EXHIBIT 10.39
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is entered into as of February 8,
2002, by and between RADIANCE MEDICAL SYSTEMS, INC., a Delaware corporation (the
"Lender"), and ENDOLOGIX, INC., a Delaware corporation (the "Borrower").
R E C I T A L S
WHEREAS, concurrently herewith, Lender and Borrower are entering into an
Agreement and Plan of Merger (the "Merger Agreement") and related agreements
pursuant to which a subsidiary of Lender will be merged with and into Borrower
(the "Merger");
WHEREAS, in connection with the Merger Agreement, Borrower desires that
Lender, in the event the Merger is not consummated, lend to Borrower up to an
aggregate of $3,000,000, subject to the terms and conditions below;
WHEREAS, Lender is willing to lend to Borrower up to an aggregate of
$3,000,000, subject to the terms and conditions below, in the event the Merger
is not consummated;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Lender and Borrower hereby agree as follows.
ARTICLE 1.
DEFINITIONS AND INTERPRETATION
Section 1.1. Defined Terms. The following definitions are in addition to those
stated elsewhere in this Agreement:
"Business Day" means any day except a Saturday, Sunday, or other day on which
banks in California are generally not open for business.
"Expiration Date" shall mean the earlier of (i) October 1, 2003, (ii) the date
on which Borrower completes any equity or convertible debt financing resulting
in proceeds of $10 million, or (iii) the date on which Borrower closes a
transaction involving a merger or consolidation in which Borrower is not the
surviving entity, or closes a transaction involving the sale of all or
substantially all of its assets.
"Intellectual Property" means (a) present and future, foreign and domestic,
patents, patent applications (including provisional applications), patent
extensions, certificates of invention and applications for certificates of
invention, together with any divisions, continuations or continuations-in-part
owned by, or licensed to Borrower, with the right to sublicense, as of the date
hereof and developed during the term of this Agreement, (b) registered
trademarks, applications to register trademarks, intent to use applications or
other registrations related to trade identity and trademarks, (c) mask work
registrations and applications to register mask works, (d) all Web addresses,
sites and domain names, (e) present and future inventions, trade secrets,
copyrights, data, regulatory submissions, know-how, proprietary information or
processes, licenses, tangible embodiments or other intellectual property of any
kind necessary or useful in Borrower's business and all confidential technical
information in the possession
of Borrower as of the date hereof and developed during the term of this
Agreement necessary or useful in Borrower's business, and (f) all proceeds of
the foregoing (for purposes of this Agreement, the term "proceeds" includes
whatever is receivable or received when Intellectual Property or proceeds is
sold, collected, exchanged or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes, without limitation, all rights to
payment, including return premiums, with respect to any insurance relating
thereto).
"Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment for
security, security interest, encumbrance, lien or charge of any kind, whether
voluntarily incurred or arising by operation of law or otherwise, affecting any
property, including any agreement to grant any of the foregoing, any conditional
sale or other title retention agreement, any lease in the nature of a security
interest, and/or the filing of or agreement to give any financing statement
(other than a precautionary financing statement with respect to a lease that is
not in the nature of a security interest) under the Uniform Commercial Code or
comparable law of any jurisdiction with respect to any Intellectual Property.
"Loan" any Loan made by Lender to Borrower pursuant to Article 2 herein.
"Loan Documents" means this Agreement, all Notes, the Security Agreement and the
other instruments and documents contemplated thereby, but excluding the Merger
Agreement with the exception of the representations and warranties incorporated
herein by Article 3 of the Loan Agreement.
"Note" means each Secured Promissory Note issued by Borrower in favor of Lender,
in substantially the form attached hereto as Exhibit B, evidencing a Loan from
Lender to Borrower hereunder.
"Security Agreement" means the Security Agreement, dated as of even date
herewith, in the form attached hereto as Exhibit C.
