EX-10.9




 EXHIBIT 10.9 

SECOND LOAN MODIFICATION AND WAIVER AGREEMENT 

This Second Loan Modification and Waiver Agreement (this “Loan Modification Agreement”) is entered into as of
July 24, 2014 by and between (i) SILICON VALLEY BANK, a California corporation (“Bank”), (ii) ECPM HOLDINGS, LLC, a Delaware limited liability company (“Holdings”),
(iii) ENDOCHOICE, INC., a Delaware corporation (“EndoChoice”), and (iv) ROBERT S. SMITH, M.D., INC., a Georgia corporation (“Smith”, and together with EndoChoice, individually and
collectively, jointly and severally, the “Borrower”). 
 1. DESCRIPTION OF EXISTING INDEBTEDNESS AND OBLIGATIONS. Among other
indebtedness and obligations which may be owing by Borrower to Bank, Borrower is indebted to Bank pursuant to a loan arrangement dated as of September 9, 2013, evidenced by, among other documents, a certain Loan and Security Agreement, dated as
of September 9, 2013, between Borrower and Bank, as amended by a certain First Loan Modification and Waiver Agreement, dated as of March 25, 2013 (as amended, the “Loan Agreement”). Capitalized terms used but not otherwise
defined herein shall have the same meaning as in the Loan Agreement. 
 2. DESCRIPTION OF COLLATERAL. Repayment of the Obligations is secured by the
Collateral as described in the Loan Agreement (together with any other collateral security granted to Bank, the “Security Documents”). Hereinafter, the Loan Agreement, the Security Documents and together with all other documents
executed in connection therewith evidencing, securing or otherwise relating to the Obligations shall be referred to as the “Existing Loan Documents”. 

3. MERGER OF CERTAIN LOAN PARTIES. Borrower has informed Bank that, effective as of July 7, 2014, International, PathOptions and Scope Services
were each merged with and into EndoChoice, with EndoChoice remaining as the sole surviving entity (collectively, the “Merger”). Certified copies of the documents evidencing the Merger, as filed with the Secretary of State for the
States of Delaware and Georgia, have been provided to the Bank. Such Merger is permitted without the Bank’s prior consent pursuant to the terms of Section 7.3 of the Loan Agreement. 

4. DESCRIPTION OF CHANGE IN TERMS. 
  

	 	A.	Modifications to Loan Agreement. 

  

	 	1	The Loan Agreement shall be amended by deleting the following text appearing as Section 6.9(b) thereof: 


“(b) Minimum Revenue Growth. Borrower shall achieve the following revenue levels, measured on a quarterly basis for each quarterly
period listed below: 
  

					
	Quarterly Period Ending	  	Minimum Revenue	 
	 March 31, 2014
	  	$	13,000,000	  
	 June 30, 2014
	  	$	17,500,000	  
	 September 30, 2014
	  	$	19,300,000	  
	 December 31, 2014
	  	$	22,000,000	  
	 March 31, 2015
	  	$	26,500,000	  
	 June 30, 2015
	  	$	32,000,000	  
	 September 30, 2015, and each quarterly period ending thereafter
	  	$	36,000,000	  

 ; provided that nothing in this Section 6.9(b) shall be deemed to be an extension of the Revolving Line
Maturity Date.” 








 and inserting in lieu thereof the following: 

“(b) Minimum Revenue Growth. Borrower shall achieve the following revenue levels, measured on a quarterly basis for each quarterly
period listed below: 
  

					
	Quarterly Period Ending	  	Minimum Revenue	 
	 September 30, 2014
	  	$	14,500,000	  
	 December 31, 2014
	  	$	18,500,000	  
	 March 31, 2015
	  	$	19,000,000	  
	 June 30, 2015
	  	$	21,000,000	  
	 September 30, 2015, and each quarterly period ending thereafter
	  	$	22,000,000	  

 ; provided that nothing in this Section 6.9(b) shall be deemed to be an extension of the Revolving Line
Maturity Date.” 
  

	 	2	All references in the Loan Documents to International, PathOptions and/or Scope Services are hereby deleted in their entirety. 

  

	 	3	The Compliance Certificate attached as Exhibit B to the Loan and Security Agreement is hereby amended in its entirety and replaced by Exhibit A attached hereto. 


5. WAIVER. Borrower and Bank acknowledge and agree that Bank hereby waives testing of the Minimum Revenue Growth financial covenant contained in former
Section 6.9(b) of the Loan Agreement for the quarterly compliance period ended June 30, 2014. Bank’s waiver of testing of such Minimum Revenue Growth financial covenant shall apply only to the foregoing specific compliance period. The
Borrower hereby acknowledges and agrees that except as specifically provided in this Section, nothing in this Section or anywhere in this Loan Modification Agreement shall be deemed or otherwise construed as a waiver by the Bank of any of its rights
and remedies pursuant to the Existing Loan Documents, applicable law or otherwise. 
 6. DELIVERY OF AUDITED FINANCIAL STATEMENTS. Notwithstanding
the terms and conditions of Section 6.2(f) of the Loan Agreement, Borrower shall, as soon as available, and in any event on or before August 15, 2014, deliver to Bank consolidating and audited consolidated financial statements for the
fiscal year ended December 31, 2013, from Holdings and its Subsidiaries, prepared under GAAP, consistently applied, together with an unqualified opinion on the audited financial statements from an independent certified public accounting firm
reasonably acceptable to Bank. 
 7. CONDITIONS PRECEDENT. Borrower hereby agrees that the following documents shall be delivered to the Bank prior
to or concurrently with the execution of this Loan Modification Agreement, each in form and substance satisfactory to the Bank (collectively, the “Conditions Precedent”): 

