Document:

Amendment to Master Agreement

 
EXHIBIT 10.31

 
 
SECOND AMENDMENT 
 
To Master Agreement to Lease Equipment No. 1103 
 
THIS SECOND AMENDMENT TO MASTER AGREEMENT TO LEASE EQUIPMENT NO. 1103 dated Apri1 14, 2003 (this “Amendment”), is entered into by and between CISCO SYSTEMS CAPITAL CORPORATION
(“Lessor”), and INTERNAP NETWORK SERVICES CORPORATION, a Delaware corporation (formerly a Washington corporation) (“Lessee”), and amends, and shall be deemed incorporated into, that certain Master Agreement to Lease
Equipment between Lessor and Lessee dated as of January 20, 1998, as amended (the “Master Lease”) (such Master Lease having been previously amended by that certain Amendment and Amendment to Master Agreement to Lease Equipment No.
1103 and Schedules dated May 23, 2002 (the “First Amendment”) which has been incorporated into the Master Lease), and is entered with reference to the following: 
 
A.    Lessor has requested certain modifications to the financial covenants in the Master
Lease. 
 
B.    Lessor and
Lessee have agreed to amend the Master Lease on the terms provided herein. 
 
NOW, THEREFORE, in consideration of the foregoing and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Lessor and Lessee hereby agree as follows:

 
1.    DEFINITIONS 
 
(a) All capitalized terms used but not otherwise defined in
this Amendment shall have the respective meanings assigned to such terms in the Lease. 
 
(b) In addition to terms defined in the Lease, the following terms shall have the following meanings and shall be incorporated into the Master Lease, as amended hereby: 
 
“Second Amendment” shall mean that certain Second
Amendment to Master Agreement to Lease Equipment No. 1103 between Lessor and Lessee, dated April 14, 2003. 
 
“Second Amendment Closing Date” shall mean the date when all of the conditions precedent set forth in Section 3 of the Second
Amendment have been satisfied or otherwise waived in writing by Lessor. 
 

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“Second
Amendment Payment” shall have the meaning ascribed to such term in Section 5(b) of the Second Amendment. 
 
(c)    The definition of “EBITDA” shall be amended and restated as follows: 
 
“EBITDA” means, for any applicable period, the
revenue of Lessee: minus Lessee’s (i) direct cost of network, (ii) cost of customer support, (iii) product development costs, (iv) sales and marketing costs, and (v) general and administrative costs; plus the amount of any
deduction to the foregoing as the result of any grant to any employees of Lessee of any stock options, to the extent deducted from the foregoing in accordance with generally accepted accounting principles. 
 
2.    ACKNOWLEDGMENT OF LEASE OBLIGATIONS 
 
Lessee hereby acknowledges, confirms and agrees that: (a)
each of the Lease Documents to which it is a party has been duly executed and delivered to Lessor by Lessee, and each is in full force and effect as of the Second Amendment Closing Date, (b) the agreements and obligations of Lessee contained in such
Lease Documents, including, without limitation, this Amendment, constitute the legal, valid and binding obligations of Lessee, enforceable against it in accordance with their respective terms, and Lessee has no valid defense to the enforcement of
such obligations, and (c) Lessor is and shall be entitled to the rights, remedies and benefits provided for in the Lease Documents and applicable law. 
 
3.    CONDITIONS PRECEDENT 
 
(a)    Conditions to Effectiveness. 
 
The effectiveness of this Amendment shall be conditional upon the following conditions having been satisfied
or provided for in a manner satisfactory to Lessor: 
 
(i)    Receipt of Lease Documents. This Amendment shall have been duly executed by, and delivered to, Lessee and Lessor. 
 
(ii)  No Events of Default. Lessee shall not be in default under (i) any agreement with Lessor or Cisco Systems, Inc. (ii) any
agreement with any Person as a result of this Amendment. 
 
(iii) Representations and Warranties. No representation or warranty by Lessee contained herein or in any of the other Lease Documents shall be untrue or incorrect in any material respect as of the Second Amendment Closing Date,
except to the extent that such representation or warranty expressly relates to an earlier date and except for changes therein expressly permitted or expressly contemplated hereunder. 
 
4.    FURTHER LESSEE REPRESENTATIONS AND COVENANTS 
 
Lessee hereby represents and warrants to Lessor that as of
the First Amendment Closing Date: 
 

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(a) The
representations and warranties contained in the First Amendment were true and correct in all material respects when made and, except to the extent (i) that a particular representation or warranty by its terms expressly applies only to an earlier
date, (ii) Lessee has previously advised Lessor in writing as contemplated under the Master Lease, or (iii) amended by this Amendment, are true and correct in all material respects as of the date hereof. 
 
