Exhibit 10.1

 

SIXTH AMENDMENT

TO

SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

This Sixth Amendment to Second Amended and Restated Loan and Security Agreement
(this “Amendment”) is entered into as of April 13, 2020, by and between Silicon
Valley Bank (“Bank”) and Sensus Healthcare, Inc. (f/k/a Sensus Healthcare, LLC),
a Delaware corporation (“Borrower”), whose address is 851 Broken Sound Parkway
NW, Suite 215, Boca Raton, FL 33487.

 

Recitals

 

A. Bank and Borrower have entered into that certain Second Amended and Restated
Loan and Security Agreement dated as of September 21, 2016 (as the same has been
and may from time to time be further amended, modified, supplemented or
restated, 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 (i) increase the
amount of the Revolving Line, (ii) extend the maturity date, and (iii) make
certain other revisions to the Loan Agreement 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.

 

2. Amendments to Loan Agreement.

 

2.1 Section 2.3 (Payment of Interest on the Credit Extensions). Section 2.3(a)
is amended in its entirety and replaced with the following:

 

(a) Interest Rate.

 

(i) Advances. Subject to Section 2.3(b), the principal amount outstanding under
the Revolving Line (other than Non-Formula Advances) shall accrue interest at a
floating per annum rate equal to (A) during any Streamline Period, the greater
of (1) three-quarters of one percentage point (0.75%) above the Prime Rate and
(2) four percent (4.00%), and (B) during any Non-Streamline Period, the greater
of (1) one and one-half percentage points (1.50%) above the Prime Rate and (2)
four and three-quarters percent (4.75%), in any case, which interest shall be
payable monthly in accordance with Section 2.3(d) below.

 

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(ii) Non-Formula Advances. Subject to Section 2.3(b), the outstanding principal
amount of the Non-Formula Advances shall accrue interest at a floating per annum
rate equal to the greater of (A) one and one-half percentage points (1.50%)
above the Prime Rate and (B) four and three-quarters percent (4.75%), in either
case, which interest shall be payable monthly in accordance with Section 2.3(d)
below.

 

2.2 Section 2.4 (Fees). Section 2.4(e) is amended in its entirety and replaced
with the following:

 

(e) Revolving Line Facility Fee. A non-refundable facility fee of One Hundred
Thousand Dollars ($100,000), fully earned as of the Sixth Amendment Date, and
payable as follows: (i) Fifty Thousand Dollars ($50,000), shall be due and
payable on the Sixth Amendment Date, and (ii) Fifty Thousand Dollars ($50,000),
shall be due and payable on the first anniversary of the Sixth Amendment Date
(or any earlier termination of the Revolving Line);

 

2.3 Section 6.6 (Access to Collateral; Books and Records). Section 6.6 is
amended by adding the following sentence to the end thereof:

 

Borrower hereby acknowledges that such an audit shall be conducted prior to the
first Advance after the Sixth Amendment Date.

 

2.4 Section 6.8 (Operating Accounts). Section 6.8(a) is amended in its entirety
and replaced with the following:

 

(a) Borrower and its Subsidiaries shall maintain account balances in any of its
accounts at or through Bank representing at least seventy-five percent (75%) of
all deposit account balances of Borrower and such Subsidiaries at any financial
institution. Borrower and its Subsidiaries shall obtain any letters of credit
exclusively from Bank.

 

2.5 Section 7.11 (Subsidiary Assets). A new Section 7.11 is added to the Loan
Agreement as follows:

 

7.11 Subsidiary Assets. Permit its Subsidiaries’ total cash to exceed One
Hundred Thousand Dollars ($100,000) (exclusive of the One Hundred Thousand
Dollars ($100,000) on deposit at Bank Hapoalim as of the Sixth Amendment Date).

