**EXHIBIT 10.7**

 

CREDIT AGREEMENT

 

THIS AGREEMENT is entered into as of July 15,2002, by and between RENTRAK CORPORATION, an Oregon corporation (“Borrower”),and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

 

RECITALS

 

Borrower has requested that Bank extend orcontinue credit to Borrower as described below, and Bank has agreed to providesuch credit to Borrower on the terms and conditions contained herein.

 

NOW, THEREFORE, for valuable consideration,the receipt and sufficiency of which are hereby acknowledged, Bank and Borrowerhereby agree as follows:

 

ARTICLE I

CREDIT TERMS

 

SECTION 1.1.                               LINEOF CREDIT.

 

(a)              Line of Credit.  Subject to the terms and conditions of thisAgreement, Bank hereby agrees to make advances to Borrower from time to time upto and including July 1, 2003, not to exceed at any time the aggregateprincipal amount of Four Million Five Hundred Thousand Dollars ($4,500,000.00)(“Line of Credit”), the proceeds of which shall be used to finance Borrower’sworking capital requirements.  Borrower’sobligation to repay advances under the Line of Credit shall be evidenced by apromissory note substantially in the form of Exhibit A attached hereto (“Lineof Credit Note”), all terms of which are incorporated herein by this reference.

 

(b)             Borrowing and Repayment.  Borrower may from time to time during theterm of the Line of Credit borrow, partially or wholly repay its outstandingborrowings, and reborrow, subject to all of the limitations, terms andconditions contained herein or in the Line of Credit Note; provided however,that the total outstanding borrowings under the Line of Credit shall not at anytime exceed the maximum principal amount available thereunder, as set forthabove.

 

SECTION 1.2.                               INTEREST/FEES.

 

(a)              Interest.                                The outstanding principalbalance of each credit subject hereto shall bear interest at the rate ofinterest set forth in each promissory note or other instrument executed inconnection therewith.

 

(b)             Prime Rate.  The term “Prime Rate” shall mean at any timethe rate of interest most recently announced within Bank at its principaloffice as its Prime Rate, with the understanding that the Prime Rate is one ofBank’s base rates and serves as the basis upon which effective rates ofinterest are calculated for those loans making reference thereto, and isevidenced by the recording thereof in such internal publication or publicationsas Bank may designate.  Each change inthe rate of interest shall become effective on the date each Prime Rate changeis announced within Bank.

 

(c)              Computation and Payment.  Interest shall be computed on the basis of a360-day year, actual days elapsed. Interest shall be payable at the times and place set forth in eachpromissory note or other instrument required hereby.

 

(d)             Unused Commitment Fee.  Borrower shall pay to Bank a fee equal to onehundred eighty eight thousands of one percent (0.188%) per annum (computed onthe basis of a 360-day year, actual days elapsed) on the average daily unusedamount of the Line of Credit, which fee shall be calculated on 

 

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a quarterly basis by Bank and shall be due and payable by Borrower inarrears within thirty (30) days after each billing is sent by Bank.

 

SECTION 1.3.                               COLLATERAL.

 

As security for all indebtedness of Borrowerto Bank subject hereto, Borrower hereby grants to Bank security interests offirst priority in all Borrower’s accounts receivable and other rights topayment, general intangibles, inventory and equipment.

 

As security for all indebtedness of Borrowerto Bank subject hereto, Borrower shall cause 3PF.Com, Inc. and BlowoutVideo, Inc. to grant to Bank security interests of first priority in allaccounts receivable and other rights to payment, general intangibles, inventoryand equipment.

 

All of the foregoing shall be evidenced by and subject to the terms ofsuch security agreements, financing statements, deeds of trust and otherdocuments, as Bank shall reasonably require, all in form and substancesatisfactory to Bank.  Borrower shallreimburse Bank immediately upon demand for all costs and expenses incurred byBank in connection with any of the foregoing security, including withoutlimitation, filing and recording fees and costs of appraisals, audits and titleinsurance.

 

SECTION 1.4.                               GUARANTIES.  All indebtedness of Borrower to Bank shall beguaranteed jointly and severally by 3PF.Com, Inc. and Blowout Video, Inc.in the principal amount of Four Million Five Hundred Thirty Five ThousandDollars ($4,535,000.00) each, as evidenced by and subject to the terms ofguaranties in form and substance satisfactory to Bank.

 

ARTICLE II

REPRESENTATIONSAND WARRANTIES

 

Borrower makes the following representationsand warranties to Bank, which representations and warranties shall survive theexecution of this Agreement and shall continue in full force and effect untilthe full and final payment, and satisfaction and discharge, of all obligationsof Borrower to Bank subject to this Agreement.

