EXHIBIT 10.41
THIRD LOAN MODIFICATION AGREEMENT
This Third Loan Modification Agreement is entered into as of June 25,
2002, 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 Restate Loan and Security Agreement, dated
February 16, 2001, as amended by that certain Loan Modification Agreement, dated
as of September 30, 2001, that certain Loan Modification Agreement, dated as of
December 19, 2001 and as may be amended from time to time, (the "Loan
Agreement"). 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 added to read as follows:
"`Credit Extension' means each Advance, Equipment Advance,
Letter of Credit, Second Equipment Advance, or any other extension of
credit by Bank for the benefit of Borrower hereunder.
`Funding Date' is any date on which a Second Equipment Advance
is made to or on account of Borrower.
`Repayment Period' as to the Second Equipment Advances, is 36
months.
`Scheduled Payments' is defined in Section 2.1.5(c)
`Second Committed Equipment Line' means a credit
extension of up to Six Million Dollars ($6,000,000.00)
1
`Second Equipment Advance' has the meaning set forth in
Section 2.1.5.
`Second Equipment Availability End Date' means
December 20, 2002.
(2) The following Section 2.1.5 is hereby added
immediately following Section 2.1.4:
"2.1.5 Second Equipment Advances.
(a) Subject to and upon the terms and conditions of
this Agreement, at any time commencing on June 21, 2002 through the Second
Equipment Availability End Date, Bank agrees to make advances (each a
"Second Equipment Advance" and, collectively, the Second Equipment
Advances") not exceeding the Second Committed Equipment Line. To evidence
the Second Equipment Advance or Second Equipment Advances, Borrower shall
deliver to Bank, at the time of each Second Equipment Advance request, an
invoice for the Equipment to be purchased. The Second Equipment Advances
shall be used only to purchase or refinance Equipment acceptable to Bank,
purchased on or after ninety (90) days prior to June 21, 2002, and shall
not exceed one hundred percent (100%) of the invoice amount of such
equipment approved from time to time by Bank, excluding taxes, shipping,
warranty charges, freight discounts and installation expense, provided,
however, that software, taxes, shipping and other "soft cost", acceptable
to Bank, may constitute up to 25% of each Second Equipment Advance. Each
Second Equipment Advance shall be in an amount of no less than $500,000.
The maximum number of Second Equipment Advances may not exceed 10.
(b) To obtain a Second Equipment Advance, Borrower
must notify Bank (the notice is irrevocable) by facsimile no later than
12:00 noon. Pacific time two (2) Business Day before the Funding Date. The
notice in the form of Exhibit B (Payment/Advance Form) must be signed by a
Responsible Officer or designee and include a copy of the invoice for the
Equipment being financed.
(c) Borrower shall repay each Second Equipment Advance
in 36 equal monthly installments of principal plus accrued interest as of
the Payment Date. Each monthly payment for each Second Equipment Advance
(collectively, "Scheduled Payments") shall be due an payable on the
Payment Date following the Funding Date with respect to such Second
Equipment Advance and continuing thereafter during the Repayment Period on
each Payment Date. All unpaid principal and accrued interest is due and
payable in full on the last Payment Date with respect to such Second
Equipment Advance. Payments received after 12:00 noon Pacific time are
considered received at the opening of business on the next Business Day.
An Equipment Advance may only be prepaid in accordance with Section 2.1.5
(f) and 2.1.5 (g).
2
(d) Borrower will pay interest on the Payment Dates
at the per annum rate of interest set forth in Section 2.3 (a).
(e) At any time, provided no Event of Default has
occurred and is continuing, Borrower may prepay any Second Equipment
Advance by providing Bank with written notice two (2) days prior to any
such prepayment and immediately paying to Bank: (i) all outstanding
principal to the Second Equipment Advance being prepaid, (ii) all accrued
unpaid interest for the Second Equipment Advance being prepaid, to the
date of the prepayment, and (iii) all other sums, if any, that shall have
become due and payable with respect to the Second Equipment Advance being
prepaid.
