EXHIBIT 10.16
SECOND LOAN MODIFICATION AGREEMENT
This Second Loan Modification Agreement is entered into as of
September 23, 1998, by and between METRISA, INC., formerly known as
Holometrix, Inc., successor by merger with, among others, Tytronics
Incorporated ("Borrower"), a Delaware corporation whose address is 00
Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000, and SILICON VALLEY
BANK, a California-based bank ("Bank") with its principal place of
business at 0000 Xxxxxx Xxxxx, Xxxxx Xxxxx, XX 00000, and with a loan
production office located at Wellesley Office Park, 00 Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, doing business under the name
"Silicon Valley East".
1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other
indebtedness which may be owing by Borrower to Bank, Borrower is
indebted to Bank pursuant to, among other documents, (i) a certain Loan and
Security Agreement dated as of July 24, 1997, as amended by a certain Loan
Modification and Assumption Agreement dated as of July 23, 1998 (as
amended, the "Loan Agreement"), and (ii) a certain Promissory Note dated
July 24, 1997 (the "Note"). Capitalized terms used but not otherwise
defined herein shall have the same meaning as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Bank shall be referred to
as the "Indebtedness."
2. DESCRIPTION OF COLLATERAL AND GUARANTIES.
Repayment of the Indebtedness is secured by the Collateral as described in
the Loan Agreement.
Hereinafter, the Loan Agreement, together with all other documents
securing repayment of the Indebtedness shall be referred to as the "Security
Documents". Hereinafter, the Security Documents, together with all other
documents evidencing or securing the Indebtedness 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 definition appearing in Section 1.1
thereof.
"Borrowing Base" means an amount equal to
the lesser of: (i) seventy percent (70.0%) of
Eligible Accounts as determined by Bank
with reference to the most recent Borrowing
Base Certificate delivered by Borrower,
increasing to seventy-five percent (75.0%) of
Eligible Accounts after the Borrower reports
two (2 ) consecutive profitable quarters, and
(ii) for Advances through September 30,
1997, the then existing Tangible Net Worth
of the Borrower, plus "Minority Interest" as
defined in the Borrower's balance sheet for
such period, and for Advances after
September 30, 1997, the then existing
Tangible Net Worth of the Borrower,
multiplied by 1. l.
and inserting in lieu thereof the following:
"Borrowing Base" means an amount equal
to: (i) seventy-five percent (75.0%) of
Eligible Accounts as determined by Bank
with reference to the most recent Borrowing
Base Certificate delivered by Borrower, plus
(ii) twenty percent (20.0%) of the value of
Borrower's Eligible Inventory (valued at the
lower of cost or wholesale fair market value)
as determined by Bank with reference to the
most recent Borrowing Base Certificate
delivered by Borrower, minus (iii) the then
outstanding principal balance of the Term
Loan.
2. The Loan Agreement shall be amended by deleting
the following definition appearing in Section 1.1
thereof:
`"Committed Revolving Line" means a credit
extension of up to One Million Dollars
($1,000,000.00).
and inserting in lieu thereof the following:
`"Committed Revolving Line" means a credit
extension of up to One Million Two Hundred
Fifty Thousand Dollars ($1 ,250,000,00).
3. The Loan Agreement shall be amended by inserting
after the definition of "Eligible Foreign Accounts"
appearing in Section 1.1 thereof the following new
definition:
`"Eligible Inventory" means that portion of
Borrower's Inventory that is located at
Borrower's principal place of business or
such other locations as are permitted under
Section 7.11 and that complies with the
representations and warranties set forth in
Section 5.5, but shall in any event exclude
used, returned or obsolete Inventory. For
purposes hereof, Inventory shall be limited to
raw materials and finished goods of the
Borrower.
4. The Loan Agreement shall be amended by deleting
the following definition appearing in Section 1.1
thereof:
`"Revolving Maturity Date" means
September 23. 1998.
and inserting in lieu thereof the following:
`"Revolving Maturity Date" means
September 23, 1999.
5. The Loan Agreement shall be amended by deleting
the following text appearing as Section 6.8 thereof:
"6.8 Quick Ratio. Borrower shall maintain as
of the last day of each of the following
periods, a ratio of Quick Assets to Current
Liabilities as follows: (a) Quarter ending June
30, 1997 - 0.50:1.0; (b) Months ending July
31, 1997, and August 31, 1997 - 0.35:1.0; (c)
Month ending October 31, 1997, and each
subsequent month which is not also a quarter
end - 0.40:1.0; and (d) Quarter ending
December 31 , 1997, and all subsequent
quarters - 0.70:1.0.
and inserting in lieu thereof the following:
6.8 Quick Ratio. Borrower shall maintain as
of the last day of each of the following
periods, a ratio of Quick Assets to Current
Liabilities as follows: (a) Quarter ending
September 30, 1998 - 0.70:1.0; (b) Quarter
ending December 31, 1998 - 0.60:1.0; (c)
Quarter ending March 31, 1999- 0.65:1.0; (d)
Quarter ending June 30, 1999 and for each
quarter thereafter - 0.70:1.0; and (e) Month
ending October 31, 1998, and each
subsequent month which is not also a quarter
end - 0.50: 1.0.
