Document:

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 or
continue credit to Borrower as described below, and Bank has agreed to provide
such 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 Borrower
hereby agree as follows:

 

ARTICLE I

CREDIT TERMS

 

SECTION 1.1.                               LINE
OF CREDIT.

 

(a)              Line of Credit.  Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time up
to and including July 1, 2003, not to exceed at any time the aggregate
principal 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’s
working capital requirements.  Borrower’s
obligation to repay advances under the Line of Credit shall be evidenced by a
promissory note substantially in the form of Exhibit A attached hereto (“Line
of Credit Note”), all terms of which are incorporated herein by this reference.

 

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

 

SECTION 1.2.                               INTEREST/FEES.

 

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

 

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

 

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

 

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

 

1

 

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

 

SECTION 1.3.                               COLLATERAL.

 

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

 

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

 

All of the foregoing shall be evidenced by and subject to the terms of
such security agreements, financing statements, deeds of trust and other
documents, as Bank shall reasonably require, all in form and substance
satisfactory to Bank.  Borrower shall
reimburse Bank immediately upon demand for all costs and expenses incurred by
Bank in connection with any of the foregoing security, including without
limitation, filing and recording fees and costs of appraisals, audits and title
insurance.

 

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

 

ARTICLE II

REPRESENTATIONS
AND WARRANTIES

 

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

 

SECTION 2.1.                               LEGAL
STATUS.  Borrower is a corporation, duly
organized and existing and in good standing under the laws of the State of
Oregon, and is qualified or licensed to do business (and is in good standing as
a foreign corporation, if applicable) in all jurisdictions in which such
qualification or licensing is required or in which the failure to so qualify or
to be so licensed could have a material adverse effect on Borrower.

 

SECTION 2.2.                               AUTHORIZATION
AND VALIDITY.  This Agreement and each
promissory note, contract, instrument and other document required hereby or at
any time hereafter delivered to Bank in connection herewith (collectively, the “Loan
Documents”) have been duly authorized, and upon their execution and delivery in
accordance with the provisions hereof will constitute legal, valid and binding
agreements and obligations of Borrower or the party which executes the same,
enforceable in accordance with their respective terms.

 

SECTION 2.3.                               NO
VIOLATION.  The execution, delivery and
performance by Borrower of each of the Loan Documents do not violate any provision
of any law or regulation, or contravene any provision of the Articles of
Incorporation or By-Laws of Borrower, or result in any breach of or default
under any contract, obligation, indenture or other instrument to which Borrower
is a party or by which Borrower may be bound.

 

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

 

2

 

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

 

SECTION 2.5.                               CORRECTNESS
OF FINANCIAL STATEMENT.  The financial
statement of Borrower dated March 31, 2002, a true copy of which has been
delivered by Borrower to Bank prior to the date hereof, (a) is complete
and correct and presents fairly the financial condition of Borrower, (b) discloses
all liabilities of Borrower that are required to be reflected or reserved
against under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) has been prepared in accordance
with generally accepted accounting principles consistently applied.  Since the date of such financial statement
there has been no material adverse change in the financial condition of
Borrower, nor has Borrower mortgaged, pledged, granted a security interest in
or otherwise encumbered any of its assets or properties except in favor of Bank
or as otherwise permitted by Bank in writing.

 

SECTION 2.6.                               INCOME
TAX RETURNS.  Borrower has no knowledge
of any pending assessments or adjustments of its income tax payable with
respect to any year.

 

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

 

SECTION 2.8.                               PERMITS,
FRANCHISES.  Borrower possesses, and will
hereafter possess, all permits, consents, approvals, franchises and licenses
required and rights to all trademarks, trade names, patents, and fictitious
names, if any, necessary to enable it to conduct the business in which it is
now engaged in compliance with applicable law.

 

SECTION 2.9.                               ERISA.  Borrower is in compliance in all material
respects with all applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended or recodified from time to time (“ERISA”);
Borrower has not violated any provision of any defined employee pension benefit
plan (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 with
respect to any Plan initiated by Borrower; Borrower has met its minimum funding
requirements under ERISA with respect to each Plan; and each Plan will be able
to fulfill its benefit obligations as they come due in accordance with the Plan
documents and under generally accepted accounting principles.

 

SECTION 2.10.                         OTHER
OBLIGATIONS.  Borrower is not in default
on any obligation for borrowed money, any purchase money obligation or any
other material lease, commitment, contract, instrument or obligation.

