FIRST AMENDMENT
TO
AMENDED AND RESTATED LOAN AGREEMENT
This First Amendment to Amended and Restated Loan Agreement (this
"Amendment") is entered into as of October 10, 1997, by and between
Comerica Bank-California ("Bank") and C-Cube Microsystems, Inc.
("Borrower").
RECITALS
Borrower and Bank are parties to that certain Amended and
Restated Loan Agreement dated as of September 27, 1996 (the
"Agreement"). Borrower and Bank desire to amend the terms of the
Agreement in accordance with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Amendments to Agreement. The Agreement is amended as
follows:
a. The following defined terms in Section 1.1 are amended
in their entirety to read as follows:
"Committed Line" means Thirty Million Dollars
($30,000,000).
"Maturity Date" means May 1, 1999.
b. Subsection (a) of Section 2.1.1 is amended in its
entirety to read as follows:
"(a) Subject to the terms and conditions of this
Agreement, Bank agrees to issue or cause to be issued Letters of
Credit for the account of Borrower in an aggregate outstanding
face amount not to exceed (i) the Committed Line minus (ii) the
then outstanding principal balance of the Advances, provided that
the face amount of outstanding Letters of Credit (including drawn
but unreimbursed Letters of Credit and any Letter of Credit
Reserve) shall not in any case exceed Fifteen Million Dollars
($15,000,000). Each Letter of Credit shall have an expiry date no
later than one hundred eighty (180) days after the Maturity Date,
provided that Borrower's Letter of Credit reimbursement
obligation shall be secured by cash on terms acceptable to Bank
at any time after the Maturity Date. All Letters of Credit shall
be, in form and substance, acceptable to Bank in its sole
discretion and shall be subject to the terms and conditions of
Bank's form of standard Application and Letter of Credit
Agreement. All amounts actually paid by Bank in respect of a
Letter of Credit shall, when paid, constitute an Advance under
this Agreement."
c. Clause (a) of Section 5.3 is amended to read as
follows:
"(a) as soon as available, but in any event within
forty-five (45) days after the end of each fiscal quarter, a
company prepared consolidated balance sheet and income statement
covering Borrower's consolidated operations during such period,
certified by a Responsible Officer;"
d. Section 6.3 is amended in its entirety to read as
follows:
"6.3 Mergers or Acquisitions. Merge or consolidate, or
permit any of its Subsidiaries to merge or consolidate, with or
into any other business organization, or acquire, or permit any
of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person, provided Borrower
may enter into mergers, consolidations or acquisitions if no
Event of Default has occurred and is continuing or would exist
immediately after the consummation of such transaction (i)
between any Subsidiaries or between Borrower and any Subsidiary
or (ii) in which the consideration is stock (in any amount) or in
cash in an amount less than Sixty Million Dollars ($60,000,000)
provided that, in any such transaction Borrower is the surviving
entity following the consummation of such transaction."
e. Exhibit A to the Agreement is replaced with Exhibit A
attached hereto.
f. The Agreement shall be and hereby is supplemented by
the Libor Supplement to Agreement (the "Supplement") attached
hereto as Appendix 1, which shall form a part of and is
incorporated into the Agreement.
2. Fees and Expenses. Borrower agrees to pay to Bank a fee
equal to Seventy-Five Thousand Dollars ($75,000), which fee shall be
deemed to be fully earned and nonrefundable as of the date hereof,
provided that Bank, in its sole discretion, may waive such fee or any
portion thereof if Borrower maintains sufficient reserves in its
depository accounts with Bank. Any portion of such fee not waived by
Bank shall be payable on demand, or if no demand is made, then
quarterly in arrears. In addition, as a condition to the effectiveness
of this Amendment, Borrower shall pay to Bank all Bank Expenses
incurred in connection with the preparation and negotiation of this
Amendment.
3. Other Defined Terms. Unless otherwise defined, all
capitalized terms in this Amendment shall be as defined in the
Agreement. Except as amended, the Agreement remains in full force and
effect and is hereby ratified and confirmed.
4. Representations and Warranties. Borrower represents and
warrants that the Representations and Warranties contained in the
Agreement are true and correct as of the date of this Amendment
(except such representations and warranties to be expressly true as of
a specific date), and that no Event of Default has occurred.
