Exhibit 10.1

SECOND LOAN MODIFICATION AGREEMENT

This Second Loan Modification Agreement (this “Loan Modification Agreement”) is
entered into as of August 13, 2018, by and among (a) SILICON VALLEY BANK, a
California corporation, with its principal place of business at 3003 Tasman
Drive, Santa Clara, California 95054 and with a loan production office located
at 275 Grove Street, Suite 2-200, Newton, Massachusetts 02466 (“Bank”) and
(b)(i) ICAD, INC., a Delaware corporation (“ICAD”), (ii) XOFT, INC., a Delaware
corporation (“Xoft”) and (iii) XOFT SOLUTIONS, LLC, a Delaware limited liability
company (“Xoft Solutions”, and together with ICAD and Xoft, individually and
collectively, jointly and severally, “Borrower”) whose address is 98 Spit Brook
Road, Suite 100, Nashua, New Hampshire 03062.

1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and obligations which may be owing by Borrower to Bank, Borrower is
indebted to Bank pursuant to a loan arrangement dated as of August 7, 2017,
evidenced by, among other documents, a certain Loan and Security Agreement dated
as of August 7, 2017, between Borrower and Bank, as amended by a certain First
Loan Modification Agreement dated as of March 22, 2018 (as amended, the “Loan
Agreement”). Capitalized terms used but not otherwise defined herein shall have
the same meaning as in the Loan Agreement.

2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as defined in the Loan Agreement (together with any other agreements
granting a security interest in collateral to Bank, the “Security Documents”).
Hereinafter, the Security Documents, together with all other documents
evidencing or securing the Obligations shall be referred to as the “Existing
Loan Documents”.

3. DESCRIPTION OF CHANGE IN TERMS.

 

  A.

Modifications to Loan Agreement.

 

  1

The Loan Agreement shall be amended by deleting the following text, appearing in
Section 3.4(a) thereof:

“In connection with any such notification, Borrower must promptly deliver to
Bank by electronic mail or through Bank’s online banking program such reports
and information, including without limitation, sales journals, cash receipts
journals, accounts receivable aging reports, as Bank may request in its
reasonable discretion.”

and inserting in lieu thereof the following:

“In connection with any such notification, Borrower must promptly deliver to
Bank by electronic mail or through Bank’s online banking program such reports
and information, including without limitation, Borrowing Base Reports, sales
journals, cash receipts journals, accounts receivable aging reports, as Bank may
request in its reasonable discretion.”

 

  2

The Loan Agreement shall be amended by deleting the following text, appearing in
Section 6.2 thereof:

“(a) within thirty (30) days after the end of each month, a Borrowing Base
Report (and any schedules related thereto and including any other information
requested by Bank with respect to Borrower’s Accounts, including a detailed
accounts receivable ledger, in a form of presentation reasonably acceptable to
Bank);”

 

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and inserting in lieu thereof the following:

“(a) (i) with each request for an Advance and (ii) within thirty (30) days after
the end of each month, a Borrowing Base Report (and any schedules related
thereto and including any other information requested by Bank with respect to
Borrower’s Accounts, including a detailed accounts receivable ledger, in a form
of presentation reasonably acceptable to Bank);”

 

  3

The Loan Agreement shall be amended by (i) deleting the “and” appearing at the
end of subjection (i), (ii) deleting the “.” appearing at the end of subsection
(j) and inserting in lieu thereof “; and”, and (iii) inserting the following to
appear as Section 6.2(k):

“(k) prompt written notice of any changes to the beneficial ownership
information set out in the CDD Attestation delivered to Bank on August 13, 2018.
Borrower understands and acknowledges that Bank relies on such true, accurate
and up-to-date beneficial ownership information to meet Bank’s regulatory
obligations to obtain, verify and record information about the beneficial owners
of its legal entity customers.”

