Exhibit 10.1
SILICON VALLEY BANK
AMENDMENT TO LOAN DOCUMENTS
BORROWER: LASERSCOPE
ADDRESS: 0000 XXXXXXX XXXXX
XXX XXXX, XXXXXXXXXX 00000
DATE: SEPTEMBER 25, 2003
THIS AMENDMENT TO LOAN DOCUMENTS is entered into between Silicon Valley
Bank ("Silicon") and the borrower named above ("Borrower").
The Parties agree to amend the Loan and Security Agreement between them,
dated October 1, 1999 (as otherwise amended, the "Loan Agreement"), as follows,
effective as of the date hereof. (Capitalized terms used but not defined in this
Amendment shall have the meanings set forth in the Loan Agreement.)
1. MODIFIED TERMINATION FEE. Section 6.2 of the Loan Agreement is hereby
amended to read as follows:
6.2 EARLY TERMINATION. This Agreement may be terminated prior to the
Maturity Date as follows: (i) by Borrower, effective three Business
Days after written notice of termination is given to Silicon; or
(ii) by Silicon at any time after the occurrence of an Event of
Default, without notice, effective immediately. If this Agreement is
terminated by Borrower or by Silicon under this Section 6.2,
Borrower shall pay to Silicon a termination fee in an amount equal
to two percent (2%) of the Maximum Credit Limit if the effective
date of termination occurs within six months after September 30,
2003, or one percent (1%) of the Maximum Credit Limit if the
effective date of termination occurs thereafter, provided that no
termination fee shall be charged if the credit facility hereunder is
replaced with a new facility from another division of Silicon Valley
Bank. The termination fee shall be due and payable on the effective
date of termination and thereafter shall bear interest at a rate
equal to the highest rate applicable to any of the Obligations.
2. MODIFIED CREDIT LIMIT (MODIFIED INVENTORY LOANS AND ADDITION OF CASH
MANAGEMENT SUBLIMIT). The Credit Limit set forth in Section 1 of the Schedule to
Loan and Security Agreement is hereby amended to read as follows:
1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of a total of
$5,000,000 at any one time outstanding (the "Maximum
Credit Limit"), or the sum or (a) and (b) below:
(a) Receivable Loans. Loans (the "Receivable Loans")
in an amount up to 80% (an "Advance Rate") of the
amount of Borrower's Eligible Receivables (as defined
in Section 8 above), plus
(b) Inventory Loans. Loans (the "Inventory Loans") in
an amount up to the lesser of:
(1) 25% (and "Advance Rate") of the
value of Borrower's Eligible
Inventory (as defined in Section 8
above), calculated at the lower of
cost or market value and determined
on a first-in, first-out basis, or
(2) an amount equal to 25% (an "Advance
Rate") of the Borrower's Eligible
Receivables (as defined in Section
8 above); or
(3) $500,000.
Silicon may, from time to time, modify the Advance
Rates, in its good faith business judgment, upon
notice to the Borrower, based on changes in
collection experience with respect to Receivables,
its evaluation of the Inventory or other issues or
factors relating to the Receivables, Inventory or
other Collateral. Without limiting the definition of
"Eligible Receivables", receivables owing to
Borrower's subsidiaries shall not constitute Eligible
Receivables.
LETTER OF CREDIT
SUBLIMIT
(Section 1.5): $2,000,000.
CASH MANAGEMENT SERVICES AND
RESERVES: Borrower may use up to $1,000,000 of Loans available hereunder
for Silicon's Cash Management Services, including, merchant
services (up to a maximum of $10,000), business credit card,
and other services identified in the cash management services
agreement related to such service (the "Cash Management
Services"). Silicon may, in its sole discretion, reserve
against Loans which would otherwise be available hereunder
such sums as Silicon shall determine in its good faith
business judgment in connection with the Cash Management
Services, and Silicon may charge to Borrower's Loan account,
any amounts that may become due or owing to Silicon in
connection with the Cash Management Services. Borrower agrees
to execute and deliver to Silicon all standard form
applications and agreements of Silicon in connection with the
Cash Management Services, and, without limiting any of the
terms of such applications and agreements, Borrower will pay
all standard fees and charges of Silicon in connection with
the Cash Management Services. The Cash Management Services
shall terminate on the Maturity Date.