 

SECTION 2.1.                               LEGALSTATUS.  Borrower is a corporation, dulyorganized and existing and in good standing under the laws of the State ofOregon, and is qualified or licensed to do business (and is in good standing asa foreign corporation, if applicable) in all jurisdictions in which suchqualification or licensing is required or in which the failure to so qualify orto be so licensed could have a material adverse effect on Borrower.

 

SECTION 2.2.                               AUTHORIZATIONAND VALIDITY.  This Agreement and eachpromissory note, contract, instrument and other document required hereby or atany time hereafter delivered to Bank in connection herewith (collectively, the “LoanDocuments”) have been duly authorized, and upon their execution and delivery inaccordance with the provisions hereof will constitute legal, valid and bindingagreements and obligations of Borrower or the party which executes the same,enforceable in accordance with their respective terms.

 

SECTION 2.3.                               NOVIOLATION.  The execution, delivery andperformance by Borrower of each of the Loan Documents do not violate any provisionof any law or regulation, or contravene any provision of the Articles ofIncorporation or By-Laws of Borrower, or result in any breach of or defaultunder any contract, obligation, indenture or other instrument to which Borroweris a party or by which Borrower may be bound.

 

SECTION 2.4.                               LITIGATION.  There are no pending, or to the best ofBorrower’s knowledge threatened, actions, claims, investigations, suits orproceedings by or before any governmental authority, arbitrator, court oradministrative agency which could have a material adverse effect on thefinancial 

 

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condition or operation of Borrower other than those disclosed byBorrower to Bank in writing prior to the date hereof.

 

SECTION 2.5.                               CORRECTNESSOF FINANCIAL STATEMENT.  The financialstatement of Borrower dated March 31, 2002, a true copy of which has beendelivered by Borrower to Bank prior to the date hereof, (a) is completeand correct and presents fairly the financial condition of Borrower, (b) disclosesall liabilities of Borrower that are required to be reflected or reservedagainst under generally accepted accounting principles, whether liquidated orunliquidated, fixed or contingent, and (c) has been prepared in accordancewith generally accepted accounting principles consistently applied.  Since the date of such financial statementthere has been no material adverse change in the financial condition ofBorrower, nor has Borrower mortgaged, pledged, granted a security interest inor otherwise encumbered any of its assets or properties except in favor of Bankor as otherwise permitted by Bank in writing.

 

SECTION 2.6.                               INCOMETAX RETURNS.  Borrower has no knowledgeof any pending assessments or adjustments of its income tax payable withrespect to any year.

 

SECTION 2.7.                               NOSUBORDINATION.  There is no agreement,indenture, contract or instrument to which Borrower is a party or by whichBorrower may be bound that requires the subordination in right of payment ofany of Borrower’s obligations subject to this Agreement to any other obligationof Borrower.

 

SECTION 2.8.                               PERMITS,FRANCHISES.  Borrower possesses, and willhereafter possess, all permits, consents, approvals, franchises and licensesrequired and rights to all trademarks, trade names, patents, and fictitiousnames, if any, necessary to enable it to conduct the business in which it isnow engaged in compliance with applicable law.

 

SECTION 2.9.                               ERISA.  Borrower is in compliance in all materialrespects with all applicable provisions of the Employee Retirement IncomeSecurity Act of 1974, as amended or recodified from time to time (“ERISA”);Borrower has not violated any provision of any defined employee pension benefitplan (as defined in ERISA) maintained or contributed to by Borrower (each, a “Plan”);no Reportable Event as defined in ERISA has occurred and is continuing withrespect to any Plan initiated by Borrower; Borrower has met its minimum fundingrequirements under ERISA with respect to each Plan; and each Plan will be ableto fulfill its benefit obligations as they come due in accordance with the Plandocuments and under generally accepted accounting principles.

 

SECTION 2.10.                         OTHEROBLIGATIONS.  Borrower is not in defaulton any obligation for borrowed money, any purchase money obligation or anyother material lease, commitment, contract, instrument or obligation.

 

SECTION 2.11.                         ENVIRONMENTALMATTERS.  Except as disclosed by Borrowerto Bank in writing prior to the date hereof, Borrower is in compliance in allmaterial respects with all applicable federal or state environmental, hazardouswaste, health and safety statutes, and any rules or regulations adoptedpursuant thereto, which govern or affect any of Borrower’s operations and/orproperties, including without limitation, the Comprehensive EnvironmentalResponse, Compensation and Liability Act of 1980, the Superfund Amendments andReauthorization Act of 1986, the Federal Resource Conservation and Recovery Actof 1976, and the Federal Toxic Substances Control Act, as any of the same maybe amended, modified or supplemented from time to time.  None of the operations of Borrower is thesubject of any federal or state investigation evaluating whether any remedialaction involving a material expenditure is needed to respond to a release ofany toxic or hazardous waste or substance into the environment.  Borrower has no material contingent liabilityin connection with any release of any toxic or hazardous waste or substanceinto the environment.

