Document:

exv10w2

Exhibit 10.2

AMENDMENT NO. 1

TO

LOAN AND SECURITY AGREEMENT

This Amendment No. 1 to Loan and Security Agreement (this “Amendment”) is entered into as
of May 7, 2009 (the “Amendment Date”), by and between Silicon Valley Bank, (“Bank”) and
DemandTec, Inc., a Delaware corporation (“Borrower”). Unless otherwise defined herein,
terms defined in the Loan Agreement (as defined below) shall have the same meanings in this
Amendment.

Recitals

	A.	 	Borrower and Bank have entered into that certain Loan and Security Agreement dated as of
April 9, 2008 (the “Loan Agreement”), pursuant to which the Bank has agreed to extend and make
available to Borrower certain advances of money.
	 
	B.	 	Borrower now desires that Bank amend the Loan Agreement to (a) extend the maturity date, (b)
increase the Revolving Line, (c) modify certain financial covenants, and (d) make certain
other changes, all upon the terms and conditions more fully set forth herein.
	 
	C.	 	Subject to the representations and warranties of Borrower herein and upon the terms and
conditions set forth in this Amendment, Bank is willing to amend the Loan Agreement.

Agreement

NOW, THEREFORE, in consideration of the foregoing Recitals and intending to be legally bound, the
parties hereto agree as follows:

	1.	 	Amendments to Loan Agreement.

	 	1.1	 	Section 2.1.2 (Letters of Credit Sublimit). Section 2.1.2(a) of the Loan Agreement is
amended in its entirety by replacing it with the following:

“(a) As part of the Revolving Line, Bank shall issue or have issued Letters of Credit
for Borrower’s account. Such aggregate amounts utilized hereunder shall at all times
reduce the amount otherwise available for Advances under the Revolving Line. The
aggregate sum of (x) the face amounts of outstanding Letters of Credit (including drawn
but unreimbursed Letters of Credit) plus (y) any Letter of Credit Reserves may not
exceed $20,000,000. The aggregate amount available to be used for the issuance of
Letters of Credit may not exceed the Availability Amount. If, on the Revolving Line
Maturity Date, there are any outstanding Letters of Credit, then on such date Borrower
shall provide to Bank cash collateral in an amount equal to 105% of the aggregate face
amounts of all such Letters of Credit plus all interest, fees, and costs due or to
become due in connection therewith (as estimated by Bank in its good faith business
judgment), to secure all of the Obligations relating to said Letters of Credit. All
Letters of Credit shall be in form and substance acceptable to Bank in its sole
discretion and shall be subject to the terms and conditions of Bank’s then standard
“Application and Letter of Credit Agreement.” Borrower agrees to execute any further
documentation in connection with the Letters of Credit as Bank may reasonably request.”

	 	1.2	 	Section 2.1.3 (Foreign Exchange Sublimit). Section 2.1.3 of the Loan Agreement is
amended in its entirety by replacing it with the following:

“2.1.3 Foreign Exchange Sublimit. As part of the Revolving Line, Borrower may enter
into foreign exchange contracts with Bank under which Borrower commits to purchase from
or sell to Bank a specific amount of Foreign Currency (each, a “FX Forward Contract”) on
a specified date (the “Settlement Date”). FX Forward Contracts are subject to the
following restrictions: (a) each FX Forward Contract shall have a Settlement Date of at
least 1 FX Business Day after the contract date; (b) the aggregate amount of FX Forward
Contracts at any one time outstanding may not exceed 10 times the amount of the FX
Reserve; and (c) the amount otherwise available for Credit Extensions under the
Revolving Line shall be reduced by an amount equal to 10% of the sum of all outstanding
FX Forward Contracts (such amount, the “FX Reduction Amount”). Any amounts needed to
fully reimburse Bank for any amounts not paid by Borrower when due in connection with FX
Forward Contracts will be treated as Advances under the Revolving Line and will accrue
interest at the interest rate applicable to Advances.”

