Document:

Exhibit 10.21

 

ECOLLEGE.COM

4900 S. Monaco Street

Denver, Colorado 80237

 

 

Dated as of May 30, 2004

 

 

Capital Resource Partners
IV, L.P.

85 Merrimac Street

Suite 200

Boston,
Massachusetts  02114

 

Re:                               Amendment
No. 1 to Senior Subordinated Secured Note and Warrant Purchase Agreement

 

Ladies and Gentlemen:

 

This
Amendment No. 1 to Senior Subordinated Secured Note and Warrant Purchase
Agreement (this “Amendment”) is made as of the date written above by and among
eCollege.com (the “Company”), a Delaware corporation, eCollege International,
Inc. (the “eCollege Sub”), a Colorado corporation, and
Capital Resource Partners IV, L.P. (“CRP”), a Delaware limited
partnership.  Reference is made to that
certain Senior Subordinated Secured Note and Warrant Purchase Agreement dated
as of October 31, 2003 (the “Purchase Agreement”).

 

WHEREAS,
the Company, eCollege Sub and CRP desire to amend the Purchase Agreement to
change certain definitions and covenants contained therein.

 

NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree to amend the Purchase Agreement
as follows:

 

1.             Amendment
to Purchase Agreement.

 

1.01.        Section 1.01
of the Purchase Agreement entitled “Definitions” is hereby amended by adding
the following definition therein to read as follows:

 

“Advance” shall have the meaning ascribed to
that term in the Loan Agreement.

 

“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 the Bank during the period such Advance
is outstanding.

 

1.02.        Section 1.01
of the Purchase Agreement entitled “Definitions” is hereby amended by changing
the definitions of “Deferred Revenue” and “Tangible Net Worth” in their
entirety 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” means, on any date, the
Consolidated total assets (excluding proceeds of any Quarter-End Advance) of
the Company 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 any Quarter-End
Advance.

 

1.03.        Section 7.01(m)(ii)
of the Purchase Agreement is hereby amended and restated in its entirety to
read as follows:

 

 (ii)          Minimum Adjusted Quick Ratio. 
Commencing on the Closing Date and continuing through the fiscal quarter
ending March 31, 2004, the Company will maintain, on a Consolidated basis,
measured at the end of each fiscal quarter, a ratio of Quick Assets to Current
Liabilities minus Deferred Revenue and any Quarter-End Advance of at least 1.30
to 1.00; provided, however that so long as the Bank is lending or remains
obligated to lend Senior Debt to the Company, such ratio shall be not less than
1.17 to 1.00.  Commencing on April 1,
2004 and including each fiscal quarter ended June 30, September 30, December 31
and March 31 thereafter the Company will maintain, on a Consolidated
basis, measured at the end of each fiscal quarter, a ratio of Quick Assets to
Current Liabilities minus Deferred Revenue and any Quarter-End Advance of at
least 1.50 to 1.00; provided, however that so long as the Bank is lending or
remain obligated to lend Senior Debt to the Company, such ratio shall be not
less than 1.35 to 1.00.

 

1.04.        Section 6.01(m)(iii) of the Purchase
Agreement is hereby amended and restated in its entirety to read as follows:

 

(iii)          Minimum Debt Service Coverage.  The
Company will maintain, on a Consolidated basis, measured at the end of each
fiscal quarter, a ratio of (a) earnings after taxes paid, less Capitalized
Product Development Costs, plus interest expense, depreciation, amortization of
intangible assets and other non-cash charges made to the Company’s income for
the preceding quarter on an annualized basis, to (b) current maturities of all
long term debt and capitalized leases plus annualized interest expense of not
less than 2.00 to 1.00 provided, however, that so long as the Bank is lending
or remains obligated to lend Senior Debt to Company, such ratio shall be not
less than 1.80 to 1.00.  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.

 

2.             Miscellaneous.

 

2.01.        No
Waiver.  This Amendment is effective
only in the specific instance and for the specific purpose for which it is
executed and, except as specifically set forth herein, shall not be 

 

 

considered a waiver or
agreement to amend as to any provision of the Purchase Agreement (as amended)
in the future.

