Exhibit 10.16

FIRST AMENDMENT TO TERM CREDIT AGREEMENT

THIS FIRST AMENDMENT TO TERM CREDIT AGREEMENT (“Amendment”) is made and entered
into as of May 14, 2004 (the “Effective Date”) by and among ENTRADA NETWORKS,
INC., a Delaware corporation (“Borrower”), HONG KONG LEAGUE CENTRAL CREDIT
UNION, in its capacity as a lender under the Credit Agreement (as hereinafter
defined) (“Hong Kong League”), HIT CREDIT UNION, in its capacity as a lender
under the Credit Agreement (“HIT”), BRIGHTLINE BRIDGE PARTNERS I, LLC, in its
capacity as a lender under the Credit Agreement (“Brightline” and Hong Kong
League shall herein be collectively referred to as “Lenders”), and SBI ADVISORS,
LLC, a California limited liability company, in its capacity as agent for
Lenders (“Agent”)), and is made with reference to the following:

A.   Agent, Hong Kong League, HIT, Shelly Singhal (“Singhal”), and Borrower have
entered into that certain Term Credit Agreement, dated as of January 30, 2004
(as the same may hereafter be amended, modified, extended and/or restated from
time to time, the “Credit Agreement”). Pursuant to the Credit Agreement, Hong
Kong League, HIT and Singhal have made certain Term Loans to Borrower, the
repayment of which Term Loans is secured by certain assets of Borrower pledged
to Agent for the ratable benefit of Hong Kong League, HIT and Singhal pursuant
to the Security Agreement.

B.   Contemporaneously with the execution and delivery of the Credit Agreement,
Borrower executed and delivered to Agent, for the benefit of Hong Kong League
and HIT (i) that certain Term Note dated January 30, 2004 in the original
principal amount of $347,368 in favor of and for the benefit of Hong Kong
League, (ii) that certain Term Note dated January 30, 2004 in the original
principal amount of $52,632 in favor of and for the benefit of HIT, and (iii)
that certain Term Note dated January 30, 2004 in the original principal amount
of $100,000 in favor of and for the benefit of Singhal (as the same may
hereafter be amended, modified, and/or restated from time to time, collectively,
the “Notes”).

C.   Singhal has assigned his interest in the Note executed and delivered to him
by Borrower to Matthew McGovern (“McGovern”) and Jon Buttles (“Buttles”)
pursuant to those Note Assignments dated as of March 30, 2004 by and among
Singhal, Borrower, McGovern and Buttles.

D.   Borrower has requested that (i) Hong Kong League advance an additional
$690,000 to Borrower, and (ii) Brightline advance $310,000 to Borrower, the
repayment of which is to be secured, on a pari passu basis, by the Collateral
pledged under the Security Agreement. Hong Kong League has agreed to provide the
additional financing requested by Borrower, and Brightline has agreed to provide
the new financing requested by Borrower, provided that Borrower agree to (x)
amend certain provisions of the Credit Agreement and deliver to Lenders
promissory notes in form and substance acceptable to Lenders, (y) pay to Lenders
certain fees relating to the additional advances, and (z) issue to Brightline
warrants to purchase common stock of the Borrower in form and substance
acceptable to Brightline, all as more particularly set forth below and in the
promissory notes to be entered into concurrently with the execution and delivery
of this Agreement.

NOW, THEREFORE, in consideration of the premises and the agreements, conditions
and covenants contained herein and other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:

1.   Terms Defined in Credit Agreement. All capitalized terms used in this
Amendment and not otherwise defined herein shall have the meanings assigned to
them in the Credit Agreement.

2.   For purposes hereof, “Effective Date” means the date on which each of the
conditions set forth in Section 10 hereof is fully satisfied to the satisfaction
of Agent in its sole and absolute discretion.

3.   Effective as of the Effective Date, the term “Security Agreement contained
in Section 1 of the Credit Agreement is hereby amended as follows:

“Security Agreement” means that Security Agreement by and between Borrower and
Agent, for the benefit of Lenders, in the form of Exhibit B attached hereto, as
the same may be amended or modified from time to time.