1

 

	 	1.3	 	Section 2.4(b) (Advances). Section 2.4(b) of the Loan Agreement is amended in its
entirety by replacing it with the following:

“(b) Advances. Each Advance shall bear interest on the outstanding principal
amount thereof from the date when made, continued or converted until paid in full at a
rate per annum equal to (1), for Prime Rate Advances, the Prime Rate or (2), for LIBOR
Rate Advances, the sum of (A) the greater of (i) the LIBOR Rate or (ii) 1.5% plus (B)
the LIBOR Rate Margin. On and after the expiration of any Interest Period applicable to
any LIBOR Advance outstanding on the date of occurrence of an Event of Default or
acceleration of the Obligations, the Effective Amount of such LIBOR Advance shall,
during the continuance of such Event of Default or after acceleration, bear interest at
a rate per annum equal to the Prime Rate plus 500 basis points. Pursuant to the terms
hereof, interest on each Advance shall be paid in arrears on each Interest Payment Date.
Interest shall also be paid on the date of any prepayment of any Advance pursuant to
this Agreement for the portion of any Advance so prepaid and upon payment (including
prepayment) in full thereof. All accrued but unpaid interest on the Advances shall be
due and payable on the Revolving Line Maturity Date.”

	 	1.4	 	Section 2.5(a) (Commitment Fee). Section 2.5(a) of the Loan Agreement is amended in
its entirety by replacing it with the following:

“(a) Commitment Fee. A fully earned, non-refundable commitment fee of $25,000,
on the Amendment 1 Date and on the first and second anniversaries thereof.”

	 	1.5	 	Section 6.7(b) (Tangible Net Worth). Section 6.7(b) of the Loan Agreement is amended in
its entirety by replacing it with the following:

“(b) Tangible Net Worth. A Tangible Net Worth of at least $20,000,000, plus (i)
50% of new net equity proceeds received on or after the Amendment 1 Date and (ii) 50% of
quarterly profits for each quarter ending on or after the Amendment 1 Date.”

	 	1.6	 	Section 13.1 (Definitions). The following defined terms and their definitions in
Section 13.1 of the Loan Agreement are amended in their entirety and replaced by the
following:

““Availability Amount” is the Revolving Line minus (a) the sum of the face amounts of
all outstanding Letters of Credit (including drawn but unreimbursed Letters of Credit),
minus (b) the sum of the Letter of Credit Reserves, minus (c) the FX Reduction Amount,
and minus (d) the outstanding principal balance of any Advances.”

““FX Reserve” means $2,000,000.”

““LIBOR Rate Margin” is 250 basis points.”

““Revolving Line” is an Advance or Advances not to exceed, in the aggregate, $20,000,000
or such lesser amount in accordance with Section 2.6.”

““Revolving Line Maturity Date” is the third anniversary of the Amendment 1 Date.”

	 	1.7	 	Section 13.1 (Definitions). The following defined term and its definition is added in
its alphabetically appropriate position in Section 13.1 of the Loan Agreement:

““Amendment
1 Date” is the Amendment Date as defined in that certain Amendment No. 1 to
Loan and Security Agreement by and between Borrower and Bank which added this definition
to the Agreement.”

	 	1.8	 	Exhibit B to Loan Agreement (Compliance Certificate). Exhibit B of the Loan Agreement
is amended in its entirety by deleting it and replacing it with Exhibit A attached
hereto.

	2.	 	Borrower’s Representations And Warranties.

	 	2.1	 	Borrower hereby affirms and makes, as of the Amendment Date, all of the representations
and warranties contained in the Loan Agreement.
	 
	 	2.2	 	In addition, Borrower represents and warrants that:

	 	(a)	 	no Event of Default has occurred and is continuing;
	 
	 	(b)	 	Borrower has the corporate power and authority to execute and deliver this
Amendment and to perform its obligations under the Loan Agreement, as amended by this
Amendment;

2

 

	 	(c)	 	Borrower’s Restated Certificate of Incorporation, Amended and Restated Bylaws,
and corporate borrowing resolutions dated May 6, 2009 delivered to Bank in connection
with the execution of this Amendment, remain true, accurate and complete and have not
been amended, supplemented or restated and are and continue to be in full force and
effect;
	 