 

2.02.        Costs,
Expenses and Taxes. The Company agrees to pay on demand all reasonable
costs and expenses of CRP (including all reasonable fees and expenses of
TH&T, counsel to CRP) in connection with the preparation, execution and delivery
of this Amendment, and in connection with the consummation of the transactions
contemplated hereby and thereby and with any amendment, waiver (whether or not
such amendment or waiver becomes effective) or enforcement of this Amendment.

 

2.03.        Prior
Agreements.  This Amendment, the
Purchase Agreement, including the exhibits, schedules and other agreements
delivered pursuant to the Purchase Agreement contain all of the terms and
conditions agreed upon by the parties relating to the subject matter of this
Amendment and supersede all prior agreements, negotiations, correspondence,
undertakings and communications of the parties, whether oral or written
respecting that subject matter.

 

2.04.        Governing
Law.  This Amendment shall be
governed by, and construed in accordance with, the internal laws of the
Commonwealth of Massachusetts.

 

2.05.        Sealed
Instrument.  This Amendment is
executed as an instrument under seal.

 

2.06.        Effect.   Except as expressly set forth in this
Amendment, the Purchase Agreement shall remain in full force and effect and
shall not be altered, amended or modified.

 

2.07.        Defined
Terms.  All capitalized terms used by
not specifically defined herein shall have the same meanings given such terms
in the Purchase Agreement unless the context clearly indicates or dictates a
contrary meaning.

 

2.08.        Counterparts.  This Amendment may be executed in any number
of counterparts, including counterparts transmitted by facsimile, all of which
taken together shall constitute one and the same instrument, and each of the
parties hereto may execute this Amendment by signing any such counterpart.

 

2.09.        Further
Assurances.  From and after the date
of this Amendment, upon the request of CRP, the Company and the Subsidiaries
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary to confirm and carry out and to effectuate fully the
provisions of this Amendment.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 to
Senior Subordinated Secured Note and Warrant Purchase Agreement as of the date
first above written.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  ECOLLEGE.COM

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Reid E.
  Simpson

  	
   

  
	
   

  	
   

  	
  Name:  Reid E. Simpson

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUBSIDIARY:

  
	
   

  	
   

  
	
   

  	
  ECOLLEGE
  INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Reid E.
  Simpson

  	
   

  
	
   

  	
   

  	
  Name:  Reid E. Simpson

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CRP:

  
	
   

  	
   

  
	
   

  	
  CAPITAL RESOURCE
  PARTNERS IV, L.P.

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  CRP PARTNERS IV,
  L.L.C.,

  
	
   

  	
   

  	
  Its General
  Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Authorized
  signer

  
	
   

  	
   

  	
  Title:Exhibit 10.22

 

ECOLLEGE.COM

4900 S. Monaco Street

Denver, Colorado 80237

 

Dated as of December 28, 2004

 

Capital Resource Partners
IV, L.P.

85 Merrimac Street

Suite 200

Boston,
Massachusetts  02114

 

Re:                               Amendment
No. 2 to Senior Subordinated Secured Note and Warrant Purchase Agreement

 

Ladies and Gentlemen:

 

This
Amendment No. 2 to Senior Subordinated Secured Note and Warrant Purchase
Agreement (this “Amendment”) is made as of the date written above by and among
eCollege.com (the “Company”), a Delaware corporation, eCollege International,
Inc. (the “eCollege Sub”), a Colorado corporation, and
Capital Resource Partners IV, L.P. (“CRP”), a Delaware limited
partnership.  Reference is made to that
certain Senior Subordinated Secured Note and Warrant Purchase Agreement dated
as of October 31, 2003, as amended by Amendment No. 1 to Senior
Subordinated Secured Note and Warrant Purchase Agreement dated as of May       ,
2004 (collectively, the “Purchase Agreement”).

 

WHEREAS,
the Company, eCollege Sub and CRP desire to amend the Purchase Agreement to
change certain covenants contained therein and consent to prepayment on the
Seller Notes.