 

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2.6 Section 13 (Definitions). Clauses (b), (c), (d), (e), (q), and (v) of the
defined term “Eligible Accounts” in Section 13.1 are amended in their entirety
and replaced with the following:

 

(b) Accounts that the Account Debtor has not paid within ninety (90) days (one
hundred eighty (180) days for Accounts of SkinCure Oncology) of invoice date
regardless of invoice payment period terms;

 

(c) Accounts with credit balances over ninety (90) days (one hundred eighty
(180) days for Accounts of SkinCure Oncology) from invoice date;

 

(d) Accounts owing from an Account Debtor, if fifty percent (50%) or more of the
Accounts owing from such Account Debtor have not been paid within ninety (90)
days (one hundred eighty (180) days for Accounts of SkinCure Oncology) of
invoice date;

 

(e) Accounts owing from an Account Debtor which does not have its principal
place of business in the United States other than Accounts owing from Account
Debtors approved in writing by Bank on a case-by-case basis in its sole
discretion;

 

(q) Accounts for which Borrower has permitted Account Debtor’s payment to extend
beyond ninety (90) days (one hundred eighty (180) days for Accounts of SkinCure
Oncology);

 

(v) Accounts owing from an Account Debtor, whose total obligations to Borrower
exceed twenty-five percent (25%) of all Accounts (except for SkinCure Oncology,
for which such percentage is fifty percent (50%)), for the amounts that exceed
that percentage, unless Bank approves in writing; and

 

2.7 Section 13 (Definitions). The defined term “Permitted Investments” in
Section 13.1 is amended by deleting the word “and” from the end of clause (g),
replacing the period at the end of clause (h) with “; and”, and adding a new
clause (i) as follows:

 

(i) Investments (i) by Borrower in Subsidiaries not to exceed (A) One Million
Four Hundred Thousand Dollars ($1,400,000) in the aggregate for the 2020 fiscal
year, and (B) Seven Hundred Fifty Thousand Dollars ($750,000) in the aggregate
for the 2021 fiscal year and for each fiscal year thereafter, and (ii) by
Subsidiaries in other Subsidiaries or in Borrower.

 

2.8 Section 13 (Definitions). The following terms and their respective
definitions set forth in Section 13.1 are amended in their entirety and replaced
with the following:

 

“Non-Formula Amount” is an amount equal to (a) at all times that Borrower
maintains an Adjusted Quick Ratio, tested monthly, of at least 1.50 to 1.00,
Three Million Dollars ($3,000,000), and (b) at all times that Borrower maintains
an Adjusted Quick Ratio, tested monthly, of less than 1.50 to 1.00, Zero Dollars
($0).

 

“Revolving Line” is an aggregate principal amount equal to Ten Million Dollars
($10,000,000).

 

“Revolving Line Maturity Date” means April 1, 2022.

 

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2.9 Section 13 (Definitions). The following term and its definition are added to
Section 13.1, in appropriate alphabetical order, as follows:

 

“Sixth Amendment Date” is April 13, 2020.

 

2.10 Exhibit B (Compliance Certificate). Exhibit B to the Loan Agreement is
amended in its entirety and replaced with Exhibit B attached hereto.

 

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 Agreement, as amended by this
Amendment;

 

4.3 The organizational documents of Borrower most recently delivered to Bank
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 Agreement, as amended by this
Amendment, have been duly authorized;

 

4.5 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, 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;

 

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4.6 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, 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
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. Integration. This Amendment and the Loan Documents represent the entire
agreement about this subject matter and supersede prior negotiations or
agreements. All prior agreements, understandings, representations, warranties,
and negotiations between the parties about the subject matter of this Amendment
and the Loan Documents merge into this Amendment and the Loan Documents.

 

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. Electronic Execution of Documents. Each party hereto may execute this
Amendment by electronic means and recognizes and accepts the use of electronic
signatures and records by any other party hereto in connection with the
execution and storage hereof.

 

8. Effectiveness. This Amendment shall be deemed effective upon (a) the due
execution and delivery to Bank of this Amendment by each party hereto, (b)
Borrower’s payment of the facility fee in an amount equal to Fifty Thousand
Dollars ($50,000) pursuant to Section 2.4(e)(i) of the Loan Agreement (as
amended hereby), and (c) payment of Bank’s legal fees and expenses in connection
with the negotiation and preparation of this Amendment.