 

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ARTICLE III

CONDITIONS

 

SECTION 3.1.                               CONDITIONSOF INITIAL EXTENSION OF CREDIT.  Theobligation of Bank to extend any credit contemplated by this Agreement issubject to the fulfillment to Bank’s satisfaction of all of the following conditions:

 

(a)              Approval of Bank Counsel.  All legal matters incidental to the extensionof credit by Bank shall be satisfactory to Bank’s counsel.

 

(b)             Documentation.  Bank shall have received, in form andsubstance satisfactory to Bank, each of the following, duly executed:

 
| (i)    |   | This Agreement and each  promissory note or other instrument required hereby.             |
|--------|--------|-------------------------------------------------------------------------------------------|
| (ii)   |   | Corporate Resolution:  Borrowing                                                          |
| (iii)  |   | Certificate of Incumbency  (3)                                                            |
| (iv)   |   | Continuing Security  Agreement Rights to Payment and Inventory                            |
| (v)    |   | Security Agreement  Equipment                                                             |
| (vi)   |   | Exhibit A to UCC1  Financing Statement (3)                                           |
| (vii)  |   | Continuing Guaranty (2)                                                                   |
| (viii) |   | Corporate Resolution:  Continuing Guaranty (2)                                            |
| (ix)   |   | Third Party Security  Agreement Rights To Payment and Inventory (2)                       |
| (x)    |   | Third Party Security  Agreement Equipment (2)                                             |
| (xi)   |   | Corporate Resolution Third  Party Collateral (2)                                          |
| (xii)  |   | Acknowledgement of  Security Interest (3); for debtor 3PF.COM, INC.                       |
| (xiii) |   | Such other documents as  Bank may require under any other Section of this Agreement. |

 

(c)              Financial Condition.  There shall have been no material adversechange, as determined by Bank, in the financial condition or business ofBorrower or any guarantor hereunder, nor any material decline, as determined byBank, in the market value of any collateral required hereunder or a substantialor material portion of the assets of Borrower or any such guarantor.

 

(d)             Insurance.  Borrower shall have delivered to Bankevidence of insurance coverage on all Borrower’s property, in form, substance,amounts, covering risks and issued by companies satisfactory to Bank, and whererequired by Bank, with loss payable endorsements in favor of Bank.

 

SECTION 3.2.                               CONDITIONSOF EACH EXTENSION OF CREDIT.  Theobligation of Bank to make each extension of credit requested by Borrowerhereunder shall be subject to the fulfillment to Bank’s satisfaction of each ofthe following conditions:

 

(a)              Compliance.  The representations and warranties containedherein and in each of the other Loan Documents shall be true on and as of thedate of the signing of this Agreement and on the date of each extension ofcredit by Bank pursuant hereto, with the same effect as though suchrepresentations and warranties had been made on and as of each such date, andon each such date, no Event of Default as defined herein, and no condition,event or act which with the giving of notice or the passage of time or bothwould constitute such an Event of Default, shall have occurred and becontinuing or shall exist.

 

(b)             Documentation.  Bank shall have received all additionaldocuments which may be required in connection with such extension of credit.

 

ARTICLE IV

AFFIRMATIVECOVENANTS

 

Borrower covenants that so long as Bankremains committed to extend credit to Borrower pursuant hereto, or any liabilities(whether direct or contingent, liquidated or unliquidated) of Borrower to Bank 

 

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under any of the Loan Documents remain outstanding, and until paymentin full of all obligations of Borrower subject hereto, Borrower shall, unlessBank otherwise consents in writing:

 

SECTION 4.1.                               PUNCTUALPAYMENTS.  Punctually pay all principal,interest, fees or other liabilities due under any of the Loan Documents at thetimes and place and in the manner specified therein.

 

SECTION 4.2.                               ACCOUNTINGRECORDS.  Maintain adequate books andrecords in accordance with generally accepted accounting principlesconsistently applied, and permit any representative of Bank, at any reasonabletime, to inspect, audit and examine such books and records, to make copies ofthe same, and to inspect the properties of Borrower.

