Document:

Exhibit 10.1

 

SECOND LOAN
MODIFICATION AGREEMENT

 

This
Second Loan Modification Agreement (this “Loan Modification
Agreement”) is entered into as of May 24, 2010, by and between (i) SILICON VALLEY BANK, a California corporation, with its
principal place of business at 3003 Tasman Drive, Santa Clara, California
95054 and with a loan production office located at One Newton Executive Park, Suite 200,
2221 Washington Street, Newton, Massachusetts 02462 (“Bank”)
and (ii)  CALIPER LIFE SCIENCES, INC.,
a Delaware corporation with a principal place of business located at 68 Elm
Street, Hopkinton, Massachusetts 01748 (“Caliper”), NOVASCREEN BIOSCIENCES CORPORATION, a Maryland corporation (“NovaScreen”), XENOGEN CORPORATION,
a Delaware corporation (“Xenogen”), and CALIPER LIFE SCIENCES LTD., a company organized under the
laws of Canada (“Caliper  Ltd.”)
(hereinafter, Caliper, NovaScreen, Xenogen, and Caliper Ltd. are jointly and
severally, individually and collectively, referred to as “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 March 6, 2009, evidenced
by, among other documents, a certain Second Amended and Restated Loan and
Security Agreement, dated as of March 6, 2009, by and between Borrower and
Bank, as modified by that certain First Loan modification Agreement, dated as
of December 11, 2009 (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 Security Documents, together with all other documents evidencing or
securing the Obligations shall be referred to as the “Existing
Loan Documents”.

 

3.             DESCRIPTION
OF CHANGE IN TERMS.

 

A.                                   Modifications
to Loan Agreement.

 

1                                          The Loan Agreement shall be
amended by deleting the following, appearing as Section 2.3(a) thereof,
in its entirety:

 

“(a)         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: (x) if Borrower’s unrestricted cash is
equal to or greater than Twenty Million Dollars ($20,000,000.00), one
percentage point (1.00%) above the Prime Rate, or (y) if Borrower’s
unrestricted cash is less than Twenty Million Dollars ($20,000,000.00), two
percentage points (2.00%) above the Prime Rate, which interest shall be payable
monthly in accordance with Section 2.3(f) below.  Any changes to the applicable interest rate
due as set forth in (x) or (y) above, shall be effective on the first
day of the month following such event.”

 

and
inserting in lieu thereof the following:

 

“(a)         Interest Rate; 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%),
which interest shall be payable monthly, in arrears, in accordance with Section 2.3(f) below.”

 

 

2                                          The Loan Agreement shall be
amended by deleting the following, appearing as Section 2.4(d) thereof,
in its entirety:

 

“(d)         Unused Revolving Line Facility Fee.  A fee (the “Unused
Revolving Line Facility Fee”), which fee shall be paid monthly, in
arrears, on the last day of each month, in an amount equal to one-half of one
percent (0.50%) per annum of the average unused portion of the Revolving Line,
as determined by Bank.  The unused
portion of the Revolving Line, for the purposes of this calculation, shall
include amounts reserved under the Cash Management Services Sublimit for
products provided and under the Foreign Exchange Sublimit for FX Forward
Contracts (as described in Section 2.1.3). 
Borrower shall not be entitled to any credit, rebate or repayment of any
Unused Revolving Line Facility Fee previously earned by Bank pursuant to this Section notwithstanding
any termination of the within Agreement, or suspension or termination of Bank’s
obligation to make loans and advances hereunder; and”

 

and inserting in lieu thereof the following:

 

“(d)         Unused Revolving Line Facility Fee.  A fee (the “Unused
Revolving Line Facility Fee”), payable monthly, in arrears, on a
calendar year basis, in an amount equal to two-fifths of one percent (0.40%)
per annum of the average unused portion of the Revolving Line, as determined by
Bank.  The unused portion of the
Revolving Line, for the purposes of this calculation, shall include amounts
reserved under the Cash Management Services Sublimit for products provided and
under the Foreign Exchange Sublimit for FX Forward Contracts (as described in Section
2.1.3).  Borrower shall not be entitled
to any credit, rebate or repayment of any Unused Revolving Line Facility Fee
previously earned by Bank pursuant to this Section notwithstanding any
termination of the within Agreement, or suspension or termination of Bank’s
obligation to make loans and advances hereunder; and”

 

3                                          The Loan Agreement shall be
amended by deleting the following, appearing as Section 6.9 thereof, in
its entirety:

 

“6.9        Financial Covenants.

 

Borrower
shall maintain at all times, to be tested as of the last day of each quarter:

 

(a)           Adjusted Quick Ratio.  A ratio of Quick Assets to Quick Liabilities
of at least 0.95  to 1.0 for the quarter ending December 31,
2008 and for each fiscal quarter thereafter.