"Subsidiary" means any corporation or entity fifty percent (50%) or more of
whose securities having ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) are at any applicable time owned, directly or indirectly, by
Borrower and/or one or more Subsidiaries of Borrower.
"Transaction Documents" shall mean the Merger Agreement, the Loan Documents and
the agreements, certificates and other documents contemplated thereby.
Section 1.2. Interpretation.
(a) Any defined term used in the plural in any Loan Document
shall refer to all members of the relevant class and any defined term used in
the singular shall refer to any number of the members of the relevant class.
(b) Any accounting term used and not specifically defined in any
Loan Document shall be construed in conformity with, and all financial data
required to be submitted under any Loan Document shall be prepared in conformity
with, United States generally accepted accounting principles applied on a
consistent basis.
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(c) All exhibits to this Agreement, as now existing and as the
same may from time to time be modified, are incorporated herein by this
reference.
(d) Any reference to any Loan Document or other document shall
include such document both as originally executed and as it may from time to
time be supplemented, modified, amended, restated or extended. References herein
to Articles, Sections and Exhibits shall be construed as references to this
Agreement unless a different document is named. References to subparagraphs
shall be construed as references to the same Section in which the reference
appears.
(e) The term "document" is used in its broadest sense and
encompasses agreements, certificates, opinions, consents, instruments and other
written material of every kind. The terms "including" and "include" mean
"including (include) without limitation." The requirement that any party
"deliver" any item to another party shall be construed to require that the first
party "deliver or cause to be delivered" such item to the second party. The term
"any," as a modifier to any noun, shall be construed to mean "any and/or all"
preceding the same noun in the plural. The terms "modify" and "modification,"
when used with reference to any document or obligation, include amendments,
supplements, renewals, extensions, waivers, terminations and other modifications
of every kind. The terms "law" and "laws," unless otherwise modified, mean,
collectively, all federal, state and local laws, rules, regulations, codes and
administrative and judicial precedents. The terms "herein," "hereunder" and
other similar compounds of the word "here" refer to the entire document in which
the term appears and not to any particular provision or section of the document.
(f) Article and section headings are included in the Loan
Documents for convenience of reference only and shall not be used in construing
the Loan Documents.
(g) This Section 1.2 shall apply to all of the Loan Documents.
ARTICLE 2.
THE LOAN
Section 2.1. Loan. In the event that the Merger is not consummated by July 1,
2002, and subject to and upon the terms and conditions set forth herein, Lender
agrees to make Loans to Borrower in increments of $500,000 on any date prior to
the Expiration Date; provided, however, that the aggregate principal amount of
Loans outstanding hereunder shall at no time exceed $3,000,000, and provided
further that Lender shall not be required to make more than one Loan to Borrower
hereunder in any one month period. Loans repaid may not be re-borrowed.
Section 2.2. Loan Request Notice. Whenever Borrower desires a Loan hereunder it
shall give Lender at least ten (10) Business Days' prior written notice in the
form attached hereto as Exhibit A (each a "Loan Request Notice"). The Loan
Request Notice shall specify the date on which the Loan is requested to be made
(which shall be a Business Day), and shall certify that as of the date of the
Loan Request Notice, and as of the date the Loan is requested to be made, the
representations and warranties referenced in Article 3 of this Agreement are
true and correct and that no Event of Default has occurred or is occurring or
would result from the Loan requested or the application of the proceeds thereof.
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Section 2.3. Note. Borrower shall execute and deliver to Lender a Note
evidencing each Loan in the form attached hereto as Exhibit B.
Section 2.4. Repayment. All amounts of principal and accrued interest under each
Note shall be due and payable on the Expiration Date.
Section 2.5. Prepayment. Borrower may prepay any Loan or any interest thereon at
any time without premium or penalty.
Section 2.6. Interest.
(a) Each Loan shall bear interest at the rate of 10% per annum.