(b) Since May 23, 2002, no Material Adverse Change has
occurred. 
 
(c) The consent of Silicon Valley Bank
to Lessee’s execution, delivery and performance of this Amendment is not required under any of the agreements between Silicon Valley Bank and Lessee. 
 
5.    AMENDMENT TO MASTER LEASE 
 
The Master Lease shall be amended as follows: 
 
(a)    Amendment to Financial Covenants.    As applicable to
the Fiscal Quarters set forth below, Section 4(d) of the Appendix shall be amended and restated as follows: 
 
“(d) From the Second Amendment Closing Date through the date that all obligations of Lessee to Lessor are paid in
full, including, without limitation, payment of all Rent, Lessee shall comply with each of the financial covenants set forth below: 
 
(i)     Minimum Revenue.    Lessee shall have for each Fiscal Quarter ending on the last
day of such Fiscal Quarter as set forth below, revenue for such period of not less than the amount set forth below opposite such Fiscal Quarter: 
 

	 Quarterly Period Ending

	 	 Revenue

	 March 31, 2003
	 	 $32,500,000

	 June 30, 2003
	 	 $32,500,000

	 September 30, 2003
	 	 $32,500,000

	 December 31, 2003 and thereafter
	 	 $32,500,000

 
(ii)    Minimum EBITDA.    Lessee shall have for each Fiscal Quarter ending on the last day of such Fiscal Quarter as set forth below, EBITDA for such period of not less than the amount
set forth below opposite such Fiscal Quarter: 
 

	 Quarterly Period Ending

	 	 EBITDA

	 March 31, 2003
	 	 $1,200,000

	 June 30, 2003
	 	 $2,400,000

	 September 30, 2003
	 	 $2,400,000

	 December 31, 2003 and thereafter
	 	 $2,600,000

 
(iii)    Minimum Unrestricted Cash Balance.    The Unrestricted Cash Balance of Lessee shall not, at any time, be less than $10,000,000.” 
 

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(b)     Modification of Payment Terms (Second Amendment Payment).    On or before April 18, 2003, Lessee shall pay to Lessor, by wire transfer to the account designated in the
attached Exhibit A, or to such other account as Lessor may hereafter notify Lessee in writing, the sum of $2,232,871.58 (the “Second Amendment Payment”), representing the sum of the March, 2004 and April, 2004 payments under
Section 2(b) of the First Amendment, together with any other payments owed by Lessee to Lessor through the Second Amendment Closing Date under the Master Lease, all Schedules subject to such Master Lease immediately prior to the effectiveness
of this Amendment, and under all other agreements between Lessor and Lessee. Such Second Amendment Payment shall be in lieu of and in substitution for the March, 2004 and April, 2004 payments under Section 2(b) of the First Amendment. All
other terms and provisions of Section 2(b) of the First Amendment shall remain in full force and effect. (By way of example, but without limiting the foregoing, nothing contained in this Amendment shall affect the due dates of the payments
payable by Lessor from and after the month of May, 2004 under Section 2(b) of the First Amendment.) 
 
(c)    Collateral Access Agreements.    The first sentence of Section 4(c)(v) of the
First Amendment is hereby deleted in its entirety. In lieu of the requirements of the first sentence of Section 4(c)(v) of the First Amendment, Lessee shall use its best efforts to obtain and to deliver to Lessor as soon as practicable and by
or before March 31, 2004, a Collateral Access Agreement for each location where Equipment subject to any Remaining Schedules is located, substantially in the form of Exhibit E attached to the First Amendment. 
 
(d)    Financial
Reports.    With respect to Lessee’s Fiscal Year ended December 31, 2002, as an alternative to providing the year-end financials required by the first sentence of Section 4(c)(iv) of the First Amendment, Lessee
may deliver to Lessor, by or before April 16, 2003, Lessee’s Form 10-K for such Fiscal Year, as filed by or before such date with the Securities and Exchange Commission. The first sentence of Section 4(c) of the First Amendment shall be
deemed amended accordingly, but all other requirements of Section 4(c) shall remain in effect. 
 
6.    MISCELLANEOUS 
 
(a)    Further Assurances.    The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary
or desirable to effectuate the provisions and purposes of this Amendment. 
 
(b)    Binding Effect.      This Amendment shall be binding upon and inure to the benefit of each of the parties hereto and their respective
successors and assigns. 
 
