EXHIBIT 10.23
THIRD LOAN MODIFICATION AGREEMENT
This Third Loan Modification Agreement (the "AGREEMENT") is entered
into effective as of June ____, 2002 by and between TRIPATH IMAGING, INC.
("BORROWER"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and SILICON VALLEY BANK ("BANK"), whose address is ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
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, a Loan and Security Agreement, dated
as of January 31, 2000, as amended by that certain First Loan Modification
Agreement dated as of January 31, 2001, as further amended by that certain
Second Loan Modification Agreement dated as of January 31, 2002 (collectively,
the "LOAN AGREEMENT"). The Loan Agreement provides for, among other things, a
committed line of credit in the original principal amount of Five Million
Dollars ($5,000,000). Hereinafter, all indebtedness owing by Borrower to Bank
shall be referred to as the "INDEBTEDNESS."
2. DESCRIPTION OF CHANGE IN TERMS OF LOAN AGREEMENT.
(a) Section 2.1.1 of the Loan Agreement is hereby
amended by deleting Section 2.1.1 of the Loan Agreement and substituting in
lieu thereof the following:
"2.1.1. Subject to and upon the terms and conditions of this
Agreement, Bank agrees to make Advances to Borrower in an aggregate
outstanding amount not to exceed the Committed Revolving Line;
provided, however, that, at any time that the ratio of Borrower's
cash, cash equivalents, short term investments and accounts receivable
to Borrower's Current Liabilities, less current deferred revenue, is
not at least 2.50 to 1.00, then Bank agrees to make Advances to
Borrower in an aggregate outstanding amount not to exceed the
Borrowing Base and shall have no obligation to make any Advances to
Borrower in an aggregate outstanding amount in excess of the Borrowing
Base. Borrower may apply up to $2,000,000 of the Advances to support
the issuance of letters of credit, business credit cards and other
cash management services (the "Reserved Amount"). Subject to the terms
and conditions of this Agreement, amounts borrowed pursuant to this
Section 2.1 may be repaid and reborrowed at any time during the term
of this Agreement. In the event that the Maturity Date with respect to
the Committed Revolving Line is not extended to a date after January
30, 2003 by the mutual agreement of Borrower and Bank and any letters
of credit, business credit cards or other cash management services
remain outstanding as of January 30, 2003, then Borrower will secure
with cash any and all outstanding balances under the Reserved Amount
with the Bank."
3. CONSISTENT CHANGES. The Loan Agreement is hereby amended
wherever necessary to reflect the changes described above.
4. BANK EXPENSES. Without limiting the Borrower's obligations
under the Loan Agreement, Borrower agrees to pay (i) a Two Hundred Fifty Dollar
($250.00) loan modification fee and (ii) on demand all of the Bank's reasonable
attorney's fees and expenses and all other reasonable out-of-pocket costs
incurred by the Bank in connection with its evaluation, negotiation,
documentation or consummation of this Third Loan Modification Agreement and the
transactions contemplated hereby.
5. NO DEFENSES OF BORROWER. Borrower agrees that it has no
defenses against the obligations to pay any amounts under the Indebtedness.
6. 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 that certain Loan Agreement and the Intellectual Property Security
Agreement, dated as of January 31, 2000, by and between Borrower and Bank (the
"BORROWER IP SECURITY AGREEMENT") and upon representations, warranties and
agreements made and agreed to by (i) Autocyte North Carolina, LLC ("AUTOCYTE"),
as set forth in that certain Autocyte Guaranty and the Intellectual Property
Security Agreement, dated as of January 31, 2000, by and between Autocyte and
Bank (the "AUTOCYTE IP SECURITY AGREEMENT"), (ii) Cell Analysis Stems, Inc.
