank may place a "hold"
on any deposit account pledged as Collateral. If the Agreement is terminated,
Bank's lien and security interest in the Collateral will continue until
Borrower fully satisfies its Obligations.
5. REPRESENTATIONS AND WARRANTIES
As of the date of this Agreement, and as of the date of the making of
each Advance or other credit extension hereunder (except to the extent that such
representations and warranties relate solely to an earlier date) Borrower
represents and warrants as follows:
5.1 DUE ORGANIZATION AND AUTHORIZATION. Borrower and each Subsidiary is
duly existing and in good standing in its state of formation and qualified
and licensed to do business in, and in good standing in, any state in which
the conduct of its business or its ownership of property requires that it be
qualified except where the failure to do so could not reasonably be expected
to cause a Material Adverse Change.
The execution, delivery and performance of the Loan Documents have been
duly authorized, and do not conflict with Borrower's formations documents, nor
constitute an event of
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default under any material agreement by which Borrower is bound. Borrower is not
in default under any agreement to which or by which it is bound in which the
default could reasonably be expected to cause a Material Adverse Change.
5.2 COLLATERAL. Borrower has good title to the Collateral, free of Liens
except Permitted Liens. The Eligible Accounts are bona fide, existing
obligations, and the service or property has been performed or delivered to
the account debtor or its agent for immediate shipment to and unconditional
acceptance by the account debtor. Borrower has no notice of any actual or
imminent Insolvency Proceeding of any account debtor whose accounts are an
Eligible Account in any Borrowing Base Certificate. All Inventory is in all
material respects of good and marketable quality, free from material defects.
Borrower is the sole owner of the Intellectual Property, except for
non-exclusive licenses granted to its customers in the ordinary course of
business. Each Patent is valid and enforceable and no part of the
Intellectual Property has been judged invalid or unenforceable, in whole or
in part, and no claim has been made that any part of the Intellectual
Property violates the rights of any third party.
5.3 LITIGATION. Except as shown in the Schedule, there are no actions or
proceedings pending or, to Borrower's knowledge, threatened by or against
Borrower or any Subsidiary in which an adverse decision could reasonably be
expected to cause a Material Adverse Change.
5.4 NO MATERIAL ADVERSE CHANGE IN FINANCIAL STATEMENTS. All consolidated
financial statements for Borrower and any Subsidiary delivered to Bank fairly
present in all material respects Borrower's consolidated financial condition
and Borrower's consolidated results of operations. There has not been any
material deterioration in Borrower's consolidated financial condition since
the date of the most recent financial statements submitted to Bank.
5.5 SOLVENCY. The fair salable value of Borrower's assets (including
goodwill minus disposition costs) exceeds the fair value of its liabilities;
the Borrower is not left with unreasonably small capital after the
transactions in this Agreement; and Borrower is able to pay its debts
(including trade debts) as they mature.
5.6 REGULATORY COMPLIANCE. Borrower is not an "investment company" or a
company "controlled" by an "investment company" under the Investment Company
Act. Borrower is not engaged as one of its important activities in extending
credit for margin stock (under Regulations T and U of the Federal Reserve
Board of Governors). Borrower has complied with the Federal Fair Labor
Standards Act. Borrower has not violated any laws, ordinances or rules, the
violation of which could reasonably be expected to cause a Material Adverse
Change. None of Borrower's or any Subsidiary's properties or assets has been
used by Borrower or any Subsidiary or, to the best of Borrower's knowledge,
by previous Persons, in disposing, producing, storing, treating, or
transporting any hazardous substance other than legally. Borrower and each
Subsidiary has timely filed all required tax returns and paid, or made
adequate provision to pay, all material taxes. Borrower and each Subsidiary
has obtained all consents, approvals and authorizations of, made all
declarations or filings with, and given all notices to, all government
authorities that are necessary to continue its business as currently
conducted.
5.7 SUBSIDIARIES. Borrower does not own any stock, partnership interest
or other equity securities except for Permitted Investments.
5.8 FULL DISCLOSURE. No representation, warranty or other statement of
Borrower in any certificate or written statement given to Bank contains any
untrue statement of a material fact or omits to state a material fact
necessary to make the statements contained in the certificates or statements
not misleading.
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6. AFFIRMATIVE COVENANTS
Borrower will do all of the following:
6.1 GOVERNMENT COMPLIANCE. Borrower will maintain its and all
Subsidiaries' corporate existence and good standing in its jurisdiction of
incorporation and maintain qualification in each jurisdiction in which the
failure to so qualify could reasonably be expected to have a material adverse
effect on Borrower's business or operations. Borrower will comply, and have
each Subsidiary comply, with all laws, ordinances and regulations to which it
is subject, noncompliance with which could reasonably be expected to have a
material adverse effect on Borrower's business or operations or could
reasonably be expected to cause a Material Adverse Change.
6.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(a) Borrower will deliver to Bank: (i) as soon as available, but no
later than 30 days after the last day of each month, a company prepared
consolidated balance sheet and income statement covering Borrower's consolidated
operations during the period, in a form acceptable to Bank and certified by a
Responsible Officer; (ii) as soon as available, but no later than 120 days after
the end of Borrower's fiscal year, audited, consolidated financial statements
prepared under GAAP, consistently applied, together with an unqualified opinion
on the financial statements from an independent certified public accounting firm
acceptable to Bank; (iii) within 5 Business Days of filing, copies of all
statements, reports and notices made available to Borrower's security holders or
to any holders of Subordinated Debt and all reports on Form 10-K, 10-Q and 8-K
filed with the Securities and Exchange Commission; (iv) a prompt report of any
legal actions pending or threatened against Borrower or any Subsidiary that
could result in damages or costs to Borrower or any Subsidiary of $100,000 or
more; (v) prompt notice of any material change in the composition of the
Intellectual Property, including any subsequent ownership right of Borrower in
or to any Copyright, Patent or Trademark not shown in any intellectual property
security agreement between Borrower and Bank or knowledge of an event that
Borrower could reasonably expect to materially adversely affect the value of the
Intellectual Property; and (vi) budgets, sales projections, operating plans or
other financial information Bank requests.