3. MODIFIED INTEREST RATE. Section 2 of the Schedule to Loan and Security
Agreement is hereby amended to read as follows:
2. INTEREST.
INTEREST RATE
(Section 1.2): A rate equal to the "Prime Rate" in effect from time
to time, plus 2.0% per annum; provided, however,
while that certain Streamline Facility Agreement
between Borrower and Silicon of approximate even date
herewith (the "Streamline Agreement") is in effect,
then a rate equal to the "Prime Rate" in effect from
time to time, plus 1.0% per annum. Interest shall be
calculated on the basis of a 360-day year for the
actual number of days elapsed. "Prime Rate" means the
rate announced from time to time by Silicon as its
"prime rate;" it is a base rate upon which other
rates charged by Silicon are based, and it is not
necessarily the best rate available at Silicon. The
interest rate applicable to the Obligations shall
change on each date there is a change in the Prime
Rate.
MINIMUM MONTHLY
INTEREST
(Section 1.2): None.
4. MODIFIED COLLATERAL MONITORING FEE. The Collateral Monitoring Fee set
forth in Section 3 of the Schedule to Loan and Security Agreement is hereby
amended to read as follows:
Collateral Monitoring Fee: $1,000, per calendar month, payable in
arrears (prorated for any partial calendar
month at the beginning and at termination of
this Agreement); provided, however, such fee
will not be applicable while the Streamline
Agreement is in effect.
5. MODIFIED MATURITY DATE. Section 4 of the Schedule to Loan and Security
Agreement is hereby amended in its entirety to read as follows:
4. MATURITY DATE
(Section 6.1): September 29, 2004.
6. MODIFIED TANGIBLE NET WORTH COVENANT. Section 5 of the Schedule to Loan
and Security Agreement is hereby amended in its entirety to read as follows:
5. FINANCIAL
COVENANTS
(Section 5.1):
Borrower shall comply with each of the
following covenant(s). Compliance shall be
determined as of the end of each month:
MINIMUM TANGIBLE Borrower shall maintain a Tangible Net Worth
NET WORTH: of not less than $13,000,000, plus (i) 50%
of all consideration received after the date
hereof for equity securities and
subordinated debt of the Borrower, plus (ii)
50% of the Borrower's net income in each
fiscal quarter ending after the date hereof.
Increases in the Minimum Tangible Net Worth
Covenant based on consideration received for
equity securities and subordinated debt of
the Borrower shall be effective as of the
end of the month in which such consideration
is received, and shall continue effective
thereafter. Increases in the Minimum
Tangible Net Worth Covenant based on net
income shall be effective on the last day of
the fiscal quarter in which said net income
is realized, and shall continue effective
thereafter. In no event shall the Minimum
Tangible Net Worth Covenant be decreased.
DEFINITIONS. For purposes of the foregoing financial
covenants, the following term shall have the
following meaning:
"Tangible Net Worth" shall mean the excess
of total assets over total liabilities,
determined in accordance with generally
accepted accounting principles, with the
following adjustments:
(A) there shall be excluded from
assets: (i) notes, accounts
receivable and other obligations
owing to the Borrower from its
officers or other Affiliates, and
(ii) all assets which would be
classified as intangible assets
under generally accepted accounting
principles, including without
limitation goodwill, licenses,
patents, trademarks, trade names,
copyrights, capitalized software
and organizational costs, licenses
and franchises.
(B) there shall be excluded from liabilities: all indebtedness
which is subordinated to the Obligations under a subordination
agreement in form specified by Silicon or by language in the instrument
evidencing the indebtedness which is acceptable to Silicon in its
discretion.
7. MODIFIED COVENANT REGARDING BANKING RELATIONSHIP. Section
9(1) of the Schedule to Loan and Security Agreement is hereby amended
in its entirety to read as follows:BANKING RELATIONSHIP. Borrower shall
at all times maintain its primary banking relationship with Silicon.