Effective as of the Effective Date, the following terms are added to Section 1
of the Credit Agreement in their proper alphabetical sequence:

“Acquisition” means the acquisition by Borrower of 100% of the capital stock of
Microtek Corporation.

“Effective Date” means the date on which each of the conditions set forth in
Section 10 of the First Amendment is fully satisfied to the satisfaction of
Agent in its sole and absolute discretion.

“First Amendment” means that certain First Amendment to Term Credit Agreement
dated as of May 14, 2004 by and among Borrower, Lenders and Agent.

“Funding Date” has the meaning assigned to such term in Section 13 of the First
Amendment.

“Initial Advance” has the meaning assigned to such term in Section 2(a).

“Supplemental Advance” has the meaning assigned to such term in Section 2(a).

4.   Effective as of the Effective Date, each reference to “Lenders” contained
in the Credit Agreement shall be a reference to Hong Kong League, HIT, McGovern,
Buttles and Brightline, collectively, and each reference to a “Lender” shall be
a reference to Hong Kong League, HIT, McGovern, Buttles or Brightline, as the
case may be.

5.   Effective as of the Effective Date, Section 2(a) of the Credit Agreement is
hereby deleted in its entirety and the following is inserted in lieu thereof:

“Term Loan Advances. Subject to the terms and conditions of this Agreement, each
Lender hereby, severally and not jointly, agrees to make loans to Borrower
(collectively, the “Term Loans”) (i) on the Closing Date in the amount of Five
Hundred Thousand Dollars ($500,000) (the “Initial Advance”), and (ii) on the
Effective Date in the amount of One Million Dollars ($1,000,000) (the
“Supplemental Advance”), which amounts may be repaid at any time prior to the
Maturity Date without premium or penalty, but may not be reborrowed once
repaid.”

6.   Effective as of the Effective Date, Section 2(c) of the Credit Agreement is
hereby deleted in its entirety, and the following is inserted in lieu thereof:

“Interest Rate and Interest Payments. Borrower shall pay interest on the unpaid
principal amount of the Term Loans as follows: (i) with respect to the Term
Loans that comprise the Initial Advance, from the Closing Date until the
Maturity Date at a rate equal to eighteen percent (18%) per annum, and (ii) with
respect to the Term Loans that comprise the Supplemental Advance, from the
Funding Date until the Maturity Date at a rate equal to twenty-four percent
(24%) per annum (the “Interest Rate”). Subject to Section 2(e) and 2(g) below,
interest on the outstanding principal amount of the Term Loans shall be due and
payable to Agent, for the ratable benefit of Lenders, (x) with respect to the
Term Loans that comprise the Initial Advance, in advance (i) on the Closing
Date, and (ii) thereafter, on the last Business Day of each calendar month,
commencing on the first of such dates following the Closing Date until the
Maturity Date, at which time all accrued but unpaid interest shall be due and
payable, and (y) with respect to the Term Loans that comprise the Supplemental
Advance, in advance (i) on the Funding Date, and (ii) thereafter, on the last
Business Day of each calendar month, commencing on the first of such dates
following the Funding Date until the Maturity Date, at which time all accrued
but unpaid interest shall be due and payable.”

7.   Effective as of the Effective Date, Section 2(d) of the Credit Agreement is
hereby deleted in its entirety, and the following is inserted in lieu thereof:

“Promissory Notes. The Term Loan shall be evidenced by promissory notes
(collectively, the “Notes”) in the forms of Exhibit “A-1”, Exhibit “A-2”, and
Exhibit “A-3” attached to this Agreement, and Exhibit “A-1” and Exhibit “A-2”
attached to the First Amendment, each duly executed by Borrower.”

