Amendment To Loan and Security Agreement
EXHIBIT 10.1
THIS AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered as of June 2,
2009 by and between Silicon Valley Bank (“Bank”) and ATS Medical, Inc., a Minnesota corporation
(the “Borrower”) whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
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 as 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 Amendment to Liquidity Ratio. A portion of Section 6.7(i) of the Loan Agreement reads as
follows:
Commencing January 1, 2009 and each month ending thereafter:
A ratio of (y) the sum of (1) unrestricted cash (and equivalents)
of Borrower on deposit with Bank plus (2)
1
50% of 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 Indebtedness of Borrower to Bank for
borrowed money, of equal to or greater than 2.00 to 1.00.
Notwithstanding the foregoing, if the amount of Borrower’s
Eligible Accounts ever becomes less than 50% of Borrower’s
accounts receivable arising from the sale or lease of goods, or
provision of services, in the ordinary course of business, then
part “2” above shall be deemed to read “(2) the lesser of the
amount of Borrower’s Eligible Accounts or 50% of Borrower’s
accounts receivable arising from the sale or lease of goods, or
provision of services, in the ordinary course of business”,
unless the Bank shall consent in writing otherwise.”
The language “equal to or greater than 2.00 to 1.00” contained in said portion of Section
6.7(i) is hereby amended to read “equal to or greater than 1.40 to 1.00” for months
commencing with May 1, 2009 and each month thereafter.
2.2 Conforming Changes to Compliance Certificate. The Bank may make such changes to the
Compliance Certificate that are required pursuant to Section 6.2(c) of the Loan Agreement as from
time to time may be necessary to conform the Compliance Certificate to any amendments that have
been or may hereinafter be made to the Loan Agreement. For purposes of illustration and not by way
of limitation, the required Liquidity Ratio as set forth in the Compliance Certificate shall be
changed to “1.40:1.00” for months commencing with May 1, 2009 and each month thereafter, to conform
with the amendment to the Liquidity Ratio being made pursuant to this Amendment.
3. Limitation of Amendments.
3.1 The consents and amendments set forth herein 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.
2
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 Third Restated Articles of Incorporation of ATS Medical, Inc. filed with the Minnesota
Secretary of State on June 11, 2008, a copy of which was provided to Bank via email on June 18,
2008, 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.
3
6. Expenses. 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.
7. Effectiveness. This Amendment shall be deemed effective upon (a) the due execution and
delivery of this Amendment by each party hereto, and (b) Bank’s receipt of the Acknowledgment of
Amendment and Reaffirmation of Guaranty substantially in the form attached hereto as Schedule 1,
duly executed and delivered by each guarantor named therein.
[Signature page follows]
4
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/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
|
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Title: Relationship Manager |
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Title: Chief Financial Officer |
Schedule 1
ACKNOWLEDGMENT OF AMENDMENT
AND REAFFIRMATION OF GUARANTY
AND REAFFIRMATION OF GUARANTY
Section 1. Each of the undersigned guarantors hereby acknowledges and confirms that it has
reviewed and approved the terms and conditions of the Amendment to Loan and Security Agreement of
substantially even date herewith (the “Amendment”).
Section 2. Each guarantor hereby consents to the Amendment and agrees that its guaranty
relating to the Obligations of Borrower under the Loan Agreement shall continue in full force and
effect, shall be valid and enforceable and shall not be impaired or otherwise affected by the
execution of the Amendment or any other document or instrument delivered in connection herewith.
Section 3. Each guarantor represents and warrants that, after giving effect to the Amendment,
all representations and warranties contained in the guaranty are true, accurate and complete as if
made the date hereof.
Dated as of June 2, 2009
3F THERAPEUTICS, INC.
|
ATS ACQUISITION CORP. | |
By:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇ |
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ | |
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ Title: President |
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ Title: President |