EXHIBIT 10.15
LOAN AGREEMENT
--------------
This LOAN AGREEMENT, dated as of the later of the two signature dates
below, is made by and among MICROSOFT CORPORATION ("Microsoft"), a Washington
Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Lender"), and
INKTOMI CORPORATION ("Inktomi"), a California corporation, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Borrower").
RECITALS
--------
A. Borrower develops and markets computer software products, including
without limitation a "search engine" software for searching and indexing
information accessible through the Internet.
B. Lender develops, manufactures, distributes and markets computer
software products and services.
C. Borrower and Lender desire to enter into a business relationship
pursuant to which, among other things, (i) Borrower would (a) develop software
for Lender to implement desired features for a Lender search engine, (b) provide
search results for Lender using Borrower's search engine customized with, among
other elements, the features developed for Lender, (c) provide software hosting
and maintenance services for Lender's benefit, and (d) purchase additional
hardware and software necessary or desirable to service Lender's needs, and (ii)
Lender would make certain payments to Borrower, and provide loans to Borrower to
facilitate Borrower's purchase of additional hardware and software necessary or
desirable to service Lender's needs.
D. This Loan Agreement and a Security Agreement between the parties of
even date, are intended to set forth the terms and conditions applicable to the
loan aspects of such business relationship.
NOW THEREFORE, for and in consideration of the mutual covenants and
conditions set forth herein, the parties agree as follows:
AGREEMENTS
----------
1. Loan to Borrower. Pursuant to the terms and conditions of that certain
----------------
Software Hosting Agreement between Borrower and Lender of even date herewith
(the "Hosting Agreement"), Borrower may be required, after consultation with and
approval by Lender, to purchase additional Hosting Servers, as that term is
defined in the Hosting Agreement. Subject to the terms and conditions of this
Agreement, Lender shall from time to time make advances ("Advances") to Borrower
during the period from the date hereof until the termination of this Agreement.
In no event shall Lender have any obligation to make Advances to Borrower
following the occurrence of any Event of Default as defined in section 11 of
this Agreement.
-1-
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
A. Advances. Advances shall be made only in amounts separately agreed
--------
between Lender and Borrower to be sufficient to purchase the additional Hosting
Servers required by Lender. Each such Advance shall be evidenced by a promissory
note (the "Promissory Note") with a term of three (3) years in substantially the
form of the sample note attached hereto as Exhibit A. The terms of all such
Promissory Notes are by this reference incorporated in this Agreement. The
proceeds of each Advance shall only be used by Borrower to purchase the
additional Hosting Servers for which that Advance is made.
B. Persons Authorized. Lender is hereby authorized by Borrower to make
------------------
Advances only upon the written requests (including requests made by telex,
telegraph or facsimile), of any one of the following persons (the "Responsible
Officers" and each a "Responsible Officer"): ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇; each of whom is and shall be authorized to request Advances
and direct the disposition of any Advance until written notice by Borrower of
the revocation of such authority is received by Lender. Any Advance shall be
conclusively presumed to have been made to or for the benefit of Borrower when
made in accordance with such a request. Requests for Advances shall be on the
Borrowing Notice form attached hereto as Exhibit B. Any such Borrowing Notice
shall be directed to the following Lender representative (or such other person
as Lender may direct from time to time) for approval prior to disbursement:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
C. Assumption of Risk. It is important to Borrower that Borrower have the
------------------
privilege of making requests for Advances by e-mail, telex, telegraph or
facsimile. Therefore, to induce Lender to lend funds in response to such
requests, and in consideration for Lender's agreement to receive and consider
such requests, BORROWER ASSUMES ALL RISK OF THE VALIDITY, AUTHENTICITY AND
AUTHORIZATION OF SUCH REQUESTS, WHETHER OR NOT THE INDIVIDUAL MAKING SUCH
REQUEST HAS AUTHORITY IN FACT TO REQUEST ADVANCES ON BEHALF OF BORROWER. UNLESS
AN UNAUTHORIZED OR INVALID ADVANCE IS MADE AS A RESULT OF GROSS NEGLIGENCE ON
THE PART OF LENDER, LENDER SHALL NOT BE RESPONSIBLE, UNDER PRINCIPLES OF
CONTRACT, TORT OR OTHERWISE, FOR ANY LOSS SUSTAINED BY BORROWER RESULTING FROM
ANY UNAUTHORIZED OR INVALID ADVANCE, INCLUDING, BUT NOT LIMITED TO, THE AMOUNT
OF ANY ADVANCE. Borrower agrees to repay any sums, with interest as provided
herein, that Lender so advances. Borrower agrees to give Lender prompt written
confirmation of all e-mail, telex, telegraph or facsimile requests for Advances;
but Borrower's failure to do so, or the failure of such confirmation to reach
Lender, shall not affect Borrower's assumption of the risk with respect to such
Advance or reduce in any way the obligation of Borrower to repay with interest
all amounts theretofore or thereafter advanced by Lender pursuant thereto.
D. Request for Advance. Each request for an Advance shall set forth the
-------------------
amount of such Advance and the date such Advance is to be made, such request to
be received by Lender by 9:30 a.m., Seattle, WA, USA time ten (10) full business
days before such Advance is to be made. Any proposed Advance shall be made and
effected only on a business day and may be disbursed only after a separate
Promissory Note for such Advance is properly executed by
-2-
Borrower, and delivered to and accepted by Lender. If the date of the proposed
Advance is not a business day, such Advance shall be effected on the next
succeeding business day. Each request for an Advance shall be irrevocable and
binding on Borrower.
E. Disbursement of Advances. Advances made and effected by Lender shall
------------------------
be disbursed by wire transfer in immediately available funds to the depository
account set forth in Exhibit E hereto, or such other account as Borrower may
designate from time to time by written notice to Lender signed by a Responsible
Officer.
2. Term and Termination. This Agreement shall terminate upon the
--------------------
termination of the Hosting Agreement ("Maturity Date"); provided that all rights
and remedies to which Lender is entitled under this Agreement and at law shall
survive any such termination of the Agreement until all amounts advanced or
otherwise due Lender under this Agreement have been repaid or otherwise
satisfied according to the terms of this Agreement.
3. Interest. The outstanding principal balance of the Loan shall bear
--------
interest at the lowest appropriate applicable federal rate, as determined by
Microsoft, when each Promissory Note (or the New Note described in section 4) is
issued. All computations of interest shall be based on a 360-day year for the
actual number of days passed.