(b) Within 20 days after the last day of each month, Borrower will
deliver to Bank a Borrowing Base Certificate signed by a Responsible Officer in
the form of Exhibit C, with aged listings of accounts receivable and accounts
payable.
(c) Within 30 days after the last day of each month, Borrower will
deliver to Bank with the monthly financial statements a Compliance Certificate
signed by a Responsible Officer in the form of Exhibit D.
(d) Bank has the right to audit Borrower's Accounts at Borrower's
expense, but the audits will be conducted no more often than once every 12
months unless an Event of Default has occurred and is continuing.
6.3 INVENTORY; RETURNS. Borrower will keep all Inventory in good and
marketable condition, free from material defects. Returns and allowances
between Borrower and its account debtors will follow Borrower's customary
practices as they exist at the Closing Date. Borrower must promptly notify
Bank of all returns, recoveries, disputes and claims that involve more than
$50,000.
6.4 TAXES. Borrower will make, and cause each Subsidiary to make, timely
payment of all material federal, state, and local taxes or assessments and
will deliver to Bank, on demand, appropriate certificates attesting to the
payment.
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6.5 INSURANCE. Borrower will keep its business and the Collateral
insured for risks ordinarily insured against by other owners in similar
businesses conducted in the locations where the Borrower's business is
conducted on the date hereof and in amounts, as Bank requests. Insurance
policies will be in a form, with companies, reasonably satisfactory to Bank
and in amounts that are satisfactory to Bank. All property policies will have
a lender's loss payable endorsement showing Bank as a loss payee and all
liability policies will show the Bank as an additional insured and provide
that the insurer must give Bank at least 20 days notice before canceling its
policy. At Bank's request, Borrower will deliver certified copies of policies
and evidence of all premium payments. Proceeds payable under any policy will,
at Bank's option, be payable to Bank on account of the Obligations. If no
Event of Default has occurred and is continuing, proceeds payable under any
casualty policy will, at Borrower's option, be payable to Borrower to replace
the property subject to the claim, provided that any such replacement
property shall be deemed Collateral in which Bank has been granted a first
priority security interest. If an Event of Default has occurred and is
continuing, then, at Bank's option, proceeds payable under any policy will be
payable to Bank on account of the Obligations.
6.6 PRIMARY ACCOUNTS. Borrower will maintain its primary depository and
operating accounts with Bank.
6.7 FINANCIAL COVENANTS.
Borrower will maintain as of the last day of each month, unless
otherwise noted:
(a) QUICK RATIO. A ratio of Quick Assets to Current
Liabilities of at least 2.0 to 1.0.
(b) TANGIBLE NET WORTH. After the occurrence of the Major
Liquidity Event, a Tangible Net Worth plus Subordinated Debt of at least
$10,000,000.
(c) LOSS. Prior to the occurrence of the Major Liquidity
Event, Borrower may suffer a loss for up to $1,000,000 for calendar year 1999
and up to $250,000 for calendar year 2000. After the occurrence of the Major
Liquidity Event, this Loss Financial Covenant shall not be applicable.
6.8 REGISTRATION OF INTELLECTUAL PROPERTY RIGHTS. Borrower will register
with the United States Copyright Office (i) any software material to the
business of Borrower it has, develops or acquires, including those in Exhibit
A to the Intellectual Property Security Agreement, within 30 days of the
Closing Date, and additional software rights material to the business of
Borrower that are developed or acquired, including significant revisions,
additions or improvements to the software or revisions, additions or
improvements which significantly improve the functionality of the software,
after the Closing Date before the sale or licensing to any third party of the
software or any product based on or containing any software. Borrower will
promptly notify Bank upon Borrower's filing of any application or
registration of any Intellectual Property rights with the United States
Patent and Trademark Office and Borrower will execute and deliver any and all
instruments and documents as Bank may require to evidence or perfect Bank's
security interest in such application or registration.
Borrower will: (i) protect, defend and maintain the validity and
enforceability of the Intellectual Property; (ii) promptly advise Bank in
writing of material infringements of the Intellectual Property; and (iii) not
allow any Intellectual Property to be abandoned, forfeited or dedicated to the
public without Bank's written consent.
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6.9 FURTHER ASSURANCES. Borrower will execute any further instruments
and take further action as Bank requests to perfect or continue Bank's
security interest in the Collateral or to effect the purposes of this
Agreement.
7. NEGATIVE COVENANTS
Borrower will not do any of the following without the Bank's written
consent, which will not be unreasonably withheld:
7.1 DISPOSITIONS. Convey, sell, lease, transfer or otherwise dispose of
(collectively a "Transfer"), or permit any of its Subsidiaries to Transfer,
all or any part of its business (other than the issuance of any capital
stock, or any options for the purchase thereof, under any incentive stock
option plan in effect on or after the date hereof) or property, other than a
Transfer (i) of Inventory in the ordinary course of business; (ii) of
non-exclusive licenses and similar arrangements for the use of the property
of Borrower or its Subsidiaries in the ordinary course of business; or (iii)
of worn-out or obsolete Equipment.
