Exhibit 10.38

LOAN MODIFICATION AGREEMENT

This Loan Modification Agreement is entered into as of December 30, 2003, by and
between At Road, 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 June 30, 1999, as amended
or modified from time to time (the “Loan Agreement”). The Loan Agreement
provides for, among other things, a Committed Revolving Line in the original
principal amount of Two Million Dollars ($2,000,000). 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.

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.    Modifications(s) to Loan Agreement.

        1.     Section 2.1.2 entitled “Letters of Credit Sublimit” is hereby
amended in its entirety to read as follows:           Bank will issue or have
issued Letters of Credit for Borrower’s account not exceeding (i) the lesser of
the Committed Revolving Line minus (ii) the outstanding principal balance of the
Advances; however, the face amount of outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may
not exceed $100,000. Borrower’s Letter of Credit reimbursement obligation will
be secured by unencumbered cash on terms acceptable to Bank at any time upon the
Revolving Maturity Date if the term of this Agreement is not extended by Bank.
Borrower agrees to execute any further documentation in connection with the
Letters of Credit as Bank may reasonably request.           2.     Section 4.1
entitled “Grant of Security Interest” is hereby deleted in its entirety and
replaced with the words “Intentionally Left Blank”.           3.     Section 6.5
entitled “Financial Statements, Reports, Certificates” is hereby incorporated to
read as follows:

        (a) Borrower will deliver to Bank: (i) as soon as available, but no
later than 50 days after the last day of each quarter, a company prepared
consolidated balance sheet and income statement covering Borrower’s consolidated
operations during the period certified by a Responsible Officer and in a form
acceptable to Bank; provided, however, Borrower may satisfy the company prepared
consolidated balance sheet and income statement reporting requirement via a
10Q filed with the SEC; (ii) if Borrower does not maintain cash, cash
equivalents, short term investments (but not restricted cash) greater than
$50,000,000, the company prepared consolidated balance and income statement will
be due, as soon as available, but no later than 50 days after the last day of

E-1

--------------------------------------------------------------------------------

 

  each month; (iii) as soon as available, but no later than 180 days after the
last day of Borrower’s fiscal year, audited consolidated financial statements
prepared under GAAP, consistently applied, together with an unqualified opinion
on the financial statements from an independent certified public accounting firm
reasonably acceptable to Bank; provided, however, Borrower may satisfy the
fiscal year end audited consolidated financial statement reporting via a 10K
filed with the SEC; and (iv) a prompt report of any legal actions pending or
threatened against Borrower or any Subsidiary that could result in damages or
costs to Borrower or any Subsidiary of $5,000,000, so long as such notification
does not cause a violation of Regulation FD (Fair Disclosure) issued by the
Security Exchange Commission; provided, however, if Borrower believes it cannot
disclose such information without violating Regulation FD, Borrower must notify
Bank in writing that it has received an opinion of counsel that the Borrower may
not disclose such information.

        (b) Within 50 days after the last day of each quarter, Borrower will
deliver to Bank with the quarterly financial statements a Compliance Certificate
signed by a Responsible Officer in the form of Exhibit C; provided, however, if
Borrower does not maintain cash, cash equivalents, short term investments (but
not restricted cash) greater that $50,000,000, the Compliance Certificate will
be due, as soon as available, but no later that 50 days after the last day of
each month.

        4.     Section 6.6 entitled “Financial Covenants” is hereby incorporated
to read as follows:

        Borrower will maintain as of the last day of each quarter (unless
otherwise noted):

        (i) Tangible Net Worth.     A Tangible Net Worth of at least $95,000,000
for the quarter ending December 31, 2003 (“12/03 TNW”); for the quarter ending
March 31, 2004, Borrower will have a Tangible Net Worth of at least the 12/03
TNW plus 50% of Borrower’s net income earned during the fiscal quarter ending
December 31, 2003, with no adjustments for losses (“3/04 TNW”); and for the
quarter ending June 30, 2004, Borrower will have a Tangible Net Worth equal to
the 3/04 TNW plus 50% of Borrower’s net income earned during the quarter ending
March 31, 2004, with no adjustments for losses.

        5.     The following defined terms under Section 13.1 entitled
“Definitions” are hereby amended to read as follows:

        “Committed Revolving Line” is a Credit Extension of up to $100,000.    
      “Revolving Maturity Date” is June 30, 2004.

