TiVo 2006 Annual Report Download - page 62

Table of Contents
For the fiscal year 2005, the principal source of cash generated from financing activities related to our borrowing under our line of credit with Silicon
Valley Bank and the issuance of common stock under our employee stock purchase plan. These transactions generated $4.5 million and $2.4 million,
respectively, for the year ended January 31, 2005. Additionally, $1.7 million was obtained from the issuance of common stock for stock options exercised and
$4.3 million was used as payment for the repayment at maturity of all of the remaining outstanding 7% convertible notes.
Financing Agreements
$100 Million Universal Shelf Registration Statement. We have an effective universal shelf registration statement on Form S-3 (No. 333-113719) on
file with the Securities and Exchange Commission under which we may issue up to $100,000,000 of securities, including debt securities, common stock,
preferred stock, and warrants. On September 5, 2006 we sold 8,264,463 shares of our common stock, par value $.001 per share, at $7.865 per share in an
underwritten public offering. The sale of the shares closed on September 11, 2006. The sale of the shares was registered pursuant to our $100 million
universal shelf registration statement on Form S-3 (File No. 333-113719). The net proceeds from this sale were approximately $64.5 million after deducting
our estimated offering expenses of $484,000. We intend to use the net proceeds from the sale of our common stock for general corporate purposes, which may
include: funding research, development, sales and marketing, increasing our working capital, reducing indebtedness, and capital expenditures. Pending the
application of the net proceeds, we have invested the net proceeds primarily in U.S. government securities and money market funds, as well as in investment-
grade, interest bearing securities. Depending upon market conditions, we may issue additional securities under this or future registration statements.
Revolving Line of Credit Facility with Citigroup.
On January 25, 2007, we entered into a credit agreement, together with a post-closing agreement and related security and other ancillary
agreements, with Citigroup Global Markets Realty Corp., as lender and agent. Citigroup, as lender, may syndicate its commitment under the credit agreement
to other lenders, subject to certain limitations. This credit facility replaces a line of credit with Silicon Valley Bank, which was in place from July 17, 2003
until it expired on September 28, 2006.
Under the terms of the credit agreement Citigroup will extend a revolving line of credit equal to the lesser of $50 million or amounts available
pursuant to a borrowing base calculation. As of January 31, 2007, we were able to borrow $50 million. We may request that an additional $50 million be
added to the revolving line of credit. The credit agreement requires us to use proceeds exclusively for working capital and general corporate purposes. As of
April 13, 2007 we had no amounts outstanding under this revolving line of credit.
Borrowings under the credit agreement are secured by a first-priority security interest on substantially all of the Company's current and future
assets (except for certain intellectual property held by our subsidiaries and certain other assets). Borrowings under the credit agreement will bear interest at a
rate equal to 1-month LIBOR for U.S. dollar deposits plus 4.0%, but during an event of default, the interest rate becomes 2.0% above the rate in effect
immediately before the event of default.
The credit agreement includes, among other terms and conditions, limitations on our ability to create, incur, assume or be liable for indebtedness
(other than certain types of permitted indebtedness); dispose of assets outside the ordinary course (subject to certain exceptions); acquire, merge or
consolidate with or into another person or entity (other than certain types of permitted acquisitions); create, incur or allow any lien on any of its property or
assign any right to receive income (except for certain permitted liens); make investments (other than certain types of investments); or pay dividends or make
distributions (each subject to certain exceptions). Our previous line of credit with Silicon Valley Bank contained restrictive covenants with generally similar
limitations. At January 31, 2007, we were in compliance with these covenants and had zero outstanding under the line of credit. The line of credit terminates
and any and all borrowings are due on January 25, 2010, but may be terminated earlier by us without penalty upon written notice and prompt repayment of all
amounts borrowed.
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