(f) If the Second Equipment Advances are accelerated
following the occurrence of an Event of Default, then Borrower will
immediately pay to Bank (i) all outstanding principal with respect to all
Second Equipment Advances, (ii) all accrued unpaid interest with respect
to all Second Equipment Advances, including the default rate of interest,
to the date of the prepayment, and (iii) all other sums, if any, that
shall have become due and payable with respect to any Second Equipment
Advance."
(3) Section 2.3 (a) is hereby amended by adding the
following subsection (iii), immediately after subsection (ii):
"(iii) Second Equipment Advances. Except as set forth in
Section 2.3(b), the Second Equipment Advances shall bear interest on the
average daily balance thereof, at a per annum rate equal to the Prime Rate
plus 35 basis points."
(4) Section 2.3 (c) is hereby amended to read as follows:
"(c) Payment. Interest hereunder shall be due and payable on
each Payment Date. Bank shall, at its option, charge such interest, all
Bank Expenses, and all Periodic Payments against any of Borrower's deposit
accounts, or against the Committed Revolving Line, the Committed Equipment
Line, or the Second Committed Equipment Line in which case those amounts
shall thereafter accrue interest at the rate then applicable hereunder.
Bank will notify Borrower of all debits which Bank has made against
Borrower's account. Any such debits against Borrower's accounts in no way
shall be deemed a set-off. Any interest not paid when due shall be
compounded by becoming a part of the Obligations, and such interest shall
thereafter accrue interest at the rate then applicable hereunder."
(5) Section 2.7 is hereby amended to read as follows:
"2.7 Term. This Agreement shall become effective on the
Closing Date and, subject to Section 12.7, shall continue in full force
and effect until all of the Credit Extensions have been paid in full in
immediately available funds. Notwithstanding the foregoing, Bank shall
have the right to terminate its
3
obligation to make Credit Extensions under this Agreement immediately and
without notice upon the occurrence and during the continuance of an Event
of Default. Notwithstanding termination, Bank's Lien on the Collateral
shall remain in effect for so long as any Obligations (excluding
Obligations under Section 2.6 and 12.2 to the extent they remain inchoate
at the time outstanding payment obligations are paid in full and other
Obligations that have been collateralized in a manner satisfactory to
Bank) are outstanding."
(6) The first sentence of Section 6.8 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 times the Commitment Amount, plus (b) any
Additional Required Cash Balance."
(7) Article 6 is hereby amended by adding the following
Sections 6.11 and 6.12:
"6.11 Profitability. Borrower's net losses for each of the
following quarters set forth below shall not exceed the amounts set forth
immediately opposite to such quarters:
Quarter Ending Net Loss
June 30, 2002 ($36,963,000)
September 30, 2002 ($36,545,000)
December 31, 2002 ($32,000,000)
March 31, 2003 ($22,000,000)
June 30, 2003 and every
every quarter thereafter ($15,000,000)
6.12 Minimum Deposits. Borrower shall maintain at all times,
no less than $6,000,000 in cash deposits at Bank or one of Bank's
affiliates.
6.13 Additional Collateral. Upon the occurrence of an Event
of Default arising out of Borrower's violation of Section 6.8 or Section
6.11, Borrower shall (at Borrower's option) maintain either of the
following (the "Collateral Deposits"): (i) a certificate of deposit at
Bank in a minimum amount equivalent to the aggregate amount of Second
Equipment Advances; or (ii) investments maintained in investment accounts
at the Bank or one of its affiliates in a minimum amount equivalent to
115% of the aggregate amount of
4
Second Equipment Advances. Borrower acknowledges and agrees that Bank will
place a "hold" in such Collateral Deposits until no Second Equipment
Advances are available for borrowing under the Second Committed Equipment
Line and all outstanding Second Equipment Advances have been paid in full
in immediately available funds. In connection with the Collateral
Deposits, Borrower agrees to deliver to Bank control agreement(s) in form
and substance satisfactory to Bank.
