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EXHIBIT 99.3
SILICON VALLEY BANK
AMENDMENT TO LOAN AGREEMENT
BORROWER: VITALCOM INC., A DELAWARE CORPORATION (FORMERLY KNOWN AS
ACCUCORE, INC., SUCCESSOR BY MERGER TO PACIFIC COMMUNICATIONS,
INC., A CALIFORNIA CORPORATION)
ADDRESS: 00000 Xxx Xxx Xxxxxx Xxxxxx, XX 00000
Date: August 6,1996
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON VALLEY BANK
("Silicon") and the borrower named above (the "Borrower").
The Parties agree to amend the Loan and Security Agreement between them
dated February 26, 1993, as amended by that Amendment to Loan Agreement dated
December 21, 1993, as amended by that Amendment to Loan Agreement dated April
27, 1994, as amended by that Amendment to Loan Agreement dated May 5, 1995, as
amended by that Amendment to Loan Agreement dated May 30, 1995, as amended by
that Amendment to Loan Agreement dated December 27, 1995 (the "December 1995
Amendment"), and as otherwise amended from time to time (the "Loan Agreement";
terms defined in the Loan Agreement are used herein as therein defined), as
follows, effective as of the date hereof. The Maturity Date set forth in the
December 1995 Amendment was May 5, 1996, and effective upon such date the Loan
Agreement was terminated. Effective as of the date hereof, the Loan Agreement
is considered to be revived and in full force and effect.
1. AMENDED SCHEDULE. The Schedule to the Loan Agreement is amended
effective on the date hereof, to read as set forth on the Schedule hereto.
2. MODIFIED SECTION 2.2. Section 2.2 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"2.2 CONDITIONAL GRANT OF SECURITY INTEREST IN COLLATERAL. Upon the
occurrence of an Event of Default arising from the Borrower's non-
compliance with any of the financial covenants set forth in the Loan
Agreement while any monetary Obligations are outstanding (the "Granting
Condition"), the following shall considered to be immediately and fully
effective at such time, without any further action on the part of
Silicon or Borrower: Borrower hereby grants Silicon a continuing
security interest in all of the Borrower's interest in the Collateral
(as defined below in Section 2.2A) as security for all Obligations
(such grant of a security interest is referred to herein as the
"Grant"). Until such time that the Granting Condition has occurred,
the Grant shall not be considered effective. Borrower agrees to take
such actions and execute such documentation as Silicon determines is
necessary or desirable in order to effectuate
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
the Grant and to allow Silicon to perfect its security interest in the
Collateral at such time as the Grant becomes effective.
2.2A COLLATERAL. The following is referred to as the "COLLATERAL":
(a) All accounts contract rights, chattel paper, letters of credit,
documents, securities, money, and instruments, and all other
obligations now or in the future owing to the Borrower; (b) All
inventory, goods, merchandise, materials, raw materials, work in
process, finished goods, farm products, advertising, packaging and
shipping materials, supplies, and all other tangible personal property
which is held for sale or lease or furnished under contracts of service
or consumed in the Borrower 5 business, and all warehouse receipts and
other documents; and (c) All equipment, including without limitation
all machinery, fixtures, trade fixtures, vehicles, furnishings,
furniture, materials, tools, machine tools, office equipment, computers
and peripheral devices, appliances, apparatus, parts, dies, and jigs;
(d) All general intangibles including, but not limited to, deposit
accounts, goodwill, names, trade names, trademarks and the goodwill of
the business symbolized thereby, trade secrets, drawings, blueprints,
customer lists, patents, patent applications, copyrights, security
deposits, loan commitment fees, federal, state and local tax refunds
and claims, all rights in all litigation presently or hereafter pending
for any cause or claim (whether in contract, tort or otherwise), and
all judgments now or hereafter arising therefrom, all claims of
Borrower against Silicon, all rights to purchase or sell real or
personal property, all rights as a licensor or licensee of any kind,
all royalties, licenses, processes, telephone numbers, proprietary
information, purchase orders, and all insurance policies and claims
(including without limitation credit, liability, property and other
insurance), and all other rights, privileges and franchises of every
kind; (e) All books and records, whether stored on computers or
otherwise maintained; and (f) All substitutions, additions and
accessions to any of the foregoing, and all products, proceeds and
insurance proceeds of the foregoing, and all guaranties of and security
for the foregoing; and all books and records relating to any of the
foregoing."