 

(b)           Minimum
EBITDA-Cap Ex.  Borrower’s
EBITDA minus its capital expenditures, (“EBITDA-Cap Ex”)
for the two (2) quarter period ending as of the last day of each quarter,
shall be in an amount equal to: (i) losses not greater than (A) One
Million Five Hundred Thousand Dollars ($1,500,000) for the quarter ended December 31,
2008; (B) Six Million Eight Hundred Thousand Dollars ($6,800,000) for the
quarter ending March 31, 2009; (C) Eight Million Seven Hundred
Thousand Dollars ($8,700,000) for the quarter ending June 30, 2009; and (D) Five
Million Five Hundred Thousand Dollars ($5,500,000) for the quarter ending September 30,
2009; (ii) not less than Sixty Thousand Dollars ($60,000) for the quarter
ending December 31, 2009; (iii) losses not greater than (A) Two
Million Dollars ($2,000,000) for the quarter ending March 31, 2010; (B) Five
Million Dollars ($5,000,000) for the quarter ending June 30, 2010; and (C) Two
Million Dollars ($2,000,000) for the quarter ending September 30, 2010; (iv) not
less than Two Million Dollars ($2,000,000) for the quarter ending December 31,
2010; and (v) losses not greater than Five Hundred Thousand Dollars
($500,000) for the quarter ending March 31, 2011.”

 

 

and
inserting in lieu thereof the following:

 

“6.9        Financial Covenants.

 

Borrower
shall maintain at all times, to be tested as of the last day of each quarter:

 

(a)           Adjusted Quick Ratio.  A ratio of Quick Assets to Quick Liabilities
of at least 1.25  to 1.0 for the quarter ending June 30,
2010 and for each fiscal quarter thereafter.

 

(b)           Minimum
EBITDA-Cap Ex.  Borrower’s
EBITDA minus its capital expenditures, (“EBITDA-Cap Ex”)
for the two (2) quarter period ending as of the last day of each quarter,
shall be in an amount equal to: (i) losses not greater than (A) One
Million Five Hundred Thousand Dollars ($1,500,000) for the quarter ended December 31,
2008; (B) Six Million Eight Hundred Thousand Dollars ($6,800,000) for the
quarter ending March 31, 2009; (C) Eight Million Seven Hundred
Thousand Dollars ($8,700,000) for the quarter ending June 30, 2009; and (D) Five
Million Five Hundred Thousand Dollars ($5,500,000) for the quarter ending September 30,
2009; (ii) not less than Sixty Thousand Dollars ($60,000) for the quarter
ending December 31, 2009; (iii) losses not greater than (A) Two
Million Dollars ($2,000,000) for the quarter ending March 31, 2010; (B) Five
Million Five Hundred Thousand Dollars ($5,500,000) for the quarter ending June 30,
2010; (C) Four Million Five Hundred Thousand Dollars ($4,500,000) for the
quarter ending September 30, 2010; (D) Two Million Dollars
($2,000,000) for the quarter ending December 31, 2010; and (E) Three
Million Five Hundred Thousand Dollars ($3,500,000) for the quarter ending March 31,
2011.  Thereafter, if the Revolving Line
is extended, in Bank’s sole discretion, then commencing with the quarterly
period ending June 30, 2011, Borrower shall achieve EBITDA-Cap Ex equal to
losses not greater than Three Million Dollars ($3,000,000), which amount shall
be increased by Five Hundred Thousand Dollars ($500,000) (i.e. the maximum net
losses will be reduced by Five Hundred Thousand Dollars ($500,000)) for each
quarterly period thereafter.”

 

4                                          The Loan Agreement shall be
amended by deleting the following definitions appearing in Section 13.1
thereof:

 

““Net Income”  means, as
calculated on a consolidated basis for Borrower and its Subsidiaries, if any, for
any period as at any date of determination, the net profit (or loss), after
provision for taxes, of Borrower and its Subsidiaries for such period taken as
a single accounting period.

 

“Prime Rate” is the greater of (i) four and one-half of
one percent (4.50%) and (ii) Bank’s most recently announced “prime rate,”
even if it is not Bank’s lowest rate.”

 

and
inserting in lieu thereof the following:

 

““Net Income”  means, as calculated
on a consolidated basis for Borrower and its Subsidiaries, if any, for any
period as at any date of determination, the net profit (or loss), exclusive of
any extraordinary gains and/or gains or proceeds from the sale of product lines
of the Borrower, after provision for taxes, of Borrower and its Subsidiaries
for such period taken as a single accounting period.

 

“Prime Rate” is Bank’s most recently announced “prime rate,”
even if it is not Bank’s lowest rate.”