5. Promissory Note. As a condition to the effectiveness of
this Amendment, Borrower shall execute and deliver to Bank a Revolving
Promissory Note in the form of Exhibit A hereto. Upon receipt by Bank
of such Revolving Promissory Note, duly executed and delivered by
Borrower, Bank shall cancel and return to Borrower the previously
existing Revolving Promissory Note.
6. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment
as of the first date above written.
C-CUBE MICROSYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Title: VP / CFO
---------------------------------
COMERICA BANK-CALIFORNIA
By: /s/ Xxxx Xxxxxx
---------------------------------
Title: VP and Assistant Manager
---------------------------------
EXHIBIT A
REVOLVING PROMISSORY NOTE
$30,000,000 San Jose, California
Date: October 10, 1997
C-CUBE MICROSYSTEMS, INC., ("Borrower"), for value received,
hereby promises to pay to the order of COMERICA BANK-CALIFORNlA
("Bank"), in lawful money of the United States of America, pursuant to
that certain Loan Agreement dated as of September 27, 1996, by and
between Borrower and Bank, as amended (the "Loan Agreement"), (i) the
principal amount of $30,000,000 or, if lesser, (ii) the principal
amount of all Advances outstanding as of the maturity date hereof.
This Note is the promissory note referred to in the Loan
Agreement. All terms defined in the Loan Agreement shall have the same
definitions when used herein, unless otherwise defined herein.
Borrower further promises to pay interest on each Advance
hereunder in like funds on the principal amount hereof from time to
time outstanding from the date hereof until paid in full, at a rate or
rates per annum and payable on the dates determined pursuant to the
Loan Agreement.
Payment on this Note shall be applied in the manner set forth in
the Loan Agreement. The Loan Agreement contains provisions for
acceleration of the maturity of Advances hereunder upon the occurrence
of certain stated events and also provides for optional and mandatory
prepayments of principal hereof prior to any stated maturity upon the
terms and conditions therein specified.
All Advances made by Bank to Borrower pursuant to the Loan
Agreement shall be recorded by Bank on the books and records of Bank.
The failure of Bank to record any Advance or any prepayment or payment
made on account of the principal balance hereof shall not limit or
otherwise affect the obligation of Borrower under this Note and under
the Loan Agreement to pay the principal, interest and other amounts
due and payable under the Advances.
Any principal or interest payments on this Note not paid when
due, whether at stated maturity, by acceleration or otherwise, shall
bear interest at the Default Rate.
Upon the occurrence of a default hereunder or an Event of Default
under the Loan Agreement, all unpaid principal, accrued interest and
other amounts owing hereunder shall, at the option of Bank, be
immediately collectible by or on behalf of Bank pursuant to the Loan
Agreement and applicable law.
Borrower waives presentment and demand for payment, notice of
dishonor, protest and notice of protest of this Note, and shall pay
all costs of collection when incurred, including reasonable attorneys'
fees, costs and expenses. The right to plead any and all statutes of
limitations as a defense to any demand hereunder is hereby waived to
the full extent permitted by law.
This Note shall be governed by, and construed and enforced in
accordance with, the laws of the State of California, excluding
conflict of laws principles that would cause the application of the
laws of any other jurisdiction.
The provisions of this Note shall inure to the benefit of and be
binding upon any successor to Borrower and shall extend to any holder
hereof.
C-CUBE MICROSYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Printed Name: Xxxx X. Xxxxxxxx
--------------------------------------
Title: VP / CFO
--------------------------------------
APPENDIX 1
LIBOR SUPPLEMENT TO AGREEMENT
This LIBOR Supplement to Agreement (the "Supplement") is a
supplement to the Amended and Restated Loan Agreement dated as of
September 27, 1996, between Comerica Bank-California ("Bank") and
C-Cube Microsystems, Inc. ("Borrower"), as amended (the "Agreement")
and forms a part of and is incorporated into the Agreement. Except as
otherwise defined in this Supplement, capitalized terms shall have the
meanings assigned in the Agreement.
1. Definitions.
"Base Rate Advances" means any Advances made or a portion thereof
on which interest is payable based on the Base Rate in accordance with
the terms hereof.
"Business Day" means a day of the year (a) that is not a
Saturday, Sunday or other day on which banks in the State of
California or the City of London are authorized or required to close
and (b) on which dealings are carried on in the interbank market in
which Bank customarily participates.
"Interest Period" means for each LIBOR Rate Advance, a period of
approximately one, two or three months as the Borrower may elect,
provided that the last day of an Interest Period for a LIBOR Rate
Advance shall be determined in accordance with the practices of the
LIBOR interbank market as from time to time in effect, provided
further in all cases such period shall expire not later than the
applicable Maturity Date.
