EIGHTH LOAN MODIFICATION AND WAIVER AGREEMENT
Exhibit 10.4
EIGHTH LOAN MODIFICATION AND WAIVER AGREEMENT
This Eighth Loan Modification and Waiver Agreement (this “Loan Modification Agreement”) is entered into as of August 5, 2013 by and between SILICON VALLEY BANK, a California corporation, with its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and with a loan production office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (“Bank”) and CHYRONHEGO CORPORATION, a New York corporation formerly known as Chyron Corporation, with its chief executive office located at ▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (“Borrower”).
1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of June 19, 2008, evidenced by, among other documents, a certain Loan and Security Agreement dated as of June 19, 2008, between Borrower and Bank, as amended by a certain First Loan Modification Agreement dated as of April 16, 2009, between Borrower and Bank, as further amended by a certain Second Loan Modification Agreement dated as of June 18, 2009, between Borrower and Bank, as further amended by a certain Third Loan Modification Agreement dated as of March 24, 2010, between Borrower and Bank, as further amended by a certain Fourth Loan Modification Agreement dated as of March 24, 2011, between Borrower and Bank, as further amended by a certain Fifth Loan Modification Agreement dated as of December 28, 2011, between Borrower and Bank, as further amended by a certain Sixth Loan Modification Agreement dated as of August 13, 2012, between Borrower and Bank and as further amended by a certain Seventh Loan Modification Agreement, dated as of March 1, 2013 (as amended, the “Loan Agreement”). Capitalized terms used but not otherwise defined herein shall have the same meaning as in the Loan Agreement.
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the Collateral as described in the Loan Agreement (together with any other collateral security granted to Bank, the “Security Documents”). Hereinafter, the Security Documents, together with all other documents evidencing or securing the Obligations, shall be referred to as the “Existing Loan Documents”.
3. DESCRIPTION OF CHANGE IN TERMS.
|
A.
|
Modifications to Loan Agreement.
|
|
1.
|
The Loan Agreement shall be amended by deleting the following definition appearing in Section 13.1 thereof:
|
“ “Revolving Line Maturity Date” is August 12, 2013.”
and inserting in lieu thereof the following:
“ “Revolving Line Maturity Date” is October 12, 2013.”
|
2.
|
The Compliance Certificate appearing as Exhibit D to the Loan Agreement is hereby replaced with the Compliance Certificate attached as Exhibit A hereto.
|
|
B.
|
Waivers.
|
|
1.
|
Bank hereby waives Borrower’s existing defaults under the Loan Agreement by virtue of Borrower’s failure to comply with (i) the Adjusted Quick Ratio financial covenant set forth in Section 6.7(a) thereof for the compliance periods ended May 31, 2013 and June 30, 2013; and (ii) the Maximum EBITDA Loss financial covenant set forth in Section 6.7(c) thereof for the quarterly compliance period ended June 30, 2013. Bank’s waiver of Borrower’s compliance of said affirmative covenant shall apply only to the foregoing specific period.
|
4. FEES. Borrower shall pay to Bank a modification fee equal to Fifteen Thousand Dollars ($15,000.00), which fee shall be due on the date hereof and shall be deemed fully earned as of the date hereof. Borrower shall also reimburse Bank for all legal fees and expenses incurred in connection with this amendment to the Existing Loan Documents.
5. RATIFICATION OF PERFECTION CERTIFICATE. Other than incorporating the new changed-name of the Borrower, Borrower hereby ratifies, confirms and reaffirms, all and singular, the terms and disclosures contained in a certain Perfection Certificate dated as of December 28, 2011, between Borrower and Bank (the “Perfection Certificate”), and acknowledges, confirms and agrees the disclosures and information Borrower provided to Bank in the Perfection Certificate have not changed, as of the date hereof.
6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever necessary to reflect the changes described above.
7. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of all security or other collateral granted to Bank and confirms that the indebtedness secured thereby includes, without limitation, the Obligations.
8. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder.
9. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, Bank is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Existing Loan Documents. Except as expressly modified pursuant to this Loan Modification Agreement, the terms of the Existing Loan Documents remain unchanged and in full force and effect. Bank’s agreement to modifications to the existing Obligations pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future modifications to the Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing. No maker will be released by virtue of this Loan Modification Agreement.
10. CONFIDENTIALITY. Bank may use confidential information for the development of databases, reporting purposes, and market analysis, so long as such confidential information is aggregated and anonymized prior to distribution unless otherwise expressly permitted by Borrower. The provisions of the immediately preceding sentence shall survive the termination of the Loan Agreement.
11. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective only when it shall have been executed by Borrower and Bank.
[The remainder of this page is intentionally left blank]
-2-
This Loan Modification Agreement is executed as of the date first written above.
BORROWER:
CHYRONHEGO CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: SVP & CFO, Treasurer and Corporate Secretary
BANK:
SILICON VALLEY BANK
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
EXHIBIT A
EXHIBIT D - COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK Date:
FROM: CHYRONHEGO CORPORATION
The undersigned authorized officer of CHYRONHEGO CORPORATION (formerly known as Chyron Corporation, the “Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (as amended, 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 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.
|
|||
|
Reporting Covenant
|
Required
|
Complies
|
|
|
Monthly financial statements with
Compliance Certificate
|
Monthly within 30 days
|
Yes No
|
|
|
Annual financial statement (CPA Audited)
|
FYE within 90 days
|
Yes No
|
|
|
Transaction Reports
|
Monthly within 30 days and with each request for an Advance
|
Yes No
|
|
|
A/R & A/P Agings
|
Monthly within 20 days
|
Yes No
|
|
|
Board-approved projections
|
FYE within 60 days, and contemporaneously with any updates or changes thereto
|
Yes No
|
|
|
Financial Covenant
|
Required
|
Actual
|
Complies
|
|
Maintain at all times:
|
|||
|
Adjusted Quick Ratio (to be tested on the last day of each month)
|
1.20:1.0
|
____:1.0
|
Yes No
|
|
Maximum EBITDA Loss (to be reported on the last day of each quarter)
|
$*
|
$________
|
Yes No
|
*As set forth in Section 6.7(c) of the Agreement.
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.”)
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
CHYRONHEGO CORPORATION
By:
Name:
Title:
|
BANK USE ONLY
Received by:
authorized signer
Date:
Verified:
authorized signer
Date:
Compliance Status: Yes No
|
Schedule 1 to Compliance Certificate
Financial Covenants of Borrower
In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern.
Dated: ____________________
I. Adjusted Quick Ratio (Section 6.7(a))
Required: 1.20:1.00
Actual: ____:1.00
| A. |
Aggregate value of the unrestricted cash of Borrower
|
$ | |||||
| B. |
Aggregate value of the net billed accounts receivable of Borrower
|
$ | |||||
| C. |
Quick Assets (the sum of lines A through B)
|
$ | |||||
| D. |
Aggregate value of Obligations to Bank
|
$ | |||||
| E. |
Aggregate value of liabilities of Borrower (including all Indebtedness) that mature within one (1) year and current portion of Subordinated Debt permitted by Bank to be paid by Borrower
|
$ | |||||
| F. |
Current Liabilities (the sum of lines D and E)
|
$ | |||||
| G |
Deferred Revenue
|
$ | |||||
| H |
Line F minus line G
|
$ | |||||
| I. |
Adjusted Quick Ratio (line C divided by line H)
|
Is line I equal to or greater than 1.20:1.00?
_______ No, not in compliance _______ Yes, in compliance
II. Maximum EBITDA Loss (Section 6.7(c))
Required: $_________ (as set forth in Section 6.7(c) of the Agreement)
Actual: $_________
_______ No, not in compliance _______ Yes, in compliance