EXHIBIT 10.38
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of December 19, 2001,
by and between Inktomi Corporation (the "Borrower") and Silicon Valley Bank
("Bank").
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, an Amended and Restated Loan and Security Agreement, dated February
16, 2001, as may be amended from time to time, (the "Loan Agreement"). The Loan
Agreement provided for, among other things, a Committed Letter of Credit Line in
the original principal amount of Seven Million Five Hundred Thousand Dollars
($7,500,000) and a Committed Equipment Line in the original principal amount of
Seven Million Five Hundred Thousand Dollars ($7,500,000). Defined terms used but
not otherwise defined herein shall have the same meanings as in the Loan
Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by the Collateral as described in the Loan Agreement and Intellectual
Property Security Agreement.
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment 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 Loan Agreement.
1. The following defined terms under Section 1.1 entitled
"Definitions" are amended and/or added to read as follows:
"Cash Management Services" are defined in Section 2.1.4.
"Committed Revolving Line' is an Advance of up to $12,500,000.
"Letter of Credit" means a letter of credit or similar
undertaking issued by Bank pursuant to Section 2.1.3.
"Revolving Maturity Date" is December 19, 2002.
2. Any and all references to "Committed Letter of Credit Line",
"Letter of Credit Facility", "Letter of Credit Maturity Date"
are hereby deleted in their entirety.
3. Section 2.1.1 is hereby deleted in its entirety and replaced
with the following:
2.1.1 Revolving Advances.
(a) Bank will make Advances not exceeding the Committed
Revolving Line, minus (i) the amount of all outstanding
Letters of Credit (including drawn but unreimbursed Letters of
Credit), minus (ii) the Cash Management Services Sublimit.
Amounts borrowed under this Section may be repaid and
reborrowed during the term of this Agreement.
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(b) To obtain an Advance, Borrower must notify Bank by
facsimile or telephone by 12:00 p.m. Pacific time on the
Business Day the Advance is to be made. Borrower must promptly
confirm the notification by delivering to Bank the
Payment/Advance Form attached as Exhibit B. Bank will credit
Advances to Borrower's deposit account. Bank may make Advances
under this Agreement based on instructions from a Responsible
Officer or his or her designee or without instructions if the
Advances are necessary to meet Obligations which have become
due. Bank may rely on any telephone notice given by a person
whom Bank believes is a Responsible Officer or designee.
Borrower will indemnify Bank for any loss Bank suffers due to
such reliance.
(c) The Committed Revolving Line terminates on the
Revolving Maturity Date, when all Advances are immediately
payable.
(d) Bank's obligation to lend the undisbursed portion of
the Obligations will terminate if, in Bank's sole discretion,
there has been a material adverse change in the general
affairs, management, results of operation, condition
(financial or otherwise) or the prospect of repayment of the
Obligations, or there has been any material adverse deviation
by Borrower from the most recent business plan of Borrower
presented to and accepted by Bank prior to the execution of
this Agreement.
4. The following Sections are hereby incorporated:
2.1.3 Letters of Credit Sublimit.
Bank will issue or have issued Letters of Credit for
Borrower's account not exceeding (i) the Committed Revolving
Line minus (ii) the outstanding principal balance of the
Advances minus the Cash Management Services Sublimit; however,
the face amount of outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit) may not exceed
$12,500,000. Each Letter of Credit will have an expiry date of
no later than 180 days after the Revolving Maturity Date, but
Borrower's reimbursement obligation will be secured by cash on
terms acceptable to Bank at any time after the Revolving
Maturity Date if the term of this Agreement is not extended by
Bank. Borrower agrees to execute any further documentation in
connection with the Letters of Credit as Bank may reasonably
request.
2.1.4 Cash Management Services Sublimit.
Borrower may use up to $12,500,000 for Bank's Cash
Management Services, which may include merchant services,
direct deposit of payroll, business credit card, and check
cashing services identified in various cash management
services agreements related to such services (the "Cash
Management Services"). All amounts Bank pays for any Cash
Management Services will be treated as Advances under the
Committed Revolving Line.
5. Section 2.2 entitled "Overadvances" is hereby amended in its
entirety to read as follows:
If Borrower's Obligations under Section 2.1.1, 2.1.3 and
2.1.4 exceed the Committed Revolving Line, Borrower must
immediately pay Bank the excess. At no such time shall
Borrower's Obligations under Section 2.1.3 and 2.1.4 exceed
the Committed Revolving Line.
6. Section 6.3 entitled "Financial Statements, Reports,
Certificates" is amended in its entirety to read as follows:
(a) Borrower will deliver to Bank: (i) as soon as available,
but no later than 30 days after the last day of each month, a
company prepared consolidated cash balance statement covering
Borrower's consolidated bank and brokerage statement during
the period certified by a Responsible Officer and in a form
acceptable to Bank; (ii) as soon as available, but no later
than 120 days after the last day of Borrower's fiscal year,
audited consolidated financial statements prepared under GAAP,
consistently applied, together with an unqualified opinion on
the financial statements from an independent certified public
accounting firm reasonably acceptable to Bank; (iii) within 10
days of filing, copies of all statements, reports and notices
made available to Borrower's security holders or to any
holders of Subordinated Debt and all reports on Form 10-K,
10-Q and 8-K filed with the Securities and Exchange
Commission; (iv) if the information is not available through
public records, a prompt 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
$1,000,000 or more; (v) budgets, sales projections, operating
plans or other financial information Bank reasonably requests;
and (vi) prompt notice of any material change in the
composition of the Intellectual Property, including any
subsequent ownership right of Borrower in or to any Copyright,
Patent or Trademark not shown in any intellectual property
security agreement between Borrower and Bank or knowledge of
an event that materially adversely affects the value of the
Intellectual Property.
(b) Within 30 days after the last day of each month, Borrower
will deliver to Bank with the monthly cash balance statements
a Compliance Certificate signed by a Responsible Officer in
the form of Exhibit D.
(c) Allow Bank to audit Borrower's Collateral at Borrower's
expense. Such audits will be conducted at such times as an
Event of Default has occurred and is continuing.
7. The first sentence of the Section 6.8 entitled "Minimum Cash
Balance" is hereby amended to read as follows:
Borrower shall maintain, on a monthly basis, a balance of
unrestricted cash, unrestricted short term cash equivalents
and unrestricted short term investments as defined by GAAP in
an amount of not less than the sum of (a) 3.5 (three and one
half) times the Commitment Revolving Line, plus (b) any
Additional Required Cash Balance.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that, as of the date hereof, it has no defenses against the
obligations to pay any amounts under the Indebtedness.
6. PAYMENT OF LOAN FEE. Borrower shall pay Bank, no later than January 15, 2002,
a fee in the amount of Eighty Seven Thousand Five Hundred and 00/100 Dollars
($87,500.00) ("Loan Fee") plus all out-of-pocket expenses.
7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing below)
understands and agrees that in modifying the existing Indebtedness, Bank 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. Bank's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Bank 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 Bank and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by Bank in writing. No maker, endorser,
or guarantor will be released by virtue of this Loan Modification Agreement. The
terms of this paragraph apply not only to this Loan Modification Agreement, but
also to all subsequent loan modification agreements.
8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first written
above.
BORROWER: BANK:
INKTOMI CORPORATION SILICON VALLEY BANK
By:/s/ Xxxxx Xxxxxxxx By:/s/ Xxxxxxx Xxxxxxxx
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Name: Name:
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Title: Title:
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