(b) Interest shall be computed on the basis of the actual number
of days during which the Loan is outstanding divided by 365 which shall for
interest computation purposes be considered one (1) year.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
Borrower hereby makes to Lender the representations and warranties made
to Lender in Sections 3.1, 3.2, 3.4(a), 3.5 (except that that the term
"Agreement" as used therein shall refer to this Agreement), and 3.6-3.20 of the
Merger Agreement, as though set forth herein, including the references to the
disclosure schedules and the documents referred to therein. In addition,
Borrower makes the following representations and warranties:
Section 3.1. Authority. Borrower has full corporate power and authority to enter
into this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by Borrower and the consummation by Borrower of the transactions
contemplated hereby have been duly authorized and approved by the Board of
Directors of Borrower, and no other corporate proceedings on the part of
Borrower are necessary to authorize the execution, delivery and performance of
this Agreement by Borrower and the consummation by Borrower of the transactions
contemplated hereby. This Agreement constitutes a valid and legally binding
obligation of Borrower, enforceable in accordance with its terms except: (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application affecting enforcement of creditors' rights
generally; and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
All of the representations and warranties in this Article 3, whether
incorporated by reference or set forth herein, shall survive the execution of
this Agreement and shall continue in full force and effect until the full and
final payment, satisfaction and discharge of all obligations of Borrower to
Lender under this Agreement or any of the Loan Documents.
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ARTICLE 4.
CONDITIONS PRECEDENT
Section 4.1. Conditions to Making of the Loan. The obligation of Lender to make
any Loan to Borrower is subject to the fulfillment to Lender's reasonable
satisfaction of all of the following conditions:
(a) Approval of Lender Counsel. All legal matters incidental to
the making of any Loan by Lender shall be reasonably satisfactory to Lender's
counsel.
(b) Documentation. Lender shall have received, in form and
substance reasonably satisfactory to Lender, each of the following, duly
executed:
(i) this Agreement;
(ii) a Loan Request Notice in the form of Exhibit A;
(iii) a Note in the form of Exhibit B evidencing such
Loan;
(iv) the Security Agreement in the form of Exhibit C;
(v) with respect to Borrower, such documentation as Lender
may reasonably require to establish its due organization, valid existence, good
standing and qualification to engage in business in each jurisdiction in which
it is engaged in business, or required to be so qualified, its authority to
execute, deliver and perform any Loan Documents to which it is a party, and the
identity, authority and capacity of each responsible official thereof authorized
to act on its behalf, including certified copies of corporate charters and
amendments thereto, bylaws and amendments thereto, certificates of good standing
and/or qualifications to engage in business, certified corporate resolutions,
incumbency certificates, certificates of responsible officials, and the like;
provided copies of charters, bylaws, resolutions, and incumbency certificates
need only to be provided prior to the initial Loan hereunder and in the event of
any material changes to such documents are subsequently made.
(vi) such other certificates, documents, instruments and
consents as Lender may reasonably require.
(c) Financial Condition. There shall have been no material
adverse change, as reasonably determined by Lender in good faith, in the
financial condition or business of Borrower, nor any material decline, as
reasonably determined by Lender in good faith, in the validity of Borrower's
Intellectual Property or market value of any other material assets of Borrower.
(d) No Event of Default. No Event of Default (defined in Article
7 below), and no event or act which with the giving of notice or the passage of
time or both would constitute an Event of Default, shall have occurred
hereunder.
(e) Perfection of Security Interest. Lender shall have perfected
a valid, first-priority security interest in all of Borrower's Intellectual
Property.
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ARTICLE 5.
AFFIRMATIVE COVENANTS
Borrower covenants that so long as any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Lender under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower shall, unless Lender otherwise consents in
writing, which consent will not be unreasonably withheld or delayed:
Section 5.1. Compliance and Maintenance of Corporate Existence. Maintain its
corporate existence and observe and comply in all material respects with all
material laws and valid requirements of any governmental authorities relative to
its corporate existence, rights and franchises, to the conduct of its business
and to its property and assets, and shall maintain and keep in full force and
effect all licenses and permits necessary in any material respect to the proper
conduct of its business.
