EXHIBIT 10.25
FOURTH LOAN MODIFICATION AGREEMENT
This Fourth Loan Modification Agreement (this "Loan Modification
Agreement') is entered into as of November 26, 2003 , by and between SILICON
VALLEY BANK, a California-chartered bank, with its principal place of business
at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 and with a loan production
office located at One Newton Executive Park, Suite 200, 0000 Xxxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, doing business under the name "Silicon Valley East"
("Bank") and ART TECHNOLOGY GROUP, INC., a Delaware corporation with its
principal place of business at 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000
("Borrower").
1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and obligations which may be owing by Borrower to Bank, Borrower is
indebted to Bank pursuant to a loan arrangement dated as of June 13, 2002,
evidenced by, among other documents, a certain Amended and Restated Loan and
Security Agreement dated as of June 13, 2002, between Borrower and Bank, as
amended by a certain First Loan Modification Agreement dated as of September 27,
2002, as further amended by a certain Amendment dated as of October __, 2002, as
further amended by a certain Second Loan Modification Agreement dated as of
December 24, 2002, and as further amended by a certain Third Loan Modification
Agreement dated as of October 20, 2003 (as amended, the "Loan Agreement").
Capitalized terms used but not otherwise defined herein shall have the same
meaning as in the Loan Agreement.
2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the Loan Agreement (together with any other
collateral security granted to Bank, 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 to Loan Agreement.
1. The Loan Agreement shall be amended by deleting the third
sentence of Section 2.1.2 (a), in its entirety, and inserting in
lieu thereof the following:
"Each Letter of Credit shall have an expiry date no later
than 364 days after the Revolving Maturity Date provided
Borrower's Letter of Credit reimbursement obligation shall
be secured by cash on terms reasonably acceptable to Bank on
and after (i) the Revolving Maturity Date if the term of
this Agreement is not extended by Bank, or (ii) the
occurrence of an Event of Default hereunder."
2. The Loan Agreement shall be amended by deleting the following
text appearing in Section 2.4 (e ) thereof:
"(e) Compensating Balance/Compensating Balances Fees. In the
event, at any time, Borrower maintains less than $27,000,000
in unrestricted cash with Bank, of which at least $3,000,000
shall be maintain in Borrower's sweep account (account no.
3300070667) at Bank, Borrower shall pay such fees and
expenses as Bank shall determine, in its sole and exclusive
discretion, to compensate Bank for its loss on income on
such deposit balance (the "Additional Fees")."
and inserting in lieu thereof the following:
"(e) Compensating Balance/Compensating Balances Fees. In the
event, at any time, Borrower maintains less than $25,000,000
in unrestricted cash with Bank, Borrower shall pay such fees
and expenses as Bank shall determine, in its sole and
exclusive discretion, to compensate Bank for its loss on
income on such deposit
balance (the "Additional Fees")."
3. The Loan Agreement shall be amended by deleting the following
text, appearing in Section 6.2 thereof:
"6.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(a) Borrower shall deliver to Bank: (i) as
soon as available, but no later than thirty (30) days after
the last day of each month, 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; (ii)
as soon as available, but no later than forty-five (45) days
after the last day of each of Borrower's fiscal quarters, 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; (iii) as soon as available, but no later
than one hundred twenty (120) 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; (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 One Hundred Thousand Dollars
($100,000.00) or more; (v) prompt notice of any material
change in the composition of the Intellectual Property,
including any subsequent ownership right of Borrower in or
to any Copyright, Patent or Trademark not shown in any
intellectual property security agreement between Borrower
and Bank or knowledge of an event that materially adversely
affects the value of the Intellectual Property; and (vi)
budgets, sales projections, operating plans or other
financial information reasonably requested by Bank.
(c) Within thirty (30) days after the last
day of each month and also forty-five (45) days after the
last day of each of Borrower's fiscal quarters, Borrower
shall deliver to Bank with the monthly and quarterly
financial statements a Compliance Certificate signed by a
Responsible Officer in the form of EXHIBIT D."
and inserting in lieu thereof the following:
"6.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.
(a) Borrower shall deliver to Bank: (i) as
soon as available, but no later than one hundred twenty
(120) 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; (ii) 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
Five Hundred Thousand Dollars ($500,000.00) or more; (iii)
prompt notice of any material change in the composition of
the Intellectual Property, including any subsequent
ownership right of Borrower in or to any Copyright, Patent
or Trademark not shown in any intellectual property security
agreement between Borrower and Bank or knowledge of an event
that materially adversely affects the value of the
Intellectual Property; and (iv) budgets, sales projections,
operating plans or other financial information reasonably
requested by Bank.
(c) Within five (5) days after filing copies
of all of Borrower's reports on Form 10-Q and Form 10-K
filed with the Securities and Exchange Commission, Borrower
shall deliver to Bank a Compliance Certificate signed by a
Responsible Officer in the form of EXHIBIT D."
4. The Loan Agreement shall be amended by deleting the following
text, appearing in Section 6.7(a) thereof:
"(a) LIQUIDITY. Borrower shall have at all times, to be
tested as of the last day of each month, unrestricted and
unencumbered cash equal to or greater than $40,000,000.00."
and inserting in lieu thereof the following:
"(a) LIQUIDITY. Borrower shall have at all times, to be
tested as of the last day of each month, unrestricted and
unencumbered cash equal to or greater than $25,000,000
.00."