 

	 	A.	copies, certified by a duly authorized officer of Borrower, to be true and complete as of the date hereof, of each of (i) the governing documents of Borrower as in effect on the date hereof (but only to the extent
modified since last delivered to the Bank), (ii) the resolutions of Borrower authorizing the execution and delivery of this Loan Modification Agreement, the other documents executed in connection herewith and Borrower’s performance of all
of the transactions contemplated hereby (but only to the extent required since last delivered to Bank), and (iii) an incumbency certificate giving the name and bearing a specimen signature of each individual who shall be so authorized on behalf
of Borrower (but only to the extent any signatories have changed since such incumbency certificate was last delivered to Bank); and 

  

	 	B.	such other documents as Bank may reasonably request. 

 8. UPDATED ARTICLES OF INCORPORATION. In
connection with this Loan Modification Agreement, EndoChoice delivered to Bank a certified copy, certified by the Secretary of State for the State of Delaware, of Endochoice’s Fifth Amended and Restated Certificate of Incorporation, filed as of
July 2, 2014. 

  
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 9. FEES. In addition to the fully-earned, non-refundable modification fee equal to Fifty Two Thousand Five
Hundred Dollars ($52,500), which modification fee shall be payable on or before September 30, 2014, Borrower shall pay to Bank on the date hereof a fully-earned, non-refundable modification fee equal to Ten Thousand Dollars ($10,000). Borrower
shall also reimburse Bank for all legal fees and expenses incurred in connection with the Existing Loan Documents and this Loan Modification Agreement. 

10. ADDITIONAL COVENANTS: RATIFICATION OF PERFECTION CERTIFICATE. Borrower hereby certifies that, other than as disclosed in the Perfection Certificate
or permitted by Section 7.2, no Collateral with a value greater than Ten Thousand Dollars ($10,000) in the aggregate is in the possession of any third party bailee (such as at a warehouse). In the event that Borrower, after the date hereof,
intends to store or otherwise deliver the Collateral with a value in excess of Ten Thousand Dollars ($10,000) in the aggregate to such a bailee, then Borrower shall first receive, the prior written consent of Bank and such bailee must acknowledge in
writing that the bailee is holding such Collateral for the benefit of Bank. The Borrower delivered an updated Perfection Certificate in connection with this Loan Modification Agreement (the “Updated Perfection Certificate”) dated as
of the date hereof, which Updated Perfection Certificate shall supersede in all respects the Perfection Certificate previously delivered to Bank by Borrower. Bank and Borrower agree that all references in the Loan Agreement to “Perfection
Certificate” shall hereinafter be deemed to be a reference to the Updated Perfection Certificate. 
 11. CONSISTENT CHANGES. The Existing Loan
Documents are hereby amended wherever necessary to reflect the changes described above. 
 12. RATIFICATION OF LOAN DOCUMENTS. Other than as
described in this Loan Modification Agreement, Borrower hereby ratifies, confirms, and reaffirms all terms and conditions of the Loan Agreement and each other Loan Document, and of all security or other collateral granted to the Bank, and confirms
that the indebtedness secured thereby includes, without limitation, the Obligations. 
 13. NO DEFENSES OF BORROWER. Borrower hereby acknowledges and
agrees that Borrower has no offsets, defenses, claims, or counterclaims against Bank with respect to the Obligations, or otherwise, and that if Borrower now has, or ever did have, any offsets, defenses, claims, or counterclaims against Bank, whether
known or unknown, at law or in equity, all of them are hereby expressly WAIVED and Borrower hereby RELEASES Bank from any liability thereunder. 
 14.
CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Obligations, 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 terms of the Existing Loan Documents remain unchanged and in full force and effect. Bank’s agreement to waive testing of the Minimum Revenue Growth financial covenant
described above pursuant to this Loan Modification Agreement in no way shall obligate Bank to make any future waivers or any other modifications to the Obligations. Nothing in this Loan Modification Agreement shall constitute a satisfaction of the
Obligations. It is the intention of Bank and Borrower to retain as liable parties all makers of Existing Loan Documents, unless the party is expressly released by Bank in writing. Other than as expressly described in this Loan Modification Agreement
as a result of the Merger, no maker will be released by virtue of this Loan Modification Agreement. 
 15. JURISDICTION/VENUE. Section 11 of the
Loan Agreement is hereby incorporated by reference. 
 16. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective only when it
shall have been executed by Borrower and Bank. 
 [Signature page follows.] 