7.2 CHANGES IN BUSINESS, OWNERSHIP, MANAGEMENT OR BUSINESS LOCATIONS.
Engage in or permit any of its Subsidiaries to engage in any business other
than the businesses currently engaged in by Borrower or have a change in its
ownership or management other than in connection with a Major Liquidity
Event, the events set forth in Section 7.3 below or in connection with the
issuance of any capital stock, or any options for the purchase thereof, under
any incentive stock option plan in effect on or after the date hereof.
Borrower will not, without at least 30 days prior written notice to Bank,
relocate its principal executive office or add any new offices or business
locations.
7.3 MERGERS OR ACQUISITIONS. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person except where (i) such
transactions do not in the aggregate result in a decrease of more than 33% of
Tangible Net Worth and (ii) no Event of Default has occurred and is
continuing or would exist after giving effect to the transactions. A
Subsidiary may merge or consolidate into another Subsidiary or into Borrower.
7.4 INDEBTEDNESS. Create, incur, assume, or be liable for any
Indebtedness, or permit any Subsidiary to do so, other than Permitted
Indebtedness.
7.5 ENCUMBRANCE. Create, incur, or allow any Lien on any of its
property, or assign or convey any right to receive income, including the sale
of any Accounts, or permit any of its Subsidiaries to do so, except for
Permitted Liens, or cause Bank's first priority security interest in the
Collateral to change.
7.6 INVESTMENTS; DISTRIBUTIONS. (i) Directly or indirectly acquire or
own any Person, or make any Investment in any Person, other than Permitted
Investments, or permit any of its Subsidiaries to do so; or (ii) pay any
dividends or make any distribution or payment or redeem, retire or purchase
any capital stock, except for repurchases of stock from former employees or
directors of Borrower under the terms of applicable repurchase agreements in
an aggregate amount not to exceed $50,000 in the aggregate in any fiscal
year, provided that no Event of Default has occurred, is continuing or would
exist after giving effect to the repurchases.
7.7 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter or permit
any material transaction with any Affiliate, except transactions that are in
the ordinary course of Borrower's
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business, on terms that are less favorable to Borrower than would be obtained in
an arm's length transaction with a non-affiliated Person.
7.8 SUBORDINATED DEBT. Make or permit any payment on any Subordinated
Debt, except under the terms of the Subordinated Debt, or amend any provision
in any document relating to the Subordinated Debt, or enter into any new
Subordinated Debt without Bank's prior written consent.
7.9 COMPLIANCE. Undertake as one of its important activities extending
credit to purchase or carry margin stock, or use the proceeds of any Advance
for that purpose; fail to meet the minimum funding requirements of ERISA,
permit a Reportable Event or Prohibited Transaction, as each such term is
defined in ERISA, to occur; fail to comply with the Federal Fair Labor
Standards Act or violate any other law or regulation, if the violation could
reasonably be expected to have a material adverse effect on Borrower's
business or operations or could reasonably be expected to cause a Material
Adverse Change, or permit any of its Subsidiaries to do so.
8. EVENTS OF DEFAULT
Any one of the following is an Event of Default:
8.1 PAYMENT DEFAULT. Borrower fails to pay any of the Obligations within
3 days (4 days if the third day is a non Business Day) after their due date.
During the additional period the failure to cure the default is not an Event
of Default (but no Advances or other Credit Extensions will be made during
the cure period);
8.2 COVENANT DEFAULT. Borrower does not perform any obligation in
Section 6 or violates any covenant in Article 7 or does not perform or
observe any other material term, condition or covenant in this Agreement, any
Loan Documents, or in any agreement between Borrower and Bank and as to any
default under a term, condition or covenant that can be cured, has not cured
the default within 10 days after it occurs, or if the default cannot be cured
within 10 days or cannot be cured after Borrower's attempts in the 10 day
period, and the default may be cured within a reasonable time, then Borrower
has an additional time, (of not more than 30 days) to attempt to cure the
default. During the additional period the failure to cure the default is not
an Event of Default (but no Credit Extensions will be made during the cure
period);
8.3 MATERIAL ADVERSE CHANGE.
(i) A material impairment in the perfection or priority of Bank's security
interest in the Collateral or in the value of such Collateral which is not
covered by adequate insurance occurs; or (ii) Bank determines, based upon
information available to it and in its reasonable judgment, that, as a result of
a material adverse change in the business, prospects, operations, results of
operations, assets, liabilities or condition (financial or otherwise) of
Borrower, there is a reasonable likelihood that Borrower will fail to comply
with one or more of the financial covenants in Section 6 during the next
succeeding financial reporting period;
8.4 ATTACHMENT. (i) Any material portion of Borrower's assets is
attached, seized, levied on, or comes into possession of a trustee or
receiver and the attachment, seizure or levy is not removed in 10 days; (ii)
Borrower is enjoined, restrained, or prevented by court order from conducting
a material part of its business; (iii) a judgment or other claim becomes a
Lien on a material portion of Borrower's assets; or (iv) a notice of lien,
levy, or assessment is filed against any of Borrower's assets by any
government agency and not paid within 10 days after Borrower receives notice.