        6.     The following defined terms “CD Rate” and “Collateral” under
Section 13.1 entitled “Definitions” are hereby deleted and replaced with the
words “Intentionally Left Blank”.

      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 paying any of the Obligations.

      6.     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,

E-2

--------------------------------------------------------------------------------

 

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.

      This Loan Modification Agreement is executed as of the date first written
above.

BORROWER:

AT ROAD, INC.

By:  /s/ THOMAS C. HOSTER

--------------------------------------------------------------------------------

Name:        Thomas C. Hoster

Title: SVP & CFO

BANK:

SILICON VALLEY BANK

By:  /s/ JOELLEN ADEMSKI

--------------------------------------------------------------------------------

Name:        Joellen Ademski

Title: SVP

E-3

--------------------------------------------------------------------------------

 

EXHIBIT C

COMPLIANCE CERTIFICATE

TO:      SILICON VALLEY BANK   FROM:  AT ROAD, INC.

      The undersigned authorized officer of At Road, Inc. (“Borrower”) certifies
that under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the “Agreement”), (i) Borrower is in complete compliance for
the period ending                               with all required covenants
except as noted below and (ii) all representations and warranties in the
Agreement are true and correct in all material respects on this date. In
addition, the undersigned authorized officer of Borrower certifies that Borrower
and each Subsidiary has timely filed all required tax returns and paid, or made
adequate provision to pay all material taxes, except those being contested in
good faith with adequate reserves under GAAP. Attached are the required
documents supporting the certification. The Officer certifies that these are
prepared in accordance with Generally Accepted Accounting Principles (GAAP)
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The Officer acknowledges that no borrowings
may be requested at any time or date of determination that Borrower is not in
compliance with any of the terms of the Agreement, and that compliance is
determined not just at the date this certificate is delivered.

      Please indicate compliance status by circling Yes/No under “Complies”
column.

              Reporting Covenant Required Complies

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Monthly financial statements
  Quarterly within 50 days*   Yes   No
Annual (Audited)
  FYE within 150 days**   Yes   No
Compliance Certificate
  Quarterly within 50 days***        

--------------------------------------------------------------------------------

 

* Borrower may satisfy the company prepared consolidated balance sheet and
income statement reporting requirement via a 10K filed with the SEC. If Borrower
does not maintain cash, cash equivalents, short term investments (but not
restricted cash) greater than $50,000,000, the company prepared consolidated
balance and income statement will be due, as soon as available, but no later
than 50 days after the last day of each month.   ** Borrower may satisfy the
fiscal year end audited consolidated financial statement reporting via a 10K
filed with the SEC   *** If Borrower does not maintain cash, cash equivalents,
short term investments (but not restricted cash) greater than $50,000,000, the
Compliance Certificate will be due, as soon as available, but no later than
50 days after the last day of each month.

                      Financial Covenant Required Actual Complies

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Maintain on a quarterly basis
(unless otherwise noted):
                   
Minimum Tangible Net Worth
  $95,000,000 for the quarter ending 12/31/03   $       Yes   No     12/03 TNW
for the quarter ending 3/31/04*   $       Yes   No     3/04 TNW for the quarter
ending 6/30/04**   $       Yes   No

 

* For the quarter ending March 31, 2004, Borrower will have a Tangible Net Worth
of at least the 12/03 TNW plus 50% of Borrower’s net income earned during the
fiscal quarter ending December 31, 2003, with no adjustments for losses (“3/04
TNW”).   ** For the quarter ending June 30, 2004, Borrower will have a Tangible
Net Worth equal to the 3/04 TNW plus 50% of Borrower’s net income earned during
the quarter ending March 31, 2004, with no adjustments for losses.

Borrower only has deposit accounts located at the following institutions:
                              .

E-5

--------------------------------------------------------------------------------

 

Comments Regarding Exceptions: See Attached.   BANK USE ONLY     Received by: 

--------------------------------------------------------------------------------

Sincerely,   AUTHORIZED SIGNER AT ROAD   Date: 

--------------------------------------------------------------------------------

    Verified: 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

  AUTHORIZED SIGNER SIGNATURE    

--------------------------------------------------------------------------------

  Date: 

--------------------------------------------------------------------------------

TITLE    

--------------------------------------------------------------------------------

  Compliance Status:           Yes   No DATE    

E-6