AMENDMENT NO. 6
TO LOAN AND SECURITY AGREEMENT
This Amendment dated as of December 12, 1997, is entered into by and
between Pico Macom, Inc., a Delaware corporation ("Debtor"), and HSBC
Business Loans, Inc., a Delaware corporation, as successor to Marine Midland
Business Loans, Inc. ("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. 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
is hereby increased from $5,500,000 to $6,500,000, and shall thereafter be
reduced by $100,000 per month, commencing on December 31, 1997 and
continuing on the last day of each month thereafter, until such sub-line is
reduced to $5,500,000.
3. INVENTORY BORROWING BASE PERCENTAGE. With respect to Item 2 of the
Schedule to the Loan Agreement, the Inventory Borrowing Base Percentage is
hereby reduced from 65% to 63%.
4. 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 of creditors generally.
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(c) No event has occurred and is continuing, or would result
from the execution, delivery and/or performance of this Amendment, which
constitutes an unwaived 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.
5. 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.
6. REFERENCES. Upon the effectiveness of this Amendment, each
reference in any Transaction Document to "the Agreement", "hereunder,
"herein, "hereof, or of like import referring to the Loan Agreement shall
mean and be a reference to the Loan Agreement as amended hereby.
7. 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 law of the State of California.
8. CONDITIONS PRECEDENT. This Amendment shall become effective if,
and only if, 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 /s/Charles G. Emley, Jr.
------------------------------
Name Charles G. Emley, Jr.
------------------------------
Title Chairman or CEO
------------------------------
HSBC BUSINESS LOANS, INC.
By
------------------------------
Name Jaimee Tahsiri
------------------------------
Title Vice President
------------------------------
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CONSENT OF GUARANTOR
The undersigned, as guarantor of the Indebtedness of Pico Macom, Inc. to
HSBC Business Loans, Inc. pursuant to that certain Unlimited Continuing
Guaranty dated as of May 25, 1994 (the "Guaranty"), hereby acknowledges
receipt of a copy of the foregoing Amendment No. 6 and acknowledges, consents
and agrees that (i) the Guaranty remains in full force and effect, and
(ii) the execution and delivery of the foregoing Amendment No. 6 and any and
all documents executed in connection therewith shall not alter, amend, reduce
or modify its obligations and liabilities under the Guaranty.
Dated: December 12, 1997
PICO PRODUCTS, INC.
By /s/Charles G. Emley, Jr.
------------------------------
Name Charles G. Emley, Jr.
------------------------------
Title Chairman and CEO
------------------------------
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AMENDMENT NO. 7
TO LOAN AND SECURITY AGREEMENT
This Amendment dated as of June 1, 1998, is entered into by and between
Pico Macom, Inc., a Delaware corporation ("Debtor"), and HSBC Business Loans,
Inc., a Delaware corporation, as successor to Marine Midland Business Loans,
Inc. ("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. SALE OF TRAP FILTER DIVISION. Debtor intends to sell some or all
of the assets in its trap filter division for a sales price of not less than
$4,000,000 cash. Secured Party authorizes and consents to such sale,
provided that it receives all of the net proceeds thereof for application to
the Indebtedness under the Loan Agreement.
2. INVENTORY SUB-LINE. With respect to Item 1(B) (ii) of the Schedule
to the Loan Agreement, and subject to the permanent reduction set forth in
paragraph 4 below, the sub-line for Advances against Eligible Inventory shall
remain at $5,500,000 reduced to $5,000,000 on August 1, 1998, and shall
thereafter be reduced by $100,000 per month, commencing on August 30, 1998
and continuing on the last day of each subsequent month, until such sub-line
is reduced to $5,500,000.
4. REDUCTIONS OF MAXIMUM BORROWING CAPACITY INVENTORY SUB-LINE
AND INVENTORY BORROWING BASE PERCENTAGE UPON SALE. Upon the sale of Debtor's
trap and filter division, the maximum Borrowing Capacity as set forth in Item
1(A) of the Schedule to the Loan Agreement shall be permanently reduced to
$7,000,000, the sub-line for Advances against Eligible Inventory as set forth
in Item 1(B) (ii) thereof shall be permanently reduced to $4,500,000, and the
Inventory Borrowing Base Percentage as set forth in Item 2 thereof shall be
permanently reduced to fifty percent (50%).