Bank agrees that upon Borrower's fulfillment of the
requirements under this Section 6.13, any existing Events of Default
arising out of Borrower's violation such Sections shall be considered
cured as follows: (i) with respect to Section 6.11, such violation shall
be considered cured and the covenant set forth therein shall be deleted in
its entirety, and (ii) with respect to Section 6.8, the violation shall be
considered cured (to the extent that the violation is the result of the
amounts outstanding under the Second Equipment Advances) and the
definition of Commitment Amount therein shall not include amounts
outstanding under the Second Equipment Advances or any amounts available
for borrowing under the Second Committed Equipment Line. Borrower
understands and agrees that, after the fulfillment of the requirements in
this Section 6.13, the covenant set forth in Section 6.8 will continue to
be effective and calculated in accordance with the revised definition of
Committed Amount set forth above."
(8) Article 7 is hereby amended by adding the following
Section 7.14:
"7.14 Negative Pledge. Create, grant to or agree with any
other Person to a negative pledge or other restriction on the granting of
security interests in, or Liens against, any of Borrower's Intellectual
Property."
(9) Section 8.3 is hereby amended to read as follows:
"8.3 Material Adverse Change.
If there (i) occurs a material adverse change in the business
operations, or condition (financial or otherwise) of the Borrower; or (ii)
is a material impairment of the prospect of repayment of any portion of
the Obligations; or (iii) is a material impairment of the value or
priority of Bank's security interests in the Collateral."
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
June 21, 2002, a fee in the amount of Sixty Thousand and 00/100 Dollars
($60,000) ("Loan Fee") plus all out-of-pocket expenses.
5
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 Third 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 Third
Loan Modification Agreement in no way shall obligate Bank to make any future
modifications to the Indebtedness. Nothing in this Third 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 Third Loan Modification Agreement. The terms of this paragraph apply not
only to this Third Loan Modification Agreement, but also to all subsequent loan
modification agreements.
8. CONDITIONS. The effectiveness of this Third Loan Modification
Agreement is conditioned upon payment of the Loan Fee.
BORROWER: BANK:
INKTOMI CORPORATION SILICON VALLEY BANK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ By: /s/
----------------------------------- -----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Name:
--------------------------------- ---------------------------------
Title: CEO and President Title:
-------------------------------- --------------------------------
6
[GRAPHIC]
SILICON VALLEY BANK
PRO FORMA INVOICE FOR LOAN CHARGES
BORROWER: INKTOMI CORPORATION
LOAN OFFICER:
DATE: JUNE 21, 2002
LOAN FEE $60,000
DOCUMENTATION FEE _________
LEGAL FEES _________
TOTAL FEE DUE $
========
PLEASE INDICATE THE METHOD OF PAYMENT:
{ } A CHECK FOR THE TOTAL AMOUNT IS ATTACHED.
{X} DEBIT DDA # 3300023368 FOR THE TOTAL AMOUNT.
{ } LOAN PROCEEDS
BORROWER:
BY:________________________________________
(AUTHORIZED SIGNER)
___________________________________________
SILICON VALLEY BANK, AS AGENT (DATE)
ACCOUNT OFFICER'S SIGNATURE
1
FOURTH LOAN MODIFICATION AGREEMENT
This Fourth Loan Modification Agreement is entered into as of July 31,
2002, 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 amended by that certain Loan Modification Agreement,
dated as of September 30, 2001, that certain Loan Modification Agreement, dated
as of December 19, 2001, and that certain Third Loan Modification Agreement,
dated June __, 2002, (as the same may be further amended from time to time, the
"Loan Agreement"). 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 to Loan Agreement.
