**EXHIBIT 10.31**

 

**FOURTH AMENDMENT**

**TO**

**LOAN ANDSECURITY AGREEMENT**

 

THIS**FOURTH AMENDMENT**to Loan and Security Agreement (this****“Amendment”)is entered into as of the 30th day of October, 2005, by and between SiliconValley Bank (“Bank”) and eCollege.com, a Delaware corporation (“eCollege”),whose address is One North LaSalle Street, Suite 1800, Chicago, Illinois60602, and DataMark Inc., a Delaware corporation (“DataMark”), whose address is2305 President’s Drive, Salt Lake City, UT 84120 (hereinafter eCollege andDataMark shall be referred to collectively as the “Borrowers” and individuallyas a “Borrower”).

 

#### **RECITALS**

####  

**A.**                                    Bank and Borrowershave entered into that certain Loan and Security Agreement dated as of October 30,2003, as amended as of December 29, 2003, April 1, 2004 and December 28,2004 (as the same may from time to time be further amended, modified,supplemented or restated, the “Loan Agreement”).

 

**B.**                                    Bank has extendedcredit to Borrowers for the purposes permitted in the Loan Agreement.

 

**C.**                                    Borrowers haverequested that Bank amend the Loan Agreement to (i) increase the amountavailable to be borrowed under the Committed Revolving Line, (ii) extendthe Revolving Maturity Date, (iii) lower the interest rate payable on theAdvances, and (iv) make certain other revisions to the Loan Agreement asmore fully set forth herein.

 

**D.**                                    Bank has agreed toso amend certain provisions of the Loan Agreement, but only to the extent, inaccordance with the terms, subject to the conditions and in reliance upon therepresentations and warranties set forth below.

 

#### **AGREEMENT**

####  

**NOW, THEREFORE,** inconsideration of the foregoing recitals and other good and valuableconsideration, the receipt and adequacy of which is hereby acknowledged, andintending to be legally bound, the parties hereto agree as follows:

 

**1.****                                      Definitions.**Capitalized terms used but not defined in this Amendment shall have themeanings given to them in the Loan Agreement.

 

**2.****                                      Amendmentsto Loan Agreement.**

 

**2.1****                               Sections2.1.2, 2.1.3, 2.1.4 and 2.2** (**Sublimits**).The figure “$3,500,000” contained in each of Sections 2.1.2, 2.1.3 and 2.1.4and in the last paragraph of Section 2.2 is amended and replaced with thefigure “$5,000,000”.

 

**2.2****                               Section 2.3****(Interest Rate, Payments).**Thefirst sentence of Section 2.3(a) is amended in its entirety andreplaced with the following:

 

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(a)                                  InterestRate. (i) Advances accrue interest on the outstanding principal balance ata per annum rate equal to the Prime Rate.

 

**2.3****                               Section 2.4 (Fees).**Section 2.4(b) andSection 2.4(c) are amended in their entirety and replaced with thefollowing:

 

(b)                                 Non-utilizationFee. A quarterly non-utilization fee equal to 12.5 basis points (0.125%) timesthe average daily, unused amount available under the Committed Revolving Line(being the difference between the amount of the Committed Revolving Line andthe average outstanding daily balance of Advances and Letters of Credit andamounts utilized for Cash Management Services and FX Reserves) during the priorquarter, payable in arrears twenty (20) days after each quarter-end.

 

(c)                                  EarlyTermination Fee.                         Afully earned, non-refundable early termination fee of $150,000.00 if, atBorrowers’ option, the Committed Revolving Line is terminated and the Advancesare paid in full on or prior to October 30, 2006, and such a fee of$75,000.00 if such events occur after October 30, 2006 but prior to October 30,2007.

 

**2.4****                               Section 6.2 (Financial Statements,Reports, Certificates.) **Section 6.2is****amended in its entirety andreplaced with the following:

 

6.2                                 Financial Statements,Reports, Certificates.

 

(a)                                  Borrowerswill deliver to Bank:  (i) as soonas available, but no later than 45 days after the last day of each fiscalquarter, company prepared consolidated and consolidating balance sheets andincome statements covering the operations of eCollege and its Subsidiariesduring the period certified by a Responsible Officer of eCollege and in a form acceptableto Bank; (ii) within 5 days of filing, copies of all statements, reportsand notices made available to eCollege’s security holders or to any holders ofSubordinated Debt and all reports on Form 10-K, 10-Q and 8-K filed withthe Securities and Exchange Commission; (iii) a prompt report of any legalactions pending or threatened against either Borrower or any Subsidiary thatcould result in damages or costs to either Borrower or any Subsidiary of$250,000 or more; (iv) budgets, sales projections, operating plans orother financial information Bank reasonably requests; and (v) promptnotice of any material change in the composition of the Intellectual Property,including any subsequent ownership right of either Borrower in or to anyCopyright, Patent or Trademark not shown in any intellectual property securityagreement between either Borrower and Bank or knowledge of an event thatmaterially adversely affects the value of the Intellectual Property.