 

  4

The Loan Agreement shall be amended by deleting the following text, appearing in
Section 6.6 thereof:

“In the event Borrower and Bank schedule an audit more than ten (10) days in
advance, and Borrower cancels or seeks to or reschedules the audit with less
than ten (10) days written notice to Bank, then (without limiting any of Bank’s
rights or remedies) Borrower shall pay Bank a fee of One Thousand Dollars
($1,000.00) plus any out-of-pocket expenses incurred by Bank to compensate Bank
for the anticipated costs and expenses of the cancellation or rescheduling.”

and inserting in lieu thereof the following:

“In the event Borrower and Bank schedule an audit more than eight (8) days in
advance, and Borrower cancels or seeks to or reschedules the audit with less
than eight (8) days written notice to Bank, then (without limiting any of Bank’s
rights or remedies) Borrower shall pay Bank a fee of Two Thousand Dollars
($2,000.00) plus any out-of-pocket expenses incurred by Bank to compensate Bank
for the anticipated costs and expenses of the cancellation or rescheduling.”

 

  5

The Loan Agreement shall be amended by deleting the following text, appearing in
Section 6.9(b) thereof:

“(b) Eight Million Three Hundred Seventy-Three Thousand Dollars ($8,373,000.00)
for the trailing six (6) month period ending June 30, 2018; (c) Eight Million
Six Hundred Forty-Eight Thousand Dollars ($8,648,000.00) for the trailing six
(6) month period ending September 30, 2018; and (d) Nine Million Five Hundred
Seventeen Thousand Dollars ($9,517,000.00) for the trailing six (6) month period
ending December 31, 2018.”

and inserting in lieu thereof the following:

 

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“(b) Seven Million Five Hundred Thousand Dollars ($7,500,000.00) for the
trailing six (6) month periods ending June 30, 2018 and September 30, 2018; and
(c) Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000.00) for the
trailing six (6) month period ending December 31, 2018.”

 

  6

The Loan Agreement shall be amended by deleting the following text, appearing in
Section 6.12(b) thereof:

“Comply with the terms of the “Banking Terms and Conditions” and ensure that all
persons utilizing the online banking platform are duly authorized to do so by an
Administrator. Bank shall be entitled to assume the authenticity, accuracy and
completeness on any information, instruction or request for a Credit Extension
submitted via the online banking platform and to further assume that any
submissions or requests made via the online banking platform have been duly
authorized by an Administrator.”

and inserting in lieu thereof the following:

“Comply with the terms of Bank’s Online Banking Agreement as in effect from time
to time and ensure that all persons utilizing Bank’s online banking platform are
duly authorized to do so by an Administrator. Bank shall be entitled to assume
the authenticity, accuracy and completeness on any information, instruction or
request for a Credit Extension submitted via Bank’s online banking platform and
to further assume that any submissions or requests made via Bank’s online
banking platform have been duly authorized by an Administrator.”

 

  7

The Loan Agreement is amended by inserting the following new text, appearing at
the end of Section 7.2 thereof:

“If Borrower intends to add any new offices or business locations, including
warehouses, containing in excess of One Hundred Thousand Dollars ($100,000.00)
of Borrower’s assets or property, then Borrower will first receive the written
consent of Bank, and Borrower shall use reasonable commercial efforts to cause
the landlord of any such new offices or business locations, including
warehouses, to execute and deliver a landlord consent in form and substance
reasonably satisfactory to Bank.”

 

  8

The Loan Agreement shall be amended by deleting the following definitions,
appearing in Section 13.1 thereof:

““2018 Term Loan Final Payment” is a payment (in addition to and not a
substitution for the regular monthly payments of principal plus accrued
interest) due on the earliest to occur of (a) the 2018 Term Loan Maturity Date,
(b) as required by Section 2.3.1(d) or 2.3.1(e), (c) the repayment of the 2018
Term Loan Advance in full, or (d) the termination of this Agreement, in an
amount equal to the original aggregate principal amount of the 2018 Term Loan
Advance multiplied by eight percent (8.0%).”

““Administrator” is an individual that is named:

(a) as an “Administrator” in the “SVB Online Services” form completed by
Borrower with the authority to determine who will be authorized to use SVB
Online Services (as defined in the “Banking Terms and Conditions”) on behalf of
Borrower; and

 

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(b) as an Authorized Signer of Borrower in an approval by the Board.”