Section 5.2. Property Maintenance and Insurance. Maintain in all material
respects its properties in good repair, working order and condition as required
for the normal conduct of its business, ordinary wear and tear excepted, and
shall at all times maintain liability and casualty insurance with financially
sound and reputable insurers in such amounts as is customary in Borrower's
industry.
Section 5.3. Tax. Borrower shall pay or cause to be paid all taxes, assessments
or governmental charges on or against it or its properties on or prior to the
time when they become due; provided, that this covenant shall not apply to any
tax, assessment or charge that is being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been established
and are being maintained in accordance with U.S. generally accepted accounting
principles.
Section 5.4. Maintenance of Books and Records. Borrower shall keep adequate
books and records of account, in which true and complete entries will be made
reflecting all of its business and financial transactions, and such entries will
be made in accordance with U.S. generally accepted accounting principles
consistently applied and applicable law.
Section 5.5. No Impairment. Borrower will not, by amendment of its Certificate
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by Borrower.
Section 5.6. Further Assurance. At any time and from time to time Borrower shall
execute and deliver such further instruments and take such further action as may
reasonably be requested by Lender to effect the purposes of this Agreement.
Section 5.7. Financial Statements. Provide to Lender all of the following, in
form and detail reasonably satisfactory to Lender:
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(a) as soon as available, but in no event later than 120 days after and
as of the end of each fiscal year, the (i) consolidated balance sheet of
Borrower and its subsidiaries as of the end of such fiscal year and the
consolidated statements of income, stockholders' equity and cash flows of
Borrower and its subsidiaries for such fiscal year, and (ii) consolidating
balance sheets and statements of income and cash flows, in each case as at the
end of and for such fiscal year, all in reasonable detail, and presented in a
manner comparing such financial statements to corresponding figures from the
preceding annual financial statements, and certified by an authorized financial
officer of Borrower as fairly presenting the financial condition, results of
operations and cash flows of Borrower and its subsidiaries in accordance with
U.S. generally accepted accounting principles, consistently applied, as at such
date and for such periods;
(b) as soon as available, but in no event later than 45 days after and
as of the end of each fiscal quarter, the (i) consolidated balance sheet of
Borrower and its subsidiaries as at the end of such fiscal quarter and the
consolidated statements of income, stockholders' equity and cash flows of
Borrower and its subsidiaries for the period from the beginning of the fiscal
year to the end of such fiscal quarter, and (ii) if prepared by Borrower, the
consolidating balance sheets and statements of income and cash flows of Borrower
and its subsidiaries as at the end of such fiscal quarter, all in reasonable
detail, and presented in a manner comparing such figures for the corresponding
period in the preceding fiscal year, and certified by an authorized financial
officer of Borrower as fairly presenting the financial condition, results of
operations and cash flows of Borrower and its subsidiaries in accordance with
U.S. generally accepted accounting principles, consistently applied, as at such
date and for such periods, subject only to normal year-end-accruals and audit
adjustments;
(c) if prepared by Borrower, promptly after such documents are
available, copies of each annual report, proxy or financial statement or other
report or communication sent to the stockholders of Borrower; and
(d) from time to time such other information as Lender may reasonably
request.
Section 5.8. Litigation. Promptly give notice in writing to Lender of any
litigation pending against Borrower with a claim in excess of $250,000 for which
insurance is not available.
Section 5.9. Notices to Lender. Promptly (but in no event more than ten (10)
business days after the occurrence of each such event or matter) give written
notice to Lender in reasonable detail of: (a) the occurrence of any Event of
Default, or any condition, event or act which with the giving of notice or the
passage of time or both would constitute an Event of Default; (b) any change in
the name or the organizational structure of Borrower; or (c) any termination or
cancellation of any insurance policy which Borrower is required to maintain, or
any uninsured or partially uninsured loss through liability or property damage,
or through fire, theft or any other cause affecting Borrower's property in
excess of an aggregate of $250,000.