4. Payment of Principal and Interest.
---------------------------------
A. Monthly Payments. Payment of principal and interest for each
----------------
Advance shall be made in immediately available funds, by 10:00 a.m., Seattle
time, at such location designated by Lender or the holder of the applicable
Promissory Note, on the date each payment is due as provided in the Promissory
Note. The payments of principal and interest shall be separately calculated for
each Advance and shall be payable in immediately available funds on the first
business day of each month until paid in full. Each installment payment shall be
in an amount sufficient to cause the principal balance of each Advance to be
repaid within three years. Notwithstanding the foregoing, any amounts accrued
but not paid at the time of termination of this Agreement shall be payable or
otherwise satisfied in accordance with the following subsections.
B. Roll-over or Acceleration. Upon expiration or termination of this
-------------------------
Agreement:
(i) If this Agreement is terminated due to the mutual agreement
of the parties, due to termination of the Hosting Agreement by Lender pursuant
to section 10.2 of the Hosting Agreement, or due to termination of the Hosting
Agreement by Borrower pursuant to section 10.1 of the Hosting Agreement, then
immediately prior to the effective date of such termination Lender shall cancel
all outstanding Promissory Notes and Borrower shall simultaneously execute a new
promissory note ("New Note") for all outstanding principal, interest and other
amounts under such Promissory Notes owed or owing to Lender by Borrower on that
date, in substantially the form attached as Exhibit C satisfying and replacing
all outstanding Advances and other amounts due under this Agreement. A New Note
issued
-3-
pursuant to this subsection shall carry the same interest rate and be subject to
the same terms and conditions as all Advances under this Agreement, except that
the term of the New Note shall be two (2) years, and each installment payment
shall be in an amount sufficient to cause the principal balance of the New Note
to be repaid within two (2) years. Installment payments for the New Note shall
be made in immediately available funds, by 10:00 a.m., Seattle time, at such
location designated by Lender or the holder of the New Note, on the date each
payment is due as provided in the New Note. Prior to execution of the New Note,
Borrower shall satisfy all conditions precedent and make all representations and
warranties required for Advances under this Agreement.
(ii) If termination of this Agreement is due to any other reason
(other than due to a material breach of this Agreement or the Hosting Agreement
by Lender), such termination shall be considered an Event of Default and subject
to any and all remedies available to Lender for an Event of Default as provided
in section 12 of this Agreement.
C. Prepayment. Borrower may prepay each Advance in whole or in part,
----------
at any time without penalty. Any repayments of the amounts due under this Loan
Agreement shall be made in immediately available funds and shall be applied
first against any amounts owed to Lender under the Security Agreement, then to
the payment of past due interest on any outstanding Advance, and any remaining
amount shall reduce the outstanding principal amount of each Advance.
5. Overdue Payments; Default Rate. If any amount due under this Agreement
------------------------------
is not paid when and as due, such amount shall bear interest from the date such
payment was due until and including the date such payment is received by Lender
at a rate per annum equal to eighteen percent (18 %) per annum (the "Default
Rate"), provided that in no event shall the rate of interest exceed that
permitted by applicable law.
6. Security for the Loan. This Loan is secured by a purchase money
---------------------
security interest in the Hosting Servers purchased by each Advance, pursuant to
the terms of a security agreement of even date ("Security Agreement"). Lender
shall have a first priority security interest in all of the collateral described
in the Security Agreement (the "Collateral").
7. Representations and Warranties. Borrower hereby represents and
------------------------------
warrants to Lender as follows:
A. Corporate Existence. Borrower is a corporation, duly organized
-------------------
and validly existing, in good standing under the laws of its state of
incorporation, and is duly authorized and qualified under all applicable laws,
regulations, ordinances and orders of public authorities to carry on such
business in any state or county where such qualification is necessary and to own
and hold property.
B. Corporate Power. Borrower has full right, power and authority to
---------------
enter into and perform this Agreement, each Promissory Note, the New Note, and
the Security
-4-
(collectively, the "Documents"), and to grant all of the rights granted and
agreed to be granted pursuant to this Agreement and the Documents.
C. Authorization. Borrower has taken all necessary corporate action
-------------
to authorize the execution, delivery and performance of this Agreement and the
other Documents, including but not limited to, all necessary corporate action
required by its articles of incorporation and bylaws.
D. No Conflict, Violation or Consent Required. The execution,
------------------------------------------
delivery and performance of, and the compliance with the provisions of each of
the Documents do not and will not violate any provision of an applicable law or
any provision of Borrower's articles of incorporation and bylaws, and will not
conflict with, require consent under any provision of, result in any breach of
any of the terms, conditions or provisions of, result in the creation or
imposition of any lien, charge or encumbrance upon any of the properties or
assets of Borrower pursuant to the terms of, or constitute a default under or
conflict with, any other indenture, contract, mortgage, deed of trust or other
agreement or instrument to which Borrower is a party or by which Borrower is
bound. Borrower shall not enter into other contractual obligations which will
restrict or impair its obligations under this Agreement or any other Document.
E. Binding Effect. This Agreement constitutes, and the Promissory
--------------
Note and each of the other Documents, when executed and delivered by Borrower,
will constitute, valid obligations of Borrower and are binding and enforceable
against Borrower in accordance with their respective terms, except as hereafter
may be limited by applicable bankruptcy, insolvency, reorganization, or similar
laws affecting the enforcement of creditor's rights and the availability of
specific performance.
F. Familiarity With Terms. Borrower is fully familiar with all of
----------------------
the terms, covenants and conditions of the Documents.
G. Legal Proceedings. Except as disclosed on Schedule 1 attached
-----------------
hereto, there is no action, suit or proceeding pending or, to the knowledge of
Borrower, threatened, at law or in equity or before or by any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that might result in a material adverse
change in Borrower's ownership or title to any of the Collateral or in its
financial condition or operations. As used in this subsection, the phrase "to
the knowledge of Borrower" shall mean the current actual knowledge of the
executive officers and directors of Borrower.
H. No Governmental Approvals. No registration with or approval of
-------------------------
any governmental agency or commission is necessary for the due execution and
delivery of any of the Documents or for the validity or enforceability thereof
with respect to any obligation of Borrower hereunder or thereunder, except acts
to be performed by Lender in order to perfect Lender's security interest in the
Collateral.
-5-
I. Liens and Encumbrances. Borrower shall keep the Collateral
----------------------
purchased with each Advance free and clear of all liens, claims, encumbrances
and rights of others and at the request of Lender from time to time, shall
obtain an agreement, in a form satisfactory to Lender in its sole discretion,
from any of its general creditors or lien holders to subordinate their interests
in the Collateral to Lender's interest pursuant to this Agreement and the
Security Agreement.
J. Compliance With Laws. Borrower has complied with all laws,
--------------------
regulations, ordinances and orders which affect in any material respect its
right to carry on its operations, perform its obligations under the Documents
or meet its obligations in the ordinary course of business.
K. Outstanding Debt. There exists no default under the provisions of
----------------
any agreement or instrument evidencing any outstanding indebtedness of Borrower
and/or its subsidiaries to any party or any material agreement to which Borrower
and/or its subsidiaries is currently a party.