These are not Events of Default if stayed or if a bond is posted pending
contest by Borrower (but no Advances or other Credit Extensions will be made
during the cure period);
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8.5 INSOLVENCY. (i) Borrower becomes insolvent; (ii) Borrower begins an
Insolvency Proceeding; or (iii) an Insolvency Proceeding is begun against
Borrower and not dismissed or stayed within 30 days (but no Credit Extensions
will be made before any Insolvency Proceeding is dismissed);
8.6 OTHER AGREEMENTS. If there is a default in any agreement between
Borrower and a third party that gives the third party the right to accelerate
any Indebtedness exceeding $150,000 or that could cause a Material Adverse
Change;
8.7 JUDGMENTS. If a money judgment or judgments in the aggregate of at
least $100,000 is rendered against the Borrower and is unsatisfied and
unstayed for 10 days (but no Credit Extensions will be made before the
judgment is stayed or satisfied);
8.8 MISREPRESENTATIONS. If Borrower or any Person acting for Borrower
makes any material misrepresentation or material misstatement now or later in
any warranty or representation in this Agreement or in any communication
delivered to Bank or to induce Bank to enter this Agreement or any Loan
Document; or
8.9 [Reserved]
9. BANK'S RIGHTS AND REMEDIES
9.1 RIGHTS AND REMEDIES. When an Event of Default occurs and continues Bank may,
without notice or demand, do any or all of the following:
(a) Declare all Obligations immediately due and payable (but if an
Event of Default described in Section 8.5 occurs all Obligations are immediately
due and payable without any action by Bank);
(b) Stop advancing money or extending credit for Borrower's benefit
under this Agreement or under any other agreement between Borrower and Bank;
(c) Settle or adjust disputes and claims directly with account debtors
for amounts, on terms and in any order that Bank considers advisable;
(d) Make any payments and do any acts it considers necessary or
reasonable to protect its security interest in the Collateral. Borrower will
assemble the Collateral if Bank requests and make it available as Bank
designates. Bank may enter premises where the Collateral is located, take and
maintain possession of any part of the Collateral, and pay, purchase, contest,
or compromise any Lien which appears to be prior or superior to its security
interest and pay all expenses incurred. Borrower grants Bank a license to enter
and occupy any of its premises, without charge, to exercise any of Bank's rights
or remedies;
(e) Apply to the Obligations any (i) balances and deposits of Borrower
it holds, or (ii) any amount held by Bank owing to or for the credit or the
account of Borrower;
(f) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell the Collateral. Bank is granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower's labels, Patents, Copyrights, Mask Works, rights of use of any name,
trade secrets, trade names, Trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank's exercise of its rights under this Section, Borrower's
rights under all licenses and all franchise agreements inure to Bank's benefit;
and
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(g) Dispose of the Collateral according to the Code.
9.2 POWER OF ATTORNEY. When an Event of Default occurs and continues,
Borrower irrevocably appoints Bank as its lawful attorney to: (i) endorse
Borrower's name on any checks or other forms of payment or security; (ii)
sign Borrower's name on any invoice or xxxx of lading for any Account or
drafts against account debtors, (iii) make, settle, and adjust all claims
under Borrower's insurance policies; (iv) settle and adjust disputes and
claims about the Accounts directly with account debtors, for amounts and on
terms Bank determines reasonable; and (v) transfer the Collateral into the
name of Bank or a third party as the Code permits. Bank may exercise the
power of attorney to sign Borrower's name on any documents necessary to
perfect or continue the perfection of any security interest regardless of
whether an Event of Default has occurred. Bank's appointment as Borrower's
attorney in fact, and all of Bank's rights and powers, coupled with an
interest, are irrevocable until all Obligations have been fully repaid and
performed and Bank's obligation to provide Credit Extensions terminates. `
9.3 ACCOUNTS COLLECTION. When an Event of Default occurs and continues,
Bank may notify any Person owing Borrower money of Bank's security interest
in the funds and verify the amount of the Account. Borrower must collect all
payments in trust for Bank and, if requested by Bank, immediately deliver the
payments to Bank in the form received from the account debtor, with proper
endorsements for deposit.
9.4 BANK EXPENSES. If Borrower fails to pay any amount or furnish any
required proof of payment thereof to third persons Bank may make all or part
of the payment or obtain insurance policies required in Section 6.5, and take
any action under the policies Bank deems prudent. Any amounts paid by Bank
are Bank Expenses and immediately due and payable, bearing interest at the
then applicable rate and secured by the Collateral. No payments by Bank are
deemed an agreement to make similar payments in the future or Bank's waiver
of any Event of Default.
9.5 BANK'S LIABILITY FOR COLLATERAL. If Bank complies with reasonable
banking practices and Section 9-207 of the Code, it is not liable or
responsible for: (a) the safekeeping of the Collateral; (b) any loss or
damage to the Collateral; (c) any diminution in the value of the Collateral;
or (d) any act or default of any carrier, warehouseman, bailee, or other
person. Borrower bears all risk of loss, damage or destruction of the
Collateral.
9.6 REMEDIES CUMULATIVE. Bank's rights and remedies under this
Agreement, the Loan Documents, and all other agreements are cumulative. Bank
has all rights and remedies provided under the Code, by law, or in equity.
Bank's exercise of one right or remedy is not an election, and Bank's waiver
of any Event of Default is not a continuing waiver. Bank's delay is not a
waiver, election, or acquiescence. No waiver is effective unless signed by
Bank and then is only effective for the specific instance and purpose for
which it was given.
9.7 DEMAND WAIVER. Borrower waives demand, notice of default or
dishonor, notice of payment and nonpayment, notice of any default, nonpayment
at maturity, release, compromise, settlement, extension, or renewal of
accounts, documents, instruments, chattel paper, and guaranties held by Bank
on which Borrower is liable.
