Exhibit 10.25

 

FIFTH LOAN MODIFICATION AGREEMENT

 

This Fifth Loan Modification Agreement is entered into as of April 8, 2004, by
and between Optio Software, Inc. (“Borrower”) and Silicon Valley Bank (“Bank”).

 

1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Bank, Borrower is indebted to Bank pursuant to, among other
documents, a Loan and Security Agreement, dated April 25, 2002, as amended by a
First Loan Modification Agreement, dated September 12, 2002, as amended by a
Second Loan Modification Agreement, dated April 24, 2003, as amended by a Third
Loan Modification Agreement, dated June 4, 2003, as amended by a Fourth Loan
Modification Agreement, dated December 4, 2003, as may be further amended from
time to time, (the “Loan Agreement”). The Loan Agreement provides for, among
other things, a Committed Revolving Line in the amount of Four Million Dollars
($4,000,000). Defined terms used but not otherwise defined herein shall have the
same meanings as in the Loan Agreement.

 

Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to as
the “Indebtedness.”

 

2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness 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 Indebtedness shall be
referred to as the “Security Documents”. Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the “Existing Loan Documents”.

 

3. DESCRIPTION OF CHANGE IN TERMS.

 

  A. Section 6.7(i) of the Loan Agreement, entitled “Quick Ratio,” shall be
amended to read as follows:

 

“A monthly (for intra-quarter months only) ratio of Quick Assets to Current
Liabilities minus Deferred Revenue of at least 1.40 to 1.00, and a quarterly
ratio of Quick Assets to Current Liabilities minus Deferred Revenue of at least
1.75 to 1.00.”

 

  B. The definition of “Revolving Maturity Date” in Section 13.1 of the Loan
Agreement shall be amended to read as follows:

 

“Revolving Maturity Date” is April 22, 2005.

 

  C. Borrower’s Borrowing Compliance Certificate shall be amended in the form of
Exhibit A hereto.

 

4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.

 

5. PAYMENT OF LOAN AND DOCUMENTATION FEES. Borrower shall pay Bank a Loan Fee of
Fifteen Thousand Dollars ($15,000.00) and a Legal Documentation Fee in the
amount of Five Hundred Fifty Dollars ($550.00), plus all out-of-pocket expenses.

 

6. NO DEFENSES OF BORROWER. Borrower agrees that, as of the date hereof, it has
no defenses against the obligations to pay any amounts under the Indebtedness.

 

7. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Indebtedness, 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,

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the terms of the Existing Loan Documents remain unchanged and in full force and
effect. Bank’s agreement to modifications to the existing Indebtedness pursuant
to this Loan Modification Agreement in no way shall obligate Bank to make any
future modifications to the Indebtedness. Nothing in this Loan Modification
Agreement shall constitute a satisfaction of the Indebtedness. 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. 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.

 

8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon the following:

 

  • Bank’s receipt of this Fifth Loan Modification duly executed by the
Borrower; and

 

  • Payment of Loan and Legal Documentation fees.

 

This Loan Modification Agreement is executed as of the date first written above.

 

BORROWER:

     

BANK:

OPTIO SOFTWARE, INC.

     

SILICON VALLEY BANK

By:   /s/    Caroline Bembry               By:   /s/    Steven
DiPasquale            

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Name:

  Caroline Bembry      

Name:

  Steven DiPasquale

Title:

  Chief Financial Officer      

Title:

  Vice President

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EXHIBIT A

COMPLIANCE CERTIFICATE

 

TO:

   SILICON VALLEY BANK

FROM:

   OPTIO SOFTWARE, INC.

 

The undersigned authorized officer of Optio Software, 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, to the knowledge of Borrower, 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
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

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Required

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   Complies

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Monthly financial statements + CC

   Monthly within 30 days (except FQE)    Yes    No

Quarterly + 10-Q + CC

   FQE within 45 days (except FYE)    Yes    No

Annual (Audited) + 10-K + CC

   FYE within 90 days    Yes    No

A/R Agings

   Monthly within 30 days    Yes    No

A/R Audit

   Initial and Annual    Yes    No

Borrowing Base Certificate

   Monthly within 30 days    Yes    No

 

Financial Covenant

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     Required

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     Actual

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   Complies

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Maintain:

                       

Monthly Minimum Quick Ratio

     1.40:1.00                  :1.00    Yes    No

Quarterly Minimum Quick Ratio

     1.75:1.00                  :1.00    Yes    No

Monthly Minimum EBIDTA:

     $1.00      $                      Yes    No

 

Have there been updates to Borrower’s intellectual property, if appropriate? Yes
/ No

 

       

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         BANK USE ONLY

Comments Regarding Exceptions: See Attached.

                  Received by:                                   
                                                       

Sincerely,

       AUTHORIZED SIGNER

Optio Software, Inc.

       Date:                                     
                                                                    

 

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Verified:                                     
                                                             

SIGNATURE

       AUTHORIZED SIGNER

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       Date:                                     
                                                                    

TITLE

        

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       Compliance Status:                                              Yes
    No        

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DATE