"Interest Rate" shall mean as to: (a) Base Rate Advances, a rate
equal to the Base Rate; and (b) LIBOR Rate Advances, a rate of 1.25%
per annum in excess of the LIBOR Rate (based on the LIBOR Rate
applicable for the Interest Period selected by the Borrower).
"LIBOR Base Rate" means, for any Interest Period for a LIBOR Rate
Advance, the rate of interest per annum determined by Bank to be the
per annum rate of interest at which deposits in United States Dollars
are offered to Bank in the London interbank market in which Bank
customarily participates at 11:00 A.M. (local time in such interbank
market) two (2) Business Days before the first day of such Interest
Period for a period approximately equal to such Interest Period and in
an amount approximately equal to the amount of such Advance.
"LIBOR Rate" shall mean, for any Interest Period for a LIBOR Rate
Advance, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) equal to (i) the LIBOR Base Rate for such Interest
Period divided by (ii) 1 minus the Reserve Requirement for such
Interest Period.
"LIBOR Rate Advances" means any Advances made or a portion
thereof on which interest is payable based on the LIBOR Rate in
accordance with the terms hereof.
"Regulatory Change" means, with respect to Bank, any change on or
after the date of this Agreement in United States federal, state or
foreign laws or regulations, including Regulation D, or the adoption
or making on or after such date of any interpretations, directives or
requests applying to a class of lenders including Bank of or under any
United States federal or state, or any foreign, laws or regulations
(whether or not having the force of law) by any court or governmental
or monetary authority charged with the interpretation or
administration thereof.
"Reserve Requirement" means, for any Interest Period, the average
maximum rate at which reserves (including any marginal, supplemental
or emergency reserves) are required to be maintained during such
Interest Period under Regulation D against "Eurocurrency liabilities"
(as such term is used in Regulation D) by member banks of the Federal
Reserve System. Without limiting the effect of the foregoing, the
Reserve Requirement shall reflect any other reserves required to be
maintained by Bank by reason of any Regulatory Change against (i) any
category of liabilities which includes deposits by reference to which
the LIBOR Rate is to be determined as provided in the definition of
"LIBOR Base Rate" or (ii) any category of extensions of credit or
other assets which include Advances.
2. Requests for Advances; Confirmation of Initial Advances.
Each LIBOR Rate Advance shall be made upon the irrevocable written
request of Borrower received by Bank not later than 11:00 a.m. (San
Jose, California time) on the Business Day three (3) Business Days
prior to the date such Advance is to be made. Each such notice shall
specify the date such Advance is to be made, which day shall be a
Business Day; the amount of such Advance, the Interest Period for such
Advance, and comply with such other requirements as Bank determines
are reasonable or desirable in connection therewith.
Each written request for a LIBOR Rate Advance shall be in the
form of a LIBOR Rate Advance Form as set forth on Exhibit 1, which
shall be duly executed by a Responsible Officer.
3. Conversion/Continuation of Advances.
(a) Borrower may from time to time submit in writing a
request that Base Rate Advances be converted to LIBOR Rate Advances or
that any existing LIBOR Rate Advances continue for an additional
Interest Period. Such request shall specify the amount of the Base
Rate Advances which will constitute LIBOR Rate Advances (subject to
the limits set forth below) and the Interest Period to be applicable
to such LIBOR Rate Advances. Each written request for a conversion to
a LIBOR Rate Advance or a continuation of a LIBOR Rate Advance shall
be substantially in the form of a LIBOR Rate Conversion/Continuation
Certificate as set forth on Exhibit 2, which shall be duly executed by
a Responsible Officer. Subject to the terms and conditions contained
herein, three (3) Business Days after Bank's receipt of such a request
from Borrower, such Base Rate Advances shall be converted to LIBOR
Rate Advances or such LIBOR Rate Advances shall continue, as the case
may be provided that:
(i) no Event of Default or event which with notice or
passage of time or both would constitute an Event of Default exists;
(ii) no party hereto shall have sent any notice of
termination of this Supplement or of the Agreement.
(iii) Borrower shall have complied with such
customary procedures as Bank has established from time to time for
Borrower's requests for LIBOR Rate Advances;
(iv) the amount of a LIBOR Rate Advance shall be
$1,000,000 or such greater amount which is an integral multiple of
$100,000; and
(v) Bank shall have determined that the Interest
Period or LIBOR Rate is available to Bank which can be readily
determined as of the date of the request for such LIBOR Rate Advance.
