Exhibit 10.1

JOINDER AND FIFTH LOAN MODIFICATION AGREEMENT

This Joinder and Fifth Loan Modification Agreement (this “Loan Modification
Agreement”) is entered into and effective as of January 30, 2013 (the “Fifth
Loan Modification Effective Date”), by and between (i) 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 380 Interlocken Crescent, Suite 600, Broomfield, Colorado 80021 (“Bank”),
(ii) ATRICURE, INC., a Delaware corporation with its chief executive office
located at 6217 Centre Park Drive, West Chester, Ohio 45069 (“Borrower”), and
(iii) ATRICURE, LLC, a Delaware limited liability company (“New Borrower”).

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 September 13, 2010,
evidenced by, among other documents, a certain Amended and Restated Loan and
Security Agreement dated as of September 13, 2010, between Borrower and Bank, as
further amended by a certain First Loan Modification Agreement entered into and
effective as of March 15, 2011, as further amended by a certain Second Loan
Modification Agreement, entered into and effective as of February 2, 2012, as
further amended by a certain Third Loan Modification Agreement, dated as of
May 31, 2012, and as further amended by a certain Fourth Loan Modification
Agreement, dated as of September 26, 2012 (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 described (i) in the Loan Agreement; (ii) in a certain
Export-Import Bank Loan and Security Agreement, dated as of September 13, 2010,
as further amended by a certain Export-Import Bank First Loan Modification
Agreement entered into and effective as of March 15, 2011, and as further
amended by a certain Export-Import Bank Second Loan Modification Agreement,
dated as of February 2, 2012 (as amended, the “EXIM Loan Agreement”); and
(iii) in a certain Intellectual Property Security Agreement dated as of May 1,
2009 (the “IP Agreement”, and together with any other collateral security
granted to Bank, the “Security Documents”).

Hereinafter, the Security Documents, together with the Existing Loan Agreement
and all other documents evidencing or securing the Obligations shall be referred
to as the “Existing Loan Documents”.

3. JOINDER AND ASSUMPTION. New Borrower is a wholly owned Subsidiary of
Borrower. New Borrower hereby joins the Loan Agreement and each of the other
appropriate Existing Loan Documents, and agrees to comply with and be bound by
all of the terms, conditions and covenants of the Loan Agreement and each of the
other appropriate Existing Loan Documents, as if New Borrower were originally
named a “Borrower” and/or a “Debtor” therein. Without limiting the generality of
the preceding sentence, New Borrower hereby assumes and agrees to pay and
perform when due all present and future indebtedness, liabilities and
obligations of Borrower under the Loan Agreement, including, without limitation,
the Obligations. From and after the date hereof, all references in the Existing
Loan Documents to “Borrower” and/or “Debtor” shall be deemed to refer to and
include New Borrower. Further, all present and future Obligations of Borrower
shall be deemed to refer to all present and future Obligations of New Borrower.
New Borrower acknowledges that the Obligations are due and owing to Bank from
Borrower including, without limitation, New Borrower, without any defense,
offset or counterclaim of any kind or nature whatsoever as of the date hereof.

4. GRANT OF SECURITY INTEREST. To secure the payment and performance of all of
the Obligations, New Borrower hereby grants to Bank a continuing lien upon and
security interest in all of New Borrower’s now existing or hereafter arising
rights and interest in the Collateral, whether now owned or existing or
hereafter created, acquired, or arising, and wherever located, including,
without limitation, all of New Borrower’s assets listed on Exhibit A attached
hereto and all of New Borrower’s books and records relating to the foregoing and
any and all claims, rights and interests in any of the above and all
substitutions for, additions, attachments, accessories, accessions and
improvements to and replacements, products, proceeds and insurance proceeds of
any or all of the foregoing. New Borrower represents, warrants, and covenants
that the security interest granted herein is and shall at all times continue to
be a first priority perfected security interest in the Collateral (subject only
to Permitted Liens that may have superior priority to Bank’s Lien under the Loan
Agreement). If New Borrower shall acquire a

