Document:

VTSS-EX-10.1

EXHIBIT 10.1
Fiscal Year 2014 Executive Bonus Plan

1.PURPOSE OF PLAN
The purpose of this Vitesse Semiconductor Corporation Fiscal Year 2014 Executive Bonus Plan (this “Plan”) is to provide members of the executive staff (“Executive”) of Vitesse Semiconductor Corporation, a Delaware corporation, (the “Corporation”) with the opportunity to earn incentive bonuses based on (a) the executive’s achievement of designated personal performance goals during Fiscal Year 2014 and (b) the Corporation’s attainment of specific financial performance objectives for Fiscal Year 2014.
2.    DEFINITIONS 
		
	2.1
	“2014 Fiscal Year” means the fiscal year of the Corporation that began on October 1, 2013 and will end on September 30, 2014.

		
	2.2
	“Adjusted EBITDA” means net income before interest, expenses for taxes, depreciation, amortization, deferred stock compensation and non-recurring professional fees. The Administrator may, from time-to-time, make other exceptions to the definition as it deems appropriate with respect to unusual or non-recurring events such as balance sheet adjustments, mergers, acquisitions, and divestitures.

		
	2.3
	“Administrator” means the Compensation Committee of the Board of Directors of the Corporation.

		
	2.4
	“Base Salary” means a Participant’s Base Salary paid (or deferred) in the 2014 Fiscal Year. Base Salary does not include bonuses or any form of compensation other than salary.

		
	2.5
	“Eligible Person” is (a) any “officer” as that term is defined in Rule 16a-1(f) under the Securities Exchange Act of 1934 (except the President/Chief Executive Officer) or (b) any vice-president who is a member of the Corporation’s executive staff.

		
	2.6
	“Goals” means the individual personal performance goals established by the Corporation’s Chief Executive Officer for each Participant for the 2014 Fiscal Year.

		
	2.7
	“Participant” means an Eligible Person who has been designated by the Administrator as eligible to earn a Bonus for the 2014 Fiscal Year.

		
	2.8
	“Total Bonus” means the portion of a Participant’s Bonus, if any, that is based on both the Participant’s achievement of his/her Personal Goals and the Corporation’s level of Adjusted EBITDA for the 2014 Fiscal Year.

3.    PLAN ADMINISTRATION
		
	3.1
	Administration. This Plan shall be administered by and all awards under this Plan shall be authorized by the Administrator.

		
	3.2
	Powers of the Administrator. Subject to the express provisions of this Plan, the Administrator is authorized and empowered to do all things necessary or desirable in connection with the authorization of awards and the administration of this Plan, including, without limitation, the authority to:

(a)    determine the Eligible Persons and, from among the Eligible Persons, designate those who are Participants;
(b)    approve the Goals established by the Corporation’s Chief Executive Officer for each Participant;
(c)    determine and approve the amount of the actual Bonus for each Participant; and
(d)    construe and interpret this Plan and any agreements defining the rights and obligations of the Corporation and Participants under this Plan, further define the terms used in this Plan, and prescribe, amend and rescind rules and regulations relating to the administration of this Plan or the Bonus payments under this Plan.
		
	3.3
	Binding Determinations. Any action taken by, or inaction of, the Corporation, the Corporation’s Chief Executive Officer, or the Administrator relating or pursuant to this Plan and within its or his authority hereunder or under applicable law shall be within the absolute discretion of that entity, person or body and shall be conclusive and binding upon all persons. Neither the Corporation’s Chief Executive Officer, the Administrator, nor any person acting at the direction thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with this Plan (or any award made under this Plan), and all such persons shall be entitled to indemnification and reimbursement by the Corporation in respect of any claim, loss, damage or expense (including, without limitation, attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under any directors and officers liability insurance coverage that may be in effect from time to time.

		
	3.4
	Reliance on Experts. In making any determination or in taking or not taking any action under this Plan, the Administrator may obtain and may rely upon the advice of experts, including employees and professional advisors to the Corporation. No director, officer or agent of the Corporation shall be liable for any such action or determination taken or made or omitted in good faith.

		
	3.5
	Delegation. The Administrator may delegate ministerial, non-discretionary functions to individuals who are officers or employees of the Corporation or to third parties.