 

SECTION 4.3.                               FINANCIALSTATEMENTS.  Provide to Bank all of thefollowing, in form and detail satisfactory to Bank:

 

(a)              not later than 90 days after and as ofthe end of each fiscal year, a copy of the 10K report filed with the SecuritiesExchange Commission, prepared by a certified public accountant acceptable toBank;

 

(b)             not later than 45 days after and as of theend of each fiscal quarter, a copy of the 10Q report filed with the SecuritiesExchange Commission, prepared by a certified public accountant acceptable toBank:

 

(c)              from time to time such other informationas Bank may reasonably request

 

SECTION 4.4.                               COMPLIANCE.  Preserve and maintain all licenses, permits,governmental approvals, rights, privileges and franchises necessary for theconduct of its business; and comply with the provisions of all documentspursuant to which Borrower is organized and/or which govern Borrower’scontinued existence and with the requirements of all laws, rules, regulationsand orders of any governmental authority applicable to Borrower and/or itsbusiness.

 

SECTION 4.5.                               INSURANCE.  Maintain and keep in force insurance of thetypes and in amounts customarily carried in lines of business similar to thatof Borrower, including but not limited to fire, extended coverage, publicliability, flood, property damage and workers’ compensation, with all suchinsurance carried with companies and in amounts satisfactory to Bank, anddeliver to Bank from time to time at Bank’s request schedules setting forth allinsurance then in effect.

 

SECTION 4.6.                               FACILITIES.  Keep all properties useful or necessary toBorrower’s business in good repair and condition, and from time to time makenecessary repairs, renewals and replacements thereto so that such propertiesshall be fully and efficiently preserved and maintained.

 

SECTION 4.7.                               TAXESAND OTHER LIABILITIES.  Pay and dischargewhen due any and all indebtedness, obligations, assessments and taxes, bothreal or personal, including without limitation federal and state income taxesand state and local property taxes and assessments, except such (a) asBorrower may in good faith contest or as to which a bona fide dispute mayarise, and (b) for which Borrower has made provision, to Bank’ssatisfaction, for eventual payment thereof in the event Borrower is obligatedto make such payment.

 

SECTION 4.8.                               LITIGATION.  Promptly give notice in writing to Bank ofany litigation pending or threatened against Borrower.

 

SECTION 4.9.                               FINANCIALCONDITION.  Maintain Borrower’s financialcondition as follows using generally accepted accounting principlesconsistently applied and used consistently with prior practices (except to theextent modified by the definitions herein):

 

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(a)              Current Ratio not at any time less than1.10 to 1.0 determined at each fiscal quarter end, with “Current Ratio” definedas total current assets divided by total current liabilities.

 

(b)             Tangible Net Worth not at any time lessthan $16,000,000.00 determined at each fiscal quarter end, with “Tangible NetWorth” defined as the aggregate of total stockholders’ equity plus subordinateddebt less any intangible assets.

 

(c)              Total Liabilities divided by Tangible NetWorth not at any time greater than 1.50 to 1.0 determined as of each fiscalquarter end, with “Total Liabilities” defined as the aggregate of currentliabilities and non-current liabilities less subordinated debt, and with “TangibleNet Worth” as defined above

 

(d)             Net income after taxes not less than $1.00for fiscal quarters ending September 30, 2002, December 31, 2002 and March 31,2003.

 

(e)              Net loss for fiscal quarter ending June 30,2002 not to exceed $100,000.00.  Net lossfor fiscal quarter ended June 30, 2002 will exclude expenses related tounamortized fees and a settlement with the former CEO.  The expenses shall not exceed $350,000.00 ona pre-tax basis.

 

(f)                Net income after taxes not less than$1.00 on an year to date basis, determined as of the fiscal quarters ended September 30,2002, December 31, 2002 and March 31, 2003 with expenses for thesettlement and unamortized fees to be excluded form year to date net income forthe quarter ended September 30, 2002.

 

SECTION 4.10.                         NOTICE TOBANK.  Promptly (but in no event morethan five (5) days after the occurrence of each such event or matter) givewritten notice to Bank in reasonable detail of: (a) the occurrence of any Event of Default, or any condition, eventor act which with the giving of notice or the passage of time or both wouldconstitute an Event of Default; (b) any change in the name or theorganizational structure of Borrower; (c) the occurrence and nature of anyReportable Event or Prohibited Transaction, each as defined in ERISA, or anyfunding deficiency with respect to any Plan; or (d) any termination orcancellation of any insurance policy which Borrower is required to maintain, orany uninsured or partially uninsured loss through liability or property damage,or through fire, theft or any other cause affecting Borrower’s property.