 

(b)                                 Within45 days after the last day of each quarter (or within 30 days after the lastday of each month if outstanding Advances in excess of $5,000,000 exist,excluding Quarter-End Advances and outstanding Letters of Credit), Borrowerswill deliver to Bank a Borrowing Base Certificate signed by a ResponsibleOfficer of eCollege in the form of Exhibit C, with aged listings ofaccounts receivable and accounts payable.

 

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(c)                                  Within45 days after the last day of each fiscal quarter, Borrowers will deliver toBank with the quarterly financial statements a Compliance Certificate signed bya Responsible Officer of eCollege in the form of **Exhibit D**.

 

(d)                                 Borrowerswill allow Bank to audit Borrowers’ Collateral at Borrowers’ expense duringnormal business hours upon reasonable notice. Audits of each Borrower will beconducted no more often than annually, unless an Event of Default has occurredand is continuing.

 

**2.5****                               Section 6.7  (Financial Covenants.) **Section 6.7 is****amended in its entirety and replaced withthe following:

 

6.7                 FinancialCovenants.

 

eCollege will have or maintain as of the lastday of each month (unless otherwise provided) and on a consolidated basis:

 

(i)                                     **Quick Ratio (Adjusted).**A ratio of QuickAssets to Current Liabilities minus Deferred Revenue and any Quarter-EndAdvance of at least 1.50 to 1.00 at each fiscal quarter-end, tested quarterly.

 

(ii)                                  **EBITDA.**An EBITDA for each fiscal quarterof not less than those amounts set forth next to the corresponding fiscalquarter set forth on Exhibit E, tested quarterly commencing with thequarter ending June 30, 2005.

 

**2.6****                               Section 7.3 (Mergers orAcquisitions.) **Section 7.3is****amended in its entirety andreplaced with the following:

 

7.3                                 Mergersor Acquisitions.

 

Merge or consolidate, orpermit any of its Subsidiaries to merge or consolidate, with any other Person,or acquire, or permit any of its Subsidiaries to acquire, all or substantiallyall of the capital stock or property of another Person, except, as long as noEvent of Default has occurred and is continuing or would result from suchaction during the term of this Agreement, (a) a Subsidiary may mergeor consolidate into another Subsidiary or into such Borrower and DataMark may mergeinto eCollege, and (b) cash acquisitions with a cost not exceeding 30% ofTangible Net Worth and non-cash acquisitions with a cost not exceeding 49% ofTangible Net Worth (or a combination of both).

 

**2.7****                               Section 13**(**Definitions**). The following terms andtheir respective definitions set forth in **Section 13.1**are amended in their entirety and replaced with the following:

 

“**Committed****Revolving Line**”is $15,000,000.00.

 

“**Revolving****MaturityDate**” is October 30, 2007.

 

**2.8**                               **Exhibits D and E.**Exhibits D and E attachedhereto are substituted for those attached to the Loan Agreement

 

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**3.****                                      Limitationof Amendments.**

 

**3.1****                              **Theamendments set forth in **Section 2**,above, are effective for the purposes set forth herein and shall be limitedprecisely as written and shall not be deemed to (a) be a consent to anyamendment, waiver or modification of any other term or condition of any LoanDocument, or (b) otherwise prejudice any right or remedy which Bank may nowhave or may have in the future under or in connection with any LoanDocument.

 

**3.2****                              **ThisAmendment shall be construed in connection with and as part of the LoanDocuments and all terms, conditions, representations, warranties, covenants andagreements set forth in the Loan Documents, except as herein amended, arehereby ratified and confirmed and shall remain in full force and effect.

 

**4.****                                      Representationsand Warranties.**To induce Bank to enter into this Amendment, each Borrowerhereby represents and warrants to Bank as follows:

 

**4.1****                              **Immediatelyafter giving effect to this Amendment (a) the representations andwarranties contained in the Loan Documents are true, accurate and complete inall material respects as of the date hereof (except to the extent suchrepresentations and warranties relate to an earlier date, in which case theyare true and correct as of such date), and (b) no Event of Default hasoccurred and is continuing;

 

**4.2****                              **EachBorrower has the power and authority to execute and deliver this Amendment andto perform its obligations under the Loan Agreement, as amended by thisAmendment;

 