 

5                                          The Compliance Certificate
appearing as Exhibit B to the Loan Agreement is hereby replaced
with the Compliance Certificate attached as Exhibit A hereto.

 

 

4.             FEES.  Borrower shall pay to Bank a modification fee
equal to Five Thousand Dollars ($5,000), which fee shall be due on the date hereof
and shall be deemed fully earned as of the date hereof.   Borrower shall also reimburse Bank for all
legal fees and expenses incurred in connection with this amendment to the
Existing Loan Documents.

 

5.             RATIFICATION
OF NEGATIVE PLEDGE.  Borrower hereby
ratifies, confirms and reaffirms, all and singular, the terms and conditions of
a certain negative pledge arrangement with respect to Borrower’s intellectual
property, between Borrower and Bank, and Borrower acknowledges, confirms and
agrees that said negative pledge arrangement remains in full force and effect.

 

6.             RATIFICATION
OF PERFECTION CERTIFICATE.  Borrower
hereby ratifies, confirms and reaffirms, all and singular, the terms and
disclosures contained in a certain Perfection Certificate dated as of March 6,
2009 (as updated, amended, amended and restated, supplemented and/or modified
as of the date hereof, including, without limitation, as a result of the “Sale
Transaction”, as such term is defined in that certain Consent and Release
Agreement, by and between Borrower and Bank, dated as of the date hereof), and
acknowledges, confirms and agrees the disclosures and information provided by
Borrower to Bank in the Perfection Certificate (as updated, amended, amended
and restated, supplemented and/or modified as of the date hereof) has not
changed.

 

7.             AUTHORIZATION
TO FILE.  Borrower hereby authorizes
Bank to file UCC financing statements without notice to Borrower, with all
appropriate jurisdictions, as Bank deems appropriate, in order to further perfect
or protect Bank’s interest in the Collateral, including a notice that any
disposition of the Collateral, by either the Borrower or any other Person,
shall be deemed to violate the rights of the Bank under the Code.

 

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

 

9.             RATIFICATION
OF LOAN DOCUMENTS.  Borrower hereby
ratifies, confirms, and reaffirms all terms and conditions of all security or
other collateral granted to the Bank, and confirms that the indebtedness
secured thereby includes, without limitation, the Obligations.

 

10.           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.

 

11.           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 modifications to the
existing Obligations pursuant to this Loan Modification Agreement in no way
shall obligate Bank to make any future 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. 
No maker will be released by virtue of this Loan Modification Agreement.

 

12.           RIGHT
OF SET-OFF.  In consideration of Bank’s
agreement to enter into this Loan Modification Agreement, Borrower hereby
reaffirms and hereby grants to Bank, a lien, security interest and right of set
off as security for all Obligations to Bank, whether now existing or hereafter
arising upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of Bank or any
entity under the control of Silicon Valley Bank (including a Bank subsidiary)
or in transit to any of them.  At any
time after the occurrence and during the continuance of an Event of Default,
without demand or notice, Bank may set off the same or any part thereof and
apply the same to any liability or obligation of Borrower even though unmatured
and regardless of the adequacy of any other collateral securing the loan.  ANY AND ALL RIGHTS TO REQUIRE BANK TO
EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH
SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT

 

 

TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF
BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

 

13.           CONFIDENTIALITY.  Bank may use confidential information for the
development of databases, reporting purposes, and market analysis, so long as
such confidential information is aggregated and anonymized prior to
distribution unless otherwise expressly permitted by Borrower.  The provisions of the immediately preceding
sentence shall survive the termination of the Loan Agreement.

 

14.           JURISDICTION/VENUE.  Borrower accepts for itself and in connection
with its properties, unconditionally, the exclusive jurisdiction of any state
or federal court of competent jurisdiction in the Commonwealth of Massachusetts
in any action, suit, or proceeding of any kind against it which arises out of
or by reason of this Loan Modification Agreement.  NOTWITHSTANDING THE FOREGOING, THE BANK SHALL
HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION WHICH THE BANK DEEMS NECESSARY
OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR TO OTHERWISE ENFORCE
THE BANK’S RIGHTS AGAINST THE BORROWER OR ITS PROPERTY.

 

15.           COUNTERSIGNATURE.  This Loan Modification Agreement shall become
effective only when it shall have been executed by Borrower and Bank.

 

[The remainder of this page is intentionally
left blank.]

 

 

This
Loan Modification Agreement is executed as a sealed instrument under the laws
of the Commonwealth of Massachusetts as of the date first written above.

 

 

	
  BORROWER:

  
	
   

  	
   

  
	
  CALIPER LIFE SCIENCES, INC.

