Amendment to Loan Agreement
Exhibit 10.1
Silicon Valley Bank
Amendment to Loan Agreement
Borrower:
|
I-Flow Corporation | |
Address:
|
00000 Xxxxxxx Xxxxx | |
| Xxxx Xxxxxx, Xxxxxxxxxx 00000 |
Dated as of: July 16, 2007
THIS AMENDMENT TO LOAN AGREEMENT is entered into between Silicon Valley Bank (“Bank”) and
the borrower named above (the “Borrower”).
The Parties agree to amend the Amended and Restated Loan and Security Agreement between them,
having an effective date of May 8, 2003 (as amended from time to time being referred to herein as
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. Revised Section 6.7. Section 6.7 of the Loan Agreement is hereby amended in its entirety
to read as follows:
“6.7 Financial Covenants.
Borrower will maintain at all times during the effectiveness of this Agreement on a
consolidated basis for I-Flow Corporation and tested quarterly during the term hereof
unless otherwise indicated below:
(i) Quick Ratio. A ratio of Quick Assets to Modified Current Liabilities of at least
1.20 to 1.00.
(ii) Adjusted Net Loss/Profit. Borrower will not incur an adjusted net loss (A) in excess
of $2,500,000 for the fiscal quarter ending June 30, 2007; and (B) in excess of $1,000,000
for each of the fiscal quarters ending September 30, 2007 and December 31, 2007.
Thereafter, in each subsequent fiscal quarter end period, Borrower shall achieve adjusted
net profit of at least $1.00.
As used herein the terms adjusted net loss/adjusted net profit shall mean net loss/net
profit for the applicable quarter end period (x) excluding the effects of non-cash charges
related to stock compensation expenses and (y) including any income from discontinued
operations, with all of the foregoing as determined in accordance with GAAP, consistently
applied.”
2. Revised Definitions. The defined terms “Modified Current Liabilities” and “Quick Assets”
as set forth in Section 13.1 of the Loan Agreement are hereby amended, respectively, to read as
follows:
“Modified Current Liabilities” are the aggregate amount of Borrower’s Current
Liabilities (excluding (i) any liabilities arising as a result of the application of
FIN48 (as defined below) and (ii) deferred tax liabilities) that would otherwise be
classified as Current Liabilities) plus, to the extent not already included in the
foregoing, all Obligations (regardless of tenor) owing to Bank including the face
amount of all outstanding Letters of Credit. As used herein “FIN48” shall
mean Interpretation No. 48 regarding Accounting for Uncertainty in Income Taxes as
promulgated by the Financial Accounting Standards Board, as in effect from time to
time.
‘Quick Assets’ shall mean as of any date of determination, the Borrower’s
consolidated, unrestricted cash, unrestricted cash equivalents, short term
investments and net trade accounts receivable of Borrower regarding continuing and
discontinued operations.”
3. Modified Revolving Maturity Date. The Revolving Maturity Date as set forth in Section 13.1
of the Loan Agreement is hereby modified to be “364 days from the date of the Amendment to Loan
Agreement dated July 16, 2007 between Bank and Borrower.”
4. Fee. In consideration for Bank entering into this Amendment, Borrower shall concurrently
pay Bank a fee in the amount of $25,000, which shall be non-refundable and in addition to all
interest and other fees payable to Bank under the Loan Documents.
5. Limitation of Amendments.
(A) The amendments set forth above 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 amendment,
waiver or modification of any other term or condition of any Loan Document, or (b) otherwise
prejudice any right or remedy which Bank may now have or may have in the future under or in
connection with any Loan Document.
(B) 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 and shall remain in full
force and effect.
6. Representations and Warranties. To induce Bank to enter into this Amendment, Borrower
hereby represents and warrants to Bank as follows:
(A) 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
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| Silicon Valley Bank | Amendment to Loan Agreement |
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;
(B) 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;
(C) The organizational documents of Borrower that the Bank obtained with respect to the
original execution of the Loan Agreement remain true, accurate and complete and have not been
amended, supplemented or restated and are and continue to be in full force and effect, other than
for the amendment and restatement of Borrower’s certificate of incorporation filed with the
Secretary of State of Delaware on May 29, 2002.
(D) 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;
(E) 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;
(F) 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 already has been obtained or made; and
(G) This Amendment has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower in 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.
7. 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.
8. Effectiveness. This Amendment shall be deemed effective upon (a) the due execution and
delivery to Bank of this Amendment by each party hereto, (b) Borrower’s payment
of an amendment fee in an amount equal to $25,000 as stated above, and (c) the delivery of
such other agreements and documents by Borrower and the taking of such other actions Borrower, in
each case as Bank shall determine are necessary or advisable in order to effectuate the terms and
provisions hereof and of the Loan Agreement.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above
written.
| Borrower: | Bank: | |||||||
| I-Flow Corporation | Silicon Valley Bank | |||||||
By:
|
/s/ Xxxxx X. Xxxxxxxx, CFO | By: | /s/ Xxxxxx Xxxxxxxx | |||||
| President or Chief Financial Officer | Title: Senior Relationship Manager | |||||||
