Extension Letter to Credit Agreement between ArthroCare Corporation and Bank of America, N.A. (July 29, 2008)

Summary

This letter agreement is between ArthroCare Corporation and Bank of America, N.A., acting as Administrative Agent for the lenders under an existing Credit Agreement. The letter grants ArthroCare a 30-day extension, until September 15, 2008, to deliver its June 30, 2008 quarterly financial statements due to the company's ongoing financial restatement. All other terms of the Credit Agreement remain unchanged, and the lenders reserve all rights under the original agreement. The letter does not constitute a waiver or modification of any other terms or defaults.

EX-10.67 2 v125430_ex10-67.htm

July 29, 2008

ArthroCare Corporation

7500 Rialto Boulevard

Building Two, Suite 100

Austin, Texas 78735

Attention: Michael Gluk

Senior Vice President, Chief Financial Officer

Re:

Credit Agreement dated as of January 13, 2006 (as amended by that certain First Amendment dated as of December 18, 2007 and as further amended, restated, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement”) by and among ArthroCare Corporation, a Delaware corporation, as Borrower (the “Borrower”), the banks and other financial institutions party thereto from time to time, as Lenders (the “Lenders”) and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C issuer (the “Administrative Agent”). Each capitalized term used herein but not defined herein shall be defined in accordance with the Credit Agreement.

Dear Mr. Gluk:

The Borrower recently advised the Administrative Agent and the Lenders that it would be restating is financial statements for fiscal years 2006, 2007 and the first quarter of 2008 as more fully described in the Borrower's 8-K filing of July 24, 2008 (such financial restatements, collectively, the “Restatement”). During the conference call among the Borrower and the Lenders on July 25, 2008 concerning the Restatement, we discussed extending the deadline for the Borrower’s delivery of its quarterly financial statements for the fiscal quarter ended June 30, 2008 by 30 days. Such additional time would be used by the Borrower to complete the Restatement.

Subject to the terms and conditions hereof, the Administrative Agent, on behalf of and at the direction of Lenders constituting Required Lenders, hereby consents to an extension of the deadline for delivery of the June 30, 2008 financial statements to September 15, 2008.

Except as expressly set forth in the preceding paragraph, the Credit Agreement and each other Loan Document shall remain in full force and effect, and this letter shall not waive, affect, or diminish any right of the Administrative Agent and the Lenders to demand strict compliance and performance with the Credit Agreement and the other Loan Documents. In furtherance thereof, the Administrative Agent and the Lenders hereby reserve all rights and remedies, and shall be entitled, to pursue at any time and from time to time, without notice, demand or any other action, any and all rights and remedies provided under the Credit Agreement and/or the other Loan Documents, at law, in equity or otherwise, whether or not with respect to any existing Events of Default, all in the sole and absolute discretion of the Administrative Agent and the Lenders.

ArthroCare Corporation

Page 2

Except as expressly set forth in the preceding paragraph, neither this letter nor any other communication between the Administrative Agent and/or the Lenders, on the one hand, and the Borrower, on the other hand, shall be construed as a consent, waiver, forbearance or other modification with respect to any term, condition or other provision of the Agreement and/or any other Loan Document. Neither this letter, any other communication between the Administrative Agent and/or the Lenders, on the one hand, and the Borrower, on the other hand, nor any act or omission on the part off the Administrative Agent and/or the Lenders constitutes, or shall be deemed to constitute, a course of conduct or a course of dealing so as to justify an expectation by the Borrower that the Administrative Agent and the Lenders will not exercise any rights or remedies available to them with respect to any existing Event of Default or any subsequent Event of Default or an expectation by the Borrower that the Administrative Agent and the Lenders will waive any existing Event of Default or any subsequent Event of Default.

This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

	Very truly yours,

	BANK OF AMERICA, N.A., as Administrative Agent op behalf of the Lenders

	By:
	Name:	Charlene Wright-Jones
	Title:	Assistant Vice President