  
	
   

  	
   

  
	
  By

  	
  /s/
  Peter F. McAree

  	
   

  
	
  Name:

  	
  Peter
  F. McAree

  
	
  Title:

  	
  Senior
  Vice President and CFO

  
	
   

  	
   

  
	
  NOVASCREEN BIOSCIENCES CORPORATION

  
	
   

  	
   

  
	
  By

  	
  /s/
  Peter F. McAree

  	
   

  
	
  Name:

  	
  Peter
  F. McAree

  
	
  Title:

  	
  Vice
  President, Finance

  
	
   

  	
   

  
	
  XENOGEN CORPORATION

  
	
   

  	
   

  
	
  By

  	
  /s/
  Peter F. McAree

  	
   

  
	
  Name:

  	
  Peter
  F. McAree

  
	
  Title:

  	
  Vice
  President, Finance

  
	
   

  	
   

  
	
  CALIPER LIFE SCIENCES LTD.

  
	
   

  	
   

  
	
  By

  	
  /s/
  Peter F. McAree

  	
   

  
	
  Name:

  	
  Peter
  F. McAree

  
	
  Title:

  	
  Vice
  President, Finance

  
	
   

  	
   

  
	
   

  
	
  BANK:

  
	
   

  	
   

  
	
  SILICON VALLEY BANK

  
	
   

  	
   

  
	
  By

  	
  /s/
  Michael Quinn

  	
   

  
	
  Name:

  	
  Michael
  Quinn

  	
   

  
	
  Title:

  	
  Vice
  President

  	
   

  

 

 

 

EXHIBIT B

 

COMPLIANCE CERTIFICATE

 

	
  TO:

  	
  SILICON
  VALLEY BANK

  	
  Date:

  	
   

  
	
  FROM:

  	
  CALIPER
  LIFE SCIENCES, INC.

  	
   

  
	
   

  	
  NOVASCREEN
  BIOSCIENCES CORPORATION

  	
   

  
	
   

  	
  XENOGEN
  CORPORATION

  	
   

  
	
   

  	
  CALIPER
  LIFE SCIENCES, LTD.

  	
   

  

 

The
undersigned authorized officers of Caliper Life Sciences, Inc., NovaScreen
Biosciences Corporation, Xenogen Corporation and Caliper Life Sciences, Ltd.
(individually and collectively, jointly and severally, “Borrower”)
certify 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 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

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Quarterly
  consolidated and consolidating financial statements with Compliance
  Certificate

  	
   

  	
  Quarterly
  within 45 days

  	
   

  	
  Yes  No

  
	
  Annual
  consolidated and consolidating financial statement (CPA Audited) + CC

  	
   

  	
  FYE
  within120 days

  	
   

  	
  Yes  No

  
	
  10-Q,
  10-K and 8-K

  	
   

  	
  Within
  5 days after filing with SEC

  	
   

  	
  Yes  No

  
	
  A/R &
  A/P Agings; Deferred Revenue report, cash report

  	
   

  	
  Monthly
  within 15 days

  	
   

  	
  Yes  No

  
	
  Transaction
  Reports

  	
   

  	
  Weekly
  and with each Advance request

  	
   

  	
  Yes  No

  
	
  Board
  approved projections

  	
   

  	
  Annually,
  as revised

  	
   

  	
  Yes  No

  

 

The
following intellectual property was registered after the Effective Date (if no
registrations, state “None”)

 

	
  Financial
  Covenant

  	
   

  	
  Required

  	
   

  	
  Actual

  	
   

  	
  Complies

  	
   

  
	
  Maintain at all times, tested
  quarterly:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum Quick Ratio

  	
   

  	
  1.25:1.00

  	
   

  	
              :1.0

  	
   

  	
  Yes  No

  	
   

  
	
  Minimum
  EBITDA minus Cap Ex*

  	
   

  	
  $

  	
    

  	
   

  	
  $

  	
    

  	
   

  	
  Yes  No

  	
   

  
										

 

*See
Section 6.9(b) of the Loan and Security Agreement

 

1

 

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.”)

 

 

 

	
  Caliper
  Life Sciences, Inc.

  	
   

  	
  BANK
  USE ONLY

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  Received
  by:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  AUTHORIZED SIGNER

  
	
  Title:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  
	
  NovaScreen
  Biosciences Corporation

  	
   

  	
  Verified:

  	
   

  
	
   

  	
   

  	
  AUTHORIZED SIGNER

  
	
  By:

  	
   

  	
   

  	
  Date:

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Compliance
  Status:                      Yes             No

  
	
   

  	
   

  	
   

  
	
  Xenogen
  Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Caliper
  Life Sciences, Ltd.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  

 

2

 

Schedule 1 to Compliance Certificate

 

Financial Covenants of Borrower

 

	
  Dated:

  	
   

  	
   

  

 

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

 

I.              ADJUSTED
QUICK RATIO (Section 6.9(a))

 

Required:
A ratio of Quick Assets to Quick Liabilities of at least: 1.25  to 1.0 for the quarter ending March 31, 2010 and for
each fiscal quarter thereafter

 

	
  A.