10. NOTICES
Unless otherwise provided in this Agreement, all notices or demands by
any party relating to this Agreement or any other agreement entered into in
connection herewith shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by a recognized overnight
10
delivery service, by certified mail, postage prepaid, return receipt requested,
or by telefacsimile to Borrower or to Bank, as the case may be, at its addresses
set forth below:
If to Borrower: ValueClick, Inc.
0000 Xxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: Mr. Xxxx Xxxxxxx
FAX: (000) 000-0000
with a cc to: Xxxxxxx Phleger & Xxxxxxxx LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
FAX: (000) 000-0000
If to Bank: Silicon Valley Bank
000 X. Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxx
FAX: (000) 000-0000
with a cc to: Levy, Small & Xxxxxx
000 Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
FAX: (000) 000-0000
11. CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER
California law governs the Loan Documents without regard to principles
of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction
of the State and Federal courts in Santa Xxxxx County, California. BORROWER AND
BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
12. GENERAL PROVISIONS
12.1 SUCCESSORS AND ASSIGNS. This Agreement binds and is for the benefit
of the successors and permitted assigns of each party. Borrower may not
assign this Agreement or any rights or Obligations under it without Bank's
prior written consent which may be granted or withheld in Bank's discretion.
Bank has the right, without the consent of or notice to Borrower, to sell,
transfer, negotiate, or grant participation in all or any part of, or any
interest in, Bank's obligations, rights and benefits under this Agreement,
the Loan Documents or any related agreement.
12.2 INDEMNIFICATION. Borrower will indemnify, defend and hold harmless
Bank and its officers, employees and agents against: (a) all obligations,
demands, claims, and liabilities
11
asserted by any other party in connection with the transactions contemplated by
the Loan Documents; and (b) all losses or Bank Expenses incurred, or paid by
Bank from, following, or consequential to transactions between Bank and Borrower
(including reasonable attorneys' fees and expenses), except for losses caused by
Bank's gross negligence or willful misconduct.
12.3 TIME OF ESSENCE. Time is of the essence for the performance of all
Obligations in this Agreement.
12.4 SEVERABILITY OF PROVISION. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.
12.5 AMENDMENTS IN WRITING, INTEGRATION. All amendments to this
Agreement must be in writing signed by both Bank and Borrower. This Agreement
and the Loan Documents represent the entire agreement about this subject
matter, and supersedes prior or contemporaneous negotiations or agreements.
All prior or contemporaneous agreements, understandings, representations,
warranties, and negotiations between the parties about the subject matter of
this Agreement and the Loan Documents merge into this Agreement and the Loan
Documents.
12.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of
which, when executed and delivered, are an original, and all taken together,
are one Agreement.
12.7 SURVIVAL. All covenants, representations and warranties made in
this Agreement continue in full force while any Obligations remain
outstanding. The obligations of Borrower in Section 12.2 to indemnify Bank
will survive until all statutes of limitations for actions that may be
brought against Bank have run.
12.8 CONFIDENTIALITY. In handling any confidential information, Bank
will exercise the same degree of care that it exercises for its own
proprietary information, but disclosure of information may be made: (i) to
Bank's subsidiaries or affiliates in connection with their present or
prospective business relations with Borrower; (ii) to prospective transferees
or purchasers of any interest in the Loans; (iii) as required by law,
regulation, subpoena, or other order, (iv) as required in connection with
Bank's examination or audit; and (v) as Bank considers appropriate in
exercising remedies under this Agreement. Confidential information does not
include information that either: (a) is in the public domain or in Bank's
possession when disclosed to Bank, or becomes part of the public domain after
disclosure to Bank; or (b) is disclosed to Bank by a third party, if Bank
does not know that the third party is prohibited from disclosing the
information.
12.9 ATTORNEYS' FEES, COSTS AND EXPENSES. In any action or proceeding
between Borrower and Bank arising out of the Loan Documents, the prevailing
party will be entitled to recover its reasonable attorneys' fees and other
costs and expenses incurred, in addition to any other relief to which it may
be entitled, whether or not a lawsuit is filed.
13. DEFINITIONS
13.1 DEFINITIONS.
"ACCOUNTS" are all existing and later arising accounts, contract
rights, and other obligations owed Borrower in connection with its sale or lease
of goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.
12
"ADVANCE" or "ADVANCES" is a loan advance (or advances) under the
Committed Revolving Line.
"AFFILIATE" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person's senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person's managers and members.
"BANK EXPENSES" are all audit fees and expenses and reasonable costs or
expenses (including reasonable attorneys' fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).
"BORROWER'S BOOKS" are all Borrower's books and records including
ledgers, records regarding Borrower's assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.
"BORROWING BASE" is (i) 80% of Eligible Accounts, as determined by Bank
from Borrower's most recent Borrowing Base Certificate.
"BUSINESS DAY" is any day that is not a Saturday, Sunday or a day on
which the Bank is closed.
"CLOSING DATE" is the date of this Agreement.
"CODE" is the California Uniform Commercial Code.
"COLLATERAL" is the property described on EXHIBIT A.
"COMMITTED REVOLVING LINE" is a Credit Extension of up to $2,500,000.