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commercial tort claim, such New Borrower shall promptly notify Bank in a writing
signed by such New Borrower of the general details thereof and grant to Bank in
such writing a security interest therein and in the proceeds thereof, all upon
the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to Bank. New Borrower further covenants and agrees that
by its execution hereof it shall provide all such information, complete all such
forms, and take all such actions, and enter into all such agreements, in form
and substance reasonably satisfactory to Bank that are reasonably deemed
necessary by Bank in order to grant and continue a valid, first perfected
security interest to Bank in the Collateral. New Borrower hereby authorizes Bank
to file financing statements, without notice to any Borrower, with all
appropriate jurisdictions in order to perfect or protect Bank’s interest or
rights hereunder, including a notice that any disposition of the Collateral, by
either any Borrower or any other Person, may be deemed to violate the rights of
Bank under the Code. Such financing statements may indicate the Collateral as
“all assets of the Debtor” or words of similar effect, or as being of an equal
or lesser scope, or with greater detail, all in Bank’s discretion.

5. SUBROGATION AND SIMILAR RIGHTS. Borrower (in each case including, without
limitation, New Borrower) waives any suretyship defenses available to it under
the Code or any other applicable law. Borrower waives any right to require Bank
to: (i) proceed against any other Borrower or any other Person; (ii) proceed
against or exhaust any security; or (iii) pursue any other remedy. Bank may
exercise or not exercise any right or remedy it has against any Borrower or any
security it holds (including the right to foreclose by judicial or non-judicial
sale) without affecting any Borrower’s liability. Notwithstanding any other
provision of this Loan Modification Agreement, the Loan Agreement, or any other
Loan Documents, Borrower irrevocably subordinates to the prior payment in full
of the Obligations and the termination of the Bank’s commitment to make Credit
Extensions to Borrower and agrees not to assert or enforce prior to the payment
in full of the Obligations and the termination of the Bank’s commitment to make
Credit Extensions to Borrower, all rights that it may have at law or in equity
(including, without limitation, any law subrogating such Borrower to the rights
of Bank under the Loan Agreement), to seek contribution, indemnification or any
other form of reimbursement from any other Borrower or any other Person now or
hereafter primarily or secondarily liable for any of the Obligations, for any
payment made by a Borrower with respect to the Obligations in connection with
the Loan Agreement or otherwise and all rights that it might have to benefit
from, or to participate in, any security for the Obligations as a result of any
payment made by any Borrower with respect to the Obligations in connection with
the Loan Agreement or otherwise. If any payment is made to any Borrower in
contravention of this section, such Borrower shall hold such payment in trust
for Bank and such payment shall be promptly delivered to Bank for application to
the Obligations, whether matured or unmatured. Either Borrower may, acting
singly, request Credit Extensions under the Loan Agreement. Each Borrower hereby
appoints the other as agent for the other for all purposes under the Loan
Agreement, including with respect to requesting Credit Extensions thereunder.
Each Borrower shall be jointly and severally obligated to repay all Credit
Extensions made under the Loan Agreement or any other Loan Documents, regardless
of which Borrower actually received said Credit Extension, as if each Borrower
directly received all Credit Extensions.

6. REPRESENTATIONS AND WARRANTIES. Except as described in the revised Perfection
Certificate delivered in connection herewith, Borrower hereby represents and
warrants to Bank that all representations and warranties in the Loan Documents
made on the part of any Borrower are true and correct on the date hereof with
respect to New Borrower, with the same force and effect as if New Borrower were
originally named as “Borrower” in the Loan Documents. In addition, Borrower and
New Borrower hereby represent and warrant to Bank that this Loan Modification
Agreement has been duly executed and delivered by Borrower and New Borrower, and
constitutes their legal, valid and binding obligation, enforceable against each
in accordance with its terms, except as may be limited by applicable bankruptcy
or insolvency laws or laws affecting the rights of creditors generally or by
principals of equity. Hereafter, each reference to “Borrower” and/or “Debtor”)
in any Loan Document shall be deemed to reference both Borrower and New
Borrower.