  	
   

  	
  Aggregate
  value of the unrestricted cash and Cash Equivalents and Marketable Securities
  of Borrower

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Aggregate
  value of the net billed accounts receivable and Unbilled Accounts of Borrower

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Quick
  Assets (the sum of lines A and B)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Aggregate
  value of Obligations to Bank

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Aggregate
  value of liabilities of Borrower (including all Indebtedness) that matures
  within one (1) year and current portion of Subordinated Debt permitted
  by Bank to be paid by Borrower

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F

  	
   

  	
  Aggregate
  value of (i) Deferred Revenue, (ii) real estate related
  restructuring expenses, and (iii) customer deposits

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  Quick
  Liabilities (the sum of lines D and E minus line F)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  H.

  	
   

  	
  Adjusted
  Quick Ratio (line C divided by line G)

  	
   

  	
   

  

 

Is
line H equal to or greater than 1.25 to 1.0

 

	
  o  No,
  not in compliance

  	
  o  Yes,
  in compliance

  

 

3

 

II.            MINIMUM  EBITDA minus CAP-EX (Section 6.9(b)

 

Required:
Borrower’s EBITDA minus its capital expenditures, (“EBITDA-Cap
Ex”) for the two (2) quarter period ending as of the last day
of each quarter, shall be in an amount equal to: (i) losses not greater
than (A) One Million Five Hundred Thousand Dollars ($1,500,000) for the
quarter ended December 31, 2008; (B) Six Million Eight Hundred
Thousand Dollars ($6,800,000) for the quarter ending March 31, 2009; (C) Eight
Million Seven Hundred Thousand Dollars ($8,700,000) for the quarter ending June 30,
2009; and (D) Five Million Five Hundred Thousand Dollars ($5,500,000) for the
quarter ending September 30, 2009; (ii) not less than Sixty Thousand
Dollars ($60,000) for the quarter ending December 31, 2009; (iii) losses
not greater than (A) Two Million Dollars ($2,000,000) for the quarter
ending March 31, 2010; (B) Five Million Five Hundred Thousand Dollars
($5,500,000) for the quarter ending June 30, 2010; (C) Four Million
Five Hundred Thousand Dollars ($4,500,000) for the quarter ending September 30,
2010; (D) Two Million Dollars ($2,000,000) for the quarter ending December 31,
2010; and (E) Three Million Five Hundred Thousand Dollars ($3,500,000) for
the quarter ending March 31, 2011. 
Thereafter, if the Revolving Line is extended, in Bank’s sole
discretion, then commencing with the quarterly period ending June 30, 2011,
Borrower shall achieve EBITDA-Cap Ex equal to losses not greater than Three
Million Dollars ($3,000,000), which amount shall be increased by Five Hundred
Thousand Dollars ($500,000) (i.e. the maximum net losses will be reduced by
Five Hundred Thousand Dollars ($500,000)) for each quarterly period thereafter.

 

	
  A.

  	
   

  	
  Net
  Income, exclusive of any extraordinary gains (including, without limitation,
  gains or proceeds from the sale of product lines of the Borrower)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Interest
  Expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  To
  the extent included in the determination of Net Income:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Depreciation
  expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
  Amortization
  expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.

  	
  Non-cash
  stock-based compensation expense and restructuring expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  income
  tax expense

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  EBITDA
  (line A, plus line B, plus line C.1, plus line C.2, plus line C.3, and plus
  line D)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  capital
  expenditures

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  G.

  	
   

  	
  EBIDTA
  minus CAP EX (line E minus line F)

  	
   

  	
  $

  	
   

  

 

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

 

	
  o  No,
  not in compliance

  	
  o  Yes,
  in compliance

  

 

1Exhibit 10.1

 

THE SPECTRANETICS CORPORATION

2006 INCENTIVE AWARD PLAN

 

RESTRICTED STOCK UNIT GRANT NOTICE

 

The
Spectranetics Corporation, a Delaware corporation (the “Company”),
pursuant to The Spectranetics Corporation 2006 Incentive Award Plan, as amended
(the “Plan”), hereby grants to the
individual listed below (the “Participant”)
the following award of Restricted Stock Units (“RSUs”).  This award of RSUs is subject to all of the
terms and conditions set forth herein and in the Restricted Stock Unit Agreement
attached hereto as Appendix A (the “Restricted Stock Unit
Agreement”) and in the Plan, each of which is incorporated
herein by reference.  All capitalized
terms used and not otherwise defined in this Grant Notice or the Restricted
Stock Unit Agreement shall have the meanings ascribed to such terms in the Plan
unless the context clearly indicates otherwise.