 

ARTICLE V

NEGATIVECOVENANTS

 

Borrower further covenants that so long asBank remains committed to extend credit to Borrower pursuant hereto, or anyliabilities (whether direct or contingent, liquidated or unliquidated) ofBorrower to Bank under any of the Loan Documents remain outstanding, and untilpayment in full of all obligations of Borrower subject hereto, Borrower willnot without Bank’s prior written consent:

 

SECTION 5.1.                               USEOF FUNDS.  Use any of the proceeds of anycredit extended hereunder except for the purposes stated in Article Ihereof.

 

SECTION 5.2.                               OTHERINDEBTEDNESS.  Create, incur, assume orpermit to exist any indebtedness or liabilities resulting from borrowings,loans or advances, whether secured or unsecured, matured or unmatured,liquidated or unliquidated, joint or several, except (a) the liabilitiesof Borrower to Bank, and (b) any other liabilities of Borrower existing asof, and disclosed to Bank prior to, the date hereof, and (c) new capital leases or new purchase moneysecurity interest financings in any fiscal year in excess of an aggregate of$1,000,000.

 

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SECTION 5.3.                               MERGER,CONSOLIDATION, TRANSFER OF ASSETS.  Mergeinto or consolidate with any other entity; make any substantial change in thenature of Borrower’s business as conducted as of the date hereof; acquire allor substantially all of the assets of any other entity; nor sell, lease,transfer or otherwise dispose of all or a substantial or material portion ofBorrower’s assets except in the ordinary course of its business.

 

SECTION 5.4.                               GUARANTIES.  Guarantee or become liable in any way assurety, endorser (other than as endorser of negotiable instruments for depositor collection in the ordinary course of business), accommodation endorser orotherwise for, nor pledge or hypothecate any assets of Borrower as securityfor, any liabilities or obligations of any other person or entity, except anyof the foregoing in favor of Bank.

 

SECTION 5.5.                               LOANS,ADVANCES, INVESTMENTS.  Make any loans oradvances to or investments in any person or entity, except any of the foregoingexisting as of, and disclosed to Bank prior to, the date hereof.

 

SECTION 5.6.                               DIVIDENDS,DISTRIBUTIONS.  Declare or pay anydividend or distribution either in cash, stock or any other property onBorrower’s stock now or hereafter outstanding.

 

SECTION 5.7.                               PLEDGEOF ASSETS.  Mortgage, pledge, grant orpermit to exist a security interest in, or lien upon, all or any portion ofBorrower’s assets now owned or hereafter acquired, except any of the foregoingin favor of Bank or which is existing as of, and disclosed to Bank in writingprior to, the date hereof.

 

ARTICLE VI

EVENTS OFDEFAULT

 

SECTION 6.1.                               Theoccurrence of any of the following shall constitute an “Event of Default” underthis Agreement:

 

(a)              Borrower shall fail to pay when due anyprincipal, interest, fees or other amounts payable under any of the LoanDocuments.

 

(b)             Any financial statement or certificatefurnished to Bank in connection with, or any representation or warranty made byBorrower or any other party under this Agreement or any other Loan Documentshall prove to be incorrect, false or misleading in any material respect whenfurnished or made.

 

(c)              Any default in the performance of orcompliance with any obligation, agreement or other provision contained hereinor in any other Loan Document (other than those referred to in subsections (a) and(b) above), and with respect to any such default which by its nature canbe cured, such default shall continue for a period of twenty (20) days from itsoccurrence.

 

(d)             Any default in the payment or performanceof any obligation, or any defined event of default, under the terms of anycontract or instrument (other than any of the Loan Documents) pursuant to whichBorrower or any guarantor hereunder has incurred any debt or other liability toany person or entity, including Bank.

 

(e)              The filing of a notice of judgment lienagainst Borrower or any guarantor hereunder; or the recording of any abstractof judgment against Borrower or any guarantor hereunder in any county in whichBorrower or such guarantor has an interest in real property; or the service ofa notice of levy and/or of a writ of attachment or execution, or other likeprocess, against the assets of Borrower or any guarantor hereunder; or theentry of a judgment against Borrower or any guarantor hereunder.

 

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(f)                Borrower or any guarantor hereundershall become insolvent, or shall suffer or consent to or apply for theappointment of a receiver, trustee, custodian or liquidator of itself or any ofits property, or shall generally fail to pay its debts as they become due, orshall make a general assignment for the benefit of creditors; Borrower or anyguarantor hereunder shall file a voluntary petition in bankruptcy, or seekingreorganization, in order to effect a plan or other arrangement with creditorsor any other relief under the Bankruptcy Reform Act, Title 11 of the UnitedStates Code, as amended or recodified from time to time (“Bankruptcy Code”), orunder any state or federal law granting relief to debtors, whether now orhereafter in effect; or any involuntary petition or proceeding pursuant to theBankruptcy Code or any other applicable state or federal law relating tobankruptcy, reorganization or other relief for debtors is filed or commencedagainst Borrower or any guarantor hereunder, or Borrower or any such guarantorshall file an answer admitting the jurisdiction of the court and the materialallegations of any involuntary petition; or Borrower or any such guarantorshall be adjudicated a bankrupt, or an order for relief shall be enteredagainst Borrower or any such guarantor by any court of competent jurisdictionunder the Bankruptcy Code or any other applicable state or federal law relatingto bankruptcy, reorganization or other relief for debtors.