 

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7. DESCRIPTION OF CHANGE IN TERMS.

 

  A. Modifications to Loan Agreement.

 

  1 The Loan Agreement shall be amended by deleting the following text appearing
as Section 6.2(f) thereof:

“(f) prior to the end of each fiscal year of Borrower, (A) annual operating
budgets (including income statements, balance sheets and cash flow statements,
by month) for the upcoming fiscal year of Borrower, and (B) annual financial
projections for the following fiscal year (on a quarterly basis) as approved by
Borrower’s board of directors, together with any related business forecasts used
in the preparation of such annual financial projections; and”

and inserting in lieu thereof the following:

“(f) as soon as available, but not more than thirty (30) days after the end of
each fiscal year of Borrower, (A) annual operating budgets (including income
statements, balance sheets and cash flow statements, by month) for the upcoming
fiscal year of Borrower, and (B) annual financial projections for the following
fiscal year (on a quarterly basis) as approved by Borrower’s board of directors,
together with any related business forecasts used in the preparation of such
annual financial projections; and”

 

  2 The Loan Agreement shall be amended by deleting the following text appearing
as Section 6.9(d) thereof:

“(d) Minimum EBITDA. Achieve, measured as of the end of each month, for the
trailing six-month period ending as of the end of such month, EBITDA of at least
the following minimum amounts for the months ending during the following periods
(amounts in parentheses below represent negative numbers):

 

Period    Minimum EBITDA  

January 31, 2012

   ($ 2,500,000 ) 

February 29, 2012 through and including April 30, 2012

   ($ 3,500,000 ) 

May 31, 2012 through and including July 31, 2012

   ($ 3,000,000 ) 

August 31, 2012 through and including October 31, 2012

   ($ 2,500,000 ) 

November 30, 2012 through and including January 31, 2013

   ($ 1,000,000 ) 

February 28, 2013 through and including May 31, 2013

   ($ 2,000,000 ) 

June 30, 2013 and each monthly period ending thereafter

   ($ 1,000,000 )” 

and inserting in lieu thereof the following:

“(d) Minimum EBITDA. Achieve, measured as of the end of each month, for the
trailing six-month period ending as of the end of such month, EBITDA of at least
the following minimum amounts for the months ending during the following periods
(amounts in parentheses below represent negative numbers):

 

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Period    Minimum EBITDA  

December 31, 2012 through and including January 31, 2013

   ($ 3,000,000 ) 

February 29, 2013 through and including April 30, 2013

   ($ 3,500,000 ) 

May 31, 2013 through and including June 30, 2013

   ($ 3,000,000 ) 

July 31, 2013 through and including August 31, 2013

   ($ 2,500,000 ) 

September 30, 2013 through and including October 31, 2013

   ($ 1,000,000 ) 

November 30, 2013 and each monthly period ending thereafter

   $ 1.00”   

 

  3 The Loan Agreement shall be amended by inserting the following new clause
(d) immediately following clause (c) in Section 7.1 thereof:

“(d) Transfers between or among any two (2) or more Borrowers.”

 

  4 The Loan Agreement shall be amended by inserting the following new clause
(a)(v) immediately following clause (a)(iv) in Section 7.1 thereof:

“(v) any Borrower which is a Subsidiary of any other Borrower may pay dividends
or make distributions or payments to such other Borrower or redeem, retire or
repurchase from such other Borrower its capital stock or membership interest.”

 

  5 The Loan Agreement shall be amended by inserting the following text at the
end of clause (g) in the definition of “Permitted Indebtedness” in Section 13.1
thereof:

“(iii) Indebtedness of any Borrower owed to any other Borrower.”

 

  6 The Loan Agreement shall be amended by inserting the following text at the
end of clause (f) in the definition of “Permitted Investments” in Section 13.1
thereof:

“(iii) Investments of any Borrower in any other Borrower.”

