Exhibit 10.1
AMENDMENT TO LOAN DOCUMENTS
     THIS AMENDMENT to Loan Documents (this “Amendment”) is entered into as of
April 24, 2006 (the “April 2006 Amendment Date”), by and between SILICON VALLEY
BANK, a California corporation (“Bank”), and ENDOCARE, INC., a Delaware
corporation (“Borrower”), whose chief executive office is located at 201
Technology Drive, Irvine, California 92618.
Recitals
     A. Borrower and Bank are parties to that certain Loan and Security
Agreement, with an Effective Date of October 26, 2005 (as amended, restated,
supplemented or otherwise modified 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 to, among
other things: (i) extend the Maturity Date; (ii) modify the Tangible Net Worth
financial covenant; (iii) provide for a new $500,000 fully-reserved Term Loan;
and (iv) make certain other revisions to the Loan Agreement; in each case, all
as more fully 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. The term
“April 2006 Amendment Date” as defined in the preamble to this Amendment hereby
is incorporated into the Loan Agreement.
     2. Amendments to Loan Documents.
          2.1 Extension of Maturity Date. The definition of “Maturity Date” set
forth in Section 13.1 of the Loan Agreement hereby is amended and restated in
its entirety to read as follows:
          “Maturity Date” is February 28, 2007.

 

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          2.2 Modification of Tangible Net Worth Financial Covenant.
Section 6.9(a) of the Loan Agreement hereby is amended and restated in its
entirety to read as follows:
          (a) Tangible Net Worth. A Tangible Net Worth of at least the sum of
the following (the “Required TNW Amount”): (a) the TNW Base Amount (as defined
below), plus (b) 25% of all consideration received after January 31, 2006 for
issuances of Endocare’s equity securities and the principal amount of
Subordinated Debt of the Borrower, plus (c) 25% of the Endocare’s positive
consolidated Net Income in each fiscal quarter ending after January 31, 2006.
As used herein, the term “TNW Base Amount” means, as of any date of
determination:
(a) $9,000,000 with respect to the month ending February 28, 2006;
(b) $8,000,000 with respect to the month ending March 31, 2006;
(c) $8,000,000 with respect to the month ending April 30, 2006;
(d) $7,500,000 with respect to the month ending May 31, 2006;
(e) $7,500,000 with respect to the month ending June 30, 2006;
(f) $7,000,000 with respect to the month ending July 31, 2006;
(g) $6,500,000 with respect to the month ending August 31, 2006;
(h) $6,000,000 with respect to the month ending September 30, 2006;
(i) $5,500,000 with respect to the month ending October 31, 2006;
(j) $4,500,000 with respect to the month ending November 30, 2006;
(k) $4,000,000 with respect to the month ending December 31, 2006;
(l) $3,500,000 with respect to the month ending January 31, 2007; and

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(m) $2,500,000 with respect to the month ending February 28, 2007.
Increases in the Required TNW Amount based on consideration received for equity
securities and Subordinated Debt of the Borrower shall be effective as of the
end of the month in which such consideration is received, and shall continue
effective thereafter. Increases in the Required TNW Amount based on Net Income
shall be effective on the last day of the fiscal quarter in which such Net
Income is realized, and shall continue effective thereafter. In no event (except
for step-downs in the TNW Base Amount as expressly set forth in the definition
thereof) shall the Required TNW Amount be decreased from one fiscal period to
another subsequent fiscal period.
          2.3 Addition of New Term Loan. The following hereby is added, in
proper numerical order, as a new Section 2.1.5 of the Loan Agreement:
          2.1.5 Term Loan.
               (a) Availability. Subject to the terms and conditions of this
Agreement, during the period commencing on the April 2006 Amendment Date and
ending 6 months thereafter (the “Term Loan Draw Period”), Bank shall make one or
more term loans (individually and collectively, the “Term Loan”) in an aggregate
original principal amount not to exceed $500,000. Each Term Loan must be in an
amount equal to at least $100,000. Borrower may only request up to three
(3) Term Loans hereunder. After repayment, no Term Loan or portion thereof may
be reborrowed.
               (b) Repayment. Term Loans outstanding on the last day of the Term
Loan Draw Period are payable in consecutive equal monthly installments of
principal, each in the amount of 1/30th of the aggregate outstanding Term Loan
balance as of the last day of the Term Loan Draw Period, beginning on the first
day of each month following the last day of the Term Loan Draw Period and ending
on the Maturity Date; provided, however, that on the Maturity Date, all
outstanding principal for the Term Loan, plus all accrued and unpaid interest
thereon, plus all other Obligations, shall be due and payable. Interest on the
Term Loans shall accrue from and after the date of funding and shall be payable,
in arrears, in monthly payments of accrued interest, beginning on the first day
of each month following the date in which the applicable Term Loan is funded and
ending on the Maturity Date.