4.    ELIGIBILITY
The Administrator may grant Bonus opportunities under this Plan only to those persons that the Administrator determines to be Eligible Persons. The Administrator shall notify each Participant of his/her eligibility to earn a Bonus under this Plan by the later of December 31, 2013 or the 45th day following the date that the Participant becomes an Eligible Person. Such notice shall be in writing and shall include a description of the Participant’s Goals.

5.    BONUS CALCULATIONS
		
	5.1
	Goals 

		
	5.1.1
	Establishment. The Corporation’s Chief Executive Officer shall establish Goals for each Participant by the later of December 31, 2013 or the 45th day following the date the Participant becomes an Eligible Person.

		
	5.1.2
	Adjustment. To preserve the intended incentives and benefits of a Goal Bonus opportunity, the Chief Executive Officer may (i) adjust the Goals to reflect any material change in corporate capitalization, any material corporate transaction (such as a reorganization, combination, separation, merger, acquisition or any combination of the foregoing), or any complete or partial liquidation of the Corporation or (ii) make other appropriate adjustments to the Goals.

		
	5.1.3
	Determination of Achievement of Goals. The Corporation’s Chief Executive Officer shall, in his sole discretion, determine the extent to which each Participant has attained the Goals established for such Participant for the 2014 Fiscal Year, which shall be expressed as a whole percentage from 0% to 100%. The Chief Executive Officer shall make that determination within 90 days following the end of the 2014 Fiscal Year and notify the Administrator and the Participant of that determination as soon thereafter as practicable.

		
	5.2
	Total Bonus 

Each Participant’s Total Bonus, if any, shall be an amount equal to (a) times (b) times (c), where (a) equals the Participant’s Base Salary, (b) equals the percentage of Total Bonus with 100% of Goals Achieved for the respective Adjusted EBITDA and (c) equals the percentage of the Participant’s achievement of his/her Goals; provided, however, that such Total Bonus shall be prorated for any Participant who is first employed by the Corporation after October 1, 2013, to reflect the portion of the 2014 Fiscal Year during which he/she was a Participant.
The formula can also be stated as:

(Base Salary) X (% of Total Bonus with 100% of Goals Achieved for the respective Adjusted EBITDA) X (% of Goals Attained), as described in Table 1 below.
An additional bonus will be paid to the VP of Sales only as:

(Base Salary) X (% of Revenue Bonus Goals Achieved + % of Design Win Bonus Goals Achieved), as described in Table 2 below.
6.    VESTING
		
	6.1
	Vesting. A Participant’s right to receive a Bonus under this Plan shall vest on September 30, 2014, subject to the employment and performance requirements set forth in this Section 6 (and subject to the levels of (a) the Participant’s achievement of Goals and (b) the Company’s Adjusted EBITDA).

		
	6.2
	Continued Employment Required. A Participant must continue to be employed by the Corporation without performance deficiencies (as described in Section 6.5) until September 30, 2014 as a condition to vesting in the right to receive a Bonus payment under this Plan. Employment for only a portion of the vesting period, even if a substantial portion, will not entitle the Eligible Person to any proportionate vesting. An approved leave of absence by a Participant, either at the time of the vesting date, or at any time during the vesting period, will not prevent vesting of payments under the Plan.

		
	6.3
	Effect of Termination Prior to Vesting. If a Participant’s employment with the Corporation terminates before September 30, 2014 for reason that is not governed by a Change in Control or employment agreement, his/her participation in the Plan will terminate immediately and he/he shall not be eligible for a Bonus.

		
	6.4
	Events Not Deemed Terminations of Service. Unless the express policy of the Corporation or the Administrator otherwise provides, the employment relationship shall not be considered terminated in the case of (a) sick leave, (b) military leave, or (c) any other leave of absence authorized by the Corporation or the Administrator; provided that, unless re-employment upon the expiration of such leave is guaranteed by contract or law or the Administrator otherwise provides, such leave is for a period of not more than three months.

		
	6.5
	Effect of Performance Deficiencies. A Participant’s right to receive a Bonus will not become vested if, (a) at the close of the 2014 Fiscal Year, the Participant is on a Corrective Action Plan, or (b) during the 2014 Fiscal Year, the Participant is otherwise notified that his/her job performance is deficient and he/she has failed to correct the deficiencies by the end of the 2014 Fiscal Year.