 

NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree to amend the Purchase Agreement
as follows:

 

1.             Amendment
to Purchase Agreement.  Section 7.01(m)(ii) of the Purchase Agreement is hereby amended and
restated in its entirety to read as follows:

 

(ii)           Minimum Adjusted Quick Ratio. 
Commencing on the Closing Date and continuing through the fiscal quarter
ending March 31, 2005, the Company will maintain, on a Consolidated
basis, measured at the end of each fiscal quarter, a ratio of Quick Assets to
Current Liabilities minus Deferred Revenue and any Quarter-End Advance of at
least 1.00 to 1.00.  Commencing on April 1,
2005 and including each fiscal quarter ended June 30, September 30, December 31
and March 31 thereafter the Company will maintain, on a Consolidated
basis, measured at the end of each fiscal quarter, a ratio of Quick Assets to
Current Liabilities minus Deferred Revenue and any Quarter-End Advance of at
least 1.50 to 1.00; provided, however that so long as the Bank is lending or
remain obligated to lend Senior Debt to the Company, such ratio shall be not
less than 1.35 to 1.00.

 

2.             Consent
to Prepayment of Seller Notes. 
Pursuant to Section 10.02 of the Purchase Agreement and
notwithstanding the provisions of Section 7.02(r) of the Purchase
Agreement, holders of at least sixty-six and two-thirds percent (66 2/3%) in
principal amount of all Notes outstanding as the date hereof 

 

 

hereby
consent to the prepayment on the Seller Notes by the Company in an aggregate
principal amount of ten million dollars ($10,000,000) plus accrued and unpaid
interest thereon.

 

3.             Miscellaneous.

 

3.01.        No
Waiver.  This Amendment is effective
only in the specific instance and for the specific purpose for which it is
executed and, except as specifically set forth herein, shall not be considered
a waiver or agreement to amend as to any provision of the Purchase Agreement
(as amended) in the future.

 

3.02.        Costs,
Expenses and Taxes. The Company agrees to pay on demand all reasonable
costs and expenses of CRP (including all reasonable fees and expenses of
TH&T, counsel to CRP) in connection with the preparation, execution and
delivery of this Amendment, and in connection with the consummation of the
transactions contemplated hereby and thereby and with any amendment, waiver
(whether or not such amendment or waiver becomes effective) or enforcement of
this Amendment.

 

3.03.        Prior
Agreements.  This Amendment, the
Purchase Agreement, including the exhibits, schedules and other agreements
delivered pursuant to the Purchase Agreement contain all of the terms and
conditions agreed upon by the parties relating to the subject matter of this
Amendment and supersede all prior agreements, negotiations, correspondence,
undertakings and communications of the parties, whether oral or written
respecting that subject matter.

 

3.04.        Governing
Law.  This Amendment shall be
governed by, and construed in accordance with, the internal laws of the
Commonwealth of Massachusetts.

 

3.05.        Sealed
Instrument.  This Amendment is executed
as an instrument under seal.

 

3.06.        Effect.   Except as expressly set
forth in this Amendment, the Purchase Agreement shall remain in full force and
effect and shall not be altered, amended or modified.

 

3.07.        Defined
Terms.  All capitalized terms used by
not specifically defined herein shall have the same meanings given such terms
in the Purchase Agreement unless the context clearly indicates or dictates a
contrary meaning.

 

3.08.        Counterparts.  This Amendment may be executed in any number
of counterparts, including counterparts transmitted by facsimile, all of which
taken together shall constitute one and the same instrument, and each of the
parties hereto may execute this Amendment by signing any such counterpart.

 

3.09.        Further
Assurances.  From and after the date
of this Amendment, upon the request of CRP, the Company and the Subsidiaries
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary to confirm and carry out and to effectuate fully the
provisions of this Amendment.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2 to
Senior Subordinated Secured Note and Warrant Purchase Agreement as of the date
first above written.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  ECOLLEGE.COM

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Reid E.
  Simpson

  	
   

  
	
   

  	
   

  	
  Name:  Reid E. Simpson

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUBSIDIARY:

  
	
   

  	
   

  
	
   

  	
  ECOLLEGE
  INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Reid E.
  Simpson

  	
   

  
	
   

  	
   

  	
  Name:  Reid E. Simpson

  
	
   

  	
   

  	
  Title:  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CRP:

  
	
   

  	
   

  
	
   

  	
  CAPITAL RESOURCE
  PARTNERS IV, L.P.

  
	
   

  	
   

  
	
   

  	
  BY:

  	
  CRP PARTNERS IV,
  L.L.C.,

  
	
   

  	
   

  	
  Its General
  Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Authorized
  signer

  
	
   

  	
   

  	
  Title:

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