L. Disclosure. This Agreement does not contain any untrue statement
----------
of a material fact and does state all material facts necessary in order to make
the statements contained herein not misleading in light of the circumstances
under which they were made. There is, to the knowledge of Borrower, no fact that
would materially adversely affect its business, prospects, condition, affairs or
operations or any of its properties or assets.
M. No Consents. The execution, delivery and filing of the Security
-----------
Agreement and any financing statements, and the creation of the lien, mortgage,
encumbrance, preference or security interest contemplated thereby, will not
require the consent or approval of any person or entity not a party to this
Agreement.
N. Perfection of Liens and Security Interest. As of the date hereof,
-----------------------------------------
Lender will have a valid and perfected first priority lien on and security
interest in all of the Collateral (whether now owned or hereafter acquired),
which lien and security interest will be enforceable against the applicable
grantor thereof and all third parties and will secure the obligations stated
therein. All filings, recordations and other actions necessary under any laws to
perfect and protect such liens and security interests as first-priority liens
and security interests in the Collateral have been, or will on the Closing Date
be, duly taken.
8. Affirmative Covenants. Until all amounts owed under the Documents have
---------------------
been paid in full or otherwise satisfied under the terms of this Agreement,
Borrower, at its own expense, covenants and agrees at all times to comply with
the terms of this paragraph 8.
A. Financial Information.
---------------------
(i) Borrower shall furnish or cause to be furnished to Lender,
as soon as practicable and in any event within forty-five (45) days after the
close of each fiscal quarter, the following unaudited financial statements of
Borrower for each such quarter, all in reasonable
-6-
detail and certified by a Responsible Officer of Borrower to be true and
correct: balance sheet, statement of income, and statement of cash flows.
(ii) Borrower shall furnish or cause to be furnished to Lender,
as soon as the same are available, and in any event within ninety (90) days
after the end of each of each fiscal year Borrower's consolidated balance sheet,
statement of income and a statement of cash flows, all as of the end of such
fiscal year (together, in each case, where applicable, with the comparable
figures for the prior fiscal year), all in reasonable detail. Annual
consolidated financial statements shall be prepared and audited (without any
qualification or exception deemed material by Lender) in accordance with
generally accepted accounting principles applied on a basis consistently
maintained throughout the period involved (except as disclosed in the notes to
the financial statements) by independent certified public accountants of
recognized national standing or otherwise reasonably acceptable to Lender.
(iii) Concurrently with the information described in (i) and
(ii) above, a certificate of a Responsible Officer of Borrower stating that the
consolidated financial statements delivered to Lender are properly stated and
that there exists no Event of Default, or event which with notice or lapse of
time, or both, would constitute an Event of Default, or, if any such event
exists, specifying the nature and period of existence thereof and what action
Borrower proposes to take with respect thereto.
(iv) Borrower shall also furnish or cause to be furnished, from
time to time, such additional financial and other information as Lender may
reasonably request in order to monitor the financial condition of Borrower.
B. Notice of Default. Immediately upon obtaining knowledge of the
-----------------
occurrence of any event that constitutes an Event of Default, or that with
notice or lapse of time, or both, would constitute an Event of Default, Borrower
shall give written notice thereof to Lender, together with a detailed statement
of the steps being taken by Borrowers to cure such event.
C. Maintenance of Existence. Borrower shall cause to be done all
------------------------
things necessary to maintain and preserve the corporate existence, rights and
franchises of Borrower and shall comply with all related laws applicable to
Borrower and/or its subsidiaries.
D. Payment of Taxes. Borrower shall pay, indemnify and hold Lender
----------------
harmless from (i) all taxes, assessments and charges lawfully levied or imposed
by the United States, any state or local government, any taxing authority or any
political or governmental subdivision of any foreign country on or with respect
to the Collateral or any part thereof, and (ii) any other claims which, if
unpaid, might become by law a lien upon Borrower's property; except, and only to
the extent that any such taxes, assessments, charges or claims are being
contested in good faith (and for the payment of which adequate reserves have
been provided) by appropriate proceedings conducted diligently and in good faith
so long as such proceedings do not involve a material danger of the sale,
forfeiture or loss of all or a material portion of the Collateral.
-7-
E. Maintenance of Property and Leases. Borrower shall keep its
----------------------------------
properties in good repair and condition, reasonable wear and tear excepted, and
from time to time make all necessary and proper repairs, renewals, replacements,
additions and improvements thereto. Borrower shall at all times comply with the
provisions of all leases to which it is a party so as to prevent any loss or
forfeiture thereof or thereunder.
F. Insurance. Borrower shall maintain with responsible companies
---------
reasonably acceptable to Lender liability insurance and insurance with respect
to the Collateral in amounts and covering risks as is customary among companies
engaged in businesses similar to that of Borrower. Each liability insurance
policy maintained pursuant to this paragraph shall name Lender as additional
insured. Each such policy other than liability policies shall name Lender as
named insured and loss payee as its interest may appear. The parties agree that
such interest of Lender shall be equal to the total of all amounts owed under
the Documents to Lender. Borrower shall maintain insurance against any other
risks as is customary among companies engaged in businesses similar to that of
Borrower. All required insurance shall (a) be in form and amount reasonably
satisfactory to Lender and (b) contain a Lender's Loss Payable Endorsement. Each
insurer shall agree by endorsement upon the policies issued by it, or by
independent instrument furnished to Lender, that it will give Lender thirty (30)
days written notice before the policy is materially altered or canceled. The
proceeds of any public liability policy shall be payable first to Lender to the
extent of its liability, if any, and the balance shall be payable to Borrower.
Borrower hereby irrevocably appoints Lender as Borrower's attorney-in-fact to
make claim for, receive payment of, and execute and endorse all documents,
checks or drafts for loss or damage under any insurance policy.
G. Notice of Litigation. Borrower shall promptly notify Lender in
--------------------
writing of the initiation of any litigation against Borrower that in Borrower's
good faith judgment might materially and adversely affect the operations,
financial condition, property or business of Borrower. If any suit is filed
against any of the Collateral or if any of the Collateral is otherwise attached,
levied upon or taken in custody by virtue of any legal proceeding in any court,
Borrower shall promptly notify Lender thereof by telephone, confirmed by letter,
and within sixty (60) days (unless otherwise consented to in writing by Lender)
cause the Collateral to be released and promptly notify Lender thereof in the
manner aforesaid.
H. Accounts and Reports. Borrower shall keep true and accurate
--------------------
records and books of account in which full, true and correct entries shall be
made of all dealings or transactions in relation to its business and affairs in
accordance with generally accepted accounting principles.
I. Compliance With Laws. Borrower shall duly observe and conform to
--------------------
all valid requirements of governmental authorities relating to the conduct of
its business or to its property or assets.