"CONTINGENT OBLIGATION" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another person or entity such
as an obligation directly or indirectly guaranteed, endorsed, co-made,
discounted or sold with recourse by that Person, or for which that Person is
directly or indirectly liable; (ii) any obligations for undrawn letters of
credit for the account of that Person; and (iii) all obligations from any
interest rate, currency or commodity swap agreement, interest rate cap or collar
agreement, or other agreement or arrangement designated to protect a Person
against fluctuation in interest rates, currency exchange rates or commodity
prices; but "Contingent Obligation" does not include endorsements in the
ordinary course of business. The amount of a Contingent Obligation is the stated
or determined amount of the primary obligation for which the Contingent
Obligation is made or, if not determinable, the maximum reasonably anticipated
liability for it determined by the Person in good faith; but the amount may not
exceed the maximum of the obligations under the guarantee or other support
arrangement.
"COPYRIGHTS" are all copyright rights, applications or registrations
and like protections in each work or authorship or derivative work, whether
published or not (whether or not it is a trade secret) now or later existing,
created, acquired or held.
"CREDIT EXTENSION" is each Advance or any other extension of credit by
Bank for Borrower's benefit.
"CURRENT ASSETS" are amounts that under GAAP should be included on that
date as current assets on Borrower's consolidated balance sheet.
13
"CURRENT LIABILITIES" are the aggregate amount of Borrower's Total
Liabilities which mature within one (1) year.
"ELIGIBLE ACCOUNTS" are Accounts in the ordinary course of Borrower's
business that meet all Borrower's representations and warranties in Section 5.2;
BUT Bank may change eligibility standards by giving Borrower 30 days prior
written notice. Unless Bank agrees otherwise in writing, Eligible Accounts will
not include:
(a) Accounts that the account debtor has not paid within 90 days of
invoice date;
(b) Accounts for an account debtor, 50% or more of whose Accounts have
not been paid within 90 days of invoice date;
(c) Credit balances over 90 days from invoice date;
(d) Accounts for an account debtor, including Affiliates, whose total
obligations to Borrower exceed 25% of all Accounts, for the amounts that exceed
that percentage, unless Bank approves in writing;
(e) Accounts for which the account debtor does not have its principal
place of business in the United States or Canada except for Eligible Foreign
Accounts;
(f) Accounts for which the account debtor is a federal, state or local
government entity or any department, agency, or instrumentality except for
Accounts of the United States if the payee has assigned its payment rights to
Bank and the assignment has been acknowledged under the Assignment of Claims Act
of 1940 (31 U.S.C. 3727);
(g) Accounts for which Borrower owes the account debtor, but only up to
the amount owed (sometimes called "contra" accounts, accounts payable, customer
deposits or credit accounts);
(h) Accounts for demonstration or promotional equipment, or in which
goods are consigned, sales guaranteed, sale or return, sale on approval, xxxx
and hold, or other terms if account debtor's payment may be conditional;
(i) Accounts for which the account debtor is Borrower's Affiliate,
officer, employee, or agent;
(j) Accounts in which the account debtor disputes liability or makes
any claim and Bank believes there may be a basis for dispute (but only up to the
disputed or claimed amount), or if the Account Debtor is subject to an
Insolvency Proceeding, or becomes insolvent, or goes out of business;
(k) Accounts for which Bank reasonably determines collection to be
doubtful.
"ELIGIBLE FOREIGN ACCOUNTS" are Accounts for which the account debtor
does not have its principal place of business in the United States or Canada but
are: (1) covered by credit insurance satisfactory to Bank, less any deductible;
or (2) supported by letter(s) of credit acceptable to Bank; or (3) that Bank
approves in writing.
"EQUIPMENT" is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.
"ERISA" is the Employment Retirement Income Security Act of 1974, and
its regulations.
14
"GAAP" is generally accepted accounting principles.
"GUARANTOR" is any present or future guarantor of the Obligations.
"INDEBTEDNESS" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.
"INSOLVENCY PROCEEDING" is any proceeding by or against any Person
under the United States Bankruptcy Code, or any other bankruptcy or insolvency
law, including assignments for the benefit of creditors, compositions,
extensions generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.
"INTELLECTUAL PROPERTY" is:
(a) Copyrights, Trademarks, Patents, and Mask Works including
amendments, renewals, extensions, and all licenses or other rights to use and
all license fees and royalties from the use;
(b) Any trade secrets and any Intellectual Property Rights in computer
software and computer software products now or later existing, created, acquired
or held;
(c) All design rights which may be available to Borrower now or later
created, acquired or held;
(d) Any claims for damages (past, present or future) for infringement
of any of the rights above, with the right, but not the obligation, to xxx and
collect damages for use or infringement of the intellectual property rights
above;
All proceeds and products of the foregoing, including all insurance,
indemnity or warranty payments.
"INVENTORY" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.
"INVESTMENT" is any beneficial ownership of (including stock,
partnership interest or other securities) any Person, or any loan, advance or
capital contribution to any Person.
"LIEN" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.
"LOAN DOCUMENTS" are, collectively, this Agreement, any note, or notes
or guaranties executed by Borrower or Guarantor, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.
"MAJOR LIQUIDITY EVENT" is the sale of Borrower's equity securities,
after the date hereof, in a public offering or to venture capital investors, the
net proceeds of which sale equal at
15
least $15,000,000 in cash.
"MASK WORKS" are all mask works or similar rights available for the
protection of semiconductor chips, now owned or later acquired.
"MATERIAL ADVERSE CHANGE" has the meaning set forth in Section 8.3
hereof.
"MATURITY DATE" is the Revolving Maturity Date.