7.    TIME OF BONUS PAYMENTS
Each Participant’s Bonus, if any, shall be paid by the end of the first quarter of Fiscal Year 2015, or as soon as practicable after determination and certification of the actual financial performance levels for the year and grant of approval by the Compensation Committee in a duly held meeting, but, in no event, later than March 15, 2015.
8.    OTHER PROVISIONS
		
	8.1
	Compliance with Laws. This Plan, the granting and vesting of awards under this Plan, and the payment of money under this Plan are subject to compliance with all applicable federal and state laws, rules and regulations (including, but not limited to, state and federal securities law) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Corporation, be necessary or advisable in connection therewith.

		
	8.2
	No Rights to Awards. No person shall have any claim or rights to be granted awards (or additional awards, as the case may be) under this Plan, subject to any express contractual rights (set forth in a document other than this Plan) to the contrary.

		
	8.3
	No Employment/Service Contract. Nothing contained in this Plan (or in any other documents under this Plan) shall confer upon any Eligible Person or Participant any right to continue in the employ or other service of the Corporation, constitute any contract or agreement of employment or other service or affect an employee’s status as an employee at will, nor shall interfere in any way with the right of the Corporation to change a person’s compensation or other benefits, or to terminate his/her employment or other service, with or without cause. Nothing in this Section 8.3, however, is intended to adversely affect any express independent right of such person under a separate employment or service contract.

		
	8.4
	Plan Not Funded. Awards payable under this Plan shall be payable from the general assets of the Corporation and no special or separate reserve, fund or deposit shall be made to assure payment of such awards. No Participant, beneficiary or other person shall have any right, title or interest in any fund or in any specific asset of the Corporation by reason of any award hereunder. Neither the provisions of this Plan (or of any related documents), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Corporation and any Participant, beneficiary or other person. To the extent that a Participant, beneficiary or other person acquires a right to receive payment pursuant to any award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Corporation.

		
	8.5
	Tax Withholding. Upon any payment of any award, the Corporation shall deduct from any amount otherwise payable in cash to the Participant (or the Participant’s personal representative or beneficiary, as the case may be) the minimum amount of any taxes which the Corporation may be required to withhold with respect to such cash payment.

		
	8.6
	Effective Date, Term, Amendments.

		
	8.6.1
	Effective Date and Term. This Plan is effective as of December 23, 2013, the date of its approval by the Compensation Committee of the Board of Directors of the Corporation (the “Effective Date”) and shall be effective for the 2014 Fiscal Year. The Plan shall automatically terminate upon the payment of the Bonuses due hereunder or, if no Bonuses are payable hereunder, as of September 30, 2014.

		
	8.6.2
	Board Authorization. The Administrator may, at any time, amend this Plan; provided that no amendment shall adversely affect any Participant’s opportunity to earn a Bonus for the 2014 Fiscal Year. 

		
	8.7
	Governing Law; Construction; Severability.

		
	8.7.1
	Choice of Law. This Plan and all other related documents shall be governed by, and construed in accordance with the laws of the State of Delaware.

		
	8.7.2
	Severability. If a court of competent jurisdiction holds any provision invalid and unenforceable, the remaining provisions of this Plan shall continue in effect.

		
	8.8
	Captions. Captions and headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof.    

		
	8.9
	Non-Exclusivity of Plan. Nothing in this Plan shall limit or be deemed to limit the authority of the Board or the Administrator to grant any award or authorize any other compensation, under any other plan or authority. Awards under this Plan may be made in addition to, in combination with, as alternatives to or in payment of grants, awards or commitments under any other plans or arrangements of the Corporation.