Any request by Borrower to convert Base Rate Advances to LIBOR
Rate Advances or continue any existing LIBOR Rate Advances shall be
irrevocable. Notwithstanding anything to the contrary contained
herein, Bank shall not be required to purchase United States Dollar
deposits in the London interbank market or other applicable LIBOR Rate
market to fund any LIBOR Rate Advances, but the provisions hereof
shall be deemed to apply as if Bank had purchased such deposits to
fund the LIBOR Rate Advances.
(b) Any LIBOR Rate Advances shall automatically convert to
Base Rate Advances upon the last day of the applicable Interest
Period, unless Bank has received and approved a complete and proper
request to continue such LIBOR Rate Advance at least three (3)
Business Days prior to such last day in accordance with the terms
hereof. Any LIBOR Rate Advances shall, at Bank's option, convert to
Base Rate Advances in the event that (i) an Event of Default, or event
which with the notice or passage of time or both would constitute an
Event of Default, shall exist, (ii) this Supplement or the Agreement
shall terminate, or (iii) the aggregate principal amount of the Base
Rate Advances which have previously been converted to LIBOR Rate
Advances, or the aggregate principal amount of existing LIBOR Rate
Advances continued, as the case may be, at the beginning of an
Interest Period shall at any time during such Interest Period exceeds
the Committed Line. Borrower agrees to pay to Bank, upon demand by
Bank (or Bank may, at its option, charge Borrower's deposit account)
any amounts required to compensate Bank for any loss (including loss
of anticipated profits), cost or expense incurred by such person, as a
result of the conversion of LIBOR Rate Advances to Base Rate Advances
pursuant to any of the foregoing.
(c) On all Advances, Interest shall be payable by Borrower
to Bank monthly in arrears not later than the last day of each
calendar month at the applicable Interest Rate.
4. Additional Requirements/Provisions Regarding LIBOR Rate
Advances; Etc.
(a) If for any reason (including voluntary or mandatory
prepayment or acceleration), Bank receives all or part of the
principal amount of a LIBOR Rate Advance prior to the last day of the
Interest Period for such Advance, Borrower shall immediately notify
Borrower's account officer at Bank and, on demand by Bank, pay Bank
the amount (if any) by which (i) the additional interest which would
have been payable on the amount so received had it not been received
until the last day of such Interest Period exceeds (ii) the interest
which would have been recoverable by Bank by placing the amount so
received on deposit in the certificate of deposit markets or the
offshore currency interbank markets or United States Treasury
investment products, as the case may be, for a period starting on the
date on which it was so received and ending on the last day of such
Interest Period at the interest rate determined by Bank in its
reasonable discretion. Bank's determination as to such amount shall
be conclusive absent manifest error.
(b) Borrower shall pay to Bank, upon demand by Bank, from
time to time such amounts as Bank may determine to be necessary to
compensate it for any costs incurred by Bank that Bank determines are
attributable to its making or maintaining of any amount receivable by
Bank hereunder in respect of any Advances relating thereto (such
increases in costs and reductions in amounts receivable being herein
called "Additional Costs"), in each case resulting from any Regulatory
Change which:
(i) changes the basis of taxation of any amounts
payable to Bank under this Supplement in respect of any Advances
(other than changes which affect taxes measured by or imposed on the
overall net income of Bank by the jurisdiction in which such Bank has
its principal office); or
(ii) imposes or modifies any reserve, special deposit
or similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of Bank
(including any Advances or any deposits referred to in the definition
of "LIBOR Base Rate"); or
(iii) imposes any other condition affecting this
Supplement (or any of such extensions of credit or liabilities).
Bank will notify Borrower of any event occurring after the date of the
Agreement which will entitle Bank to compensation pursuant to this
section as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation. Bank will furnish
Borrower with a statement setting forth the basis and amount of each
request by Bank for compensation under this Section 4. Determinations
and allocations by Bank for purposes of this Section 4 of the effect
of any Regulatory Change on its costs of maintaining its obligations
to make Advances or of making or maintaining Advances or on amounts
receivable by it in respect of Advances, and of the additional amounts
required to compensate Bank in respect of any Additional Costs, shall
be conclusive absent manifest error.
