SUPPLEMENT to the Loan and Security Agreement Dated as of September 30, 2004 between Volcano Therapeutics, Inc. (“Borrower”) and Venture Lending & Leasing IV, Inc. (“Lender”)
Exhibit 10.9
SUPPLEMENT
to the
Loan and Security Agreement
Dated as of September 30, 2004
between
Volcano Therapeutics, Inc. (“Borrower”)
and
Venture Lending & Leasing IV, Inc. (“Lender”)
to the
Loan and Security Agreement
Dated as of September 30, 2004
between
Volcano Therapeutics, Inc. (“Borrower”)
and
Venture Lending & Leasing IV, Inc. (“Lender”)
This is a Supplement identified in the document entitled Loan and Security Agreement dated as
of September 30, 2004, between Borrower and Lender. All capitalized terms used in this Supplement
and not otherwise defined in this Supplement have the meanings ascribed to them in Section 10 of
the Loan and Security Agreement, which is incorporated in its entirety into this Supplement. In the
event of any inconsistency between the provisions of that document and this Supplement, this
Supplement is controlling. Execution of this Supplement by the Lender and Borrower shall constitute
execution of the Loan and Security Agreement.
In addition to the provisions of the Loan and Security Agreement, the parties agree
as follows:
Part 1. — Additional Definitions:
Part 1. — Additional Definitions:
“Commitment”: Subject to the terms and conditions set forth in the Loan and Security
Agreement and this Supplement, Lender commits to make Equipment and/or Inventory Loans to Borrower
up to the aggregate original principal amount of Two Million Dollars ($2,000,000.00) to finance the
acquisition of Eligible Equipment and Inventory; provided that as a sub-facility of the Commitment,
Lender commits to make Currently Owned Equipment and/or Inventory Loans and/or Soft Cost Loans to
Borrower in an aggregate original principal amount not to exceed One Million Five Hundred Thousand
Dollars ($1,500,000.00) of the Commitment (the “Currently Owned Equipment and Inventory /Soft Cost
Loan Sublimit”).
“Current Book Value as of June 30, 2004” means for Currently Owned Equipment and
Inventory, the value of any item of Eligible Equipment and/ or Eligible Inventory set forth in the
Schedule of Assets provided by the Borrower attached hereto as Exhibit G to this Supplement.
“Currently
Owned Equipment and Inventory” means Eligible Equipment and Eligible
Inventory to which Borrower holds title at the time of a Borrowing Request and that was acquired
and /or produced by the Borrower on or after January 1, 2002.
“Designated Rate”: means for each Loan, a fixed rate of interest per annum equal to the Prime
Rate as published on the Business Day on which Lender prepares the Note for such Loan following
Borrower’s submission of the Borrowing Request for such Loan, plus two and 288/1000 percent
(2.288%); provided, however, that in no event shall the Designated Rate for a Loan be less
than six and 538/1000 percent (6.538%).
“Eligible Equipment” means Intravascular Ultrasound Systems, WaveMap Systems, computer
equipment, lab and shop equipment, manufacturing equipment, test equipment, office equipment and
other standard hardware approved by Lender in writing (such approval to be evidenced by Lender’
execution of the respective Borrowing Request) and that is not the subject of a license agreements)
between Borrower and any Person.
“Eligible Inventory” means Intravascular Ultrasound Systems, including Catheter Utilization
Equipment and WaveMap Systems (whether or not the same may have been Eligible Equipment), or items
approved by Lender in writing (such approval to be evidenced by Lender’ execution of the respective
Borrowing Request) which Borrower (a) has placed in the possession of a third party under a lease,
license or other use agreement, as part of Borrower’s so-called Customer Utilization Program or
otherwise, (b) holds for sale or lease to a third party or is to be furnished under a contract of
service, (c) is furnished by the Borrower to a third person under a contract of service; provided,
however, that no item of Evaluation Inventory shall be Eligible Inventory at a time when Lender’s
Collateral includes other Evaluation Inventory having an aggregate current Book Value of
$500,000.00 or more;
and, provided, further, that “Eligible Inventory” shall not include any item described herein
that is utilized by Borrower in its Customer Acquisition Program.
“Equipment and/or Inventory Loan” means any Loan requested by Borrower and funded by Lender to
finance Borrower’s acquisition or carrying of specific items of Eligible Equipment and/or Eligible
Inventory, as the case may be.