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ARTICLE 6.
NEGATIVE COVENANTS
Borrower further covenants that so long as any liabilities (whether
direct or contingent, liquidated or unliquidated) of Borrower to Lender under
any of the Loan Documents remain outstanding, and until payment in full of all
obligations of Borrower subject hereto, Borrower will not, and will not allow
any of its subsidiaries to, do any of the following without Lender's prior
written consent.
Section 6.1. Other Indebtedness. Create, incur, assume or permit to exist any
indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or unmatured, direct or contingent,
liquidated or unliquidated, joint or several, unless expressly subordinated to
each Loan hereunder in a writing acceptable to Lender (which acceptance shall
not be unreasonably withheld or delayed), except (a) the liabilities of Borrower
to Lender; (b) any other liabilities of Borrower existing as of, and disclosed
to Lender prior to, the date hereof; (c) indebtedness to trade creditors
incurred in the ordinary course of business; (d) indebtedness secured by liens
permitted hereunder; (e) extensions; refinancings, modifications, amendments and
restatements of any items permitted herein, provided that the principal amount
thereof is not increased or the terms thereof are not modified to impose more
burdensome terms upon Borrowers or its Subsidiaries, as the case may be; (f)
indebtedness of Borrower to any wholly-owned Subsidiary and indebtedness of any
wholly-owned Subsidiary to any other wholly-owned Subsidiary; (g) accrued
dividends on Borrower's stock; (h) indebtedness that is part of a financing
transaction the proceeds of which will be used to pay off this Loan in its
entirety at the closing of such financing transaction; and (i) other
indebtedness not exceeding $250,000 in aggregate outstanding at any one time.
Section 6.2. Guaranties. Guarantee or become liable in any way as surety,
endorser (other than as endorser of negotiable instruments for deposit or
collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of Borrower as security for,
any liabilities or obligations of any other person or entity, except as in
existence as of, and disclosed to Lender prior to, the date hereof, unless
expressly subordinated to each Loan hereunder in a writing acceptable to Lender
(which acceptance shall not be unreasonably withheld or delayed).
Section 6.3. Liens. Mortgage, pledge, grant or permit to exist a security
interest in, or lien upon, all or any portion of its Intellectual Property,
except (a) pursuant to the Loan Documents; (b) which is existing as of, and
disclosed to Lender in writing prior to, the date hereof; (c) liens for taxes,
fees, assessments or other government charges or levies, either not delinquent
or being contested in good faith and for which Borrower maintains adequate
reserves on its books; (d) purchase money liens (i) on equipment being acquired
or held by Borrower or its Subsidiaries incurred for financing the acquisition
of the equipment for use in the ordinary course of business or (ii) existing on
equipment for use in the ordinary course of business when acquired, if the lien
is confined to the property and improvements and the proceeds of the equipment;
(e) licenses or sublicenses granted in the ordinary course of Borrower's
business and any interest or title of a licensor under license or sublicense,
(f) leases or subleases granted in the ordinary course of Borrower's business,
including in connection with Borrower's leased premises or leased property; (g)
liens arising from judgments, decrees and attachments not constituting an Event
of Default; (h) liens in favor of
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financial institutions arising in connection with Borrower's deposit accounts
held at such institutions; (i) liens in connection with equipment leases for
equipment for use in the ordinary course of business; (j) liens securing claims
or demand of materialmen, mechanics, carriers, warehousemen, landlords and other
like persons or entities imposed without action of such parties, provided that
the payment thereof is not yet required; (k) liens incurred or deposits made in
the ordinary course of Borrower's business in connection with worker's
compensation, unemployment insurance, social security and other like laws; (l)
liens in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation or goods;
(m) liens in connection with debt subordinated to the interest of Lender in the
Collateral (as defined in the Security Agreement) in a writing acceptable to
Lender (which acceptance shall not be unreasonably withheld or delayed); (n)
liens incurred in the extension, renewal or refinancing of the indebtedness
secured by the liens described above (provided such liens do not increase the
scope of such lienor's interest in the assets of Borrower); and (o) other liens
not described above arising in the ordinary course of business and not having,
individually or in the aggregate, a material adverse interest in Lender's
interests in the assets of Borrower.