(c)    Survival of Representations and Warranties.    All representations and warranties made in this Amendment or any other document furnished in connection with this Amendment shall
survive the execution and delivery of this Amendment and the other documents, and no investigation by Lessor shall affect the representations and warranties or the right of Lessor to rely upon them. 
 

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(d)
Severability. Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment. 
 
(e) Governing Law. The governing law section set forth
in the Master Lease shall apply to this Amendment. 
 
(f) Counterparts. This Agreement may be executed in any number of counterparts, but all of such counterparts shall together constitute but one and the same agreement. 
 
(g) Complete Agreement. This Agreement together with
other Lease Documents constitute the complete and final agreement of the parties hereto, and supersedes all prior or contemporaneous oral or written communications, proposals, and discussions, with respect to the subject matter hereof. 
 
IN WITNESS WHEREOF, Lessor and Lessee have caused this
Amendment to be duly executed by their authorized representatives as of the date first set forth above. 
 

	 CISCO SYSTEMS CAPITAL
 CORPORATION,
 Lessor
  
 By:

  
 Title:

	 	 INTERNAP NETWORK SERVICES
 CORPORATION
 Lessee
  
 By:

  
 Title:

 

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Exhibit A
 
to Second Amendment to  
Master Agreement to Lease Equipment No. 1103 
 
Wire Transfer Instructions 
 
Bank of America 
 
Account No.  
 
ABA No. 121000358  
 
Address: 1455 Market Street, 21st Floor 
 
San Francisco, CA 94103 
 
Account Name: Cisco Systems Capital Corp 
 
Reference: Internap 
 
 

A-6Amendment to Loan and Security Agreement

  EXHIBIT 10.32
 Silicon Valley Bank
 Amendment to Loan Documents
 Borrower:     Internap Network Services Corporation
 Date:              March 25, 2003
 THIS AMENDMENT TO LOAN
DOCUMENTS is entered into between Silicon Valley Bank (“Silicon”) and the borrower named above (“Borrower”).
 The
Parties agree to amend the Loan and Security Agreement between them, dated October 21, 2002 (as otherwise amended, if at all, the “Loan Agreement”), as follows, effective as of the date hereof. (Capitalized terms used but not defined in
this Amendment shall have the meanings set forth in the Loan Agreement.)
 1.        Addition of Letter of Credit Sublimit Provision. Section 1.6 of the Loan Agreement is hereby amended in its entirety to read as follows:

 1.6 Letters of Credit.  At the request of Borrower, Silicon may, in its good faith business judgment, issue or arrange for
the issuance of letters of credit for the account of Borrower, in each case in form and substance satisfactory to Silicon in its sole discretion (collectively, “Letters of Credit”). The aggregate face amount of all Letters of Credit from
time to time outstanding shall not exceed the amount shown on the Schedule (the “Letter of Credit Sublimit”), and shall be reserved against Loans which would otherwise be available hereunder, and in the event at any time there are
insufficient Loans available to Borrower for such reserve, Borrower shall deposit and maintain with Silicon cash collateral in an amount at all times equal to such deficiency, which shall be held as Collateral for all purposes of this Agreement.
Borrower shall pay all bank charges (including charges of Silicon) for the issuance of Letters of Credit, together with such additional fee as Silicon’s letter of credit department shall charge in connection with the issuance of the Letters of
Credit. Any payment by Silicon under or in connection with a Letter of Credit shall constitute a Loan hereunder on the date such payment is made. Each Letter of Credit shall have an expiry date no later than thirty days prior to the Maturity Date.
Borrower hereby agrees to indemnify and hold Silicon harmless from any loss, cost, expense, or liability, including payments made by Silicon, expenses, and reasonable attorneys’ fees incurred by Silicon arising out of or in connection with any
Letters of Credit. Borrower agrees to be bound by the regulations and interpretations of the issuer of any Letters of Credit guarantied by Silicon and opened for Borrower’s account or by Silicon’s
 
