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EX-10.24 8 v79038a2ex10-24.txt EXHIBIT 10.24 Exhibit 10.24 SILICON VALLEY BANK LIMITED WAIVER AND AMENDMENT TO LOAN DOCUMENTS - -------------------------------------------------------------------------------- SILICON VALLEY BANK LIMITED WAIVER AND AMENDMENT TO LOAN DOCUMENTS BORROWER: QUINTON INC. (FKA QUINTON INSTRUMENT COMPANY) DATE: FEBRUARY 15, 2002 THIS LIMITED WAIVER AND AMENDMENT TO LOAN DOCUMENTS is entered into between SILICON VALLEY BANK ("Silicon") and the borrower named above ("Borrower"). The Parties agree to amend the Loan and Security Agreement between them, dated June 5, 1998, as amended, if at all (the "Loan Agreement"), as follows, effective as of the date hereof. (Capitalized terms used but not defined in this Amendment shall have the meanings set forth in the Loan Agreement.) 1. WAIVER OF DEFAULT. Silicon and Borrower agree that the Borrower's existing default under the Loan Agreement due to the Borrower's failure to comply with the Minimum Tangible Net-Worth Financial Covenant set forth in Section 5 of the Schedule to Loan and Security Agreement entitled "5. FINANCIAL COVENANTS (Section 5.l)," for the reporting period ending December 31, 2001 is hereby waived. It is understood by the parties hereto, however, that such waiver does not constitute a waiver of any other provision or term of the Loan Agreement or any related document nor an agreement to waive in the future this covenant or any other provision or term of the Loan Agreement or any related document. 2. MODIFIED FINANCIAL COVENANT. Section 5 of the Schedule to Loan and Security Agreement is hereby amended and restated in its entirety to read as follows: "5. FINANCIAL COVENANT (Section 5.l): Borrower shall comply with the following covenant. Compliance shall be determined as of the end of each month: MINIMUM TANGIBLE NET WORTH: Borrower shall maintain a Tangible Net Worth of not less than ($1,000,000) plus 75% of -1- SILICON VALLEY BANK LIMITED WAIVER AND AMENDMENT TO LOAN DOCUMENTS - -------------------------------------------------------------------------------- the total consideration received by Borrower after December 31, 2001 in consideration for the issuance by Borrower of its equity securities, effective on the date such consideration is received. DEFINITIONS. For purposes of the foregoing financial covenants, the following term shall have the following meaning: "()" shall mean a negative figure or loss, as applicable. "Liabilities" shall have the meaning ascribed thereto by generally accepted accounting principles. "Tangible Net Worth" shall mean the excess of total assets over total liabilities, determined in accordance with generally accepted accounting principles, with the following adjustments; (A) there shall be excluded from assets: (i) notes, accounts receivable and other obligations owing to the Borrower from its officers or other Affiliates, and (ii) all assets which would be classified as intangible assets under generally accepted accounting principles, including without limitation goodwill, licenses, patents, trademarks, trade names, copyrights, capitalized software and organizational costs, licenses and franchises (B) there shall be excluded from liabilities: all indebtedness -2- SILICON VALLEY BANK LIMITED WAIVER AND AMENDMENT TO LOAN DOCUMENTS - -------------------------------------------------------------------------------- which is subordinated to the Obligations under a subordination agreement in form specified by Silicon or by language in the instrument evidencing the indebtedness which is acceptable to Silicon in its discretion and current liabilities associated with warrants held by Silicon, equal to the fair market value of the stock to be issued upon the exercise of such warrants." 3. SCHEDULE OF DEFERRED REVENUE ACCOUNTS. Borrower hereby covenants and agrees to provide Silicon, within thirty days after the end of each month, a schedule listing, by Account Debtor, of Borrower's deferred revenue accounts. 4. FEE. In consideration for Silicon entering into this Amendment, Borrower shall concurrently pay Silicon a fee in the amount of $10,000, which shall be non-refundable and in addition to all interest and other fees payable to Silicon under the Loan Documents. Silicon is authorized to charge said fee to Borrower's loan account. 5. REPRESENTATIONS TRUE. Borrower represents and warrants to Silicon that all representations and warranties set forth in the Loan Agreement, as amended hereby, are true and correct. 6. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior written amendments to the Loan Agreement signed by Silicon and Borrower, and the other written documents and agreements between Silicon 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 Silicon and Borrower shall continue in full force and effect and the same are hereby ratified and confirmed. -3- SILICON VALLEY BANK LIMITED WAIVER AND AMENDMENT TO LOAN DOCUMENTS - -------------------------------------------------------------------------------- BORROWER: SILICON: QUINTON INC. (FKA QUINTON SILICON VALLEY BANK INSTRUMENT COMPANY) By /s/ John R. Hinson By /s/ Silicon Valley Bank ----------------------------------- ------------------------------ President or Vice President Title Vice President --------------------------- By /s/ John R. Hinson ----------------------------------- Secretary or Ass't Secretary -4- SILICON VALLEY BANK LIMITED WAIVER AND AMENDMENT TO LOAN DOCUMENTS - -------------------------------------------------------------------------------- CONSENT The undersigned acknowledge that their consent to the foregoing Agreement is not required, but the undersigned nevertheless do hereby consent to the foregoing Agreement and to the documents and agreements referred to therein and to all future modifications and amendments thereto, and any termination thereof, and to any and all other present and future documents and agreements between or among the foregoing parties. Nothing herein shall in any way limit any of the terms or provisions of the Continuing Guaranties of the undersigned, all of which are hereby ratified and affirmed. QIC HOLDING CORP. By: /s/ John R. Hinson ----------------------------------------- Title: Secretary -------------------------------------- -5-