Amendment
To
Loan and Security
Agreement
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 3905
Annapolis Lane, Suite 105, Minneapolis, Minnesota
55447.
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.
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 o
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