J. Inspection. Borrower shall permit Lender or its designated
----------
representative, at all reasonable hours upon reasonable advance notice, to visit
and inspect Borrower's
-8-
properties, offices, facilities and the Collateral, and to examine Borrower's
books of account, solely to monitor the status of the Collateral and financial
condition of Borrower. Lender agrees that any such visitation or inspection may
be escorted and monitored by Borrower.
K. Filing and Execution of Documents. Borrower shall from time to
---------------------------------
time do and perform such other and further acts and execute and deliver any and
all such further instruments as may be required by law or reasonably requested
by Lender to establish, maintain and protect Lender's security interest in any
of the Collateral as provided in this Agreement.
L. Anti-forfeiture. Borrower shall not have committed or commit any
---------------
act or omission affording the federal government or any state or local
government the right of forfeiture as against the property of Borrower or any
part thereof or any moneys paid in performance of its obligations under this
Agreement, any Promissory Note or under any of the other Documents. Borrower
covenants and agrees not to commit, permit or suffer to exist any act or
omission affording such right of forfeiture. In furtherance thereof, Borrower
hereby indemnifies Lender and agrees to defend and hold Lender harmless from and
against any loss, damage or injury by reason of the breach of the covenants and
agreements or the warranties and representations set forth in the preceding
sentence. Without limiting the generality of the foregoing, the filing of formal
charges or the commencement of proceedings against Borrower, Lender, or all or
any of the property of any Borrower under any federal or state law for which
forfeiture of such property or any part thereof or of any moneys paid in
performance of any Borrower's obligations under the Documents shall, at the
election of Lender, constitute an Event of Default hereunder without notice or
opportunity to cure.
M. Meeting. The Responsible Officers of Borrower (and such other
-------
officers and employees of Borrower as Lender may reasonably request) shall meet
at least once per year with Lender's designated representatives to review
Borrower's consolidated financial statements and such other information
regarding the operation of Borrower's business as may be reasonably requested by
Lender to monitor the financial condition of Borrower and status of the
Collateral.
9. Negative Covenants. Until all amounts owed under this Agreement, the
------------------
Promissory Note and the other Documents have been paid in full or otherwise
satisfied under the terms of this Agreement, Borrower, without the prior written
consent of Lender, covenants and agrees that it shall not sell all or any
portion of the Collateral, nor relocate the Collateral. Borrower shall not
encumber the Collateral, assume any debt secured by the Collateral or subject
the Collateral to any unpaid charge or claim of any third party. Lender may give
its prior written consent to any sale or encumbrance of any of the Collateral
upon the express terms and conditions set forth in such consent of Lender.
10. Conditions Precedent to Loan Advances. Notwithstanding anything
-------------------------------------
contained herein to the contrary, the obligation of Lender to make any Advance
to Borrower, is expressly conditioned upon the following:
A. Representations and Warranties. All representations and
------------------------------
warranties of Borrower contained in this Agreement, in the Documents and in any
certificate or other
-9-
instrument delivered pursuant to the provisions hereof, or in connection with
the transactions contemplated hereby, shall be and remain true and correct in
all material respects throughout the term of this Agreement, including without
limitation on the date of each request for an Advance with the same force and
effect as though such representations and warranties had been made on the date
of the Advance.
B. Covenants. Borrower shall have performed and complied with all
---------
material terms, covenants and conditions of this Agreement and the Documents to
be performed or complied with by it on or before execution of this Agreement or
on or before the date of each Advance, as the case may be.
C. No Event of Default. There shall exist no Event of Default, or
-------------------
event which with notice or lapse of time, or both, would constitute an Event of
Default, under this Agreement or the other Documents.
D. Subordination of Prior Interests/Release of Liens. If Lender so
-------------------------------------------------
requests, for any prior security interest, lien or encumbrance in the Collateral
or in the general assets of the Borrower's business, Borrower shall obtain a
subordination agreement from its creditor or lien holder in favor Lender or
shall obtain the release and discharge of such security interest, lien or
encumbrance, including any financing statement or recorded lien filed to perfect
such interest, lien or encumbrance.
E. Delivery of Documentation. Borrower, at its sole cost and
-------------------------
expense, shall have delivered to Lender the following documents, duly executed
by the appropriate party, in form and substance satisfactory to Lender:
(i) the applicable Promissory Note executed by Borrower prior
to disbursement of each respective Advance;
(ii) the Security Agreement executed by Borrower on the date of
this Agreement;
(iii) the Hosting Agreement executed by Borrower, on the date of
this Agreement;
(iv) a certificate of Borrower's corporate secretary, to be
dated as of the date of this Agreement, certifying as true and accurate and in
full force and effect as of that date, copies of current resolutions of
Borrower's Board of Directors authorizing (i) Borrower to enter into and perform
this Agreement and to execute, deliver and honor and perform the other
Documents, and (ii) the persons who have executed or will execute this
Agreement, the Promissory Note and the other Documents to do so;
(v) a certificate, as of the most recent date practical, of the
secretary of state of Borrower's state of incorporation as to the good standing
of Borrower;
-10-
(vi) certificates issued in favor of Lender evidencing the
insurance policies required by Lender in accordance with Section 8F hereof;
(vii) UCC financing statements executed by Borrower, in form and
substance satisfactory to Lender, evidencing Lender's security interest in the
Collateral designated thereon to be filed in each jurisdiction in which Borrower
is or may be doing business;
(viii) officer's certificates executed by a Responsible Officer
of Borrower, dated the purchase date for each purchase of each item of
Collateral, certifying that on that date (i) Borrower has good title to all
Collateral described in the Security Agreement, (ii) no Event of Default, or
event which with notice or lapse of time, or both, would constitute an Event of
Default, has occurred, and is continuing, and (iii) the representations and
warranties contained in the Documents are true and accurate on and as of that
date;
(ix) such other agreements, certificates or other documents as
shall be deemed necessary or desirable, in the good faith opinion of Lender or
its counsel, in order to fully and completely perfect, preserve or protect
Lender's interests hereunder and Lender's security interest in the Collateral;
(x) a valid and authorized Borrowing Notice containing a
request for an Advance approved by Lender's designated representative.
11. Events of Default. The occurrence of one or more of the following
-----------------
events (herein called "Events of Default") shall constitute a default under this
Agreement.
A. Borrower's failure to pay any portion of any installment of
principal or interest due under any Promissory Note or any other amount under
any of the other Documents when and as the same shall become due and payable as
therein or herein expressed, if such failure continues for a period of ten (10)
days after Lender has notified Borrower (regardless of whether Borrower actually
receives such notice) that such payment has not been received;
B. Borrower's failure to comply with and duly and punctually observe
or perform, any of the covenants of Borrower contained in Sections 8B, 8C, 8D,
8E and 8H and Section 9 of this Loan Agreement;
C. Borrower's failure to maintain insurance as required in
accordance with Section 8F hereof; which failure shall continue for a period of
ten (10) days after the earlier of the giving of notice of such failure by
Lender to Borrower, or the date Lender is notified of such failure by Borrower
or should have been so notified pursuant to section 8B hereof.