 

  7 The Loan Agreement shall be amended by inserting the following definition in
its appropriate alphabetical order in Section 13.1 thereof:

“Fifth Loan Modification Effective Date” is January 30, 2013.

 

  8 The Loan Agreement shall be amended by deleting Exhibit B attached thereto
and inserting Exhibit B attached hereto in lieu thereof:

8. CONDITIONS PRECEDENT. As a condition precedent to the effectiveness of this
Loan Modification Agreement and the Bank’s obligation to make further Advances
under the Revolving Line, the Bank shall have received the following documents
prior to or concurrently with this Loan Modification Agreement, each in form and
substance satisfactory to the Bank:

 

  A. this Loan Modification Agreement duly executed on behalf of each Borrower
(including, without limitation, New Borrower) and signed by way of
acknowledgement by Guarantor;

 

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  B. Bank shall have received copies, certified by a duly authorized officer of
each Borrower (including, without limitation, New Borrower), to be true and
complete as of the date hereof, of each of (i) the governing documents of each
Borrower (including, without limitation, New Borrower) as in effect on the date
hereof, (ii) the resolutions of each Borrower (including, without limitation,
New Borrower) authorizing the execution and delivery of this Loan Modification
Agreement, the other documents executed in connection herewith and each
Borrower’s performance of all of the transactions contemplated hereby, and
(iii) an incumbency certificate giving the name and bearing a specimen signature
of each individual who shall be so authorized on behalf of each Borrower
(including, without limitation, New Borrower);

 

  C. a good standing certificate of each Borrower (including, without
limitation, New Borrower), certified by the Secretary of State of the state of
incorporation of each respective Borrower (including, without limitation, New
Borrower), together with a certificate of foreign qualification from the
Secretary of State (or comparable governmental entity) of each state in which
each Borrower (including, without limitation, New Borrower) is qualified to
transact business as a foreign entity, if any, in each case dated as of a date
no earlier than thirty (30) days prior to the date hereof;

 

  D. certified copies, dated as of a recent date, of financing statement and
other lien searches of each Borrower (including, without limitation, New
Borrower), as Bank may request and which shall be obtained by Bank, accompanied
by written evidence (including any UCC termination statements) that the Liens
revealed in any such searched either (i) will be terminated prior to or in
connection with the Loan Modification Agreement, or (ii) in the sole discretion
of Bank, will constitute Permitted Liens;

 

  E. a filed copy, which shall be filed by Bank, acknowledged by the appropriate
filing office in the State of Delaware, of a UCC Financing Statement, naming New
Borrower as “Debtor” and Bank as “Secured Party”;

 

  F. a completed Perfection Certificate executed by New Borrower, together with
the duly executed original signatures thereto;

 

  G. evidence satisfactory to Bank that the insurance policies required for New
Borrower are in full force and effect, together with appropriate evidence
showing lender loss payable and/or additional insured clauses or endorsements in
favor of Bank; and

 

  H. such other documents as Bank may reasonably request.

9. BORROWING BASE RESTRICTIONS. Until the Collateral of New Borrower is subject
only to the first-priority Lien in favor of Bank and is not subject to any other
Lien (other than Permitted Liens), the Accounts of Account Debtor’s of New
Borrower will not be considered “Eligible Accounts” and none will be included in
any Borrowing Base Certificate submitted by Borrower.

10. ACKNOWLEDGMENT; WAIVER. Bank (a) acknowledges and agrees that M. Andrew Wade
is a person reasonably acceptable to the Bank as Chief Financial Officer of
Atricure, Inc. for purposes of Section 7.2(c)(i) of the Loan Agreement; and
(b) waives any Default or Event of Default (if any), arising under such
Section 7.2(c)(i), arising as a result of the failure of Atricure, Inc. to
appoint a Chief Financial Officer reasonably acceptable to Bank prior to
November 25, 2012.

