EXHIBIT 10.18
THIRD LOAN MODIFICATION AGREEMENT
This Third Loan Modification Agreement is entered into as of
__________, 1999, 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 ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and SILICON VALLEY BANK, a California-based bank
("Bank") with its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇▇, and with a loan production office located at Wellesley Office Park, ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 by a certain Second Loan Modification Agreement dated
as of September 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. Repayment of the Indebtedness is secured by the
Collateral as described in the Loan Agreement (together with all other documents
securing repayment of the Indebtedness, 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: (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."
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) fifteen percent (15.0%) 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 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) 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."
and inserting in lieu thereof the following:
"6.9 Tangible Net Worth. Borrower shall maintain: (a) as of the
last day of quarter ending March 31, 1999, a Tangible Net Worth
of not less than Two Million Dollars ($2,000,000.00), (b) on a
monthly basis, as of the last day of the months ending April 30,
1999 and May 31, 1999, a Tangible Net Worth of not less than One
Million Six Hundred Thousand Dollars ($1,600,000.00), (c) as of
the last day of quarter ending June 30, 1999, a Tangible Net
Worth of not less than Two Million Dollars ($2,000,000.00), (d)
on a monthly basis, as of the last day of the months ending July
31, 1999 and August 31, 1999, a Tangible Net Worth of not less
than One Million Seven Hundred Sixty Thousand Dollars
($1,760,000.00), (e) as of the last day of the quarter ending
September 30, 1999, and as of the last day of each quarter
thereafter, a Tangible Net Worth of not less than Two Million Two
Hundred Thousand Dollars ($2,200,000.00), and (f) on a monthly
basis, as of the last day of all months which are not the last
month of a quarter, commencing with the month ending October 31,
1999, a Tangible Net Worth of not less than One Million Seven
Hundred Sixty Thousand Dollars($1,760,000.00)."
3. 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
2
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."
and inserting in lieu thereof the following:
"6.13 Net Income. Borrower shall maintain, as of the last day of
each of the following quarters: (a) a maximum Net Loss of Three
Hundred Thousand Dollars ($300,000.00) for the quarter ending
March 31, 1999, and (b) a minimum Net Income of One Dollar
($1.00) for the quarter ending June 30, 1999 and each quarter
thereafter."
4. The Loan Agreement shall be amended by deleting Section 8.2(a) and
inserting in lieu thereof the following text:
"(a) If Borrower fails to perform any obligation hereunder, or
violates any of the covenants contained in Article 6 of this
Agreement,"
5. 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.
6. 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.
4. FACILITY FEE. Borrower shall pay to Bank a facility fee (the "Facility Fee")
equal to One Thousand Dollars ($1,000.00) which fee shall be due on the date
hereof and which shall be deemed fully earned as of the date hereof. The
Borrower shall also reimburse Bank for all legal fees and expenses incurred in
connection with this amendment to the Existing Loan Documents.
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.
3
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. Noting 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, the venue shall lie in Santa ▇▇▇▇▇ 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 SILICON VALLEY BANK, doing
as Holometrix, Inc., successor business as SILICON VALLEY EAST
by merger with, among others,
Tytronics Incorporated
By: By:
------------------------- ---------------------------
Name: Name:
----------------------- -------------------------
Title: Title:
---------------------- ------------------------
SILICON VALLEY BANK
By:
---------------------------
Name:
-------------------------
Title:
------------------------
(signed in Santa ▇▇▇▇▇ County, California)
4
