EXHIBIT 10.1


 


NINTH AMENDMENT TO LOAN AND SECURITY AGREEMENT


 


This
Ninth Amendment to Loan and Security Agreement (this “Amendment”) is entered
into as of December 31, 2007, by and between COMERICA BANK, (successor by
merger to COMERICA BANK-CALIFORNIA)
(“Bank”) and HIRERIGHT, INC. (“Borrower”).


 


RECITALS


 


Borrower
and Bank are parties to that certain Loan and Security Agreement dated as of April 18,
2002, as amended from time to time including by that certain First Amendment to
Loan and Security Agreement dated as of August 6, 2002, that
certain Second Amendment to Loan and Security Agreement dated as of December 16,
2002, that certain Third Amendment to Loan and Security Agreement dated as of January 23,
2003, that certain Fourth Amendment to Loan and Security Agreement dated as of February 27,
2003, that certain Fifth Amendment to Loan and Security Agreement dated as of February 2,
2004, that certain Sixth Amendment to Loan and Security Agreement dated as of May 31, 2004 that certain Seventh Amendment
to Loan and Security Agreement dated as of December 22, 2004 and that
certain Eighth Amendment to Loan and Security Agreement dated as of December 31,
2006 (the “Agreement”). The parties
desire to amend the Agreement in accordance with the terms of this Amendment.


 


NOW, THEREFORE, the
parties agree as follows:


 


1.             The following defined terms in Section 1.1 of the
Agreement hereby are added, amended or restated as follows:


 


“FX
Sublimit” means a sublimit for FX Contracts under the Revolving Line not to
exceed Five Hundred
Thousand Dollars ($500,000).


 


“Letter
of Credit” means a commercial or standby letter of credit or similar
undertaking issued by Bank
at Borrower’s request in accordance with Section 2.1(a)(iii).


 


“Letter
of Credit Sublimit” means a sublimit for Letters of Credit under the Revolving
Line not to exceed
One Million Dollars ($1,000,000).


 


“Revolving
Line” means a credit extension of up to Five Million Dollars
($5,000,000)(inclusive of any amounts outstanding under the Letter of Credit Sublimit and the FX
Sublimit).


 


“Revolving Maturity Date”
means December 31, 2009.


 


2.             Section 2.1(a) of the Agreement is hereby
amended and restated in its entirety to read as follows:


 


“(a)           Revolving
Advances.


 


(i)              Amount.  Subject to and upon the terms and conditions
of this Agreement (1) Borrower may request Advances in an aggregate
outstanding amount not to exceed the Revolving Line, less any amounts outstanding
under the Letter of Credit Sublimit and the FX Sublimit, and (2) amounts
borrowed pursuant to this Section 2.1(b) may be repaid and
reborrowed at any time prior to the Revolving Maturity Date, at which time all Advances under this
Section 2.1(b) shall be immediately due and payable. Borrower may
prepay any Advances without
penalty or premium.


 


(ii)             Form of Request.  Whenever Borrower desires an Advance,
Borrower will notify Bank by facsimile transmission or telephone no
later than 3:00 p.m. Pacific time (1:00 p.m. Pacific time for wire transfers), on
the Business Day that the Advance is to be made. Each such notification shall
be promptly confirmed by a Payment/Advance Form in substantially
the form of Exhibit B hereto. Bank is authorized to make Advances under
this Agreement, based upon instructions received from a Responsible Officer or
a designee of a Responsible
Officer, or without instructions if in Bank’s discretion such Advances are
necessary to meet Obligations


 

















 


which
have become due and remain unpaid. Bank shall be entitled to rely on any
telephonic notice given by a person who Bank reasonably believes to be a Responsible Officer or a
designee thereof, and Borrower shall indemnify
and hold Bank harmless for any damages or loss suffered by Bank as a result of
such reliance. Bank will credit the amount of Advances made under this Section 2.1(a) to
Borrower’s deposit account.


