EXHIBIT 10(Q)
AMENDMENT NO. 3
TO LOAN AND SECURITY AGREEMENT
This Amendment dated as of December 20, 1995, is entered into by and between
Pico Macom, Inc., a Delaware corporation ("Debtor"), and Marine Midland Business
Loans, Inc., a Delaware corporation ("Secured Party"), with reference to the
following facts:
RECITALS
A. Secured Party is extending various secured financial accommodations to
Debtor upon the terms of that certain Loan and Security Agreement
dated as of May 25, 1994, as amended (the "Loan Agreement").
B. Debtor and Secured Party desire to amend the Loan Agreement upon the
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing and for the other good and
valuable consideration, the receipt and adequacy of which is hereby acknowledged
by each party hereto, Debtor and Secured Party hereby agree as follows:
1. DEFINED TERMS. Unless otherwise specified herein, any capitalized
terms defined in the Loan Agreement shall have the same respective
meanings as used herein.
2. MAXIMUM BORROWING CAPACITY. With respect to the definition of
"Borrowing Capacity" in Section 1.1 of the Loan Agreement and Item
1(A) of the Schedule thereto, the maximum Borrowing Capacity shall be
increased from $10,000,000.00 to $11,000,000.00.
3. INVENTORY SUB-LINE. With respect to Item 1(B)(ii) of the Schedule to
the Loan Agreement, the sub-line for Advances against Eligible
Inventory shall be increased from $4,500,000.00 to $5,500,000.00.
4. FINANCIAL COVENANTS. With respect to Section 10.15 of the Loan
Agreement and Item 26 of the Schedule thereto, Debtor shall maintain
the following levels of financial performance:
(a) Net Working Capital of not less than $3,500,000.00 at all times after
the date of this Amendment;
(b) Working Capital Ratio of not less than 1.30:1 at all times after the
date of this Amendment;
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(c) Tangible Net Worth of not less than $4,000,000.00 at all times after
the date of this Amendment;
(d) Debt to Tangible Net Worth ratio of not more than 3.0:1 after the date
of this Amendment; and
(e) Net Income After Taxes of not less than $750,000.00 during each fiscal
year ending on or after December 31, 1995.
5. TERM. With respect to Section 13.13(a) of the Loan Agreement and Item 35
of the schedule thereto, the term thereof is hereby extended to December
31, 1996, and shall be automatically renewed for successive annual terms,
subject to the termination provisions set forth therein.
6. REPRESENTATIONS AND WARRANTIES. Debtor reaffirms that the representations
and warranties made to Secured Party in the Loan Agreement and other
Transaction Documents are true and correct in all material respects as of
the date of this Amendment as though made as of such date and after giving
effect to this Amendment. In addition, Debtor makes the following
representations and warranties to Secured Party, which shall survive the
execution of this Amendment:
(a) The execution, delivery and performance of this Amendment are within
Debtor's powers, have been duly authorized by all necessary actions,
have received all necessary governmental approvals, if any, and do not
contravene any law or any contractual restrictions binding on Debtor.
(b) This Amendment is the legal, valid and binding obligation of Debtor,
enforceable against Debtor in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium and
other similar laws affecting the rights or creditors generally.
(c) No event has occurred and is continuing, or would result from the
execution, delivery and/or performance of this Amendment, which
constitutes an Event of Default under the Loan Agreement or any other
of the Transaction Documents, or would constitute such an Event of
Default but for the requirement that notice be given or time elapse or
both.
7. CONTINUING EFFECT OF LOAN DOCUMENTS. To the extent of any
inconsistencies between the terms of this Amendment and the Loan
Agreement, this Amendment shall govern. In all other respects, the
Loan Agreement and other Transaction Documents shall remain in full
force and effect and are hereby ratified and confirmed.
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8. REFERENCES. Upon the effectiveness of this Amendment, each reference in
any Transaction Document to "the Agreement", "hereunder", "herein", or of
like import referring to the Loan Agreement shall mean and be a reference
to the Loan Agreement as amended hereby.
9. GOVERNING LAWS. This Amendment, upon becoming effective, shall be deemed
to be a contract made under, governed by, and subject to, and shall be
construed in accordance with, the internal laws of the State of California.
10. CONDITIONS PRECEDENT. This Amendment shall become effective when, and only
when, Secured Party shall have received a counterpart of this Amendment
duly executed by Debtor and acknowledged by the guarantor indicated
hereinbelow, together with such other documents, instruments or agreements
as Secured Party or its legal counsel may reasonably request.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have executed this Amendment as of the date first set forth above, to become
effective in the manner set forth above.
PICO MACOM, INC.
By Joseph T. Kingsley
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Title V.P. Finance
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MARINE MIDLAND BUSINESS LOANS, INC.
By William Field
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Title Vice President
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