EXHIBIT 10.29
SEVENTH LOAN MODIFICATION AGREEMENT
This Seventh Loan Modification Agreement (this "Loan Modification
Agreement") is entered into as of December 21, 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 Xxxxxx 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, as
further amended by a certain Third Loan Modification Agreement dated as of
October 20, 2003, as further amended by a certain Fourth Loan Modification
Agreement dated November 26, 2003, as further amended by a certain Letter
Agreement dated June 16, 2004, as further amended by a certain Fifth Loan
Modification Agreement dated June 30, 2004, and as further amended by a
certain Sixth Loan Modification Agreement dated November 24, 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.
Modifications to Loan Agreement.
1. 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
$25,000,000 in unrestricted cash (including, without
limitation, cash, cash equivalents and marketable
securities) 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")."
and inserting in lieu thereof the following:
"(e) Compensating Balance/Compensating Balances Fees. In
the event, at any time, Borrower maintains, at any time,
an amount less than two (2) times the
amount of the outstanding Obligations, at any time, in
unrestricted cash (including, without limitation, cash,
cash equivalents and marketable securities) 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")."
2. The Loan Agreement shall be amended by deleting the following
text, appearing in Section 6.7 thereof:
"(a) LIQUIDITY. Borrower shall have at all times, to be
tested as of the last day of each month, unrestricted
and unencumbered cash (including, without limitation,
cash, cash equivalents and marketable securities) equal
to or greater than $25,000,000.00.
(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"
an 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, minimum
unrestricted and unencumbered cash (including, without
limitation, cash, cash equivalents and marketable
securities) in an amount equal to: (i) for the months
ending January 31, 2005, February 28, 2005, April 30,
2005 and May 31, 2005, the greater of (A) Fifteen
Million Dollars ($15,000,000.00) and (B) two (2) times
the amount of the Obligations, and (ii) ) for months
ending March 31, 2005 and June 30, 2005, and as of the
last day of each month thereafter Twenty Million Dollars
($20,000,000.00).
(b) PROFITABILITY. Borrower shall have quarterly: (i)
net losses of not more than (A) $4,500,000.00 for the
quarter ending December 31, 2004; (B) $2,000,000.00 for
the quarter ending March 31, 2005; (C) $500,000.00 for
the quarter ending June 30, 2005; (D) $1,500,000.00 for
the quarter ending September 30, 2005; and (ii) net
profit of at least One Dollar ($1.00) for the quarter
ending December 31, 2005, and as of the last day of each
quarter thereafter."
3. The Loan Agreement shall be amended by deleting the following
definitions appearing in Section 13 thereof, in their
entirety:
""GUARANTOR" is any present or future guarantor of the
Obligations, including Art Technology Group (Europe)
Limited.
""OBLIGATIONS" are debts, principal, interest, Bank
Expenses and other amounts Borrower owes Bank now or
later, including letters of credit, cash management
services, and foreign exchange contracts, if any, and
including interest accruing after Insolvency Proceedings
begin and debts, liabilities, or obligations of Borrower
assigned to Bank."
"REVOLVING MATURITY DATE" is December 25, 2004."
and inserting in lieu thereof the following:
""GUARANTOR" is any present or future guarantor of the
Obligations, including but not limited to Primus
Knowledge Solutions, Inc."
""OBLIGATIONS" are debts, principal, interest, Bank
Expenses and other amounts Borrower owes Bank now or
later, including letters of credit (including the
aggregate amount of undrawn letters of credit), cash
management services, and foreign exchange contracts, if
any, and including interest accruing after Insolvency
Proceedings begin and debts, liabilities, or obligations
of Borrower assigned to Bank."
"REVOLVING MATURITY DATE" is December 24, 2005."
4. FEES. Borrower shall pay to Bank a modification fee equal to Seventy-Five
Thousand Dollars and 00/100 ($75,000.00), 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 (with the
exception of the Intellectual Property Collateral set forth on Schedule 5
attached hereto) as of June 13, 2002 or any subsequent amendment thereto
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 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).
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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: CFO Title: Vice President
12/21/04
SILICON VALLEY BANK
By: /s/ Xxxxxxxxxx Le
-------------------------------
Name: Xxxxxxxxxx Le
Title: Operations Supervisor
(signed in Santa Xxxxx County, California)