D. Borrower applies for, consents to or acquiesces in the
appointment of a trustee, receiver, liquidator, assignee, sequestrator or other
similar official for Borrower or for any of Borrower's property, or makes a
general assignment for the benefit of creditors, or files a petition or an
answer seeking reorganization in a proceeding under any bankruptcy law (as now
-11-
or hereafter in effect) or a readjustment of its indebtedness or an answer
admitting the material allegations of a petition filed against it in any such
proceeding, or seeks relief under the provisions of any bankruptcy or similar
law; or, in the absence of any of the foregoing, a trustee, receiver,
liquidator, assignee, sequestrator or other similar official is appointed for
Borrower or for a substantial part of any of the property of Borrower and is not
discharged within sixty (60) days; or any bankruptcy, reorganization, debt
arrangement or other proceeding under any bankruptcy or other insolvency law or
common law or in equity is instituted against Borrower and is not dismissed
within sixty (60) days; or, in the absence of any of the foregoing, if, under
the provisions of any law providing for reorganization or winding up which may
apply to Borrower, any court of competent jurisdiction shall assume
jurisdiction, custody or control of Borrower or of any substantial part of any
of Borrower's property and such jurisdiction, custody or control shall remain in
force unrelinquished, unstayed or unterminated for a period of sixty (60) days;
E. any material representation or warranty made by Borrower and
contained in any of the Documents, or otherwise made by Borrower to Lender,
proves or becomes untrue in any material respect, provided that any cure period
(if any) available to remedy the inaccuracy has passed;
F. Borrower is in material default in the payment or performance of
any material obligation under any promissory note, indenture, contract,
mortgage, deed of trust or other instrument to which Borrower is a party or by
which Borrower is bound and the applicable cure period shall have expired;
G. any provision of any Document, including, without limitation, the
Security Agreement, shall for any reason (except for acts to be performed by
Lender) cease to be valid and binding on any signatory thereto, or such
signatory shall so allege, or any Security Agreement shall for any reason
(except for acts to be performed by Lender) cease to create a valid and
perfected first priority lien, mortgage, encumbrance or security interest except
to the extent permitted by the terms thereof, in any of the property purported
to be covered thereby, or the signatory to such Security Agreement shall so
allege;
H. the termination of the Hosting Agreement by Lender due to the
material breach thereunder by Borrower; or
I. Borrower's failure to duly and punctually observe or perform, in
any material respect, any other of the covenants, conditions or agreements to be
performed or observed by Borrower contained in this Agreement or any of the
Documents and, except as may otherwise be specifically provided in the
Documents, such failure continues for a period of thirty (30) days after the
earlier of the giving of notice of such failure by Lender to Borrower, or the
date Lender is notified of such failure by Borrower or should have been so
notified pursuant to section 8B hereof.
J. Borrower's material breach under the Hosting Agreement and/or any
of the following agreements between the parties (which remains uncured after the
applicable core
-12-
period, if any, thereunder): the Software Development Agreement of even date
herewith; and the Information Services Agreement of even date herewith (and the
Escrow Agreement referred to therein).
12. Remedies. Upon the occurrence of an Event of Default and while any
--------
Event of Default is continuing, Lender may at its option elect to pursue any or
all of the following remedies, which are cumulative and in addition to any other
right or remedy provided by applicable law:
A. without further demand, protest or notice of any kind to
Borrower, declare any or all sums and obligations due under the Documents to be
due and immediately payable, and upon such declaration the same shall become and
be immediately due and payable;
B. terminate Lender's commitment to make Advances hereunder;
C. If Borrower fails to perform any act that it is required to
perform under this Agreement or the Security Agreement, Lender may, but shall
not be obligated to, perform, or cause to performed, such act, provided that any
reasonable expense thereby incurred by Lender and any money thereby paid by
Lender, shall be a demand obligation owing by Borrower and Lender shall promptly
notify Borrower of the amount of such obligation, which obligation shall bear
interest at the Default Rate from the date Lender makes such payment until
repaid by Borrower; and Lender shall be subrogated to all rights of the person
receiving such payment;
D. enforce Lender's rights under the Security Agreement;
E. terminate the Hosting Agreement;
F. institute one or more legal proceedings at law or in equity for
the:
(i) specific performance of any covenant, condition, agreement
or undertaking contained in the Documents, or in aid of the execution of any
powers granted therein and/or to recover a judgment for damages for the breach
hereof, including, without limitation, any amount due under the Documents,
either by their terms or by virtue of such declaration, and collect the same out
of any property of Borrower;
(ii) foreclosure of its security interest in the Collateral and
the sale of all or any part of the Collateral under the judgment or decree of
any court of competent jurisdiction;
(iii) enforcement of such other appropriate legal or equitable
remedy as may in the opinion of Lender be necessary to protect and enforce
Lender's rights under the Documents;
G. assert such other rights and remedies of a secured party and of a
mortgagee under the laws of the United States or the state of Washington
(regardless of whether such law or one similar thereto has been enacted in the
jurisdiction where the rights or remedies are asserted),
-13-
including, without limitation, all rights of a secured party under the UCC,
whether or not this Agreement and the transactions contemplated hereby are
determined to be governed by the UCC.
13. Costs and Expenses of Collection and Enforcement. Borrower shall pay
------------------------------------------------
to Lender on demand all reasonable attorneys fees and other costs and expenses
reasonably incurred by Lender in protecting the Collateral or in exercising
Lender's rights, powers or remedies under this Agreement or the Documents,
together with interest on such sums at the Default Rate from the date when the
costs and expenses are incurred until fully paid. If because of Borrower's
default the Lender consults an attorney regarding the enforcement of any of its
rights under any Document, or if suit is brought to enforce any Document,
Borrower promises to pay all costs thereof, including attorneys' fees. Such
costs and attorneys' fees shall include, without limitation, costs and
attorneys' fees incurred in any appeal, forfeiture proceeding or in any
proceedings under any present or future federal bankruptcy or state receivership
law.
