SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit 10.1
THIS SECOND AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered into this
3rd day of March, 2009, by and between Silicon Valley Bank (“Bank”) and ENDOLOGIX, INC., a Delaware
corporation (“Borrower”) whose address is 11 Studebaker, Xxxxxx, XX 00000.
Recitals
A. Bank and Borrower have entered into that certain Loan and Security Agreement dated as of
February 21, 2007 as amended from time to time including by that certain First Amendment to Loan
and Security Agreement dated as of July 22, 2008 (as the same may from time to time be further
amended, modified, supplemented or restated, 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 (i) restructure the
availability under the Revolving Line and (ii) make certain other revisions to the Loan Agreement
as more fully set forth herein.
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 Section 2.2 (Overadvances) Section 2.2 is amended and restated in its entirety as
follows:
“2.2 Overadvances. If, at any time after the Covenant Default Date, the sum of (a) the
outstanding principal amount of any Advances (including any amounts used for Cash Management
Services), plus (b) the FX Reserve exceeds the lesser of either the Revolving Line or the Borrowing
Base, Borrower shall immediately pay to Bank in cash such excess.”
2.2 Section 2.3 (Interest Rates). Section 2.3(a) is amended and restated in its entirety as
follows:
“(a) Interest Rates.
(i) Subject to Section 2.3(b), (A) at all times prior to the Covenant Default Date,
the principal amount outstanding under the Revolving Line shall accrue interest at a
floating per annum rate equal to one half of one percentage point (0.50%) above the Prime
Rate; and (B) at all times beginning on the Covenant Default Date, the principal amount
outstanding under the Revolving Line shall accrue interest at a floating per annum rate
equal to the greater of (I) one and one half of one percentage points (1.50%) above the
Prime Rate or (II) five
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and one half percent (5.50%), which interest shall be payable monthly in accordance
with Section 2.3(f) below.
(ii) Term Advances. Subject to Section 2.3(b), (A) at all times prior to the
Covenant Default Date, the principal amount outstanding under the Term Line shall accrue
interest at a per annum rate equal to one percentage point (1.00%) above the Prime Rate
and (B) at all times beginning on the Covenant Default Date, the principal amount
outstanding under the Term Line shall accrue interest at a per annum rate equal to the
greater of (I) two percentage points (2.00%) above the Prime Rate or (II) six percent
(6.00%) which interest shall be payable monthly in accordance with Section 2.3(f) below.”
2.3 Section 5.3 (Accounts Receivable; Inventory). Section 5.3 is amended and restated in its
entirety as follows:
“5.3 Accounts Receivable; Inventory. For any Eligible Account in any Borrowing Base
Certificate, all statements made and all unpaid balances appearing in all invoices, instruments and
other documents evidencing such Eligible Accounts are and shall be true and correct and all such
invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all
respects what they purport to be. Whether or not an Event of Default has occurred and is
continuing, Bank may notify any Account Debtor owing Borrower money of Bank’s security interest in
such funds and verify the amount of such Eligible Account. All sales and other transactions
underlying or giving rise to each Eligible Account shall comply in all material respects with all
applicable laws and governmental rules and regulations. Borrower has no knowledge of any actual or
imminent Insolvency Proceeding of any Account Debtor whose accounts are Eligible Accounts in any
Borrowing Base Certificate. To the best of Borrower’s knowledge, all signatures and endorsements
on all documents, instruments, and agreements relating to all Eligible Accounts are genuine, and
all such documents, instruments and agreements are legally enforceable in accordance with their
terms.
For any item of Inventory consisting of “Eligible Inventory” in any Borrowing Base
Certificate, such Inventory (a) consists of raw materials or finished goods, in good, new, and
salable condition, which is not perishable, returned, consigned, obsolete, not sellable, damaged,
or defective, and is not comprised of demonstrative or custom inventory, works in progress,
packaging or shipping materials, or supplies; (b) meets all applicable governmental standards; (c)
has been manufactured in compliance with the Fair Labor Standards Act; (d) is not subject to any
Liens, except the first priority Liens granted or in favor of Bank under this Agreement or any of
the other Loan Documents; and (e) is located at the locations identified by Borrower in the
Perfection Certificate where it maintains Inventory (or any location permitted under Section 7.2).”
