EXHIBIT 10.13
SILICON VALLEY BANK
AMENDMENT TO LOAN AGREEMENT
BORROWER: I-FLOW CORPORATION
DATE: JANUARY 30, 2004
THIS AMENDMENT TO LOAN DOCUMENTS is entered into between Silicon Valley
Bank ("Bank") and the borrower named above (the "Borrower").
The Parties agree to amend the Amended and Restated Loan and Security
Agreement between them, having an effective date of May 8, 2003 (as amended from
time being referred to herein as the "Loan Agreement"), as follows, effective as
of the date hereof. Such Loan Agreement shall be deemed revived and effective as
of the date hereof and modified in accordance with the terms and conditions
hereof. (Capitalized terms used but not defined in this Amendment, shall have
the meanings set forth in the Loan Agreement.)
1. REVISED SECTION 2.1.1. Section 2.1.1 of the Loan Agreement is
hereby amended to read as follows:
"2.1.1 Revolving Advances.
(a) Bank will make Revolving Advances not exceeding, on a
joint basis for the Borrower, the lesser of (A) the Committed Revolving
Line or (B) the Borrowing Base minus (i) all amounts for services
utilized under the Merchant Services Sublimit, and minus (ii) the
amount of all outstanding Letters of Credit (including drawn but
unreimbursed Letters of Credit). Amounts borrowed under this Section
may be repaid and reborrowed during the term of this Agreement.
(b) To obtain a Revolving Advance, Borrower must notify
Bank by facsimile or telephone by 12:00 p.m. Pacific time on the
Business Day the Revolving Advance is proposed to be made. Borrower
must promptly confirm the notification by delivering to Bank the
Payment/Advance Form, in the form attached hereto as Exhibit B. Bank
will credit Revolving Advances to Borrower's deposit account. Bank may
make Revolving Advances under this Agreement based on instructions from
a Responsible Officer or his or her designee or without instructions if
any such Revolving Advances are necessary to meet Obligations which
have become due. Bank may rely on any telephonic notice given by a
person whom Bank believes is a Responsible Officer or such Person's
designee, and Borrower hereby indemnifies Bank for any loss Bank
suffers due to any such reliance.
(c) The Committed Revolving Line terminates on the
Revolving Maturity Date, when all Revolving Advances and related
Obligations are immediately payable."
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
2. NO TERM LOAN ADVANCES. No Term Loan Advances were made under
the Loan Agreement prior to the Availability End Date and thus no Term Loan
Advances are now outstanding. Further, it is understood and agreed that the Term
Loan Advance facility has now expired and no Term Loan Advances shall henceforth
be made thereunder.
3. REVISED INTEREST RATE. Section 2.3(a) of the Loan Agreement is
hereby amended to read as follows:
"(a) Interest Rate. Revolving Advances accrue interest on the
outstanding principal balance at a per annum rate equal to the Prime
Rate. After an Event of Default, Obligations accrue interest at five
(5) percentage points above the rate effective immediately before the
Event of Default. The interest rate increases or decreases when the
Prime Rate changes. Interest is computed on a 360 day year for the
actual number of days elapsed."
4. MAINTENANCE OF ACCOUNTS. In accordance with Section 6.6 of the
Loan Agreement, Borrower shall continue to maintain its primary banking and
investment account relationships with Bank.
5. REVISED SECTION 6.2(b). Section 6.2(b) of the Loan Agreement
is hereby amended to read as follows:
"(b) Within 20 days after the last day of each month when any Credit
Extensions are outstanding hereunder (and in conjunction with a request
for a Credit Extension when none are then outstanding), Borrower will
deliver to Bank a Borrowing Base Certificate signed by a Responsible
Officer in the form of Exhibit C, with aged listings of accounts
receivable and accounts payable together with an inventory report in
form acceptable to Bank."
6. REVISED SECTION 6.7. Section 6.7 of the Loan Agreement is
hereby amended in its entirety to read as follows:
"6.7 FINANCIAL COVENANTS.
Borrower will maintain at all times during the effectiveness of this
Agreement on a consolidated basis for I-Flow Corporation and tested
quarterly during the term hereof unless otherwise indicated below:
(i) QUICK RATIO. A ratio of Quick Assets to Modified Current
Liabilities of at least 1.50 TO 1.00.
(ii) PROFITABILITY. Borrower will not incur a net loss in excess of
$2,500,000 for the quarter ending March 31, 2004, $1,500,000 for the
quarter ending June 30, 2004 and $1,000,000 for each quarter ending
thereafter."
7. DELETIONS OF SECTIONS 7.10 AND 7.11. Sections 7.10 (regarding
the maintenance of the InfuSystem Credit Facility) and 7.11 (regarding a
limitation with respect to InfuSystem borrowings) of the Loan Agreement are
hereby deemed deleted and shall be of no further force or effect.
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
8. MODIFIED COMMITTEE REVOLVING LINE DEFINITION. The defined term
"Committed Revolving Line" as set forth in Section 13.1 of the Loan Agreement is
hereby amended to read as follows:
" 'COMMITTED REVOLVING LINE' is the revolving credit facility extended
by Bank hereunder to Borrower and relating to an aggregate amount of Revolving
Advances of up to Four-Million Dollars ($4,000,000)."
9. MODIFIED REVOLVING MATURITY DATE. The Revolving Maturity Date
as set forth in Section 13.1 of the Loan Agreement is hereby modified to be
"April 30, 2005."
10. FEE. In consideration for Bank entering into this Amendment,
Borrower shall concurrently pay Bank a fee in the amount of $13,333, which shall
be non-refundable and in addition to all interest and other fees payable to Bank
under the Loan Documents. Bank is authorized to charge said fee to Borrower's
loan account.
11. REPRESENTATIONS TRUE. Borrower represents and warrants to Bank
that all representations and warranties set forth in the Loan Agreement, as
amended hereby, are true and correct.
12. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any
prior written amendments to the Loan Agreement signed by Bank and Borrower, and
the other written documents and agreements between Bank and Borrower set forth
in full all of the representations and agreements of the parties with respect to
the subject matter hereof and supersede all prior discussions, representations,
agreements and understandings between the parties with respect to the subject
hereof. Except as herein expressly amended, all of the terms and provisions of
the Loan Agreement, and all other documents and agreements between Bank and
Borrower shall continue in full force and effect and the same are hereby
ratified and confirmed.
BORROWER: BANK:
I-FLOW CORPORATION SILICON VALLEY BANK
BY______________________________ BY____________________________
PRESIDENT OR VICE PRESIDENT TITLE_________________________
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