EXHIBIT 10.16
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of July 8, 2002, by and
between iManage, Inc. (the "Borrower") and Silicon Valley Bank ("Bank").
1. DESCRIPTION OF EXISTING OBLIGATIONS: Among other Obligations which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, a Loan and Security Agreement, dated March 31, 1999, as may be
amended from time to time, (the "Loan Agreement"). The Loan Agreement provides
for, among other things, a Revolving Commitment in the original principal amount
of Five Million Dollars ($5,000,000) and an Equipment Commitment in the original
principal amount of One Million Dollars ($1,000,000). The Loan Agreement has
been modified pursuant to, among other documents, a Loan Modification Agreement
dated March 29, 2000, pursuant to which, among other things, the Revolving
Commitment was decreased to Three Million Dollars ($3,000,000) and a March 2000
Equipment Commitment in the original principal amount of Two Million Dollars
($2,000,000) was incorporated into the Loan Agreement. The Loan Agreement has
been further modified pursuant to, among other documents, a Loan Modification
Agreement dated September 25, 2000, pursuant to which, among other things, the
Revolving Commitment was increased to Four Million Dollars ($4,000,000).
Additionally, the Loan Agreement has been modified pursuant to, among other
documents, a Loan Modification Agreement dated December 26, 2001, pursuant to
which, among other things, a Committed Equipment 2 Line in the original
principal amount of One Million Dollars ($1,000,000) was incorporated into the
Loan Agreement. Defined terms used but not otherwise defined herein shall have
the same meanings as set forth in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the "Obligations."
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the Loan Agreement and an Intellectual Property
Security Agreement.
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Obligations shall be referred
to as the "Security Documents". Hereinafter, the Security Documents, together
with all other documents evidencing or securing the Obligations shall be
referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
A. Modification(s) to Loan Agreement.
1. Notwithstanding anything to the contrary contained in Section 7.6
entitled "Distributions", Bank will allow Borrower to repurchase
up to Three Million Dollars ($3,000,000) of its shares.
B. Waiver of Financial Covenant Default(s)
1. Bank hereby waives Borrower's existing default under the Loan
Agreement by virtue of Borrower's failure to comply with the Cash
Losses covenant as of quarter ended June 30, 2002. Bank's waiver
of Borrower's compliance of this covenant shall apply only to the
foregoing period. Accordingly, for the quarter ending September
30, 2002, Borrower shall be in compliance with this covenant.
2. Bank's agreement to waive the above-described default (1) in no
way shall be deemed an agreement by the Bank to waive Borrower's
compliance with the above-described covenant as of all other
dates and (2) shall not limit or impair the Bank's right to
demand strict performance of this covenant as of all other dates
and (3) shall not limit or impair the Bank's right to demand
strict performance of all other covenants as of any date.
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 the date hereof, it
has no defenses against paying any of the Obligations.
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6. PAYMENT OF LOAN FEE. Borrower shall pay Bank a fee in the amount of Five
Hundred and 00/100 Dollars ($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 Obligations, 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 Obligations pursuant to this Loan Modification Agreement in no
way shall obligate Bank to make any future modifications to the Obligations.
Nothing in this Loan Modification Agreement shall constitute a satisfaction of
the Obligations. 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. Unless expressly released herein, 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:
IMANAGE, INC. SILICON VALLEY BANK
By: By:
----------------------------- -----------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
-------------------------- --------------------------
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[SILICON VALLEY BANK LOGO]
SILICON VALLEY BANK
PRO FORMA INVOICE FOR LOAN CHARGES
BORROWER: IMANAGE, INC.
LOAN OFFICER: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
DATE: JULY 8, 2002
LOAN FEE $500.00
DOCUMENTATION FEE $250.00
TOTAL FEE DUE $750.00
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PLEASE INDICATE THE METHOD OF PAYMENT:
{ } A CHECK FOR THE TOTAL AMOUNT IS ATTACHED.
{ } DEBIT DDA # __________________ FOR THE TOTAL AMOUNT.
{ } LOAN PROCEEDS
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BORROWER (DATE)
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SILICON VALLEY BANK (DATE)
ACCOUNT OFFICER'S SIGNATURE
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