 

SECTION 2.11.                         ENVIRONMENTAL
MATTERS.  Except as disclosed by Borrower
to Bank in writing prior to the date hereof, Borrower is in compliance in all
material respects with all applicable federal or state environmental, hazardous
waste, health and safety statutes, and any rules or regulations adopted
pursuant thereto, which govern or affect any of Borrower’s operations and/or
properties, including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act of 1986, the Federal Resource Conservation and Recovery Act
of 1976, and the Federal Toxic Substances Control Act, as any of the same may
be amended, modified or supplemented from time to time.  None of the operations of Borrower is the
subject of any federal or state investigation evaluating whether any remedial
action involving a material expenditure is needed to respond to a release of
any toxic or hazardous waste or substance into the environment.  Borrower has no material contingent liability
in connection with any release of any toxic or hazardous waste or substance
into the environment.

 

3

 

ARTICLE III

CONDITIONS

 

SECTION 3.1.                               CONDITIONS
OF INITIAL EXTENSION OF CREDIT.  The
obligation of Bank to extend any credit contemplated by this Agreement is
subject to the fulfillment to Bank’s satisfaction of all of the following conditions:

 

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

 

(b)             Documentation.  Bank shall have received, in form and
substance 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 adverse
change, as determined by Bank, in the financial condition or business of
Borrower or any guarantor hereunder, nor any material decline, as determined by
Bank, in the market value of any collateral required hereunder or a substantial
or material portion of the assets of Borrower or any such guarantor.

 

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

 

SECTION 3.2.                               CONDITIONS
OF EACH EXTENSION OF CREDIT.  The
obligation of Bank to make each extension of credit requested by Borrower
hereunder shall be subject to the fulfillment to Bank’s satisfaction of each of
the following conditions:

 

(a)              Compliance.  The representations and warranties contained
herein and in each of the other Loan Documents shall be true on and as of the
date of the signing of this Agreement and on the date of each extension of
credit by Bank pursuant hereto, with the same effect as though such
representations and warranties had been made on and as of each such date, and
on 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 both
would constitute such an Event of Default, shall have occurred and be
continuing or shall exist.

 

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

 

ARTICLE IV

AFFIRMATIVE
COVENANTS

 

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

 

4

 

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

 

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

 

SECTION 4.2.                               ACCOUNTING
RECORDS.  Maintain adequate books and
records in accordance with generally accepted accounting principles
consistently applied, and permit any representative of Bank, at any reasonable
time, to inspect, audit and examine such books and records, to make copies of
the same, and to inspect the properties of Borrower.

 

SECTION 4.3.                               FINANCIAL
STATEMENTS.  Provide to Bank all of the
following, in form and detail satisfactory to Bank:

 

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

 

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

 

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

 

SECTION 4.4.                               COMPLIANCE.  Preserve and maintain all licenses, permits,
governmental approvals, rights, privileges and franchises necessary for the
conduct of its business; and comply with the provisions of all documents
pursuant to which Borrower is organized and/or which govern Borrower’s
continued existence and with the requirements of all laws, rules, regulations
and orders of any governmental authority applicable to Borrower and/or its
business.

 

SECTION 4.5.                               INSURANCE.  Maintain and keep in force insurance of the
types and in amounts customarily carried in lines of business similar to that
of Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers’ compensation, with all such
insurance carried with companies and in amounts satisfactory to Bank, and
deliver to Bank from time to time at Bank’s request schedules setting forth all
insurance then in effect.

 

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

 

SECTION 4.7.                               TAXES
AND OTHER LIABILITIES.  Pay and discharge
when due any and all indebtedness, obligations, assessments and taxes, both
real or personal, including without limitation federal and state income taxes
and state and local property taxes and assessments, except such (a) as
Borrower may in good faith contest or as to which a bona fide dispute may
arise, and (b) for which Borrower has made provision, to Bank’s
satisfaction, for eventual payment thereof in the event Borrower is obligated
to make such payment.

 

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

 

SECTION 4.9.                               FINANCIAL
CONDITION.  Maintain Borrower’s financial
condition as follows using generally accepted accounting principles
consistently applied and used consistently with prior practices (except to the
extent modified by the definitions herein):

 

5

 

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

 

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

 

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

 

(d)             Net income after taxes not less than $1.00
for 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 loss
for fiscal quarter ended June 30, 2002 will exclude expenses related to
unamortized fees and a settlement with the former CEO.  The expenses shall not exceed $350,000.00 on
a 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 the
settlement and unamortized fees to be excluded form year to date net income for
the quarter ended September 30, 2002.

