FOURTH Amendment to AMENDED AND RESTATED Loan and security agreement
Exhibit 10.2
FOURTH Amendment to
AMENDED AND RESTATED Loan and security agreement
THIS FOURTH AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into this 28th day of February, 2022, by and among SILICON VALLEY BANK, a California corporation (“Bank”), RESEARCH SOLUTIONS, INC., a Nevada corporation (“Research Solutions”), and REPRINTS DESK, INC., a Delaware corporation (“Reprints”; together with Research Solutions, individually and collectively, jointly and severally, “Borrower”).
Recitals
Agreement
Now, Therefore, in consideration of the foregoing recitals and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the parties hereto agree as follows:
(a)Interest Rate. Subject to Section 2.7(b), the principal amount outstanding under the Revolving Line shall accrue interest at a floating per annum rate equal to (a) at all times when a Streamline Period is in effect, the greater of (i) one percent
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(1.00%) above the Prime Rate and (ii) five percent (5.00%), and (b) at all times when a Streamline Period is not in effect, the greater of (i) one and one half of one percent (1.50%) above the Prime Rate and (ii) five and one half of one percent (5.50%), which interest shall be payable monthly in accordance with Section 2.7(e) below.
(c)Termination Fee. Upon termination of this Agreement or the termination of the Revolving Line for any reason prior to the Revolving Line Maturity Date, in addition to the payment of any other amounts then-owing, a termination fee in an amount equal to (i) 2.0% of the Maximum Dollar Amount if such termination occurs prior to the first anniversary of the Fourth Amendment Effective Date, or (ii) 1.0% of the Maximum Dollar Amount if such termination occurs on or at any time after the first anniversary of the Fourth Amendment Effective Date provided that no termination fee shall be charged if the credit facility hereunder is replaced with a new facility from Bank;
(g)Fourth Amendment Anniversary Fee. A fully earned, non-refundable anniversary fee of Twelve Thousand Five Hundred Dollars ($12,500) (the “Fourth Amendment Anniversary Fee”) is earned as of the Fourth Amendment Effective Date and is due and payable on the earlier to occur of (i) the one (1) year anniversary of the Fourth Amendment Effective Date, (ii) the termination of this Agreement, or (iii) the occurrence of an Event of Default.
(b)Reserved.
“Obligations” are Borrower’s obligations to pay when due any debts, principal, interest, fees, Bank Expenses, the Termination Fee, the Anniversary Fee, the Second Amendment Anniversary Fee, the Fourth Amendment Anniversary Fee, and other amounts Borrower owes to Bank now or later, whether under this Agreement, the other Loan Documents, or otherwise, including, without limitation, all obligations relating to Bank Services and interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank, and to perform Borrower’s duties under the Loan Documents.
“Revolving Line Maturity Date” is February 28, 2024.
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“Streamline Period” is, provided no Event of Default has occurred and is continuing, the period commencing on the first day of the second calendar month following a Testing Month in which Borrower achieves an Adjusted Quick Ratio equal to or greater than 1.45 to 1.0 (the “AQR Requirement”) and continuing in effect thereafter until (i) Borrower fails to achieve the AQR Requirement in any Testing Month or (ii) a Default or Event of Default has occurred and is continuing. As an example, assuming no Default or Event of Default has occurred or does occur, if Borrower achieves the AQR Requirement for October 2022, the Streamline Period will go into effect on December 1, 2022 (since Bank receives Borrower’s October financial reporting in November). If Borrower subsequently fails to achieve the AQR Requirement for December 2022, but satisfies the AQR Requirement for January 2023, a new Streamline Period will go into effect on March 1, 2023.
“Fourth Amendment Anniversary Fee” is defined in Section 2.8(g).
“Fourth Amendment Effective Date” is February 28, 2022.
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[Signature page follows.]
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In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered as of the date first written above.
