EXHIBIT 10.11
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LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of September 1, 1998 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 Loan Agreement.
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1. 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
$400,000.00 for the fiscal quarter ending June 30, 1999 and
breakeven or profitable thereafter.
2. Lender acknowledges that Borrower is revising its fiscal year end
from September 30 to December 31.
B. Waiver of Covenant Defaults.
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1. Lender hereby waives Borrower's existing default under the Loan
Agreement by virtue of Borrower's failure to comply with the
quarterly loss covenant as of the fiscal quarter ended June 30,
1998. Lender's waiver of Borrower's compliance of this covenant
shall apply only to the foregoing period. Accordingly, for the
fiscal quarter ending September 30, 1998, Borrower shall have
been in compliance with this covenant, as amended herein.
Lender's agreement to waive the above-described default (1) in no
way shall be deemed an agreement by the Lender to waive
Borrower's compliance with the above-described covenant as of all
other dates and (2) shall not limit or impair the
Lender's right to demand strict performance of this covenant as
of all other dates and (3) shall not limit or impair the Lender's
right to demand strict performance of all other covenants as of
any date.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
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wherever necessary to reflect the changes described above.
5. 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.
6. 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/ Xx Xxxxxxxx
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Name: Xxxxxx X. Xxxxxx Name: Xx Xxxxxxxx
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Title: CFO Title: SVP
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