14. Allocation of Proceeds. The (a) proceeds of any sale, (b) proceeds of
----------------------
any insurance received by Lender under any insurance policy obtained by any
Borrower hereunder, and (c) any and all other moneys received by Lender with
respect to the Documents, the application of which has not elsewhere herein been
specifically provided for, shall, except as otherwise specified in any
applicable Document, be applied as follows
(i) first, to the payment of all expenses and charges, including
expenses of any sale or retaking, reasonable attorneys' fees, court costs and
other expenses or advances reasonably made or incurred by Lender, or on Lender's
behalf, under the Documents upon an Event of Default, and to the payment of, and
provision for adequate indemnity for, any taxes, assessments or liens prior to
the lien of Lender;
(ii) second, to the payment of all accrued and unpaid interest under
the Promissory Notes or New Notes;
(iii) third, to the payment of the unpaid principal balance under the
Promissory Notes or New Note;
(iv) fourth, to the payment of all other amounts due to Lender under
the Documents; and
(v) last, any residue shall be paid to Borrower, or as otherwise
required by law, or, directed by a court having jurisdiction.
If the proceeds and other sums described in this section 14 are insufficient to
pay in full all amounts due to Lender under the Documents, Borrower shall
immediately pay such deficiency to Lender.
15. Modifications, Consents and Waivers. No failure or delay on the part
-----------------------------------
of Lender in exercising any power or right hereunder or under the Promissory
Notes or New Notes or under any other Document shall operate as a waiver
thereof, nor shall any single or partial exercise of
-14-
any such right or power preclude any other or further exercise thereof or the
exercise of any other right or power. No amendment, modification or waiver of
any provision to this Agreement, the Notes or any other Document, nor consent to
any departure therefrom, shall in any event be effective unless the same shall
be in writing and consented to by Lender, and then such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on Borrower in any case shall
entitle Borrower to any other or further notice or demand in similar or other
circumstances.
16. Notices. All notices and requests in connection with this Agreement,
-------
the Promissory Notes, the New Note or any other Document shall be in writing and
may be given by personal delivery, registered or certified mail, telegram,
facsimile or telex addressed as follows:
to Borrower: Inktomi Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
and to:
Inktomi Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
to Lender: Microsoft Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and to:
Microsoft Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Law & Corporate Affairs, U.S. Legal
or to such other address as the party to receive the notice or request shall
designate by notice to the other. The effective date of any notice or request
shall be five (5) days from the date on which it is sent by the addresser if
mailed, or when delivered to a telegraph company, properly addressed as above
with charges prepaid, or when telexed, sent by facsimile or personally
-15-
delivered. Borrowers hereby agree that such notice shall be deemed to meet any
requirements of reasonable notice contained in the UCC.
17. Costs and Expenses of Perfecting Security Interests and other Rights.
--------------------------------------------------------------------
Borrower shall pay in a timely manner all costs and expenses incurred by Lender,
including the reasonable fees and expenses of legal counsel, in connection with
the approval, preparation, negotiation, filing, or recording of any financing
statements, pledge agreements, waivers, subordination agreements, and
assignments (as well as any amendments or extensions thereto) reasonably
required to protect or perfect Lender's interest in the Collateral or any other
rights granted by the Documents.
18. Survival of Covenants. All covenants, agreements, representations and
---------------------
warranties made by Borrower hereunder shall survive the execution and delivery
of this Agreement and the disbursement of any Advances made pursuant to this
Agreement. All statements contained in certificates or other instruments
delivered by Borrower pursuant to this Agreement shall constitute
representations and warranties made by Borrower hereunder, as the case may be.
19. Binding Effect and Assignment. This Agreement, the Promissory Notes
-----------------------------
and all other Documents shall be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns, except that,
subject to Exhibit D hereto, Borrower may not assign or transfer its rights
hereunder, or delegate its obligations hereunder, without the prior written
consent of Lender, which may be withheld in Lender's sole and absolute
discretion. From and after any assignment, transfer or delegation of obligation
by Lender of its interest hereunder, Lender shall be released from all liability
to Borrower hereunder arising after the date of such assignment, transfer or
delegation of obligation; provided, however, that any assignee of Lender shall
expressly assume all of the obligations of Lender hereunder. For purposes of
this Agreement, an "transfer" under this Section shall be deemed to include,
without limitation, the following: (a) a merger or any other combination of an
entity with another party (other than a reincorporation of Inktomi from the
State of California to the State of Delaware), whether or not the entity is the
surviving entity; (b) any transaction or series of transactions whereby a third
party acquires direct or indirect power to control the management and policies
of an entity, whether through the acquisition of voting securities, by contract,
or otherwise; (c) in the case of Inktomi, the sale or other transfer of
Inktomi's search engine business or any other substantial portion of Inktomi's
assets (whether in a single transaction or series of transactions), or (d) the
transfer of any rights or obligations in the course of a liquidation or other
similar reorganization of an entity (other than a reincorporation of Inktomi
from the State of California to the State of Delaware).
20. Headings. Article and paragraph headings used in this Agreement are
--------
for convenience of reference only and shall not affect the construction of this
Agreement.
21. Severability. The unenforceability or invalidity of any provision or
------------
provisions of this Agreement, the Promissory Notes, the New Note, or any other
Document shall not render any other provision or provisions hereof or thereof
unenforceable or invalid. If any rate of
-16-
interest provided for herein is greater than that permitted under applicable
law, such rate shall be automatically reduced to be the maximum permitted by
law.
22. Additional Documents. Borrower shall at Lender's request, from time
--------------------
to time, at Borrower's sole cost and expense, execute, re-execute, deliver and
redeliver any and all documents, and do and perform such other and further acts,
as may reasonably be required by Lender to enable Lender to perfect, preserve
and protect Lender's security interest in the Collateral and Lender's and
Lender's rights and remedies under this Agreement or granted by law and to carry
out and effect the intents and purposes of this Agreement.
23. Integration. This Agreement and the other Documents shall constitute
-----------
the entire agreement between the parties hereto with respect to the subject
matter of this Loan Agreement and shall supersede all other agreements, written
or oral, with respect thereto. In the event of any conflict between this
Agreement and the other Documents, the provisions of this Agreement shall
control.
24. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original if fully executed, but
all of which shall constitute one and the same document.
25. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the state of Washington.
26. Confidentiality.
---------------
A. The parties hereby agree that all terms and conditions of that
certain Microsoft Corporation Non-Disclosure Agreement between them dated March
18, 1997, shall govern the disclosure of confidential and proprietary
information made under this Agreement. In this connection, the parties hereby
agree that the terms of this Agreement and any information provided to Lender
hereunder shall be treated as confidential in accordance with the terms of said
Non-Disclosure Agreement.
B. Without having first sought and obtained Lender's written
approval (which Lender may withhold in its sole and absolute discretion),
Borrower shall not, directly or indirectly, (i) trade upon this transaction or
any aspect of Borrower's relationship with Lender, or (ii) otherwise deprecate
Microsoft technology.
C. Neither party will issue any press release or make any public
announcement(s) relating in any way whatsoever to this Agreement or the
relationship established by this Agreement without the express prior written
consent of the other party. However, the parties acknowledge that this
Agreement, or portions thereof, may be required under applicable law to be
disclosed, as part of or an exhibit to a party's required public disclosure
documents. If either party is advised by its legal counsel that such disclosure
is required, it will notify the other in writing and the parties will jointly
seek confidential treatment
-17-
of this Agreement to the maximum extent reasonably possible, in documents
approved by both parties and filed with the applicable governmental or
regulatory authorities.