 

[Signature page 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.

 

BANK   BORROWER       Silicon Valley Bank   Sensus Healthcare, Inc.       By:
/s/ Dan Greaney   By: /s/ Javier Rampolla Name: Dan Greaney   Name: Javier
Rampolla Title: Vice President I, Life Sciences   Title: CFO

 

[Signature Page to Sixth Amendment to

Second Amended and Restated Loan and Security Agreement]

 

 

 

 

EXHIBIT B

 

COMPLIANCE CERTIFICATE

 

TO: SILICON VALLEY BANK Date: ________________ FROM: SENSUS HEALTHCARE, INC.  

 

 

The undersigned authorized officer of SENSUS HEALTHCARE, INC. (“Borrower”)
certifies that under the terms and conditions of the Second Amended and Restated
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 or any 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 Covenant  Required  Complies         Monthly financial statements with
Compliance Certificate  Monthly within 30 days  Yes No Annual financial
statement (CPA Audited) + CC  FYE within 150 days  Yes No 10-Q, 10-K and 8-K 
Monthly within 30 days  Yes No Borrowing Base Report  Monthly within 30 days 
Yes No A/R & A/P Agings, Deferred Revenue report  Monthly within 30 days  Yes No
Annual Financial Projections  FYE within 30 days and as updated  Yes No

 

Financial Covenant  Required  Actual  Complies            Maintain on a Monthly
Basis:          Minimum Adjusted Quick Ratio  1.35:1.00  ____:1.00  Yes No

 

Lockbox; Streamline Period; Non-Formula Availability  Applies AQR ≥ 2.00:1.00* 
No Lockbox Required; Streamline Period; Non-Formula = $3,000,000  Yes No
2.00:1.00 > AQR ≥ 1.50:1.00*  Lockbox Required; Streamline Period; Non-Formula =
$3,000,000  Yes No AQR < 1.50:1.00  Lockbox Required; Non-Streamline Period;
Non-Formula = $0  Yes No

 

*At all times during the applicable Testing Month

 

 

 

 

The following financial covenant analysis 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.”)

 

 

 

 

 

 

 

Sensus Healthcare, Inc.   BANK USE ONLY       By:            Received by:  
Name:       AUTHORIZED SIGNER Title:         Date:             Verified:
                         AUTHORIZED SIGNER             Date:              
Compliance Status: Yes No

 

 

 

 

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.Adjusted Quick Ratio

 

Required: 1.35:1.00 (For financial covenants)   2.00:1.00 (For Lockbox to not be
required)   1.50:1.00 (For Streamline Period eligibility (at all times during
the applicable Testing Month) and Non-Formula availability)

 

Actual:

 

A. Aggregate value of the unrestricted cash and Cash Equivalents of Borrower
maintained with Bank $_________       B. Aggregate value of the net billed
accounts receivable of Borrower $ _________       C. Quick Assets (the sum of
lines A and B) $ _________       D. Aggregate value of Obligations to Bank $
_________       E. Aggregate value of liabilities that should, under GAAP, be
classified as liabilities on Borrower’s consolidated balance sheet, including
all Indebtedness and the current portion of Subordinated Debt, and not otherwise
reflected in line D above that matures within one (1) year $ _________       F.
Current Liabilities (the sum of lines D and E) $ _________       G.

Aggregate value of all amounts received or invoiced by Borrower in advance of
performance under contracts and not yet recognized as revenue

$ _________       H. Line F minus line G $ _________       I. Adjusted Quick
Ratio (line C divided by line H) ____:1.00

 

Is line I equal to or greater than 1.35:1.00?

 

_______  No: Not in compliance   _______  Yes: In Compliance       Has line I
been equal to or greater than 2.00:1.00 at all times during the term of this
Agreement?       _______  No: Lockbox is required  

_______  Yes: Lockbox is not required

     

Was line I equal to or greater than 1.50:1.00 at all times during the applicable
Testing Month?

      _______  No: Non-Streamline Period; Non-Formula = $0   _______  Yes:
Streamline Period; Non-Formula = $3,000,000