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Exhibit 10.8
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of September 11, 1996,
by and between GeoTel Communications Corporation ("Borrower") whose address is
00 Xxxxxx Xxxx, Xxxxxxxxx, XX 00000 and Silicon Valley Bank, a
California-chartered bank ("Lender"), with its principal place of business at
0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000 and with a loan production office
located at Wellesley Office Park, 00 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX
00000, doing business under the name "Silicon Valley East".
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Lender, Borrower is indebted to Lender pursuant to, among
other documents, a Promissory Note, dated May 18, 1994 in the original principal
amount of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the "Term Note
1"), a Promissory Note, dated May 1, 1995, in the original principal amount of
Six Hundred Thousand and 00/100 Dollars ($600,000.00 (the "Term Note 2"), and a
Promissory Note, dated March 1, 1995 in the original principal amount of Two
Hundred Fourteen Thousand Seven Hundred Eighty Two and 53/100 Dollars
($214,782.53) (the "Term Note 3"). The Term Note 1, Term Note 2 and Term Note 3
shall be referred to collectively herein as the Notes. Notwithstanding anything
to the contrary contained in the Notes, the Notes, together with other
promissory notes from Borrower to Lender, shall now be governed by the terms and
conditions of the Letter Agreement, dated September 11, 1996, between Borrower
and Lender, as such agreement may be amended from time to time (the "Loan
Agreement"). Such Loan Agreement shall supersede any and all existing letter
agreements between Borrower and Lender. Capitalized terms used but not otherwise
defined herein shall have the same meaning as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL: Repayment of the Indebtedness is secured by a
Commercial Security Agreement, dated May 18, 1994, and Collateral Assignment,
Patent Mortgage and Security Agreement dated May 18, 1994.
Hereinafter, the above-described security documents, together with all other
documents securing payment of the Indebtedness shall be referred to as the
"Security Documents". Hereinafter, the Security Documents, together with all
other documents evidencing or securing the Indebtedness shall be referred to as
the "Existing Loan Documents."
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Notes.
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1. The Notes are hereby amended to provide that Borrower now has the
option to adjust the interest rate on the unpaid principal
balance of the Notes, to either a variable rate or a fixed rate,
as described-below:
A rate equal to the Index (as defined therein), resulting in an
initial rate of 8.250% per annum (the "Variable Rate") or a fixed
rate of either (i) a three (3) year Treasury Yield Percentage
plus 300 basis points or (ii) the LIBOR Rate plus 250 basis
points.
For purposes of this Agreement:
"Treasury Yield Percentage" shall be defined as the most recent
weekly average yield on actively traded U.S. Treasury obligations
as determined by reference to the week ending figures published
in the most recent Federal Reserve Statistical Release which
shall become available at least two business days prior to the
date as of which such yield is to be
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determined, or if a Statistical Release is not then published, the
arithmetic average (rounded to the nearest .01%) of the per annum yields to
maturity for each business day during the week ending at least two business
days prior to the date such determination is made, of all issues of
actively traded marketable United States Treasury fixed interest rate
securities with a constant maturity equal to, or not more than 30 days
longer or 30 days shorter than the average life of the payments of
principal and interest that are avoided by any prepayment (excluding all
such securities which can be surrendered at the option of the holder at the
face value of payment of any Federal estate tax, or which provide for tax
benefits to the holder).
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) equal to (i) the LIBOR Base Rate (for the Interest
Period) divided by (ii) 1 minus the Reserve Requirement for such Interest
Period.
"LIBOR Base Rate" means the rate of interest per annum determined by Lender
to be the per annum rate of interest as which deposits in United States
Dollars are offered to Lender in the London interbank market in which
Lender customarily participates at 11:00 A.M. (local time in such interbank
market) two (2) business days before the end of the Draw Period.
"Interest Period" means either a thirty, sixty or ninety day LIBOR Base
Rate, as Borrower may elect.
"Reserve Requirement" means the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required
to be maintained during such Interest Period under Regulation D against
"Eurocurrency liabilities" (as such term is used in Regulation D) by member
banks of the Federal Reserve System. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by Lender by reason of any Regulatory Change
against (i) any category of liabilities which includes deposits by
reference to which the LIBOR Rate is to be determined as provided in the
definition of "LIBOR Base Rate" or (ii) any category of extensions of
credit or other assets which include Loans.