 

SECTION 4.10.                         NOTICE TO
BANK.  Promptly (but in no event more
than five (5) days after the occurrence of each such event or matter) give
written notice to Bank in reasonable detail of: 
(a) the occurrence of any Event of Default, or any condition, event
or act which with the giving of notice or the passage of time or both would
constitute an Event of Default; (b) any change in the name or the
organizational structure of Borrower; (c) the occurrence and nature of any
Reportable Event or Prohibited Transaction, each as defined in ERISA, or any
funding deficiency with respect to any Plan; or (d) any termination or
cancellation of any insurance policy which Borrower is required to maintain, or
any uninsured or partially uninsured loss through liability or property damage,
or through fire, theft or any other cause affecting Borrower’s property.

 

ARTICLE V

NEGATIVE
COVENANTS

 

Borrower further covenants that so long as
Bank remains committed to extend credit to Borrower pursuant hereto, or any
liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Bank under any of the Loan Documents remain outstanding, and until
payment in full of all obligations of Borrower subject hereto, Borrower will
not without Bank’s prior written consent:

 

SECTION 5.1.                               USE
OF FUNDS.  Use any of the proceeds of any
credit extended hereunder except for the purposes stated in Article I
hereof.

 

SECTION 5.2.                               OTHER
INDEBTEDNESS.  Create, incur, assume or
permit 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 liabilities
of Borrower to Bank, and (b) any other liabilities of Borrower existing as
of, and disclosed to Bank prior to, the date hereof, and (c) new capital leases or new purchase money
security interest financings in any fiscal year in excess of an aggregate of
$1,000,000.

 

6

 

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

 

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

 

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

 

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

 

SECTION 5.7.                               PLEDGE
OF ASSETS.  Mortgage, pledge, grant or
permit to exist a security interest in, or lien upon, all or any portion of
Borrower’s assets now owned or hereafter acquired, except any of the foregoing
in favor of Bank or which is existing as of, and disclosed to Bank in writing
prior to, the date hereof.

 

ARTICLE VI

EVENTS OF
DEFAULT

 

SECTION 6.1.                               The
occurrence of any of the following shall constitute an “Event of Default” under
this Agreement:

 

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

 

(b)             Any financial statement or certificate
furnished to Bank in connection with, or any representation or warranty made by
Borrower or any other party under this Agreement or any other Loan Document
shall prove to be incorrect, false or misleading in any material respect when
furnished or made.

 

(c)              Any default in the performance of or
compliance with any obligation, agreement or other provision contained herein
or 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 can
be cured, such default shall continue for a period of twenty (20) days from its
occurrence.

 

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

 

(e)              The filing of a notice of judgment lien
against Borrower or any guarantor hereunder; or the recording of any abstract
of judgment against Borrower or any guarantor hereunder in any county in which
Borrower or such guarantor has an interest in real property; or the service of
a notice of levy and/or of a writ of attachment or execution, or other like
process, against the assets of Borrower or any guarantor hereunder; or the
entry of a judgment against Borrower or any guarantor hereunder.

 

7

 

(f)                Borrower or any guarantor hereunder
shall become insolvent, or shall suffer or consent to or apply for the
appointment of a receiver, trustee, custodian or liquidator of itself or any of
its property, or shall generally fail to pay its debts as they become due, or
shall make a general assignment for the benefit of creditors; Borrower or any
guarantor hereunder shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement with creditors
or any other relief under the Bankruptcy Reform Act, Title 11 of the United
States Code, as amended or recodified from time to time (“Bankruptcy Code”), or
under any state or federal law granting relief to debtors, whether now or
hereafter in effect; or any involuntary petition or proceeding pursuant to the
Bankruptcy Code or any other applicable state or federal law relating to
bankruptcy, reorganization or other relief for debtors is filed or commenced
against Borrower or any guarantor hereunder, or Borrower or any such guarantor
shall file an answer admitting the jurisdiction of the court and the material
allegations of any involuntary petition; or Borrower or any such guarantor
shall be adjudicated a bankrupt, or an order for relief shall be entered
against Borrower or any such guarantor by any court of competent jurisdiction
under the Bankruptcy Code or any other applicable state or federal law relating
to bankruptcy, reorganization or other relief for debtors.