11. FEES. Borrower shall pay to Bank a modification fee equal to Twelve Thousand
Five Hundred Dollars ($12,500.00), which fee shall be due on the date hereof and
shall be deemed fully earned and non-refundable as of the date hereof. In
addition, without duplication of the anniversary fees payable pursuant to the
Second Loan Modification Agreement, dated as of February 2, 2012, Borrower shall
pay to Bank an anniversary fee equal to Fifty Thousand Dollars ($50,000) on
May 1, 2013. Borrower shall also reimburse Bank for all reasonable legal fees
and expenses incurred in connection with this amendment to the Existing Loan
Documents.

 

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12. AUTHORIZATION TO FILE. Borrower hereby authorizes Bank to file UCC financing
statements without notice to Borrower, with all appropriate jurisdictions, as
Bank deems appropriate, in order to further perfect or protect Bank’s interest
in the Collateral, including a notice that any disposition of the Collateral, by
either the Borrower or any other Person, shall be deemed to violate the rights
of the Bank under the Code.

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

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

15. 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.

16. 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 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.

17. RIGHT OF SET-OFF. In consideration of Bank’s agreement to enter into this
Loan Modification Agreement, Borrower hereby reaffirms and hereby grants to
Bank, a lien, security interest and right of set off as security for all
Obligations to Bank, whether now existing or hereafter arising upon and against
all deposits, credits, collateral and property, now or hereafter in the
possession, custody, safekeeping or control of Bank or any entity under the
control of Silicon Valley Bank (including a Bank subsidiary) or in transit to
any of them. At any time after the occurrence and during the continuance of an
Event of Default, without demand or notice, Bank may set off the same or any
part thereof and apply the same to any liability or obligation of Borrower even
though unmatured and regardless of the adequacy of any other collateral securing
the loan. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

18. CONFIDENTIALITY. Without limiting Section 12.10 of the Loan Agreement (which
is and shall remain in full force and effect), Bank may use confidential
information for the development of databases, reporting purposes, and market
analysis, so long as such confidential information is aggregated and anonymized
prior to distribution unless otherwise expressly permitted by Borrower. The
provisions of the immediately preceding sentence shall survive the termination
of the Loan Agreement.

19. JURISDICTION/VENUE. California law governs the Loan Documents, including,
without limitation, this Loan Modification Agreement without regard to
principles of conflicts of law. Borrower and Bank each submit to the exclusive
jurisdiction of the State and Federal courts in Santa Clara County, California;
provided, however, that nothing in this Agreement shall be deemed to operate to
preclude Bank from bringing suit or taking other legal action in any other
jurisdiction to realize on the Collateral or any other security for the
Obligations, or to enforce a judgment or other court order in favor of Bank.
Borrower expressly submits and consents in advance to such jurisdiction in any
action or suit commenced in any such court, and Borrower hereby waives any
objection that it may have based upon lack of personal jurisdiction, improper
venue, or forum non conveniens and hereby consents to the granting of such legal
or equitable relief as is deemed appropriate by such court. Borrower hereby
waives

 

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personal service of the summons, complaints, and other process issued in such
action or suit and agrees that service of such summons, complaints, and other
process may be made by registered or certified mail addressed to Borrower at the
address set forth in, or subsequently provided by Borrower in accordance with,
Section 10 of the Loan Agreement and that service so made shall be deemed
completed upon the earlier to occur of Borrower’s actual receipt thereof or
three (3) days after deposit in the U.S. mails, proper postage prepaid.

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE
THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR
BASED UPON THIS LOAN MODIFICATION AGREEMENT, THE LOAN AGREEMENT, THE LOAN
DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF
DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES
TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS
COUNSEL.

WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR
RESPECTIVE RIGHT TO A TRIAL BY JURY, if the above waiver of the right to a trial
by jury is not enforceable, the parties hereto agree that any and all disputes
or controversies of any nature between them arising at any time shall be decided
by a reference to a private judge, mutually selected by the parties (or, if they
cannot agree, by the Presiding Judge of the Santa Clara County, California
Superior Court) appointed in accordance with California Code of Civil Procedure
Section 638 (or pursuant to comparable provisions of federal law if the dispute
falls within the exclusive jurisdiction of the federal courts), sitting without
a jury, in Santa Clara County, California; and the parties hereby submit to the
jurisdiction of such court. The reference proceedings shall be conducted
pursuant to and in accordance with the provisions of California Code of Civil
Procedure §§ 638 through 645.1, inclusive. The private judge shall have the
power, among others, to grant provisional relief, including without limitation,
entering temporary restraining orders, issuing preliminary and permanent
injunctions and appointing receivers. All such proceedings shall be closed to
the public and confidential and all records relating thereto shall be
permanently sealed. If during the course of any dispute, a party desires to seek
provisional relief, but a judge has not been appointed at that point pursuant to
the judicial reference procedures, then such party may apply to the Santa Clara
County, California Superior Court for such relief. The proceeding before the
private judge shall be conducted in the same manner as it would be before a
court under the rules of evidence applicable to judicial proceedings. The
parties shall be entitled to discovery which shall be conducted in the same
manner as it would be before a court under the rules of discovery applicable to
judicial proceedings. The private judge shall oversee discovery and may enforce
all discovery rules and orders applicable to judicial proceedings in the same
manner as a trial court judge. The parties agree that the selected or appointed
private judge shall have the power to decide all issues in the action or
proceeding, whether of fact or of law, and shall report a statement of decision
thereon pursuant to California Code of Civil Procedure § 644(a). Nothing in this
paragraph shall limit the right of any party at any time to exercise self-help
remedies, foreclose against collateral, or obtain provisional remedies. The
private judge shall also determine all issues relating to the applicability,
interpretation, and enforceability of this paragraph.

20. 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 Fifth Loan Modification
Effective Date.

 

BORROWER:   BANK: ATRICURE, INC.   SILICON VALLEY BANK By:   /s/ M. Andrew Wade
  By:   /s/ Tom Hertzberg Name: M. Andrew Wade   Name: Tom Hertzberg Title: Vice
President and Chief Financial Officer   Title: Relationship Manager

 

ATRICURE, LLC By:   /s/ M. Andrew Wade Name: M. Andrew Wade Title: Vice
President and Chief Financial Officer

The undersigned, Vice President and Chief Financial Officer of ATRICURE EUROPE,
B.V., a company organized under the laws of The Netherlands and a wholly owned
Subsidiary of Borrower, ratifies, confirms and reaffirms, all and singular, the
terms and conditions of (i) a certain Unconditional Guarantee dated as of
September 26, 2012 (the “Guaranty”) and (ii) a certain Guarantor Security
Agreement, dated as of September 26, 2012 (the “Guarantor Security Agreement”),
and acknowledges, confirms and agrees that the Guaranty and the Guarantor
Security Agreement shall remain in full force and effect and shall in no way be
limited by the execution of this Loan Modification Agreement, or any other
documents, instruments and/or agreements executed and/or delivered in connection
herewith.

 

ATRICURE EUROPE, B.V.

By

  /s/ M. Andrew Wade

Name: M. Andrew Wade

Title: Vice President and Chief Financial Officer

 

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EXHIBIT A

Collateral Description

The Collateral consists of all of Borrower’s right, title and interest in and to
the following personal property:

All goods, Accounts (including health-care receivables), Equipment, Inventory,
contract rights or rights to payment of money, leases, license agreements,
franchise agreements, General Intangibles, commercial tort claims, documents,
instruments (including any promissory notes), chattel paper (whether tangible or
electronic), cash, deposit accounts, fixtures, letters of credit rights (whether
or not the letter of credit is evidenced by a writing), securities, and all
other investment property, supporting obligations, and financial assets, whether
now owned or hereafter acquired, wherever located; and

all Borrower’s Books relating to the foregoing, and any and all claims, rights
and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

Notwithstanding the foregoing, the Collateral does not include more than
sixty-five percent (65%) of the presently existing and hereafter arising issued
and outstanding shares of capital stock owned by Borrower of any Foreign
Subsidiary which shares entitle the holder thereof to vote for directors or any
other matter (other than the capital stock of Atricure B.V., to the extent
contemplated by the Dutch Security Documents).

