Exhibit 10.54


 


FOURTH AMENDMENT AND WAIVER TO REVOLVING CREDIT AND
TERMLOAN AGREEMENT


 


This Fourth Amendment and
Waiver to Revolving Credit and Term Loan Agreement (the “Amendment”) is made as
of the        day of February 2004 by and among


 


MFIC Corporation (the
“Borrower”), a Delaware corporation with its principal executive offices at 30
Ossipee Road, Newton, Massachusetts 02464; and


 


PNC Bank, National
Association, a national banking association (the “Lender”) with a place of
business at 70 East 55th Street, 14th Floor, New York,
New York 10022.


 


in consideration of the mutual covenants herein
contained and benefits to be derived herefrom.


 


W I T N E S S E T H


 


WHEREAS, the Borrower and
National Bank of Canada (“NBC”) entered into a certain Revolving Credit and
Term Loan Agreement dated as of February 28, 2000 (as amended in effect, the
“Loan Agreement”); and


 


WHEREAS, NBC has assigned
all of its right, title and interest in and to the Loan Agreement and the
documents, instruments and agreements executed and delivered in connection
therewith to the Lender; and


 


WHEREAS, the Borrower has
requested that the Lender modify and amend and waive compliance with certain
provisions of the Loan Agreement; and


 


WHEREAS, the Lender has
agreed to modify and amend and waive compliance with certain provisions of the
Loan Agreement on the terms and conditions set forth herein.


 


NOW THEREFORE, it is
hereby agreed as follows:


 


1.             Definitions.


 


(a)                                  All capitalized terms used herein and not
otherwise defined shall have the same meanings herein as in the Loan Agreement.


 


(b)           Section 1 of the Loan Agreement is
hereby amended by either amending or inserting the following definitions
therein:


 

















 


“Contingent
Consideration” means certain moneys which may be payable to Borrower subsequent
to the Closing (as defined in the Asset Purchase Agreement (defined below)) of
the Morehouse-COWLES Disposition pursuant to the Asset Purchase Agreement.


 


“Morehouse-COWLES
Disposition” shall mean the Borrower’s sale of the assets of its Morehouse-COWLES
Division to NuSil Corporation, or its wholly owned subsidiary  (“NuSil”) in accordance with the terms of
the Asset Purchase Agreement dated February    , 2004 (the
“Asset Purchase Agreement”) between MFIC Corporation and Morehouse-COWLES,
Inc.), including: (i) the inventory; (ii) relevant tangible equipment; (iii)
accounts receivable, work in progress and pending orders, (iv) trade names of
the Morehouse-COWLES Division (including but not limited to the trade names
“Morehouse-COWLES” and “Zinger”); (v) all trademarks, copyrights, issued
patents, patent application, trade secrets and other confidential and
proprietary information; (vi) all rights under contracts to which the
Morehouse-COWLES Division is a party; and (vii) the goodwill of the Morehouse-COWLES
Division.  All assets transferred
pursuant to the Morehouse-COWLES Disposition” shall be referred to collectively
herein as the “Disposition Assets”.


 


“Morehouse-COWLES
Division” shall mean the business operated by Borrower as Morehouse-COWLES, the
assets of which are to be sold to NuSil in accordance with the Morehouse-COWLES
Disposition .


 


“Morehouse-COWLES
Purchase Price” shall mean the consideration consisting of (a) cash paid by
NuSil at the closing of the Morehouse-COWLES Disposition (the “Closing Cash”),
(b) the Contingent Consideration, (c) assumption by NuSil of the
Morehouse-COWLES trade payables and (d) issuance to Borrower by NuSil of the
NuSil Promissory Note, all as set forth in the Asset Purchase Agreement.


 


“NuSil Promissory Note”
shall mean the portion of the Morehouse-COWLES Purchase Price in the form of a
$100,000.00 promissory note executed and delivered by NuSil to Borrower.


 


“Release Conditions”
shall mean (a) payment of the Closing Cash to Lender, (b) assignment by
Borrower to Lender of all of its rights to receive Contingent Consideration,
(c) endorsement by Borrower to Lender of the NuSil Promissory Note and (d) and
assignment


 

















 


from the Borrower to the
Lender of the Security Agreement dated February     , 2004
(the “Security Agreement”) between Morehouse-COWLES, Inc. and Borrower creating
the Subordinated Security Interest.  All
payments of moneys by Borrower to Lender pursuant to the Release Conditions
shall be applied to Borrower’s outstanding balance under the Revolving Credit
Loan.


 


“Subordinated Security
Interest” shall mean the security interest granted by NuSil in favor of
Borrower in the Disposition Assets, which shall remain subordinate to Lender’s
security interest in said assets until the Release Conditions have been
satisfied.