Section 6.4. Dividends and Distributions. Declare or pay any dividend or
distribution either in cash, stock or any other property, on Borrower's stock
now or hereafter outstanding, except for (a) dividends paid by a Subsidiary of
Borrower to Borrower, (b) dividends payable solely in the capital stock of
Borrower, in either case made in compliance with applicable law, (c) repurchases
of stock from former employees and directors of Borrower under the terms of
applicable stock purchase agreements.
Section 6.5. Change in Business; Transfer of Assets. Make any substantial change
in the nature of its business as conducted as of the date hereof; or sell,
lease, transfer or otherwise dispose of all or a substantial or material portion
of its assets except in the ordinary course of its business.
ARTICLE 7.
EVENTS OF DEFAULT
Section 7.1. Events of Default. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement.
(a) Payment. The Borrower shall fail to pay within ten (10) days
of the date due, any principal, interest, fees or other amounts payable under
any of the Loan Documents.
(b) Breaches of Other Covenants. The Borrower shall fail to
observe or perform any other covenant, obligation, condition or agreement
contained in this Agreement or in any of the Loan Documents, and: (i) such
failure shall continue for twenty (20) days following the receipt of written
notice from Lender of such default (the "Default Notice"); or (ii) if such
failure is not curable within such twenty (20) day period but is reasonably
capable of cure within thirty (30) days from the Default Notice, either (x)
Borrower shall not have commenced a cure in a manner reasonably satisfactory to
Lender within the initial twenty (20) day period from the Default Notice or (y)
the failure continues for the entire thirty (30) day period.
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(c) Representations and Warranties. Any representation, warranty,
certificate, or other written statement made or furnished by Borrower to Lender
in writing signed by an officer of the Company in connection with this
Agreement, or as an inducement to Lender to enter into this Agreement, shall be
false, incorrect, incomplete or misleading in any material respect when made or
furnished.
(d) Voluntary Bankruptcy or Insolvency Proceedings. The Borrower
shall: (i) apply for or consent to the appointment of a receiver, trustee,
liquidator or custodian of itself or of all or a substantial part of its
property; (ii) be unable, or admit in writing its inability, to pay its debts
generally as they mature; (iii) make a general assignment for the benefit of its
creditors; (iv) be dissolved or liquidated in full or in part; (v) commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or consent to any such relief or to
the appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it; or (vi) take any
action for the purpose of effecting any of the foregoing.
(e) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings
for the appointment of a receiver, trustee, liquidator or custodian of Borrower
or of all or a substantial part of the property thereof, or an involuntary case
or other proceedings seeking liquidation, reorganization or other relief with
respect to Borrower or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within
sixty (60) days of commencement.
(f) Judgments. A final judgment or order for the payment of money
in excess of $1,000,000 (exclusive of amounts covered by insurance) shall be
rendered against Borrower and the same shall remain unpaid for a period of
thirty (30) days during which execution shall not be effectively stayed, or any
judgment, writ, assessment, warrant of attachment, or execution or similar
process shall be issued or levied against a substantial part of the property of
Borrower and such judgment, writ, or similar process shall not be released,
stayed, vacated or otherwise dismissed within thirty (30) days after issue or
levy.