“Evaluation Inventory” means Eligible Inventory which Borrower has furnished to third persons
solely for purposes of evaluation for future purchases.
“Loan” means an Equipment Loan, Inventory Loan, Soft Cost Loan and/or a Currently Owned
Equipment and/or Inventory Loans, as the context requires.
“Permitted
Indebtedness” means
(a) all amounts owing to Silicon Valley Bank under that certain Loan and Security Agreement,
dated July 18, 2003, as may be amended or supplemented from time to time; provided, however, that such
amendment or supplement does not increase the amount of borrowings under such agreement to be greater than
the maximum amount of the credit limit under that certain Amendment to Loan Documents entered into by
Borrower and SVB on July , 2004, the amortization of such amounts, or otherwise materially adversely effect
Lender’s rights hereunder.
(b) all
amounts owing to Venture Lending & Leasing III, Inc. (“VLL3”) under that certain Loan
and Security Agreement along with all Supplements and amendments thereto, between VLL3 and
Borrower dated as of September 26, 2003.
(c) all amounts owing under the Senior Subordinated Notes dated December 9, 2003, issued by
Borrower to FFC Partners II, L.P., a Delaware limited partnership, FFC Executive Partners II, L.P, a
Delaware limited partnership, and any other holders of the subordinated obligations (“Subordinated
Noteholders”), provided however that the Subordinated Noteholders execute an written subordination agreement in favor of
Lender as provided by Part 2 Section 3 of this Supplement, in similar form and substance as the Intercreditor and
Subordination Agreement dated December 9, 2003 executed by the Subordinated Noteholders in favor of VLL3.
“Permitted Lien” includes, in addition to those liens defined in the Loan and
Security Agreement, the security interest in favor of Silicon Valley Bank and Venture Lending & Leasing III,
Inc securing their Permitted Indebtedness.
“Prime Rate” means the “prime rate” of interest, as published from time to time by The
Wall Street Journal in the “Money Rates” section of its Western Edition newspaper.
“Soft Costs” means, with respect to amounts to be financed hereunder with proceeds of a Soft
Cost Loan, Borrower’s costs of acquiring or licensing non-standard equipment (not otherwise
approved by Lender as Eligible Equipment), perpetual software license fees, tenant improvements at
Borrower’s primary business premises, mask sets, sales tax, freight charges and other items
approved by Lender in writing.
“Soft Cost Loan” means any Loan requested by Borrower and funded by Lender to finance Soft
Costs.
“Terminal Payment” means a payment equal to ten percent (10%) of the original principal
amount of such Loan payable upon the maturity of such Loan.
“Termination Date” means the earliest of (a) the date Lender may terminate making Loans or
extending other credit pursuant to the rights of Lender under Article 7 of the Loan and Security
Agreement, or (b)
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October 15, 2004, as to the Currently Owned Equipment and/or Inventory /Soft Cost Loan Sublimit of
the Commitment designated for financing of Currently Owned Equipment and/or Inventory and Soft
Costs, or (c) June 30, 2005.
“Threshold Amount” means Fifty Thousand Dollars ($50,000.00).
Part 2. — Additional Covenants and Conditions:
1. Use of Proceeds; Limitations on Loans.
(a) Equipment and Inventory Loan Facility. Subject to the terms and conditions of the
Agreement, Lender agrees to make:
(i) Loans for Currently Owned Equipment and Inventory located in the United States to
Borrower from time to time from the Closing Date and to and including the Termination Date in an
aggregate original principal amount up to but not exceeding the lesser of (A) the then unfunded
portion of the Commitment; (B) the then unfunded portion of the Currently Owned Equipment/Soft Cost
Loan Sublimit; and (C) an amount equal to 100% of the Borrower’s Current Book Value as of June
30, 2004 for the subject Eligible Equipment and/or Eligible Inventory.
(ii) Equipment Loans for Currently Owned Equipment and Inventory
located outside the United States to Borrower from time to time from the Closing Date and to and including
the Termination Date in an aggregate original principal amount up to but not exceeding the lesser
of (A) the then unfunded portion of the Commitment; (B) the then unfunded portion of the Currently
Owned Equipment/Soft Cost Loan Sublimit, and (C) an amount equal to 50% of the Borrower’s Current
Book Value as of June 30, 2004 for the subject Eligible Equipment and/or Eligible Inventory.
