**Exhibit 10.1**

 

**LOAN MODIFICATION AGREEMENT**

 

This Loan Modification Agreement is enteredinto as of April 19, 2002, by and between Endocardial Solutions, Inc. (the“Borrower”) and Silicon Valley Bank (“Bank”).

 

1.             DESCRIPTIONOF EXISTING OBLIGATIONS:  Among otherObligations which may be owing by Borrower to Bank, Borrower is indebted toBank pursuant to, among other documents, a Loan and Security Agreement, datedJune 28, 2001, as may be amended from time to time, (the “Loan Agreement”).  The Loan Agreement provides for, among otherthings, a Committed Revolving Line in the original principal amount of TwoMillion Dollars ($2,000,000) and a Committed Equipment Line in the originalprincipal amount of One Million Five Hundred Thousand Dollars ($1,500,000).  Defined terms used but not otherwise definedherein shall have the same meanings as set forth in the Loan Agreement.

 

Hereinafter, all indebtedness owing byBorrower to Bank shall be referred to as the “Obligations.”

 

2.             DESCRIPTIONOF COLLATERAL.  Repayment of theObligations is secured by the Collateral as described in the Loan Agreement.

 

Hereinafter, the above-described securitydocument and guaranties, together with all other documents securing repaymentof the Obligations shall be referred to as the “Security Documents”.  Hereinafter, the Security Documents,together with all other documents evidencing or securing the Obligations shallbe referred to as the “Existing Loan Documents”.

 

3.             DESCRIPTIONOF CHANGE IN TERMS.

 

A.            Modification(s) to Loan Agreement.

 

1.                                       Sub-letter (a)under Section 2.1.1 entitled “Revolving Advances” is hereby amended to read asfollows:

 

(a)           Bank will make Advances not exceeding (i) the lesser of(A) the Committed Revolving Line or (B) the Borrowing Base, minus (ii) theamount of all outstanding Letters of Credit (including drawn but unreimbursedLetters of Credit).  Amounts borrowedunder this Section may be repaid and reborrowed during the term of thisAgreement.

 

2.                                       Section 2.1.3entitled “Letters of Credit Sublimit” is hereby incorporated to read asfollows:

 

Bank will issue or haveissued Letters of Credit for Borrower’s account not exceeding (i) the lesser ofthe Committed Revolving Line or the Borrowing Base minus (ii) the outstandingprincipal balance of the Advances; however, the face amount of outstandingLetters of Credit (including drawn but unreimbursed Letters of Credit) may notexceed $750,000.  Each Letter of Creditwill have an expiry date of no later than 180 days after the Revolving MaturityDate, but Borrower’s reimbursement obligation will be secured by cash on termsacceptable to Bank at any time after the Revolving Maturity Date if the term ofthis Agreement is not extended by Bank. Borrower agrees to execute any further documentation in connection withthe Letters of Credit as Bank may reasonably request.

 

3.                                       Section 2.2entitled “Overadvances” is hereby amended to read as follows:

 

If Borrower’s Obligationsunder Section 2.1.1 or 2.1.3 exceed the lesser of either (i) the CommittedRevolving Line or (ii) the Borrowing Base, Borrower must immediately pay Bankthe excess.

 

 

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4.                                       Sub-letter (e)under Section 6.2 entitled “Financial Statements, Reports, Certificates” ishereby incorporated to read as follows:

 

(e)           Within 30 days after each meeting held by Borrower’s boardof directors, Borrower will deliver to Bank a report from Borrower’s board ofdirectors meeting.

 

5.                                       Section 6.6entitled “Primary Accounts” is hereby amended to read as follows:

 

Borrower will maintain itsprimary operating accounts and 80% of its excess cash and investment balanceswith Bank.

 

6.                                       Sub-section(ii) under Section 6.7 entitled “Financial Covenants” is hereby amended to readas follows:

 

(ii)           Tangible Net Worth. A Tangible Net Worth of at least $10,000,000.

 

7.                                       The followingdefined terms under Section 13.1 entitled “Definitions” are hereby amended toread as follows:

 

“Committed Revolving Line”is an Advance of up to $3,000,000.

 

“Revolving Maturity Date” isApril 19, 2003.

 

4.             CONSISTENTCHANGES.  The Existing LoanDocuments are hereby amended wherever necessary to reflect the changesdescribed above.

 

5.             NODEFENSES OF BORROWER.  Borroweragrees that, as of the date hereof, it has no defenses against paying any ofthe Obligations.

 

6.             PAYMENTOF LOAN FEE.  Borrower shall payBank a fee in the amount of Twenty Two Thousand Five Hundred Dollars ($22,500)(“Loan Fee”) plus all out-of-pocket expenses.

 

7.             CONCERNINGREVISED ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE.  The Borrower affirms and reaffirms that notwithstanding the termsof the Security Documents to the contrary, (i) that the definition of “Code”,“UCC” or “Uniform Commercial Code” as set forth in the Security Documents shallbe deemed to mean and refer to “the Uniform Commercial Code as adopted by theState of California, as may be amended and in effect from time to time and (ii)the Collateral is all assets of the Borrower. In connection therewith, the Collateral shall include, withoutlimitation, the following categories of assets as defined in the Code:  goods (including inventory, equipment andany accessions thereto), instruments (including promissory notes), documents,accounts (including health-care-insurance receivables, and license fees),chattel paper (whether tangible or electronic), deposit accounts, letter-of-creditrights (whether or not the letter of credit is evidenced by a writing),commercial tort claims, securities and all other investment property, generalintangibles (including payment intangibles and software), supportingobligations and any and all proceeds of any thereof, wherever located, whethernow owned or hereafter acquired.

 

8.             CONTINUINGVALIDITY.  Borrower understands andagrees that in modifying the existing Indebtedness, Bank is relying uponBorrower’s representations, warranties, and agreements, as set forth in theExisting Loan Documents.  Except asexpressly modified pursuant to this Loan Modification Agreement, the terms ofthe Existing Loan Documents remain unchanged and in full force and effect.  Bank’s agreement to modifications to theexisting Obligations pursuant to this Loan Modification Agreement in no wayshall obligate Bank to make any future modifications to the Obligations.  Nothing in this Loan Modification Agreementshall constitute a satisfaction of the Obligations.  It is the intention of Bank and Borrower to retain as liableparties all makers and endorsers of Existing Loan Documents, unless the partyis expressly released by Bank in writing. Unless expressly released herein, no maker, endorser, or guarantor willbe

 

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released by virtue of this Loan ModificationAgreement.  The terms of this paragraphapply not only to this Loan Modification Agreement, but also to all subsequentloan modification agreements.

 

9.             CONDITIONS.  The effectiveness of this Loan ModificationAgreement is conditioned upon payment of the Loan Fee.

 

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

 
| **BORROWER:**                    |                 | **BANK:**                |
|----------------------------------|----------------------|--------------------------|
|                             |                 |                     |
| **ENDOCARDIAL  SOLUTIONS, INC.** |                 | **SILICON  VALLEY BANK** |
|                             |                 |                     |
|                             |                 |                     |
| By:                              | /s/ Michael Fredrick |                     | By: | /s/ Jay McNeil |
| Name:                            | Michael Fredrick     |                     | Name: | Jay McNeil |
| Title:                           | Controller           |                     | Title: | Vice President |
|                                  |                      |                          |  |  |  |  |  |  |

 

 

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