First Amendment to Loan and Security Agreement, dated June 16, 2020, between iCAD, Inc., Xoft, Inc., Xoft Solutions LLC and Western Alliance Bank
CERTAIN INFORMATION IDENTIFIED BY
BRACKETED ASTERISKS ([* * *]) HAS
BEEN OMITTED FROM THIS EXHIBIT
BECAUSE IT IS BOTH NOT MATERIAL
AND WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED.
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
This First Amendment to Loan and Security Agreement (this Amendment) is entered into as of June 16, 2020, by and between WESTERN ALLIANCE BANK, an Arizona corporation (Bank) and ICAD, INC., a Delaware corporation (Parent), (ii) XOFT, INC., a Delaware corporation (Xoft) and (iii) XOFT SOLUTIONS, LLC, a Delaware limited liability company (Xoft Solutions) (each a Borrower and collectively, the Borrowers).
Borrowers and Bank are parties to that certain Loan and Security Agreement dated as of March 30, 2020, as amended from time to time (the Agreement). The parties desire to amend the Agreement in accordance with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Section 6.8 of the Agreement hereby is amended and restated in its entirety to read as follows:
6.8 Financial Covenants.
(a) At all times, Borrower shall be in compliance with at least one (1) of the following financial covenants:
(i) Performance to Plan; Minimum Revenue. Borrowers shall maintain consolidated revenue (measured in accordance with GAAP), tested monthly as of the last day of each month on a trailing six (6) month basis, of not less than (x) for the periods ending February 29, 2020, March 31, 2020, April 30, 2020, May 31, 2020, June 30, 2020, July 31, 2020, August 31, 2020, September 30, 2020, October 31, 2020, November 30, 2020, and December 31, 2020, the amount set forth opposite such date on Annex I to the Compliance Certificate, and (y) for the last day of each month thereafter, shall be set by Bank and Borrower, working in good faith to set such levels, based on Borrowers projections delivered to Bank in accordance with Section 6.3(e) hereof and documented in an amendment to this Agreement; provided that if Borrowers and Bank cannot agree to such levels by January 31st of any year, then from January 31st of such year until such levels are agreed to and documented, Borrowers shall be at all times required to comply with Section 6.8(a)(ii) hereof.
(ii) Cash to Bank Indebtedness. Borrowers shall maintain a ratio of (x) unrestricted cash at Bank, to (y) the aggregate total Indebtedness owing from Borrowers to Bank, equal to or greater than 1.25 to 1.00.
2. Section 2.6(h) hereby is added to the Agreement as follows:
(h) First Amendment Fee. On June 16, 2020, Borrowers shall pay to Bank an amendment fee equal to Ten Thousand Dollars ($10,000) (the First Amendment Fee), which shall be nonrefundable;
3. Exhibit D of the Agreement hereby is amended and restated in its entirety to read as set forth on Exhibit D attached hereto.
4. No course of dealing on the part of Bank or its officers, nor any failure or delay in the exercise of any right by Bank, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Banks failure at any time to require strict performance by any Borrower of any provision shall not affect any right of Bank thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Bank.
5. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Agreement. The Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Agreement, as in effect prior to the date hereof.
6. Each Borrower represents and warrants that (a) the Representations and Warranties contained in the Agreement are true and correct in all material respects as of the date of this Amendment (except to the extent any such representation or warranty is expressly stated to have been made as of a specific date, in which case such representation or warranty shall be true and correct in all material respects as of such date), (b) the execution, delivery, and performance of this Amendment have been duly authorized, (c) on the date hereof, the persons whose names appear on the Corporate Resolutions to Borrow or the Limited Liability Company Resolution, as the case may be, dated March 30, 2020, delivered to Bank to Borrowers in connection with the Agreement are duly elected, qualified and acting officers of the applicable Borrower occupying the offices set forth adjacent to their respective names, the signatures set forth adjacent to their respective names are their true signatures, and each such officer is duly authorized to execute and deliver, on behalf of such Borrower, this Amendment and each of the Loan Documents and to act as an authorized officer on behalf of such Borrower under this Amendment each of the Loan Documents, and (d) no Event of Default has occurred and is continuing.
7. As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:
(a) this Amendment, duly executed by each Borrower;
(b) in accordance with Section 2.6(h), the First Amendment Fee, in the amount of Ten Thousand Dollars ($10,000), which may be debited from any of Borrowers accounts; and
(c) all reasonable Bank Expenses incurred through the date of this Amendment, which may be debited from any of Borrowers accounts.
8. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument. Delivery of an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Amendment.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.
|XOFT SOLUTIONS, LLC|
|WESTERN ALLIANCE BANK, an Arizona corporation|
[Signature Page to First Amendment to Loan and Security Agreement]
TO: WESTERN ALLIANCE BANK, an Arizona corporation
FROM: ICAD, INC., for itself and on behalf of all Borrowers
The undersigned authorized officer of ICAD, INC. hereby certifies that in accordance with the terms and conditions of the Loan and Security Agreement between ICAD, INC., a Delaware corporation (Parent), (ii) XOFT, INC., a Delaware corporation (Xoft) and (iii) XOFT SOLUTIONS, LLC, a Delaware limited liability company (Xoft Solutions) (each a Borrower and collectively, the Borrowers) and Bank (the Agreement), (i) Borrowers are in complete compliance for the period ending with all required covenants except as noted below and (ii) all representations and warranties of each Borrower stated in the Agreement are true and correct as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes.
Please indicate compliance status by circling Yes/No under Complies column.
|Annual financial statements (CPA Audited)||FYE within 90 days||Yes||No|
|Monthly financial statements and Compliance Certificate; with bank account statements while accounts still maintained outside of Bank||monthly within 30 days||Yes||No|
|10K and 10Q||(as applicable)||Yes||No|
|Annual operating budget, sales projections and operating plans approved by board of directors||Annually no later than 30 days after the beginning of each fiscal year||Yes||No|
|A/R & A/P Agings, Borrowing Base Certificate||monthly within 30 days||Yes||No|
|A/R Audit||Initial and Annual||Yes||No|
|Deposit balances with Bank||$|
|Deposit balance outside Bank||$|
|Minimum consolidated revenue (As set forth on Annex I or as determined pursuant to Section 6.8(a)(i), as applicable)||$||$||Yes||No||N/A|
|Minimum unrestricted Cash to Bank Indebtedness ratio||1.25 to 1.00||to 1.00||Yes||No||N/A|
|Comments Regarding Exceptions: See Attached.||BANK USE ONLY|
|Compliance Status Yes No|
Minimum Trailing 6 Month Revenue
|Trailing 6 Months Period Ending||Minimum Revenue|
|February 29, 2020||[* * *]|
|March 31, 2020||[* * *]|
|April 30, 2020||[* * *]|
|May 31, 2020||[* * *]|
|June 30, 2020||[* * *]|
|July 31, 2020||[* * *]|
|August 31, 2020||[* * *]|
|September 30, 2020||[* * *]|
|October 31, 2020||[* * *]|
|November 30, 2020||[* * *]|
|December 31, 2020||[* * *]|