"OBLIGATIONS" are debts, principal, interest, Bank Expenses and other
amounts Borrower owes Bank now or later, including letters of credit and foreign
exchange contracts, if any, and including interest accruing after Insolvency
Proceedings begin and debts, liabilities, or obligations of Borrower assigned to
Bank.
"PATENTS" are patents, patent applications and like protections,
including improvements, divisions, continuations, renewals, reissues, extensions
and continuations-in-part of the same.
"PAYMENT ADVANCE FORM" means a Loan Payment/Advance Form Telephone
Request Form in the form attached hereto as Exhibit B.
"PERMITTED INDEBTEDNESS" is:
(a) Borrower's indebtedness to Bank under this Agreement or the Loan
Documents;
(b) Indebtedness existing on the Closing Date and shown on the
Schedule;
(c) Subordinated Debt;
(d) Indebtedness to trade creditors incurred in the ordinary course of
business; and
Indebtedness secured by Permitted Liens.
"PERMITTED INVESTMENTS" are:
(a) Investments shown on the Schedule and existing on the Closing
Date;
(b) (i) marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any State maturing within 1
year from its acquisition, (ii) commercial paper maturing no more than 1 year
after its creation and having the highest rating from either Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc., and (iii) Bank's certificates of
deposit issued maturing no more than 1 year after issue; and
(c) Loans or advances to employees made by Borrower in the ordinary
course of business in an aggregate principal amount outstanding at any one time
not to exceed $250,000.
"PERMITTED LIENS" are:
(a) Liens existing on the Closing Date and shown on the Schedule or
arising under this Agreement or other Loan Documents;
(b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, IF they have no priority over
any of Bank's security interests;
16
(c) Purchase money Liens (i) on Equipment acquired or held by Borrower
or its Subsidiaries incurred for financing the acquisition of the Equipment, or
(ii) existing on equipment when acquired, IF the Lien is confined to the
property and improvements and the proceeds of the equipment;
(d) Leases or subleases and licenses or sublicenses granted in the
ordinary course of Borrower's business, IF the leases, subleases, licenses and
sublicenses permit granting Bank a security interest;
(e) Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), BUT any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase;
(f) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 8.4 or 8.7;
(g) Liens in favor of other financial institutions arising in
connection with Borrower's deposit accounts held at such institutions, provided
that Bank has a perfected security interest in the amounts held in such deposit
accounts;
(h) Liens on deposits or pledges to secure the payment of workmen's
compensation, unemployment insurance, surety or appeal bonds, bid or performance
bonds, or other obligations of a like nature incurred in the ordinary course of
business and not in connection with the borrowing of money (but nothing in this
clause (h) shall permit the creation of Liens on Accounts, Inventory or General
Intangibles),
(i) Liens arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers or suppliers, incurred in
the ordinary course of Borrower's business and not in connection with the
borrowing of money, for sums not delinquent; and
(j) Other Liens not described above arising in the ordinary course of
business and not having or not reasonably likely to have a material adverse
effect on Borrower and its Subsidiaries taken as a whole.
"PERSON" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.
"PRIME RATE" is Bank's most recently announced "prime rate," even if it
is not Bank's lowest rate.
"QUICK ASSETS" is, on any date, the Borrower's consolidated,
unrestricted cash, cash equivalents, net billed accounts receivable and
investments with maturities of less than 12 months determined according to GAAP.
"RESPONSIBLE OFFICER" is each of the Chief Executive Officer, the
President, the Chief Financial Officer and the Controller of Borrower.
"REVOLVING MATURITY DATE" is the first anniversary of the date of this
Agreement.
"SCHEDULE" is any attached schedule of exceptions.
"SUBORDINATED DEBT" is debt incurred by Borrower subordinated to
Borrower's debt to
17
Bank (and identified as subordinated by Borrower and Bank).
"SUBSIDIARY" is for any Person, joint venture, or any other business
entity of which more than 50% of the voting stock or other equity interests is
owned or controlled, directly or indirectly, by the Person or one or more
Affiliates of the Person.
"TANGIBLE NET WORTH" is, on any date, the consolidated total assets of
Borrower and its Subsidiaries MINUS, (i) any amounts attributable to (a)
goodwill, (b) intangible items such as unamortized debt discount and expense,
Patents, trade and service marks and names, Copyrights and research and
development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, AND (ii) Total Liabilities plus Subordinated Debt.
"TOTAL LIABILITIES" is on any day, obligations that should, under GAAP,
be classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness, and current portion Subordinated Debt allowed to be paid, but
excluding all other Subordinated Debt.
"TRADEMARKS" are trademark and service xxxx rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Assignor connected with the trademarks.
BORROWER:
VALUECLICK, INC.
By: Xxxx X. Xxxxxxx
------------------------------
Title: CFO
---------------------------
SILICON VALLEY BANK
By: Xxxx X. Xxxxx
------------------------------
Title: Vice President
---------------------------
18
EXHIBIT A
The Collateral consists of all of Borrower's right, title and interest
in and to the following:
All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;
All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above;
All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, servicemarks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;
All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower;
All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, financial assets,
letters of credit, certificates of deposit, instruments and chattel paper now
owned or hereafter acquired and Borrower's Books relating to the foregoing;
All copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work thereof,
whether published or unpublished, now owned or hereafter acquired; all trade
secret rights, including all rights to unpatented inventions, know-how,
operating manuals, license rights and agreements and confidential information,
now owned or hereafter acquired; all mask work or similar rights available for
the protection of semiconductor chips, now owned or hereafter acquired; all
claims for damages by way of any past, present and future infringement of any of
the foregoing; and
All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions
and accessions to and proceeds thereof.
