Third Amendment to Loan and Security Agreement
Exhibit 10.39
THIS THIRD AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered into as of
November 2, 2007, by and between SILICON VALLEY BANK (“Bank”), on the one side, and EV3
ENDOVASCULAR, INC., a Delaware corporation, EV3 INTERNATIONAL, INC., a Delaware corporation, and
MICRO THERAPEUTICS, INC., a Delaware corporation (collectively and jointly and severally referred
to as “Borrowers”), whose address is c/o ev3 Inc., 0000 00xx Xxxxxx Xxxxx, Xxxxxxxx, XX
00000, on the other side.
Recitals
A. Bank and Borrowers have entered into that certain Loan and Security Agreement dated as of
an Effective Date of June 28, 2006 (as the same may from time to time be further amended, modified,
supplemented or restated, the “Loan Agreement”). The Obligations of the Borrowers have been
guarantied by, among others, the following companies, in favor of Bank: ev3 Inc., a Delaware
corporation; Micro Therapeutics International, Inc., a Delaware corporation; and ev3 Peripheral,
Inc., a Minnesota corporation (collectively, the “Guarantors”).
B. Bank has extended credit to Borrowers for the purposes permitted in the Loan Agreement.
C. Borrowers have requested that Bank (i) waive Borrowers’ compliance with the Tangible Net
Worth covenant for the month of September 2007, (ii) eliminate the Tangible Net Worth covenant
under the Loan Agreement going forward, and (iii) acknowledge that Borrowers’ and Guarantors’
agreement to settle certain litigation, and make payments pursuant to such settlement, as described
herein shall not constitute an Event of Default under specified provisions of the Loan Agreement.
D. Bank has agreed to so amend the Loan Agreement, but only to the extent, in accordance with
the terms, subject to the conditions and in reliance upon the representations and warranties set
forth below.
Agreement
Now, Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to
be legally bound, the parties hereto agree as follows:
1. Definitions. Capitalized terms used but not defined in this Amendment shall
have the meanings given to them in the Loan Agreement.
2. Amendments to Loan Agreement.
2.1 Section 6.7(b) (Waiver of TNW Default). Borrowers have advised Bank that Borrowers may
fail to comply with the Tangible Net Worth covenant set forth in Section 6.7(b) of the Loan
Agreement for September 2007. Bank and Borrowers agree that any such noncompliance is hereby
waived effective as of September 30, 2007. It is understood by the parties hereto that such waiver
does not constitute a waiver of any other default under the Loan Agreement or any other Loan
Document, nor an agreement by Bank to waive or forbear from exercising its rights and remedies in
the future regarding defaults under any financial covenant or any other defaults under the Loan
Agreement or any other Loan Documents.
2.2 Section 6.7(b) (Elimination of TNW Covenant). Effective September 30, 2007, Section
6.7(b) of the Loan Agreement is deleted, and the Compliance Certificate shall be revised
accordingly. On or before December 31, 2007, Borrowers and Bank shall use reasonable commercial
efforts to negotiate and agree to one or more new financial covenant(s), to be effective January 1,
2008.
2.3 Agreement Regarding Certain Events of Default. Borrowers have advised Bank that ev3 Inc.
and its subsidiaries, including the Borrowers and the Guarantors (other than ev3 Inc.), have agreed
in principle to settle certain litigation described in the page of Exhibit 99.1 of the Form 8-k
filed by ev3 Inc. on October 31, 2007 with the Securities and Exchange Commission attached hereto.
Bank agrees that the payment of approximately $21,000,000 in settlement of such litigation shall
not constitute an Event Default under the following Sections of the Loan Agreement: Section 8.2 (by
potential violation of covenants listed in Sections 7.1, 7.4 and 7.7), Section 8.3, Subsections
8.4(a) and (d) (but only to the extent the “assets” referred to in such Subsections are limited to
$21,000,000 of cash or cash equivalents that is set aside for purposes of paying the settlement),
and Section 8.7 (but only to the extent any such judgment is for purposes of effectuating such
settlement).
