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EXHIBIT 10.1
SILICON VALLEY BANK
AMENDMENT TO LOAN AGREEMENT
BORROWER: VITALCOM INC., A DELAWARE CORPORATION
ADDRESS: 00000 XXX XXX XXXXXX
XXXXXX, XX 00000
DATED AS OF: AUGUST 6, 1997
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON VALLEY BANK
("Silicon") and the borrower named above (the "Borrower").
The Parties agree to amend the Loan and Security Agreement between them dated
February 26, 1993, as amended by that Amendment to Loan Agreement dated December
21, 1993, as amended by that Amendment to Loan Agreement dated April 27, 1994,
as amended by that Amendment to Loan Agreement dated May 5, 1995, as amended by
that Amendment to Loan Agreement dated May 30, 1995, as amended by that
Amendment to Loan Agreement dated December 27, 1995 (the "December 1995
Amendment"), as amended by that Amendment to Loan Agreement dated August 6,
1996, as amended by that Amendment to Loan Agreement dated September 25, 1996,
and as otherwise amended from time to time (the "Loan Agreement"; terms defined
in the Loan Agreement are used herein as therein defined), as follows, effective
as of the date hereof.
1. AMENDED FINANCIAL COVENANTS. The section of the Schedule to the Loan
Agreement entitled "Financial Covenants (Section 4.1)" is amended
effective as of the date hereof to read as follows:
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"FINANCIAL COVENANTS
(Section 4.1): Borrower shall comply with all of the following
covenants. Compliance shall be determined as of the
end of each calendar quarter, except as otherwise
specifically provided below:
QUICK ASSET RATIO: Borrower shall maintain a ratio of "Quick Assets" to
current liabilities of not less than 2.00 to 1.
TANGIBLE NET WORTH: Borrower shall maintain a tangible net worth of not
less than $20,000,000.
DEBT TO TANGIBLE
NET WORTH RATIO: Borrower shall maintain a ratio of total liabilities
to tangible net worth of not more than 1.00 to 1.
MINIMUM CASH COVERAGE Borrower shall maintain an aggregate total of cash
and marketable securities (valued at market value) in
an amount at least equal to the product of two times
the maximum amount of the Credit Line.
DEFINITIONS: "Current Assets" and "current liabilities" shall have
the meanings ascribed to them in accordance with
generally accepted accounting principles. "Tangible
net worth" means the excess of total assets over
total liabilities, determined in accordance with
generally accepted accounting principles, excluding
however all assets which would be classified as
intangible assets under generally accepted accounting
principles, including without limitation goodwill,
licenses, patents, trademarks, trade names,
copyrights, and franchises. "Quick Assets" means cash
on hand or on deposit in banks, readily marketable
securities issued by the United States, readily
marketable commercial paper rated "A-1" by Standard &
Poor's Corporation (or a similar rating by a similar
organization), certificates of deposit and banker's
acceptances, and accounts receivable (net of
allowance for doubtful accounts).
SUBORDINATED DEBT: "Liabilities" for purposes of the foregoing covenants
do not include indebtedness which is subordinated to
the indebtedness to Silicon under a subordination
agreement in form specified by Silicon or by language
in the instrument evidencing the indebtedness which
is acceptable to Silicon.
2. AMENDED MATURITY DATE. The section of the Schedule to the Loan Agreement
entitled "Maturity Date (Section 5.1)" is amended effective as of the date
hereof to read as follows:
"Maturity Date
(Sections 5.1): August 5, 1998."
3. CONSENT TO BORROWER LOANS. Borrower has made (I) a bridge loan to its Vice
President of Direct Sales in the approximate amount of $175,000 and (II)
two loans in an aggregate amount of $194,960 to two consultants of
borrower relating to such persons' purchase of Borrower's stock
(collectively, the "Borrower Loans"). Silicon hereby consents to the
Borrower Loans, and hereby agrees that no Event of Default shall arise
under the Loan Agreement in connection herewith.
4. FEE. It is acknowledged that Borrower shall pay to Silicon a fee in the
amount of $8,250 in connection with this Amendment, which shall be in
addition to all interest and all other fees payable to Silicon and shall
be non-refundable. At such time that any Loans are made hereunder,
Borrower shall, prior to Silicon's making of any such
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Loans, pay to Silicon a further fee of $8,250, which shall be in addition
to all interest and all other fees payable to Silicon and shall be
non-refundable.
5. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior written
amendments to the Loan Agreement signed by Silicon and the Borrower, and
the other written documents and agreements between Silicon and the
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 the Borrower shall
continue in full force and effect and the same are hereby ratified and
confirmed. This Amendment shall be controlling in the event of any
conflicts between any prior written agreements and amendments between
Silicon and the Borrower, on the one hand, and the Amendment.
Borrower: Silicon:
VITALCOM INC., a Delaware corporation SILICON VALLEY BANK
By /s/Xxxxxx X. Xxxxxx
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President or Vice President
By /s/Xxxxxxxxx Xxxxxxxxxxx
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By/s/ Xxxxxxx X. Xxxxxx Title V.P.
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Secretary
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