EXHIBIT 10.7
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of June 17, 1997, by and
between Data Critical Corp. ("Borrower") whose address is 0000 000xx Xxxxxx, XX,
Xxxxxxx, XX 00000, and Silicon Valley Bank ("Lender") whose address is 0000
Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be
owing by Borrower to Lender, Borrower is indebted to Lender pursuant to, among
other documents, a Promissory Note, dated April 10, 1997, in the original
principal amount of Five Hundred Thousand and 00/100 Dollars ($500,000.00), as
amended from time to time (the "Line") and a Promissory Note dated April 10,
1997 in the original principal amount of One Hundred Thousand and 00/100 Dollars
($100,000.00) (the "Term Note) and collectively referred to as the "Notes". The
Notes, together with other promissory notes from Borrower to Lender, are
governed by the terms of a Business Loan Agreement, dated April 10, 1997, as
such agreement may be amended from time to time, between Borrower and Lender
(the "Loan Agreement'). Defined terms used but not otherwise defined herein
shall have the same meanings as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to
as the "Indebtedness".
2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is
secured by a Commercial Security Agreement, dated April 10, 1997, and a
Collateral Assignment, Patent Mortgage and Security Agreement dated April 10,
1997.
Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".
3. DESCRIPTION OF CHANGE IN TERMS.
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A. Modification(s) to Loan Agreement.
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1. The paragraph entitled "Borrowing Base Formula" is hereby amended
in its entirety to read as follows:
Funds shall be advanced under Borrower's line of credit facility
according to a borrowing base formula, as determined by Lender on
a monthly basis, defined as follows: the lesser of (i) $500,000.00
minus the face amount of all outstanding letters of credit
(including drawn but unreimbursed letters of credit) or (ii)
seventy-five percent (75%) of Eligible Accounts Receivable minus
the face amount of all outstanding letters of credit (including
drawn but unreimbursed letters of credit). Eligible Accounts
Receivable shall be defined as those accounts that arise in the
ordinary course of Borrower's business, and shall include, but not
be limited to, those accounts outstanding less than 90 days from
the date of invoice, excluding all foreign, government, contra and
intercompany accounts, and exclude accounts wherein 50% or more of
the account is outstanding more than 90 days from the date of
invoice. Other than those accounts receivable from Hewlett Packard
Company and Marquette Medical Systems, which shall have a 60%
concentration limit, any account which alone exceeds 25% of total
accounts will be ineligible to the extent said account exceeds 25%
of total accounts. Lender shall also deem ineligible any credit
balances which are aged past 90 days, and accounts generated by
the sale of demonstration or promotional equipment. The standards
of eligibility shall be fixed from time to time by Lender, in
Lender's reasonable judgment, upon notification to Borrower.
Lender reserves the right to exclude any accounts, the collection
of which, Lender reasonably determines to be doubtful.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
below) agrees that it has no defenses against the obligations to pay any amounts
under the Indebtedness.
6. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness,
Lender is relying upon Borrower's representations, warranties, and agreements,
as set forth in the Existing Loan Documents. Except as expressly modified
pursuant to this Loan Modification Agreement, the terms of the Existing Loan
Documents remain unchanged and in full force and effect. Lender's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Lender to make any future modifications to
the Indebtedness. Nothing in this Loan Modification Agreement shall constitute a
satisfaction of the Indebtedness. It is the intention of Lender and Borrower to
retain as liable parties all makers and endorsers of Existing Loan Documents,
unless the party is expressly released by
Lender in writing. No maker, endorser, or guarantor will be released by virtue
of this Loan Modification Agreement. The terms of this paragraph apply not only
to this Loan Modification Agreement, but also to all subsequent loan
modification agreements.
This Loan Modification Agreement is executed as of the date first written above.
BORROWER: LENDER:
DATA CRITICAL CORPORATION SILICON VALLEY BANK
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xx Xxxxxxxx
Name: Xxxxxx X. Xxxxxx Name: Xx Xxxxxxxx
Title: CFO Title: SVP