““Final Payment” is a payment (in addition to and not a substitution for the
regular monthly payments of principal plus accrued interest) due on the earliest
to occur of (a) the Term Loan Maturity Date, (b) as required by Section 2.3(d)
or 2.3(e), (c) the repayment of the Term Loan Advances in full, or (d) the
termination of this Agreement, in an amount equal to the original aggregate
principal amount of the Term Loan Advances multiplied by eight percent (8.0%).”

““Reserve Release Event” occurs (if ever) upon Bank’s receipt of evidence,
satisfactory to Bank in its sole discretion, that either (a) the Adjusted EBITDA
Event has occurred or (b) Borrower has been in compliance with all terms and
conditions of this Agreement at all times through and including September 30,
2018.”

and inserting in lieu thereof the following:

““2018 Term Loan Final Payment” is a payment (in addition to and not a
substitution for the regular monthly payments of principal plus accrued
interest) due on the earliest to occur of (a) the 2018 Term Loan Maturity Date,
(b) as required by Section 2.3.1(d) or 2.3.1(e), (c) the repayment of the 2018
Term Loan Advance in full, or (d) the termination of this Agreement, in an
amount equal to the original aggregate principal amount of the 2018 Term Loan
Advance multiplied by eight and one-half of one percent (8.50%).”

““Administrator” is an individual that is named:

(a) as an “Administrator” in the “SVB Online Services” form completed by
Borrower with the authority to determine who will be authorized to use SVB
Online Services (as defined in Bank’s Online Banking Agreement as in effect from
time to time) on behalf of Borrower; and

(b) as an Authorized Signer of Borrower in an approval by the Board.”

““Final Payment” is a payment (in addition to and not a substitution for the
regular monthly payments of principal plus accrued interest) due on the earliest
to occur of (a) the Term Loan Maturity Date, (b) as required by Section 2.3(d)
or 2.3(e), (c) the repayment of the Term Loan Advances in full, or (d) the
termination of this Agreement, in an amount equal to the original aggregate
principal amount of the Term Loan Advances multiplied by eight and one-half of
one percent (8.50%).”

““Reserve Release Event” occurs (if ever) upon Bank’s receipt of evidence,
satisfactory to Bank in its sole discretion, that both (a) the Reserve Adjusted
EBITDA Event has occurred and (b) Borrower has been in compliance with all terms
and conditions of this Agreement at all times through and including
September 30, 2018.”

 

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  9

The Loan Agreement shall be amended by inserting the following new definition,
appearing alphabetically in Section 13.1 thereof:

““Reserve Adjusted EBITDA Event” is Bank’s receipt of evidence, satisfactory to
Bank in its reasonable discretion, that Borrower had, for a trailing three
(3) month period ending on any calendar month occurring after the First LMA
Effective Date but on or prior to July 31, 2018, Adjusted EBITDA of at least
($350,000.00).”

 

  10

The Compliance Certificate appearing as Exhibit B to the Loan Agreement is
hereby deleted and replaced with the Compliance Certificate attached as Schedule
1 hereto.

4. FEES AND EXPENSES. Borrower shall reimburse Bank for all legal fees and
expenses incurred in connection with this amendment to the Existing Loan
Documents.

5. RATIFICATION OF PERFECTION CERTIFICATES.

(a) ICAD hereby ratifies, confirms and reaffirms, all and singular, the terms
and disclosures contained in a certain Perfection Certificate of ICAD dated as
of August 7, 2017 (the “ICAD Perfection Certificate”), and acknowledges,
confirms and agrees that the disclosures and information ICAD provided to Bank
in the ICAD Perfection Certificate have not changed, as of the date hereof.

(b) Xoft hereby ratifies, confirms and reaffirms, all and singular, the terms
and disclosures contained in a certain Perfection Certificate of Xoft dated as
of August 7, 2017 (the “Xoft Perfection Certificate”), and acknowledges,
confirms and agrees that the disclosures and information Xoft provided to Bank
in the Xoft Perfection Certificate have not changed, as of the date hereof.

(c) Xoft Solutions hereby ratifies, confirms and reaffirms, all and singular,
the terms and disclosures contained in a certain Perfection Certificate of Xoft
Solutions dated as of August 7, 2017 (the “Xoft Solutions Perfection
Certificate”), and acknowledges, confirms and agrees that the disclosures and
information Xoft Solutions provided to Bank in the Xoft Solutions Perfection
Certificate have not changed, as of the date hereof.

6. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.

7. RATIFICATION OF LOAN DOCUMENTS. Borrower hereby ratifies, confirms, and
reaffirms all terms and conditions of all security or other collateral granted
to Bank, and confirms that the indebtedness secured thereby includes, without
limitation, the Obligations.

8. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and agrees that
Borrower has no offsets, defenses, claims, or counterclaims against Bank with
respect to the Obligations, or otherwise, and that if Borrower now has, or ever
did have, any offsets, defenses, claims, or counterclaims against Bank, whether
known or unknown, at law or in equity, all of them are hereby expressly WAIVED
and Borrower hereby RELEASES Bank from any liability thereunder.

9. CONTINUING VALIDITY. Borrower understands and agrees that in modifying the
existing Obligations, Bank is relying upon Borrower’s representations,
warranties, and agreements, as set forth in the Existing Loan Documents. Except
as expressly modified pursuant to this Loan Modification Agreement, the terms of
the Existing

 

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Loan Documents remain unchanged and in full force and effect. Bank’s agreement
to modifications to the existing Obligations pursuant to this Loan Modification
Agreement in no way shall obligate Bank to make any future modifications to the
Obligations. Nothing in this Loan Modification Agreement shall constitute a
satisfaction of the Obligations. It is the intention of Bank and Borrower to
retain as liable parties all makers of Existing Loan Documents, unless the party
is expressly released by Bank in writing. No maker will be released by virtue of
this Loan Modification Agreement.

10. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Bank.

[The remainder of this page is intentionally left blank]

 

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This Loan Modification Agreement is executed as of the date first written above.

 

BANK: SILICON VALLEY BANK By  

/s/ Sam Subilia

Name:  

Sam Subilia

Title:  

VP

[Signatures continue on following page]

 

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BORROWER: ICAD, INC. By:  

/s/ Kenneth Ferry

Name:  

Kenneth Ferry

Title:  

CEO

XOFT, INC. By:  

/s/ Kenneth Ferry

Name:  

Kenneth Ferry

Title:  

CEO

XOFT SOLUTIONS, LLC By:  

/s/ Kenneth Ferry

Name:  

Kenneth Ferry

Title:  

CEO

 

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Schedule 1

EXHIBIT B

COMPLIANCE CERTIFICATE

 

TO:

  

SILICON VALLEY BANK

   Date:                                         

FROM:    

  

ICAD, INC., XOFT, INC. and XOFT SOLUTIONS, LLC

  

The undersigned authorized officer of ICAD, INC., XOFT INC. and XOFT SOLUTIONS,
LLC (individually and collectively, jointly and severally, “Borrower”) certifies
that under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for
the period ending                             with all required covenants except
as noted below, (2) there are no Events of Default, (3) all representations and
warranties in the Agreement are true and correct in all material respects on
this date except as noted below; provided, however, that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof; and
provided, further that those representations and warranties expressly referring
to a specific date shall be true, accurate and complete in all material respects
as of such date, (4) Borrower, and each of its Subsidiaries has timely filed all
required tax returns and reports, and Borrower has timely paid all foreign,
federal, state and local taxes, assessments, deposits and contributions owed by
Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of
the Agreement, and (5) no Liens have been levied or claims made against
Borrower, and each of its Subsidiaries relating to unpaid employee payroll or
benefits of which Borrower has not previously provided written notification to
Bank. Attached are the required documents supporting the certification. The
undersigned certifies that these are prepared in accordance with GAAP
consistently applied from one period to the next except as explained in an
accompanying letter or footnotes. The undersigned acknowledges that no
borrowings may be requested at any time or date of determination that Borrower
is not in compliance with any of the terms of the Agreement, and that compliance
is determined not just at the date this certificate is delivered. Capitalized
terms used but not otherwise defined herein shall have the meanings given them
in the Agreement.

Please indicate compliance status by circling Yes/No under “Complies” column.

