Exhibit 10.7

 

EXECUTION VERSION

 

Amendment no 4. and WAIVER to term loan agreement

 

THIS AMENDMENT NO 4. AND WAIVER TO TERM LOAN AGREEMENT dated as of May 12, 2020
(this “Agreement”), is made among AVINGER, INC., a Delaware corporation
(“Borrower”), the Subsidiary Guarantors from time to time party thereto
(together with Borrower, the Obligors”), the Lenders listed on the signature
pages hereto under the heading “LENDERS” (each a “Lender” and, collectively,
“Lenders”), with respect to the Loan Agreement referred to below.

 

RECITALS

 

WHEREAS, Borrower, the Subsidiary Guarantors from time to time party thereto,
and the Lenders are parties to the Term Loan Agreement, dated as of September
22, 2015, as amended by Amendment 1 to Term Loan Agreement, dated as of October
28, 2016, as further amended by Amendment No. 2 to Term Loan Agreement, dated as
of February 14, 2018, as further amended by Amendment No. 3 to Term Loan
Agreement, dated as of March 2, 2020, and as modified by the Waiver and Consent,
dated as of December 14, 2017, the Waiver and Consent, dated as of January 24,
2018 , the Waiver and Consent, dated as of April 5, 2019, the Waiver and
Consent, dated as of July 24, 2019, the Waiver and Consent, dated as of March 2,
2020, and the Consent, dated as of April 20, 2020 (as amended, restated,
modified or otherwise supplemented from time to time, the “Loan Agreement”).

 

WHEREAS, Borrower has requested that the Lenders (which Lenders constitute all
of the Lenders party to the Loan Agreement as required by Section 12.04 of the
Loan Agreement), and the Lenders have agreed to, waive Borrower’s requirement to
comply with the Minimum Required Revenue covenant set forth in Section 10.02(f)
of the Loan Agreement.

 

AGREEMENT

 

NOW THEREFORE, accordingly, the parties hereto agree as follows.

 

SECTION 1.     Definitions; Interpretation.

 

(a)     Terms Defined in Loan Agreement. All capitalized terms used in this
Agreement (including in the recitals hereof) and not otherwise defined herein
shall have the meanings assigned to them in the Loan Agreement.

 

(b)     Interpretation. The rules of interpretation set forth in Section 1.03 of
the Loan Agreement shall be applicable to this Agreement and are incorporated
herein by this reference.

 

SECTION 2.     Amendments to Loan Agreement. Subject to Section 4, the Loan
Agreement is hereby amended as follows:

 

(a)     Section 3.03(a) of the Loan Agreement is hereby amended and restated in
its entirety as follows:

 

 

--------------------------------------------------------------------------------

 

 

“(a)     Optional Prepayments. Upon prior written notice to the Lenders
delivered pursuant to Section 4.03, Borrower shall have the right to optionally
prepay in whole or in part the outstanding principal amount of the Loans on any
Business Day for the Redemption Price. No partial prepayment shall be made under
this Section 3.03(a) in connection with any event described in Section 3.03(b).”

 

SECTION 3.     Waiver.

 

(a)     Subject to Section 4, the Lenders which constitute the Majority Lenders
as required by Section 12.04 of the Loan Agreement, waive Borrower’s requirement
to comply with the Minimum Required Revenue covenant set forth in Section
10.02(f) of the Loan Agreement.

 

(b)     The waiver set forth in Section 3(a) shall be limited precisely as
written. Nothing in this Agreement shall be deemed to constitute a waiver of
noncompliance or breach of any other term or provision in the Loan Agreement or
the other Loan Documents, nor prejudice any right or remedy that Lenders may now
have or may have in the future under or in connection with the Loan Agreement or
the other Loan Documents. Nothing contained herein shall be deemed a waiver or
consent in respect of (or otherwise affect Lenders’ ability to enforce) any
condition not explicitly waived by Section 3(a).

 

SECTION 4.     Conditions to Effectiveness. The effectiveness of Sections 2 and
3 shall be subject to the satisfaction of each of the following conditions
precedent:

 

(a)     Borrower and all of the Lenders shall have duly executed and delivered
this Agreement pursuant to Section 12.04 of the Loan Agreement; provided,
however, that this Agreement shall have no binding force or effect unless all
conditions set forth in this Section 4 have been satisfied.

 

(b)     The Borrower shall have paid or reimbursed Lenders for Lenders’
reasonable out of pocket costs and expense incurred in connection with this
Agreement, including Lenders’ reasonable and documented out of pocket legal fees
and costs, pursuant to Section 12.03(a)(i)(z) of the Loan Agreement.