3. MODIFICATION TO SECTION 3.7. SECTION 3.7 of the Loan Agreement is
hereby amended in its entirety to read as follows:
"3.7 FINANCIAL CONDITION AND STATEMENTS. All financial statements now
or in the future delivered to Silicon have been, and will be, prepared
in conformity with generally accepted accounting principles and now and
in the future will completely and accurately reflect the financial
condition of the Borrower, at the times and for the periods therein
stated subject to normal year-end adjustments. Since the last date
covered by any such statement, there has been no material adverse
change in the financial condition or business of the Borrower. The
Borrower is now and will continue to be solvent. The Borrower will
provide Silicon: (i) Within the earlier of (A) 45 days after the end of
each quarter or (B) 5 days after the earlier of the date the report
10-Q is filed or is required to be filed with the Securities and
Exchange Commission ("SEC") with respect to Borrower, such 10-Q report,
a quarterly financial statement prepared by Borrower, and a Compliance
Certificate in such form as Silicon shall reasonably specify, signed by
the Chief Financial Officer of the Borrower, certifying that throughout
such quarter the Borrower was in full compliance with all of the terms
and conditions of this Agreement, and setting forth calculations
showing compliance with the financial covenants set forth on the
Schedule and such other information as Silicon shall reasonably request
(the "Compliance Certificate"); (iii) within the earlier of (A) 90 days
after the end of Borrower's fiscal year or (B) 5 days after the earlier
of the date the report 10-K is filed or is required to be filed with
the Securities and Exchange Commission with respect to Borrower, such
10-K report, complete annual financial statements, certified by
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
Deloitte & Touche or other independent certified public accountants
acceptable to Silicon, and a Compliance Certificate for the quarter
then ended; PROVIDED, however, with respect to the 10-Q and 10-K
reports referred to above, if (x) Borrower applies for and obtains an
extension from the SEC for the delivery of such reports to the SEC, (y)
Borrower provides Silicon with evidence of the SEC's grant of such
extension, and (z) such extension is not 30 days beyond the regular
submission date for such reports, then the required dates for the
submission of financial information and reports set forth in this
Section 3.7 shall be deemed to be modified to the date of the extension
so granted by the SEC."
4. REFERENCES IN LOAN AGREEMENT; ETC. Until such time that Grant has
become effective, Borrower and Silicon hereby agree that all references to the
security interest or lien of Silicon in the Collateral are deemed not to be in
effect; PROVIDED upon the effectiveness of the Grant, such provisions and such
references shall immediately be deemed to be in full force and effect, without
any further action or notice by Silicon or Borrower.
5. FEE. It is acknowledged that Borrower has paid to Silicon a fee in the
amount of $8,250 in connection with this Amendment, which shall be in addition
to all interest and all other fees payable to Silicon and shall be
non-refundable. At such time that any Loans are made hereunder, Borrower shall,
prior to Silicon's making of any such Loan, pay to Silicon a further fee of
$8,250, which shall be in addition to all interest and all other fees payable to
Silicon and shall be non-refundable.
6. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior
written amendments to the Loan Agreement signed by Silicon and the Borrower,
and the other written documents and agreements between Silicon and the Borrower
set forth in full all of the representations and agreements of the parties with
respect to the subject matter hereof and supersede all prior discussions,
representations, agreements and understandings between the parties with respect
to the subject hereof. Except as herein expressly amended, all of the terms and
provisions of the Loan Agreement, and all other documents and agreements
between Silicon and the Borrower shall continue in full force and effect and
the same are hereby ratified and confirmed. This Amendment shall be controlling
in the event of any conflicts between any prior written agreements and
amendments between Silicon and the BORROWER, on the one hand, and this
Amendment.