		
	8.10
	No Corporate Action Restriction. The existence of this Plan shall not limit, affect or restrict in any way the right or power of the Board or the stockholders of the Corporation to make or authorize (a) any adjustment, recapitalization, reorganization or other change in the capital structure or business of the Corporation, (b) any merger, amalgamation, consolidation or change in the ownership of the Corporation, (c) any issue of bonds, debentures, capital, preferred or prior preference stock ahead of or affecting the capital stock (or the rights thereof) of the Corporation, (d) any dissolution or liquidation of the Corporation, (e) any sale or transfer of all or any part of the assets or business of the Corporation, or (f) any other corporate act or proceeding by the Corporation. No Participant, beneficiary or any other person shall have any claim under any grant of a Bonus opportunity against any member of the Board or the Administrator, or the Corporation or any employees, officers or agents of the Corporation, as a result of any such action.

INWITNESS WHEREOF, this Plan is executed by its duly authorized officer as of December 23, 2013.
VITESSE SEMICONDUCTOR CORPORATION

	
		
	By
	/s/ Christopher R. Gardner

	Name
	Christopher R. Gardner

	Title
	President / CEO

EXHIBIT A

		
	Table 1:
	Incentive Bonus Calculations based on Adjusted EBITDA and

Assuming All Goals Are Achieved (as Percent of Base Salary)

	
				
	

Adjusted
EBITDA Achieved in FY2014
	Total
Bonus with
100% of
Goals
Achieved

(CFO)
	Total
Bonus with
100% of
Goals
Achieved

(Other VPs)
	 

	<=$[l] 1
	40.0%
	30.0%
	 

	>$[l] to $[l]
	40.0%
	35.0%
	 

	>$[l] to $[l]
	50.0%
	40.0%
	Target Bonus

	>$[l] to $[l]
	52.5%
	42.5%
	 

	>$[l] to $[l]
	55.0%
	45.0%
	 

	>$[l] to $[l]
	57.5%
	47.5%
	 

	> $[l]
	60.0%
	50.0%
	Maximum Bonus

		
	Table 2:
	Sales Incentive Bonus Calculations (as Percent of Base Salary)

Additional bonus that applies to VP of Sales ONLY

	
					
	

Product Revenue Achieved in FY2014
	

Revenue Bonus
	New Product Design Wins Achieved in FY2014
	

Design Win Bonus
	 

	<$[l]
	[l]%
	<$[l]
	[l]%
	Below Minimum

	$[l] to $[l]
	[l]%
	$[l] – <$[l]
	[l]%
	Minimum Bonus

	>$[l] to $[l]
	[l]%
	$[l] – <$[l]
	[l]%
	Target Bonus

	>$[l] to $[l]
	[l]%
	$[l] – $[l]
	[l]%
	 

	>$[l]
	[l]%
	>$[l]
	[l]%
	Maximum Bonus

1 Terms represented by this symbol are considered confidential.  These confidential terms have been omitted pursuant to a Confidential Treatment Request filed with the Securities and Exchange Commission (“SEC”) and have been filed separately with the SEC.EXHIBIT 10.1

 

THIRD Amendment
to Loan and security agreement

THIS
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”) is entered into this 30th day
of January, 2014 (“Closing Date”), by and between SILICON VALLEY BANK, a California corporation (“Bank”)
and UROLOGIX, INC., a Minnesota corporation (“Borrower”).

Recitals

A.                 
Bank and Borrower have entered into that certain Loan and Security Agreement dated as of January
11, 2012 (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 extend the Revolving Line Maturity Date and make certain
other revisions to the Loan Agreement as more fully set forth herein.

D.                 
Although Bank is under no obligation to do so, Bank is willing to extend the Revolving Line
Maturity Date and make certain other revisions to 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, including its preamble and recitals, shall have the meanings given to them in the Loan Agreement.

2.                  
Amendments to Loan Agreement.

2.1               
Section 2.3 (Payment of Interest on the Credit Extensions).
Section 2.3(a) of the Loan Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

(a)                
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 either the (i) Prime Rate, plus three and one quarter of one percent (3.25%) at all times that Borrower’s Adjusted
Quick Ratio is greater than 1.50 to 1.00 or (ii) Prime Rate, plus four and one quarter of one percent (4.25%) at all other times,
which interest shall be payable monthly in accordance with Section 2.3(f) below. The interest rate shall be adjusted based upon
Borrower’s Adjusted Quick Ratio as reported in each monthly Compliance Certificate as of the first (1st) calendar day of
the first (1st) month immediately following such change. If Borrower fails to deliver a Compliance Certificate for any month, the
Applicable Rate for the following month (as of the first (1st) calendar day of such month) shall be equal to a floating per annum
rate equal to the Prime Rate plus four and one quarter of percent (4.25%).