(iii) Soft Cost Loans to Borrower from time to time from the Closing
Date and to and including the Termination Date in an aggregate original principal amount up to but not
exceeding the lowest of (A) the then unfunded portion of the Commitment; (B) the then unfunded
portion of the Soft Cost Loan Sublimit; and (C) an amount equal to 100% of the Soft Costs proposed
to be financed under the related Borrowing Request. Notwithstanding the foregoing, no item of Soft
Costs shall be eligible to be financed with the proceeds of a Soft Cost Loan if such Soft Cost was
first expended or incurred by Borrower earlier than 90 days prior to the Borrowing Date of such
Soft Cost Loan, provided, however, that so long as the Borrowing Date of the initial Soft
Cost Loan occurs prior to October 15, 2004, Borrower may finance Soft Costs acquired or first placed
in service after January 1, 2004, at Original Cost.
(iv) Loans to Borrower for future purchases of Eligible Equipment and/or Eligible
Inventory from time to time from the Closing Date and to and including the Termination Date in an
aggregate original principal amount up to but not exceeding the lesser of (A) the then unfunded
portion of the Commitment that may be used to finance future purchases of Eligible Equipment and/or
Eligible Inventory, and (B) the amount paid or payable by Borrower to a manufacturer, vendor or
dealer who is riot an Affiliate of Borrower for each item of Eligible Equipment and/or Eligible
Inventory being financed with the proceeds of such Equipment Loan and/or Inventory Loan as shown on
an invoice dated within 90 days of the funding Date of the Equipment and or Inventory Loan therefor
(excluding any commissions and any portion of the amount invoiced which relates to servicing of the
Eligible Equipment, delivery, freight and installation charges or sales taxes payable upon
acquisition) (“Original Cost”), provided, however, that so long as the Borrowing Date of
the initial Equipment and/or Inventory Loan occurs prior to October 15,2004, Borrower may finance
Eligible Equipment and/or Eligible Inventory acquired or first placed in service after January
1, 2004, at Original Cost.
(v) All Eligible Equipment and Eligible Inventory financed hereunder
shall be located at all times at Borrower’s principal place of business in Rancho Cordova, California,
current or future hospital locations, or such other place of business located within or outside the
United States approved by Lender in writing prior to the Funding Date of any Equipment Loan.
Borrower shall provide a monthly statement of all Equipment and Inventory financed by Lender, which
shall include the location of all such Equipment and Inventory.
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(b) Minimum Funding Amount. Loan or Loans requested by Borrower to be made on a single
Business Day shall be for a minimum aggregate principal amount of One Hundred Thousand Dollars
($100,000.00). Borrower shall not submit a Borrowing Request more frequently than once each month.
2. Repayment of Loans, Voluntary Prepayment
(a) Repayment of Loans. Principal of and interest on each Loan shall be payable as set
forth in the Note (substantially in the form as Exhibit A), evidencing such Loan, which Note,
shall provide substantially as follows. Principal and interest at the Designated Rate shall be fully
amortized over a period of 36 months in equal, monthly installments. In particular, on the Borrowing Date applicable to the
Loan(s) evidenced by such Note, Borrower shall pay to Lender (i) interest only at 13.2% per annum, in advance, on
the outstanding principal balance of the Loans evidenced by such Note, for the period from such Borrowing Date
through the last day of the calendar month in which such Borrowing Date occurs, (ii) a first (1st)
amortization installment of principal and interest at the Designated Rate, and (iii) a thirty-sixth (36th) amortization
installment of principal and interest at the Designated Rate. Commencing on the first day of the second full month after
the Borrowing Date, and continuing on the first day of each consecutive calendar month thereafter, principal and
interest at the Designated Rate shall be payable, in advance, in 34 equal consecutive installments in an
amount sufficient to fully amortize the Loan(s) evidenced by such Note (including the 36th amortization installment that
was paid in advance). Borrower shall pay the Terminal Payment within 30 days of the last amortization payment.
(b) Voluntary Prepayment. Borrower may voluntarily prepay any Loan in whole but not in part
at any time by tendering to Lender payment in respect of such Loan (i) all accrued and unpaid
Basic Interest on such Loan as of the date of prepayment; (ii) the undiscounted Terminal Payment on such Loan, if
applicable; and (iii) an amount equal to the undiscounted, total amount of all installment payments of principal and
Basic Interest that would have accrued and been payable from the date of prepayment through the stated Maturity
Date of the Loan had it remained outstanding and been paid in accordance with the terms of the related Note.