 

	
  Participant:

  	
   

  	
  [                ]

  
	
   

  	
   

  	
   

  
	
  Grant Date:

  	
   

  	
  [                ]

  
	
   

  	
   

  	
   

  
	
  Number of RSUs:

  	
   

  	
  [                ]

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
  This award shall vest with
  respect to 25% of the RSUs on each of the first, second, third and fourth
  anniversaries of the Grant Date, subject, in each case, to the Participant’s
  continued service with the Company on each such date.

  
	
   

  	
   

  	
   

  
	
  Payment of RSUs:

  	
   

  	
  Vested RSUs shall be paid
  to the Participant in the form of shares of Stock as set forth in
  Section 5 of the attached Restricted Stock Unit Agreement.

  
	
   

  	
   

  	
   

  
	
  Termination of RSUs:

  	
   

  	
  In the event that the
  Participant ceases to be an Employee, Consultant or member of the Board (a “Termination of Service”), all RSUs
  that have not vested prior to or in connection with such Termination of
  Service shall be immediately forfeited by the Participant as of such
  Termination of Service without consideration therefor.

  

 

By
his or her signature and the Company’s signature below, the Participant agrees
to be bound by the terms and conditions of the Plan, the Restricted Stock Unit
Agreement and this Grant Notice.  The
Participant has reviewed the Restricted Stock Unit Agreement, the Plan and this
Grant Notice in their entirety, has had an opportunity to obtain the advice of
counsel prior to executing this Grant Notice and fully understands all
provisions of this Grant Notice, the Restricted Stock Unit Agreement and the
Plan.  In the event that there are any
inconsistencies 

 

 

between the terms of the
Plan and the terms of this Grant Notice or the Restricted Stock Unit Agreement,
the terms of the Plan shall control.  If
the Participant is married, his or her spouse has signed the Consent of Spouse
attached to this Grant Notice as Appendix B.  The Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee
upon any questions arising under the Plan, this Grant Notice or the Restricted
Stock Unit Agreement.

 

IN
WITNESS WHEREOF, this Grant Notice has been executed and delivered by the
parties hereto as of the Grant Date first written above.

 

 

	
  THE SPECTRANETICS 

  	
   

  	
  PARTICIPANT:

  
	
  CORPORATION:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Print 

  	
   

  	
   

  	
  Print 

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

2

 

APPENDIX A

TO RESTRICTED STOCK UNIT GRANT NOTICE

 

RESTRICTED STOCK UNIT AGREEMENT

 

1.             Grant.  Pursuant to the Restricted Stock Unit Grant
Notice (the “Grant Notice”) to which this
Restricted Stock Unit Agreement (the “Agreement”)
is attached, The Spectranetics Corporation, a Delaware corporation (the “Company”), has granted to the
Participant an award of [      ] RSUs under The
Spectranetics Corporation 2006 Incentive Award Plan, as amended (the “Plan”), as set forth in the Grant
Notice, subject to all of the terms and conditions contained in this Agreement
and the Plan.  All capitalized terms used
but not defined herein shall have the meanings ascribed to such terms in the Plan
and the Grant Notice unless the context clearly indicates otherwise.

 

2.             RSUs.  Each RSU that vests shall represent the right
to receive payment, in accordance with Section 5 below, in the form of one
share of Stock.  Unless and until an RSU
vests, the Participant will have no right to payment in respect of any such
RSU.  Prior to actual payment in respect
of any vested RSU, such RSU will represent an unsecured obligation of the
Company, payable (if at all) only from the general assets of the Company.

 

3.             Vesting and Termination.    The RSUs shall vest and shall terminate as
set forth in the Grant Notice.  All RSUs
that have not become vested as of the Participant’s Termination of Service
shall thereupon terminate and be forfeited and canceled without payment of
consideration therefor.

 

4.             Payment after Vesting; Code Section 409A.  The issuance of shares (in book-entry form or
otherwise) in respect of any RSUs that vest in accordance herewith shall be
made to the Participant (or in the event of the Participant’s death, to the
Participant’s estate) in whole shares of Stock on as soon as practicable
following the date on which such RSUs vest. 
The Committee shall determine, in its sole discretion, whether and how
any fractional vested RSUs will be paid. 
Notwithstanding anything herein to the contrary, no such payment shall
be made to the Participant during the six-month period following the
Participant’s “separation from service” (within the meaning of Section 409A
of the Code) if the Participant is a “specified employee” (within the meaning
of Section 409A of the Code) on the date of such separation from service
(as determined by the Company in accordance with Section 409A of the Code)
and the Company determines that paying such amounts at the time set forth in
this Section 4 would be a prohibited distribution under Section 409A(a)(2)(B)(i) of
the Code.  If the payment of any such
amounts is delayed as a result of the previous sentence, then on the first day
following the end of such six-month period, the Company shall pay the
Participant the cumulative amounts that would have otherwise been payable to
the Participant during such six-month period.