BORROWER: SILICON:
VITALCOM INC., a Delaware corporation SILICON VALLEY BANK
By /s/ XXXXX X. XXXXXXXXXXXXX /s/ X. XXXXXXXXXX for Xxxxxx X. Xxxxx
----------------------------- -------------------------------------
President or Vice President V.P.
By /s/ XXXXXXX X. XXXXXX
-----------------------------
Secretary or Ass't Secretary
(3)
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SILICON VALLEY BANK SCHEDULE TO LOAN AGREEMENT
SILICON VALLEY BANK
SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: VITALCOM INC., A DELAWARE CORPORATION (FORMERLY KNOWN AS
ACCUCORE, INC., SUCCESSOR BY MERGER TO PACIFIC COMMUNICATIONS,
INC., A CALIFORNIA CORPORATION)
ADDRESS: 00000 XXX XXX XXXXXX
XXXXXX, XX 00000
DATE: AUGUST 6,1996
CREDIT LIMIT An amount equal to $5,000,000.
(Section 1.1):
LETTERS OF CREDIT Silicon, in its reasonable discretion, will
from time to time during the term of this
Agreement issue letters of credit for the
account of the Borrower ("Letters of Credit"),
in an aggregate amount at any one time
outstanding not to exceed $250,000, upon the
request of the Borrower, provided that, on the
date the Letters of Credit are to be issued,
Borrower has available to it Loans in an
amount equal to or greater than the face
amount of the Letters of Credit to be issued.
Prior to the issuance of any Letters of
Credit, Borrower shall execute and deliver to
Silicon Applications for Letters of Credit and
such other documentation as Silicon shall
specify (the "Letter of Credit
Documentation"). Fees for the Letters of
Credit shall be as provided in the Letter of
Credit Documentation.
The Credit Limit set forth above and the Loans
available under this Agreement at any time
shall be reduced by the face amount of Letters
of Credit from time to time outstanding.
INTEREST RATE (SECTION 1.2): A rate equal to the "Prime Rate" in effect
from time to time. Interest shall be
calculated on the basis of a 360-day year for
the actual number of days elapsed. "Prime
Rate" means the rate announced from time to
time by Silicon as its "prime rate;" it is a
base rate upon which other rates charged by
Silicon are based, and it is not necessarily
the best rate available at Silicon. The
interest rate applicable to the Obligations
shall change on each date there is a change in
the Prime Rate.
(1)
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SILICON VALLEY BANK SCHEDULE TO LOAN AGREEMENT
LOAN ORIGINATION FEE Per the Amendment to Loan Agreement of even
(Section 1.3): date. (Section 3.10):
MATURITY DATE AUGUST 5, 1997.
(Section 5.1):
PRIOR NAMES OF BORROWER ACCUCORE, INC., PACIFIC COMMUNICATIONS, INC.
(Section 3.2):
TRADE NAMES OF BORROWER ACCUCORE
(Section 3.2):
OTHER LOCATIONS AND ADDRESSES NONE
(Section 3.3):
MATERIAL ADVERSE LITIGATION NONE
NEGATIVE COVENANTS-EXCEPTIONS Without Silicon's prior written consent,
(Section 4.6): Borrower may do the following, provided that,
after giving effect thereto, no Event of
Default has occurred and no event has occurred
which, with notice or passage of time or both,
would constitute an Event of Default, and
provided that the following are done in
compliance with all applicable laws, rules and
regulations: (i) repurchase shares of
Borrower's stock, provided that the total
amount paid by Borrower for such stock does
not exceed $250,000 in any fiscal year.