 

(g)             There shall exist or occur any event orcondition which Bank in good faith believes impairs, or is substantially likelyto impair, the prospect of payment or performance by Borrower of itsobligations under any of the Loan Documents.

 

(h)             The death or incapacity of any guarantorhereunder.  The dissolution orliquidation of Borrower or any guarantor hereunder; or Borrower or any suchguarantor, or any of its directors, stockholders or members, shall take actionseeking to effect the dissolution or liquidation of Borrower or such guarantor.

 

(i)                 Any change in ownership during the termof this Agreement of an aggregate of twenty-five percent (25%) or more of thecommon stock of Borrower.

 

SECTION 6.2.                               REMEDIES.  Upon the occurrence of any Event ofDefault:  (a) all indebtedness ofBorrower under each of the Loan Documents, any term thereof to the contrarynotwithstanding, shall at Bank’s option and without notice become immediatelydue and payable without presentment, demand, protest or notice of dishonor, allof which are hereby expressly waived by each Borrower; (b) the obligation,if any, of Bank to extend any further credit under any of the Loan Documentsshall immediately cease and terminate; and (c) Bank shall have all rights,powers and remedies available under each of the Loan Documents, or accorded bylaw, including without limitation the right to resort to any or all securityfor any credit subject hereto and to exercise any or all of the rights of abeneficiary or secured party pursuant to applicable law.  All rights, powers and remedies of Bank maybe exercised at any time by Bank and from time to time after the occurrence ofan Event of Default, are cumulative and not exclusive, and shall be in additionto any other rights, powers or remedies provided by law or equity.

 

ARTICLE VII

MISCELLANEOUS

 

SECTION 7.1.                               NOWAIVER.  No delay, failure ordiscontinuance of Bank in exercising any right, power or remedy under any ofthe Loan Documents shall affect or operate as a waiver of such right, power orremedy; nor shall any single or partial exercise of any such right, power orremedy preclude, waive or otherwise affect any other or further exercisethereof or the exercise of any other right, power or remedy.  Any waiver, permit, consent or approval ofany kind by Bank of any breach of or default under any of the Loan Documentsmust be in writing and shall be effective only to the extent set forth in suchwriting.

 

SECTION 7.2.                               NOTICES.  All notices, requests and demands which anyparty is required or may desire to give to any other party under any provisionof this Agreement must be in writing delivered to each party at the followingaddress:

 

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| BORROWER: |   | RENTRAK CORPORATION                    |
|-----------|--------|----------------------------------------|
|      |   | 7700 NE Ambassador Pl.                 |
|      |   | Portland, Or 97220                     |
|      |   |                                   |
| BANK:     |   | WELLS FARGO BANK, NATIONAL ASSOCIATION |
|      |   | PORTLAND RCBO                          |
|      |   | 1300 S.W. Fifth Avenue T-13            |
|      |   | Portland, OR 97201                     |

 

or to such other address as any party may designate by written noticeto all other parties.  Each such notice,request and demand shall be deemed given or made as follows:  (a) if sent by hand delivery, upondelivery; (b) if sent by mail, upon the earlier of the date of receipt orthree (3) days after deposit in the U.S. mail, first class and postageprepaid; and (c) if sent by telecopy, upon receipt.

 

SECTION 7.3.                               COSTS,EXPENSES AND ATTORNEYS’ FEES.  Borrowershall pay to Bank immediately upon demand the full amount of all payments,advances, charges, costs and expenses, including reasonable attorneys’ fees (toinclude outside counsel fees and all allocated costs of Bank’s in-housecounsel), expended or incurred by Bank in connection with (a) thenegotiation and preparation of this Agreement and the other Loan Documents,Bank’s continued administration hereof and thereof, and the preparation of anyamendments and waivers hereto and thereto, (b) the enforcement of Bank’srights and/or the collection of any amounts which become due to Bank under anyof the Loan Documents, and (c) the prosecution or defense of any action inany way related to any of the Loan Documents, including without limitation, anyaction for declaratory relief, whether incurred at the trial or appellatelevel, in an arbitration proceeding or otherwise, and including any of theforegoing incurred in connection with any bankruptcy proceeding (includingwithout limitation, any adversary proceeding, contested matter or motionbrought by Bank or any other person) relating to any Borrower or any otherperson or entity.

