**Exhibit 10.38**

 

**FOURTH LOAN MODIFICATION AGREEMENT**

 

This Fourth Loan Modification Agreement isentered into as of February 28, 2002, by and between Novoste Corporation (“Borrower”) and Silicon Valley Bank (“Bank”). 

 

1.    DESCRIPTION OF EXISTING INDEBTEDNESS: Among other Indebtedness which may be owing by Borrower to Bank, Borrower maybecome indebted to Bank pursuant to, among other documents, a Loan and Security Agreement, dated August 1, 2001, as amended July 30, 2002, as further amended August 27, 2002, as further amended November 25, 2002, and as may be further amended fromtime to time, (the “Loan Agreement”). The Loan Agreement provides for, among other things, a Committed Revolving Line in the amount of Ten Million Dollars ($10,000,000). Defined terms used but not otherwise defined herein shall have thesame meanings as in the Loan Agreement. 

 

Hereinafter allindebtedness owing by Borrower to Bank shall be referred to as the “Indebtedness.” 

 

2.    DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the Indebtedness is secured by the Collateral as described in the Loan Agreement. 

 

Hereinafter, the above-described security documents and guaranties, togetherwith all other documents securing repayment of the Indebtedness shall be referred to as the “Security Documents”. Hereinafter, the Security Documents, together with all other documents evidencing or securing the Indebtedness shall bereferred to as the “ Existing Loan Documents”. 

 

3.    DESCRIPTION OF CHANGE IN TERMS. 

 

 

 

“Advances accrue intereston the outstanding principal balance at a per annum rate of 1 percentage point above the greater of (i) Prime Rate or (ii) 4.25%. As such time as Borrower achieves 3 consecutive months of Profitability, the interest rate shall be decreased to a rateequal to the greater of (i) Prime Rate or (ii) 4.25%.” 

 

 

“(ii) **Tangible Net Worth**. A Tangible Net Worth of at least $48,000,000 plus 25%of the proceeds from any stock offering.” 

 

 

**“****Borrowing Base****”** is 75% of Eligible Accounts as determined by Bank from Borrower’s most recent Borrowing Base Certificate; provided, however, that Bank may lower or increase thepercentage of the Borrowing Base after performing an audit of Borrower’s Collateral. 

 

**“Revolving Maturity Date”** is February 27, 2004. 

 E. Borrower’s Borrowing Base Certificate is hereby amended as set forth in Exhibit “A” hereto and Borrower’s Compliance Certificate if herebyamended as set forth in Exhibit “B”, hereto. 
 

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

 

5. PAYMENT OF LOAN AND DOCUMENTATION FEES. Borrower shall pay Bank a Loan Fee of Thirty Thousand Five Hundred Dollars ($30,000.00) and a LegalDocumentation Fee in the amount of Five Hundred Twenty Dollars ($520.00), plus all out-of-pocket expenses. 

 

6. NO DEFENSES OF BORROWER. Borrower agrees that, as of the date hereof, it has no defenses against the obligations to pay any amounts under the indebtedness. 

 

7. CONTINUING VALIDITY. Borrower understands and agrees that inmodifying the existing Indebtedness, 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 termsof the Existing Loan Documents remain unchanged and in full force and effect. Bank’s agreement to modifications to the existing Indebtedness pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any futuremodifications to the Indebtedness. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the Indebtedness. It is the intention of Bank and Borrower to retain as liable parties all makers and endorsers of Existing LoanDocuments, unless the party is expressly released by Bank in writing. No maker, endorser, or guarantor will be released by virtue of this Loan Modification Agreement. The terms of this paragraph apply not only to this Loan Modification Agreement,but also to all subsequent loan modification agreements. 

 

8.CONDITIONS. The effectiveness of this Loan Modification Agreement is conditioned upon the following: 

 
 A. Bank’s receipt of this Fourth Loan Modification duly executed by the Borrower; and  B. Bank’s receipt of payment of the Loan and Legal Documentation Fees. 

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

 

**BORROWER:**
   
**BANK:**
     
**NOVOSTE CORPORATION**
   
**SILICON VALLEYBANK**

By:
 
/s/    ALFRED NOVAK
   
By:
 
/s/    ALAN P. SPURGUN

Name:
 
**Alfred Novak**
   
Name:
 
**Alan P. Spurgun**

Title:
 
**CEO & President**
   
Title
 
**SVP**

 

**EXHIBIT“B”**

**COMPLIANCE CERTIFICATE**

 

TO:
   
SILICON VALLEY BANK

3003 Tasman Drive

Santa Clara, CA 95054

FROM:
   
NOVOSTE CORPORATION

 

Theundersigned authorized officer of Novoste Corporation (“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (i) Borrower is in completecompliance for the period ending                          with all required covenants except as noted below and (ii) allrepresentations and warranties in the Agreement are true and correct in all material respects on this date. Attached are the required documents supporting the certification. The Officer certifies that these are prepared in accordance with GenerallyAccepted Accounting Principles (GAAP) consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The Officer acknowledges that no borrowings may be requested at any time or date of determination thatBorrower 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. 