3. Limitations on Other Indebtedness; Subordination of Debt to Lender. At all times after the
initial Loan is advanced and so long as any Loans remain outstanding, Borrower shall not incur
or permit to exist any Indebtedness for borrowed money, other than Permitted Indebtedness, unless such
Indebtedness is (a) approved by the Lender in its sole and reasonable discretion, and (b) the right to payment of such
Indebtedness, the priority of any Lien (other than a Permitted Lien) securing the same, and the rights of the holder thereof
to enforce remedies against Borrower following default have been made subordinate to the Liens of Lender and the
prior payment of the Obligations to Lender under the Loan Documents pursuant to a written subordination agreement
approved by Lender in its sole, reasonable discretion (except that regularly scheduled payments of accrued
interest on such subordinated Indebtedness may be paid by Borrower and retained by the holder so long as no
Event of Default has occurred).
4. Partial Releases of Silicon Valley Bank Lien. As an additional condition precedent under
Section 4.2 of the Loan and Security Agreement, on or prior to each Borrowing Date, Lender
shall be in receipt of an executed release from Silicon Valley Bank of any and all Liens on the Collateral that is
the subject of the Borrowing Request.
5. Issuance of Warrant to Lender. As additional consideration for the making of the
Commitment, Lender shall be issued a warrant issued by Borrower (the “Warrant”) initially exercisable for
46,667 of fully paid and nonassessable shares of the Borrower’s Series B Preferred Stock. The Warrant shall be in
substantially the form attached hereto as Exhibit “D” and shall be exercisable at any time and from time to time
through June 30, 2015. Borrower acknowledges that Lender has assigned its rights to receive the Warrant to its
parent, Venture Lending & Leasing IV, LLC; in connection therewith, Borrower shall issue the Warrant directly to Venture
Lending & Leasing IV, LLC. Upon request of Borrower, Lender shall furnish to Borrower a copy of the agreement in
which Lender assigned the Warrant to Venture Lending & Leasing IV, LLC.
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6. Fee Payment. As an additional condition precedent under Section 4.1 of the Loan and
Security Agreement, on or prior to the initial Borrowing Date, Borrower shall pay Lender Two Thousand
Five Hundred Dollars ($2,500.00).
7. Completion of Due Diligence; Payment and Disposition of Commitment Fee. As an additional
condition precedent under Section 4.1 of the Loan and Security Agreement, Lender shall have
completed to its satisfaction its due diligence review of Borrower’s business and financial condition and
prospects, and Lender’s credit committee shall have approved the Commitment. If this condition is not satisfied,
Lender shall refund to Borrower the Seven Thousand Five Hundred Dollars ($7,500.00) commitment fee previously paid to
Lender on account of the Commitment. Lender agrees that with respect to first the One Million Dollars
($1,000,000.00) of the Commitment advanced under this Loan and Security Agreement, on the Borrowing Date applicable
to each such Loan, Lender shall credit against the payments due from Borrower on such date in respect of
such Loan an amount equal to the product of Seven Thousand Five Hundred Dollars ($7,500.00) and a fraction the
numerator of which is the principal amount of such Loan and the denominator of which is One Million Dollars
($1,000,000.00), until the aggregate amount of such credits equals but does not exceed Seven Thousand Five Hundred
Dollars ($7,500.00).
8. Insurance Coverage. As an additional condition precedent to each Loan under Section 4.2 of
the Loan Agreement, on or prior to the Borrowing Date for a specific Loan, Borrower shall provide
to Lender insurance certificates or endorsements showing that all-risk casualty insurance coverage is in effect
with respect to each item of Equipment or Inventory that is provided as collateral security for such Loan, in amounts
and of the types required under Section 5.5 of the Loan and Security Agreement. The certificate or endorsement shall
name Lender as additional loss payee with respect to the Equipment or Inventory, and specify that coverage as
to Lender shall not be invalidated by any action of or breach of warranty by Borrower of any provision thereof
pursuant to a standard lender’s loss payable clause, include a waiver of subrogation rights against Lender, and
provide for at least thirty (30) days’ prior written notice to Lender by the underwriter or insurance company in the event
of cancellation or expiration.