5. 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 of creditors generally.
4
(c) No event has occurred and is continuing, or would result
from the execution, delivery and/or performance of this Amendment, which
constitutes an unwaived 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.
6. 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.
7. REFERENCES. Upon the effectiveness of this Amendment, each
reference in any Transaction Document to "the Agreement", "hereunder,
"herein, "hereof, or of like import referring to the Loan Agreement shall
mean and be a reference to the Loan Agreement as amended hereby.
8. 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 law of the State of California.
8. CONDITIONS PRECEDENT. This Amendment shall become effective if,
and only if, 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 /s/Mike Gavigan
------------------------------
Name Mike Gavigan
------------------------------
Title Controller
------------------------------
HSBC BUSINESS LOANS, INC.
By /s/ Jaimee Tahsiri
------------------------------
Name Jaimee Tahsiri
------------------------------
Title Vice President
------------------------------
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CONSENT OF GUARANTOR
The undersigned, as guarantor of the Indebtedness of Pico Macom, Inc. to
HSBC Business Loans, Inc. pursuant to that certain Unlimited Continuing
Guaranty dated as of May 25, 1994 (the "Guaranty"), hereby acknowledges
receipt of a copy of the foregoing Amendment No. 6 and acknowledges, consents
and agrees that (i) the Guaranty remains in full force and effect, and (ii)
the execution and delivery of the foregoing Amendment No. 6 and any and all
documents executed in connection therewith shall not alter, amend, reduce or
modify its obligations and liabilities under the Guaranty.
Dated: As of June 1, 1998
PICO PRODUCTS, INC.
By /s/Michael Gavigan
------------------------------
Name Michael Gavigan
------------------------------
Title Controller
------------------------------
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EXHIBIT 10(s) AMENDMENT NO. 8
TO LOAN AND SECURITY AGREEMENT
This Amendment dated as of October 7, 1998, is entered into by and
between Pico Macom, Inc., a Delaware corporation ("Debtor"), and HSBC
Business Loans, Inc., a Delaware corporation, as successor to Marine Midland
Business Loans, Inc. ("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
$7,000,000 to $8,000,000.
3. 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 of creditors generally.
7
(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.
4. 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.
5. REFERENCES. Upon the effectiveness of this Amendment, each
reference in any Transaction Document to "the Agreement", "hereunder,"
"herein," "hereof," or of like import referring to the Loan Agreement shall
mean and be a reference to the Loan Agreement as amended hereby.
6. 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.
7. 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 S\MIKE GAVIGAN
------------------------------
Name MIKE GAVIGAN
------------------------------
Title CONTROLLER
------------------------------
HSBC BUSINESS LOANS, INC.
By S\JAIMEE TAHSIRI
------------------------------
Name JAIMEE TAHSIRI
------------------------------
Title VICE PRESIDENT
------------------------------
8
CONSENT OF GUARANTOR
The undersigned, as guarantor of the Indebtedness of Pico Macom, Inc. to
HSBC Business Loans, Inc. pursuant to that certain Unlimited Continuing
Guaranty dated as of May 25, 1994 (the "Guaranty"), hereby acknowledges
receipt of a copy of the foregoing Amendment No. 8 and acknowledges, consents
and agrees that (i) the Guaranty remains in full force and effect, and (ii)
the execution and delivery of the foregoing Amendment No. 8 and any and all
documents executed in connection therewith shall not alter, amend, reduce or
modify its obligations and liabilities under the Guaranty.
Dated: As of October 7, 1998
PICO PRODUCTS, INC.
By: S\MIKE GAVIGAN
------------------------------
Name: MIKE GAVIGAN
------------------------------
Title: CONTROLLER
------------------------------
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AMENDMENT NO. 9
TO LOAN AND SECURITY AGREEMENT
This Amendment dated as of November 13, 1998, is entered into by and
between Pico Macom, Inc., a Delaware corporation ("Debtor"), and HSBC
Business Loans, Inc., a Delaware corporation, as successor to Marine Midland
Business Loans, Inc. ("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. 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 $1,000,000 as of the last day
of each fiscal quarter ending on or after October 31, 1998;
(b) Working Capital Ratio of not less than 1.00:1 as of the last day
of each fiscal quarter ending on or after October 31, 1998;
(c) Tangible Net Worth of not less than $1,800,000 as of the last day
of each fiscal quarter ending on or after October 31, 1998;
(d) Debt to Tangible Net Worth of not more than 7.25:1 as of the last
day of each fiscal quarter ending on or after October 31, 1998; and
(e) Net Income Before Taxes of not less than $900,000 during each
fiscal year ending on or after July 31, 1999.
