EXHIBIT 10.12
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LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of February 12, 1999,
by and between Data Critical Corp. ("Borrower") and Silicon Valley Bank
("Lender").
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may
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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). The
Line has been modified pursuant to, among other documents, a Loan Modification
Agreement, dated April 14, 1998, pursuant to which, among other things, the
principal amount was increased to One Million and 00/100 Dollars
($1,000,000.00). The Note, 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
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secured by a Commercial Security Agreement, dated April 10, 1997, and an
Intellectual Property 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 the Note.
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1. The amount of the Line is hereby increased to One Million Five
Hundred Thousand and 00/100 Dollars ($1,500,000.00).
B. Modifications to the Business Loan Agreement
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1. Letter of Credit Sublimit. The first sentence under Letter of
Credit Sublimit is hereby amended as follows: Subject to the
terms and conditions of this Agreement, Lender agrees to issues
or cause to be issued under Borrower's line of credit facility,
letters of credit for the account of Borrower in an aggregate
face amount not to exceed (i) the lesser of the $1,500,000.00 of
the Borrowing Base Formula minus (ii) the then outstanding
principal balance of the line of credit facility; provided that
the face amount of outstanding letters of credit (including drawn
but unreimbursed letters of credit) shall not in any case exceed
Three Hundred Forty Thousand and 00/100 Dollars ($340,000.00).
2. The paragraph entitled "Borrowing Base Formula" is hereby amended
in part to provide that if the Adjusted Quick Ratio is less than
1.50 but greater then 1.20, the advance rate will be 60% against
invoices.
3. The paragraph entitled "Financial Covenants" is hereby amended,
in part, to permit Borrower to incur quarterly losses, provided
such losses do not exceed $1,500,000.00 beginning the fiscal
quarter ending September 30, 1998, decreasing to $800,000.00 for
the fiscal quarter ending March 31, 1999, further decreasing to
$600,000.00 for the fiscal quarter ending June 30, 1999 and
breakeven or profitable thereafter.
The quick ratio of 1.50 to 1.00 is hereby replaced with the
Adjusted Quick Ratio. The Adjusted Quick Ratio is defined as
cash and equivalents plus receivables divided by current
liabilities less deferred revenues. Borrower shall maintain a
minimum Adjusted Quick Ratio of 1.50 : 1.00 for the term of the
Loan except for quarters ending June 30, 1999 and September 30,
1999, the minimum Adjusted Quick Ratio shall be 1.20 : 1.00.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
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wherever necessary to reflect the changes described above.
5. PAYMENT OF LOAN FEE. Borrower shall pay to Lender a fee in the amount of
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$1,250.00 (the "Loan Fee") plus all out of pocket expenses.
6. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
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below) agrees that it has no defenses against the obligations to pay any amounts
under the Indebtedness.
7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
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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 CORP. SILICON VALLEY BANK
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxxx
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Name: Xxxxxx X. Xxxxxx Name: Xxxx Xxxxxxx
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Title: CFO Title: AVP
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