 

5.             Tax Withholding.  The Company shall have the authority and the
right to deduct or withhold, or to require the Participant to remit to the
Company, an amount sufficient to satisfy all applicable federal, state and
local taxes (including the Participant’s employment tax obligations, if any)
required by law to be withheld with respect to any taxable event arising in
connection with the RSUs.  Without limiting the generality of Section 15.3
of the Plan, to the extent that such obligation arises at the time that the
RSUs are paid to the Participant in shares 

 

A-1

 

of Stock,
the Participant may, in satisfaction of the foregoing requirement, elect to
have the Company withhold shares of Stock otherwise issuable in respect of such
RSUs having a Fair Market Value equal to the sums required to be withheld.  Notwithstanding any other provision of the
Plan or this Agreement, the number of shares of Stock which may be so withheld
in order to satisfy the Participant’s income and payroll tax liabilities with
respect to the issuance, vesting or payment of the RSUs shall be limited to the
number of shares of Stock which have a Fair Market Value on the date of
withholding equal to the aggregate amount of such liabilities based on the
minimum statutory withholding rates for income and payroll tax purposes that
are applicable to such supplemental taxable income.

 

6.             Rights as Shareholder.  Neither the Participant nor any person
claiming under or through the Participant will have any of the rights or
privileges of a shareholder of the Company in respect of any shares of Stock
that may become deliverable hereunder unless and until certificates
representing such shares of Stock shall have been issued, recorded on the
records of the Company or its transfer agents or registrars, and delivered in
certificate or book entry form to the Participant or any person claiming under
or through the Participant.

 

7.             Non-Transferability.  Neither the RSUs nor any interest or right
therein shall be liable for the debts, contracts or engagements of the
Participant or his or her successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means, whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment
or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void
and of no effect; provided, however,
that this Section 7 shall not prevent transfers by will or by the
applicable laws of descent and distribution or pursuant to a domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.  Upon any attempt by the Participant to
transfer, assign, pledge, hypothecate or otherwise dispose of this grant, or
any right or privilege conferred hereby, or upon any attempted sale by the
Participant under any execution, attachment or similar process, this grant and
the rights and privileges conferred hereby shall immediately become null and
void.

 

8.             Distribution of Stock.  Notwithstanding anything herein to the
contrary, the Company shall not be required to issue or deliver any
certificates evidencing shares of Stock pursuant to this Agreement unless and
until the Committee has determined, with advice of counsel, that the issuance
and delivery of such certificates is in compliance with all applicable laws,
regulations of governmental authorities and, if applicable, the requirements of
any exchange on which the shares of Stock are listed or traded.  All Stock certificates delivered pursuant to
this Agreement shall be subject to any stop-transfer orders and other
restrictions as the Committee deems necessary or advisable to comply with
federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded.  The Committee may place legends on any Stock
certificate to reference restrictions applicable to the Stock.   In addition to the terms and conditions
provided herein, the Committee may require that the Participant make such
reasonable covenants, agreements, and representations as the Committee, in its
discretion, deems advisable in order to comply with any such laws, regulations,
or requirements.  The Committee shall
have the right to require the 

 

A-2

 

Participant to comply with
any timing or other restrictions with respect to the settlement of any RSUs,
including a window-period limitation, as may be imposed in the discretion of
the Committee.  Notwithstanding any other
provision of this Agreement, unless otherwise determined by the Committee or
required by any applicable law, rule or regulation, the Company shall not
deliver to the Participant any certificates evidencing shares of Stock issued
upon settlement of any RSUs under this Agreement and instead such shares of
Stock shall be recorded in the books of the Company (or, as applicable, its transfer
agent or stock plan administrator) and all references herein to certificates
shall be deemed to apply instead to recordation in such books.

 

9.             No Effect on Service
Relationship.  Nothing in this
Agreement or in the Plan shall confer upon the Participant any right to serve
or continue to serve as an Employee, Consultant, member of the Board or other
service provider of the Company or any Subsidiary.

 

10.           Severability.  In the event that any provision in this
Agreement is held invalid or unenforceable, such provision will be severable
from, and such invalidity or unenforceability will not be construed to have any
effect on, the remaining provisions of this Agreement, which shall remain in
full force and effect.

 

11.           Tax Consultation.  The Participant understands that the
Participant may suffer adverse tax consequences in connection with the RSUs
granted pursuant to this Agreement.  The
Participant represents that the Participant has consulted with any tax
consultants that the Participant deems advisable in connection with the RSUs
and that the Participant is not relying on the Company for tax advice.

