exv10w1







Exhibit 10.1




Sixth Amendment

to

Loan and Security Agreement




     THIS SIXTH AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered into as of
December 22, 2008, by and between SILICON VALLEY BANK (“Bank”), on the one side, and



     EV3 ENDOVASCULAR, INC., a Delaware corporation,



     EV3 INTERNATIONAL, INC., a Delaware corporation,



     MICRO THERAPEUTICS, INC., a Delaware corporation, and



     FOXHOLLOW TECHNOLOGIES, INC., a Delaware corporation


(collectively and jointly and severally referred to as “Borrowers”), whose address is c/o ev3 Inc.,
9600 54th Avenue North, Plymouth, MN 55442, on the other side.




Recitals




     A. Bank and Borrowers have entered into that certain Loan and Security Agreement dated as of
an Effective Date of June 28, 2006 (as the same may from time to time be further amended, modified,
supplemented or restated, the “Loan Agreement”). The Obligations of the Borrowers have been
guarantied by, among others, the following companies, in favor of Bank: ev3 Inc., a Delaware
corporation; Micro Therapeutics International, Inc., a Delaware corporation; and ev3 Peripheral,
Inc., a Minnesota corporation (collectively, the “Guarantors”).



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



     C. Borrowers have requested that Bank amend the Loan Agreement to modify certain financial
covenants and certain other provisions of the Loan Agreement.



     D. Bank has agreed to so amend 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 Section 6.7 (Financial Covenants). Section 6.7 of the Loan Agreement is hereby amended
and restated in its entirety to read as follows, effective on the date hereof:





“6.7 Financial Covenants.




“Parent shall maintain at all times, to be tested as of the last day
of each month, unless otherwise noted, on a consolidated basis with
respect to Parent and its Subsidiaries:




“(a) Adjusted Quick Ratio. A ratio of Qualified Quick
Assets to Current Liabilities of at least 0.75 to 1.00.




“(b) EBITDA. EBITDA for each fiscal quarter listed in the
table below, which shall be tested as of the last calendar day of
such fiscal quarter, shall equal or exceed the minimum EBITDA
requirement listed next to such fiscal quarter period:



	 	 	 	 	 
	 	 	Minimum
	Period	 	EBITDA
	Fiscal quarter ending December 31, 2008
	 	$	2,500,000.	 
	Fiscal quarter ending March 30, 2009
	 	$	2,500,000.	 
	Fiscal quarter ending June 29, 2009
	 	$	5,000,000.	 
	Fiscal quarter ending September 28, 2009
	 	$	7,500,000.	 
	Fiscal quarter ending December 31, 2009, and each fiscal
quarter thereafter
	 	$	10,000,000.	 






          2.2 “EBITDA”. The definition of “EBITDA” in Section 13.1 of the Loan Agreement is
hereby amended and restated in its entirety to read as follows, effective on the date hereof:





“‘EBITDA’ for any period, means (i) the sum, without duplication, of
the amounts for such period of (a) consolidated Net Income, plus (b)
consolidated Interest Expense, plus (c) provisions for taxes based
on income, plus (d) total depreciation expense, plus (e) total
amortization expense, plus (f) other non-cash items reducing
consolidated Net Income including any non-cash compensation expense
as well as any non-cash impairment of goodwill or other



2









 






intangible
assets (excluding any such non-cash item to the extent that it
represents an accrual or reserve for a potential cash payment in any
future period or an expense of a prepaid cash item that was paid in
a prior period), minus (ii) the sum, without duplication of
the amounts for such period of (a) non-cash items increasing
consolidated Net Income for such period (excluding any such non-cash
item to the extent it represents the reversal of an accrual or
reserve for potential cash item in any prior period), plus (b)
interest income.”



          2.3 Interest Rate. Sections 2.3(a)(i) and (iii) of the Loan Agreement are each hereby amended
and restated in their entirety to read as follows, effective on the date hereof:





“(a) Interest Rate.




“(i) Advances. Subject to Section 2.3(b), the
principal amount outstanding under the Revolving Line shall
accrue interest at a floating per annum rate equal to the
Prime Rate plus one-half of one percent (0.50%) per annum,
which interest shall be payable monthly in accordance with
Section 2.3(f) below.”




“(iii) Term Loan. Subject to Section 2.3(b), the
principal amount outstanding of the Term Loan shall accrue
interest at a floating per annum rate equal to the Prime Rate
plus one percent (1.00%) per annum, which interest shall be
payable monthly in accordance with Section 2.3(f) below.”



          2.4 Exhibit D (Compliance Certificate). Exhibit D to the Loan Agreement is hereby replaced by
Exhibit A hereto.




          2.5 Conforming Changes. In addition to implement the foregoing, the definition of “Tangible
Net Worth” and all references to the defined term “Tangible Net Worth,” including but not limited
to any “Tangible Net Worth” financial covenant applicable to the Parent and its Subsidiaries, in
any of the Loan Documents is hereby removed and deleted.




     3. Limitation of Amendments.



          3.1 The 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 other
transaction or 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




3









 







agreements set forth in the Loan
Documents, except as herein amended, are hereby ratified and confirmed, shall remain in full force
and effect, and are incorporated herein by reference.




