Exhibit 10.1

 

AMENDMENT NO. 1

TO

LOAN AND SECURITY AGREEMENT

 

THIS AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is
entered into this 29th day of June, 2004, by and between TIVO INC., a Delaware
corporation (“Borrower”), and SILICON VALLEY BANK (“Bank”). Capitalized terms
used herein without definition shall have the same meanings given them in the
Loan Agreement (as defined below).

 

RECITALS

 

A. Borrower and Bank have entered into that certain Loan and Security Agreement
dated as of July 17, 2003 (the “Loan Agreement”), pursuant to which Bank agreed
to extend and make available to Borrower certain advances of money.

 

B. Borrower desires that Bank amend the Loan Agreement to, among other things,
increase the amount available for borrowing thereunder and to extend the
maturity of such indebtedness.

 

C. Subject to the representations and warranties of Borrower herein and upon the
terms and conditions set forth in this Amendment, Bank is willing to amend the
Loan Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be
legally bound, the parties hereto agree as follows:

 

  1. AMENDMENTS TO LOAN AGREEMENT.

 

1.1 Section 2.1.1 (Advances). Section 2.1.1(a) of the Loan Agreement is amended
and restated in its entirety as follows:

 

(a) Bank will make Advances not exceeding the Committed Revolving Line minus the
sum of (i) the amount of all outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit), (ii) all amounts owed for services utilized
under the Cash Management Services Sublimit, and (iii) the FX Reserve. Amounts
borrowed under this Section 2.1 may be repaid (without penalty) and reborrowed
during the term of this Agreement.

 

1.2 Section 2.1.2 (Letters of Credit). The Loan Agreement is amended by adding
the following Section 2.1.2 prior to Section 2.2:

 

2.1.2 Letters of Credit.

 

Bank will issue or have issued Letters of Credit for Borrower’s account not
exceeding the Committed Revolving Line minus the sum of (a) all amounts owed for
services utilized under the Cash Management Services Sublimit, (b) the FX
Reserve, and (c) the sum of the outstanding principal balance of the

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Advances. Each Letter of Credit will have an expiry date of no later than
eighteen (18) months after the Maturity Date, and Borrower’s reimbursement
obligation will be fully secured by cash on terms acceptable to Bank at any time
after the Maturity Date if the term of this Agreement is not extended by Bank.
Borrower agrees to execute any further documentation in connection with the
Letters of Credit as Bank may reasonably request.

 

1.3 Section 2.1.3 (Foreign Exchange Sublimit). The Loan Agreement is amended by
adding the following Section 2.1.3 after Section 2.1.2 and prior to Section 2.2:

 

2.1.3 Foreign Exchange Sublimit.

 

If there is availability under the Committed Revolving Line, then Borrower may
enter in foreign exchange forward contracts with the Bank under which Borrower
commits to purchase from or sell to Bank a set amount of foreign currency more
than one business day after the contract date (the “FX Forward Contract”). Bank
will subtract ten percent (10%) of each outstanding FX Forward Contract from the
foreign exchange sublimit which is a maximum of the Committed Revolving Line
minus the sum of (a) the amount of all outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit), (b) all amounts owed for services
utilized under the Cash Management Services Sublimit, and (c) the sum of the
outstanding principal balance of the Advances (the “FX Reserve”). The total FX
Forward Contracts at any one time may not exceed ten (10) times the amount of
the FX Reserve. Bank may terminate the FX Forward Contracts if an Event of
Default occurs.

 

1.4 Section 2.1.4 (Cash Management Services Sublimit). The Loan Agreement is
amended by adding the following Section 2.1.4 after Section 2.1.3 and prior to
Section 2.2:

 

2.1.4 Cash Management Services Sublimit.

 

Borrower may use up to the Committed Revolving Line minus the sum of (a) the
amount of all outstanding Letters of Credit (including drawn but unreimbursed
Letters of Credit), (b) the FX Reserve, and (c) the sum of the outstanding
principal balance of the Advances (the “Cash Management Services Sublimit”) for
Bank’s Cash Management Services, which may include merchant services, direct
deposit of payroll, business credit card, and check cashing services identified
in various cash management services agreements related to such services (the
“Cash Management Services”). Such aggregate amounts utilized under the Cash
Management Services Sublimit will at all times reduce the amount otherwise
available to be borrowed under the Committed Revolving Line; provided, however,
amounts outstanding under the Existing Merchant Services Facility shall not be
deducted for determining amounts available to be borrowed under the Committed
Revolving Line. Any amounts Bank pays on behalf of Borrower or any amounts that
are not paid by Borrower for any Cash Management Services will be treated as
Advances under the Committed Revolving Line and will accrue interest at the rate
for Advances.

 

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1.5 Section 2.2 (Overadvances). Section 2.2 of the Loan Agreement is amended and
restated in its entirety as follows:

 

2.2 Overadvances.

 

If Borrower’s Obligations under Sections 2.1.1, 2.1.2, 2.1.3, and 2.1.4 exceed
the Committed Revolving Line, Borrower must pay Bank the excess within one (1)
Business Day of Bank’s notice to Borrower of such excess.