8.   Effective as of the Effective Date, a new Section 4(d) and Section 4(e)
shall be added to the Credit Agreement to read as follows:

“(d)   Lender Fees. (i) Borrower shall pay to Agent on the Funding Date, for the
benefit of Hong Kong League, $69,000 in consideration of Hong Kong League
agreeing to enter into the transactions set forth herein, which amount shall be
non-refundable and deemed fully-earned upon Agent’s receipt thereof; and (ii)
Borrower shall, on the Funding Date, pay to Agent, for the benefit of
Brightline, $6,000 and deliver to Brightline 125,000 shares of the common stock
of Borrower in consideration of Brightline agreeing to enter into the
transactions set forth herein, which amounts shall be non-refundable and deemed
fully-earned upon Agent’s receipt thereof.

(e)   Mandatory Prepayment. Notwithstanding any provision to the contrary
contained herein, upon the issuance and sale of any equity securities by
Borrower subsequent to the date hereof, Borrower shall, within fifteen (15)
Business Days of Borrower’s receipt of the proceeds thereof, prepay to Agent,
for the ratable benefit of Lenders, the aggregate outstanding principal amount
of the Term Loans in an amount equal to fifty percent (50.0%) of all cash
proceeds therefrom, net of underwriting discounts and commissions and all other
reasonable costs paid to non-affiliates in connection therewith.”

9.    Amendment to and Reaffirmation of Security Agreement. The Security
Agreement is hereby amended to add Brightline as a Lender in the premises
thereof. Effective as of the Effective Date, each reference to “Lenders”
contained in the Security Agreement shall be a reference to Hong Kong League,
HIT, McGovern, Buttles and Brightline, collectively, and each reference to a
“Lender” shall be a reference to Hong Kong League, HIT, McGovern, Buttles or
Brightline, as the case may be. Borrower hereby reaffirms on the date hereof
each of the covenants and agreements made by it in the Security Agreement and
agrees that each of such covenants and agreements shall remain unmodified and in
full force and effect notwithstanding the execution and delivery of this
Amendment.

10.   Conditions Precedent. The satisfaction of the following shall be
conditions precedent to the effectiveness of this Amendment:

10.1   Amendment. Agent shall have received this Amendment, duly executed by
Borrower.

10.2   Promissory Notes. Agent shall have received (i) the Term Note in the form
of Exhibit A-1 attached hereto, dated of even date herewith in the original
principal amount of $690,000 in favor of and for the benefit of Hong Kong
League, and (ii) the Term Note in the form of Exhibit A-2 attached hereto dated
of even date herewith in the original principal amount of $310,000 in favor of
and for the benefit of Brightline.

10.3   Representations and Warranties. Each representation and warranty made by
Borrower in Section 3 of the Credit Agreement shall be true and correct on and
as of the Effective Date as though made as of the Effective Date, except to the
extent such representations and warranties relate solely to an earlier date.

11.   Concurrent Advances; Use of Proceeds. Upon the satisfaction by Borrower of
the conditions precedent set forth in Section 10 above, Hong Kong League shall
make a Term Loan to Borrower in the principal amount of Six Hundred Ninety
Thousand Dollars ($690,000), and Brightline shall make a Term Loan to Borrower
in the principal amount of Three Hundred Ten Thousand Dollars ($310,000) (the
“Concurrent Advances”). Proceeds from the Concurrent Advances shall be used by
Borrower solely for the purpose of funding the down payment for the Acquisition
and to finance any fees and expenses associated with the Acquisition.

12.   Delivery of Warrants. (a) Borrower shall deliver to Brightline, as holder
thereof, on the Funding Date (as hereinafter defined) an executed warrant to
purchase 1,550,000 shares of common stock of Borrower at an exercise price of
$0.16 per share, which warrant shall not expire prior to the third anniversary
of the Funding Date and shall contain piggyback registration rights, in form and
substance acceptable to Brightline; and (b) Borrower shall deliver to SBI
Brightline IV, LLC, as holder thereof, on the Funding Date a duly executed
warrant to purchase 3,450,000 shares of common stock of Borrower at an exercise
price of $0.16 per share, which warrant shall not expire prior to the third
anniversary of the Funding Date and shall contain piggyback registration rights,
in form and substance acceptable to SBI Brightline IV, LLC.