 

SECTION 7.4.                               SUCCESSORS,ASSIGNMENT.  This Agreement shall bebinding upon and inure to the benefit of the heirs, executors, administrators,legal representatives, successors and assigns of the parties; provided however,that Borrower may not assign or transfer its interest hereunder without Bank’sprior written consent.  Bank reserves theright to sell, assign, transfer, negotiate or grant participations in all orany part of, or any interest in, Bank’s rights and benefits under each of theLoan Documents.  In connection therewith,Bank may disclose all documents and information which Bank now has or mayhereafter acquire relating to any credit subject hereto, Borrower or itsbusiness, any guarantor hereunder or the business of such guarantor, or anycollateral required hereunder.

 

SECTION 7.5.                               ENTIREAGREEMENT; AMENDMENT.  This Agreement andthe other Loan Documents constitute the entire agreement between Borrower andBank with respect to each credit subject hereto and supersede all priornegotiations, communications, discussions and correspondence concerning thesubject matter hereof.  This Agreementmay be amended or modified only in writing signed by each party hereto.

 

SECTION 7.6.                               NOTHIRD PARTY BENEFICIARIES.  ThisAgreement is made and entered into for the sole protection and benefit of theparties hereto and their respective permitted successors and assigns, and noother person or entity shall be a third party beneficiary of, or have anydirect or indirect cause of action or claim in connection with, this Agreementor any other of the Loan Documents to which it is not a party.

 

SECTION 7.7.                               TIME.  Time is of the essence of each and everyprovision of this Agreement and each other of the Loan Documents.

 

SECTION 7.8.                               SEVERABILITYOF PROVISIONS.  If any provision of thisAgreement shall be prohibited by or invalid under applicable law, suchprovision shall be ineffective only to the extent of such prohibition orinvalidity without invalidating the remainder of such provision or anyremaining provisions of this Agreement.

 

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SECTION 7.9.                               COUNTERPARTS.  This Agreement may be executed in any numberof counterparts, each of which when executed and delivered shall be deemed tobe an original, and all of which when taken together shall constitute one andthe same Agreement.

 

SECTION 7.10.                         GOVERNINGLAW.  This Agreement shall be governed byand construed in accordance with the laws of the State of Oregon.

 

SECTION 7.11.                         ARBITRATION.

 

(a)              Arbitration.  The parties hereto agree, upon demand by anyparty, to submit to binding arbitration all claims, disputes and controversiesbetween or among them (and their respective employees, officers, directors,attorneys, and other agents), whether in tort, contract or otherwise arisingout of or relating to in any way (i) the loan and related Loan Documentswhich are the subject of this Agreement and its negotiation, execution,collateralization, administration, repayment, modification, extension,substitution, formation, inducement, enforcement, default or termination; or (ii) requestsfor additional credit.

 

(b)             Governing Rules.  Any arbitration proceeding will (i) proceedin a location in Oregon selected by the American Arbitration Association (“AAA”);(ii) be governed by the Federal Arbitration Act (Title 9 of the UnitedStates Code), notwithstanding any conflicting choice of law provision in any ofthe documents between the parties; and (iii) be conducted by the AAA, orsuch other administrator as the parties shall mutually agree upon, inaccordance with the AAA’s commercial dispute resolution procedures, unless theclaim or counterclaim is at least $1,000,000.00 exclusive of claimed interest,arbitration fees and costs in which case the arbitration shall be conducted inaccordance with the AAA’s optional procedures for large, complex commercialdisputes (the commercial dispute resolution procedures or the optionalprocedures for large, complex commercial disputes to be referred to, asapplicable, as the “Rules”).  If there isany inconsistency between the terms hereof and the Rules, the terms andprocedures set forth herein shall control. Any party who fails or refuses to submit to arbitration following ademand by any other party shall bear all costs and expenses incurred by suchother party in compelling arbitration of any dispute.  Nothing contained herein shall be deemed tobe a waiver by any party that is a bank of the protections afforded to it under12 U.S.C. §91 or any similar applicable state law.

 

(c)              NoWaiver of Provisional Remedies, Self-Help and Foreclosure.  The arbitration requirement does not limitthe right of any party to (i) foreclose against real or personal propertycollateral; (ii) exercise self-help remedies relating to collateral orproceeds of collateral such as setoff or repossession; or (iii) obtainprovisional or ancillary remedies such as replevin, injunctive relief, attachmentor the appointment of a receiver, before during or after the pendency of anyarbitration proceeding.  This exclusiondoes not constitute a waiver of the right or obligation of any party to submitany dispute to arbitration or reference hereunder, including those arising fromthe exercise of the actions detailed in sections (i), (ii) and (iii) ofthis paragraph.

