Exhibit 10.16

THIRD AMENDMENT AND NOTE MODIFICATION AGREEMENT

THIS AGREEMENT is made as of the 20 day of August, 2007, by and among KVH
Industries, Inc., a Delaware corporation with its principal place of business
located at 50 Enterprise Center, Middletown, Rhode Island (the “Borrower”), and
Bank of America, N.A. (successor-by-merger with Fleet National Bank and assignee
of Banc of America Leasing & Capital, LLC [itself a successor-by-merger with
Fleet Capital Corporation]), a national banking association with a place of
business located at 111 Westminster Street, Providence, Rhode Island (the
“Bank”).

PURPOSE:

On July 17, 2003, the Borrower, Fleet Capital Corporation
(predecessor-in-interest to Banc of America Leasing & Capital, LLC) and Fleet
National Bank (predecessor-in-interest to the Bank, as issuing lender and cash
management bank) entered into, among other things, that certain Amended and
Restated Credit and Security Agreement (the “Credit Agreement”) providing for a
$15,000,000 line of credit (the “Line”) to the Borrower.

As further evidence of the Line, the Borrower executed and delivered to Fleet
Capital Corporation that certain Revolving Credit Note dated July 17, 2003, in
the amount of $15,000,000 (the “Note”).

Banc of America Leasing & Capital, LLC assigned all of its rights in and to the
Credit Agreement and the Note, together with any and all other documents
executed and/or prepared in connection therewith (collectively, the “Financing
Documents”), to the Bank pursuant to that certain Assignment and Assumption and
Amendment and Note Modification Agreement dated as of July 17, 2006, by and
among the Borrower, Banc of America Leasing & Capital, LLC and the Bank (the
“First Amendment”), which First Amendment also amended certain terms and
conditions contained in the Financing Documents.

On December 28, 2006, the parties hereto entered into that certain Second
Amendment and Note Modification Agreement (the “Second Amendment”) which
provided for an extension of the maturity date of the Line to December 31, 2008.

The Bank and the Borrower are desirous of further amending the Credit Agreement
to provide for the issuance of a letter of credit that will, among other things,
expire after the aforementioned maturity date.

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NOW, THEREFORE, in consideration of the terms and conditions herein contained
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows (capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto in the Credit
Agreement):

1. Notwithstanding anything in the Credit Agreement to the contrary, the letter
of credit the Borrower is seeking to obtain for its account in the amount of
$228,374.60 pursuant to that certain Application and Agreement for Standby
Letter of Credit dated August, 2007 (the “Reimbursement Agreement”), shall
constitute a Letter of Credit under the Credit Agreement (and for purposes of
this Agreement, shall be referred to as the “Exception Credit”) notwithstanding
the fact that the Exception Credit shall expire on April 30, 2010, a date
subsequent to the current Revolving Credit Maturity Date. In that regard:

(a) The Reimbursement Agreement shall constitute a Loan Document under the
Credit Agreement.

(b) Amounts advanced by the Bank under and pursuant to the Exception Credit
shall constitute an LC Disbursement.

(c) The obligations of the Borrower under the Reimbursement Agreement and the
Credit Agreement to reimburse the Bank for amounts drawn under the Exception
Credit shall constitute an Obligation under the Credit Agreement, and thus shall
be secured thereby.

(d) Under no circumstances shall the Revolving Credit Maturity Date be
interpreted to have been similarly amended; rather, the Revolving Credit
Maturity Date shall, unless amended, remain at December 31, 2008; provided
however, in the event the Revolving Credit Maturity Date is not extended to a
date subsequent to April 30, 2010, all terms and conditions for the payment in
full of all Loans on the Revolving Credit Maturity Date shall remain in full
force and effect with the following exceptions:

 

  (i) The terms and conditions pertaining to the making of LC Disbursements by
the Bank shall remain in full force and effect after the Revolving Credit
Maturity Date with respect to the Exception Credit, and shall expire on
April 30, 2010;

 

  (ii) The terms and conditions pertaining to the repayment in full of all
amounts due from the Borrower in respect of Letters of Credit (i.e.
Reimbursement Obligations), including without limitation the accrual of interest
thereon as provided in Section 2.3(f) of the Credit Agreement, shall remain in
full force and effect after the Revolving Credit Maturity Date with respect to
the Exception Credit, which amounts shall be due and payable by the Borrower at
such time as an LC Disbursement in respect thereof shall be made by the Bank,
all as provided in Section 2.3(d); provided however, such Reimbursement
Obligation shall not be satisfied by the Bank with the funding of a Base Rate
Borrowing.

 

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2. It is the intent of the parties hereby to permit the issuance of the
Exception Credit as a Letter of Credit notwithstanding its expiry date, and that
the Reimbursement Obligations of the Borrower with respect thereto shall be
governed by the Credit Agreement and the Reimbursement Agreement (subject to the
last sentence of Section 2.3(a)), and thus such Reimbursement Obligations shall
be secured by the Credit Agreement. In this regard, the terms and conditions of
the Credit Agreement as relate to such Reimbursement Obligations, the security
therefor and the Exception Credit shall survive any Revolving Credit Maturity
Date occurring prior to April 30, 2010.

3. Except as modified hereby, the Borrower hereby affirms and restates all of
the covenants and agreements made and set forth in the Financing Documents, the
First Amendment, the Second Amendment and any and all other documents executed
in connection therewith.

4. All references to the Credit Agreement appearing in the Note, the First
Amendment, the Second Amendment and any and all other documents executed in
connection therewith, as the Credit Agreement may be otherwise defined or
referred to therein, shall be deemed to mean the Credit Agreement as amended
hereby.

5. Any provision of this Agreement which is prohibited or unenforceable under
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

6. This Agreement is intended by the parties hereto as a final expression of
this Agreement and is also intended as a complete and exclusive statement of the
terms hereof. No course of dealing, course of performance or trade usage, and no
parol or evidence of any nature shall be used to supplement or modify any terms
hereof.

7. This Agreement has been negotiated, executed, and delivered in, and shall be
deemed to have been made in the State of Rhode Island, and the validity of this
Agreement, its construction, interpretation and enforcement, and the rights of
the parties hereunder shall be determined under, governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
Rhode Island.

8. An original of this Agreement shall be attached to and made a part of the
Note and shall constitute an allonge thereto.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the date first above written.

 

WITNESS:     KVH Industries, Inc.

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         By:  

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    Bank of America, N.A.

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    By:  

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      Scott A. McCaughey, Vice President

 

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