FINANCIAL COVENANTS Borrower shall comply with all of the
(Section 4.1): following covenants. Compliance shall be
determined as of the end of each calendar
quarter, except as otherwise specifically
provided below:
QUICK ASSET RATIO: Borrower shall maintain a ratio of "Quick
Assets" to current liabilities of not less
than 2.00 to 1.
TANGIBLE NET WORTH: Borrower shall maintain a tangible net worth
of not less than $25,000,000.
DEBT TO TANGIBLE NET Borrower shall maintain a ratio of total
WORTH RATIO: liabilities to tangible net worth of not more
than 1.00 to 1.
PROFITABILITY: Borrower shall not incur a loss (after taxes)
for any fiscal quarter, other than in a single
fiscal quarter during any calendar year in
which Borrower shall not incur a loss (after
taxes) in an amount greater than $500,000.
DEFINITIONS: "Current assets," and "current liabilities"
shall have the meanings ascribed to them in
accordance with generally accepted accounting
principles.
"Tangible net worth" means the excess of total
assets over total liabilities, determined in
accordance with generally accepted accounting
principles, excluding however all assets which
would be classified as intangible assets under
generally accepted
(2)
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SILICON VALLEY BANK SCHEDULE TO LOAN AGREEMENT
accounting principles, excluding however all
assets which would be classified as intangible
assets under generally accepted accounting
principles, including without limitation
goodwill, licenses, patents, trademarks, trade
names, copyrights, and franchises.
"Quick Assets" means cash on hand or on
deposit in banks, readily marketable
securities issued by the United States,
readily marketable commercial paper rated
"A-1" by Standard & Poor's Corporation (or a
similar rating by a similar rating
organization), certificates of deposit and
banker's acceptances, and accounts receivable
(net of allowance for doubtful accounts).
SUBORDINATED DEBT: "Liabilities" for purposes of the foregoing
covenants do not include indebtedness which is
subordinated to the indebtedness to Silicon
under a subordination agreement in form
specified by Silicon or by language in the
instrument evidencing the indebtedness which
is acceptable to Silicon.
OTHER COVENANTS Borrower shall at all times comply with all of
(Section 4.1): the following additional covenants:
1. BANKING RELATIONSHIP. Borrower shall at
all times maintain its primary operating
banking relationship with Silicon.
2. 30 DAY CLEAN-UP PERIOD. Borrower shall
have no monetary Obligations outstanding
for a period of 30 consecutive days during
the term hereof.
3. INDEBTEDNESS. Without limiting any of the
foregoing terms or provisions of this
Agreement, Borrower shall not in the
future incur indebtedness for borrowed
money, except for (i) indebtedness to
Silicon, and (ii) indebtedness incurred in
the future for the purchase price of or
lease of equipment.
4. UCCS. Borrower is concurrently delivering
to Silicon UCC-1 financing statements, and
it is understood and agreed that such
financing statements shall not be
considered effective unless and until the
Grant is effective. At such time Silicon
shall be permitted to file such financing
statements immediately.
5. TERMINATION OR AGREEMENT. Borrower and
Silicon hereby agree that this Agreement
may be terminated by Borrower's written
notice to Silicon when no Obligations are
outstanding or otherwise have been paid
and performed in full.
BORROWER:
VITALCOM INC.
By /s/ XXXXX X. XXXXXXXXXXXXX
-----------------------------
President or Vice President
By /s/ XXXXXXX X. XXXXXX
-----------------------------
Secretary or Ass't Secretary
(3)
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SILICON VALLEY BANK SCHEDULE TO LOAN AGREEMENT
SILICON VALLEY BANK
AMENDMENT TO LOAN AGREEMENT
BORROWER: VITALCOM INC., A DELAWARE CORPORATION
ADDRESS: 00000 XXX XXX XXXXXX XXXXXX, XX 00000
DATE: SEPTEMBER 25, 1996
THIS AMENDMENT TO LOAN AGREEMENT is entered into between SILICON VALLEY
BANK ("Silicon") and the borrower named above (the "Borrower").