 

1.6 Section 2.3 (Interest Rate; Payments). Section 2.3(a) of the Loan Agreement
is amended and restated in its entirety as follows:

 

(a) Interest Rate. Advances accrue interest on the outstanding principal balance
thereof at a per annum rate equal to the Prime Rate, and in any event, shall not
be less than four percent (4.00%) per annum. After an Event of Default has
occurred and is continuing, Obligations shall accrue interest at a rate per
annum equal to three percent (3%) above the rate effective immediately before
the 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.

 

1.7 Section 5.2 (Collateral). Section 5.2 of the Loan Agreement is amended and
restated in its entirety as follows:

 

Borrower has good title to the Collateral and its Intellectual Property, free of
Liens except Permitted Liens. The 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. The Collateral is not in the possession of any third party
bailee (such as at a warehouse). All Inventory is in all material respects of
good and marketable quality, free from material defects.

 

1.8 Section 6.2 (Financial Statements, Reports, Certificates). Section 6.2 of
the Loan Agreement is amended and restated in its entirety as follows:

 

Borrower shall deliver to Bank:

 

(a) (i) as soon as available, but no later than thirty (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
certified by a Responsible Officer and in a form acceptable to Bank; (ii) within
five (5) days of filing with the SEC, Borrower’s Report on Form 10-Q containing
consolidated financial statements prepared under GAAP, consistently applied,
subject to year-end audit adjustments; (iii) within five (5) days of filing with
the SEC, Borrower’s Report on Form 10-K containing 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 reasonably acceptable to Bank; (iv) a prompt report of
the institution of, or in Borrower’s reasonable judgment, non-frivolous threat
of, any litigation against Borrower or any Subsidiary that could result in
damages or costs

 

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to Borrower or any Subsidiary of $250,000 or more; and (v) budgets, sales
projections, operating plans or other financial information Bank reasonably
requests.

 

(b) within twenty (20) days after the last day of each month when borrowing or
within twenty (20) days after the end of each fiscal quarter when not borrowing,
its aged listings of accounts receivable and accounts payable and a schedule
containing a description of Borrower’s Deferred Revenue in form and substance
acceptable to Bank.

 

(c) as soon as available, but no later than forty-five (45) days after the end
of each fiscal year, a one (1) year (prepared on a quarterly basis) financial
projections of Borrower on a consolidated basis, including a pro forma balance
sheet and statements of income and cash flows and showing projected operating
revenues, expenses and debt service of Borrower on a consolidated basis; and

 

(d) within thirty (30) days after the last day of each month, together with the
monthly financial statements required above, a Compliance Certificate.

 

Borrower will allow Bank to audit Borrower’s Collateral at Borrower’s expense,
and such audit will be satisfactory to Bank. Such audits will be conducted no
more often than once each calendar year on Borrower’s premises during Borrower’s
regular business hours unless an Event of Default shall have occurred. Except
when an Event of Default has occurred and is continuing, Borrower’s expense for
each audit conducted pursuant to this Agreement shall not exceed $10,000, and
Bank shall be solely responsible for all audit-related expenses that exceed such
amount.

 

1.9 Section 6.6 (Financial Covenant). Section 6.6 of the Loan Agreement is
amended and restated in its entirety as follows:

 

6.6 Financial Covenants.

 

Borrower shall maintain:

 

(a) as of the last day of each month, a ratio of (i) Quick Assets to (ii) the
difference of (1) Current Liabilities minus (2) that portion of Deferred Revenue
which matures within one (1) year of the relevant calculation date, of at least
1.25 to 1.00.

 

(b) for each period listed below, a Tangible Net Worth equal to or greater than
the amount set forth opposite such time period:

 

Period

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   Tangible Net Worth

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3-month period ending 4/30/04    $32,600,000 3-month period ending 7/31/04   
$20,100,000 3-month period ending 10/31/04    $49,600,000 3-month period ending
1/31/05    $60,000,000

 

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The Tangible Net Worth for the period beginning February 1, 2005, and thereafter
shall be determined by Bank in its reasonable discretion upon its receipt and
review of Borrower’s financial projections for fiscal year 2005 and after
discussions with Borrower regarding the same.

 

1.10 Section 9.1 (Rights and Remedies). Section 9.1 of the Loan Agreement is
amended to (a) delete “and” at the end of Section 9.1(f), (b) delete the period
at the end of Section 9.1(g) and insert “;” at the end thereof, and (c) add the
following Sections 9.1(h) and 9.1(i) to read as follows:

 

(h) Terminate any FX Forward Contracts; and

 

(i) Demand that Borrower provide cash in an amount equal to the amount of the
outstanding Letters of Credit to serve as collateral for such Letters of Credit.

 

1.11 Section 13 (Definitions). Section 13 of the Loan Agreement is amended in
the following manner:

 

(a) The terms, “Borrowing Base,” “Borrowing Base Certificate,” “Eligible
Domestic Accounts,” “Eligible Foreign Accounts,” and “Related Party Accounts,”
and their respective definitions are deleted in their entirety.