	 	(d)	 	the execution and delivery by Borrower of this Amendment and the performance by
Borrower of its obligations under the Loan Agreement, as amended by this Amendment,
have been duly authorized by all necessary corporate action on the part of Borrower;
	 
	 	(e)	 	this Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower in accordance with the
terms of this Amendment, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors’ rights; and
	 
	 	(f)	 	as of the date hereof, Borrower has no defenses against the obligation to pay
to Bank any amounts under the Obligations. Borrower acknowledges that Bank has acted
in good faith and has conducted in a commercially reasonable manner its relationships
with Borrower in connection with this Amendment and in connection with the Loan
Documents.

	 	2.3	 	Borrower understands and acknowledges that Bank is entering into this Amendment in
reliance upon, and in partial consideration for, the representations and warranties in
Section 2.1 and 2.2, and agrees that such reliance is reasonable and appropriate.

	3.	 	Limitation. The amendments set forth in Section 1 shall be limited precisely as
written and shall not be deemed (a) to be a waiver or modification of any other term or
condition of the Loan Agreement or of any other instrument or agreement referred to therein or
to prejudice any right or remedy which Bank may now have or may have in the future under or in
connection with the Loan Agreement or any instrument or agreement referred to therein; or (b)
to be a consent to any future amendment or modification or waiver to any instrument or
agreement the execution and delivery of which is consented to hereby, or to any waiver of any
of the provisions thereof. Except as expressly amended hereby, the Loan Agreement shall
continue in full force and effect.
	 
	4.	 	Effectiveness. This Amendment shall become effective upon the satisfaction of all
the following conditions precedent:

	 	4.1	 	Amendment. Borrower and Bank shall have duly executed and delivered this Amendment to
Bank;
	 
	 	4.2	 	Commitment Fee. Borrower shall have paid to Bank the fully earned, non-refundable
commitment fee due on the Amendment Date pursuant to Section 2.5(a) of the Loan Agreement,
as amended by this Amendment.
	 
	 	4.3	 	Bank Expenses. Borrower shall have paid to Bank all Bank Expenses incurred through the
date of this Amendment.

	5.	 	Counterparts. This Amendment may be signed in any number of counterparts, and by
different parties hereto in separate counterparts, with the same effect as if the signatures
to each such counterpart were upon a single instrument. All counterparts shall be deemed an
original of this Amendment.
	 
	6.	 	Integration. This Amendment and any documents executed in connection herewith or
pursuant hereto contain the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior agreements, understandings, offers and negotiations,
oral or written, with respect thereto and no extrinsic evidence whatsoever may be introduced
in any judicial or arbitration proceeding, if any, involving this Amendment; except that any
financing statements or other agreements or instruments filed by Bank with respect to
Borrowers shall remain in full force and effect.
	 
	7.	 	Governing Law; Venue. THIS AMENDMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. Borrowers and Bank each
submit to the exclusive jurisdiction of the State and Federal courts in Santa Clara County,
California.

[Remainder of page left blank — signature page follows.]

3

 

[Signature page to Amendment 1]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the date
first written above.

	 	 	 	 	 
	Borrower:

	 	DemandTec, Inc., a Delaware corporation	 	 
	 
	 	 	 	 
	 

	 	By: /s/ Mark Culhane	 	 
	 

	 	 

Printed Name: Mark Culhane
	 	 
	 

	 	Title: CFO	 	 
	 
	 	 	 	 
	Bank:

	 	Silicon Valley Bank	 	 
	 
	 	 	 	 
	 

	 	By: /s/ Ray Aguilar	 	 
	 

	 	 

Printed Name: Ray Aguilar
	 	 
	 

	 	Title: RM	 	 

 

EXHIBIT A TO AMENDMENT NO. 1

EXHIBIT B TO AGREEMENT — COMPLIANCE CERTIFICATE

	 	 	 	 	 
	TO:

	 	Silicon Valley Bank
	 	Date:                     
	 
	 	 	 	 
	FROM:

	 	DemandTec, Inc.	 	 

