EXHIBIT 10.16 Congress Talcott Corporation 1133 Avenue of the Americas New York NY 10036 212 840 2000 Congress Talcott January 2, 1997 Mr. Harvey Grossblatt Universal Security Instruments, Inc. 10324 So. Dolfield Road Owings Mills, MD 21117 Gentlemen: This letter will modify and amend the Discount Factoring Agreement between us dated February 28, 1995 (as amended) effective January 1, 1997 as follows: Paragraph #6(a) to increase the interest rate from 1% to 1 1/2%, in excess of the prime commercial interest rate from time to time announced by CoreStates Bank, N.A. whether or not such announced rate is the best available at such bank, in effect the first day of each month. Paragraph #7 to inrease the commission rate from 3/4 of 1% to 1%. Nothing herein contained shall vary, or amend any provisions of the said Discount Factoring Agreement between us, except as specifically provided herein. Very truly yours, CONGRESS TALCOTT CORPORATION By: DOREEN DRISCOLL DOREEN DRISCOLL Title: VICE PRESIDENT Agreed and Accepted: UNIVERSAL SECURITY INSTRUMENTS, INC. By: HARVEY GROSSBLATT HARVEY GROSSBLATT Title: PRESIDENT CONGRESS TALCOTT NEW YORK LOS ANGELES A CoreStates Company