ORAL COMMITMENTS. NOTICE IS HEREBY GIVEN THAT ORAL AGREEMENTS OR ORAL
----------------
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT
OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Lender: Borrower:
Microsoft Corporation, a Washington Inktomi Corporation, a California
corporation corporation
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
By __________________________ By __________________________
Vice President CEO
Its ______________________ Its ______________________
July 27, 1997 July 24, 1997
Date: ____________________ Date: ____________________
-18-
EXHIBIT A
---------
PROMISSORY NOTE
---------------
US$_________________ Seattle, Washington
_________, 199__
FOR VALUE RECEIVED, the undersigned, INKTOMI CORPORATION ("Maker"), hereby
promises to pay to the order of MICROSOFT CORPORATION ("Lender"), at such place
as Lender may designate in writing from time to time, the principal sum of
___________________ and No/100 United States Dollars (US$________________)
together with interest and costs as herein provided.
Interest. The outstanding principal balance of the Loan shall bear interest at
--------
the rate of ____ percent (___%) per annum. All computations of interest shall be
based on a 360-day year for the actual number of days passed.
Term/Note Maturity Date. The term of this Note shall be three (3) years. The
-----------------------
Note Maturity Date shall be __________________, 200_.
Loan Agreement. This Note is given pursuant to the terms and conditions of the
--------------
Loan Agreement, dated as of ____________, 1997 between Maker and Lender (the
"Loan Agreement"). Capitalized terms not otherwise defined herein shall have
the meaning given to them in the Loan Agreement.
Payments of Principal and Interest. Maker shall make monthly principal and
----------------------------------
interest payments of ___________________ on the first day of each month during
the term of this Note. Maker shall pay all remaining principal and accrued
interest on or before the Note Maturity Date.
Prepayment. Maker may repay all or any portion of the amount due under this
----------
Note without premium or penalty.
Events of Default; Acceleration. Upon occurrence of an Event of Default, at the
-------------------------------
option of Lender the entire outstanding principal, interest and costs hereunder
shall be immediately due and payable and shall thereafter bear interest at a
rate equal to eighteen percent (18%) per annum (the "Default Rate"), until
payment in full of all amounts due to Lender. Notwithstanding the foregoing,
the interest paid under this Note shall never be greater than the maximum rate
of interest permitted under applicable law.
Liability and Waiver. Maker hereby waives diligence, presentment, demand,
--------------------
protest and notice of any kind whatsoever. The non-exercise by Lender of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
-19-
Costs of Collection. Maker, together with all sureties, endorsers and
-------------------
guarantors of this Note, jointly and severally promise to pay: (a) all costs and
expenses incurred by Lender, including without limitation attorneys' fees, in
the event that Lender consults an attorney regarding a default by Borrower, even
though suit is not instituted; (b) attorneys' fees, and all other costs,
expenses and fees incurred by Lender, including costs on appeal, in the event
that suit is instituted on this Note; (c) all costs and expenses provided for in
the Loan Agreement or in any other instrument given as security for this Note
and/or incurred by or on behalf of Lender in connection with collecting or
otherwise enforcing any right of Lender under this Note, the Loan Agreement or
any other instrument given as security for this Note; and (d) all costs and
expenses, including, without limitation, attorneys' fees, incurred by Lender in
connection with any bankruptcy, forfeiture, insolvency or reorganization
proceeding or receivership in which Maker is involved, including, without
limitation, those incurred in making any appearances in any such proceeding or
in seeking relief from any stay or injunction issued in or arising out of any
such proceeding.
NOTICE. NOTICE IS HEREBY GIVEN THAT ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
------
MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
Applicable Law. This Note shall be governed by and construed in accordance with
--------------
the laws of the State of Washington.
Maker:
Inktomi Corporation, a California corporation
By _____________________________
Its _________________________
-20-
Exhibit B
---------
Notice of Borrowing
-------------------
To: Microsoft Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
The undersigned, INKTOMI CORPORATION ("Inktomi"), hereby refers to the Software
Hosting Agreement and Loan Agreement, both dated July __, 1997, and hereby
requests to borrow the sum of $__________ pursuant to said Loan Agreement and
that such funds be sent by wire transfer to the account specified in the Loan
Agreement.
Pursuant to said Software Hosting Agreement, you and Inktomi agreed, on or about
_________________________, that the Microsoft Search Engine would be increased
to accommodate up to ______________ hits per day, and that Inktomi would
purchase __________ new Hosting Servers to satisfy such capacity requirement.
Inktomi certifies that all amounts loaned by you in response to this request
will be used only to purchase __________ new Hosting Servers for the cluster
servicing the Microsoft Search Engine.
Inktomi further certifies that as of the date hereof: (i) all representations
and warranties made by Inktomi under said Loan Agreement remain true; (ii)
Inktomi is in full compliance with all of its affirmative covenants under said
Loan Agreement; and (iii) no event has occurred and is continuing which
constitutes an Event of Default under said Loan Agreement.
All capitalized terms used in this Notice will have the meanings ascribed to
them under said Loan Agreement or Software Hosting Agreement (whichever is
applicable).
INKTOMI CORPORATION
By: _________________________
Printed Name: _________________________
Printed Title: _________________________
Date: _________________________
-21-
EXHIBIT C
---------
PROMISSORY NOTE
---------------
US$_________________ Seattle, Washington
_________, 199__
FOR VALUE RECEIVED, the undersigned, INKTOMI CORPORATION ("Maker"), hereby
promises to pay to the order of MICROSOFT CORPORATION ("Lender"), at such place
as Lender may designate in writing from time to time, the principal sum of
___________________ and No/100 United States Dollars (US$________________)
together with interest and costs as herein provided.
Interest. The outstanding principal balance of the Loan shall bear interest at
--------
the rate of ____ percent (___%) per annum. All computations of interest shall be
based on a 360-day year for the actual number of days passed.
Term/Note Maturity Date. The term of this Note shall be two (2) years. The
-----------------------
Note Maturity Date shall be __________________, 200_.
Loan Agreement. This Note is given pursuant to the terms and conditions of the
--------------
Loan Agreement, dated as of ____________, 1997 between Maker and Lender (the
"Loan Agreement"). Capitalized terms not otherwise defined herein shall have
the meaning given to them in the Loan Agreement.
Payments of Principal and Interest. Maker shall make monthly principal and
----------------------------------
interest payments of ___________________ on the first day of each month during
the term of this Note. Maker shall pay all remaining principal and accrued
interest on or before the Note Maturity Date.