13.   Escrowed Funds. Borrower hereby agrees that the net proceeds from the
Concurrent Advances shall be deposited into an escrow account maintained by Loeb
& Loeb LLP (the “Escrow Account”), and shall be maintained in the Escrow Account
until such time as Borrower shall have provided to Agent evidence satisfactory
to Agent of the execution and delivery of definitive documentation relating to
the Acquisition. In furtherance of the foregoing, Borrower hereby authorizes
Agent to wire the net proceeds from the Concurrent Advances into the Escrow
Account. Upon notification in writing by Agent to Loeb & Loeb LLP that the
foregoing condition has been satisfied, all monies deposited in the Escrow
Account shall be released to Borrower. The date of the release of such monies
shall be referred to herein as the “Funding Date”.

14.   Addition of Brightline as a Lender. Effective as of the Effective Date,
Brightline is hereby added as a Lender to the Credit Agreement. Brightline
agrees that, from and after the Effective Date, it will be bound by the
provisions of the Credit Agreement and will perform all of the obligations which
by the terms of the Credit Agreement are required to be performed by it as a
Lender. All notices delivered to Brightline pursuant to Section 11(c) of the
Credit Agreement shall be sent to the following:
 
Brightline Bridge Partners I, LLC
610 Newport Center, Suite 1205
Newport Beach, CA 92660
Telecopy No.: (949) 679-7280

15.   General Amendment. Effective as of the Effective Date, the Credit
Agreement, the Security Agreement, and each document delivered to Lender in
connection therewith (collectively, the “Loan Documents”) are hereby amended to
the further extent required to give effect to the terms and conditions of the
amendments to the Credit Agreement effected hereunder.

16.   Full Force and Effect. Effective as of the Effective Date, each of the
Loan Documents is hereby amended such that all references to the Credit
Agreement contained in any such documents shall be deemed to be references to
the Credit Agreement, as amended by this Amendment. Except as amended hereby,
the Credit Agreement and the other Loan Documents shall remain unaltered and in
full force and effect.

17.   Counterparts. This Amendment may be executed in multiple counterparts,
each of which shall constitute an original and all of which, taken together,
shall constitute but one and the same instrument.

18.   Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of California.

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment by their
respective duly authorized officers as of the date first above written.

“BORROWER”

ENTRADA NETWORKS, INC., a Delaware corporation

By: /s/ Kanwar J. S. Chadha
Name: Kanwar J. S. Chadha
Its: President and CEO

 
“AGENT”
 
SBI ADVISORS, LLC, solely in its capacity as Agent hereunder

By: /s/ Shelly Singhal
Name: Shelly Singhal
Its: Managing Partner   

“LENDERS”

 
HONG KONG LEAGUE CENTRAL CREDIT UNION

By: /s/ Shelly Singhal
Name: Shelly Singhal
Its: Attorney-In-Fact   

HIT CREDIT UNION

By: /s/ Shelly Singhal
Name: Shelly Singhal
Its: Attorney-In-Fact   

BRIGHTLINE BRIDGE PARTNERS I, LLC
 
By: /s/ Shelly Singhal
Name: Shelly Singhal
Its: Managing Partner   

ACKNOWLEDGED AND AGREED:

/s/ Matthew McGovern                   
MATTHEW MCGOVERN

 

/s/ Jon Buttles               
JON BUTTLES

       

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Exhibit A-1

to the First Amendment to Term Credit Agreement

FORM OF TERM NOTE

THE OBLIGATIONS EVIDENCED BY THIS TERM NOTE HAVE BEEN EXPRESSLY SUBORDINATED TO
CERTAIN OTHER OBLIGATIONS OF BORROWER PURSUANT TO THE TERMS OF THAT CERTAIN
SUBORDINATION AGREEMENT (DEBT AND SECURITY INTEREST) BY AND AMONG ENTRADA
NETWORKS, INC., HONG KONG LEAGUE CENTRAL CREDIT UNION, AND SILICON VALLEY BANK,
AS AMENDED.