(c) Borrower shall pay to Bank, upon the request of Bank,
such amount or amounts as shall be sufficient (in the sole good faith
opinion of such Bank) to compensate it for any loss, costs or expense
incurred by it as a result of any failure by Borrower to borrow a
LIBOR Rate Advance on the date for such borrowing specified in the
relevant notice of borrowing hereunder.
(d) If Bank shall determine that the adoption or
implementation of any applicable law, rule, regulation or treaty
regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Bank (or
its applicable lending office) with any respect or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on capital of Bank or any person
or entity controlling Bank (a "Parent") as a consequence of its
obligations hereunder to a level below that which Bank (or its Parent)
could have achieved but for such adoption, change or compliance
(taking into consideration its policies with respect to capital
adequacy) by an amount deemed by Bank to be material, then from time
to time, within 15 days after demand by Bank, Borrower shall pay to
Bank such additional amount or amounts as will compensate Bank for
such reduction. A statement of Bank claiming compensation under this
Section and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive absent manifest error.
(e) If at any time Bank, in its sole and absolute
discretion, determines that: (i) the amount of the LIBOR Rate Advances
for periods equal to the corresponding Interest Periods are not
available to Bank in the offshore currency interbank markets, or (ii)
the LIBOR Rate does not accurately reflect the cost to Bank of lending
the LIBOR Rate Advance, then Bank shall promptly give notice thereof
to Borrower, and upon the giving of such notice Bank's obligation to
make the LIBOR Rate Advances shall terminate, unless Bank and the
Borrower agree in writing to a different interest rate Advances shall
terminate, unless Bank and the Borrower agree in writing to a
different interest rate applicable to LIBOR Rate Advances. If it
shall become unlawful for Bank to continue to fund or maintain any
Advances, or to perform its obligations hereunder, upon demand by
Bank, Borrower shall prepay the Advances in full with accrued interest
thereon and all other amounts payable by Borrower hereunder
(including, without limitation, any amount payable in connection with
such prepayment pursuant to Section 4(a)).
IN WITNESS WHEREOF, the undersigned have executed this LIBOR
Supplement to Agreement as of the first date above written.
C-CUBE MICROSYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Title: VP / CFO
------------------------------------
COMERICA BANK-CALIFORNIA
By: /s/ Xxxx Xxxxxx
------------------------------------
Title: VP and Assistant Manager
------------------------------------
EXHIBIT 1
LIBOR RATE ADVANCE FORM
The undersigned hereby certifies as follows:
I, _______________________, am the duly elected and acting
_______________________ of C-Cube Microsystems, Inc. ("Borrower").
This certificate is delivered pursuant to Section 2 of that
certain LIBOR Supplement to Agreement together with the Loan
Agreement by and between Borrower and Comerica Bank-California
("Bank") (the "Agreement"). The terms used in this Borrowing
Certificate which are defined in the Agreement have the same
meaning herein as ascribed to them therein.
Borrower hereby requests on ______________, 19__ a LIBOR Rate
Advance (the "Advance") as follows:
(a) The date on which the Advance is to be made is
______________, 19___.
(b) The amount of the Advance is to be _____________
($___________), for an Interest Period of month(s).
All representations and warranties of Borrower stated in the
Agreement are true, correct and complete in all material respects
as of the date of this request for a loan; provided, however, that
those representations and warranties expressly referring to
another date shall be true, correct and complete in all material
respects as of such date.
IN WITNESS WHEREOF, this LIBOR Rate Advance Form is executed by
the undersigned as of this ______ day of ______________, 19__.
C-CUBE MICROSYSTEMS, INC.
By:
---------------------------------
Title:
---------------------------------
For Internal Bank Use Only
LIBOR Pricing Date LIBOR Rate LIBOR Rate Variance Maturity Date
EXHIBIT 2
LIBOR RATE CONVERSION/CONTINUATION CERTIFICATE
The undersigned hereby certifies as follows:
I, _____________, am the duly elected and acting ________________
of C-Cube Microsystems, Inc. ("Borrower").
This certificate is delivered pursuant to Section 2 of that
certain LIBOR Supplement to Agreement together with the Loan Agreement
by and between Borrower and Comerica Bank-California ("Bank") (the
"Agreement"). The terms used in this LIBOR RateConversion/Continuation
Certificate which are defined in the Agreement have the same meaning
herein as ascribed to them therein.