Section 7.2. Remedies. Upon the occurrence or existence and continuance of any
Event of Default (other than an Event of Default referred to in Sections 7.1(d)
or (e) above) and at any time thereafter during the continuance of such Event of
Default, Lender may, by written notice to Borrower, declare all outstanding
obligations payable by Borrower under the Loan Documents to be immediately due
and payable without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived, anything contained herein to the
contrary notwithstanding. Immediately upon the occurrence or existence of any
Event of Default described in Sections 7.1(d) or (e) above, all outstanding
obligations payable by Borrower under the Loan Documents automatically shall
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived, anything
contained herein to the contrary notwithstanding. In addition to the foregoing
remedies, upon the occurrence or existence and continuance of any Event of
Default, Lender may exercise any other right, power or remedy otherwise
permitted to it by law, either by suit in equity or by action at law, or both.
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ARTICLE 8.
MISCELLANEOUS
Section 8.1. No Waiver. No delay, failure or discontinuance of Lender in
exercising any right, power or remedy under any of the Loan Documents shall
affect or operate as a waiver of such right, power or remedy; nor shall any
single or partial exercise of any such right, power or remedy preclude, waive or
otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any
kind by Lender of any breach of or default under any of the Loan Documents must
be in writing and shall be effective only to the extent set forth in such
writing.
Section 8.2. Notices. All notices, requests and demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to each party at the following address:
Borrower:
Endologix, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ Dallas, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Lender:
Radiance Medical Systems, Inc.
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (949) ▇▇▇- ▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.
Section 8.3. Costs, Expenses and Attorneys' Fees. Borrower shall pay to Lender
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including reasonable attorneys' fees, incurred by Lender in
connection with (a) the enforcement of Lender's rights and/or the collection of
any amounts which become due to Lender under any of the Loan Documents; and (b)
the prosecution or defense of any action in any way related to any of the Loan
Documents, including any action for declaratory relief, and including any of the
foregoing incurred in connection with any bankruptcy proceeding relating to
Borrower.
Section 8.4. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the parties. Borrower may not assign
or transfer its interest hereunder without Lender's written consent. Lender may
assign or transfer its interest hereunder without the consent of Borrower.
Section 8.5. Entire Agreement; Amendment. This Agreement and the other Loan
Documents constitute the entire agreement between Borrower and Lender with
respect to the Loans and supersede all prior negotiations, communications,
discussions and correspondence concerning the subject matter hereof. This
Agreement may be amended or modified only by a written instrument executed by
each party hereto.
Section 8.6. No Third Party Beneficiaries. This Agreement is made and entered
into for the sole protection and benefit of the parties hereto and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, this Agreement or any other of the Loan Documents
to which it is not a party.
Section 8.7. Time of the Essence. Time is of the essence of each and every
provision of this Agreement and each other of the Loan Documents.
Section 8.8. Usury Savings Clause; Severability.
(a) Borrower and Lender intend to contract in compliance with all
applicable usury laws governing any Loans made hereunder. Borrower and Lender
agree that none of the terms of this Agreement or any Note shall be construed as
a contract for, or requirement to pay interest at a rate in excess of, the
maximum interest rate allowed by any applicable usury laws. If Lender receives
sums which constitute interest that would otherwise increase the effective
interest rate on any Loan to a rate in excess of that permitted by any
applicable law, then all such sums constituting interest in excess of the
maximum lawful rate shall at Lender's option either be credited to the payment
of principal or returned to Borrower. The provisions of this paragraph control
the other provisions of this Agreement, each Note and any other agreement
between Borrower and Lender.
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(b) In addition and without duplication, if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or any remaining provisions
of this Agreement.
Section 8.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
Agreement.
Section 8.10. CHOICE OF LAW; CONSENT TO JURISDICTION. THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA.
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR STATE COURT SITTING IN CALIFORNIA IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS. THE BORROWER HEREBY
IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS.