**4.3****                              **Theorganizational documents of each Borrower delivered to Bank on or about October 30,2003 remain true, accurate and complete and have not been amended, supplementedor restated and are and continue to be in full force and effect;

 

**4.4****                              **Theexecution and delivery by each Borrower of this Amendment and the performance bysuch Borrower of its obligations under the Loan Agreement, as amended by thisAmendment, have been duly authorized;

 

**4.5****                              **Theexecution and delivery by each Borrower of this Amendment and the performanceby such Borrower of its obligations under the Loan Agreement, as amended bythis Amendment, do not and will not contravene (a) any law or regulationbinding on or affecting such Borrower, (b) any contractual restrictionwith a Person binding on such Borrower, (c) any order, judgment or decreeof any court or other governmental or public body or authority, or subdivisionthereof, binding on such Borrower, or (d) the organizational documents ofsuch Borrower;

 

**4.6****                              **Theexecution and delivery by each Borrower of this Amendment and the performanceby such Borrower of its obligations under the Loan Agreement, as amended bythis Amendment, do not require any order, consent, approval, license,authorization or validation of, or filing, recording or registration with, orexemption by any governmental or public body or authority, or subdivisionthereof, binding on either Borrower, except as already has been obtained ormade; and

 

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**4.7****                              **ThisAmendment has been duly executed and delivered by each Borrower and is thebinding obligation of such Borrower, enforceable against Borrower in accordancewith its terms, except as such enforceability may be limited bybankruptcy, insolvency, reorganization, liquidation, moratorium or othersimilar laws of general application and equitable principles relating to oraffecting creditors’ rights.

 

**5.****                                      Counterparts.**This Amendment may be executed in any number of counterparts and allof such counterparts taken together shall be deemed to constitute one and thesame instrument.

 

**6.****                                      Effectiveness**.This Amendment shall be deemed effective upon (a) the due execution anddelivery to Bank of this Amendment by each party hereto, and (b) Borrowers’payment of an amendment fee in an amount equal to $15,000.00.

 

[Signature page follows.]

 

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**IN WITNESS WHEREOF,** theparties hereto have caused this Amendment to be duly executed and delivered asof the date first written above.

 

 
| **BANK**            | **BORROWER**      |
|---------------------|-------------------|
| ** **          | ** **        |
| Silicon Valley Bank | eCollege.com      |
|                |              |
|                |              |
| By:                 | /s/ Frank Amoroso |   | By: | /s/ Reid Simpson |   |
| Name:               | Frank Amoroso     |   | Name: | Reid Simpson |   |
| Title:              | Vice President    |   | Title: | Chief Financial Officer |   |
|                |              |
|                |              |
| ** **          | **BORROWER**      |
| ** **          | ** **        |
|                | DataMark Inc.     |
|                |              |
|                | By:               | /s/ Reid Simpson |   |
|                | Name:             | Reid Simpson |   |
|                | Title:            | Chief Financial Officer |   |
|                     |                   |  |  |  |  |  |  |  |  |  |  |

 

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### ** **

### **EXHIBIT D**

### ** **

### **COMPLIANCE CERTIFICATE**

### ** **

| TO:    | SILICON VALLEY BANK   |
|--------|-----------------------|
|   | 3003 Tasman Drive     |
|   | Santa Clara, CA 95054 |
|   |                  |
| FROM:  | ECOLLEGE.COM          |

 

The undersigned authorized officer ofeCollege.com certifies that under the terms and conditions of the Loan andSecurity Agreement between eCollege,com and DataMark, Inc. (“Borrowers”)  and Bank (the “Agreement”), (i) Borrowersare in complete compliance for the period ending                             with all required covenants except as noted below and (ii) allrepresentations and warranties in the Agreement are true and correct in allmaterial respects on this date. Attached are the required documents supportingthe certification. Such officer certifies that these are prepared in accordancewith Generally Accepted Accounting Principles (GAAP) consistently applied fromone period to the next except as explained in an accompanying letter orfootnotes. Such officer acknowledges that no borrowings may be requestedat any time or date of determination that Borrowers are not in compliance withany of the terms of the Agreement, and that compliance is determined not justat the date this certificate is delivered.

