Exhibit
10.23


 


LOAN MODIFICATION AGREEMENT


 


This Loan Modification
Agreement is entered into as of April 1, 2004, by and between SILICON
VALLEY BANK, a California chartered bank (“Bank”), with its principal place of
business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan
production office at 4410 Arapahoe Avenue, Suite 200, Boulder, CO 80303, and
eCollege.com (“eCollege”), whose address is 4900 South Monaco Street, Denver,
Colorado 80237, and DataMark, Inc. (“DataMark”), whose address is 2305
President’s Drive, Salt Lake City, UT 84120 (hereinafter eCollege and DataMark
shall be referred to collectively as the “Borrowers” and individually as a “Borrower”).


 


1.             DESCRIPTION
OF EXISTING INDEBTEDNESS:  Among
other indebtedness which may be owing by Borrowers to Bank, Borrowers are or
may be indebted to Bank pursuant to, among other documents, a Loan and Security
Agreement, dated as of October 30, 2003, as it may be amended from time to
time (the “Loan Agreement”).  The Loan
Agreement provided for, among other things, a Committed Revolving Line in the
original principal amount of up to Ten Million Dollars ($10,000,000) and a Term
Loan of up to Three Million Dollars ($3,000,000).  Defined terms used but not otherwise defined
herein shall have the same meanings as set forth in the Loan Agreement.


 


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


 


2.             DESCRIPTION
OF COLLATERAL. Repayment of the Indebtedness is secured by the Collateral,
as described in the Loan Agreement and in the Intellectual Property Security
Agreements.


 


Hereinafter, the
above-described security documents, 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.


 


Modification(s)
to Loan Agreement.


 


1.             Section 6.2
entitled “Financial Statements, Reports, Certificates” is amended by changing
subsection (a)(i) thereof to read as follows:


 


(a) Borrowers will
deliver to Bank: (i) as soon as available, but no later than 30 days (but
through the period ending 9/30/04, no later than 40 days) after the last day of
each month, company prepared consolidated and consolidating balance sheets and
income statements covering the operations of eCollege and its Subsidiaries
during the period certified by a Responsible Officer of eCollege and in a form
acceptable to Bank;


 


2.             Section 6.2
entitled “Financial Statements, Reports, Certificates” is amended by changing
subsection (c) thereof to read as follows:


 


(c) Within 30 days (but
through the period ending 9/30/04, within 40 days) after the last day of each
month, Borrowers will deliver to Bank with the monthly financial statements a
Compliance Certificate signed by a Responsible Officer of eCollege in the form
of Exhibit D.


 


3.                             Section 6.7
entitled “Financial Covenants” is amended by changing subsection (i)
thereof entitled “Quick Ratio (Adjusted)” to read as follows:


 





















 


(i)            Quick Ratio (Adjusted).  A ratio of Quick Assets to Current
Liabilities minus Deferred Revenue and any Quarter-End Advance of at least 1.30
to 1.00 through 3/31/04, and of at least 1.50 to 1.00 at 4/30/04 and
thereafter.


 


4.             Section 6.7
entitled “Financial Covenants” is amended by changing subsection (iii)
thereof entitled “Debt Service Coverage Ratio” to add the following sentence at
the end thereof:


 


For purposes hereof “interest expense” shall exclude
non-current, non-cash and non-recurring interest expense items and shall
include only actual cash paid interest expense items.


 


5.             Section 13.1
entitled “Definitions” is amended by adding the following definition therein to
read as follows:


 


“Quarter-End Advance”
is an Advance made on the last Business Day of a fiscal quarter which Advance
remains outstanding no longer than 3 Business Days following the date such
Advance is made and the proceeds of which remain on deposit at Bank during the
period such Advance is outstanding.


 


6.             Section 13.1
entitled “Definitions” is amended by changing the following definitions therein
to read as follows:


 


“Deferred Revenue”
is all amounts received in advance of performance under a maintenance contract
and not yet recognized as revenue, and other amounts received from or billed to
customers in excess of revenue that has been earned, including customer
advances or deposits that customers are required to pay for services, where
such payments received are recorded as customer advances (liability) until the
revenue is recognized as earned.


 


“Tangible Net Worth”
is, on any date, the consolidated total assets (excluding proceeds of any
Quarter-End Advance) of eCollege and its Subsidiaries minus,
(i) any amounts attributable to (a) goodwill,  (b) intangible items such as unamortized debt
discount and expense, Patents, trade and service marks and names, Copyrights
and research and development expenses except prepaid expenses, and (c) reserves
not already deducted from assets, and (ii) Total Liabilities
excluding all Subordinated Debt and excluding any Quarter-End Advance.


 


7.             Exhibit
D attached hereto shall be substituted for that attached to the Loan Agreement.


 


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


 


5.             PAYMENT
OF EXPENSES.  Borrowers shall pay
Bank all of Bank’s out-of-pocket expenses in connection with this Loan
Modification Agreement.


 


6.             NO
DEFENSES.  Borrowers (and each
guarantor and pledgor signing below) agrees that, as of the date hereof, they
have no defenses against the obligations to pay any amounts under the
Indebtedness.


 





















 


7.             CONTINUING
VALIDITY.  Borrowers (and each
guarantor and pledgor signing below) understand and agree that in modifying the
existing Indebtedness, Bank is relying upon Borrowers’ 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 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 Borrowers to retain as liable parties all makers and
endorsers of Existing Loan Documents, unless the party is expressly released by
Bank in writing.  Unless expressly
released herein, 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 receipt by Bank of a fully executed counterpart
hereof.


 


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


 


	
  BORROWERS:

  	
  BANK:

  
	
   

  	
   

  
	
  eCollege.com.

  	
  SILICON
  VALLEY BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Douglas H.
  Kelsall

  	
   

  	
  By:

  	
  /s/ Frank
  Amoroso

  	
   

  
	
  Name: Douglas H.
  Kelsall

  	
  Name: Frank Amoroso

  
	
  Title: President
  and COO

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DataMark,
  Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Douglas H.
  Kelsall

  	
   

  	
   

  
	
  Name: Douglas H.
  Kelsall

  
	
  Title: Assistant
  Treasurer