     The undersigned authorized officer of Demandtec, Inc. (“Borrower” ) certifies that
under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the
“Agreement”), (1) Borrower is in complete compliance for the period ending                     
with all required covenants except as noted below, (2) there are no Events of Default, (3) all
representations and warranties in the Agreement are true, accurate, and complete in all material
respects on this date except as noted below; provided, however, that such materiality qualifier
shall not be applicable to any representations and warranties that already are qualified or
modified by materiality in the text thereof; and provided, further that those representations and
warranties expressly referring to a specific date shall be true, accurate and complete in all
material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all
required tax returns and reports, and Borrower has timely paid all foreign, federal, state and
local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted
pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims
made against Borrower or any of its Subsidiaries relating to unpaid employee payroll or benefits of
which Borrower has not previously provided written notification to Bank. Attached are the required
documents supporting the certification. The undersigned certifies that these are prepared in
accordance with GAAP consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The undersigned 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. Capitalized terms used but not otherwise defined herein shall have the meanings given
them in the Agreement.

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

	 	 	 	 	 
	Reporting Covenant	 	Required	 	Complies
	Compliance Certificate

	 	With financial statements
	 	Yes    No
	Annual financial projections

	 	FYE within 50 days
	 	Yes    No
	10-Q, 10-K and 8-K

	 	Within 5 days after filing with SEC
	 	Yes    No
	Cash balance report, A/R & A/P Agings

	 	Quarterly within 50 days
	 	Yes    No

	 	 	 	 	 	 	 	 	 	 	 
	Financial Covenant	 	Required	 	 	Actual	 	 	Complies
	Maintain on a Quarterly Basis:
	 	 	 	 	 	 	 	 	 	 
	Minimum Adjusted Quick Ratio
	 	 	2.0:1.0	 	 	 	          :1.0	 	 	Yes      No
	Minimum Tangible Net Worth
	 	$	20,000,000	*	 	$	 	 	 	Yes    No
	 
	 	 	 	 	 	 	 	 	 	 

 

			
	*	 	increasing by 50% of net new equity and 50% of quarterly profits

     The financial covenant analyses, calculations and information set forth in Schedule 1 attached
hereto are true, accurate, and complete as of the date of this Certificate.

     The following are the exceptions with respect to the certification above: (If no exceptions
exist, state “No exceptions to note.”)

	 	 	 	 	 	 
	Demandtec, Inc.

	 	BANK USE ONLY	 	 
	 
	 	 	 	 
	 

	 	Received by:
	 	Date:
	 	 	 
	 	 
	 
	 

	 	AUTHORIZED SIGNER
	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:

	 	Verified by:
	 	Date:
	 	 	 
	 	 
	 
	 

	 	AUTHORIZED SIGNER
	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	Compliance Status:
       
           
           
                ___Yes ___No	 	 

Exhibit A-1

 

Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

In the event of a conflict between this Schedule and the Loan Agreement, the terms of the Loan Agreement shall govern.

Dated:                     

I. Adjusted Quick Ratio (Section 6.7(a))

Required:            2.00:1.00

Actual (line J):                     

	 	 	 	 	 	 	 
	A.
	 	Aggregate value of the unrestricted cash and cash equivalents of Borrower and its Subsidiaries	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	B.
	 	Aggregate value of the net billed accounts receivable of Borrower and its Subsidiaries	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	C.
	 	Aggregate value of the Investments of Borrower and its Subsidiaries	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	D.
	 	Quick Assets (the sum of lines A through C)	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	E.
	 	Aggregate value of current Obligations to Bank	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	F.
	 	Aggregate value of liabilities that should, under GAAP, be classified as liabilities on
Borrower’s consolidated balance sheet, including all Indebtedness, and not otherwise
reflected in line E above that matures within one (1) year
	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	G.
	 	Current Liabilities (the sum of lines E and F)	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	H.
	 	Deferred Revenue to the extent included in line G	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	I.
	 	Line G minus Line H	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	J.
	 	Adjusted Quick Ratio (line D divided by line I)	 	$ 	 	 
	 
	 	 	 	 	 	 

Is line J equal to or greater than 2.00:1.00?       
             