     4. Representations and Warranties. To induce Bank to enter into this Amendment, each 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 Each 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 organizational documents of each Borrower previously delivered to Bank 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 each 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 each 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 any Borrower, (b) any contractual
restriction with a Person binding on any Borrower, (c) any order, judgment or decree of any court
or other governmental or public body or authority, or subdivision thereof, binding on any Borrower,
or (d) the organizational documents of any Borrower;




          4.6 The execution and delivery by each 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 any Borrower, except as already have been obtained or made; and




          4.7 This Amendment has been duly executed and delivered by each Borrower and is the binding
obligation of each Borrower, enforceable against each 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.



4









 





     6. 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 thereon.



     7. Expenses. Without limitation on the terms of the Loan Documents, Borrowers agree 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
Borrowers’ loan account or any of Borrowers’ deposit accounts maintained with Bank.



[ Signature Page Follows ]




5









 








     In Witness Whereof, the parties hereto have caused this Amendment to be duly executed
and delivered as of the date first written above.



Borrowers:




	 	 	 	 	 	 	 
	EV3 ENDOVASCULAR, INC.	 	EV3 INTERNATIONAL, INC.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Patrick D. Spangler
	 	By:
	 	/s/ Patrick D. Spangler
	 

	 	 
	 	 	 	 
	Name:

	 	Patrick D. Spangler
	 	Name:
	 	Patrick D. Spangler
	Title:

	 	Vice President
and Chief Financial Officer
	 	Title:
	 	Treasurer
	 
	 	 	 	 	 	 
	MICRO THERAPEUTICS, INC.	 	FOXHOLLOW TECHNOLOGIES, INC.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Patrick D. Spangler
	 	By:
	 	/s/ Patrick D. Spangler
	 

	 	 
	 	 	 	 
	Name:

	 	Patrick D. Spangler
	 	Name:
	 	Patrick D. Spangler
	Title:

	 	Chief Financial Officer
and Treasurer
	 	Title:
	 	Chief Financial Officer
and Treasurer
	 
	 	 	 	 	 	 
	Bank:	 	 	 	 
	 
	SILICON VALLEY BANK	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Kimberly A. Stover	 	 	 	 
	 

	 	 	 	 	 	 
	Name:

	 	Kimberly A. Stover	 	 	 	 
	Title:

	 	Relationship Manager	 	 	 	 






[Signature Page—Sixth Amendment to Loan and Security Agreement]




6









 








EXHIBIT A

TO

SIXTH AMENDMENT

TO LOAN AND SECURITY AGREEMENT




EXHIBIT D




COMPLIANCE CERTIFICATE




			
	TO: SILICON VALLEY BANK
	 	Date:                                         





FROM: ev3 Endovascular, Inc.; ev3 International, Inc.; Micro Therapeutics, Inc.; FoxHollow
Technologies, Inc. (the foregoing are referred to as “Borrowers”); and ev3 Inc. (“Parent”)



The undersigned authorized officers of Borrowers and Parent certify that under the terms and
conditions of the Loan and Security Agreement between Borrowers and Bank (the “Agreement”),
(1) Borrowers are 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) Borrowers, Parent, and each of its Subsidiaries have timely filed all required tax returns and
reports, and Borrowers, Parent, and each of its Subsidiaries have timely paid all foreign, federal,
state and local taxes, assessments, deposits and contributions owed by them except as otherwise
permitted pursuant to the terms of Section 5.9 of the Agreement, (5) no Liens have been levied or
claims made against Borrowers, Parent, or any of its Subsidiaries relating to unpaid employee
payroll or benefits of which Borrowers have not previously provided written notification to Bank,
and (6) attached hereto is an organizational chart showing Parent’s ownership of its Subsidiaries,
Parent’s Subsidiaries’ ownership of any Subsidiaries, and so forth for all Subsidiaries of
Subsidiaries. Also attached are the required documents supporting the certification. The
undersigned certify 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
acknowledge that no borrowings may be requested at any time or date of determination that Borrowers
are 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
	Monthly financial statements with Compliance Certificate

	 	Monthly within 30 days
	 	Yes No
	10-K with Compliance Certificate

	 	Within 5 days of filing with SEC
but within 120 days FYE
	 	Yes No
	10-Q with Compliance Certificate

	 	Within 5 days of filing with SEC
but within 45 days FQE
	 	Yes No
	8-K

	 	Within 5 days after filing with SEC
	 	Yes No
	Borrowing Base Certificate (if applicable), A/R & A/P Agings, cash balance reports, inventory reports

	 	Monthly within 30 days
	 	Yes No
	Annual financial projections

	 	Prior to FYE for following year
	 	Yes No






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	Financial Covenant	 	Required	 	 	Actual	 	 	Complies	 
	Maintain at all times:
	 	 	 	 	 	 	 	 	 	 	 	 
