exv10w38



 




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
    




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	 	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,



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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
    



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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:                               .



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	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	 	 



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