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EXHIBIT 10.18
SILICON VALLEY BANK
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: GLOBAL VILLAGE COMMUNICATION, INC.
ADDRESS: 0000 XXXX XXXXXX XXXXXX
XXXXXXXXX, XXXXXXXXXX 00000
DATE: APRIL 23, 1997
This Schedule forms an integral part of the Loan and Security Agreement between
Silicon Valley Bank and the above-borrower of even date.
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1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of: (i) $5,000,000 at any one time outstanding; or (ii) 80%
of the amount of Borrower's Eligible Receivables (as defined in Section 8 above); provided
that, for purposes of the foregoing, the greater of the following amounts shall be deducted
from total Receivables in determining the amount of Eligible Receivables: (a) 125% of the
Receivables that are not Eligible Receivables as defined in Section 8 above, or (b) the
receivable reserve established by the Borrower on its most recent balance sheet.
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2. INTEREST.
INTEREST RATE (Section 1.2):
A rate equal to the "Prime Rate" in effect from time to time, plus 2.5% 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.
MINIMUM MONTHLY
INTEREST (Section 1.2): None
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3. FEES (Section 1.4):
Loan Fee: $50,000, payable concurrently herewith. (Any Commitment Fee previously paid by the Borrower
in connection with this loan shall be credited against this Fee.)
Collateral Monitoring
Fee: $1,000 per month, payable in arrears (prorated for any partial calendar month at the beginning
and at termination of this Agreement).
4. MATURITY DATE
(Section 6.1): Two years from the date of this Agreement, subject to automatic renewal as provided in Section
6.1 above, and early termination as provided in Section 6.2 above.
5. FINANCIAL COVENANTS
(Section 5.1): Borrower shall comply with all of the following covenants:
MINIMUM TANGIBLE
NET WORTH: Borrower shall maintain a Tangible Net Worth of not less than $3,000,000 (the "Minimum
Tangible Net Worth Requirement") as of the end of each fiscal quarter; provided that, at the
end of each fiscal year of the Borrower, the Minimum Tangible Net Worth Requirement shall
be increased by 60% of the net income of the Borrower during such fiscal year. Said increased
Minimum Tangible Net Worth Requirement shall be effective during the following fiscal year. In
no event shall the Minimum Tangible Net Worth Requirement be decreased.
DEFINITIONS. For purposes of the foregoing financial covenants, the following terms shall have the
following meanings:
"Tangible Net Worth" shall mean the excess of total assets over total liabilities, determined
in accordance with generally accepted accounting principles, with the following adjustments:
(A) there shall be excluded from assets: (i) notes, accounts receivable and
other obligations owing to the Borrower from its officers or other Affiliates, and (ii)
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,
licenses and franchises
(B) there shall be excluded from liabilities: all indebtedness which is
subordinated to the Obligations under a subordination agreement in form specified by
Silicon or by language in the instrument evidencing the indebtedness which is acceptable
to Silicon in its discretion.
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(C) any write-downs or write-ups of Borrower's investment in Ex Machina, Inc.
will not be taken into account in determining Tangible Net Worth.
6. REPORTING.
(Section 5.3):
Borrower shall provide Silicon with the following:
1. Monthly Receivable agings, aged by invoice date, within fifteen days after the end of each
month.
2. Monthly accounts payable agings, aged by invoice date, and outstanding or held check registers
within fifteen days after the end of each month.
3. Monthly reconciliations of Receivable agings (aged by invoice date), transaction reports, and
general ledger, within fifteen days after the end of each month.
4. Monthly reports, within fifteen days after the end of each month, as to (i) the Borrower's
Receivables reserves and offsets to such reserves and (ii) sell-through reports from
Borrower's account debtors with respect to Receivables which represent more than 10% of total
Eligible Receivables.
5. Monthly unaudited financial statements, as soon as available, and in any event within thirty
days after the end of each month.
6. Monthly Compliance Certificates, within thirty days after the end of each month, in such form
as Silicon shall reasonably specify, signed by the Chief Financial Officer of Borrower,
certifying that as of the end of such month 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 in this Agreement and such other information as Silicon
shall reasonably request.
7. Quarterly unaudited financial statements, as soon as available, and in any event within
forty-five days after the end of each fiscal quarter of Borrower.
8. Annual operating budgets (including income statements, balance sheets and cash flow
statements, by month) for the upcoming fiscal year of Borrower within thirty days prior to the
end of each fiscal year of Borrower.
9. Annual financial statements, as soon as available, and in any event within 120 days following
the end of Borrower's fiscal year, certified by independent certified public accountants
acceptable to Silicon.
7. COMPENSATION
(Section 5.5): Without Silicon's prior written consent, Borrower shall not pay total compensation, including
salaries, withdrawals, fees, bonuses, commissions, drawing accounts and other payments,
whether directly or indirectly, in money or otherwise, during any fiscal year to all of
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Borrower's executives, officers and directors (or any relative thereof) as a group in excess
of 115% of the total amount thereof in the prior fiscal year.
8. BORROWER INFORMATION:
PRIOR NAMES OF
BORROWER
(Section 3.2): None
PRIOR TRADE
NAMES OF BORROWER
(Section 3.2): None
EXISTING TRADE
NAMES OF BORROWER
(Section 3.2): See Representations and Warranties of Borrower dated March 26, 1997.
OTHER LOCATIONS AND
ADDRESSES (Section 3.3): See Representations and Warranties of Borrower dated March 26, 1997. Borrower represents and
warrants that, although Borrower has offices outside California, all of Borrower's inventory
(with only immaterial exceptions) is located in the State of California.
MATERIAL ADVERSE
LITIGATION (Section 3.10): None
9. OTHER PROVISIONS
(Section 5.1): (1) BANKING RELATIONSHIP. Borrower shall at all times maintain its primary banking
relationship with Silicon.
(2) AFFILIATES. Borrower represents and warrants that Softnet, Inc. and Global
Village Communication, FSC are and will continue to be sales affiliates of
Borrower without any material assets.
(3) NOTE. Borrower shall, concurrently, deliver to Silicon the original $2,600,000
Promissory Note made by GlobalCenter, Inc. to the order of Borrower, duly
endorsed by Borrower to Silicon, to enable Silicon to perfect its security
interest therein.
Borrower: Silicon:
GLOBAL VILLAGE COMMUNICATION, INC. SILICON VALLEY BANK
By_______________________________
By_______________________________ Title____________________________
President or Vice President
By_______________________________
Secretary or Ass't Secretary