    	 

    	 

    

 

2.2               
Section 2.4 (Fees). Section 2.4(b) of the Loan Agreement
is hereby amended by deleting it in its entirety and replacing it with the following:

(b)                
[Reserved];

2.3               
Section 2.4 (Fees). Section 2.4(d) of the Loan Agreement
is hereby amended by deleting it in its entirety and replacing it with the following:

(d)                
Collateral
Monitoring Fee. At all times that there shall exist any outstanding Obligations under the Revolving Line, a monthly collateral
monitoring fee of Seven Hundred Fifty Dollars ($750) and at all other times, such fee shall be Zero Dollars ($0) (the “Collateral
Monitoring Fee”), payable in arrears on the last day of each month (prorated for any partial month at the beginning and
upon termination of this Agreement).

2.4               
Section 2.4 (Fees). Section 2.4 of the Loan Agreement
is hereby amended by adding Section 2.4(g) in its entirety to the Loan Agreement immediately after Section 2.4(f) of the Loan Agreement
as follows:

(g)                
Renewal
Commitment Fee. A fully earned, non-refundable renewal commitment fee of Six Thousand Two Hundred Fifty Dollars ($6,250) (the
“Renewal Commitment Fee”) which shall be paid to Bank on January 30, 2014.

2.5               
Section 6.2 (Financial Statements, Reports, Certificates).
Section 6.2(a) of the Loan Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

(a)                
a Transaction
Report (including sales, credit memos, collections journals, other Collateral adjustments, and any schedules related thereto) on
a weekly basis;

2.6               
Section 6.2 (Financial Statements, Reports, Certificates).
Section 6.2 of the Loan Agreement is hereby amended by adding Section 6.2(l) in its entirety to the Loan Agreement immediately
after Section 6.2(k) of the Loan Agreement as follows:

(l)                
immediate written
notice of any demand for a royalty payment and/or annual license payment from Medtronic.

2.7               
Section 6.3 (Accounts Receivable). Section 6.3(c)
of the Loan Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

(c)                
Collection
of Accounts. Borrower shall have the right to collect all Accounts, unless and until an Event of Default has occurred and is
continuing. Bank shall require that all proceeds of Accounts be deposited by Borrower into a lockbox account, or such other “blocked
account” as specified by Bank, pursuant to a blocked account agreement in such form as Bank may specify in its good faith
business judgment. Whether or not an Event of Default has occurred and is continuing, Borrower shall immediately deliver all payments
on and proceeds of Accounts to an account maintained with Bank to be applied (i) prior to an Event of Default, pursuant to the
terms of Section 2.5(b) hereof, and (ii) after the occurrence and during the continuance of an Event of Default, pursuant to the
terms of Section 9.4 hereof.

    	2

    	 

    

 

2.8               
Section 6.9 (Financial Covenants). Section 6.9 of
the Loan Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

6.9               
Financial Covenants.

 

Maintain at all times,
to be tested as of the last day of each month, on a consolidated basis with respect to Borrower and its Subsidiaries:

(a)                
Minimum Liquidity.
Liquidity of at least four (4) months Cash Burn.

2.9               
Section 8 (Events of Default). Section 8 of the Loan
Agreement is hereby amended by adding Section 8.10 in its entirety to the Loan Agreement immediately after Section 8.9 of the Loan
Agreement as follows:

8.10               
Medtronic
Royalty Payments. (a) Borrower makes any royalty payment and/or annual license payment to Medtronic (the “Medtronic
Royalty Payment”), (b) Medtronic threatens orally or in writing to take any action, exercise any remedy, or enforce any
right it may have against Borrower to collect any portion of the Medtronic Royalty Payment, or (c) Medtronic commences any action
or proceeding against Borrower with respect to the Medtronic Royalty Payment, provided, however, that an Event of Default under
this Section 8.10 shall be cured for purposes of this Agreement upon Borrower receiving, within thirty (30) days of the occurrence
of the Event of Default under this Section 8.10, Net Proceeds from a new round of Financing with investors satisfactory to Bank
in its sole discretion of at least Seven Hundred Fifteen Thousand Dollars ($715,000) (the “Cure Equity Raise”),
if at the time of such Cure Equity Raise Bank has not declared an Event of Default under this Agreement and/or exercised any rights
with respect thereto. Upon the occurrence of an Event of Default under this Section 8.10, no additional Credit Extensions shall
be available to Borrower under the Revolving Line.