2.4
Section 6.2 (Financial Statements, Reports, Certificates). New Section 6.2(d) is added as
follows:
“(d) At all times beginning on the Covenant Default Date, within twenty (20) days after the
last day of each month and/or promptly upon request therefor by Bank, deliver to Bank a duly
completed Borrowing Base Certificate signed by a Responsible Officer, with (i) aged listings of
accounts receivable and accounts payable (by invoice date) and (ii) perpetual inventory reports for
the Inventory valued on a first-in, first-out basis at the lower of cost or market (in accordance
with GAAP) or such other inventory reports as are requested by Bank in its good faith business
judgment.”
2.5 Section 6.7 (Financial Covenants). Section 6.7 is amended and restated in its entirety as
follows:
“6.7 Financial Covenants.
Borrower shall maintain, at all times to be tested, as of the last day of each month, unless
otherwise noted:
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(a) Liquidity Ratio. A ratio of (i) Cash at Bank (excluding any restricted cash) plus
availability under the Revolving Line to (ii) all amounts owing from Borrower to Bank under the
Term Line of at least 1.50 to 1.00.
(b) Tangible Net Worth.
(i) A Tangible Net Worth of at least Thirteen Million Dollars ($13,000,000) at all times,
which amount shall be increased by fifty percent (50%) of issuances of equity (other than issuances
under Borrower’s equity compensation plans) or Subordinated Debt
received after March 3, 2009 in
the month following such issuance and by fifty percent (50%) of Net Income in the first month
following the calendar quarter which Net Income is earned.
(ii) Notwithstanding the foregoing, at all times from the Covenant Default Date (if the
Covenant Default Date is prior to June 29, 2009) until June 29, 2009, Borrower shall maintain a
Tangible Net Worth of at least Twelve Million Dollars ($12,000,000) and (ii) at all times beginning
on the later of (a) the Covenant Default Date (if the Covenant Default Date is after June 30, 2009)
or (b) June 30 2009, Borrower shall maintain a Tangible Net Worth of at least Twelve Million Five
Hundred Thousand Dollars ($12,500,000), which amounts shall be increased by fifty percent (50%) of
issuances of equity (other than issuances under Borrower’s equity compensation plans) or
Subordinated Debt received after March 3, 2009 in the month following such issuance and by fifty
percent (50%) of Net Income in the first month following the calendar quarter which Net Income is
earned.”
2.6 Section 13 (Definitions). The following terms and their respective definitions set forth
in Section 13.1 are added or amended in their entirety and replaced with the following:
“Availability Amount” is (I) at all times prior to the Covenant Default Date, (a) the
Revolving Line minus (b) the FX Reserve, and minus (c) the outstanding principal balance of any
Advances (including any amounts used for Cash Management Services) and (II) at all times after the
Covenant Default Date, (a) the lesser of (i) the Revolving Line or the (ii) the Borrowing Base,
minus (b) the FX Reserve, and minus (c) the outstanding principal balance of any Advances
(including any amounts used for Cash Management Services).
“Borrowing Base” is (a) eighty percent (80%) of Eligible Accounts plus (b) the least of (i)
twenty percent (20%) of the value of Borrower’s Eligible Inventory (valued at the lower of cost or
wholesale fair market value), (ii) an amount equal to forty percent (40%) of Eligible Accounts or
(iii) One Million Dollars ($1,000,000), all as determined by Bank from Borrower’s most recent
Borrowing Base Certificate; provided, however, that Bank may decrease the foregoing amount and
percentages in its good faith business judgment based on events, conditions, contingencies, or
risks which, as determined by Bank, may adversely affect Collateral.
“Borrowing Base Certificate” is that certain certificate in the form attached hereto as
Exhibit E.
“Covenant Default Date” is the first date on which Borrower is not in complete compliance with
either Section 6.7(a) or 6.7(b)(i) hereof.