9. Debits to Account for ACH Transfers. For purposes of Section 2.2 and 5.10 of the Loan and
Security Agreement, Borrower’s Primary Operating Account is:
Silicon Valley Bank
Account No.: 3300392276
Routing No.: ###-##-####
Account No.: 3300392276
Routing No.: ###-##-####
Loans will be advanced to the account specified above and payments will be automatically debited
from the same account.
Part 3. — Additional Representations:
Borrower represents and warrants that as of the Closing Date and each Borrowing Date:
a) Its chief executive office is located at: 0000 Xxxxxxx Xxxx, Xxxxxx Xxxxxxx, XX
00000
b) Its Equipment is located at: 0000 Xxxxxxx Xxxx, Xxxxxx
Xxxxxxx, XX 00000, except as otherwise disclosed in the Borrowing Request for an Equipment Loan.
c) Its Records are located at: 0000 Xxxxxxx Xxxx, Xxxxxx Xxxxxxx, XX 00000.
d) In addition to its chief executive office, Borrower maintains
offices or operates its business at the following locations:
1) 00000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxxx, XX 00000
2) Xxx xx Xxxxxxxxx 00, 0000 Xxxxxxxx, Xxxxxxx
3) 0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000
4) 0000 Xxxxxxxxxxx Xx., Xxxxx 000, Xxxxxx Xxxxxxx, XX 00000
2) Xxx xx Xxxxxxxxx 00, 0000 Xxxxxxxx, Xxxxxxx
3) 0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000
4) 0000 Xxxxxxxxxxx Xx., Xxxxx 000, Xxxxxx Xxxxxxx, XX 00000
5
5)
K K Ebisu Shimizu Xxxx. 0X, 0-00-0 Xxxxx, Xxxxxxx-Xx, Xxxxx, Xxxxx
150-0013
e) Other than its full corporate name, Borrower has conducted
business using the following trade names or fictitious business names: Cardio
Technology, Inc.
f) Borrower’s Federal Tax I.D. number is: 00-0000000.
g)
Borrower’s Delaware state corporation I.D. number is:
Part 4. — Additional Loan Documents:
Form of Note
|
Exhibit “A” | |
Form of Borrowing Request
|
Exhibit “B” | |
Form of Compliance Certificate
|
Exhibit “C” | |
Form of Warrant
|
Exhibit “D” | |
Form of Landlord Waiver
|
Exhibit “E” | |
Form of Legal Opinion
|
Exhibit “F” | |
Schedule of Current Asset Values
|
Exhibit “G” |
[Signature Page Follows]
6
IN WITNESS WHEREOF, the parties have executed this Supplement as of the date first
above written,
| BORROWER: | ||||
| VOLCANO THERAPEUTICS, INC. | ||||
| By: | /s/ Xxxx Xxxxxxxx | |||
| Name: | Xxxx Xxxxxxxx | |||
| Title: | CFO | |||
Address for Notices:
|
Attn: | Xxxx Xxxxxxxx | ||
| 0000 Xxxxxxx Xxxx, | ||||
| Xxxxxx Xxxxxxx, XX 00000 | ||||
| Fax #: (000) 000-0000 | ||||
| LENDER: | ||||
| VENTURE LENDING & LEASING IV, INC. | ||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Chief Executive Officer | |||
| Address for Notices: | Attn: Chief Financial Officer | |||
| 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000 | ||||
| Xxx Xxxx, Xxxxxxxxxx 00000 | ||||
| Fax #: (000) 000-0000 | ||||
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EXHIBIT “A”
FORM OF PROMISSORY NOTE
FORM OF PROMISSORY NOTE
[Note No. X-XXX]
$ |
,200 | |||
| San Jose, California | ||||
The undersigned (“Borrower”) promises to pay to the order of VENTURE LENDING & LEASING IV,
INC., a Maryland corporation (“Lender”), at its office at 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxx, Xxxxxxxxxx 00000, or at such other place as Lender may designate in writing, in lawful
money of the United States of America, the principal sum of
Dollars ($ ), with Basic Interest thereon
(except as otherwise provided herein) from the date hereof until maturity, whether scheduled or
accelerated, at a fixed rate per annum equal to [ the Prime Rate on the Business Day Lender
prepares the Note plus 2.288%, but in no event less than 6.538%;
the “Designated Rate”) [, and a Terminal Payment in the sum of
[10.00% of face amount ] Dollars ($ ) payable on the Maturity Date.]