2.10           
Section 12.1 (Termination Prior to Revolving Line Maturity Date).
Section 12.1 of the Loan Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

12.1                
Termination Prior
to Revolving Line Maturity Date.

This Agreement may
be terminated prior to the Revolving Line Maturity Date by Borrower, effective three (3) Business Days after written notice of
termination is given to Bank. Notwithstanding any such termination, Bank’s lien and security interest in the Collateral shall
continue until Borrower fully satisfies its Obligations.

    	3

    	 

    

 

2.11           
Section 13 (Definitions). 

(a)                
The definition of “Revolving Line Maturity Date” set forth in Section 13.1 of
the Loan Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“Revolving Line
Maturity Date” is June 30, 2014.

(b)                
The following terms and their respective definitions are hereby added in alphabetical order
to Section 13.1 of the Loan Agreement as follows:

“Adjusted
Quick Ratio” means, as of the date of determination, a ratio of Quick Assets to Current Liabilities.

“Cash Burn”
means Borrower’s average monthly Net Income for the trailing three (3) month period then ended, plus (i) to the extent deducted
in the calculation of Net Income, depreciation expense and amortization expense, plus (ii) all non-cash expenses, minus (iii) all
non-cash gains.

“Current
Liabilities” are all obligations and liabilities of Borrower to Bank, plus, without duplication, the aggregate amount
of Borrower’s Total Liabilities that mature within one (1) year.

“Financing”
means a bona fide round of private or public equity financing or Subordinated Debt of Borrower with investors satisfactory to Bank
in its sole discretion, on terms acceptable to Bank.

“Liquidity”
means the sum of (a) Borrower’s unrestricted cash maintained at Bank, plus fifty percent (50%) of (b) an amount equal to
(i) the Revolving Line multiplied by the Borrowing Base, minus (ii) the outstanding principal balance of any Advances.

“Medtronic”
means Medtronic, Inc., a Minnesota corporation.

“Net Proceeds”
means the gross proceeds received by Borrower from any bona-fide issuances of new equity, less reasonable and customary closing
costs (including, but not limited to, reasonable attorneys’ fees, brokers’ fees or commissions, investment bankers’
fees or commissions and similar items) owed to any Person in an arm’s length transaction that are actually incurred in connection
with such bona-fide issuances of new equity.

“Quick Assets”
is, on any date, Borrower’s consolidated, unrestricted cash and Cash Equivalents, net billed accounts receivable and investments
with maturities of fewer than 12 months determined according to GAAP.

“Total Liabilities”
is on any day, obligations that should, under GAAP, be classified as liabilities on Borrower’s consolidated balance sheet,
including all Indebtedness, but excluding all Subordinated Debt.

    	4

    	 

    

 

3.                  
Compliance Certificate. From and after the Closing
Date, Exhibit D of the Loan Agreement is replaced in its entirety with Exhibit D attached hereto and all references
in the Loan Agreement to the Compliance Certificate shall be deemed to refer to Exhibit D attached hereto.

4.                  
Limitation of Amendments.

4.1               
The amendments set forth in Sections 2 and 3, are effective for the purposes set
forth herein and shall be limited precisely as written and shall not be deemed to be a consent to any amendment, waiver or modification
of any other term or condition of any Loan Document, or  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.

4.2               
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.

4.3               
In addition to those Events of Default specifically enumerated in the Loan Documents,
the failure to comply with the terms of any covenant or agreement contained herein shall constitute an Event of Default and shall
entitle the Bank to exercise all rights and remedies provided to the Bank under the terms of any of the other Loan Documents as
a result of the occurrence of the same. 