Section 8.11. Indemnity by Borrower. Borrower agrees to indemnify, save and hold
harmless Lender and its directors, officers, agents, attorneys and employees
(collectively, the "Indemnitees") from and against: (a) any and all claims,
demands, actions or causes of action (collectively, a "Claim") that are asserted
against any Indemnitee if the Claim arises out of or relates to the relationship
between Borrower and Lender under any of the Loan Documents or the transactions
contemplated thereby; (b) any and all administrative or investigative
proceedings by any governmental agency or authority arising out of or related to
any claim, demand, action or cause of action described in clause (a) above; and
(c) any and all liabilities, losses, costs or expenses (including reasonable
attorneys' fees and disbursements and other professional services) that any
Indemnitee suffers or incurs as a result of the assertion of any of the
foregoing; provided that no Indemnitee shall be entitled to indemnification for
any loss caused by its own or its employees' or agents' gross negligence or
willful misconduct; and provided, further, that Lender shall not be entitled to
indemnification for Claims asserted by stockholders of Lender in a derivative
action. Each Indemnitee is authorized to employ counsel in enforcing its rights
hereunder and in defending against any claim, demand, action, cause of action or
administrative or investigative proceeding covered by this Section; provided
that the Indemnitees as a group may retain only one law firm to represent them
with respect to any such matter unless there is, under applicable standards of
professional conduct, conflict on any significant issue between the positions of
any two or more Indemnitees. Any obligation or liability of Borrower to any
Indemnitee under this Section shall be and hereby is covered and secured by the
Loan Documents and shall survive the expiration or termination of this Agreement
and the repayment of the Loan and the payment and performance of all other
obligations owed to Lender.
Section 8.12. Further Assurances. Borrower shall, at its expense and without
expense to Lender, do, execute and deliver such further acts and documents as
Lender from time to time reasonably requires for the assuring and confirming
unto Lender of the rights hereby created or intended now or hereafter so to be,
or for carrying out the intention or facilitating the performance of the terms
of any Loan Document.
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Section 8.13. Conflicting Provisions. The provisions of this Agreement are not
intended to supersede the provisions of the other Loan Documents but shall be
construed as supplemental thereto. However, in the event of any actual
irreconcilable conflict between the provisions hereof and any provisions of the
other Loan Documents, it is intended that the provisions of this Agreement shall
control; provided that the inclusion of provisions in such other Loan Documents
which are not addressed in this Agreement shall not be deemed a conflict with
this Agreement. The foregoing shall apply with respect to all Loan Documents,
whether executed and delivered by Borrower or by any third-party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
BORROWER: LENDER:
ENDOLOGIX, INC. RADIANCE MEDICAL SYSTEMS, INC.
----------------------------------- -----------------------------------
By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: Chief Executive Officer Its: Chief Executive Officer
14
EXHIBIT A
LOAN REQUEST NOTICE
Radiance Medical Systems, Inc. [Date]
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
The undersigned, Endologix, Inc., refers to the Loan Agreement dated as
of ___________, 2002 between the undersigned and Radiance Medical Systems, Inc.
(as amended from time to time, the "Loan Agreement," the terms defined therein
being used herein as therein defined). Notice is hereby given by the
undersigned, irrevocably, pursuant to Section 2.2 of the Loan Agreement, that
the undersigned hereby requests a Loan under the Loan Agreement, and in that
connection sets forth below the information relating to such Loan as required by
Sections 2.2 and 4 of the Loan Agreement:
(i) The Business Day of the Loan requested herein is ____________,
2002.
(ii) The aggregate principal amount of the requested Loan is $500,000.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true and correct on the date of the Loan
requested herein:
(A) the representations and warranties referenced in Section 3 of
the Loan Agreement are true and correct; and
(B) no Event of Default has occurred and is continuing, or would
result from such Loan or from the application of the proceeds thereof.
Very truly yours,
Endologix, Inc.
By:
--------------------------------
Title:
EXHIBIT B
NOTE
[submitted separately]
EXHIBIT C
SECURITY AGREEMENT
[submitted separately]