 


2.             Modification, Amendment and/or Waiver to Compliance
With Terms.


 


(a)                                  Section 6.6 Existence; Maintenance of
Properties is deemed amended to provide that Lender consents to the
Morehouse-COWLES Disposition, and waives the breach which might otherwise  occur as a result thereof under Section 6.6,
provided that the Release Conditions have been satisfied;


 


(b)                                 Section 7.2 Restrictions on Liens,
Etc. is deemed amended to provide that Lender consents to the granting by
NuSil of the Subordinated Security Interest to Borrower, and waives the breach
which might otherwise occur as a  result
thereof under Section 7.2.  Furthermore,
provided that upon satisfaction of the Release Conditions ,
Lender’s   lien on the Disposition
Assets shall be released (the “Release”)  
and, accordingly, the Subordinated Security Interest shall become, as
of  the date of the Release, a first
priority security interest in the Disposition Assets, and Lender further
authorizes and irrevocably makes, constitutes and appoints Borrower as its true
and lawful attorney with power to sign Lender’s name on any documents,
including without limitation termination statements, with respect to such
assets in connection with the Release and to file any such documents with the
appropriate governmental office; Lender further agrees that, upon satisfaction
of the Release Conditions, it will execute any further document reasonably
necessary to effectuate the Release.


 


(c)                                  Section 7.4 Merger, Consolidation
is deemed amended to provide that Lender consents to the Morehouse-COWLES
Disposition, and waives the breach which might otherwise occur as a result
thereof


 

















 


under Section 7.4.


 


3.                                       Conditions to Effectiveness. 
This Amendment shall not be effective until each of the following
conditions precedent have been fulfilled to the satisfaction of the Lender.


 


(a)                                  This
Amendment shall have been duly executed and delivered by the respective parties
hereto and, shall be in full force and effect and shall be in form and
substance satisfactory to the Lender.


 


(b)                                 All
action on the part of the Borrower necessary for the valid execution, delivery
and performance by the Borrower of this Amendment shall have been duly and
effectively taken and evidence thereof satisfactory to the Lender shall have
been provided to the Lender.  The Lender
shall have received from the  Borrower
true copies of the resolutions adopted by its board of  directors authorizing the transactions
described herein, certified by  the
Borrower’s secretary to be true and complete.


 


(c)                                  The
Borrower shall have paid to the Lender all fees and expenses  then due and owing pursuant to the
Agreement, including, without 
limitation, the Lenders’ attorneys’ fees and expenses.


 


(d)                                 No
Default or Event of Default shall have occurred and be continuing.


 


(e)                                  The
Borrower shall have provided such additional instruments and  documents to the Lender as the Lender and
the Lender’s counsel  may have
reasonably requested, including but not limited to the executed Asset Purchase
Agreement for the Morehouse-COWLES Disposition.


 


4.                                       Ratification
of Loan Documents.  Except as
provided herein, all terms and conditions of this Loan Agreement and the other
Loan Documents remain in full force and effect.  The Borrower hereby ratifies, confirms, and reaffirms all
representations, warranties, and covenants contained therein and acknowledges
and agrees that the Liabilities, are and continue to be secured by the
Collateral.  The Borrower further
acknowledges and agrees that Borrower does not have any offsets, defenses, or
counterclaims against the Lender thereunder (except for any offsets which may
be provided for in the NuSil Promissory Note), and to the extent that any such
offsets, defenses, or counterclaims may exist, the Borrower hereby waives and
releases the Lender therefrom.


 

















 


5.                                       Final
Payment Date.  If all amounts
payable under the NuSil Promissory Note have not been paid after the date which
is one year and ninety days from the date of such note, Borrower shall pay to
Lender all outstanding amounts due under such note; provided that with respect
to any such amounts paid by Borrower, Lender shall assign to Borrower any
rights it may have under said note to seek collection of such amounts from
NuSil.  Upon receipt by Lender, the
payments by Borrower provided for in this section shall be applied to
Borrower’s outstanding balance under the Revolving Credit Loan.


 


6.                                       Miscellaneous.


 


(a)                                  This
Amendment may be executed in several counterparts and by  each party on a separate counterpart, each
of which when so  executed and delivered
shall be an original, and all of which 
together shall constitute one instrument.


 


(b)                                 This Amendment expresses the entire
understanding of the parties with respect to the transactions contemplated
hereby.  No prior negotiations or
discussions shall limit, modify, or otherwise affect the provisions hereof.


 

















 


IN WITNESS WHEREOF, the undersigned have hereunto executed this
Amendment as a sealed instrument as of the date first above written.


 


	
   

  	
  MFIC CORPORATION

  
	
   

  	
   

  
	
   

  	
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  PNC BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
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