EXHIBIT 10.29
LOAN MODIFICATION AGREEMENT
This Loan Modification Agreement is entered into as of October 31, 1996,
by and between DATAWATCH Corporation and Personics Corporation (jointly and
severally, the "Borrower" and sometimes referred to as "Company") whose address
is ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and Silicon Valley Bank, a
California-chartered bank ("Lender"), 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 Lender, Borrower is indebted to Lender pursuant to, among
other documents, a Promissory Note, dated November 1, 1994 in the original
principal amount of One Million Five Hundred Thousand and 00/100 Dollars
($1,500,000.00), as may have been modified from time to time (the "Note"). The
Note, together with the promissory notes from Borrower to Lender, is governed by
the terms of a Letter Agreement, dated November 1, 1994, between Borrower and
Lender, as such agreement may be amended from time to time (the "Loan
Agreement"). Defined terms used but not otherwise defined herein shall have the
same meaning as in the Loan Agreement.
Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to
as the "Indebtedness".
2. DESCRIPTION OF COLLATERAL: Repayments of the Indebtedness is secured by two
(2) Commercial Security Agreements, each dated November 1, 1994 (each, the
"Security Agreement"), and two (2) Collateral Assignment, Patent Mortgage and
Security Agreements, each dated November 1, 1994 (each, the "Patent
Agreements").
Hereinafter, the above-described security documents, together with all other
documents securing payments 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. Modification(s) to Note:
1. Payable in one payment of all outstanding principal plus all
accrued unpaid interest on October 30, 1997. In addition, Borrower
will pay regular monthly payments of all accrued unpaid interest
due as of each payment date beginning November 30,
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1996, and all subsequent interest payments are due on the same day
of each month thereafter.
2. The interest rate to be applied to the unpaid principal balance
of the Note, effective as of this date, is hereby decreased to one
(1.00) percentage point over Lender's current Index (as defined
therein).
B. Modification(s) to Loan Agreement:
1. The paragraph describing the maximum available borrowings is
hereby modified to increase the percentage of all the Company's
eligible non-distributor domestic trade accounts within 90 days
from invoice, from 70% to 75%.
2. The paragraph entitled "Minimum Equity" is hereby amended in
its entirety, to read as follows:
(Tested Monthly) Have a minimum Tangible Capital Base (TCB) of
$4,500,000.00 through quarter ending December 31, 1996, increasing
to $5,500,000.00 through quarter ending March 31, 1997, increasing
to $6,500,000.00 through quarter ending June 30, 1997 and
increasing to $7,500,000.00 through quarter ending September 30,
1997 and thereafter. TCB is defined as Stockholder's Equity plus
Subordinated Debt (debt which is formally subordinated to the
Bank) less intangibles (including but not limited to Goodwill,
Capitalized Software and Excess Purchase Costs).
3. The paragraph entitled "Leverage" is amended to include the
months ending January and February under the covenant ratio
requirement of 1.50 to 1.00.
4. The following paragraphs are hereby incorporated into the Loan
Agreement:
SUBROGATION AND SIMILAR RIGHTS: Notwithstanding any other
provisions of this Agreement or any other Existing Loan Document,
each Borrower irrevocably waives all rights that it may have at
law or in equity (including, without limitation, any law
subrogating the Borrower to the rights of Borrower under the
Existing Loan Documents) to seek contribution, indemnification, or
any other form of reimbursement from any other Borrower, or any
other person now or hereafter primarily or secondarily liable for
any Indebtedness of Borrower, for any payment made by the Borrower
with respect to the Indebtedness in connection with this Agreement
or the Existing Loan Documents or otherwise and
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all rights that it might have to benefit from, or to participate
in, any security for the Indebtedness as a result of any payment
made by the Borrower with respect to the Indebtedness in
connection with the Existing Loan Documents or otherwise. Any
agreement providing for indemnification, reimbursement or any
other arrangement prohibited under this Agreement shall be null
and void. If any payment is made to a Borrower in contravention of
this Section, such Borrower shall hold such payment in trust for
Lender and such payment shall be promptly delivered to Lender for
application to the Indebtedness, whether matured or unmatured.
SUBROGATION DEFENSES: Each Borrower hereby waives any defense
based on impairment or destruction of its subrogation or other
rights against any other Borrower and waives all benefits which
might otherwise be available to it under Commonwealth of
Massachusetts law now in effect and hereafter amended, and under
any other similar laws now and hereafter in effect.
4. PAYMENT OF LOAN FEE: Borrower shall pay Lender a fee in the amount of Three
Thousand and 00/100 Dollars ($3,000.00) plus all out-of-pocket expenses (the
"Loan Fee").
5. CONSISTENT CHANGES: The Existing Loan Documents are hereby amended wherever
necessary to reflect the changes described above.
6. NO DEFENSES OF BORROWER: Borrower agrees that, as of this date, it has no
defenses against the obligations to pay any amounts under the Indebtedness.
7. CONTINUING VALIDITY: Borrower understands and agrees that in modifying the
existing Indebtedness, Lender 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.
Lender's agreement to modifications to the existing Indebtedness pursuant to
this Loan Modification Agreement in no way shall obligate Lender 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 Lender and Borrower to retain as liable parties all makers and
endorsers of Existing Loan Documents, unless the party is expressly released by
Lender 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.
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8. 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 Lender cannot avail itself of the courts of the Commonwealth of
Massachusetts, then venue shall lie in Santa ▇▇▇▇▇ County, California.
9. COUNTERSIGNATURE. This Loan Modification Agreement shall become effective
only when it shall have been executed by Borrower and Lender (provided, however,
in no event shall this Loan Modification Agreement become effective until signed
by an officer of Lender in California).
10. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon payment of the Loan Fee.
This Loan Modification Agreement is executed as of the date first written above.
BORROWER:
DATAWATCH CORPORATION and
PERSONICS CORPORATION
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Executive Vice President
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LENDER: SILICON VALLEY BANK
SILICON VALLEY BANK, doing business as
SILICON VALLEY EAST
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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Title: Vice President Title: Vice President
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(Signed at Santa ▇▇▇▇▇ County, CA)
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