“Eligible Accounts” means Accounts which arise in the ordinary course of Borrower’s business
that meet all Borrower’s representations and warranties in Section 5.3. Bank reserves the right at
any time after the Effective Date to adjust any of the criteria set forth below and to establish
new criteria in its good faith business judgment. Unless otherwise agreed to by Bank in writing,
Eligible Accounts shall not include:
(a) Accounts that the Account Debtor has not paid within ninety (90) days of invoice date
regardless of invoice payment period terms;
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(b) Accounts owing from an Account Debtor, fifty percent (50%) or more of whose Accounts have
not been paid within ninety (90) days of invoice date;
(c) Accounts billed in the United States and owing from an Account Debtor which does not have
its principal place of business in the United States or Canada unless such Accounts are otherwise
Eligible Accounts and (i) covered in full by credit insurance satisfactory to Bank, less any
deductible, (ii) supported by letter(s) of credit acceptable to Bank, (iii) supported by a guaranty
from the Export-Import Bank of the United States, or (iv) that Bank otherwise approves of in
writing.;
(d) Accounts billed and payable outside of the United States unless the Bank has a first
priority, perfected security interest or other enforceable Lien in such Accounts;
(e) Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated
in any manner to the Account Debtor (as creditor, lessor, supplier or otherwise — sometimes called
“contra” accounts, accounts payable, customer deposits or credit accounts), with the exception of
customary credits, adjustments and/or discounts given to an Account Debtor by Borrower in the
ordinary course of its business;
(f) Accounts for which the Account Debtor is Borrower’s Affiliate, officer, employee, or
agent;
(g) Accounts with credit balances over ninety (90) days from invoice date;
(h) Accounts owing from an Account Debtor, including Affiliates, whose total obligations to
Borrower exceed twenty-five (25%) of all Accounts, for the amounts that exceed that percentage,
unless Bank approves in writing;
(i) Accounts owing from an Account Debtor which is a United States government entity or any
department, agency, or instrumentality thereof unless Borrower has assigned its payment rights to
Bank and the assignment has been acknowledged under the Federal Assignment of Claims Act of 1940,
as amended;
(j) Accounts for demonstration or promotional equipment, or in which goods are consigned, or
sold on a “sale guaranteed”, “sale or return”, “sale on approval”, or other terms if Account
Debtor’s payment may be conditional;
(k) Accounts owing from an Account Debtor that has not been invoiced or where goods or
services have not yet been rendered to the Account Debtor (sometimes called memo xxxxxxxx or
pre-xxxxxxxx);
(l) Accounts subject to contractual arrangements between Borrower and an Account Debtor where
payments shall be scheduled or due according to completion or fulfillment requirements where the
Account Debtor has a right of offset for damages suffered as a result of Borrower’s failure to
perform in accordance with the contract (sometimes called contracts accounts receivable, progress
xxxxxxxx, milestone xxxxxxxx, or fulfillment contracts);
(m) Accounts owing from an Account Debtor the amount of which may be subject to withholding
based on the Account Debtor’s satisfaction of Borrower’s complete performance (but only to the
extent of the amount withheld; sometimes called retainage xxxxxxxx);
(n) Accounts subject to trust provisions, subrogation rights of a bonding company, or a
statutory trust;
(o) Accounts owing from an Account Debtor that has been invoiced for goods that have not been
shipped to the Account Debtor unless Bank, Borrower, and the Account Debtor have entered into an
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agreement acceptable to Bank in its sole discretion wherein the Account Debtor acknowledges
that (i) it has title to and has ownership of the goods wherever located, (ii) a bona fide sale of
the goods has occurred, and (iii) it owes payment for such goods in accordance with invoices from
Borrower (sometimes called “xxxx and hold” accounts);
(p) Accounts for which the Account Debtor has not been invoiced;
(q) Accounts that represent non-trade receivables or that are derived by means other than in
the ordinary course of Borrower’s business;
(r) Accounts for which Borrower has permitted Account Debtor’s payment to extend beyond 90
days;
(s) Accounts subject to chargebacks or others payment deductions taken by an Account Debtor
(but only to the extent the chargeback is determined invalid and subsequently collected by
Borrower);
(t) Accounts in which the Account Debtor disputes liability or makes any claim (but only up to
the disputed or claimed amount), or if the Account Debtor is subject to an Insolvency Proceeding,
or becomes insolvent, or goes out of business; and
(u) Accounts for which Bank in its good faith business judgment determines collection to be
doubtful.
“Eligible Inventory” means Inventory that meets all of Borrower’s representations and
warranties in Section 5.3 and is otherwise acceptable to Bank in all respects.
2.7 Exhibit D is hereby replaced with Exhibit D attached hereto.
2.8 Exhibit E is hereby added in the form attached hereto.
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;
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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 either 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. Effectiveness. This Amendment shall be deemed effective upon (a) the due execution and
delivery to Bank of this Amendment by each party hereto, (b) the due execution and delivery to Bank
of borrowing resolutions for Borrower and (c) Borrower’s payment of a restructuring fee in the
amount equal to Five Thousand Dollars ($5,000).
[Signature page follows.]
