**Exhibit 10.54**

 

FOURTH AMENDMENT AND WAIVER TO REVOLVING CREDIT ANDTERMLOAN AGREEMENT

 

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

 

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

 

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

 

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

 

W I T N E S S E T H

 

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

 

WHEREAS, NBC has assignedall of its right, title and interest in and to the Loan Agreement and thedocuments, instruments and agreements executed and delivered in connectiontherewith to the Lender; and

 

WHEREAS, the Borrower hasrequested that the Lender modify and amend and waive compliance with certainprovisions of the Loan Agreement; and

 

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

 

NOW THEREFORE, it ishereby agreed as follows:

 

1.             Definitions.

 

(a)                                  All capitalized terms used herein and nototherwise defined shall have the same meanings herein as in the Loan Agreement.

 

(b)           Section 1 of the Loan Agreement ishereby amended by either amending or inserting the following definitionstherein:

 

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

 

“Morehouse-COWLESDisposition” shall mean the Borrower’s sale of the assets of its Morehouse-COWLESDivision to NuSil Corporation, or its wholly owned subsidiary  (“NuSil”) in accordance with the terms ofthe 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 ofthe Morehouse-COWLES Division (including but not limited to the trade names“Morehouse-COWLES” and “Zinger”); (v) all trademarks, copyrights, issuedpatents, patent application, trade secrets and other confidential andproprietary information; (vi) all rights under contracts to which theMorehouse-COWLES Division is a party; and (vii) the goodwill of the Morehouse-COWLESDivision.  All assets transferredpursuant to the Morehouse-COWLES Disposition” shall be referred to collectivelyherein as the “Disposition Assets”.

 

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

 

“Morehouse-COWLESPurchase Price” shall mean the consideration consisting of (a) cash paid byNuSil at the closing of the Morehouse-COWLES Disposition (the “Closing Cash”),(b) the Contingent Consideration, (c) assumption by NuSil of theMorehouse-COWLES trade payables and (d) issuance to Borrower by NuSil of theNuSil 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 byBorrower to Lender of all of its rights to receive Contingent Consideration,(c) endorsement by Borrower to Lender of the NuSil Promissory Note and (d) andassignment

 

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from the Borrower to theLender of the Security Agreement dated February     , 2004(the “Security Agreement”) between Morehouse-COWLES, Inc. and Borrower creatingthe Subordinated Security Interest.  Allpayments of moneys by Borrower to Lender pursuant to the Release Conditionsshall be applied to Borrower’s outstanding balance under the Revolving CreditLoan.

 

“Subordinated SecurityInterest” shall mean the security interest granted by NuSil in favor ofBorrower in the Disposition Assets, which shall remain subordinate to Lender’ssecurity interest in said assets until the Release Conditions have beensatisfied.

 

2.             Modification, Amendment and/or Waiver to ComplianceWith Terms.

 

(a)                                  Section 6.6 Existence; Maintenance ofProperties is deemed amended to provide that Lender consents to theMorehouse-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 byNuSil of the Subordinated Security Interest to Borrower, and waives the breachwhich might otherwise occur as a  resultthereof under Section 7.2.  Furthermore,provided that upon satisfaction of the Release Conditions ,Lender’s   lien on the DispositionAssets shall be released (the “Release”)  and, accordingly, the Subordinated Security Interest shall become, asof  the date of the Release, a firstpriority security interest in the Disposition Assets, and Lender furtherauthorizes and irrevocably makes, constitutes and appoints Borrower as its trueand lawful attorney with power to sign Lender’s name on any documents,including without limitation termination statements, with respect to suchassets in connection with the Release and to file any such documents with theappropriate governmental office; Lender further agrees that, upon satisfactionof the Release Conditions, it will execute any further document reasonablynecessary to effectuate the Release.

 

(c)                                  Section 7.4 Merger, Consolidationis deemed amended to provide that Lender consents to the Morehouse-COWLESDisposition, and waives the breach which might otherwise occur as a resultthereof

 

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under Section 7.4.

 

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

 

(a)                                  ThisAmendment shall have been duly executed and delivered by the respective partieshereto and, shall be in full force and effect and shall be in form andsubstance satisfactory to the Lender.

 

(b)                                 Allaction on the part of the Borrower necessary for the valid execution, deliveryand performance by the Borrower of this Amendment shall have been duly andeffectively taken and evidence thereof satisfactory to the Lender shall havebeen provided to the Lender.  The Lendershall have received from the  Borrowertrue copies of the resolutions adopted by its board of  directors authorizing the transactionsdescribed herein, certified by  theBorrower’s secretary to be true and complete.

 

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

 

(d)                                 NoDefault or Event of Default shall have occurred and be continuing.

 

(e)                                  TheBorrower shall have provided such additional instruments and  documents to the Lender as the Lender andthe Lender’s counsel  may havereasonably requested, including but not limited to the executed Asset PurchaseAgreement for the Morehouse-COWLES Disposition.

 

4.                                       Ratificationof Loan Documents.  Except asprovided herein, all terms and conditions of this Loan Agreement and the otherLoan Documents remain in full force and effect.  The Borrower hereby ratifies, confirms, and reaffirms allrepresentations, warranties, and covenants contained therein and acknowledgesand agrees that the Liabilities, are and continue to be secured by theCollateral.  The Borrower furtheracknowledges and agrees that Borrower does not have any offsets, defenses, orcounterclaims against the Lender thereunder (except for any offsets which maybe provided for in the NuSil Promissory Note), and to the extent that any suchoffsets, defenses, or counterclaims may exist, the Borrower hereby waives andreleases the Lender therefrom.

 

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5.                                       FinalPayment Date.  If all amountspayable under the NuSil Promissory Note have not been paid after the date whichis one year and ninety days from the date of such note, Borrower shall pay toLender all outstanding amounts due under such note; provided that with respectto any such amounts paid by Borrower, Lender shall assign to Borrower anyrights it may have under said note to seek collection of such amounts fromNuSil.  Upon receipt by Lender, thepayments by Borrower provided for in this section shall be applied toBorrower’s outstanding balance under the Revolving Credit Loan.

 

6.                                       Miscellaneous.

 

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

 

(b)                                 This Amendment expresses the entireunderstanding of the parties with respect to the transactions contemplatedhereby.  No prior negotiations ordiscussions shall limit, modify, or otherwise affect the provisions hereof.

 

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

 
|   | MFIC CORPORATION               |
|--------|--------------------------------|
|   |                           |
|   | By:                            |   |   |
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|   | Name:                          |   |   |
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|   | Title:                         |   |   |
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|   | PNC BANK, NATIONAL ASSOCIATION |
|   |                           |
|   | By:                            |   |   |
|   |                           |
|   | Name:                          |   |   |
|   |                           |
|   | Title:                         |   |   |
|        |                                |  |  |  |  |  |  |  |  |  |

 

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