The Parties agree to amend the Loan and Security Agreement between them
dated February 26, 1993, as amended by that Amendment to Loan Agreement dated
December 21, 1993, as amended by that Amendment to Loan Agreement dated April
27, 1994, as amended by that Amendment to Loan Agreement dated May 5, 1995, as
amended by that Amendment to Loan Agreement dated May 30, 1995, as amended by
that Amendment to Loan Agreement dated December 27, 1995 (the "December 1995
Amendment"), as amended by that Amendment to Loan Agreement dated August 6,
1996 and as otherwise amended from time to time (the "Loan Agreement"; terms
defined in the Loan Agreement are used herein as therein defined), as follows,
effective as of the date hereof.
1. AMENDED FINANCIAL COVENANTS. The section of the Schedule to the
Loan Agreement entitled "Financial Covenants (Section 4.1)" is amended
effective as of the date hereof to read as follows:
"FINANCIAL COVENANTS Borrower shall comply with all of the
(Section 4.1): following covenants. Compliance shall be
determined as of the end of each calendar
quarter, except as otherwise specifically
provided below:
QUICK ASSET RATIO: Borrower shall maintain a ratio of "Quick
Assets" to current liabilities of not less
than 2.00 to 1.
TANGIBLE NET WORTH: Borrower shall maintain a tangible net worth
of not less than $22,500,000.
DEBT TO TANGIBLE Borrower shall maintain a ratio of total
NET WORTH RATIO: liabilities to tangible net worth of not more
than 1.00 to 1.
MINIMUM CASH COVERAGE: Borrower shall maintain an aggregate total of
cash and marketable securities (valued at
market value) in an amount at
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SILICON VALLEY BANK AMENDMENT TO LOAN AGREEMENT
least equal to the product of two times the
maximum amount of the Credit Limit.
DEFINITIONS: "Current assets," and "current liabilities"
shall have the meanings ascribed to them in
accordance with generally accepted accounting
principles.
"Tangible net worth" means the excess of total
assets over total liabilities, determined in
accordance with generally accepted accounting
principles, excluding however all assets which
would be classified as intangible assets under
generally accepted accounting principles,
including without limitation goodwill,
licenses, patents, trademarks, trade names,
copyrights, and franchises.
"Quick Assets" means cash on hand or on
deposit in banks, readily marketable
securities issued by the United States,
readily marketable commercial paper rated
"A-1" by Standard & Poor's Corporation (or a
similar rating by a similar rating
organization), certificates of deposit and
banker's acceptances, and accounts receivable
(net of allowance for doubtful accounts)
SUBORDINATED DEBT: "Liabilities" for purposes of the foregoing
covenants do not include indebtedness which is
subordinated to the indebtedness to Silicon
under a subordination agreement in form
specified by Silicon or by language in the
instrument evidencing the indebtedness which
is acceptable to Silicon."
2. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior
written amendments to the Loan Agreement signed by Silicon and the Borrower,
and the other written documents and agreements between Silicon and the Borrower
set forth in full all of the representations and agreements of the parties with
respect to the subject matter hereof and supersede all prior discussions,
representations, agreements and understandings between the parties with respect
to the subject hereof. Except as herein expressly amended, all of the terms
and provisions of the Loan Agreement, and all other documents and agreements
between Silicon and the Borrower shall continue in full force and effect and
the same are hereby ratified and confirmed. This Amendment shall be
controlling in the event of any conflicts between any prior written agreements
and amendments between Silicon and the Borrower, on the one hand, and this
Amendment.
Borrower: Silicon:
VITALCOM INC., a Delaware corporation SILICON VALLEY BANK
By /s/ XXXXX X. XXXXXXXXXXXXX By /s/ X. XXXXXXXXXX
----------------------------- ---------------------------
President or Vice President V.P.
By /s/ XXXXXXX X. XXXXXX
-----------------------------
Secretary or Ass't Secretary
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