       No, not in compliance          
             Yes, in compliance

II. Tangible Net Worth (Section 6.7(b))

	 	 	 	 	 	 	 
	Required: $20,000,000 increasing by 50% of net new equity proceeds and 50% of quarterly profits,
i.e.
	 	$ 	 	 
	 
	 	 	 	 	 	 

Actual (line G):

	 	 	 	 	 	 	 
	A.
	 	Aggregate value of total assets of Borrower and its Subsidiaries	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	B.
	 	Aggregate value of goodwill of Borrower and its Subsidiaries	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	C.
	 	Aggregate value of intangible assets of Borrower and its Subsidiaries	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	D.
	 	Aggregate value of any reserves not already deducted from assets	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	E.
	 	Total Liabilities	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	F.
	 	Subordinated Debt	 	$ 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	G.
	 	Tangible Net Worth (line A minus line B minus line C minus line D minus line E plus line F )	 	$ 	 	 
	 
	 	 	 	 	 	 

Is line G equal to or greater than the required amount?
                    
           No, not in compliance
           
                    
          Yes, in
compliance

Exhibit A-2exv10w3

Exhibit 10.3

Non-Employee Director Compensation Policy

(adopted May 6, 2009, effective as of March 1, 2009)

1. Fiscal Year 2009 Cash Compensation.

Board: The annual cash retainer for each director is $25,000, paid quarterly.

Audit Committee: The Audit Committee chair will receive an additional annual cash retainer
of $20,000, paid quarterly, and other Audit Committee members will receive an additional annual
cash retainer of $10,000, paid quarterly.

Compensation Committee: The Compensation Committee chair will receive an additional annual
cash retainer of $10,000, paid quarterly, and other Compensation Committee members will receive an
additional annual cash retainer of $5,000, paid quarterly.

Nominating/Corporate Governance Committee: The Nominating/Corporate Governance Committee
chair will receive an additional annual cash retainer of $5,000, and other Nominating/Corporate
Governance Committee members will receive an additional annual cash retainer of $2,500, paid
quarterly.

2. Fiscal Year 2010 Equity Compensation.

Current Directors: On the date of the 2009 annual meeting of stockholders, each continuing
director will be granted an annual option grant to purchase 15,000 shares of common stock (the
“Annual Continuing Director Option Grant”) which will cliff vest as of the Company’s 2010 annual
meeting of stockholders.

Non-Executive Chair: In addition to the Annual Continuing Director Option Grant, the
non-executive Chair shall receive an additional option to purchase 15,000 shares of common stock,
granted on the same date as the Annual Continuing Director Option Grant, which will cliff vest as
of the Company’s 2010 annual meeting of stockholders.

3. Compensation in Subsequent Fiscal Years.

Annual Cash Compensation for Continuing Directors: It is the Company’s policy annually to
review the level of cash compensation for directors, including for services as members or chair of
committees of the Board. The level of cash compensation will be recommended by the Compensation
Committee each year in consultation with an independent compensation consultant, taking into
account the peer group and the competitive environment.

Annual Equity Compensation for Continuing Directors: It is the Company’s policy to make
annual one-year cliff vesting equity grants to each of its continuing directors on the date of the
Company’s annual meeting of stockholders. This includes an additional incremental one-year cliff
vesting grant to the non-executive Chair. The size of these grants and their form (e.g., options,
RSUs, shares, etc.), will be recommended by the Compensation Committee each year in consultation
with an independent compensation consultant, taking into account the peer group and the competitive
environment.

 

 

New Directors: The Company intends that new directors would receive an initial option to
purchase 30,000 shares upon joining the Board, which option would vest over four years with
one-year cliff vesting and monthly vesting thereafter. New directors who join the Board during the
year would not receive a pro rated Annual Continuing Director Grant for the year in which they join
the Board.

4. General.

All option grants will have an exercise price per share equal to the fair market value of the
Company’s common stock on the date of grant.

The options will be for 7 years, except that they will terminate 12 months after the director’s
services as a director terminates for any reason.

All unvested options will be fully vested and immediately exercisable upon a change-in-control of
the Company.

2

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