Prepayment. Maker may repay all or any portion of the amount due under this
----------
Note without premium or penalty.
Events of Default; Acceleration. Upon occurrence of an Event of Default, at the
-------------------------------
option of Lender the entire outstanding principal, interest and costs hereunder
shall be immediately due and payable and shall thereafter bear interest at a
rate equal to eighteen percent (18%) per annum (the "Default Rate"), until
payment in full of all amounts due to Lender. Notwithstanding the foregoing,
the interest paid under this Note shall never be greater than the maximum rate
of interest permitted under applicable law.
Liability and Waiver. Maker hereby waives diligence, presentment, demand,
--------------------
protest and notice of any kind whatsoever. The non-exercise by Lender of its
rights hereunder in any particular instance shall not constitute a waiver
thereof in that or any subsequent instance.
-22-
Costs of Collection. Maker, together with all sureties, endorsers and
-------------------
guarantors of this Note, jointly and severally promise to pay: (a) all costs and
expenses incurred by Lender, including without limitation attorneys' fees, in
the event that Lender consults an attorney regarding a default by Borrower, even
though suit is not instituted; (b) attorneys' fees, and all other costs,
expenses and fees incurred by Lender, including costs on appeal, in the event
that suit is instituted on this Note; (c) all costs and expenses provided for
in the Loan Agreement or in any other instrument given as security for this Note
and/or incurred by or on behalf of Lender in connection with collecting or
otherwise enforcing any right of Lender under this Note, the Loan Agreement or
any other instrument given as security for this Note; and (d) all costs and
expenses, including, without limitation, attorneys' fees, incurred by Lender in
connection with any bankruptcy, forfeiture, insolvency or reorganization
proceeding or receivership in which Maker is involved, including, without
limitation, those incurred in making any appearances in any such proceeding or
in seeking relief from any stay or injunction issued in or arising out of any
such proceeding.
NOTICE. NOTICE IS HEREBY GIVEN THAT ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN
------
MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
Applicable Law. This Note shall be governed by and construed in accordance with
--------------
the laws of the State of Washington.
Maker:
Inktomi Corporation, a California corporation
By ___________________________
Its _________________________
-23-
EXHIBIT D
---------
Transfer of Inktomi
-------------------
If Inktomi requests Microsoft's consent to a transfer as described in clause (a)
of Section 19 of this Loan Agreement to which this Exhibit D is appended, and
Microsoft reasonably withholds its consent to such transfer (an "Unconsented
Transfer"), then Inktomi will nevertheless have the right to transfer this
Agreement in connection with its proposed Unconsented Transfer subject to the
following conditions precedent to the Unconsented Transfer:
(i) Inktomi, at its sole cost and expense, and without any financing supplied
by Microsoft, will create a separate cluster of Hosting Servers for Microsoft
required to service Microsoft's reasonably anticipated needs for a period of
twelve months after the commencement of operation of such new and relocated
cluster (provided however that Microsoft will purchase, or fund (in accordance
with this Loan Agreement) Inktomi's purchase of (whichever Microsoft elects) any
new hosting servers beyond the Hosting Servers purchased by Inktomi under the
Software Hosting Agreement of even date herewith necessary to service
Microsoft's reasonably anticipated needs as set forth above);
(ii) Inktomi will relocate, at its sole cost and expense (including, without
limitation, indemnifying Microsoft and holding it harmless against any and all
Taxes that arise as a direct or indirect result of the relocation of the Hosting
Servers), all Hosting Servers referred to in clause (i) to a location designated
by Microsoft, in its sole discretion;
(iii) Inktomi, at its sole cost and expense, will provide training to Microsoft
personnel to the extent requested by Microsoft, to enable such personnel to use
and maintain the Microsoft Search Engine, and to create enhancements thereto,
with reasonable competence (all as determined by Microsoft in its sole
discretion);
(iv) Inktomi will grant to Microsoft an irrevocable, non-exclusive, royalty-
free license to use the Product (and all required underlying Inktomi Technology)
solely in connection with Microsoft's operation of the Microsoft Search Engine
(which license shall include the right to create enhancements and other
derivative works based thereon for use in conjunction therewith) for such period
as Microsoft may require to transition its search engine services to non-Inktomi
technology (the "Transition Period"), and Inktomi will waive all royalties
otherwise payable pursuant to the Software Development Agreement and/or the
Information Services Agreement of even date herewith; for the purposes of this
clause (iv), the Transition Period will commence at such time as Microsoft
assumes control over said separate cluster and begins itself operating the
Microsoft Search Engine, and will continue thereafter for eighteen months (18)
or until the termination of said Software Development Agreement and Information
Services Agreement (whichever is longer);
-24-
(v) Inktomi will direct the Escrow Agent to release to Microsoft all
Confidential Materials held by the Escrow Agent, subject to Microsoft's
agreement to use such Confidential Materials only in connection with its
licensed rights under clause (iv) above;
(vi) Inktomi will agree to reimburse Microsoft for all reasonable costs
incurred by Microsoft in transitioning its search engine to non-Inktomi
technology (whether created by Microsoft or by a third party); and
(vii) Inktomi will cause the applicable proposed assignee, transferee or
delegatee of obligation of this Agreement to assume, jointly and severally with
Inktomi, all of Inktomi's obligations hereunder.
Microsoft will cooperate with Inktomi and use its reasonable best efforts so as
to enable Inktomi to satisfy the foregoing conditions precedent in a timely
manner. Upon satisfaction of the foregoing conditions precedent, said Software
Hosting Agreement shall be deemed terminated pursuant to Section 10.1 thereof.
Upon expiration of the Transition Period, all rights granted to Microsoft to use
the Product (other than Microsoft Technology, Joint Derivative Technology and
the Microsoft Derivative Technology) and/or any Inktomi Technology under the
transitional license referred to in clause (iv) or otherwise shall cease, and
Microsoft shall immediately return to Inktomi all Confidential Materials (and
all copies thereof), provided however that, notwithstanding any provision of the
Ancillary Agreements to the contrary, the undertaking by Inktomi to indemnify
Microsoft and hold it harmless against Taxes as provided in clause (ii) above
shall survive any such terminations.
Capitalized terms used in this Exhibit D and not otherwise defined in this Loan
Agreement shall be defined in the same manner as in the applicable agreement
among the following agreements between Lender and Borrower of even date
herewith: Software Development Agreement; Information Services Agreement; and/or
Software Hosting Agreement.
-25-
EXHIBIT E
---------
Inktomi Depository Account Information
--------------------------------------
All Advances should be sent to Borrower's account by wire transfer as follows,
unless Borrower notifies Lender in writing signed by a Responsible Officer that
Advances henceforth should be sent to a different account:
Name of Bank: Silicon Valley Bank
Address of Bank: ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Routing Number: [*]
Account Number: [*]
-26-
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.