BANK | |
SILICON VALLEY BANK | |
By:____________________________ Kelly Pedersen Vice President | |
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BORROWER By:____________________________ William Xxxxxxx Chief Financial Officer and Secretary REPRINTS DESK, INC. | |
By:____________________________ William Nurthen Chief Financial Officer and Secretary | |
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[Signature Page to Fourth Amendment to Amended and Restated Loan and Security Agreement]
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EXHIBIT B
COMPLIANCE CERTIFICATE
TO:SILICON VALLEY BANKDate:
FROM: RESEARCH SOLUTIONS, INC. and REPRINTS DESK, INC.
The undersigned authorized officer of RESEARCH SOLUTIONS, INC. (“Research Solutions”) and REPRINTS DESK, INC., (“Reprints”; together with Research Solutions, individually and collectively, “Borrower”) certifies that under the terms and conditions of the Amended and Restated Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries, if any, relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned 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. Capitalized terms used but not otherwise defined herein shall have the meanings given them in the Agreement.
Please indicate compliance status by circling Yes/No under “Complies” column. | ||
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Reporting Covenants | Required | Complies |
| | |
Monthly financial statements with | Monthly within 30 days | Yes No |
10-Q, 10-K and 8-K | Within 5 days after filing with SEC | Yes No |
A/R & A/P Agings | Streamline Period not in effect: Weekly and with each Advance request; Streamline Period in effect: Monthly within 7 days and with each Advance request | Yes No |
Borrowing Base Reports | Streamline Period not in effect: Weekly and with each Advance request; Streamline Period in effect: Monthly within 7 days and with each Advance request | Yes No |
Board approved projections | FYE within 30 days and as amended/updated | Yes No |
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The following Intellectual Property was registered after the Effective Date (if no registrations, state “None”) ____________________________________________________________________________ |
Financial Covenant | Required | Actual | Complies |
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Maintain as indicated: | | | |
Minimum Adjusted Quick Ratio | 1.15:1.0 | _____:1.0 | Yes No |
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Performance Pricing | Applies | |
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AQR ≥ 1.45 to 1.0 | Prime + 1.00%, 5.00% Floor | Yes No |
AQR < 1.45 to 1.0 | Prime + 1.50%, 5.50% Floor | Yes No |
Streamline Period | Applies | |
| | |
AQR ≥ 1.45 to 1.0 | Streamline Period in Effect | Yes No |
AQR < 1.45 to 1.0 | Streamline Period not in Effect | Yes No |
The following financial covenant analyses and information set forth in Schedule 1 attached hereto are true and accurate as of the date of this Certificate.
The following are the exceptions with respect to the certification above: (If no exceptions exist, state “No exceptions to note.”)
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By: Name: Title: REPRINTS DESK, INC. By: Name: Title: | BANK USE ONLY Received by: _____________________ authorized signer Date: _________________________ Verified: ________________________ authorized signer Date: _________________________ Compliance Status:Yes No |
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Schedule 1 to Compliance Certificate
Financial Covenants of Borrower
In the event of a conflict between this Schedule and the Agreement, the terms of the Agreement shall govern.
Dated:____________________
I.Adjusted Quick Ratio (Section 6.9(a))
Required:1.15:1.00
Actual:
A. | Aggregate value of the unrestricted and unencumbered cash and cash equivalents of Borrower and its Subsidiaries maintained with Bank | $ |
B. | Aggregate value of the net billed accounts receivable of Borrower and its Subsidiaries | $ |
C. | Quick Assets (the sum of lines A and B) | $ |
D. | Aggregate value of Obligations to Bank | $ |
E. | Aggregate value of liabilities of Borrower and its Subsidiaries (including all Indebtedness) that matures within one (1) year and current portion of Subordinated Debt permitted by Bank to be paid by Borrower less the current portion of Deferred Revenue and less the current portion of accrued lease liabilities | $ |
F. | Current Liabilities (the sum of lines D and E) | $ |
G. | Adjusted Quick Ratio (line C divided by line F) | |
Is line G equal to or greater than 1.15:1:00?
No, not in compliance Yes, in compliance
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