 

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

 

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

 

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

 

SECTION 6.2.                               REMEDIES.  Upon the occurrence of any Event of
Default:  (a) all indebtedness of
Borrower under each of the Loan Documents, any term thereof to the contrary
notwithstanding, shall at Bank’s option and without notice become immediately
due and payable without presentment, demand, protest or notice of dishonor, all
of 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 Documents
shall immediately cease and terminate; and (c) Bank shall have all rights,
powers and remedies available under each of the Loan Documents, or accorded by
law, including without limitation the right to resort to any or all security
for any credit subject hereto and to exercise any or all of the rights of a
beneficiary or secured party pursuant to applicable law.  All rights, powers and remedies of Bank may
be exercised at any time by Bank and from time to time after the occurrence of
an Event of Default, are cumulative and not exclusive, and shall be in addition
to any other rights, powers or remedies provided by law or equity.

 

ARTICLE VII

MISCELLANEOUS

 

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

 

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

 

8

 

	
  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 notice
to all other parties.  Each such notice,
request and demand shall be deemed given or made as follows:  (a) if sent by hand delivery, upon
delivery; (b) if sent by mail, upon the earlier of the date of receipt or
three (3) days after deposit in the U.S. mail, first class and postage
prepaid; and (c) if sent by telecopy, upon receipt.

 

SECTION 7.3.                               COSTS,
EXPENSES AND ATTORNEYS’ FEES.  Borrower
shall pay to Bank immediately upon demand the full amount of all payments,
advances, charges, costs and expenses, including reasonable attorneys’ fees (to
include outside counsel fees and all allocated costs of Bank’s in-house
counsel), expended or incurred by Bank in connection with (a) the
negotiation and preparation of this Agreement and the other Loan Documents,
Bank’s continued administration hereof and thereof, and the preparation of any
amendments and waivers hereto and thereto, (b) the enforcement of Bank’s
rights and/or the collection of any amounts which become due to Bank under any
of the Loan Documents, and (c) the prosecution or defense of any action in
any way related to any of the Loan Documents, including without limitation, any
action for declaratory relief, whether incurred at the trial or appellate
level, in an arbitration proceeding or otherwise, and including any of the
foregoing incurred in connection with any bankruptcy proceeding (including
without limitation, any adversary proceeding, contested matter or motion
brought by Bank or any other person) relating to any Borrower or any other
person or entity.

 

SECTION 7.4.                               SUCCESSORS,
ASSIGNMENT.  This Agreement shall be
binding 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’s
prior written consent.  Bank reserves the
right to sell, assign, transfer, negotiate or grant participations in all or
any part of, or any interest in, Bank’s rights and benefits under each of the
Loan Documents.  In connection therewith,
Bank may disclose all documents and information which Bank now has or may
hereafter acquire relating to any credit subject hereto, Borrower or its
business, any guarantor hereunder or the business of such guarantor, or any
collateral required hereunder.

 

SECTION 7.5.                               ENTIRE
AGREEMENT; AMENDMENT.  This Agreement and
the other Loan Documents constitute the entire agreement between Borrower and
Bank with respect to each credit subject hereto and supersede all prior
negotiations, communications, discussions and correspondence concerning the
subject matter hereof.  This Agreement
may be amended or modified only in writing signed by each party hereto.

 

SECTION 7.6.                               NO
THIRD PARTY BENEFICIARIES.  This
Agreement is made and entered into for the sole protection and benefit of the
parties hereto and their respective permitted successors and assigns, and no
other person or entity shall be a third party beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or 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 every
provision of this Agreement and each other of the Loan Documents.

 

SECTION 7.8.                               SEVERABILITY
OF PROVISIONS.  If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or any
remaining provisions of this Agreement.

 

9

 

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

 

SECTION 7.10.                         GOVERNING
LAW.  This Agreement shall be governed by
and construed in accordance with the laws of the State of Oregon.

 

SECTION 7.11.                         ARBITRATION.

 

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

 

(b)             Governing Rules.  Any arbitration proceeding will (i) proceed
in a location in Oregon selected by the American Arbitration Association (“AAA”);
(ii) be governed by the Federal Arbitration Act (Title 9 of the United
States Code), notwithstanding any conflicting choice of law provision in any of
the documents between the parties; and (iii) be conducted by the AAA, or
such other administrator as the parties shall mutually agree upon, in
accordance with the AAA’s commercial dispute resolution procedures, unless the
claim 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 in
accordance with the AAA’s optional procedures for large, complex commercial
disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to, as
applicable, as the “Rules”).  If there is
any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. 
Any party who fails or refuses to submit to arbitration following a
demand by any other party shall bear all costs and expenses incurred by such
other party in compelling arbitration of any dispute.  Nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. §91 or any similar applicable state law.