 

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EXHIBIT B

COMPLIANCE CERTIFICATE

 

TO:     SILICON VALLEY BANK

   Date:            

FROM: ATRICURE, INC. and ATRICURE, LLC

The undersigned authorized officer of AtriCure, Inc. (“Borrower”) certifies that
under the terms and conditions of the Loan and Security Agreement between
Borrower and Bank (as amended, 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 Transaction Reports    Non-Streamline: Weekly; Streamline: monthly
within 15 days    Yes   No Monthly payable & receivable items, check registers,
general ledger, & reconciliations    Monthly within 15 days    Yes   No Monthly
financial statements with Compliance Certificate    Monthly within 30 days   
Yes   No Annual financial statement (CPA Audited)    FYE within 120 days   
Yes   No Annual budgets and projections    30 days after FYE    Yes   No

 

Financial Covenants

   Required      Actual     

Complies

Maintain on a Monthly Basis:

        

Minimum Liquidity Ratio (when required)

     1.75:1.00                     :1.00       Yes   No

Maximum Capital Expenditures

     *       $                        Yes   No

Minimum Fixed Charge Coverage Ratio (when required)

     1.50:1.00                     :1.00       Yes   No

Minimum EBITDA

     *       $                        Yes   No

 

* See Loan Agreement

 

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Performance Pricing

   Applies

Liquidity Ratio:

     

greater or equal to 2.50 to 1.00

   First Tier Rate    Yes   No

greater or equal to 2.00 to 1.00, but less than 2.50 to 1.00

   Second Tier Rate    Yes   No

Less than 2.00 to 1.00, or Event of Default exists

   Regular Rate    Yes   No

 

    

Streamline Period

    

Streamline Requirement Met?

   See Loan Agreement    Yes   No

Borrower is party to, or bound by, the following material Restricted Licenses
that were not previously noted in the Perfection Certificate or a prior
Compliance Certificate:

                                                                   
                                         
                                                      .

Borrower intends to register the following copyrights or mask works with the
United States Copyright Office that were not previously noted in a prior
Compliance Certificate:

                                                                   
                                         
                                                      .

Borrower has (i) obtained the following Patents, registered Trademarks,
registered Copyrights, registered mask work, or any pending application for any
of the foregoing, whether as owner, licensee or otherwise, and (ii) applied for
the following Patents and the registration of the following Trademarks; in each
case, that were not previously noted in the Perfection Certificate or a prior
Compliance Certificate (to be reported on as part of the Compliance Certificate
due following the last month of each fiscal quarter):

                                                                   
                                         
                                                      .

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.”)

 

 

 

 

 

 

 

ATRICURE, INC.

ATRICURE, LLC

    BANK USE ONLY       Received by:       AUTHORIZED SIGNER By:         Date:  
  Name:  

 

      Title:  

 

    Verified:  

 

      AUTHORIZED SIGNER       Date:  

 

      Compliance Status:         Yes             No

 

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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 Liquidity Ratio (Section 6.9(a))

Required: Maintain a minimum Liquidity Ratio of at least 1.75 to 1.00 at all
times, it being understood that Quarter-end Advances shall be excluded from the
foregoing calculation; provided, however, that the foregoing Liquidity Ratio
covenant will no longer be tested (other than to determine the interest rate
applicable to the Revolving Line as described in Section 2.3(a)), for any period
commencing on the date that Borrower provides Bank evidence satisfactory to
Bank, in its reasonable discretion, that Borrower has achieved a Fixed Charge
Coverage Ratio, measured on a trailing twelve month basis, as of the last day of
each of the immediately preceding four consecutive fiscal quarters of greater
than 1.50:1.00 (the “FCCR Triggering Event”).