TERM NOTE

Los Angeles, California

U.S.$690,000                               May 14, 2004

FOR VALUE RECEIVED, the undersigned, ENTRADA NETWORKS, INC., a Delaware
corporation (the “Borrower”), HEREBY UNCONDITIONALLY PROMISES TO PAY to the
order of HONG KONG LEAGUE CENTRAL CREDIT UNION (the “Lender”), without offset or
counterclaim, the principal sum of Six Hundred Ninety Thousand U.S. Dollars
(U.S.$690,000) on or before the Maturity Date (as such term is defined in the
Credit Agreement referred to below). The Borrower further promises to pay
interest on the Term Loan outstanding hereunder from time to time at the
interest rates, and payable on the dates, set forth in the Credit Agreement
referred to below. This Term Note may be prepaid at any time prior to the
Maturity Date without premium or penalty.

1.   Payment. Both principal and interest are payable in lawful money of the
United States of America and in immediately available funds to the Lender at
Party Room 1-2, G/F, Kam Wah House, Choi Hung Estate, Kowloon, Hong Kong, or
such other place as the Lender may designate in writing to the Borrower from
time to time.

2.   Record Keeping. The Lender shall record the amount of principal and
interest due and payable from time to time hereunder, each payment thereof and
the resulting unpaid principal balance hereof, in the Lender’s internal records,
and any such recordation shall be rebuttable presumptive evidence of the
accuracy of the information so recorded; provided, however, that the Lender’s
failure so to record shall not limit or otherwise affect the obligations of the
Borrower hereunder and under the Credit Agreement to repay the principal of and
interest on the Term Loan.

3.   Credit Agreement. This Term Note is one of the Notes referred to in, and is
subject to and entitled to the benefits of, that certain Term Credit Agreement
dated as of January 30, 2004 (as amended by the First Amendment, and as may be
further modified, renewed or extended from time to time, the “Credit Agreement”)
between the Borrower, the Lender, and certain other parties thereto. Unless
otherwise defined herein, capitalized terms used herein shall have the
respective meanings assigned to them in the Credit Agreement. The Credit
Agreement provides, among other things, for acceleration (which in certain cases
shall be automatic) of the maturity hereof upon the occurrence of certain stated
events, in each case without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived. This Term Note is secured by
certain Collateral more specifically described in the Security Agreement.

4.   Limitation on Interest Rate. In no contingency or event whatsoever shall
the aggregate of all amounts deemed interest hereunder or under the Credit
Agreement and charged or collected by the Lender or any holder of this Term Note
exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that the Lender has charged or received
interest hereunder or under the Credit Agreement in excess of the highest
applicable rate, the rate in effect hereunder and under the Credit Agreement
shall automatically be reduced to the maximum rate permitted by applicable law
and the Lender shall apply all interest paid in excess of the maximum lawful
rate to reduce the principal balance of the amounts outstanding hereunder and
under the Credit Agreement. It is the intent of the parties hereto that the
Borrower not pay or contract to pay, and that the Lender not receive or contract
to receive, directly or indirectly in any manner whatsoever, interest in excess
of the maximum rate of interest that may be paid by the Borrower to the Lender
under applicable law.

5.   Governing Law. THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, EXCLUSIVE OF ITS CONFLICTS
OF LAWS AND CHOICE OF LAWS RULES THAT WOULD OR MAY CAUSE THE APPICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF CALIFORNIA.

ENTRADA NETWORKS, INC.
 
By: /s/ Kanwar J. S. Chadha
Name: Kanwar J. S. Chadha
Its: President and CEO

       

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Exhibit A-2

to the First Amendment to Term Credit Agreement

FORM OF TERM NOTE

THE OBLIGATIONS EVIDENCED BY THIS TERM NOTE HAVE BEEN EXPRESSLY SUBORDINATED TO
CERTAIN OTHER OBLIGATIONS OF BORROWER PURSUANT TO THE TERMS OF THAT CERTAIN
SUBORDINATION AGREEMENT (DEBT AND SECURITY INTEREST) BY AND AMONG ENTRADA
NETWORKS, INC., BRIGHTLINE BRIDGE PARTNERS I, LLC, AND SILICON VALLEY BANK, AS
AMENDED.