2.4 FoxHollow. Reference is made to the Consent and Second Amendment to Loan and Security
Agreement, dated October 4, 2007, among the Bank and the Borrowers. Section 3 of said amendment
requires that the Borrowers cause certain events to occur for purposes of making “FoxHollow” an
additional borrower under the Loan Agreement, within thirty days of the consummation of the
“FoxHollow Merger” (as defined in said amendment). The thirty day period set forth in the
amendment to accomplish such events is hereby extended to be the period ending December 17, 2007.
3. Limitation of Amendments.
3.1 The consents and amendments set forth herein are effective for the purposes set forth
herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any
other transaction or to any amendment, waiver or modification of any other term or condition of any
Loan Document, or (b) otherwise prejudice any
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right or remedy which Bank may now have or may have in the future under or in connection with
any Loan Document.
3.2 This Amendment shall be construed in connection with and as part of the Loan Documents and
all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan
Documents, except as herein amended, are hereby ratified and confirmed, shall remain in full force
and effect, and are incorporated herein by reference.
4. Representations and Warranties. To induce Bank to enter into this Amendment, each Borrower
hereby represents and warrants to Bank as follows:
4.1 Immediately after giving effect to this Amendment (a) the representations and warranties
contained in the Loan Documents are true, accurate and complete in all material respects as of the
date hereof (except to the extent such representations and warranties relate to an earlier date, in
which case they are true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;
4.2 Borrower has the power and authority to execute and deliver this Amendment and to perform
its obligations under the Loan Agreement, as amended by this Amendment;
4.3 The organizational documents of Borrower previously delivered to Bank remain true,
accurate and complete and have not been amended, supplemented or restated and are and continue to
be in full force and effect;
4.4 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;
4.5 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, do not and will not
contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual
restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or
other governmental or public body or authority, or subdivision thereof, binding on Borrower, or
(d) the organizational documents of Borrower;
4.6 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, do not require any
order, consent, approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by any governmental or public body or authority, or subdivision
thereof, binding on either Borrower, except as (i) already have been obtained or made and (ii) such
filings as shall be required by law to perfect a security interest in the Collateral of FoxHollow;
and
4.7 This Amendment has been duly executed and delivered by
Borrower and is the binding obligation of Borrower,
enforceable against Borrower in
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accordance with its terms, 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.
5. Counterparts. This Amendment may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same instrument.
6. Effectiveness. This Amendment shall be deemed effective upon (a) the due execution and
delivery of this Amendment by each party hereto, and (b) Bank’s receipt of the Acknowledgment of
Amendment and Reaffirmation of Guaranty substantially in the form attached hereto as Schedule 1,
duly executed and delivered by each Guarantor named thereon.
7. Fee. In consideration for Bank entering into this Amendment, Borrower shall
concurrently pay Bank a fee in the amount of $12,500, which fee is deemed fully earned
on the date hereof, and shall be non-refundable and in addition to all interest and
other fees payable to Bank under the Loan Documents.
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In Witness Whereof, the parties hereto have caused this Amendment to be duly executed
and delivered as of the date first written above.
| Borrowers: | ||||||||||
| EV3 ENDOVASCULAR, INC. | EV3 INTERNATIONAL, INC. | |||||||||
By
|
/s/ Xxxxxxx X. Xxxxxxxx | By | /s/ Xxxxxxx X. Xxxxxxxx | |||||||
Name:
|
Name: | |||||||||
Title:
|
Vice President and | Title: | Treasurer | |||||||
| Chief Financial Officer | ||||||||||
| MICRO THERAPEUTICS, INC. | ||||||||
By Name: |
/s/ Xxxxxxx X. Xxxxxxxx
|
|||||||
Title:
|
Chief Financial Officer and Treasurer | |||||||
| Bank: | ||||
| SILICON VALLEY BANK | ||||
By |
/s/ Xxx XxXxxx | |||
Name:
|
||||
Title:
|
Senior Relationship Manager | |||
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