EXHIBIT B
LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.
TO: CENTRAL CLIENT SERVICE DIVISION DATE:
----------------------------------------
FAX#: (000) 000-0000 TIME:
----------------------------------------
-------------------------------------------------------------------------------------------------------------------
FROM:
--------------------------------------------------------------------------------------------------------------
CLIENT NAME (BORROWER)
REQUESTED BY:
------------------------------------------------------------------------------------------------------
AUTHORIZED SIGNER'S NAME
AUTHORIZED SIGNATURE:
----------------------------------------------------------------------------------------------
PHONE NUMBER:
------------------------------------------------------------------------------------------------------
FROM ACCOUNT # TO ACCOUNT #
------------------------------------ -------------------------------------------------
REQUESTED TRANSACTION TYPE REQUEST DOLLAR AMOUNT
PRINCIPAL INCREASE (ADVANCE) $
----------------------------------------------------------------------
PRINCIPAL PAYMENT (ONLY) $
----------------------------------------------------------------------
INTEREST PAYMENT (ONLY) $
----------------------------------------------------------------------
PRINCIPAL AND INTEREST (PAYMENT) $
----------------------------------------------------------------------
OTHER INSTRUCTIONS:
------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
All Borrower's representations and warranties in the Loan and Security Agreement are true, correct and complete
in all material respects on the date of the telephone request for and Advance confirmed by this Borrowing
Certificate; but those representations and warranties expressly referring to another date shall be true, correct
and complete in all material respects as of that date.
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
BANK USE ONLY
TELEPHONE REQUEST:
The following person is authorized to request the loan payment transfer/loan
advance on the advance designated account and is known to me.
------------------------------------------------------------------------------------
Authorized Requester ------------- Phone #
------------------------------------------------------------------------------------
Received By (Bank) ------------- Phone #
-----------------------------------------------------------------------------------------
Authorized Signature (Bank)
-------------------------------------------------------------------------------------------------------------------
EXHIBIT C
BORROWING BASE CERTIFICATE
------------------------------------------------------------------------------------------------------------------------------
Borrower: ValueClick, Inc. Lender: Silicon Valley Bank
Commitment Amount: $2,500,000
------------------------------------------------------------------------------------------------------------------------------
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. Credit balances over 90 days $
-----------
7. Concentration Limits $
-----------
8. Foreign Accounts $
-----------
9. Governmental Accounts $
-----------
10. Contra Accounts $
-----------
11. Promotion or Demo Accounts $
-----------
12. Intercompany/Employee Accounts $
-----------
13. Other (please explain on reverse) $
-----------
14. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS $
-----------
15. Eligible Accounts (#3 minus #13) $
-----------
16. LOAN VALUE OF ACCOUNTS ( ____% of #14) $
-----------
INVENTORY
17. Inventory Value as of _______________ $
-----------
18. LOAN VALUE OF INVENTORY ( ____% of #16) $
-----------
BALANCES
19. Maximum Loan Amount $
-----------
20. Total Funds Available [Lesser of #18 or (#15 plus #17)] $
-----------
21. Present balance owing on Line of Credit $
-----------
22. Outstanding under Sublimits ( ) $
-----------
23. RESERVE POSITION (#19 minus #20 and #21) $
-----------
THE UNDERSIGNED REPRESENTS AND WARRANTS THAT THIS IS TRUE, COMPLETE AND CORRECT, AND THAT THE INFORMATION IN THIS
BORROWING BASE CERTIFICATE COMPLIES WITH THE REPRESENTATIONS AND WARRANTIES IN THE LOAN AND SECURITY AGREEMENT BETWEEN
THE UNDERSIGNED AND SILICON VALLEY BANK.
COMMENTS: -----------------------
VALUECLICK, INC.
By:
---------------------------
Authorized Signer
-----------------------
EXHIBIT D
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK
FROM: VALUECLICK, INC.
The undersigned authorized officer of VALUECLICK, INC. certifies
that under the terms and conditions of the Loan and Security Agreement
between Borrower and Bank (the "Agreement"), (i) Borrower is in complete
compliance for the period ending _______________ with all required covenants
except as noted below and (ii) all representations and warranties in the
Agreement are true and correct in all material respects on this date.
Attached are the required documents supporting the certification. The Officer
certifies that these are prepared in accordance with Generally Accepted
Accounting Principles (GAAP) consistently applied from one period to the next
except as explained in an accompanying letter or footnotes. The Officer
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.
PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES"
COLUMN.
REPORTING COVENANT REQUIRED COMPLIES
Monthly financial statements Monthly within 30 days Yes No
Annual (CPA Audited) FYE within 120 days Yes No
10-Q, 10-K and 8-K Within 5 days after filing with SEC Yes No
A/R & A/P Agings Monthly within 20 days Yes No
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
Maintain on a Monthly Basis:
Minimum Quick Ratio 2.0:1.0 _____:1.0 Yes No
Minimum Tangible Net Worth $10,000,000 $________ Yes No
(Applicable Only After Major Liq. Event)
Loss: (N/A after Major Liq. Event)
Annually $1,000,000 (1999) $________ Yes No
$250,000 (2000) $________ Yes No
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COMMENTS REGARDING EXCEPTIONS: See Attached. BANK USE ONLY
Received by:
--------------------------------
AUTHORIZED SIGNER
Sincerely,
Date:
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SIGNATURE
Verified:
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-------------------------------------------- AUTHORIZED SIGNER
TITLE
Date:
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DATE Compliance Status: Yes No
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