 

12.           Amendments, Suspension and
Termination.  To the extent permitted
by the Plan, this Agreement may be wholly or partially amended or otherwise
modified, suspended or terminated at any time or from time to time by the
Committee or the Board.

 

13.           Conformity to Securities Laws.  The Participant acknowledges that the Plan
and this Agreement are intended to conform to the extent necessary with all
provisions of the Securities Act of 1933, as amended, and the Exchange Act and
any and all regulations and rules promulgated by the Securities and
Exchange Commission thereunder, and all applicable state securities laws and
regulations.  Notwithstanding anything
herein to the contrary, the Plan shall be administered, and the RSUs are
granted, only in such a manner as to conform to such laws, rules and
regulations.  To the extent permitted by
applicable law, the Plan and this Agreement shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.

 

14.           Limitations Applicable to Section 16
Persons.  Notwithstanding any other
provision of the Plan or this Agreement, if the Participant becomes subject to Section 16
of the Exchange Act, the Plan, the RSUs and this Agreement shall be subject to
any additional limitations set forth in any applicable exemptive rule under
Section 16 of the Exchange Act (including any amendment to Rule 16b-3
of the Exchange Act) that are requirements for the application of such
exemptive rule.  To the extent permitted
by applicable law, this Agreement shall be deemed amended to the extent
necessary to conform to such applicable exemptive rule.

 

15.           Code Section 409A.  Neither the RSUs nor this Agreement is intended to provide 

 

A-3

 

for
any deferral of compensation subject to Section 409A of the Code, and,
accordingly, notwithstanding anything to the contrary, the shares of Stock
issuable hereunder shall be distributed no later than the later of: (i) the
fifteenth (15th) day of the third
(3rd) month following Participant’s first taxable
year in which the RSUs are no longer subject to a substantial risk of
forfeiture, and (ii) the fifteenth (15th)
day of the third (3rd) month following
the first taxable year of the Company in which the RSUs are no longer subject
to substantial risk of forfeiture, as determined in accordance with Code Section 409A
and any Treasury Regulations and other guidance issued thereunder.  Nevertheless, to the extent
that the Committee determines that any RSUs may not be exempt from (or
compliant with) Section 409A of the Code, the Committee may (but shall not
be required to) amend this Agreement in a manner intended to comply with the
requirements of Section 409A of the Code or an exemption therefrom
(including amendments with retroactive effect), or take any other actions as it
deems necessary or appropriate to (a) exempt the RSUs from Section 409A
of the Code and/or preserve the intended tax treatment of the benefits provided
with respect to the RSUs, or (b) comply with the requirements of Section 409A
of the Code.  To the extent applicable,
this Agreement shall be interpreted in accordance with the provisions of Section 409A
of the Code.

 

16.           Adjustments.  The Participant acknowledges that the RSUs
are subject to modification and termination in certain events as provided in
this Agreement and Article 11 of the Plan.

 

17.           Notices.  Notices required or permitted hereunder shall
be given in writing and shall be deemed effectively given upon personal
delivery or upon deposit in the United States mail by certified mail, with
postage and fees prepaid, addressed to the Participant to his or her address
shown in the Company records, and to the Company at its principal executive
office.

 

18.           Successors and Assigns.  The Company may assign any of its rights
under this Agreement to single or multiple assignees, and this Agreement shall
inure to the benefit of the successors and assigns of the Company.  Subject to the restrictions on transfer
contained herein, this Agreement shall be binding upon the Participant and his
or her heirs, executors, administrators, successors and assigns.

 

19.           Governing Law.   This Agreement shall be administered,
interpreted and enforced under the internal laws of the State of Delaware, without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.

 

20.           Captions.  Captions provided herein are for convenience
only and are not to serve as a basis for interpretation or construction of this
Agreement.

 

A-4

 

APPENDIX B

TO RESTRICTED STOCK UNIT GRANT NOTICE

 

CONSENT OF SPOUSE

 

I,
                                        ,
spouse of
                                        ,
have read and approve the foregoing Restricted Stock Unit Grant Notice and
Restricted Stock Unit Agreement (the “Agreement”).  In consideration of issuing to my spouse the
Restricted Stock Units of The Spectranetics Corporation set forth in the Grant
Notice and the Agreement, I hereby appoint my spouse as my
attorney-in-fact in respect to the exercise of any rights under the Grant
Notice and the Agreement and agree to be bound by the provisions thereof
insofar as I may have any rights therein or in or to any shares of the common
stock of The Spectranetics Corporation issued pursuant thereto under the
community property laws or similar laws relating to marital property in effect
in the state of our residence as of the date of the signing of the Grant Notice
and the Agreement.

 

 

	
  Dated:
                                ,

  	
   

  
	
   

  	
  Signature of Spouse

  

 

B-1

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