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

 

									
	HOLDINGS:				ENDOCHOICE, INC., as a Borrower
				
	ECPM HOLDINGS, LLC.				By		 /s/ Michael J. Lambert

							Name:		 Michael J. Lambert

	By		 /s/ Michael J. Lambert
				Title:		 CFO

	Name:		 Michael J. Lambert
						
	Title:		 CFO
						
				
	ROBERT S. SMITH, M.D., INC., as a Borrower						
					
	By		 /s/ Michael J. Lambert
						
	Name:		 Michael J. Lambert
						
	Title:		 CFO
						
				
	BANK:						
				
	SILICON VALLEY BANK						
					
	By		 /s/ Andrew J. Kirk
						
	Name:		 Andrew J. Kirk
						
	Title:		 Director
						

 Acknowledgment and Agreement: 

The undersigned ratifies, confirms and reaffirms, all and singular, the terms and conditions of a certain Unconditional Guaranty and a certain Guarantor
Security Agreement, each dated as of September 9, 2013, and each document executed in connection therewith, and acknowledges, confirms and agrees that the Unconditional Guaranty, the Guarantor Security Agreement and each document executed in
connection therewith shall remain in full force and effect and shall in no way be limited by the execution of this Loan Modification Agreement, or any other documents, instruments and/or agreements executed and/or delivered in connection herewith.

  

			
	ECPM HOLDINGS, LLC
		
	By		 /s/ Michael J. Lambert

	Name:		 Michael J. Lambert

	Title:		 CFO



  
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 Exhibit A to Second Loan Modification Agreement 

EXHIBIT B 

COMPLIANCE CERTIFICATE 
  

											
	TO:	 	SILICON VALLEY BANK	 		 	Date:	 	                                      
  	 	
	FROM:	 	ENDOCHOICE, INC., et al.	 		 		 		 	

 The undersigned authorized officer of ENDOCHOICE, INC. (for itself and on behalf of each other co-borrower,
the “Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (as amended, the “Agreement”), (1) Borrower is 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) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by
Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against Borrower or any of its Subsidiaries, if any, relating to unpaid employee payroll or
benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents supporting the certification. The undersigned certifies 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 acknowledges that no borrowings may be requested at any time or date of determination that Borrower 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. 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
			
	Annual financial statement (CPA Audited) + CC	  	FYE within 180 days (for FYE ended December 31, 2013, on or before August 15, 2014)	  	Yes    No
			
	10-Q, 10-K and 8-K	  	Within 5 days after filing with SEC	  	Yes    No
			
	A/R & A/P Agings	  	Monthly within 30 days	  	Yes    No
			
	Transaction Reports	  	(i) with each request for an Advance, (ii) on the 15th (or the immediately preceding Business Day if the 15th is not a
Business Day) and the last Business Day of each month when a Streamline Period is not in effect, and (iii) within fifteen (15) days after the end of each month when a Streamline Period is in effect	  	Yes    No
			
	Projections	  	FYE within 30 days	  	Yes    No


  
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	 Financial Covenant
	  	Required	 	  	Actual	 	  	Complies
				
	 Maintain as indicated:
	  				  				  	
				
	 Minimum Revenue
	  	 	  	* 	  	$	            	  	  	Yes    No

  

	*	See Section 6.9(b) 

  

									
	 Streamline Period - Performance Pricing
	  	 	 	 	Applies	 
			
	 Adjusted Quick Ratio 3 1.15:1.00
	  	 	Prime + 1.50	% 	 	 	Yes    No	  
			
	 Adjusted Quick Ratio < 1.15:1.00
	  	 	Prime + 2.50	% 	 	 	Yes    No	  

 The following financial covenant analyses and information set forth in Schedule 1 attached hereto 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.”) 
  
  

 
  

 
  

 
  

									
	EndoChoice, Inc., et al.	 		 	BANK USE ONLY
					
		 		 		 	Received by:	 	  

	By:	 	  
	 		 		 	AUTHORIZED SIGNER
	Name:	 	  
	 		 	Date:	 	  

	Title:	 	  
	 		 		 	
		 		 		 	Verified:	 	  

		 		 		 		 	AUTHORIZED SIGNER
		 		 		 	Date:	 	  

					
		 		 		 	Compliance Status:	 	Yes    No


  
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 Schedule 1 to Compliance Certificate 

Financial Covenants of Borrower 
  

	II.	Minimum Revenue Growth (Section 6.9(b)) 

 Required: Borrower shall achieve the following revenue levels,
measured on a quarterly basis for each quarterly period listed below: 
  

					
	Quarterly Period Ending	  	Minimum Revenue	 
	 September 30, 2014
	  	$	14,500,000	  
	 December 31, 2014
	  	$	18,500,000	  
	 March 31, 2015
	  	$	19,000,000	  
	 June 30, 2015
	  	$	21,000,000	  
	 September 30, 2015, and each quarterly period ending thereafter
	  	$	22,000,000	  

 Actual: All amounts measured on a quarterly basis 
  

							
	 A. Borrower’s consolidated revenue
	  	$	            	  

 Is line A equal to or greater than $[        ]? 

 

					
	         No, not in compliance	 	         Yes, in compliance	 	


  
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