(1) Section 6.13 of the Loan Agreement is hereby amended to
read as follows:
"6.13 Additional Collateral. Upon the occurrence of an Event
of Default arising out of Borrower's violation of Section 6.8 or Section
6.11, Borrower shall (at Borrower's option) maintain either of the
following and grant Bank a perfected security interest in the same (the
"Collateral Deposits"): (i) a certificate of deposit at Bank in a minimum
amount equivalent to the aggregate amount of Second Equipment Advances;
(ii) investments made through the Bank or one of its affiliates in US
Treasuries or US Treasury Funds, in a minimum amount equivalent to 100% of
the aggregate amount of Second Equipment Advances or (iii) investments
maintained in investment accounts at the Bank or one of its affiliates,
other than those in subsection (ii) above, in a minimum amount equivalent
to 115% of the aggregate amount of Second Equipment Advances. Borrower
acknowledges and agrees that Bank will place a "hold" in such Collateral
Deposits
2
Bank agrees that upon Borrower's fulfillment of the requirements under
this Section 6.13, any existing Events of Default arising out of
Borrower's violation such Sections shall be considered cured as follows:
(i) with respect to Section 6.11, such violation shall be considered cured
and the covenant set forth therein shall be deleted in its entirety, and
(ii) with respect to Section 6.8, the violation shall be considered cured
(to the extent that the violation is the result of the amounts outstanding
under the Second Equipment Advances) and the definition of Commitment
Amount therein shall not include amounts outstanding under the Second
Equipment Advances or any amounts available for borrowing under the Second
Committed Equipment Line. Borrower understands and agrees that, after the
fulfillment of the requirements in this Section 6.13, the covenant set
forth in Section 6.8 will continue to be effective and calculated in
accordance with the revised definition of Committed Amount set forth
above."
4. Consistent Changes. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.
5. Waiver and Consent.
A. Waiver. Bank hereby waives, solely for fiscal quarter ending June
30, 2002, the Event of Default under Section 8.2 of the Loan Agreement as a
result of Borrower's failure to meet the minimum profitability covenant set
forth in Section 6.11 but only to the extent such Event of Default arose out of:
(i) non-cash charges resulting from the write-off of goodwill and (ii) non-cash
lease expenses, or other non-cash charges relating the Synthetic Lease
Transaction (the "Profitability Default").
B. Consent. Notwithstanding Section 7.3 of the Loan Agreement, Bank
hereby consents to the acquisition by Borrower of all the capital stock of
Quiver, Inc., provided, however that Borrower shall not spend more than
$7,000,000 cash consideration in connection with such acquisition.
C. Limitation. The waiver in paragraph A (the "Waiver") and consent
in paragraph B (the "Consent") of this Section 5 shall become effective only in
accordance with Section 8 hereof and then only in this specific instance and for
the specific purposes set forth herein. Neither the Waiver nor the Consent
allows for any other or further departure from the terms and conditions of the
Loan Agreement, as amended hereby, or any of the other Existing Loan Documents,
which terms and conditions shall remain in full force and effect.
6. 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.
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 Fourth Loan Modification Agreement, the terms of the Existing Loan
Documents remain unchanged and in full force and
3
effect. Bank's agreement to modifications to the existing Indebtedness pursuant
to this Fourth Loan Modification Agreement in no way shall obligate Bank to make
any future modifications to the Indebtedness. Nothing in this Fourth 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 Fourth Loan Modification Agreement. The terms of this paragraph apply not
only to this Fourth Loan Modification Agreement, but also to all subsequent loan
modification agreements.
8. Conditions. The effectiveness of this Fourth Loan Modification
Agreement is conditioned upon receipt by Bank of a fully executed original of
the same.
BORROWER: BANK:
INKTOMI CORPORATION SILICON VALLEY BANK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------- -----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------- ---------------------------------
Title: SVP and CFO Title: Vice President
-------------------------------- --------------------------------
4
[GRAPHIC]
SILICON VALLEY BANK
PRO FORMA INVOICE FOR LOAN CHARGES
BORROWER: INKTOMI CORPORATION
LOAN OFFICER:
DATE: JULY __, 2002
LOAN FEE $_________
DOCUMENTATION FEE _________
LEGAL FEES _________
TOTAL FEE DUE $
=========
PLEASE INDICATE THE METHOD OF PAYMENT:
{ } A CHECK FOR THE TOTAL AMOUNT IS ATTACHED.
{X} DEBIT DDA # 3300023368 FOR THE TOTAL AMOUNT.
{ } LOAN PROCEEDS
BORROWER:
BY:_________________________________________
(AUTHORIZED SIGNER)
____________________________________________
SILICON VALLEY BANK, AS AGENT (DATE)
ACCOUNT OFFICER'S SIGNATURE
5