EXHIBIT 10.25
FOURTH LOAN MODIFICATION AGREEMENT
This Fourth Loan Modification Agreement (the "AGREEMENT") is entered
into on February ___, 2003, and effective as of January 31, 2003, by and
between TRIPATH IMAGING, INC. ("BORROWER"), whose address is 1111 Huffman Mill
Road, Burlington, North Carolina 27215, and SILICON VALLEY BANK ("BANK"), whose
address is 3003 Tasman Drive, Santa Clara, California 95054.
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, as further
amended by that certain Third Loan Modification Agreement dated as of June 17,
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 1.1 of the Loan Agreement is hereby amended
by deleting the definition of "MATURITY DATE" and by substituting in lieu
thereof the following new definition of such term:
"MATURITY DATE" shall mean January 29, 2004.
(b) 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 $3,000,000 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
29, 2004 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 29, 2004, 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 Facility Fee equal to
(x) one-quarter percent (1/4%) of the Committed Revolving Line (i.e., Twelve
Thousand Five Hundred Dollars ($12,500.00)), which shall be fully earned and
non-refundable when paid, and (y) one-sixteenth percent (1/16%) of the unused
portion of Committed Revolving Line, calculated as of the last day of the
calendar quarter immediately preceding each relevant
payment date described below, which shall be payable in arrears quarterly
beginning on the first (1st) day of the fiscal quarter immediately following
the date hereof (i.e., April 1, 2003) and continuing on the first (1st) day of
each fiscal quarter thereafter during the term of the Loan Agreement (i.e.,
July 1, 2003, October 1, 2003, and January 1, 2004), 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 Fourth Loan Modification
Agreement and the transactions contemplated hereby, and any reasonable
attorney's fees and expenses previously incurred by the Bank in connection with
the Loan Agreement, as amended, which have not previously been paid.
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 Fourth 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 Fourth Loan Modification Agreement in no way
shall obligate Bank to make any future modifications to the Indebtedness.
Nothing in this Fourth 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 Fourth Loan
Modification Agreement. The terms of this paragraph apply not only to this
Fourth Loan Modification Agreement, but also to all subsequent loan
modification agreements entered into between Borrower and Bank.
7. CONDITIONS. The effectiveness of this Fourth Loan
Modification Agreement is conditioned upon the following:
(a) Bank's receipt of this Fourth Loan Modification
Agreement duly executed by Borrower and Autocyte, Cell Analysis and TriPath
Oncology;
(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.
-2-
(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 Fourth Loan Modification Agreement, and any
reasonable attorney's fees and expenses previously incurred by the Bank in
connection with the Loan Agreement, as amended, which have not previously been
paid;
(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, the Third Loan
Modification Agreement, dated as of June 17, 2002, and this Fourth Loan
Modification Agreement by signing one or more counterparts of this Fourth Loan
Modification Agreement in the appropriate space indicated below and returning
the same to Bank; and
(f) Such other documents, and completion of other
matters, as Bank may reasonably deem necessary or appropriate.
[Remainder of this page is intentionally left blank]
-3-
This Fourth Loan Modification Agreement is executed as of the year and
date first written above.
BORROWER: BANK:
TRIPATH IMAGING, INC. SILICON VALLEY BANK
By: /s/ James D. Everhart By: /s/ Andrew A. Rico
---------------------------- ----------------------------------------
Name: James D. Everhart Name: Andrew A. Rico
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, the Third Loan Modification Agreement, dated as of June 17, 2002, and
this Fourth 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/ James D. Everhart
----------------------------
Name: James D. Everhart
Title: Director of Finance and
Treasurer
CELL ANALYSIS SYSTEMS, INC.
By: /s/ James D. Everhart
----------------------------
Name: James D. Everhart
Title: Director of Finance and
Treasurer
TRIPATH ONCOLOGY, INC.
By: /s/ James D. Everhart
----------------------------
Name: James D. Everhart
Title: Director of Finance and
Treasurer
-4-