5. The Loan Agreement shall be amended by deleting the following
text, appearing in Section 6.7(b) thereof:
"(b) PROFITABILITY. Borrower shall have quarterly net losses
of not more than (i) $4,500,000.00 for the quarter ending
December 31, 2002; (ii) $4,000,000.00 for the quarter ending
March 31, 2003; (iii) $2,000,000.00 for the quarter ending
June 30, 2003; (iv) $1,000,000.00 for each quarter
thereafter. In calculating Borrower's profitability
hereunder, Bank will exclude a restructuring charge not to
exceed $25,000,000 in the aggregate (of which (x) not more
than $7,500,000 will be used for non-lease cash obligations
payable within twelve months and (y) not more than
$12,000,000 will be used for cash payments for lease
termination obligations payable within twelve months), which
restructuring charge may be taken by Borrower in each of (or
any of) the quarters ending December 31, 2002, March 31,
2003, June 30, 2003 and September 30, 2003."
and inserting in lieu thereof the following:
"(b) PROFITABILITY. Borrower shall have quarterly net losses
of not more than (i) $3,500,000.00 for the quarter ending
December 3 1, 20 03; (ii) $3,000,000.00 for the quarter
ending March 31, 200 4; (iii) $2,000,000.00 for the quarter
ending June 30, 2004; (iv) $2,000,000.00 for the quarter
ending September 30, 20 04; (v) $1,000,000.00 for each
quarter thereafter."
6. The Loan Agreement shall be amended by deleting the following
definition appearing in Section 13 thereof, in its entirety:
""REVOLVING MATURITY DATE" is December 26, 2003."
and inserting in lieu thereof the following:
""REVOLVING MATURITY DATE" is November 25, 2004."
7. The Compliance Certificate appearing as EXHIBIT D to the Loan
Agreement is hereby replaced with the Compliance Certificate
attached as EXHIBIT A hereto .
4. FEES. Borrower shall pay to Bank: (a) a commitment fee equal to $78,287.67,
and (b) a modification fee equal
to $5,000.00, which fees shall be due on the date hereof and shall be deemed
fully earned as of the date hereof. The Borrower shall also reimburse Bank for
all reasonable legal fees and expenses incurred in connection with this
amendment to the Existing Loan Documents.
5. RATIFICATION OF INTELLECTUAL PROPERTY SECURITY AGREEMENT. Borrower hereby
ratifies, confirms and reaffirms, all and singular, the terms and conditions of
a certain Intellectual Property Security Agreement dated as of June 13, 2002
between Borrower and Bank, and acknowledges, confirms and agrees that said
Intellectual Property Security Agreement contains an accurate and complete
listing of all Intellectual Property Collateral as defined in said Intellectual
Property Security Agreement (with the exception of the Intellectual Property
Collateral set forth on Schedule 5 attached hereto) and shall remain in full
force and effect.
6. RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby ratifies, confirms
and reaffirms, all and singular, the terms and disclosures contained in a
certain Perfection Certificate dated as of June 13, 2002 between Borrower and
Bank, and acknowledges, confirms and agrees the disclosures and information
Borrower provided to Bank in said Perfection Certificate has not changed, as of
the date hereof.
7. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
8. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to the Bank, and confirms that the indebtedness secured thereby includes,
without limitation, the Obligations.
9. NO DEFENSES OF BORROWER .Borrower agrees that, as of this date, it has no
defenses against the obligations to pay any amounts under the Obligations.
10. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations, Bank is relying up on Borrower's representations,
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 of Existing Loan Documents,
unless the party is expressly released by Bank in writing. No maker will be
released by virtue of this Loan Modification Agreement.
11. JURISDICTION/VENUE. Borrower accepts for itself and in connection with its
properties, unconditionally, the exclusive jurisdiction of any state or federal
court of competent jurisdiction in the Commonwealth of Massachusetts in any
action, suit, or proceeding of any kind against it which arises out of or by
reason of this Loan Modification Agreement; provided, however, that if for any
reason Bank cannot avail itself of the courts of the Commonwealth of
Massachusetts, then venue shall lie in Santa Xxxxx County, California.
NOTWITHSTANDING THE FOREGOING, THE BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION
OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION WHICH THE BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE
ON THE COLLATERAL OR TO OTHERWISE ENFORCE THE BANK'S RIGHTS AGAINST THE BORROWER
OR ITS PROPERTY.
12. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Bank (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Bank in California).
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This Loan Modification Agreement is executed as a sealed instrument under
the laws of the Commonwealth of Massachusetts as of the date first written
above.
BORROWER: BANK:
ART TECHNOLOGY GROUP, INC. SILICON VALLEY BANK, doing business as
SILICON VALLEY EAST
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------- -----------------------------------
Name: Xxxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxxxx
---------------------------- -----------------------------------
Title: Chief Financial Officer Title: Vice President
---------------------------- -----------------------------------
SILICON VALLEY BANK
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
(signed in Santa Xxxxx County,
California)
EXHIBIT A
COMPLIANCE CERTIFICATE
TO: SILICON VALLEY BANK
FROM: ART TECHNO LOGY GROUP , INC.
The undersigned authorized officer of ART TECHNOLOGY GROUP, INC.
certifies that under the terms and conditions of the Amended and Restated 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. 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 term s 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
------------------ -------- --------
Annual (CPA Audited) FYE within 120 days Yes No
FINANCIAL COVENANT REQUIRED ACTUAL COMPLIES
------------------ -------- ------ --------
Maintain on a Monthly Basis:
Minimum Liquidity $* $________ Yes No
Maintain on a Quarterly Basis:
Profitability: $** $________ Yes No
*See Section 6.7(a) of the Agreement
**See Section 6.7(b) of the Agreement
COMMENTS REGARDING EXCEPTIONS:
See Attached.
BANK USE ONLY
Sincerely,
Received by: _____________________
AUTHORIZED SIGNER
_____________________________
SIGNATURE
Date: ____________________________
_____________________________
Verified: ________________________
TITLE
AUTHORIZED SIGNER
_____________________________
Date: ____________________________
DATE
802168
