SUPPLEMENT TO REVOLVING LINE OF CREDIT AGREEMENT
AMENDED AND RESTATED
The following constitutes the special provisions and/or special covenants and/or
modifications referred to in that Revolving Line of Credit Agreement dated
August 31, 1994 (the "Credit Agreement") covering the Loans (as that term is
defined in the Credit Agreement) of the undersigned (the "Borrower") from Mellon
Bank, N.A. ("Bank").
The following shall supersede any special provision or covenant contained in any
prior Supplement to Revolving Line of Credit Agreement and shall be applicable
to all Loans in existence on the date hereof or incurred hereafter.
1. The provisions of this Supplement shall, as of the date hereof, be deemed to
be fully incorporated by reference in, constitute a part of, and supplement the
provisions of, the Credit Agreement, which, except as supplemented hereby, shall
continue in full force and effect in accordance with its terms and conditions.
2. Borrower hereby covenants and agrees that, so long as any Loans are
outstanding, Borrower shall, except as Bank may grant its prior written consent:
A. Furnish to Bank, within 90 days after the end of each fiscal year of
Borrower, a financial statement of Borrower's profit and loss and surplus of
such fiscal year and a balance sheet as of the end of such fiscal year, in each
case setting forth in comparative form the corresponding figures for the
preceding fiscal year, all in reasonable detail and audited by an independent
certified public accountant not unsatisfactory to Bank, and certified by the
principal financial officer of Borrower.
B. Provide within 45 days from the end of each quarter an internal financial
statement of Borrowers profit and loss and a balance sheet as of the end of such
period, in each case setting forth in comparative form corresponding figures for
the preceding like period, all in reasonable detail. Borrower to also furnish to
Bank, within 45 days from the end of each quarter, a report, as of the end of
the preceding fiscal quarter, containing Borrower's accounts receivable aging
and a description of raw material and finished goods inventory, including a
listing of eligible Accounts Receivable and eligible Inventory, all in
reasonable detail and in form and content satisfactory to Bank.
C. Furnish to Bank a copy of Form(s) 10-K and 10-Q when provided to the
Securities and Exchange Commission.
D. Maintain at all times a ratio of Borrower's total liabilities to tangible
net worth (as defined by GAAP) of not more than 1 to 1.
For purposes of this agreement, Tangible Net Worth shall mean stockholder's
equity in Borrower less treasury stock and less all items properly classified as
intangible, as determined in accordance with generally accepted accounting
principles consistently applied.
E. Maintain minimum net income from continuing operations of $5OO,OOO, to be
measured on a rolling four quarter basis. First measurement will be the quarter
ending 12/31/97. This net income covenant will exclude the following:
- Exclude impact of discontinued operation in Fremont, California.
- Exclude impact of benefit from possible tax refunds due to operating loss.
F. Not permit the outstanding balance and accrued but unpaid interest under
Borrower's Line of Credit extended pursuant to the term hereof (The Revolving
"Line of Credit") to exceed an amount equal to the sum of 80% of the outstanding
dollar amount of Borrower's Eligible Accounts (as defined below) plus 20% of the
outstanding dollar amount of Borrower's Eligible Inventory (as defined below),
however that at no time shall the portion of loans based on Eligible Inventory
exceed $5 million.
"Eligible Accounts"' means United States accounts, and Canadian accounts aged 90
days or less, created or acquired by Borrower in the ordinary course of business
which are and at all times continue to be acceptable to Bank and in which Bank
has a prior security interest at all times.
"Eligible Inventory" shall mean all raw materials and finished goods.
Borrower agrees and acknowledges that Bank, at its sole discretion, may lend
additional amounts to Borrower in excess of the limitations set forth above and
may, upon an event of default as defined in the Revolving Line of Credit
Agreement, change the percentage loan limit of Eligible Accounts set forth
above.
If the outstanding principal balance and accrued but unpaid interest on
Borrower's Line of Credit shall at any time exceed the limit set forth above,
then Borrower shall, upon Bank's request, pay immediately to Bank such
additional collateral security as Bank in its sole discretion may deem
appropriate.
G. Not incur, create, assume or permit to exist ' any pledge, lien, charge or
other encumbrance of any nature whatsoever on any of its accounts receivable and
inventory, now or hereafter owned, other then (I) such encumbrances reflected in
the most recent financial statement of Borrower submitted to Bank prior hereto,
(ii) security interests granted in favor of Bank, (iii) pledges or deposits
under workers' compensation, unemployment insurance and social security laws, or
to secure the performance of bids, tenders, contracts (other than for the
repayment of borrowed money) or leases or to secure statutory obligations or
surety or other similar bonds used in the ordinary course of business, (iv) tax
liens which are being contested in good faith and by appropriate proceedings
diligently conducted (unless and until foreclosure, sale or other similar
proceedings have been commenced) and provided that such reserve or other
appropriate provisions, if any, as shall be required by generally accepted
accounting principles shall have been made therefore, and (v) any unfilled
materialmen's, mechanic's, workmen's and repairman's liens (provided, that if
such a lien shall be perfected, it shall be discharged of record immediately by
payment, bond or otherwise).
Regulation U: The borrower hereby represents and warrants that it will make no
borrowings hereunder for the purpose of buying or carrying any "margin stock",
as such term is used in Regulation U of the board of governors of the federal
reserve system, as amended from time to time. Neither the Borrower nor any
subsidiary owns any "margin stock". Neither the borrower nor any subsidiary is
engaged in the business of extending credit to others for such purpose, and no
part of the proceeds of any borrowing hereunder will be used to purchase or
carry any "margin stock" or to extend credit to others for the purpose of
purchasing or carrying any "margin stock".
SIGNATURES
Witness the due execution hereof intending to be legally bound this 30th day of
December, 1997.
Attest:
By: /s/ Xxxxxx X. Xxxxxxx
Controller & Assistant Secretary
C-COR Electronics, Inc.
By: /s/ Xxxxx X. Xxxxxx
Vice President - Finance, Secretary
& Treasurer
Mellon Bank, N.A.
X.X. Xxx 0000
00 X. 0xx Xxxxxx
Xxxxxxxxxx, XX 00000
By: /s/ Xxxxxx X. Xxxxx