 

(c)              No
Waiver of Provisional Remedies, Self-Help and Foreclosure.  The arbitration requirement does not limit
the right of any party to (i) foreclose against real or personal property
collateral; (ii) exercise self-help remedies relating to collateral or
proceeds of collateral such as setoff or repossession; or (iii) obtain
provisional or ancillary remedies such as replevin, injunctive relief, attachment
or the appointment of a receiver, before during or after the pendency of any
arbitration proceeding.  This exclusion
does not constitute a waiver of the right or obligation of any party to submit
any dispute to arbitration or reference hereunder, including those arising from
the exercise of the actions detailed in sections (i), (ii) and (iii) of
this paragraph.

 

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

 

10

 

take such other action as the arbitrator deems necessary to the same
extent a judge could pursuant to the Federal Rules of Civil Procedure, the
Oregon Rules of Civil Procedure or other applicable law.  Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction.  The institution and maintenance of an action
for judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.

 

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

 

(f)                Class Proceedings and
Consolidations.  The resolution of
any dispute arising pursuant to the terms of this Agreement shall be determined
by a separate arbitration proceeding and such dispute shall not be consolidated
with other disputes or included in any class proceeding.

 

(g)             Payment Of Arbitration Costs And Fees.  The arbitrator shall award all costs and
expenses 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 any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA.  No arbitrator or other party to an
arbitration proceeding may disclose the existence, content or results thereof,
except for disclosures of information by a party required in the ordinary
course of its business or by applicable law or regulation.  If more than one agreement for arbitration by
or between the parties potentially applies to a dispute, the arbitration
provision most directly related to the Loan Documents or the subject matter of
the dispute shall control.  This
arbitration provision shall survive termination, amendment or expiration of any
of the Loan Documents or any relationship between the parties.

 

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

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed as of the day and year first written
above.

 

	
   

  	
  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:

  	
   

  	
   

  
							

 

11EXHIBIT 10.8

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS
FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of July 1,
2003, by and between Rentrak Corporation, an Oregon Corporation (“Borrower”),
and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

 

RECITALS

 

WHEREAS,
Borrower is currently indebted to Bank pursuant to the terms and conditions of
that certain Credit Agreement between Borrower and Bank dated as of July 15,
2002, as amended from time to time (“Credit Agreement”).

 

WHEREAS,
Bank and Borrower have agreed to certain changes in the terms and conditions
set forth in the Credit Agreement and have agreed to amend the Credit Agreement
to reflect said changes.

 

NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree that the Credit Agreement shall
be amended as follows:

 

1.                                       Section 4.9.
(b) is hereby deleted in its entirety, and the following substituted
therefor:

 

“(b)                           Tangible
Net Worth not at any time less than $15,000,000.00 determined at each fiscal
quarter end, with “Tangible Net Worth” defined as the aggregate of total
stockholders’ equity plus subordinated debt less any intangible assets.”

 

2.                                       Except
as specifically provided herein, all terms and conditions of the Credit
Agreement remain in full force and effect, without waiver or modification.  All terms defined in the Credit Agreement
shall have the same meaning when used in this Amendment.  This Amendment and the Credit Agreement shall
be read together, as one document.

 

3.                                       Borrower
hereby remakes all representations and warranties contained in the Credit
Agreement and reaffirms all covenants set forth therein.  Borrower further certifies that as of the
date of this Amendment there exists no Event of Default as defined in the
Credit Agreement, nor any condition, act or event which with the giving of
notice or the passage of time or both would constitute any such Event of
Default.

 

UNDER
OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK AFTER OCTOBER 3,
1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL,
FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER’S RESIDENCE MUST
BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE ENFORCEABLE.

 

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

 

	
   

  	
   

  	
  WELLS FARGO
  BANK,

  
	
  Rentrak
  Corporation

  	
   

  	
    NATIONAL
  ASSOCIATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Mark Thoenes

  	
   

  	
  By: 

  	
  /s Victoria Vohs

  	
   

  
	
   

  	
  Mark Thoenes,
  Chief Financial Officer

  	
   

  	
  Victoria Vohs,
  Vice President

  
							

 

1

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