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  interpretations of any Letter of Credit issued by Silicon for Borrower’s account, and Borrower understands and agrees that Silicon
shall not be liable for any error, negligence, or mistake, whether of omission or commission, in following Borrower’s instructions or those contained in the Letters of Credit or any modifications, amendments, or supplements thereto. Borrower
understands that Letters of Credit may require Silicon to indemnify the issuing bank for certain costs or liabilities arising out of claims by Borrower against such issuing bank. Borrower hereby agrees to indemnify and hold Silicon harmless with
respect to any loss, cost, expense, or liability incurred by Silicon under any Letter of Credit as a result of Silicon’s indemnification of any such issuing bank. The provisions of this Loan Agreement, as it pertains to Letters of Credit, and
any other Loan Documents relating to Letters of Credit are cumulative.
 2.        Modified Credit Limit. Subclause (A) of the Credit Limit set forth in Section 1 of the Schedule to Loan and Security Agreement is hereby amended in
its entirety to read as follows:
 (A) The lesser of (i) $20,000,000 (referred to herein as the “Maximum Revolving Credit Limit” ) at any one
time outstanding; or (ii) the sum of (a) up to 80% (the “Advance Rate”) of the amount of Borrower’s Eligible Accounts (as defined in
Section 8 above) and (b) up to 50% of the aggregate amount of unrestricted cash and cash equivalents maintained at accounts at Silicon (provided that availability hereunder shall be reduced, as and when
applicable, pursuant to the terms of clause (B) below); PLUS
 3.        Modified Definition of Debt Service Coverage Ratio. The term “Debt Service Coverage Ratio” set forth in Section 1 of the Schedule to Loan
and Security Agreement is hereby amended in its entirety to read as follows:
 The term “Debt Service Coverage Ratio” shall mean, on a consolidated basis, as of any date of determination with respect to the then immediately preceding three month period, the ratio of (a) net income of Borrower before net interest, depreciation and other non-cash
amortization expenses of Borrower, less unfunded capital expenditures, relating to the then immediately preceding three month period, determined in accordance with GAAP, consistently applied, to (b) the
amount of Borrower’s obligations relating to the payment of interest for such three month period plus the principal amounts due during such three month period regarding Borrower’s outstanding
long term indebtedness, including, without limitation, obligations relating to capitalized leases, with all of the foregoing determined in accordance with GAAP, consistently applied.
 4.        Addition of Letter of Credit Sublimit in Schedule. The following is hereby added to Section 1
of the Schedule to Loan and Security Agreement immediately preceding the paragraph entitled “Credit Card Sublimit” and shall read as follows:
 Letter of Credit
Sublimit
  
 
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  (Section
1.6):                                       
       $2,100,000.
 5.        Modified Loan Fee. The sentence in that portion of Section 3 of the Schedule to Loan and Security Agreement entitled “Loan Fee” that
currently reads as follows:
 Further, on the anniversary of this Agreement, Borrower shall pay an additional fee of $75,000, which shall be fully due and
payable on such date, which shall be in addition to interest and all other amounts otherwise payable hereunder and which shall not, under any circumstances, be refundable.
 is
hereby amended in its entirety to read as follows:
 Further, on the anniversary of this Agreement, Borrower shall pay an additional fee of $100,000, which
shall be fully due and payable on such date, which shall be in addition to interest and all other amounts otherwise payable hereunder and which shall not, under any circumstances, be refundable.  
 6.        Modified Maturity Date Provision. Section 4 of the
Schedule to Loan and Security Agreement is hereby amended in its entirety to read as follows:
 4. MATURITY DATE 
 (Section 6.1):          October 21, 2004.
 Notwithstanding the foregoing, with respect to the Term Loan and related Obligations: As set forth in Section 1.1 above regarding the Term Loan. 
 Notwithstanding the foregoing, with respect to the Existing Equipment Advances: As set forth in Section 1.1 above regarding the Existing Equipment Advances.
 7.        Covenant Regarding Clean-Up Period. Borrower
hereby covenants and agrees that by the close of business on the 15th of each month (or the first Business Day after the 15th if such day is not a Business Day), the amount of Revolving Advances and related Obligations shall
not exceed the sum of (a) up to 80% of the amount of Borrower’s Eligible Accounts (as defined in Section 8 above) and (b) up to 25% of the
aggregate amount of unrestricted cash and cash equivalents maintained at accounts at Silicon (subject to the Maximum Credit Limit set forth above). 
 8.        Fee. In consideration for Silicon entering into this Amendment, Borrower shall concurrently pay Silicon a fee in the
amount of $22,000, which shall be non-refundable and in addition to all interest and other fees payable to Silicon under the Loan Documents. Silicon is authorized to charge said fee to Borrower’s loan account.
  