 

(c)     No Default or Event of Default shall have occurred and be continuing.

 

SECTION 5.     Representations and Warranties. Each Obligor hereby represents
and warrants to each Lender as follows:

 

(i)     Such Obligor has full power, authority and legal right to make and
perform this Agreement. This Agreement is within such Obligor’s corporate powers
and has been duly authorized by all necessary corporate and, if required, by all
necessary shareholder action. This Agreement has been duly executed and
delivered by such Obligor and constitutes a legal, valid and binding obligation
of such Obligor, enforceable against such Obligor in accordance with its terms,
except as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors’ rights and (b) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). This Agreement (x) does not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority or any third party, except for such as have been obtained
or made and are in full force and effect and the filing of a copy of this
Agreement with the SEC following its effectiveness, (y) will not violate any
applicable law or regulation or the charter, bylaws or other organizational
documents of such Obligor and its Subsidiaries or any order of any Governmental
Authority, other than any such violations that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
(z) will not violate or result in an event of default under any material
indenture, agreement or other instrument binding upon such Obligor and its
Subsidiaries or assets, or give rise to a right thereunder to require any
payment to be made by any such Person.

 

2

--------------------------------------------------------------------------------

 

 

(ii)     No Default has occurred or is continuing or will result after giving
effect to this Agreement.

 

(iii)     There has been no Material Adverse Effect since the date of the Loan
Agreement.

 

(iv)     The representations and warranties made by or with respect to such
Obligor in Section 7 of the Loan Agreement are (A) in the case of
representations qualified by “materiality,” “Material Adverse Effect” or similar
language, true and correct in all respects and (B) in the case of all other
representations and warranties, true and correct in all material respects
(except that the representation regarding representations and warranties that
refer to a specific earlier date are true and correct on the basis set forth
above as of such earlier date), in each case taking into account any changes
made to schedules updated in accordance with Section 7.21 of the Loan Agreement
or attached hereto.

 

SECTION 6.     Reaffirmation. Each Obligor hereby ratifies, confirms, reaffirms,
and acknowledges its obligations under the Loan Documents to which it is a party
and agrees that the Loan Documents remain in full force and effect, undiminished
by this Agreement, except as expressly provided herein. By executing this
Agreement, each Obligor acknowledges that it has read, consulted with its
attorneys regarding, and understands, this Agreement.

 

SECTION 7.     Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)     Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed in accordance with, the
law of the State of New York, without regard to principles of conflicts of laws
that would result in the application of the laws of any other jurisdiction;
provided that Section 5-1401 of the New York General Obligations Law shall
apply.

 

(b)     Submission to Jurisdiction. Each Obligor agrees that any suit, action or
proceeding with respect to this Agreement or any other Loan Document to which it
is a party or any judgment entered by any court in respect thereof may be
brought initially in the federal or state courts in Houston, Texas or in the
courts of its own corporate domicile and irrevocably submits to the
non-exclusive jurisdiction of each such court for the purpose of any such suit,
action, proceeding or judgment. This Section 7 is for the benefit of the Lenders
only and, as a result, no Lender shall be prevented from taking proceedings in
any other courts with jurisdiction. To the extent allowed by applicable Laws,
the Lenders may take concurrent proceedings in any number of jurisdictions.

 

3

--------------------------------------------------------------------------------

 

 

(c)     Waiver of Jury Trial. Each Obligor and each Lender hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any suit, action or proceeding arising out of or relating to
this Agreement, the other Loan Documents or the transactions contemplated hereby
or thereby.

 

SECTION 8.     No Actions, Claims, Etc. Each Obligor acknowledges and confirms
that it has no knowledge of any actions, causes of action, claims, demands,
damages or liabilities of whatever kind or nature, in law or in equity, against
any Secured Party, in any case, arising from any action or failure of any
Secured Party to act under any Loan Document on or prior to the date hereof, or
of any offset right, counterclaim or defense of any kind against any of its
respective obligations, indebtedness or liabilities to Secured Party under any
Loan Document. Each Obligor unconditionally releases, waives and forever
discharges (i) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of any Lender to such Obligor, except the obligations
required to be performed by any Lender under the Loan Documents on or after the
date hereof, and (ii) all claims, offsets, causes of action, suits or defenses
of any kind whatsoever (if any), whether arising at law or in equity, whether
known or unknown, which such Obligor might otherwise have against any Secured
Party in connection with the Loan Documents or the transactions contemplated
thereby, in the case of each of clauses (i) and (ii), on account of any past or
presently existing condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind. Each Obligor acknowledges that it may discover facts or law
different from, or in addition to, the facts or law that it knows or believes to
be true with respect to the claims released in this Section 8 and agrees,
nonetheless, that this release shall be and remain effective in all respects
notwithstanding such different or additional facts or the discovery of them.
Each Obligor expressly acknowledges and agrees that all rights under Section
1542 of the California Civil Code are expressly waived. That section provides:

 

“A general release does not extend to claims that the creditor or releasing
party does not know or suspect to exist in his or her favor at the time of
executing the release and that, if known by him or her, would have materially
affected his or her settlement with the debtor or released party.”