	Adjusted Quick Ratio, tested monthly
	 	 	0.75:1.00	 	 	 	:1.00	 	 	Yes   No
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	EBITDA (FQ ending 12/31/08)
	 	$	2,500,000	 	 	$	 	 	 	Yes   No
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	EBITDA (FQ ending 3/30/09)
	 	$	2,500,000	 	 	$	 	 	 	Yes   No
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	EBITDA (FQ ending 6/29/09)
	 	$	5,000,000	 	 	$	 	 	 	Yes   No
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	EBITDA (FQ ending 9/28/09)
	 	$	7,500,000	 	 	$	 	 	 	Yes   No
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	EBITDA (FQ ending 12/31/09)
	 	$	10,000,000	 	 	$	 	 	 	Yes   No
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	EBITDA (each fiscal quarter thereafter)
	 	$	10,000,000	 	 	$	 	 	 	Yes   No
	 
	 	 	 	 	 	 	 	 	 	 	 	 





     Amount and locations of cash, Cash Equivalents and investments:
                                        .



     Other (e.g., legal actions):                                         .



     Set forth in Schedule 1 attached hereto are the calculations supporting the financial
covenants, which 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.”)



 





 





 





BANK USE ONLY




	 	 	 	 	 
	Received by:
	 	 	 	 
	 

	 	 

authorized signer
	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Verified:
	 	 	 	 
	 

	 	 

authorized signer
	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Compliance Status:          Yes     No	 	 






[Signatures continued to next page]




8









 








	 	 	 	 	 	 	 
	EV3 ENDOVASCULAR, INC.	 	EV3 INC.
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	EV3 INTERNATIONAL, INC.	 	FOXHOLLOW TECHNOLOGIES, INC.
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	Name:

	 	 	 	Name:	 	 
	 

	 	 
	 	 	 	 
	Title:

	 	 	 	Title:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	MICRO THERAPEUTICS, INC.	 	 	 	 






	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 






9









 






Schedule 1 to Compliance Certificate




Financial Covenants of Borrower




10









 





SCHEDULE 1

TO

SIXTH AMENDMENT

TO LOAN AND SECURITY AGREEMENT




ACKNOWLEDGEMENT OF AMENDMENT

AND REAFFIRMATION OF GUARANTY




December 22, 2008




Silicon Valley Bank

301 Carlson Parkway, Suite 255

Minnetonka, MN 55305

Attn: Jay McNeil





	 	Re:	 	 Silicon Valley Bank/ev3 Inc.





Gentlemen:




     Reference is made to (i) the Loan and Security Agreement (as amended from time to time, the
“Loan Agreement”), dated as of an Effective Date of June 28, 2006, between Silicon Valley Bank
(“Bank”), on the one side, and ev3 Endovascular, Inc., ev3 International, Inc., Micro Therapeutics,
Inc., and FoxHollow Technologies, Inc. (collectively, the “Borrowers”) (FoxHollow Technologies,
Inc. became a party to the Loan Agreement pursuant to the Assumption Agreement and Fourth Amendment
to Loan and Security Agreement, dated December 14, 2007, entered into among Bank and the
Borrowers), on the other side, and (ii) the Sixth Amendment to Loan and Security Agreement (the
“Amendment”), of substantially even date, between Bank and Borrowers. (Capitalized terms used but
not defined herein shall have the meanings given to them in the Loan Agreement.)



     The undersigned (each a “Guarantor”) are each parties to that certain Amended Unconditional
Guaranty, dated as of December 14, 2007, in favor of Bank (the “Guaranty”). Each Guarantor agrees
that:



     Section 1. It acknowledges and confirms that it has reviewed and approved the terms and
conditions of the Amendment.



     Section 2. It consents to the Amendment and agrees that the Guaranty 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.



11









 





     Section 3. It 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.



     Section 4. This agreement may be executed in any number of counterparts and all such
counterparts taken together shall be deemed to constitute one and the same instrument.



     This agreement, the Guaranty, and the other written agreements entered into in connection with
the Guaranty constitute and contain the entire agreement of the parties and supersede any and all
prior and contemporaneous agreements, negotiations, correspondence, understandings and
communications between the undersigned and Bank, whether written or oral, respecting the subject
matter hereof. This agreement shall be construed in connection with and as a part of the Guaranty
and the terms of the Guaranty are incorporated herein.



[ Signature Page Follows ]




12









 









	 	 	 	 	 	 	 
	Guarantor

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ev3 Inc., a Delaware corporation	 	Micro Therapeutics
International, Inc., a Delaware Corporation
	 
	 	 	 	 	 	 
	By:

	 	/s/ Patrick D. Spangler
	 	By:
	 	/s/ Patrick D. Spangler
	 

	 	 
	 	 	 	 
	Name:

	 	Patrick D. Spangler
	 	Name:
	 	Patrick D. Spangler
	Title:

	 	Senior Vice President,
Chief Financial Officer,
and Treasurer
	 	Title:
	 	Treasurer
	 
	 	 	 	 	 	 
	ev3 Peripheral, Inc., a Minnesota
corporation	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Patrick D. Spangler
 

	 	 
	 	 
	Name:

	 	Patrick D. Spangler	 	 	 	 
	Title:

	 	Treasurer	 	 	 	 






[Signature Page—Acknowledgement of Sixth Amendment and Reaffirmation of Guaranty]





13