 

(d)             Arbitrator Qualifications and Powers.  Any arbitration proceeding in which theamount in controversy is $5,000,000.00 or less will be decided by a singlearbitrator selected according to the Rules, and who shall not render an awardof greater than $5,000,000.00.  Anydispute in which the amount in controversy exceeds $5,000,000.00 shall bedecided by majority vote of a panel of three arbitrators; provided however,that all three arbitrators must actively participate in all hearings anddeliberations.  The arbitrator will be aneutral attorney licensed in the State of Oregon or a neutral retired judge ofthe state or federal judiciary of Oregon, in either case with a minimum of tenyears experience in the substantive law applicable to the subject matter of thedispute to be arbitrated.  The arbitratorwill determine whether or not an issue is arbitratable and will give effect tothe statutes of limitation in determining any claim.  In any arbitration proceeding the arbitratorwill decide (by documents only or with a hearing at the arbitrator’sdiscretion) any pre-hearing motions which are similar to motions to dismiss forfailure to state a claim or motions for summary adjudication.  The arbitrator shall resolve all disputes inaccordance with the substantive law of Oregon and may grant any remedy orrelief that a court of such state could order or grant within the scope hereofand such ancillary relief as is necessary to make effective any award.  The arbitrator shall also have the power toaward recovery of all costs and fees, to impose sanctions and to 

 

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take such other action as the arbitrator deems necessary to the sameextent a judge could pursuant to the Federal Rules of Civil Procedure, theOregon Rules of Civil Procedure or other applicable law.  Judgment upon the award rendered by thearbitrator may be entered in any court having jurisdiction.  The institution and maintenance of an actionfor judicial relief or pursuit of a provisional or ancillary remedy shall notconstitute a waiver of the right of any party, including the plaintiff, tosubmit the controversy or claim to arbitration if any other party contests suchaction for judicial relief.

 

(e)              Discovery.  In any arbitration proceeding discovery willbe permitted in accordance with the Rules. All discovery shall be expressly limited to matters directly relevant tothe dispute being arbitrated and must be completed no later than 20 days beforethe hearing date and within 180 days of the filing of the dispute with theAAA.  Any requests for an extension ofthe discovery periods, or any discovery disputes, will be subject to final determinationby the arbitrator upon a showing that the request for discovery is essentialfor the party’s presentation and that no alternative means for obtaininginformation is available.

 

(f)                Class Proceedings andConsolidations.  The resolution ofany dispute arising pursuant to the terms of this Agreement shall be determinedby a separate arbitration proceeding and such dispute shall not be consolidatedwith other disputes or included in any class proceeding.

 

(g)             Payment Of Arbitration Costs And Fees.  The arbitrator shall award all costs andexpenses of the arbitration proceeding.

 

(h)             Miscellaneous.  To the maximum extent practicable, the AAA,the arbitrators and the parties shall take all action required to conclude anyarbitration proceeding within 180 days of the filing of the dispute with theAAA.  No arbitrator or other party to anarbitration proceeding may disclose the existence, content or results thereof,except for disclosures of information by a party required in the ordinarycourse of its business or by applicable law or regulation.  If more than one agreement for arbitration byor between the parties potentially applies to a dispute, the arbitrationprovision most directly related to the Loan Documents or the subject matter ofthe dispute shall control.  Thisarbitration provision shall survive termination, amendment or expiration of anyof the Loan Documents or any relationship between the parties.

 

**UNDER OREGON LAW, MOST AGREEMENTS, PROMISESAND COMMITMENTS MADE BY BANK AFTER OCTOBER 3, 1989 CONCERNING LOANS ANDOTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLDPURPOSESOR SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESSCONSIDERATION AND BE SIGNED BY BANK TO BE ENFORCEABLE.**

 

IN WITNESS WHEREOF, the parties hereto havecaused this Agreement to be executed as of the day and year first writtenabove.

 
|                                  | WELLS FARGO BANK,                |
|---------------------------------------|----------------------------------|
| RENTRAK CORPORATION                   |   NATIONAL ASSOCIATION |
|                                  |                             |
| By:                                   | /s/ Mark Thoenes                 |   | By:  | /s/ Marcus R. Hall |   |
| Mark Thoenes, Chief Financial Officer |                             | Marcus R. Hall |
|                                  |                             |
|                                  | Title:                           |   |   |
|                                       |                                  |  |  |  |  |  |

 

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