 

Reporting Covenants

  

Required

  

Complies

Monthly financial statements with
Compliance Certificate    Monthly within 30 days    Yes No Form 10-Q   

Quarterly within 45 days (for first 3

quarters of a fiscal year)

   Yes No Form 10-K   

Annually within 90 days of the last

quarter of a fiscal year

   Yes No 10-Q, 10-K and 8-K    Within 5 days after filing with SEC (if not
previously delivered)    Yes No A/R & A/P Agings, Deferred Revenue report and
Account Debtor listing    Monthly within 30 days    Yes No Borrowing Base
Reports    (i) with each request for an Advance and (ii) monthly within 30 days
   Yes No Board approved Projections   

Within the earlier of 30 days of (i) Board approval or (ii) fiscal year end,
together

with any period updates

   Yes No

 

Streamline Period

   Required      Actual      Eligible  

Maintain:

        

Adjusted Quick Ratio (at all times, tested monthly)

     > 1.25 : 1.0                : 1.0        Yes     No      

 

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Financial Covenant

   Required     Actual      Complies  

Maintain as indicated:

       

Minimum Detection Revenue (six month period, tested quarterly)

   $               *    $                      Yes     No      

Adjusted EBITDA (six month period, tested quarterly)

   $               **    $          Yes     No      

 

*

As set forth in Section 6.9(b) of the Agreement.

**

As set forth in Section 6.9(c) of the Agreement.

The following financial covenant analyses and information set forth in Schedule
1 attached hereto are true and accurate as of the date of this Certificate.

The following are the exceptions with respect to the certification above: (If no
exceptions exist, state “No exceptions to note.”)

 

 

 

 

 

 

ICAD, INC.      BANK USE ONLY By:  

                    

    

Received by:                                                                 
     

AUTHORIZED SIGNER

Name:  

 

     Date:                                     
                                              Title:  

 

    

Verified:                                                                  
          

AUTHORIZED SIGNER

XOFT, INC.      Date:                                     
                                              By:  

                    

     Compliance Status:        Yes         No Name:  

 

    

Title:

 

 

     XOFT SOLUTIONS, LLC      By:  

                             

     Name:  

 

    

Title:

 

 

    

 

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Schedule 1 to Compliance Certificate

Financial Covenants of Borrower

In the event of a conflict between this Schedule and the Loan Agreement, the
terms of the Loan Agreement shall govern.

Dated:                                     

 

I.

Minimum Detection Revenue (Section 6.9(b)) (six month period, tested quarterly)

Required: Amount set forth below.

 

Six Month Period Ending    Minimum Detection Revenue  

March 31, 2018

   $ 8,622,000.00  

June 30, 2018

   $ 7,500,000.00  

September 30, 2018

   $ 7,500,000.00  

December 31, 2018

   $ 8,750,000.00  

Levels for 2019 through 2021 to be established in accordance with Section 6.9 of
the Agreement.

Actual:     $                                    

Is the actual amount equal to or greater than the required amount above?

                     No, not in
compliance                                        
                                                  Yes, in compliance

 

II.

Adjusted EBITDA (Section 6.9(c)) (six month period, tested quarterly)

Required: Amount set forth below (as calculated on a consolidated basis for
Borrower and its Subsidiaries).

 

Six Month Period Ending    Adjusted EBITDA  

March 31, 2018

   ($ 4,500,000.00 ) 

June 30, 2018

   ($ 3,750,000.00 ) 

September 30, 2018

   ($ 1,000,000.00 ) 

December 31, 2018

   $ 1.00  

Levels for 2019 through 2021 to be established in accordance with Section 6.9 of
the Agreement.

Actual:     $                                    

 

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A. Net Income

   $                    

B. To the extent included in the determination of Net Income

     

1.  Interest Expense

   $                       

2.  Taxes

   $                       

3.  Depreciation

   $                       

4.  Amortization

   $                       

5.  Non-cash stock compensation expense

   $                       

6.  Non-cash impairment of goodwill expense

   $                       

7.  Other non-cash items approved by writing by Bank on a case-by-case basis in
its good faith business discretion

   $                       

8.  The sum of lines 1 through 7

   $                    

C. Adjusted EBITDA (line A plus line B.8)

   $                    

Is the actual amount equal to or greater than the required amount above?

 

                      No, not in compliance

  

                      Yes, in compliance

 

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