Borrower covenants that while this Agreement is in effect, the value of
the investments in its D.B. Alex. Xxxxx Account in excess of $200,000
(the "Cap") will be deposited in Borrower's account at Silicon within
five working days of the end of each month. Silicon, in turn, hereby
agrees that so long as Borrower acts in accordance with the preceding
sentence, Silicon will not require Borrower to cause Xxxx Xxxxx to
execute a Securities Account Control Agreement (or other control
agreement) with respect to the Borrower's investments maintained at
Xxxx Xxxxx.
8. MODIFIED PERCENTAGE REGARDING SUBSIDIARY RECEIVABLES.
Section 9(5) of the Schedule to Loan and Security Agreement that
currently reads as follows:
(5) SUBSIDIARY RECEIVABLES. Without limiting any of the
other terms or provisions of this Agreement, Borrower shall
not at any time permit the total outstanding Receivables owing
to Borrower from all of its partially and wholly-owned
subsidiaries combined, which arise after the date hereof, to
exceed 50% of Borrower's total Receivables.
is hereby deleted.
9. RENAISSANCE NOTES AND INDEBTEDNESS. Borrower is party to
that certain 8.00% Convertible Debenture No. 1 issued February 11, 2000
by Borrower in favor of Renaissance Capital Growth & Income Fund III,
Inc. in the original principal amount of $1,500,000 and that certain
8.00% Convertible Debenture No. 2 issued February 11, 2000 by Borrower
in favor of Renaissance US Growth & Income Trust PLC in the original
principal amount of $1,500,000 (collectively, the "Renaissance Notes").
Silicon hereby agrees that it will not require Renaissance Capital
Group, Inc., as agent for Renaissance Capital Growth & Income Fund III,
Inc. and Renaissance US Growth & Income Trust PLC (collectively,
"Renaissance"), to execute a subordination agreement on Silicon's
standard form with respect to the indebtedness evidenced by the
Renaissance Note and any related security interest. In addition,
provided that, so long as no Default or Event of Default has occurred
under the Loan Agreement or any other written document or agreement
between Borrower and Silicon, both before and after giving effect to
the following payments, Borrower may make, and Renaissance may accept,
payment of the following amounts under the Renaissance Notes: (i)
Regularly scheduled payments of interest as set forth in the
Renaissance Notes; and (ii) Regularly scheduled payments of principal
equal to 1% of the outstanding principal amount of the indebtedness as
set forth in the Renaissance Notes.
10. FEE. In consideration for Silicon entering into this
Amendment, Borrower shall concurrently pay Silicon a fee in the amount
of $20,000, which shall be non-refundable and in addition to all
interest and other fees payable to Silicon under the Loan Documents.
Silicon is authorized to charge said fee to Borrower's loan account.
11. REPRESENTATIONS TRUE. Borrower represents and warrants to Silicon
that all representations and warranties set forth in the Loan Agreement, as
amended hereby, are true and correct.
12. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior
written amendments to the Loan Agreement signed by Silicon and Borrower, and the
other written documents and agreements between Silicon and Borrower set forth in
full all of the representations and agreements of the parties with respect to
the subject matter hereof and supersede all prior discussions, representations,
agreements and understandings between the parties with respect to the subject
hereof. Except as herein expressly amended, all of the terms and provisions of
the Loan Agreement, and all other documents and agreements between Silicon and
Borrower shall continue in full force and effect and the same are hereby
ratified and confirmed.
BORROWER: SILICON:
LASERSCOPE SILICON VALLEY BANK
BY /S/ XXXXXX XXXXXXXXXXXX BY /S/ XXXXXXXXXXX X. XXXX
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PRESIDENT OR VICE PRESIDENT TITLE SENIOR VICE PRESIDENT
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BY
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SECRETARY OR ASS'T SECRETARY
CONSENT
The undersigned acknowledges that its consent to the foregoing
Agreement is not required, but the undersigned nevertheless does hereby consent
to the foregoing Agreement and to the documents and agreements referred to
therein and to all future modifications and amendments thereto, and any
termination thereof, and to any and all other present and future documents and
agreements between or among the foregoing parties. Nothing herein shall in any
way limit any of the terms or provisions of the Guarantee of the undersigned,
all of which are hereby ratified and affirmed.
LASERSCOPE (UK) LIMITED
BY /S/ XXXXXX XXXXXXXXXXXX
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TITLE VICE PRESIDENT, FINANCE
AND CHIEF FINANCIAL OFFICER