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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 | Endologix, Inc. | |||||
By:
|
/s/ Xxxxxx Le | By: | /s/ Xxxxxx X. Xxxxx | |||
Name:
|
Xxxxxx Le | Name: | Xxxxxx X. Xxxxx | |||
Title:
|
Relationship Manager | Title: | Chief Financial Officer | |||
BORROWING RESOLUTIONS
CORPORATE BORROWING CERTIFICATE
Borrower:
|
Endologix, Inc. | Date: March 3, 2009 | ||
Bank:
|
Silicon Valley Bank |
I hereby certify as follows, as of the date set forth above:
A. I am the Secretary, Assistant Secretary or other officer of Borrower. My title is as set forth
below.
B. Borrower’s exact legal name is set forth above. Borrower is a corporation existing under the
laws of the State of Delaware.
C. Attached hereto are true, correct and complete copies of Borrower’s Certificate of Incorporation
(including amendments), as filed with the Secretary of State of the state in which Borrower is
incorporated as set forth in paragraph 1 above. Such Certificate of Incorporation have not been
amended, annulled, rescinded, revoked or supplemented, and remain in full force and effect as of
the date hereof.
D. The following resolutions were duly and validly adopted by Borrower’s Board of Directors at a
duly held meeting of such directors (or pursuant to a unanimous written consent or other authorized
corporate action). Such resolutions are in full force and effect as of the date hereof and have
not been in any way modified, repealed, rescinded, amended or revoked, and Bank may rely on them
until Bank receives written notice of revocation from Borrower.
Resolved, that any one of the following officers or employees of Borrower, whose
names, titles and signatures are below, may act on behalf of Borrower:
| Authorized to | ||||||||||
| Add or Remove | ||||||||||
| Name | Title | Signature | Signatories | |||||||
| o | ||||||||||
| o | ||||||||||
| o | ||||||||||
| o | ||||||||||
Resolved Further, that any one of the persons designated above with a checked box
beside his or her name may, from time to time, add or remove any individuals to and from the
above list of persons authorized to act on behalf of Borrower.
Resolved Further, that such individuals may, on behalf of Borrower:
Borrow
Money. Borrow money from Silicon Valley Bank
(“Bank”).
Execute Loan Documents. Execute any loan documents Bank requires.
Grant Security. Grant Bank a security interest in any of Borrower’s assets.
Negotiate Items. Negotiate or discount all drafts, trade acceptances, promissory notes, or other indebtedness in which Borrower has an interest and receive cash or otherwise use the proceeds.
Letters of Credit. Apply for letters of credit from Bank.
Foreign Exchange Contracts. Execute spot or forward foreign exchange contracts.
Further Acts. Designate other individuals to request advances, pay fees and costs and execute other documents or agreements (including documents or agreement that waive Borrowers right to a jury trial) they believe to be necessary to effectuate such resolutions.
Execute Loan Documents. Execute any loan documents Bank requires.
Grant Security. Grant Bank a security interest in any of Borrower’s assets.
Negotiate Items. Negotiate or discount all drafts, trade acceptances, promissory notes, or other indebtedness in which Borrower has an interest and receive cash or otherwise use the proceeds.
Letters of Credit. Apply for letters of credit from Bank.
Foreign Exchange Contracts. Execute spot or forward foreign exchange contracts.
Further Acts. Designate other individuals to request advances, pay fees and costs and execute other documents or agreements (including documents or agreement that waive Borrowers right to a jury trial) they believe to be necessary to effectuate such resolutions.
Resolved Further, that all acts authorized by the above resolutions and any prior
acts relating thereto are ratified.
E. The persons listed above are Borrower’s officers or employees with their titles and signatures
shown next to their names.
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
*** If the Secretary, Assistant Secretary or other certifying officer executing above is
designated by the resolutions set forth in paragraph 4 as one of the authorized signing officers,
this Certificate must also be signed by a second authorized officer or director of Borrower.
I, the
of Borrower, hereby certify as to paragraphs 1 through 5
above, as of the date set forth above.
[print title]
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
EXHIBIT D
COMPLIANCE CERTIFICATE
| TO: SILICON VALLEY BANK FROM: ENDOLOGIX, INC. |
Date: |
The undersigned authorized officer of Endologix, Inc. (“Borrower”) certifies that under the
terms and conditions of the Loan and Security Agreement between Borrower and Bank (the
“Agreement”), (1) Borrower is in complete compliance for the period ending with all
required covenants except as noted below, (2) there are no Events of Default, (3) all
representations and warranties in the Agreement are true and correct in all material respects on
this date except as noted below; provided, however, that such materiality qualifier shall not be
applicable to any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those representations and warranties
expressly referring to a specific date shall be true, accurate and complete in all material
respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required
tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes,
assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to
the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against
Borrower [or any of its Subsidiaries] relating to unpaid employee payroll or benefits of which
Borrower has not previously provided written notification to Bank. Attached are the required
documents supporting the certification. The undersigned certifies that these are prepared in
accordance with GAAP consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested
at any time or date of determination that Borrower is not in compliance with any of the terms of
the Agreement, and that compliance is determined not just at the date this certificate is
delivered. Capitalized terms used but not otherwise defined herein shall have the meanings given
them in the Agreement.
