EXHIBIT 10.26
FIFTH LOAN MODIFICATION AGREEMENT
This Fifth Loan Modification Agreement (this "Loan Modification
Agreement') is entered into as of June ___, 2004, 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
amended by a certain Third Loan Modification Agreement dated as of October
20, 2003, and as amended by a certain Fourth Loan Modification Agreement
dated November 26, 2003, and as further amended by a certain Letter
Agreement dated June 16, 2004 (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 following
text, appearing in Section 6.7(b) thereof:
"(b) PROFITABILITY. Borrower shall have quarterly net
losses of not more than (i) $3,500,000.00 for the
quarter ending December 31, 2003; (ii) $3,000,000.00 for
the quarter ending March 31, 2004; (iii) $2,000,000.00
for the quarter ending June 30, 2004; (iv) $2,000,000.00
for the quarter ending September 30, 2004; (v)
$1,000,000.00 for each quarter thereafter."
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 31, 2003; (ii) $3,000,000.00 for
the quarter ending March 31, 2004; (iii) $5,000,000.00
for the quarter ending June 30, 2004; (iv) $2,000,000.00
for the quarter ending September 30, 2004; (v)
$1,000,000.00 for each quarter thereafter."
4. FEES. Borrower shall pay to Bank a modification fee equal to
Five Thousand Dollars ($5,000.00), which fee 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 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 hereby acknowledges and
agrees that Borrower has no offsets, defenses, claims, or
counterclaims against Bank with respect to the Obligations, or
otherwise, and that if Borrower now has, or ever did have, any
offsets, defenses, claims, or counterclaims against Bank,
whether known or unknown, at law or in equity, all of them are
hereby expressly WAIVED and Borrower hereby RELEASES Bank from
any liability thereunder.
10. CONTINUING VALIDITY. Borrower understands and agrees that in
modifying the existing Obligations, Bank is relying upon
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. 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).
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/ Irina Case
------------------------- -------------------------------
Name: Xxxxxx Xxxxxx Name: Irina Case
Title: CFO Title: VP
SILICON VALLEY BANK
By: /s/ Xxxxxx Xxxxxx
------------------------------
Name: Xxxxxx Xxxxxx
Title: AVP
(signed in Santa Xxxxx County,
California)