 

**Please indicate compliance status by circling Yes/No under “Complies” column.**

 

**Reporting Covenant**
  
**Required**
  
**Complies**

Interim financial statements
  
Monthly within 30 days
  
Yes        No

Compliance Certificate
  
Monthly w/in 30 days and Quarterly w/in 45 days
  
Yes        No

Annual (Audited)
  
FYE within 90 days
  
Yes        No

A/R Agings + BBC*
  
Monthly within 20 days
  
Yes        No

10-Q, 10-K
  
Within 5 days of filing with the SEC
  
Yes        No

*when Advances are outstanding
      
 

**Financial Covenant**
    
**Required**
    
**Actual**
    
**Complies**

Maintain on a Monthly Basis:
               
Minimum Quick Ratio
    
1.75:1.00
    
            :1.00
    
Yes        No

Minimum Tangible Net Worth
    
$48,000,000**
    
($                )
    
Yes        No

**plus 25% of the proceeds from any stock offering
                     
Have there been updates to Borrower’s intellectual property, if appropriate?        
         
Yes        No

 

Borrower has depositaccounts only at the followinginstitutions:                                                                                                             

 

**Comments Regarding Exceptions:** See Attached. 

 
      
**BANK USE ONLY**

Sincerely,
          
Received by:
       
AUTHORIZED SIGNER

NOVOSTE CORPORATION
          
Date:
 
/s/    ALFRED NOVAK
      
SIGNATURE
   
Verified:
       
AUTHORIZED SIGNER

            CEO &President
      
TITLE
   
Date:
        
            03-04-03
   
Compliance Status:
 
****Yes        No****

DATE
      

 

**SILICONVALLEY BANK**

 

**PRO FORMA INVOICE FOR LOANCHARGES**

 

**BORROWER:**
  
**NOVOSTE CORPORATION**
            
**LOAN OFFICER:**
  
**Angela Hart**
            
**DATE:**
  
**February 27, 2003**
               
**Bank Fees:**
       
**Loan Fee**
  
**$**

**30,000.00**
           
**Outside Counsel Fees:**
       
**Documentation Fee**
  
**$**

**520.00**
           
**TOTAL FEE DUE**
  
**$**

**30,520.00**
      
 

**Please indicate themethod of payment:**

 

**{    } A check for the total amount is attached.**

 

**{    } Debit DDA #                                 for the total amount.**

 

**{    } Loan proceeds**

 

/s/    ALFREDNOVAK        
   
03-04-03

**Borrower**
   
**(Date)**
        
**Silicon Valley Bank**
   
**(Date)**

**Account Officer’s Signature**
         

**LOAN PAYMENT/ADVANCE REQUEST FORM**

 

DEADLINEFORSAMEDAYPROCESSINGIS 3:00 E.S.T

 

FaxTo:        **404-495-4500**
 
Date:                                                            

 

**NOVOSTE CORPORATION.**

(Client Name/Borrower) 

 

 ̈    **LOAN PAYMENT:**

 

From Account #:                                                                    

                                        (Deposit Account Number) 

 

Principal $                                                     and/or Interest $                                                                    

 

**ALL BORROWER’SREPRESENTATIONANDWARRANTIESINTHE LOANAND SECURITY AGREEMENTARETRUE, CORRECTANDCOMPLETEINALLMATERIALRESPECTSTOONTHEDATEOFTHETELEPHONETRANSFERREQUESTFORANDADVANCE, BUTTHOSEREPRESENTATIONSANDWARRANTIESEXPRESSLYREFERRINGTOANOTHERDATESHALLBETRUE, CORRECTANDCOMPLETEINALLMATERIALRESPECTSASOFTHEDATE:**

 

**Authorized Signature:**                                                                                    Phone Number:                                                                

 

 
 ̈ **LOAN ADVANCE:****  ** **COMPLETE*****OUTGOING WIRE REQUEST*****SECTIONBELOWIFALLORAPORTIONOFTHEFUNDSFROMTHISLOANADVANCEAREFORANOUTGOINGWIRE.**
 

From Account #:                                                             
    
To Account #:                                                                

(Loan Account Number)
    
(Deposit Account Number)

 

Amount of Advance$                                

**ALL BORROWER’SREPRESENTATIONANDWARRANTIESINTHE LOANAND SECURITY AGREEMENTARETRUE, CORRECTANDCOMPLETEINALLMATERIALRESPECTSTOONTHEDATEOFTHETELEPHONETRANSFERREQUESTFORANDADVANCE, BUTTHOSEREPRESENTATIONSANDWARRANTIESEXPRESSLYREFERRINGTOANOTHERDATESHALLBETRUE, CORRECTANDCOMPLETEINALLMATERIALRESPECTSASOFTHEDATE:**

 

**Authorized Signature:**                                                                                  Phone Number:                                                        

 

 
x     **OUTGOING WIRE REQUEST:**
 

BeneficiaryName:**  McKenna Long & Aldridge LLP**
  
Amount of Wire:**  $520.00**

Beneficiary Bank:  **SunTrustBank**
  
Account Number:  **8800918057**

City and State:  **Atlanta, GA**
   
Beneficiary Bank Transit (ABA)#:**061000104**
   
Special Instruction:  **Notify Lisa Stipancic (404) 527-8366.Invoice #09875.0041 for Novoste.**

 

*BYSIGNINGBELOW, I (WE) ACKNOWLEDGEANDAGREETHATMY (OUR) FUNDSTRANSFERREQUESTSHALLBEPROCESSEDINACCORDANCEWITHANDSUBJECTTOTHETERMSANDCONDITIONSSETFORTHINTHEAGREEMENTS(S) COVERINGFUNDSTRANSFERSERVICE(S), WHICHAGREEMENTS(S) WEREPREVIOUSLYRECEIVEDANDEXECUTEDBYME (US).*

 

**Authorized Signature:**  /s/ ALFREDNOVAK                                
 
**2nd Signature (If Required):**                                                    

Print Name/Title:  Alfred Novak CEO &President                
 
PrintName/Title:                                                                          

Telephone#  770-717-6096                                                        
 
Telephone#