Please indicate compliance status by circling Yes/No under “Complies” column.
| Reporting Covenant | Required | Complies | ||
Monthly financial statements with
Compliance Certificate |
Monthly within 30 days | Yes No | ||
10-Q, 10-K and 8-K |
Within 5 days after filing with SEC | Yes No | ||
A/R & A/P Agings |
As requested by Bank and Monthly within 20 days after Covenant Default Date | Yes No | ||
Borrowing Base Certificate, Inventory Report
|
Monthly within 20 days and as requested by Bank after Covenant Default Date | Yes No |
The following Intellectual Property was registered after the Effective Date (if no registrations, state “None”)
| Financial Covenant | Required | Actual | Complies | |||||||||
Maintain on a Monthly Basis: |
||||||||||||
Minimum Liquidity Ratio |
1.50:1.0 | :1.0 | Yes No | |||||||||
|
|
||||||||||||
Minimum Tangible Net Worth |
* | $ | Yes No | |||||||||
|
|
||||||||||||
| * | at least (i) Thirteen Million Dollars ($13,000,000) at all times prior to the Covenant Default Date, (ii) Twelve Million Dollars ($12,000,000) at all times from the Covenant Default Date (if the Covenant Default Date is prior to June 29, 2009) until June 29, 2009 and (iii) Twelve Million Five Hundred Thousand Dollars ($12,500,000) at all |
| times beginning on the later of (a) the Covenant Default Date (if the Covenant Default Date is after June 30, 2009) or (b) June 30, 2009, which amounts shall be increased by fifty percent (50%) of issuances of equity (other than issuances under Borrower’s equity compensation plans) or Subordinated Debt received after February , 2009 in the month following such issuance and by fifty percent (50%) of Net Income in the first month following the calendar quarter which Net Income is earned. |
The following financial covenant analyses and information set forth in Schedule 1 attached
hereto are true and accurate as of the date of this Certificate.
The following are the exceptions with respect to the certification above: (If no exceptions
exist, state “No exceptions to note.”)
| ENDOLOGIX, INC. | BANK USE ONLY | |||||||
| Received by: | ||||||||
By:
|
AUTHORIZED SIGNER | |||||||
Name: |
Date: | |||||||
Title: |
Verified: | |||||||
| AUTHORIZED SIGNER | ||||||||
| Date: | ||||||||
| Compliance Status: Yes No | ||||||||
Schedule 1 to Compliance Certificate
Financial Covenants of Borrower
Dated:
I. Liquidity Ratio (Section 6.7(a))
Required: 1.50:1.00
Actual:
A. Aggregate value of the unrestricted cash of Borrower held at Bank |
$ | |||
B. Aggregate availability under the Revolving Line |
$ | |||
C. Liquidity (the sum of lines A and B) |
$ | |||
D. Aggregate value of Obligations to Bank under the Term Line |
$ | |||
E. Liquidity Ratio (line C divided by line D) |
||||
|
|
||||
Is line E equal to or greater than 1.50:1:00?
