EXHIBIT 10.8
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of October 15, 1997, by and
between Data Critical Corp. ("Borrower") whose address is 0000 000xx Xxxxxx, XX,
Xxxxxxx, XX 00000, and Silicon Valley Bank ("Lender") whose address is 0000
Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000.
1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may 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), as
amended from time to time (the "Line") and a Promissory Note dated April 10,
1997 in the original principal amount of One Hundred Thousand and 00/100 Dollars
($100,000.00) (the "Term Note) and collectively referred to as the "Notes". The
Notes, 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
secured by a Commercial Security Agreement, dated April 10, 1997, and a
Collateral Assignment, Patent Mortgage and 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 Term Note.
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1. The Draw Period is hereby extended to November 26, 1997.
Accordingly, the first principal plus interest payment shall be
due on December 26, 1997, with all subsequent payments due on the
same day of each month thereafter. The final payment, due
November 26, 2000, will be for all outstanding principal plus all
accrued interest not yet paid.
B. Modification(s) to Loan Agreement.
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1. The paragraph entitled "Financial Covenants" is hereby amended in
its entirety to read as follows:
Borrower shall maintain on a monthly basis, beginning with the
month ending October 31, 1997, a minimum quick ratio of 1.50 to
1.00; a minimum Tangible Net Worth of $650,000.00, a maximum
total Debt to Tangible Net Worth ratio of 0.80 to 1.00 and a
minimum Liquidity Coverage ratio of 2.00 to 1.00. Furthermore,
Borrower shall not permit losses to exceed $650,000.00 for the
quarter ending December 31, 1997, $550,000.00 for the quarter
ending March 31, 1998 and $150,000.00 for the quarter ending June
30, 1998 and thereafter.
C. Waiver of Covenant Default.
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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
Tangible Net Worth covenant as of the months ended May 31, 1997,
June 30, 1997, July 31, 1997, August 31, 1997 and September 30,
1997, the Quick Ratio covenant as of the month ended September
30, 1997 and the maximum loss covenant for the quarter ended
September 30, 1997. Lender's waiver of Borrowers compliance of
these covenants shall apply only to the foregoing periods.
Accordingly, for the month ending October 31, 1997 Borrower shall
be in compliance with the Quick Ratio covenant and the Tangible
Net Worth covenant, as amended herein and for the quarter ending
December 31, 1997, Borrower shall be in compliance with the
maximum loss 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 covenants as of all other dates and (2) shall
not limit or impair the Lender's right to demand strict
performance of these covenants as of all other dates and (3)
shall not limit or impair the Lenders right to demand strict
performance of all other covenants as of any date.
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor signing
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
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 CORPORATION SILICON VALLEY BANK
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xx Xxxxxxxx
Name: Xxxxxx X. Xxxxxx Name: Xx Xxxxxxxx