 


(iii)            Letter of Credit Sublimit.  Subject to the availability under the
Revolving Line, and
in reliance on the representations and warranties of Borrower set forth herein,
at any time and from time to time from the date hereof through the Business Day
immediately prior to the Revolving Maturity Date, Bank shall issue for the account of Borrower such Letters of
Credit as Borrower may request by delivering to Bank a duly executed letter of credit application on Bank’s standard
form; provided, however, that the outstanding and undrawn amounts under all such Letters of Credit (i) shall
not at any time exceed the Letter of Credit Sublimit, and (ii) shall be
deemed to constitute Advances for the
purpose of calculating availability under the Revolving Line. Any drawn but unreimbursed amounts under any Letters of Credit
shall be charged as Advances against the Revolving Line. All Letters of Credit
shall be in form and substance acceptable to Bank in its sole discretion and
shall be subject to the terms and conditions of Bank’s form application and
letter of credit agreement. Borrower will pay any standard issuance and
other fees that Bank notifies Borrower it will charge for issuing and
processing Letters of Credit.


 


(iv)            Foreign Exchange Sublimit.  Subject to and upon the terms and conditions
of this Agreement and any other agreement that Borrower may enter into with
the Bank in connection with foreign exchange transactions (“FX
Contracts”), Borrower may request Bank to enter into FX Contracts with Borrower
due not later than the Revolving Maturity Date. Borrower shall pay any
standard issuance and other fees that Bank notifies Borrower will be charged for issuing and
processing FX Contracts for Borrower. The FX Amount shall at all times be equal to or less than the FX Sublimit.
The “FX Amount” shall equal the amount determined by multiplying (i) the aggregate amount, in
United States Dollars, of FX Contracts between Borrower and Bank remaining
outstanding as of any date of determination by (ii) the applicable Foreign
Exchange Reserve Percentage as of such date.
The “Foreign Exchange Reserve Percentage” shall be a percentage as determined
by Bank, in its sole discretion from time to time. The initial Foreign
Exchange Reserve Percentage shall be ten percent (10%).


 


(v)            Collateralization of Obligations Extending Beyond
Maturity.  If Borrower has

not secured to Bank’s satisfaction
its obligations with respect to any Letters of Credit or FX Contracts by the Revolving
Maturity Date, then, effective as of such date, the balance in any deposit
accounts held by Bank and the certificates
of deposit or time deposit accounts issued by Bank in Borrower’s name (and any
interest paid thereon or proceeds thereof, including any amounts payable upon
the maturity or liquidation of such certificates or accounts), shall
automatically secure such obligations to the extent of the then continuing or
outstanding and undrawn Letters of Credit
or FX Contracts. Borrower authorizes Bank to hold such balances in pledge and
to decline to honor any drafts thereon
or any requests by Borrower or any other Person to pay or otherwise transfer
any part of such balances for so long as the Letters of Credit or FX
Contracts are outstanding or continue.”


 


3.             Section 2.5(c) of the Agreement is hereby
amended and restated in its entirety to read as follows:


 


“(c)         Non-Usage
Fee.  In addition to other amounts
due or to become due, Borrower shall

Bank a fee equal to one eighth of one
percent (0.125%) of the difference between the Revolving Line and the average daily balance outstanding under the
Revolving Line during the term hereof, paid quarterly in arrears, which shall
be nonrefundable.”


 


4.             Section 6.3
of the Agreement is hereby amended and restated in its entirety to read as
follows:


 


“6.3         Financial
Statements, Reports, Certificates. 
Borrower shall deliver the following to

Bank: (a) as soon as available,
but in any event within forty five (45) days after the end of each fiscal
quarter, a company prepared
consolidated balance sheet, income, and cash flow statement covering Borrower’s
consolidated operations during such period, prepared in accordance with
GAAP, consistently applied, in a form acceptable to Bank and certified by a
Responsible Officer; (b) as soon as available, but in any event within
ninety (90) days after the end of Borrower’s
fiscal year, audited consolidated financial statements of Borrower prepared in
accordance with GAAP, consistently
applied, together with an unqualified opinion on such financial statements of
an independent certified public
accounting firm reasonably acceptable to Bank; (c) if applicable, copies
of all statements, reports and notices sent or made available generally
by Borrower to its security holders or to any holders


 

















