EXHIBIT 10.1
AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT to Loan and Security Agreement (this "Amendment") is entered as
of February 15, 2007 by and between Silicon Valley Bank ("Bank") and ATS
Medical, Inc., a Minnesota corporation (the "Borrower") whose address is 0000
Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000.
RECITALS
A. Bank and Borrower have entered into that certain Loan and Security
Agreement dated as of July 28, 2004 (as amended, modified, supplemented or
restated from time to time, the "Loan Agreement").
B. Bank has extended credit to Borrower for the purposes permitted in the
Loan Agreement.
C. Borrower has requested that Bank amend the Loan Agreement to terminate
the Committed Revolving Line, amend the financial covenants, and make certain
other revisions to the Loan Agreement.
D. Bank has agreed to so amend certain provisions of 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 TERMINATION OF COMMITTED REVOLVING LINE. Notwithstanding Section
2.1.1 of the Loan Agreement, the Committed Revolving Line is terminated
effective as of the date hereof, and on such date Borrower shall pay to Bank all
outstanding Revolving Advances and accrued interest on Revolving Advances, and
from such date forward no further Revolving Advances shall be made.
2.2 MAXIMUM AGGREGATE ADVANCES. Section 2.1.7 of the Loan Agreement,
which reads as follows is hereby deleted in its entirety:
SECTION 2.1.7 MAXIMUM AGGREGATE ADVANCES. Not-withstanding
anything herein to the contrary, in no event shall the aggregate
amount of outstanding Revolving Advances, Equipment Advances and
New Equipment Advances exceed $8,600,000
2.3 TERMINATION OF UNUSED LINE FEE. The Unused Line Fee provided for
in Section 2.4(c) of the Loan Agreement shall be eliminated with respect to
future fiscal quarters. For
purposes of the Unused Line Fee with respect to the current fiscal quarter, the
date hereof shall be deemed the end of the term of the Committed Revolving Line.
2.4 CHANGE TO FINANCIAL COVENANTS. Section 6.7 of the Loan Agreement
reads as follows:
Borrower will maintain at all times, on a consolidated basis:
(i) LIQUIDITY RATIO. A ratio of (y) unrestricted cash (and
equivalents) of Borrower on deposit with Bank plus Borrower's
Eligible Accounts, (z) divided by Current Liabilities, of equal
to or greater than 2.0 to 1.00.
(ii) TANGIBLE NET WORTH. A Tangible Net Worth, at the end of each
month, of at least $40,000,000.
Said Section 6.7 is hereby amended effective December 31, 2006 to read as
follows:
Borrower will maintain at all times, on a consolidated basis:
(i) LIQUIDITY RATIO. A ratio of (y) the sum of unrestricted cash
(and equivalents) of Borrower on deposit with Bank plus
Borrower's accounts receivable arising from the sale or lease of
goods, or provision of services, in the ordinary course of
business, (z) divided by the sum of Current Liabilities plus
Indebtedness of Borrower to Bank for borrowed money, of equal to
or greater than 1.60 to 1.00.
3. LIMITATION OF AMENDMENTS.
3.1 The amendments set forth in SECTION 2, 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.
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 and shall remain in full force and
effect.
4. REPRESENTATIONS AND WARRANTIES. To induce Bank to enter into this
Amendment, 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 delivered to Bank on the
Effective Date 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 Borrower, except as already has been obtained or made; and
4.7 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.
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. FEES AND EXPENSES. In consideration for Bank entering into this
Amendment, Borrower shall concurrently pay Bank a fee in the amount of $2,000,
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. Bank is authorized to charge said fee to Borrower's loan account.
Without limitation on the terms of the Loan Documents, Borrower agrees to
reimburse Bank for all its costs and expenses (including reasonable attorneys'
fees) incurred in connection with this Amendment. Bank is authorized to charge
said fees, costs and expenses to Borrower's loan account or any of Borrower's
deposit accounts maintained with Bank.
[Signature page follows.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the date first written above.
BANK BORROWER
Silicon Valley Bank ATS Medical, Inc.
By: /s/ R. Xxx XxXxxx By: /s/ Xxxxxxx X. Xxxx
--------------------------------- ------------------------------------
Name: R. Xxx XxXxxx Name: Xxxxxxx X. Xxxx
Title: Senior Relationship Manager Title: Chief Executive Officer