 

(b) The definitions for the following terms are amended and restated in their
entirety as follows:

 

“Committed Revolving Line” is an Advance or Advances of up to the aggregate
principal amount of $15,000,000 at any time.

 

“Maturity Date” is June 29, 2006.

 

“Total Liabilities” is on any day, obligations that should, under GAAP, be
classified as liabilities on Borrower’s consolidated balance sheet, including
all Indebtedness (including Indebtedness evidenced by this Agreement) but
excluding (a) the existing letter of credit issued by Bank in favor of Borrower
in the amount of $476,700, (b) the Existing Merchant Services Facility, (c)
direct deposit payroll, and (d) existing business credit card facilities
maintained by Borrower with Bank.

 

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(c) The following terms and their respective definitions are added in their
proper alphabetical order:

 

“Existing Merchant Services Facility” shall mean that certain merchant services
agreement by and between Bank and Borrower pursuant to which Bank provides a
merchant services facility in the amount of $3,500,000 to Borrower.

 

“Tangible Net Worth” is, on any date, the consolidated total assets of Borrower
and its Subsidiaries minus (a) any amounts attributable to (i) goodwill, (ii)
intangible items such as unamortized debt discount and expense, Intellectual
Property, and research and development expenses except prepaid expenses, and
(iii) reserves not already deducted from assets and (b) Total Liabilities.

 

1.12 Exhibit C (“Borrowing Base Certificate”) to the Loan Agreement is deleted
in its entirety.

 

1.13 Exhibit D (“Compliance Certificate”) to the Loan Agreement is amended by
deleting it in its entirety and replacing it with Exhibit A attached hereto.

 

2. BORROWER’S REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants
that:

 

(a) immediately upon giving effect to this Amendment (i) the representations and
warranties contained in the Loan Documents are true, accurate and complete in
all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date, and except to the extent any such
representations and warranties are altered by information disclosed in
Borrower’s reports filed with the US Securities and Exchange Commission
subsequent to the Closing Date), and (ii) no Event of Default has occurred and
is continuing;

 

(b) Borrower has the corporate power and authority to execute and deliver this
Amendment and to perform its obligations under the Loan Agreement, as amended by
this Amendment;

 

(c) the certificate of incorporation, bylaws and other organizational documents
of Borrower delivered to Bank on the Closing Date remain true, accurate and
complete and have not been amended, supplemented or restated and are and
continue to be in full force and effect;

 

(d) the execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, have been duly authorized by all necessary corporate action on the
part of Borrower; and

 

(e) this Amendment has been duly executed and delivered by the Borrower and is
the binding obligation of Borrower, enforceable against it in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws of
general application and equitable principles relating to or affecting creditors’
rights.

 

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3. LIMITATION. The amendments set forth in this Amendment shall be limited
precisely as written and shall not be deemed (a) to be a waiver or modification
of any other term or condition of the Loan Agreement or of any other instrument
or agreement referred to therein or to prejudice any right or remedy which Bank
may now have or may have in the future under or in connection with the Loan
Agreement or any instrument or agreement referred to therein; or (b) to be a
consent to any future amendment or modification or waiver to any instrument or
agreement the execution and delivery of which is consented to hereby, or to any
waiver of any of the provisions thereof. Except as expressly amended hereby, the
Loan Agreement shall continue in full force and effect.

 

4. EFFECTIVENESS. This Amendment shall become effective upon the satisfaction of
all the following conditions precedent:

 

4.1 Amendment. Borrower and Bank shall have duly executed and delivered this
Amendment to Bank.

 

4.2 Payment of Bank Expenses. Borrower shall have paid all Bank Expenses
(including all reasonable attorneys’ fees and reasonable expenses) incurred
through the date of this Amendment.

 

5. COUNTERPARTS. This Amendment may be signed in any number of counterparts, and
by different parties hereto in separate counterparts, with the same effect as if
the signatures to each such counterpart were upon a single instrument. All
counterparts shall be deemed an original of this Amendment.

 

6. INTEGRATION. This Amendment and any documents executed in connection herewith
or pursuant hereto contain the entire agreement between the parties with respect
to the subject matter hereof and supersede all prior agreements, understandings,
offers and negotiations, oral or written, with respect thereto and no extrinsic
evidence whatsoever may be introduced in any judicial or arbitration proceeding,
if any, involving this Amendment; except that any financing statements or other
agreements or instruments filed by Bank with respect to Borrower shall remain in
full force and effect.

 

7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICT OF LAW.

 

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the date first written above.

 

BORROWER:

 

TIVO INC.

   

a Delaware corporation

   

By:

 

/s/ David H. Courtney

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Printed Name:

 

David H. Courtney

   

Title:

 

Chief Financial Officer

BANK:

 

SILICON VALLEY BANK

   

By:

 

/s/ Jean Lee

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Printed Name:

 

Jean Lee

   

Title:

 

VP/Relationship Manager