No, not in compliance |
Yes, in compliance |
II. Tangible Net Worth (Section 6.7(b))
Required: at least (i) Thirteen Million Dollars ($13,000,000) at all times prior to the Covenant
Default Date, (ii) Twelve Million Dollars ($12,000,000) at all times from the Covenant Default Date
(if the Covenant Default Date is prior to June 29, 2009) until June 29, 2009 and (iii) Twelve
Million Five Hundred Thousand Dollars ($12,500,000) at all times beginning on the later of (a) the
Covenant Default Date (if the Covenant Default Date is after June 30, 2009) or (b) June 30, 2009,
which amounts shall be increased by fifty percent (50%) of issuances of equity (other than
issuances under Borrower’s equity compensation plans) or Subordinated Debt received after February
, 2009 in the month following such issuance and by fifty percent (50%) of Net Income in the first
month following the calendar quarter which Net Income is earned
Actual:
A. Aggregate value of total assets of Borrower |
$ | |||
B. Aggregate value of goodwill of Borrower |
$ | |||
C. Aggregate value of intangible assets of Borrower |
$ | |||
D. Aggregate value of any reserves not already deducted from assets |
$ | |||
E. Aggregate value of liabilities that should, under GAAP, be classified as liabilities on
Borrower’s consolidated balance sheet, including all Indebtedness |
$ | |||
F. Aggregate Value of Subordinated Debt |
$ | |||
G. Tangible Net Worth (line A minus line B minus line C minus line D minus line E plus line F) |
$ | |||
Is line G equal to or greater than (i) Thirteen Million Dollars ($13,000,000) at all times prior to
the Covenant Default Date, (ii) Twelve Million Dollars ($12,000,000) at all times from the Covenant
Default Date (if the Covenant Default Date is prior to June 29, 2009) until June 29, 2009 and (iii)
Twelve Million Five Hundred Thousand Dollars ($12,500,000) at all times beginning on the later of
(a) the Covenant Default Date (if the Covenant Default Date is after June 30, 2009) or (b) June 30,
2009, which amounts shall be increased by fifty percent (50%) of issuances of equity (other than
issuances under Borrower’s equity compensation plans) or Subordinated Debt received after February
, 2009 in the month following such issuance and by fifty percent (50%) of Net Income in the first
month following the calendar quarter which Net Income is earned
No, not in compliance |
Yes, in compliance |
EXHIBIT E
BORROWING BASE CERTIFICATE
Borrower: ENDOLOGIX, INC.
Lender: Silicon Valley Bank
Commitment Amount: $5,000,000
Lender: Silicon Valley Bank
Commitment Amount: $5,000,000
ACCOUNTS RECEIVABLE |
||||
1. Accounts Receivable (invoiced) Book Value as of |
$ | |||
2. Additions (please explain on reverse) |
$ | |||
3. TOTAL ACCOUNTS RECEIVABLE |
$ | |||
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication) |
||||
4. Amounts over 90 days due |
$ | |||
5. Balance of 50% over 90 day accounts |
$ | |||
6. Foreign Accounts |
$ | |||
7. Foreign Invoiced Accounts |
$ | |||
8. Contra/Customer Deposit Accounts |
$ | |||
9. Intercompany/Employee Accounts |
$ | |||
10. Credit balances over 90 days |
$ | |||
11. Concentration Limits |
$ | |||
12. U.S. Governmental Accounts |
$ | |||
13. Promotion or Demo Accounts; Guaranteed Sale or Consignment Sale
Accounts |
$ | |||
14. Accounts with Progress/Milestone/Pre-xxxxxxxx; Contract Accounts |
$ | |||
15. Accounts for Retainage Billing |
$ | |||
16. Trust Accounts |
$ | |||
17. Xxxx and Hold Accounts |
$ | |||
18. Unbilled Accounts |
$ | |||
19. Non-Trade Accounts |
$ | |||
20. Accounts with Extended Term Invoices |
$ | |||
21. Accounts subject to Chargebacks |
$ | |||
22. Disputed Accounts |
$ | |||
23. Other (please explain on reverse) |
$ | |||
24. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS |
$ | |||
25. Eligible Accounts (#3 minus #24) |
$ | |||
26. ELIGIBLE AMOUNT OF ACCOUNTS (80% of #25) |
$ | |||
INVENTORY |
||||
27. Eligible Inventory Value as of |
$ | |||
28. ELIGIBLE
AMOUNT OF INVENTORY (Least of (i) 20% of #27, (ii) 40% of
#25 or (iii) $1,000,000) |
$ | |||
BALANCES |
||||
29. Maximum Loan Amount |
$ | 5,000,0000 | ||
30. Total Funds Available [Lesser of #29 or (#26 plus #28)] |
$ | |||
31. Present balance owing on Line of Credit |
$ | |||
32. Outstanding under Sublimits |
$ | |||
33. RESERVE POSITION (#30 minus #31 and #32) |
$ | |||
[Continued on following page.]
The undersigned represents and warrants that this is true, complete and correct, and that the
information in this Borrowing Base Certificate complies with the representations and warranties in
the Loan and Security Agreement between the undersigned and Silicon Valley Bank.
| BANK USE ONLY |
||||||||||||
| Received by: | ||||||||||||
| COMMENTS: | AUTHORIZED SIGNER |
|||||||||||
| Date: | ||||||||||||
By:
|
Verified: | |||||||||||
| Authorized Signer | AUTHORIZED SIGNER |
|||||||||||
Date:
|
Date: | |||||||||||
| Compliance Status: | Yes No | |||||||||||