("Cell Analysis"), as set forth in that certain Cell Analysis Guaranty and the
Intellectual Property Security Agreement, dated as of January 31, 2000, by and
between Cell Analysis and Bank (the "CELL ANALYSIS IP SECURITY AGREEMENT"), and
(iii) TriPath Oncology, Inc. ("TRIPATH ONCOLOGY"), as set forth in that certain
TriPath Oncology Guaranty and the Intellectual Property Security Agreement,
dated as of January 31, 2002, by and between TriPath Oncology and Bank (the
"TRIPATH ONCOLOGY IP SECURITY AGREEMENT"),. Except as expressly modified
pursuant to this Third Loan Modification Agreement, the terms of the Loan
Agreement, the Borrower IP Security Agreement, the Autocyte Guaranty, the
Autocyte IP Security Agreement, the Cell Analysis Guaranty, the Cell Analysis
IP Security Agreement, the TriPath Oncology Guaranty and the TriPath Oncology
IP Security Agreement remain unchanged and in full force and effect and, except
as expressly provided in Schedule I attached hereto, each of Borrower,
Autocyte, Cell Analysis and TriPath Oncology represents and warrants to Bank
that the representations and warranties included in the Loan Agreement, the
Borrower IP Security Agreement, the Autocyte Guaranty, the Autocyte IP Security
Agreement, the Cell Analysis Guaranty, the Cell Analysis IP Security Agreement,
the TriPath Oncology Guaranty, and the TriPath Oncology IP Security Agreement
are true and correct as of the date hereof. Bank's agreement to modifications
to the existing Indebtedness pursuant to this Third Loan Modification Agreement
in no way shall obligate Bank to make any future modifications to the
Indebtedness. Nothing in this Third 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 Loan Agreement
and the Guaranties, unless the party is expressly released by Bank in writing.
No maker, endorser, or guarantor will be released by virtue of this Third Loan
Modification Agreement. The terms of this paragraph apply not only to this
Third Loan Modification Agreement, but also to all subsequent loan modification
agreements entered into between Borrower and Bank.
7. CONDITIONS. The effectiveness of this Third Loan Modification
Agreement is conditioned upon the following:
(a) Bank's receipt of this Third Loan Modification duly
executed by Borrower and Autocyte;
(b) Subordination of any and all existing notes payable
of Borrower, upon terms and conditions satisfactory to Bank in Bank's sole
discretion; provided, that monthly payments or principal and interest may be
made by Borrower under such notes payable so long as no Event of Default has
occurred or is continuing under the Loan Agreement.
(c) Applicable recordation cover sheets for filing with
the United States Patent and Trademark Office and the United States Copyright
Office;
(d) Borrower's payment of the Bank's fees and expenses
pursuant to Section 4 of this Third Loan Modification Agreement;
(e) Autocyte, Cell Analysis, and TriPath Oncology shall
have consented to the modifications of the Indebtedness pursuant to the First
Loan Modification Agreement, dated as of January 31, 2001, the Second Loan
Modification Agreement, dated as of January 31, 2002 and this Third Loan
Modification Agreement by signing one or more counterparts of this Third Loan
Modification Agreement in the appropriate space indicated below and returning
the same to Bank; and
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(f) Such other documents, and completion of other
matters, as Bank may reasonably deem necessary or appropriate.
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This Third Loan Modification Agreement is executed as of the year and
date first written above.
BORROWER: BANK:
TRIPATH IMAGING, INC. SILICON VALLEY BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Director of Finance and Title: Vice President
Treasurer
The undersigned Guarantors hereby consent to the modifications to the
Indebtedness pursuant to the First Loan Modification Agreement, dated as of
January 31, 2001, the Second Loan Modification Agreement, dated as of January
31, 2002 and this Third Loan Modification Agreement, and hereby ratify all the
provisions of the Guaranty and confirm that all provisions of such document are
in full force and effect.
GUARANTOR:
AUTOCYTE NORTH CAROLINA, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director of Finance and
Treasurer
CELL ANALYSIS SYSTEMS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director of Finance and
Treasurer
TRIPATH ONCOLOGY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director of Finance and
Treasurer
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