 

Please indicate compliance status by circling Yes/No under “Complies”column.

 
| **Reporting  Covenant**             | ** ** | **Required**             | ** ** | **Complies** |
|-------------------------------------|------------|--------------------------|------------|--------------|
|                                |       |                     |       |         |   |   |
| Quarterly financial statements + CC |       | Quarterly within 45 days |       | Yes          |   | No |
| Annual (Audited)                    |       | FYE within 95 days       |       | Yes          |   | No |
| A/R & A/P Agings           |       | Monthly within 30 days*  |       | Yes          |   | No |
| Borrowing Base Certificate          |       | Monthly within 30 days*  |       | Yes          |   | No |
| A/R Audit                           |       | Annual                   |       | Yes          |   | No |

 
| **Financial  Covenant**                     | ** ** | **Required**          | ** ** | **Actual**                                                        | ** ** | **Complies** |
|---------------------------------------------|------------|-----------------------|------------|-------------------------------------------------------------------|------------|--------------|
|                                        |       |                  |       |                                                              |       |         |   |   |
| Maintain on a Quarterly Basis:              |       |                  |       |                                                              |       |         |   |   |
| Minimum  Quick Ratio (Adjusted) (quarterly) |       | 1.50:1.00 at each FQE |       |           :1.00 |       | Yes          |   | No |
|                                        |       |                  |       |                                                              |       |         |   |   |
| Minimum EBITDA (quarterly)                  |       | See Exhibit E    |       | $                                                                 |       |         | Yes |   | No |
|                                             |            |                       |            |                                                                   |            |              |  |  |  |

 

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*Quarterlywithin 45 days if no outstanding Advances exceeding $5,000,000 exist other thanQuarter-End Advances and outstanding Letters of Credit.

 

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Have therebeen updates to Borrowers’ intellectual property, if appropriate?

Yes / No

 
| Comments Regarding Exceptions: See  Attached. | BANK USE ONLY |
|-----------------------------------------------|---------------|
|                                          |          |
|                                          |          |
| Sincerely,                                    | Received by:  |   |   |
|                                          |          | AUTHORIZED SIGNER |
|                                          |          |
| eCollege.com                                  | Date:         |   |   |
|                                          |          |
| By:                                           |          |   | Verified: |   |   |
| TITLE:                                        |          |   |   | AUTHORIZED SIGNER |
|                                          |          |
|                                          | Date:         |   |   |
|                                          |          |
| DATE:                                         |          |   | Compliance Status: | Yes | No |
|                                               |               |  |  |  |  |  |  |  |  |  |

 

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EXHIBIT E

 
| **Fiscal quarter ended** | ** ** | **Minimum EBITDA** | ** ** |
|--------------------------|------------|--------------------|------------|
| ** **               | ** ** | ** **         | ** ** |
| June 30, 2005       |       | $                  | 3,000,000  |   |
| September 30, 2005  |       | $                  | 3,000,000  |   |
| December 31, 2005   |       | $                  | 3,500,000  |   |
| March 31, 2006      |       | $                  | 3,500,000  |   |
| June 30, 2006       |       | $                  | 3,500,000  |   |
| September 30, 2006  |       | $                  | 3,500,000  |   |
| December 31, 2006   |       | $                  | 4,000,000  |   |
| March 31, 2007      |       | $                  | 4,000,000  |   |
| June 30, 2007       |       | $                  | 4,000,000  |   |
| September 30, 2007  |       | $                  | 4,000,000  |   |

 

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**SILICON VALLEY BANK**

** **

### **PRO FORMA INVOICE FOR LOAN CHARGES**

### ** **

| **BORROWER:**     | ** ** | **eCollege.com and DataMark Inc.** | ** ** |
|-------------------|------------|------------------------------------|------------|
|              |       |                               |       |   |   |
| **LOAN OFFICER:** | ** ** | **Frank Amoroso**                  | ** ** | ** ** | ** ** |
| ** **        | ** ** | ** **                         | ** ** | ** ** | ** ** |
| **DATE:**         | ** ** | ** **                         | ** ** | ** ** | ** ** |
| ** **        | ** ** | ** **                         | ** ** | ** ** | ** ** |
| ** **        | ** ** | **Loan Fee**                       | ** ** | **$** | **15,000.00** | ** ** |
| ** **        | ** ** | **Documentation Fee**              | ** ** | **$** | ** ** |
|              |       |                               |       |   |   |
| ** **        | ** ** | **TOTAL FEES DUE**                 | ** ** | **$** | ** ** |
|                   |            |                                    |            |  |  |  |

 

**{   }  A check for thetotal amount is attached.**

 

**{   }  Debit DDA #                                     for the total amount.**

 

 
| **BORROWER:**              |       |
|----------------------------|------------|
| **ECollege.com**           |       |
|                       |       |   |
|                       |       |   |
| **Authorized Signer**      | **(Date)** |
|                       |       |
| **DataMark Inc.**          |       |
|                       |       |
|                       |       |   |
| **Authorized Signer**      | **(Date)** |
|                       |       |
|                       |       |
| **BANK;**                  |       |
| **SILICON VALLEY BANK**    |       |
|                       |       |   |
|                       |       |   |
| **Loan Officer Signature** | **(Date)** |

 

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