3. TERM. With respect to Section 13.13(a) of the Loan Agreement, the
term thereof shall be through December 31, 1998,
10
and shall be automatically renewed for successive monthly terms ending on the
last Business Day of each month thereafter; provided, however, that either
party may terminate the Loan Agreement as of the end of the then current term
by giving the other party written notice to terminate prior to the last day
of such term.
4. ADDITIONAL AFFIRMATIVE COVENANTS. So long as any of the Indebtedness
under the Loan Agreement remains unpaid or the Loan Agreement remains in
effect, Debtor shall comply with the following additional affirmative
covenants:
(a) Debtor will be "Millennium Compliant." As set forth herein,
Millennium Compliant means that software, hardware, embedded microchips and
other processing capabilities utilized by and material to, the business
operations ("Systems") of Debtor function accurately and consistently accept
date input, provide date output and perform calculations on dates before,
during and after January 1, 2000 without interruption and without any change
in operations associated with the advent of the year 2000.
(b) Upon request by Secured Party, Debtor will provide Secured Party
its plan to become Millennium Compliant and status reports on the
implementation of the same, or such other information which is sufficient to
demonstrate that Debtor will be Millennium Compliant.
5. ADDITIONAL EVENTS OF DEFAULT. The occurrence of any one or more of
the following additional events shall constitute an Event of Default under
the Loan Agreement:
(a) Failure of Debtor to be Millennium Compliant. Pending full
implementations of Debtor's plan to become Millennium Compliant, Debtor will
not be considered in default under this sub-paragraph until such time as any
of its Systems begins to malfunction as a result of the coming or arrival of
the year 2000.
(b) If Secured Party determines, in its sole discretion, that
Debtor's plan to become Millennium Compliant and/or the implementation
thereof are insufficient to ensure that the Debtor will be Millennium
Compliant.
6. ACCOMMODATION FEE. In consideration of the accommodations provided
herein, Debtor shall pay Secured Party an accommodation fee in the amount of
$5,000 concurrently with its execution and delivery of this Amendment.
7. 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
11
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 of 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 unwaived Event of Default under the Loan Agreement or any
other of the Transaction Documents, or would constitute such an unwaived
Event of Default but for the requirement that notice be given or time elapse
or both.
8. 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.
9. REFERENCES. Upon the effectiveness of this Amendment, each
reference in any Transaction Document to "the Agreement", "hereunder,"
"herein," "hereof," or of like import referring to the Loan Agreement shall
mean and be a reference to the Loan Agreement as amended hereby.
10. 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.
11. 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
12
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 /s/ Mike Gavigan
---------------------------
Name Mike Gavigan
-------------------------
Title Controller
------------------------
HSBC BUSINESS LOANS, INC.
By /s/ William Field
---------------------------
Name William Field
-------------------------
Title VP
------------------------
13
CONSENT OF GUARANTOR
The undersigned, as guarantor of the Indebtedness of Pico Macom, Inc. to
HSBC Business Loans, Inc. pursuant to that certain Unlimited Continuing
Guaranty dated as of May 25, 1994 (the "Guaranty"), hereby acknowledges
receipt of a copy of the foregoing Amendment No. 9 and acknowledges, consents
and agrees that (i) the Guaranty remains in full force and effect, and (ii)
the execution and delivery of the foregoing Amendment No. 9 and any and all
documents executed in connection therewith shall not alter, amend, reduce or
modify its obligations and liabilities under the Guaranty.
Dated: As of November 13, 1998
PICO PRODUCTS, INC.
By: /s/ Mike Gavigan
-------------------------------
Name: Mike Gavigan
-----------------------------
Title: Controller
-----------------------------
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