Exhibit 10.31


 


FOURTH AMENDMENT

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


 


                THIS FOURTH AMENDMENT to Amended and Restated Loan and Security
Agreement (this “Amendment ) is entered into this 29th day of October, 2007, by
and between Silicon Valley Bank (“Bank ) and Transoma Medical, Inc., a Delaware
corporation (“Borrower ) whose address is 4211 Lexington Avenue N, Suite 2244,
St. Paul, Minnesota 55126.


 


RECITALS


 


                A.            Bank and
Borrower have entered into that certain Amended and Restated Loan and Security
Agreement dated as of June 21, 2005, as amended by that certain First Amendment
to Amended and Restated Loan and Security Agreement by and between Bank and
Borrower dated as of January 4, 2007, that certain Second Amendment to Amended
and Restated Loan and Security Agreement by and between Bank and Borrower dated
as of July 19, 2007, and that certain Third Amendment to Amended and Restated
Loan and Security Agreement by and between Bank and Borrower dated as of August
22, 2007 (as the same may from time to time be further amended, modified,
supplemented or restated, 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 to (i) increase the aggregate
amount available to be borrowed under the Loan Agreement, and (ii) revise the
requirements related to Bank’s audit of Borrower’s Collateral in Section 6.2 of
the Loan Agreement.


 


                D.           Bank has
agreed to so amend certain provisions of 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 2.3 (Overadvances).   The last
sentence in Section 2.3 is amended in its entirety and replaced with the
following:


 

















 


                If
the Credit Extensions ever exceed $11,750,000, Borrower must immediately pay
Bank the excess.


 


                                2.2          Section 6.2 (Financial Statements,
Reports, Certificates).   Section 6.2(d) is amended
in its entirety and replaced with the following:


 


                (d)
Allow Bank to audit Borrower’s Collateral at Borrower’s expense. Such audits
will be conducted (i) within 90 days following the initial Advance but no later
than prior to the aggregate outstanding principal balance under the Committed
Revolving Line exceeding $1,000,000, and (ii) no more often than every year thereafter,
unless an Event of Default has occurred and is continuing.


 


                                2.3          Section 13 (Definitions).   The
following term and its respective definition set forth in Section 13.1 is
amended in its entirety and replaced with the following:


 


                “Committed Revolving Line” is an aggregate of Advances at
any time outstanding of up to $6,000,000 less the amount, if any, by which the
aggregate of all Credit Extensions exceeds $11,750,000.


 


                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, except as herein amended, 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 Agreement, as amended by this Amendment;


 


                                4.3   The organizational documents of
Borrower delivered to Bank as of September 22, 2005 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 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 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 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 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 either Borrower, except as
already has been obtained or made; and


 


                                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.             Integration.   This
Amendment and the Loan Documents represent the entire agreement about this
subject matter and supersede prior negotiations or agreements. All prior
agreements, understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Amendment and the Loan
Documents merge into this Amendment and the Loan Documents.


 


                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 (a) the due execution and delivery to
Bank of this Amendment by each party hereto, (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, and (c) Bank’s receipt of the Acknowledgment of Amendment and
Reaffirmation of Pledge substantially in the form attached hereto as Schedule
2, duly executed and delivered by each Pledgor.


 


[Signature page follows.]


 

















 


                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

  	
   

  	
  Transoma Medical, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jay McNeil

  	
   

  	
  By:

  	
  /s/ Charles T. Coggin

  	
   

  
	
  Name:

  	
  Jay McNeil

  	
   

  	
  Name:

  	
  Charles T. Coggin

  	
   

  
	
  Title:

  	
  SRM

  	
   

  	
  Title:

  	
  VP & CFO

  	
   

  



 

















 


Schedule 1


 


 


ACKNOWLEDGMENT OF AMENDMENT


AND REAFFIRMATION OF GUARANTY


 


                Section 1.              Guarantor
hereby acknowledges and confirms that it has reviewed and approved the terms
and conditions of the Fourth Amendment to Amended and Restated Loan and
Security Agreement dated as of even date herewith (the “Amendment ).


 


                Section 2.              Guarantor
hereby consents to the Amendment and agrees that the Guaranty relating to the
Obligations of Borrower under the Loan Agreement 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.


 


                Section 3.              Guarantor
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.


 


Dated as of October 29, 2007


 


	
  GUARANTOR

  	
  Data Sciences UK, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian P. Brockway

  	
   

  
	
   

  	
  Name:

  	
  Brian P. Brockway

  	
   

  
	
   

  	
  Title:

  	
  President and CEO

  	
   

  



 

















 


Schedule 2


 


ACKNOWLEDGMENT OF AMENDMENT

AND REAFFIRMATION OF PLEDGE


 


 


                Section 1.              Pledgor
hereby acknowledges and confirms that it has reviewed and approved the terms
and conditions of the Fourth Amendment to Amended and Restated Loan and
Security Agreement dated as of even date herewith (the “Amendment ).


 


                Section 2.              Pledgor
hereby consents to the Amendment and agrees that the Security Agreement
securing the Obligations of Borrower under the Loan Agreement 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.


 


                Section 3.              Pledgor
represents and warrants that, after giving effect to the Amendment, all
representations and warranties contained in the Security Agreement are true,
accurate and complete as if made the date hereof.


 


Dated as of October 29, 2007


 


 


	
  PLEDGOR

  	
  Data Sciences UK, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brian P. Brockway

  	
   

  
	
   

  	
  Name:

  	
  Brian P. Brockway

  	
   

  
	
   

  	
  Title:

  	
  President and CEO