 

SECTION 9.     Miscellaneous.

 

(a)     No Waiver. Except as expressly set forth in Section 3, nothing contained
herein shall be deemed to constitute a waiver of compliance with any term or
condition contained in the Loan Agreement or any of the other Loan Documents or
constitute a course of conduct or dealing among the parties. Except as expressly
stated herein, the Lenders reserve all rights, privileges and remedies under the
Loan Documents (including, without limitation, all such rights, privileges and
remedies with respect to any Default, Event of Default or Material Adverse
Effect, whether or not communicated to Lenders). Except as amended hereby, the
Loan Agreement and other Loan Documents remain unmodified and in full force and
effect. All references in the Loan Documents to the Loan Agreement shall be
deemed to be references to the Loan Agreement as amended hereby.

 

4

--------------------------------------------------------------------------------

 

 

(b)     Severability. In case any provision of or obligation under this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

 

(c)     Headings. Headings and captions used in this Agreement (including the
Exhibits, Schedules and Annexes hereto, if any) are included for convenience of
reference only and shall not be given any substantive effect.

 

(d)     Integration. This Agreement constitutes a Loan Document and, together
with the other Loan Documents, incorporates all negotiations of the parties
hereto with respect to the subject matter hereof and is the final expression and
agreement of the parties hereto with respect to the subject matter hereof.

 

(e)     Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. Executed counterparts delivered by facsimile or other
electronic transmission (e.g., “PDF” or “TIF”) shall be effective as delivery of
a manually executed counterpart.

 

(f)     Controlling Provisions. In the event of any inconsistencies between the
provisions of this Agreement and the provisions of any other Loan Document, the
provisions of this Agreement shall govern and prevail.

 

(g)     Loan Document. This Agreement is a Loan Document.

 

[Remainder of page intentionally left blank]

 

5

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

 

 

OBLIGORS:

 

 

AVINGER, INC.

 

By:   /s/ Mark Weinswig                             

Name: Mark Weinswig

Title: CFO

 

 

[Signature Page to Amendment No. 4 and Waiver]

 

--------------------------------------------------------------------------------

 

 

LENDERS:

 

Crg PARTNERS III L.P. 

By Crg PARTNERS III GP L.P., its General Partner

By Crg PARTNERS III GP LLC, its General Partner

 

By /s/ Nathan Hukill                                           

Name:  Nathan Hukill

Title: Authorized Signatory

 

Crg PARTNERS III – PARALLEL FUND “a” L.P.

By Crg PARTNERS III – PARALLEL FUND “A” GP L.P., its General Partner

By Crg PARTNERS III GP LLC, its General Partner

 

By /s/ Nathan Hukill                                           

Name: Nathan Hukill

Title: Authorized Signatory

 

Crg PARTNERS III – parallel fund “B” (cayman) L.P.

By Crg PARTNERS III (Cayman) GP L.P., its General Partner

By Crg PARTNERS III GP LLC, its General Partner

 

By /s/ Nathan Hukill                                           

Name: Nathan Hukill

Title: Authorized Signatory

 

WITNESS: /s/ Nicole Nesson

Name: Nicole Nesson

 

Crg PARTNERS III (cayman) LEV AIV L.P.

By Crg PARTNERS III (Cayman) GP L.P., its General Partner

By Crg PARTNERS III GP LLC, its General Partner

 

By /s/ Nathan Hukill                                           

Name: Nathan Hukill

Title: Authorized Signatory

 

WITNESS: /s/ Nicole Nesson

Name:  Nicole Nesson

 

[Signature Page to Amendment No. 4 and Waiver]

 

--------------------------------------------------------------------------------

 

 

CRG PARTNERS III (CAYMAN) UNLEV AIV I L.P.

By CRG PARTNERS III (CAYMAN) GP L.P., its General Partner

By CRG PARTNERS III (CAYMAN) GP LLC, its General Partner

 

By /s/ Nathan Hukill                                           

Nathan Hukill

Authorized Signatory

 

WITNESS: /s/ Nicole Nesson

Name: Nicole Nesson

 

[Signature Page to Amendment No. 4 and Waiver]