6. The Loan Agreement shall be amended by deleting
the following text appearing as Section 6.9 thereof:
6.9 Tangible Net Worth. Borrower shall
maintain as of the last day of each of the
following periods, a Tangible Net Worth as
follows: (a) Month ending June 30, 1997 -
$550,000.00; (b) Months ending July 31,
1997, and August 31, 1997 - $500,000.00; (c)
Quarter ending September 30, 1997, and each
subsequent quarter - $1,150,000.00; and (d)
Month ending October 31, 1997, and each
subsequent month which is not also a quarter
end - $900,000.00.
and inserting in lieu thereof the following
6.9 Tangible Net Worth. Borrower shall
maintain as of the last day of each of the
following periods, a Tangible Net Worth as
follows: (a) Quarter ending September 30,
1998, and each subsequent quarter -
$1,200,000.00; and (b) Month ending
October 31, 1998, and each subsequent
month which is not also a quarter end -
$900,000 00.
7. The Loan Agreement shall be amended by deleting
the following text appearing as Section 6.13 thereof:
6.13 Net Income. Borrower shall maintain
on the last day of each of the following
quarters, Net Income as follows: (a) Quarter
ending June 30,1997 - ($25,000.00); (b)
Quarter ending September 30, 1997 -
$150,000.00; (c) Quarter ending December
31, 1997 - ($75,000.00); (d) Quarter ending
March 31, 1998 - $1.00; and (e) Quarter
ending June 30 1998 - $50,000.00.
and inserting in lieu thereof the following:
6.13 Net Income. Borrower shall maintain
on the last day of each of the following
quarters, Net Income as follows: (a) Quarter
ending September 30, 1998 - $250,000.00;
(b) Quarter ending December 31, 1998 - -
($375,000.00); (c) Quarter ending March 31,
1999 - ($125,000.00); and (d) Quarter ending
June 30, 1999 and for each quarter thereafter -
$1.00.
8. The Loan Agreement shall be amended by deleting
the Compliance Certificate attached as Exhibit D to
the Loan Agreement and inserting in lieu thereof
Exhibit D attached to this Loan Modification
Agreement.
? 9. The Loan Agreement shall be amended by deleting
the Borrowing Base Certificate attached as Exhibit
C to the Loan Agreement and inserting in lieu
thereof Exhibit C attached to this Loan
Modification Agreement.
4. FACILITY FEE. Borrower shall pay to Bank a facility fee (the
"Facility Fee") equal to Ten Thousand Dollars ($10,000.00) which fee shall
be due on the date hereof and which shall be deemed fully earned as of the
date hereof.
5. 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 and
Obligations secured thereby includes, without limitation, the Indebtedness.
6. CONSISTENT CHANGES. The Existing Loan Documents are
hereby amended wherever necessary to reflect the changes described above.
7. NO DEFENSES OF BORROWER. Borrower agrees that it has no
defenses against the obligations to pay any amounts under the Indebtedness.
8. CONTINUING VALIDITY. Borrower understands and agrees that
in modifying the existing Indebtedness, 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 Indebtedness pursuant to this Loan Modification Agreement
in no way shall obligate Bank to make any future modifications to the
Indebtedness. Nothing in this Loan Modification Agreement shall constitute
a satisfaction of the Indebtedness. It is the intention of Bank and Borrower
to retain as liable parties all makers and endorsers of Existing Loan
Documents, unless the party is expressly released by Bank in writing. No
maker, endorser, or guarantor will be released by virtue of this Loan
Modification Agreement. The terms of this paragraph apply not only to this
Loan Modification Agreement, but also to all subsequent loan modification
agreements.
9. JURISDICTION/VENUE. Borrower accepts for itself and in
connection with its properties, unconditionally, the non-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; provided, however, that if for any reason Bank cannot avail
itself of the courts of the Commonwealth of Massachusetts, then venue shall
lie in Santa Xxxxx County, California.
10. COUNTERSIGNATURE. This Loan Modification Agreement shall
become effective only when it shall have been executed by Borrower and
Bank (provided, however, in no event shall this Loan Modification
Agreement become effective until signed by an officer of Bank in
California),
This Loan Modification Agreement is executed as of the date first
written above.
BORROWER: BANK:
METRISA, INC., formerly known as SILICON VALLEY BANK,
doing Holometrix, Inc., successor doing business as
by merger with, doing business as among SILICON VALLEY EAST
others, Tytronics Incorporated
By:_______________________ By:____________________
Name:_____________________ Name:__________________
Title:______________________ Title:___________________
SILICON VALLEY BANK
By:____________________
Name:__________________
Title:___________________
(signed in Santa Xxxxx
County, California)
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