 
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  9.        Representations True.
Borrower represents and warrants to Silicon that all representations and warranties set forth in the Loan Agreement, as amended hereby, are true and correct as of the date hereof. 
 10.      General Provisions. This Amendment, the Loan Agreement, any prior written amendments
to the Loan Agreement signed by Silicon and Borrower, and the other written documents and agreements between Silicon and Borrower set forth in full all of the representations and agreements of the parties with respect to the subject matter hereof
and supersede all prior discussions, representations, agreements and understandings between the parties with respect to the subject hereof. Except as herein expressly amended, all of the terms and provisions of the Loan Agreement, and all other
documents and agreements between Silicon and Borrower shall continue in full force and effect and the same are hereby ratified and confirmed.
  

	  
 	 Borrower:
 
 INTERNAP NETWORK SERVICES CORPORATION
 	  
 	 Silicon:
 
 SILICON VALLEY BANK
 
	  
 	 By 
 	 
 
 
 	  
 	 By 
 	 
 
 
 
	  
 	  
 	 
 	  
 	  
 	 
 
	  
 	  
 	 President or Vice President
 	  
 	 Title 
 	  
 
	  
 	  
 	  
 	  
 	  
 	 
 
	  
 	 By 
 	  
 	  
 	  
 	  
 
	  
 	  
 	 
 	  
 	  
 	  
 
	  
 	  
 	 Secretary or Ass’t Secretary
 	  
 	  
 	  
 

  
 
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  CONSENT
 The undersigned acknowledges
that his consent to the foregoing Agreement is not required, but the undersigned nevertheless does hereby consent to the foregoing Agreement and to the documents and agreements referred to therein and to all future modifications and amendments
thereto, and any termination thereof, and to any and all other present and future documents and agreements between or among the foregoing parties. Nothing herein shall in any way limit any of the terms or provisions of the Continuing Guaranty of the
undersigned, all of which are hereby ratified and affirmed.
  

	  
 	 CO SPACE, INC.
 	  
 	 CO SPACE CONSTRUCTION, LLC
 
	  
 	  
 	  
 	  
 
	  
 	 By: 
 	  
 	  
 	 By: Co Space Services, LLC, its sole 
 member
 
	  
 	  
 	 
 	  
 	  
 
	  
 	 Title: 
 	  
 	  
 	  
 	  
 
	  
 	  
 	 
 	  
 	  
 	  
 
	  
 	  
 	  
 	  
 	 By: Co Space, Inc., its sole member
 
	  
 	  
 	  
 	  
 	  
 	  
 
	  
 	  
 	  
 	  
 	 By 
 	  
 
	  
 	  
 	  
 	  
 	  
 	 
 
	  
 	  
 	  
 	  
 	 Title 
 	  
 
	  
 	  
 	  
 	  
 	  
 	 
 

  

	  
 	 CO SPACE SERVICES, LLC
 	  
 	 CO SPACE SERVICES TEXAS, L.P.
 
	  
 	  
 	  
 	  
 
	  
 	 By: Co Space, Inc., its sole member
 	  
 	 By: Co Space Services, LLC, its general
 partner
 
	  
 	 By 
 	  
 	  
 	  
 	  
 
	  
 	  
 	 
 	  
 	  
 	  
 
	  
 	 Title 
 	  
 	  
 	 By: Co Space, Inc., its sole member
 
	  
 	  
 	 
 	  
 	  
 
	  
 	  
 	  
 	  
 	  
 	  
 
	  
 	  
 	  
 	  
 	 By 
 	  
 
	  
 	  
 	  
 	  
 	  
 	 
 
	  
 	  
 	  
 	  
 	 Title 
 	  
 
	  
 	  
 	  
 	  
 	  
 	 
 

  

	  
 	 CO SPACE PROPERTIES, LLC
 	  
 	 CO SPACE PROPERTIES TEXAS, L.P.
 
	  
 	  
 	  
 	  
 
	  
 	 By: Co Space Services, LLC, its sole 
 member
 	  
 	 By: Co Space Services, LLC, its general 
 partner
 
	  
 	  
 	  
 	  
 
	  
 	 By: Co Space, Inc., its sole member
 	  
 	 By: Co Space, Inc., its sole member
 
	  
 	  
 	  
 	  
 	  
 	  
 
	  
 	 By 
 	  
 	  
 	 By 
 	  
 
	  
 	  
 	 
 	  
 	  
 	 
 
	  
 	 Title 
 	  
 	  
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 	 VPNX.COM, INC.
 	  
 	  
 
	  
 	 By 
 	 
 
 
 	  
 	  
 	 
 
 
 
	  
 	  
 	 
 	  
 	  
 	  
 
	  
 	 Title 
 	  
 	  
 	  
 	  
 
	  
 	  
 	 
 	  
 	  
 	  
 

  
 
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