Actual:

 

A.    Borrower’s unrestricted cash (and Cash Equivalents) held with Bank and its
Affiliates      $                B.    Borrower’s Eligible Accounts and Eligible
EXIM Accounts      $                C.    Line A plus line B      $            
   D.    All outstanding liabilities and obligations of Borrower owed to Bank,
including, without limitation or duplication, the face amount of any outstanding
Letters of Credit (including drawn but unreimbursed Letters of Credit but
excluding the undrawn portion of the Revolving Line) (for purposes of clarity,
the parties acknowledge that Borrower’s cash or Cash Equivalents shall not be
considered to be restricted by reason of the fact that they are subject to
Bank’s Lien)      $                E.    Liquidity Ratio (line C divided by line
D)            :1.00   

Is line E greater than or equal to 1.75:1.00?

 

             No, not in compliance

               Yes, in compliance

 

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II. Maximum Capital Expenditures (Section 6.9(b))

Required: Borrower shall not contract for, purchase or make any expenditure or
commitments for Capital Expenditures in an aggregate amount in excess of Four
Million Dollars ($4,000,000) for Borrower’s fiscal year ending December 31,
2012, and an amount for each of Borrower’s fiscal years ending thereafter as
Borrower and Bank shall agree; provided that if Borrower and Bank fail to agree
on the amount with respect to any such year, such amount shall be deemed to be
Four Million Dollars ($4,000,000) for such year; provided, further, that for
each fiscal year, any Capital Expenditure amount not used by the last day of the
respective fiscal year shall be added to the permitted Capital Expenditure
amount for the next succeeding fiscal year Actual:

 

A.    Capital expenditure limit provided for in Section 6.9(b) (including any
prior-year rollover amount)      $                B.    Capital expenditures for
fiscal year      $                C.    Line A minus line B      $            
  

Is line C greater than or equal to zero?

 

             No, not in compliance

                Yes, in compliance

 

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III. Minimum Fixed Charge Coverage Ratio (Section 6.9(c))

Required: Achieve, measured on a trailing twelve month basis, as of the last day
of each monthly period, a Fixed Charge Coverage Ratio of not less than
1.50:1.00; provided, however, that until the occurrence of the FCCR Triggering
Event described in Section 6.9(a) above, the Fixed Charge Coverage Ratio shall
be measured solely to determine whether the FCCR Triggering Event has occurred
and shall not be deemed a covenant; provided further, that upon the occurrence
of the FCCR Triggering Event, the Liquidity Ratio covenant contained in
Section 6.9(a) shall no longer be tested (other than to determine the interest
rate applicable to the Revolving Line as described in Section 2.3(a)), and
achievement of the Fixed Charge Coverage Ratio of not less than 1.50:1.00
(tested monthly, on a trailing twelve month basis as of the last day of each
monthly period), shall thereafter be required.

Actual:

 

A.    EBITDA (as defined in the Loan Agreement)      $                    B.   
Cash income taxes paid      $                    C.    Unfinanced Capital
Expenditures      $                    D.    Line A minus line B minus line C   
  $                    E.    Current portion of long term debt, other than DOJ
Obligations to the extent included in the calculation of the current portion of
long term debt      $                    F.   

Interest Expense, other than Interest Expense on the DOJ Obligations, to the
extent included

in the calculation of Interest Expense

     $                    G    Line E plus line F      $                    H.
   Fixed Charge Coverage Ratio (line D divided by line G)              :1.00   

Is line H greater than or equal to 1.50:1.00?

 

              No, not in compliance

                Yes, in compliance

 

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IV. Minimum EBITDA (Section 6.9(d))

Required: equal to or greater than (negative amount no worse than) the amounts
set forth in Section 6.9(d) of the Loan Agreement.

Actual:

 

A.    EBITDA (as defined in the Loan Agreement)      $                B.   
Minimum required per Section 6.9(d)      $                C.    Line A minus
line B      $               

Is line C greater than or equal to zero?

 

             No, not in compliance

                Yes, in compliance

 

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