This Note is one of the Notes referred to in, and is entitled to all the benefits of, a Loan
and Security Agreement dated as of September 30, 2004, between Borrower and Lender (the “Loan
Agreement”). Each capitalized term not otherwise defined herein shall have the meaning set forth in
the Loan Agreement. The Loan Agreement contains provisions for the acceleration of the maturity of
this Note upon the happening of certain stated events.
Principal of and interest on this Note shall be payable as follows:
On the Borrowing Date, Borrower shall pay (i) interest at a rate of twelve percent (13.2%)
per annum, in advance, on the outstanding principal balance of this Note for the period from the
Borrowing Date through [ the last day of the same
month] ; and (ii) a first
(1st) amortization installment of principal and Basic Interest at the
Designated Rate in the amount of
, in advance for the month of [first full month after
Borrowing Date] and (iii) a thirty-sixth (36th ), amortization installment of principal and Basic Interest at the
Designated Rate in the amount of $
,
in advance for the month of [date of last regular
amortization payment].
Commencing on the first day of the second full month after the Borrowing Date, and continuing
on the first day of each consecutive month thereafter, principal and Basic Interest at the
Designated Rate shall be payable, in advance, in thirty-three
(33) equal consecutive installments
of Dollars
($ ) each, with a 34th installment equal to the entire unpaid principal balance and accrued Basic
Interest at the Designated Rate on
, 200 . The Terminal Payment and unpaid expenses, fees, interest and
principal amount shall be due and payable on [one month later] , 200 ].
Any unpaid payments of principal or interest on this Note shall bear interest from their
respective maturities, whether scheduled or accelerated, at a rate per annum equal to the Default
Rate. Borrower shall pay such interest on demand.
Interest, charges and fees shall be calculated for actual days elapsed on the basis of a
360-day year, which results in higher interest, charge or fee payments than if a 365-day year were
used. In no event shall Borrower be obligated to pay interest, charges or fees at a rate in excess
of the highest rate permitted by applicable law from time to time in effect.
This Note may be voluntarily prepaid only as permitted under Section 2 of Part 2 of the
Supplement to the Loan Agreement.
If Borrower is late in making any payment under this Note by more than five (5) Business
Days, Borrower agrees to pay a “late charge” of five percent (5%) of the installment due, but not
less than fifty dollars ($50.00) for any one such delinquent payment. This late charge may be
charged by Lender for the purpose of defraying the expenses incidental to the handling of such
delinquent amounts. Borrower acknowledges that such late charge represents a reasonable sum
considering all of the circumstances existing on the date of this Note and represents a fair and
reasonable estimate of the costs that will be sustained by Lender due to the failure of Borrower to
make timely payments. Borrower further agrees that proof of actual damages would be costly and
inconvenient. Such late charge shall be paid without prejudice to the right of Lender to collect
any other amounts provided to be paid or to declare a default under this Note or any of the other
Loan Documents or from exercising any other rights and remedies of Lender.
This Note shall be governed by, and construed in accordance with, the laws of the State of
California.
| VOLCANO | THERAPEUTICS, INC. | |||
| By: | ||||
| Name: | ||||
| Its: | ||||
EXHIBIT “B”
FORM OF BORROWING REQUEST
[Date]
Venture
Lending & Leasing IV, Inc.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Re: Volcano Therapeutics, Inc.
Gentlemen:
Reference is made to the Loan and Security Agreement dated as of September 30, 2004 (as
amended from time to time, the “Loan Agreement”, the capitalized terms used herein as defined
therein), between Venture Lending & Leasing IV, Inc. and Volcano Therapeutics, Inc. (the
“Company”).
The
undersigned is the of the Company, and hereby requests on behalf
of the Company a Loan under the Loan Agreement, and in that connection certifies as follows:
1.
The type(s) of the proposed Loan is/are [an Equipment and/or Inventory Loan][ a
Currently Owned Equipment and/or Inventory Loan][a Soft
Costs Loan]. The amount of the
proposed Loan is
and /100 Dollars ($ ). The Borrowing Date of the proposed
Loan
is
,
200 .
