Amendment No. 1 to Security and Loan Agreement
and Addendum, Exhibit "A," Thereto
This Amendment No. 1 dated as of March 31, 1997 ("Amendment") amends that
certain Security and Loan Agreement dated June 17, 1996 by and between Imperial
Bank ("Bank") and Xscribe Corporation ("Borrower") and the Addendum, Exhibit
"A," (the "Addendum") thereto, of even date as previously amended (collectively
herein the Security and Loan Agreement and the Addendum are referred to as the
"Agreement"), as follows: The name of Borrower shall be changed from Xscribe
Corporation to Photomatrix, Inc. in the Agreement and any documents executed by
Borrower relating thereto.
1. The name of Borrower shall be changed from Xscribe Corporation to
Photomatrix, Inc. in the Agreement and any documents executed by Borrower
relating thereto.
2. The advance rate on the accounts receivable line of credit as reflected in
Section 1. of the Security and Loan Agreement is amended from 80.000% of
Eligible Accounts to 70.000% of Eligible Accounts.
3. Section 6.e. of the Addendum is deleted in its entirety and the following
substituted therefor:
" Accounts with respect to international transactions unless insured by
an insurance company acceptable to Bank or covered by letters of credit
issued or confirmed by a bank acceptable to Bank. However, Bank may
deem, at its sole discretion, international accounts eligible on a case
by case basis."
4. Section 7. of the Addendum is deleted in its entirety and the following
substituted therefor:
" All financial covenants and financial information referenced herein
shall be interpreted and prepared in accordance with generally accepted
accounting principles applied on a basis consistent with previous
years. Compliance with financial covenants shall be calculated and
monitored on a monthly basis."
5. Section 8.a. of the Addendum is deleted in its entirety and the following
substituted therefor:
" Have and maintain a minimum tangible net worth (meaning the excess of
all assets, over its liabilities, less subordinated debt) of not less
than $3,050,000 from 3/31/97 through 4/29/97 and $2,800,000 at 4/30/97
and thereafter."
6. Section 8.b. of the Addendum is deleted in its entirety and the following
substituted therefor:
" Have and maintain a ratio of total liabilities to tangible net worth
of not greater than 1.10 to 1.00 at 3/31/97 and thereafter."
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7. Section 8.c. of the Addendum is deleted in its entirety and the following
substituted therefor:
" Have and maintain working capital of $2,000,000 from 3/31/97 through
4/29/97 and $1,750,000 at 4/30/97 and thereafter. Working capital is
defined as current assets minus current liabilities."
8. Section 8.d. of the Addendum is deleted in its entirety and the following
substituted therefor:
" Have and maintain a current ratio of 1.70 to 1.00 at 3/31/97 and
thereafter. Current ratio is defined as current assets divided by
current liabilities."
9. Section 10.a. of the Addendum is deleted in its entirety and the following
substituted therefor:
" The rate of interest applicable to the Line of Credit Loan Account
shall 2.50% per year in excess of the rate of interest which Bank has
announced as its prime lending rate ("Prime Rate") which shall vary
concurrently with any change in such Prime Rate. A nonutilization fee
of one percent (1.00%) shall be charged on the average daily unused
portion of the line, payable quarterly in arrears."
10. In consideration of the Bank executing this Amendment, that Borrower agrees
that the strike price on the existing warrant for the purchase of 75,000 shares
of Photomatrix, Inc. common stock is reset to the lesser of $.50 per share or
current market price. This reset is effective immediately and will be documented
in entirety with a modified warrant agreement, which Borrower agrees to execute.
11. Except as provided above, the Agreement remains unchanged and the parties
hereby confirm that the Agreement as herein amended is in full force and effect.
PHOTOMATRIX, INC.
"Borrower"
By:
Title:
IMPERIAL BANK
"Bank"
By:
Title:
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