 


of
Subordinated Debt and all reports on Forms 10-K and 10-Q filed with the
Securities and Exchange Commission; (d) promptly upon receipt of notice
thereof, a report of any legal actions pending or threatened against Borrower
or any Subsidiary that could result in damages or costs to Borrower or any
Subsidiary of Fifty Thousand Dollars ($50,000) or more; (e) such budgets,
sales projections, operating plans or other financial information as Bank may
reasonably request from time to time generally prepared by Borrower in the
ordinary course of business, including but not limited to Borrower’s
annual business plan (including operating budget) no later than January 31
of each calendar
year; and (f) within forty five (45) days of the last day of each fiscal
quarter, a report signed by Borrower, in form
reasonably acceptable to Bank, listing any applications or registrations that
Borrower has made or filed in respect
of any Patents, Copyrights or Trademarks and the status of any outstanding
applications or registrations, as well as any material change in Borrower’s
intellectual property, including but not limited to any subsequent ownership
right of Borrower in or to any Trademark, Patent or Copyright not specified in Exhibits
A, B, and C of the Intellectual Property Security Agreement delivered to
Bank by Borrower in connection with this Agreement.


 


Borrower
shall deliver to Bank with the quarterly financial statements a Compliance
Certificate signed by a Responsible
Officer in substantially the form of Exhibit D hereto.


 


Bank
shall have a right from time to time hereafter to appraise Collateral at
Borrower’s expense, provided that such audits will be conducted no more often
than once per year unless an Event of Default has occurred and is continuing.”


 


5.               Section 6.8
of the Agreement is hereby amended and restated in its entirety to read as
follows:


 


“6.8         Liquidity
Ratio.  Borrower shall at all times maintain,
measured as of the last day of each

calendar quarter, a ratio of (a) the sum of (i) Cash, plus, (ii) Net
Accounts Receivable to (b) all Indebtedness (including without limitation any Contingent Obligations) owing from
Borrower to Bank (including Letters of Credit, except to the extent
cash-secured), of at least 1.75 to 1.00.”


 


6.               Section 2(a) of the LIBOR Addendum
attached hereto as Exhibit C is hereby amended and restated in its
entirety to read as follows


 


“(a)         A rate equal to one and one quarter
percent (1.25%) above Bank’s LIBOR, (the “LIBOR

Option Advance”), which LIBOR Option Advance shall be in effect during the
relevant LIBOR Period; or”


 


7.               Exhibit D
to the Agreement is hereby replaced with Exhibit D attached hereto.


 


8.               No course of dealing on the part of Bank or its
officers, nor any failure or delay in the exercise of any right by Bank, shall
operate as a waiver thereof, and any single or partial exercise of any such
right shall not preclude any later exercise of any such right. Bank’s failure at any time to require strict
performance by Borrower of any provision
shall not affect any right of Bank thereafter to demand strict compliance and
performance. Any suspension or waiver of a right must be in writing
signed by an officer of Bank.


 


9.               Unless otherwise defined, all initially
capitalized terms in this Amendment shall be as defined in the
Agreement. The Agreement, as amended
hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and
confirmed in all respects. Except as expressly set forth herein, the execution,
delivery, and performance of this Amendment shall not operate as a waiver of,
or as an amendment of, any right, power, or remedy of Bank under the Agreement,
as in effect prior to the date hereof.


 


10.             Borrower represents and warrants that the
Representations and Warranties contained in the Agreement are true and correct as of the date of this Amendment, and
that no Event of Default has occurred and is continuing.


 


11.             As a condition to the effectiveness
of this Amendment, Bank shall have received, in form and

substance satisfactory to Bank, the following:


 


(a)             this
Amendment, duly executed by Borrower;


 

















 


(b)             a Certificate of the Secretary of Borrower with respect
to incumbency and resolutions
authorizing the execution and delivery of this Amendment;


 


(c)             a commitment fee in the amount of Six Thousand Two
Hundred Fifty Dollars ($6,250),
which may be debited from any of Borrower’s accounts;


 


(d)             a
signed Acknowledgement in the form attached hereto as Annex A;


 


(e)             all reasonable Bank Expenses incurred through the date
of this Amendment, which
may be debited from any of Borrower’s accounts; and


 


(f)             such other documents, and
completion of such other matters, as Bank may reasonably deem necessary or
appropriate.


 


12.            This Amendment may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one instrument.


 


 


IN WITNESS WHEREOF, the
undersigned have executed this Amendment as of the first date above written.


 


	
   

  	
  HIRERIGHT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Jeffrey A. Wahba

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
  COMERICA BANK,
  successor by merger to

  COMERICA BANK-CALIFORNIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Wayne Liao

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CBO