2.
[If for future purchases of Equipment and Inventory and/or Soft Costs Loan] The Eligible
Equipment, Eligible Inventory and/or Soft Costs to be financed with the proceeds of the
Equipment and/or Inventory Loan and/or Soft Costs Loan are described, and are or will be located at the address(es)
shown, on the attached Schedule 1 or amendment or
supplement to Schedule 1, which is hereby
incorporated by reference in and made a part of the Loan Agreement. The requested amount of the Equipment Loan and/or Inventory Loan
and/ or Soft Cost Loan does not exceed the aggregate of one hundred percent (100%) of the amount paid or payable
by Borrower to a non-affiliated manufacturer, vendor or dealer for such items of Eligible Equipment, Eligible
Inventory and/ or Soft Cost as shown on an invoice therefor (excluding any commissions and any portion of the payment
which relates to the servicing of the equipment or item and sales taxes payable by Borrower upon acquisition,
and delivery charges). No item of Eligible Equipment, Eligible Inventory and/ or Soft Cost has been owned or was
incurred by Borrower earlier than 90 days before the proposed Borrowing Date. No item of Eligible Equipment,
Eligible Inventory or Soft Costs has been owned or was incurred by Borrower earlier than 90 days before the proposed
Borrowing Date, or with respect to the initial Equipment and/or Inventory Loan and/ or Soft Cost Loan for
Eligible Equipment, Eligible Inventory and/or Soft Costs, from
January 1, 2004 (if such initial Equipment and/or Inventory
Loan and/ or Soft Cost Loan was funded prior to October 15, 2004).
[If
for Currently Owned Equipment in the United States] The Eligible Equipment and/or Eligible
Inventory to be financed with the proceeds of the Currently Owned Equipment and/or Inventory Loan
are Currently Owned Equipment and/or Inventory located within the United States are described, and
will be located at the address(es) shown, on the attached Schedule 1 or amendment or
supplement to Schedule 1, which is hereby incorporated by reference in and made a part of
the Loan Agreement. The requested amount of the Loans for Currently Owned Equipment and/or
Inventory located in the United States does not exceed 100% of the Borrower’s Current Book Value as
of June 30, 2004, as that term is defined in the Supplement to the Loan and Security Agreement, for
the subject Equipment and /or Inventory. All such Equipment and Inventory was acquired by the
Borrower on or after January 1, 2002.
[If for Currently Owned Equipment outside the United States] The Eligible Equipment and/or
Eligible Inventory to be financed with the proceeds of the Currently Owned Equipment and/or
Inventory Loan are
Currently Owned Equipment and/or Inventory located outside the United States are described, and
will be located at the address(es) shown, on the attached Schedule 1 or amendment or
supplement to Schedule 1, which is hereby incorporated by reference in and made a part of
the Loan Agreement. The requested amount of the Loans for Currently Owned Equipment and/or
Inventory located outside the United States does not exceed 50% of the Borrower’s Current Book
Value as of June 30, 2004, as that term is defined in the Supplement to the Loan and Security
Agreement, for the subject Equipment and/or Inventory. All such Equipment and/or Inventory was
acquired by the Borrower on or after January 1, 2002.
3. Title to the Eligible Equipment and /or the Eligible Inventory to be financed by this
Borrowing Request is held by the Borrower and not by any of its subsidiaries.
4. As of this date, no Default or Event of Default has occurred and is continuing, or will
result from the making of the proposed Loan, the representations and warranties of the Company
contained in Article 3 of the Loan Agreement are true and correct, and the conditions precedent described
in Article 4 of the Loan Agreement have been met.
5. No event that has had or could reasonably be expected to have a Material Adverse
Change has occurred.
6. If updated since the date of the last Borrowing Request, the Company’s most
recent [financial projections or business plan] dated
, as approved by the Company’s Board of Directors on
, are enclosed herewith.
7. As of the date hereof, Borrower has no outstanding Indebtedness except for (I) Permitted
Indebtedness and (ii) such Indebtedness that has been approved by the Lender and the right to
payment of which, the priority of any Lien (other than a Permitted Lien) securing the same, and the rights of the
holder thereof to enforce remedies against Borrower following default have been made subordinate to Lender’s Liens and
to the prior payment of the Obligations to Lender under the Loan Documents pursuant to written
subordination agreement(s) which have been approved by Lender (except that regularly scheduled payments of accrued
interest on such subordinated Indebtedness may be paid so long as no Event of Default has occurred).
