exv10w1







	 	 	 	 	 



Exhibit 10.1



LIMITED WAIVER AND AMENDMENT TO LOAN DOCUMENTS





     THIS LIMITED WAIVER AND AMENDMENT to Loan Documents (this “Amendment”) is entered into as of
February 26, 2009 by and between SILICON VALLEY BANK, a California corporation (“Bank”), and
ENDOCARE, INC., a Delaware corporation (“Borrower”), whose chief executive office is located at 201
Technology Drive, Irvine, California 92618.



Recitals




     A. Borrower and Bank are parties to that certain Loan and Security Agreement, with an
Effective Date of October 26, 2005 (as amended, restated, supplemented or otherwise modified from
time to time, the “Loan Agreement”).



     B. Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.



     C. Borrower has requested that Bank amend the Loan Agreement, as herein set forth, and Bank
has agreed to the same, but only to the extent, in accordance with the terms, subject to the
conditions and in reliance upon the representations and warranties set forth herein.



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. Amendment to Loan Documents.



          2.1 Limited Waiver Regarding Tangible Net Worth Defaults. Borrower is currently in default of
the Loan Agreement for failing to comply with the Tangible Net Worth Financial Covenant set forth
in Section 6.9(a) of the Loan Agreement for the compliance period ending December 31, 2008 (the
“Existing TNW Default”). Borrower has advised Bank that Borrower anticipates that it shall be in
default of the Loan Agreement for failing to comply with the Tangible Net Worth Financial Covenant
set forth in Section 6.9(a) of the Loan Agreement for the compliance period ending January 31, 2009
(the “Anticipated TNW Default” and together with the “Existing TNW Default, hereinafter, the “TNW
Defaults”). Bank and Borrower agree that the Borrower’s TNW Defaults are hereby waived. It is
understood by the parties hereto, however, that such waiver does not constitute a waiver of any
other provision or term of the Loan Agreement or any related document, nor an agreement to waive in
the future this covenant or any other provision or term of the Loan Agreement or any related
document.



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          2.2 Modified Tangible Net Worth Financial Covenant. The Tangible Net Worth Financial Covenant
set forth in Section 6.9(a) of the Loan Agreement is hereby amended in its entirety to read as
follows:




(a) Tangible Net Worth. A Tangible Net Worth of at least
the sum of the following (the “Required TNW Amount”): (a) the TNW
Base Amount (as defined below), plus (b) 25% of all consideration
received after January 1, 2009 for issuances of Endocare’s equity
securities and the principal amount of Subordinated Debt of the
Borrower, plus (c) 25% of the Endocare’s positive consolidated
Net Income in each fiscal quarter ending after January 1, 2009.




As used herein, the term “TNW Base Amount” means, as of any date
of determination:




(a) <$1,500,000> with respect to the month ending February
28, 2009;




(b) <$2,000,000> with respect to the month ending March 31,
2009; and




(c) <$2,500,000> with respect to the month ending April 30,
2009.




Increases in the Required TNW Amount based on consideration
received for equity securities and Subordinated Debt of the
Borrower shall be effective as of the end of the month in which
such consideration is received, and shall continue effective
thereafter. Increases in the Required TNW Amount based on Net
Income shall be effective on the last day of the fiscal quarter
in which such Net Income is realized, and shall continue
effective thereafter. In no event (except for step-downs (if any)
in the TNW Base Amount as expressly set forth in the definition
thereof) shall the Required TNW Amount be decreased from one
fiscal period to another subsequent fiscal period.



          2.3 Extension of Maturity Date. The definition of “Maturity Date” set forth in Section 13.1
of the Loan Agreement hereby is amended and restated in its entirety to read as follows:



“Maturity Date” is May 27, 2009.



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     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, as amended hereby (as applicable), are hereby ratified and confirmed and shall remain in
full force and effect.



     4. Representations and Warranties. To induce Bank to enter into this Amendment, Borrower
hereby represents and warrants to Bank as follows:



          4.1 Immediately after giving effect to this Amendment (a) the representations and warranties
contained in the Loan Documents are true, accurate and complete in all material respects as of the
date hereof (except to the extent such representations and warranties relate to an earlier date, in
which case they are true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;



          4.2 Borrower has the power and authority to execute and deliver this Amendment and to perform
its obligations under the Loan Documents, as amended by this Amendment;



          4.3 The organizational documents of Borrower delivered to Bank on the Effective Date remain
true, accurate and complete and have not been amended, supplemented or restated (except for the
amendment thereof attached as Exhibit 3.1 to the Form 8-K filed by Borrower with the S.E.C. on
August 21, 2007) and, as so amended, are and continue to be in full force and effect;



          4.4 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Documents, as amended by this Amendment, have been duly
authorized;



          4.5 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Documents, as amended by this Amendment, do not and will not
contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual
restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or
other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d)
the organizational documents of Borrower;



          4.6 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Documents, as amended by this Amendment, do not require any
order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or
public body or authority, or subdivision thereof, binding on Borrower, except as already has been
obtained or made; and



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          4.7 This Amendment has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws of general application and equitable principles relating to or affecting
creditors’ rights.



     5. Fee. In consideration for Bank entering into this Amendment, Borrower shall pay Bank a fee
of $12,500.00 concurrently with the execution and delivery of this Amendment, which fee shall be
non-refundable and in addition to all interest and other fees payable to Bank under the Loan
Documents. Bank is authorized to charge said fee to Borrower’s loan account.



     6. Counterparts. This Amendment may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same instrument.



     7. Effectiveness. This Amendment shall be deemed effective upon the due execution and
delivery to Bank of this Amendment by each party hereto.



[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	 	 	 	Endocare, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By: 

Name:

	 	/s/ Kurt Miklinski
 

Kurt Miklinski
	 	 
	 	By:

Name:
	 	/s/ Michael Rodriguez
 

Michael Rodriguez
	 	 
	Title:

	 	Vice President
	 	 	 	Title:
	 	SVP, Finance & CFO	 	 







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