"Regulatory Change" means, with respect to Lender, any change on or after
the date of this Note in United States federal, state or foreign laws or
regulations, including Regulation D, or the adoption or making on or after
such date of any interpretations, directives or requests applying to a
class of lenders including Lender of or under any United States federal or
state, or any foreign, laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
2. The following paragraphs are hereby added:
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject
to refund upon early payment (whether voluntary or as a result of default),
except as otherwise required by law. During such time as the Variable Rate
is in effect, Borrower may pay without penalty all or a portion of the
amount owed earlier than it is due. Early payments will not, unless agreed
to by Lender in writing, relieve Borrower of Borrower's obligation to
continue to make payments of accrued unpaid interest. Rather, they will
reduce the principal balance due. Notwithstanding any other provisions of
this Note, in the event Borrower elects the fixed rate option, the
following pre-payment penalty shall apply:
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"Prepayment Penalty" means with respect to prepayment of all or any portion
of the Obligations which are subject to a fixed rate of interest (the
"Fixed Obligations"), a fee equal to the greater of (i) zero or (ii) the
Xxxx to Market Adjustment. "Xxxx to Market Adjustment" means the amount,
calculated on the Prepayment Date, equal to the difference between (a) the
principal amount of the Fixed Obligations or portion thereof to be prepaid
as of such Prepayment Date, less (b) the Xxxx to Market Value of the Fixed
Obligations or portion of thereof to be prepaid on such Prepayment Date.
"Xxxx to Market Value" means the amount calculated on any Prepayment Date,
equal to the sum of the present values of each prospective payment of
principal and interest which, without such full or partial prepayment,
could otherwise have been received by Lender over the remaining contractual
life of the Fixed Obligations to be prepaid if Lender had instead invested
the Fixed Obligations proceeds on the Closing Date of such Fixed
Obligations at the Initial Blended Money Market Funds Rate. The individual
discount rate used to evaluate each prospective payment of interest or
principal shall be the Current Blended Money Market Funds Rate for the
maturity matching that of each specific payment of principal or interest.
"Current Blended Money Market Funds Rate means that zero-coupon rate,
calculated on the applicable Prepayment Date, which would be attainable by
Lender if it borrowed funds on such Prepayment Date in a maturity matching
a specific principal or interest payment date. Such funds would be borrowed
in one or more wholesale funding markets available to Lender, including
negotiable certificates of deposit, Federal Funds or others. A separate
Current Blended Money Market Funds Rate will be calculated for each
principal repayment or interest payment date. The calculation of the
Current Blended Money Market Funds Rate shall be at the sole discretion of
Lender. "Initial Blended Money Market Funds Rate" means that borrowing
rate, calculated on the funding date with respect to any Fixed Obligation
and including costs incurred by Lender for FDIC insurance, reserve
requirements, and other such explicit or implicit costs levied upon Lender
by any regulatory agency which would be attainable by Lender had it
borrowed funds with an interest payment frequency and principal repayment
schedule matching that of such Obligation. Such funds would be borrowed in
one or more wholesale funding markets available to Lender, including
negotiable certificates of deposit, Federal Funds or others. Borrower
acknowledges that Lender may not actually fund the Obligation with any such
specific matched set or mix of instruments. The calculation of the Initial
Blended Money Market Funds Rate shall be at the sole discretion of Lender.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower agrees that, as of this date, it has no
defenses against the obligations to pay any amounts under the Indebtedness.
6. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Indebtedness, Lender is relying upon Borrower's representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing Loan Documents remain unchanged and in full force and effect.
Lender's agreement to modifications to the existing Indebtedness pursuant to
this Loan Modification Agreement in no way shall obligate Lender to make any
future modifications to the Indebtedness. Nothing in this Loan Modification
Agreement shall constitute a satisfaction of the Indebtedness. It is the
intention of Lender and Borrower to retain as liable parties all makers and
endorsers of Existing Loan Documents, unless the party is expressly released by
Lender in writing. No maker, endorser, or guarantor will be released by virtue
of this
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Loan Modification Agreement. The terms of this Paragraph apply not only to this
Loan Modification Agreement, but also to all subsequent loan modification
agreements.
7. JURISDICTION/VENUE. Borrower accepts for itself and in connection with its
properties, unconditionally, the non-exclusive jurisdiction of any state or
federal court of competent jurisdiction in the Commonwealth of Massachusetts in
any action, suit, or proceeding of any kind against it which arises out of or by
reason of this Loan Modification Agreement; provided, however, that if for any
reason Lender cannot avail itself of the courts of the Commonwealth of
Massachusetts, then venue shall lie in Santa Xxxxx County, California.
8. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Lender (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Lender in California).
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: LENDER:
GEOTEL COMMUNICATIONS CORPORATION SILICON VALLEY BANK, DOING BUSINESS AS
SILICON VALLEY EAST
By: /s/ XXXXXXX X. XXXXX By:
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Name: XXXXXXX X. XXXXX Name:
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Title: VICE PRESIDENT AND CFO Title:
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SILICON VALLEY BANK
By:
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Name:
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Title:
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(Signed at Santa Clara, CA)
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