1
EXHIBIT 10.20
AMENDMENT NUMBER TWO TO THE GENERAL
LOAN AND SECURITY AGREEMENT
GENRAD, INC.
This Amendment Number Two To The General Loan And Security Agreement
(this "Amendment") is entered into this 24th day of November, 1993, by and
between GENRAD, INC., a Massachusetts corporation ("Borrower"), whose chief
executive office is located at 300 Baker Avenue, Concord, Massachusetts
01742-2174 and FOOTHILL CAPITAL CORPORATION, a California corporation
("Foothill"), with a place of business located at 11111 Santa Monica
Boulevard, Suite 1500, Los Angeles, California 90025-3333, in light of the
following facts:
FACTS
-----
FACT ONE: Foothill and Borrower have previously entered into that certain
General Loan And Security Agreement, dated June 23, 1992, as amended (the
"Agreement").
FACT TWO: Foothill and Borrower desire to further amend the Agreement as
provided herein. Terms defined in the Agreement which are used herein shall
have the same meanings as set forth in the Agreement, unless otherwise
specified.
NOW, THEREFORE, Foothill and Borrower hereby modify and amend the
Agreement as follows:
1. Unless earlier terminated by Foothill pursuant to Section 3.1 of
the Agreement, the term of the Agreement shall be extended to
January 1, 1995.
2. Section 6.13 of the Agreement is hereby amended in its entirety to
read as follows:
"6.13 FINANCIAL COVENANTS. As of the end of any fiscal quarter during the
term of this Agreement:
2
(a) Minimum Current Ratio.
---------------------
(i) CONSOLIDATED. Borrower and its Subsidiaries will not
permit the ratio of (A) Consolidated Current Assets to (B) Consolidated
Current Liabilities to be less than .8 to 1.0.
(ii) DOMESTIC. Borrower will not permit the ratio of (A)
Borrower's Current Assets to (B) Borrower's Current Liabilities to be less
than .55 to 1.0.
(b) Minimum Capital Funds.
---------------------
(i) CONSOLIDATED. Borrower and its Subsidiaries will not
permit Consolidated Capital Funds to be less than:
4th Quarter, 1993 $2,000,000
1st Quarter, 1994 $2,000,000
2nd Quarter, 1994 $2,500,000
3rd Quarter, 1994 $3,500,000
4th Quarter, 1994 $3,500,000
<FN>
(ii) DOMESTIC. Borrower will not permit Borrower's Capital
Funds to be less than Twelve Million Dollars ($12,000,000).
(c) Leverage Ratio.
--------------
(i) CONSOLIDATED. Borrower and its Subsidiaries will not
permit the ratio of (A) Indebtedness to (B) Consolidated Capital Funds to
be greater than:
4th Quarter, 1993 4.75 to 1.0
1st Quarter, 1994 4.75 to 1.0
2nd Quarter, 1994 4.75 to 1.0
3rd Quarter, 1994 2.75 to 1.0
4th Quarter, 1994 2.75 to 1.0
(ii) DOMESTIC. Borrower will not permit the ratio of (A)
Indebtedness to (B) Borrower's Capital Funds to be greater than 1.0 to
1.0."
3. Borrower shall pay to Foothill a contract extension fee in the
amount of $60,000 and a covenant amendment fee in the amount of $15,000,
for a total of $75,000, due and payable upon execution hereof. Said
contract extension fee and
3
covenant amendment fee shall be earned at the time of payment and shall be
non-refundable.
4. In the event of a conflict between the terms and provisions of
this Amendment and the terms and provisions of the Agreement, the terms and
provisions of this Amendment shall govern. In all other respects, the
Agreement, as supplemented, amended and modified, shall remain in full
force and effect.
IN WITNESS WHEREOF, Borrower and Foothill have executed this
Amendment as of the day and year first written above.
FOOTHILL CAPITAL CORPORATION GENRAD, INC.
By /s/ LISA M. GONZALES By /s/ ROBERT C. ALDWORTH
--------------------------- ----------------------------
Its AVP Its VICE PRESIDENT & CFO
-------------------------- ----------------------------
----------------------------------------------------------------
By its acceptance below this 30th day of November, 1992, the undersigned
guarantor hereby reaffirms its Continuing Guaranty dated June 23, 1992 and
consents to the above-stated terms.
The undersigned further confirms that the Guaranty continues to be secured
by that certain Stock Pledge Agreement dated June 23, 1992.
GENRAD HOLDINGS, LIMITED
By /s/ WALTER SHEPHARD
--------------------
Walter Shephard
Its Director
--------------------