5.                  
Representations and Warranties. To induce Bank to
enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

5.1               
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;

5.2               
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;

5.3               
The organizational documents of Borrower delivered to Bank on the Effective Date remain
true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

5.4               
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;

5.5               
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  any law or regulation
binding on or affecting Borrower,  any contractual restriction with a Person binding on Borrower,  any order, judgment
or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or  the
organizational documents of Borrower;

    	5

    	 

    

 

5.6               
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 Borrower, except as already has been obtained or made; and

5.7               
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.

6.                  
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.

7.                  
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.

8.                  
Effectiveness. This Amendment shall be deemed effective
upon  the due execution and delivery to Bank of this Amendment by each party hereto, Borrower’s payment of a renewal
fee to Bank in an amount equal to Six Thousand Two Hundred Fifty Dollars ($6,250), and   payment of Bank’s legal fees
and expenses in connection with the negotiation and preparation of this Amendment.

[Signature page follows.]

 

 

 

 

    	6

    	 

    

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

	BANK
	 	 
	SILICON VALLEY BANK
	 	 
	 	 
	By:	/s/ Eric Jacobson
	 	Name:  Eric Jacobson

Title:  Director
	 	 
	 	 
	BORROWER:
	 	 
	UROLOGIX, INC.
	 	 
	 	 
	By:	/s/ Brian J. Smrdel
	 	Name:  Brian J. Smrdel

Title:  Chief Financial Officer

 

 

 

 

 

 

 

 

 

    	 

    	 

    

EXHIBIT D

 

COMPLIANCE CERTIFICATE

 

	TO:	SILICON VALLEY BANK	Date:	 
	FROM:  	Urologix, Inc.	 	 

 

The undersigned authorized officer of Urologix, Inc.
(“Borrower”) certifies that under the terms and conditions of the Loan and Security Agreement between Borrower
and Bank (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 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)	FYE within 120 days	Yes   No
	Board Projections	FYE within 30 days 	Yes   No
	A/R & A/P Agings	Monthly within 30 days	Yes   No
	Transaction Report	Weekly	Yes   No
	Deferred Revenue Reports	Monthly within 30 days	Yes   No
	 

 

    	 

    	 

    

 

	Financial Covenants	Required	Actual	Complies
	 	 	 	 
	Maintain on a Monthly Basis:	 	 	 
	   Minimum Liquidity of at least	4 months Cash Burn	$________	Yes   No

 

	Performance Pricing	Applies
	 	 	 
	Adjusted Quick Ratio > 1.50 to 1.00	Prime + 3.25%	Yes   No
	Adjusted Quick Ratio ≤ 1.50 to 1.00	Prime + 4.25%	Yes   No

 

The following financial covenant
analysis 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.”)

 

 

 

	UROLOGIX, Inc	 	BANK USE ONLY	 
	 	 	 	 	 	 
	 	 	 	Received by:	 	 
	By:	 	 	 	authorized signer	 
	 	Name:	 	Date:	 	 
	 	Title:	 	Verified:	 	 
	 	 	 	 	authorized signer	 
	 	 	 	Date:	 	 
	 	 	 	 	Compliance Status:   Yes   No	 

 

 

 

 

 

 

 

 

    	 

    	 

    

Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

In the event of a conflict between this Schedule and
the Loan Agreement, the terms of the Loan Agreement shall govern.

 

Dated:__________________________

 

I.      Minimum Liquidity (Section 6.9(a))

 

Required:      Liquidity of at least four (4) months
Cash Burn.

 

Actual:

 

	A.	Borrower’s unrestricted cash at Bank	$______
	B.	Revolving Line multiplied by the Borrowing Base 	$______
	C.	Outstanding principal balance of any Advances	
        $______

        
	D.	Availability (line B minus line C)	$______
	E.	Liquidity (sum of line A plus line D)	$______
	F	Average Monthly Net Income of Borrower (on a trailing 3-month basis)	$______
	G.	Amortization of Borrower	$______
	H.	Depreciation of Borrower	$______
	I.	Non-cash expenses of Borrower	$______
	J.	Non-cash gains	$______
	K.	Cash Burn (line F plus, line G plus, line H plus, line I, minus line J)	$______
	L	Four (4) months Cash Burn (line K multiplied by 4)	$______

 

Is line E equal to or greater than line K?

 

_________  No,
not in compliance                 _________  Yes,
in compliance

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