EXHIBIT 10.1
Amendment
To
Loan and Security Agreement
     THIS AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered
as of June 2, 2009 by and between Silicon Valley Bank (“Bank”) and ATS Medical,
Inc., a Minnesota corporation (the “Borrower”) whose address is 3905 Annapolis
Lane, Suite 105, Minneapolis, Minnesota 55447.
Recitals
     A. Bank and Borrower have entered into that certain Loan and Security
Agreement dated as of July 28, 2004 (as amended, modified, supplemented or
restated 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 as 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 Amendment to Liquidity Ratio. A portion of Section 6.7(i) of the
Loan Agreement reads as follows:
       Commencing January 1, 2009 and each month ending thereafter:
  A ratio of (y) the sum of (1) unrestricted cash (and equivalents) of Borrower
on deposit with Bank plus (2)

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50% of Borrower’s accounts receivable arising from the sale or lease of goods,
or provision of services, in the ordinary course of business, (z) divided by
Indebtedness of Borrower to Bank for borrowed money, of equal to or greater than
2.00 to 1.00. Notwithstanding the foregoing, if the amount of Borrower’s
Eligible Accounts ever becomes less than 50% of Borrower’s accounts receivable
arising from the sale or lease of goods, or provision of services, in the
ordinary course of business, then part “2” above shall be deemed to read
“(2) the lesser of the amount of Borrower’s Eligible Accounts or 50% of
Borrower’s accounts receivable arising from the sale or lease of goods, or
provision of services, in the ordinary course of business”, unless the Bank
shall consent in writing otherwise.”
The language “equal to or greater than 2.00 to 1.00” contained in said portion
of Section 6.7(i) is hereby amended to read “equal to or greater than 1.40 to
1.00” for months commencing with May 1, 2009 and each month thereafter.
          2.2 Conforming Changes to Compliance Certificate. The Bank may make
such changes to the Compliance Certificate that are required pursuant to
Section 6.2(c) of the Loan Agreement as from time to time may be necessary to
conform the Compliance Certificate to any amendments that have been or may
hereinafter be made to the Loan Agreement. For purposes of illustration and not
by way of limitation, the required Liquidity Ratio as set forth in the
Compliance Certificate shall be changed to “1.40:1.00” for months commencing
with May 1, 2009 and each month thereafter, to conform with the amendment to the
Liquidity Ratio being made pursuant to this Amendment.
     3. Limitation of Amendments.
          3.1 The consents and amendments set forth herein 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.

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     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 Third Restated Articles of Incorporation of ATS Medical, Inc.
filed with the Minnesota Secretary of State on June 11, 2008, a copy of which
was provided to Bank via email on June 18, 2008, 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;
          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. 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.

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     6. Expenses. Without limitation on the terms of the Loan Documents,
Borrower agrees to reimburse Bank for all its costs and expenses (including
reasonable attorneys’ fees) incurred in connection with this Amendment. Bank is
authorized to charge said fees, costs and expenses to Borrower’s loan account or
any of Borrower’s deposit accounts maintained with Bank.
     7. Effectiveness. This Amendment shall be deemed effective upon (a) the due
execution and delivery of this Amendment by each party hereto, and (b) Bank’s
receipt of the Acknowledgment of Amendment and Reaffirmation of Guaranty
substantially in the form attached hereto as Schedule 1, duly executed and
delivered by each guarantor named therein.
[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
  ATS Medical, Inc.
 
   
By: /s/ Nick Honigman            
  By: /s/ Michael Kramer           
Name: Nick Honigman
Title: Relationship Manager
  Name: Michael Kramer
Title: Chief Financial Officer

 

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Schedule 1
ACKNOWLEDGMENT OF AMENDMENT
AND REAFFIRMATION OF GUARANTY
     Section 1. Each of the undersigned guarantors hereby acknowledges and
confirms that it has reviewed and approved the terms and conditions of the
Amendment to Loan and Security Agreement of substantially even date herewith
(the “Amendment”).
     Section 2. Each guarantor hereby consents to the Amendment and agrees that
its guaranty relating to the Obligations of Borrower under the Loan Agreement
shall continue in full force and effect, shall be valid and enforceable and
shall not be impaired or otherwise affected by the execution of the Amendment or
any other document or instrument delivered in connection herewith.
     Section 3. Each guarantor represents and warrants that, after giving effect
to the Amendment, all representations and warranties contained in the guaranty
are true, accurate and complete as if made the date hereof.
Dated as of June 2, 2009

     
3F THERAPEUTICS, INC.
  ATS ACQUISITION CORP.
 
   
By: /s/ Michael Dale            

  By: /s/ Michael Dale           
Name: Michael Dale
Title: President
  Name: Michael Dale
Title: President