TERM NOTE

Los Angeles, California

U.S.$310,000                               May 14, 2004

FOR VALUE RECEIVED, the undersigned, ENTRADA NETWORKS, INC., a Delaware
corporation (the “Borrower”), HEREBY UNCONDITIONALLY PROMISES TO PAY to the
order of BRIGHTLINE BRIDGE PARTNERS I, LLC (the “Lender”), without offset or
counterclaim, the principal sum of Three Hundred Ten Thousand U.S. Dollars
(U.S.$310,000) on or before the Maturity Date (as such term is defined in the
Credit Agreement referred to below). The Borrower further promises to pay
interest on the Term Loan outstanding hereunder from time to time at the
interest rates, and payable on the dates, set forth in the Credit Agreement
referred to below. This Term Note may be prepaid at any time prior to the
Maturity Date without premium or penalty.

6.   Payment. Both principal and interest are payable in lawful money of the
United States of America and in immediately available funds to the Lender at
Brightline Bridge Partners I, LLC, 610 Newport Center, Suite 1205, Newport
Beach, CA 92660, or such other place as the Lender may designate in writing to
the Borrower from time to time.

7.   Record Keeping. The Lender shall record the amount of principal and
interest due and payable from time to time hereunder, each payment thereof and
the resulting unpaid principal balance hereof, in the Lender’s internal records,
and any such recordation shall be rebuttable presumptive evidence of the
accuracy of the information so recorded; provided, however, that the Lender’s
failure so to record shall not limit or otherwise affect the obligations of the
Borrower hereunder and under the Credit Agreement to repay the principal of and
interest on the Term Loan.

8.   Credit Agreement. This Term Note is one of the Notes referred to in, and is
subject to and entitled to the benefits of, that certain Term Credit Agreement,
dated as of January 30, 2004 (as amended by the First Amendment, and as may be
further amended, modified, renewed or extended from time to time, the “Credit
Agreement”) between the Borrower, the Lender, and certain other parties thereto.
Unless otherwise defined herein, capitalized terms used herein shall have the
respective meanings assigned to them in the Credit Agreement. The Credit
Agreement provides, among other things, for acceleration (which in certain cases
shall be automatic) of the maturity hereof upon the occurrence of certain stated
events, in each case without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived. This Term Note is secured by
certain Collateral more specifically described in the Security Agreement.

9.   Limitation on Interest Rate. In no contingency or event whatsoever shall
the aggregate of all amounts deemed interest hereunder or under the Credit
Agreement and charged or collected by the Lender or any holder of this Term Note
exceed the highest rate permissible under any law which a court of competent
jurisdiction shall, in a final determination, deem applicable hereto. In the
event that such a court determines that the Lender has charged or received
interest hereunder or under the Credit Agreement in excess of the highest
applicable rate, the rate in effect hereunder and under the Credit Agreement
shall automatically be reduced to the maximum rate permitted by applicable law
and the Lender shall apply all interest paid in excess of the maximum lawful
rate to reduce the principal balance of the amounts outstanding hereunder and
under the Credit Agreement. It is the intent of the parties hereto that the
Borrower not pay or contract to pay, and that the Lender not receive or contract
to receive, directly or indirectly in any manner whatsoever, interest in excess
of the maximum rate of interest that may be paid by the Borrower to the Lender
under applicable law.

10.   Governing Law. THIS TERM NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, EXCLUSIVE OF ITS CONFLICTS
OF LAWS AND CHOICE OF LAWS RULES THAT WOULD OR MAY CAUSE THE APPICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF CALIFORNIA.

ENTRADA NETWORKS, INC.
 
By: /s/ Kanwar J. S. Chadha
Name: Kanwar J. S. Chadha
Its: President and CEO