The Company shall notify you promptly before the funding of the Loan if any of the matters to
which I have certified above shall not be true and correct on the Borrowing Date
| Very truly yours, | ||||||
| VOLCANO THERAPEUTICS, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Schedule 1 to the Loan and Security Agreement
Description of Equipment/Inventory
| Quantity | Article | Make | Year Mfg. | Model/ Serial # | Location | üif Inventory |
See attached continuation to Schedule 1
together with all improvements, replacements, accessions and additions thereto, wherever
located, and all Proceeds thereof arising from the sale, lease, rental or other use or
disposition of any such property, including all rights to payment with respect to insurance or
condemnation, returned premiums, or any cause of action relating to any of the foregoing.
VOLCANO
|
THERAPEUTICS, INC. | |||
By: |
||||
Name: |
||||
Its: |
||||
VENTURE
|
LENDING & LEASING IV, INC. | |||
By: |
||||
Name: |
||||
Its: |
||||
EXHIBIT “C”
COMPLIANCE CERTIFICATE
Venture Lending & Leasing IV,
Inc.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Re: Volcano Therapeutics, Inc..
Gentlemen:
Reference
is made to the Loan and Security Agreement dated as of September 30, 2004 (as the
same have been and may be amended from time to time, the “Loan Agreement”, the capitalized terms
used herein as defined therein), between Venture Lending & Leasing IV, Inc. and Volcano
Therapeutics, Inc.. (the “Company”).
The undersigned authorized representative of the Company hereby certifies that in accordance
with the terms and conditions of the Loan Agreement, the Company is in complete compliance for the
financial reporting period
ending with all required financial reporting under the Loan Agreement, except as noted
below. Attached herewith are the required documents supporting the foregoing certification. The
undersigned further certifies that the accompanying financial statements have been prepared in
accordance with GAAP, and are consistent from one period to the next, except as explained below.
Indicate compliance status by circling Yes/No under “Complies ”
| REPORTING REQUIREMENT | REQUIRED | COMPLIES | ||
Interim Financial Statements
|
Monthly within 30 days | YES/NO | ||
Audited Financial Statements
|
FYE within 120 days | YES/NO | ||
Most Recent Financial Projections or Business Plan dated |
With each Borrowing Request | YES/NO | ||
Current Fixed Asset List
(including locations) of all
Equipment and Inventory which
constitute Lender’s Collateral under
the Loan Agreement
|
Monthly within 30 days | YES/NO |
| Very truly yours, | ||||||
| VOLCANO THERAPEUTICS, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
EXHIBIT “D”
FORM OF WARRANT
EXHIBIT
“E”
FORM OF LANDLORD WAIVER
EXHIBIT “F”
FORM OF LEGAL OPINION
Volcano Therapeutics, Inc.
Western Tech Equipment Listing
Net Book Value as of June 30, 2004
Net Book Value as of June 30, 2004
| Adjusted Fair | ||||||||||||||||||||
| CAP | Value Less | NBV WTI | Cost Basis @ | |||||||||||||||||
| Asset Class | Fair Value | PROGRAM | CAPS | Collateral | 7/18/2003 | |||||||||||||||
Manufacturing Equipment |
$ | 3,943,647 | $ | 3,943,647 | $ | 3,086,020 | $ | 3,778,800 | ||||||||||||
In-Vision Consoles |
2,406,917 | 161,078 | 2,245,839 | 864,564 | 1,222,100 | |||||||||||||||
Computer Equipment |
358,264 | 358,264 | ||||||||||||||||||
Office Furniture & Equipment |
121,070 | 121,070 | ||||||||||||||||||
Software |
185,698 | 185,698 | ||||||||||||||||||
Motor Vehicles & Equipment |
2,042 | 2,042 | ||||||||||||||||||
FloMap Consoles |
10,535 | 10,535 | ||||||||||||||||||
Capital Equipment in Progress |
200,255 | 200,255 | ||||||||||||||||||
Capital Leases |
101,111 | 101,111 | ||||||||||||||||||
| $ | 7,329,539 | $ | 161,078 | $ | 7,168,461 | $ | 3,950,584 | $ | 5,000,900 | |||||||||||
Schedule G