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          2.4 Reservation of Term Loan Against Revolving Advances.
Section 2.1.1(a) of the Loan Agreement hereby is amended and restated in its
entirety to read as follows:
          (a) Availability. Subject to the terms and conditions of this
Agreement and to deduction of Reserves, Bank will make Advances to Borrower up
to an amount (“Net Borrowing Availability”) not to exceed the result of: (i) the
lesser of (y) the Maximum Revolver Amount, or (z) amounts available under the
Borrowing Base; minus (ii) the then aggregate outstanding amount of the Term
Loan; provided, however, that Bank shall have no obligation to make, or permit
to remain outstanding, Advances based on Borrower’s Eligible Inventory
(“Inventory Advances”) if and to the extent the Inventory Advances exceed, or
would exceed, 50% of the aggregate outstanding amount of Advances based on
Borrower’s Eligible Accounts. Advances and other Credit Extensions will be made
to each Borrower based on the Eligible Accounts and Eligible Inventory of such
Borrower, subject to the Maximum Revolver Amount for all Advances and other
Credit Extensions to all Borrowers combined. Advances borrowed pursuant to this
Section may be repaid and, subject to the terms and conditions hereof,
reborrowed during the term of this Agreement.
          2.5 Term Loan Interest Rate. Section 2.3(a) of the Loan Agreement
hereby is amended and restated in its entirety to read as follows:
          (a) Interest Rate; Obligations. Subject to Section 2.3(b), the amounts
outstanding under the Revolving Line and the Term Loan shall accrue interest at
a per annum rate equal to the Loan Margin above the Prime Rate, which interest
shall be payable monthly. As used herein, the term “Loan Margin” means, as of
any date of determination: (a) at all times during the period that Phase I is in
effect, 1.00 percentage points; and (b) at all times during the period that
Phase II is in effect, 1.50 percentage points.
          2.6 Additional Conforming Modifications relative to the Term Loan.
               (a) The defined term “Credit Extension” set forth in Section 13.1
of the Loan Agreement hereby is amended and restated in its entirety to read as
follows:
               “Credit Extension” is any Advance, any Term Loan, or any other
extension of credit by Bank for Borrower’s benefit.

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               (b) The following new defined terms hereby are added, in proper
alphabetical order, to Section 13.1 of the Loan Agreement:
     “Term Loan” has the meaning ascribed to such term in Section 2.1.5. hereof.
     “Term Loan Draw Period” has the meaning ascribed to such term in Section
2.1.5. hereof
     3. Limitation of Amendments.
          3.1 The amendments set forth in Section 2, above, 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.
     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 Documents, as amended by
this Amendment;
          4.3 The organizational documents of Borrower delivered to Bank on the
Effective Date 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 Documents, as amended
by this Amendment, have been duly authorized;

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          4.5 The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Documents, 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 Documents, 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 either 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. Fee. In consideration for Bank entering into this Amendment, Borrower
shall pay Bank a fee of $16,000 concurrently with the execution and delivery of
this Amendment, which fee shall be non-refundable and in addition to all
interest and other fees payable to Bank under the Loan Documents. Bank is
authorized to charge said fee to Borrower’s loan account.
     6. 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.
     7. Effectiveness. This Amendment shall be deemed effective upon the due
execution and delivery to Bank of this Amendment by each party hereto.
[Remainder of page intentionally left blank; signature page immediately
follows.]

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     In Witness Whereof, the parties hereto have caused this Amendment to be
duly executed and delivered as of the date first written above.
ENDOCARE, INC.

            By:   /s/ Michael R. Rodriguez     Name:   Michael R. Rodriguez   
Title:   SVP, Finance & CFO     

SILICON VALLEY BANK

            By:   /s/ Kurt Miklinski     Name:   Kurt Miklinski    Title:   Vice
President     

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