Borrower hereby requests on _________________, 19___ a LIBOR Rate
Advance (the "Advance") as follows:
(a) --- (i) A rate conversion of an existing Base Rate Advance
from a Base Rate Advance to a LIBOR Rate Advance; or
--- (ii) A continuation of an existing LIBOR Rate Advance
as a LIBOR Rate Advance;
[Check (i) or (ii) above]
(b) The date on which the Advance is to be made is ______, 19___.
(c) The amount of the Advance is to be _________($_______), for an
Interest Period of _________ month(s).
All representations and warranties of Borrower stated in the
Agreement are true, correct and complete in all material respects as
of the date of this request for a loan; provided, however, that those
representations and warranties expressly referring to another date
shall be true, correct and complete in all material respects as of
such date.
IN WITNESS WHEREOF, this LIBOR Rate Conversion/Continuation
Certificate is executed by the undersigned as of this _________ day of
_________________ 19___.
C-CUBE MICROSYSTEMS, INC.
By:
---------------------------------
Title:
---------------------------------
For Internal Bank Use Only
LIBOR Pricing Date LIBOR Rate LIBOR Rate Variance Maturity Date
SECOND AMENDMENT
TO
AMENDED AND RESTATED LOAN AGREEMENT
This Second Amendment to Amended and Restated Loan Agreement
(this "Amendment") is entered into as of October 10, 1997, by and
between Comerica Bank-California ("Bank") and C-Cube Microsystems,
Inc. ("Borrower").
RECITALS
Borrower and Bank are parties to that certain Amended and
Restated Loan Agreement dated as of September 27, 1996, as amended
(the "Agreement"). Borrower and Bank desire to amend the terms of the
Agreement in accordance with the terms of this Amendment.
NOW, THEREFORE, the parties agree as follows:
1. Amendments to Agreement. The Agreement is amended as
follows:
a. Section 5.8 is amended in its entirety to read as
follows:
"5.8 Quick Ratio. Borrower shall maintain, as of the
last day of each calendar quarter, a ratio of Quick Assets to
Current Liabilities of at least 1.75 to 1.0."
b. Section 5.9 is amended in its entirety to read as
follows:
"5.9 Debt-Net Worth Ratio. Borrower shall maintain, as
of the last day of each calendar quarter, a ratio of Total
Liabilities less Subordinated Debt to Tangible Net Worth plus
Subordinated Debt of not more than 0.75 to 1.0."
c. Section 5.10 is amended in its entirety to read as
follows:
"5.10 Tangible Net Worth. Borrower shall maintain, as
of the last day of each calendar quarter, a Tangible Net Worth of
not less than the sum of (i) One Hundred Eighty Million Dollars
($180,000,000), plus (ii) 75% of Borrower's quarterly profits
commencing with the quarter ending September 30, 1997, plus (iii)
100% of the proceeds of the sale or issuance of Borrower's equity
securities or Subordinated Debt from and after September 30,
1997, minus (iv) any in-process research and development expense
write-offs in connection with acquisitions permitted by the terms
of this Agreement, up to a maximum of $50,000,000 during the term
of this Agreement."
d. Section 5.11 is amended in its entirety to read as
follows:
"5.11 Profitability. Borrower shall be profitable on an
operating and after tax basis for each fiscal quarter, except
that Borrower may incur a loss for one fiscal quarter in any
fiscal year of not more than $3,000,000."
e. Exhibit C to the Agreement is replaced with Exhibit C
attached hereto.
2. Fees and Expenses. As a condition to the effectiveness of
this Amendment, Borrower shall pay to Bank all Bank Expenses
incurred in connection with the preparation and negotiation of
this Amendment.
3. Other Defined Terms. Unless otherwise defined, all
capitalized terms in this Amendment shall be as defined in the
Agreement. Except as amended, the Agreement remains in full force
and effect and is hereby ratified and confirmed.
4. Representations and Warranties. Borrower represents
and warrants that the Representations and Warranties contained in
the Agreement are true and correct as of the date of this
Amendment (except such representations and warranties to be
expressly true as of a specific date), and that no Event of
Default has occurred.
5. Counterparts. This Amendment may be executed in two or
more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one instrument.
IN WITNESS WHEREOF, the undersigned have executed this Amendment
as of the first date above written.
C-CUBE MICROSYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------------------
Title: VP / CFO
----------------------------------------------
COMERICA BANK-CALIFORNIA
By: /s/ Xxxx Xxxxxx
----------------------------------------------
Title: VP & Assistant Manager
----------------------------------------------
EXHIBIT C
COMPLIANCE CERTIFICATE
TO: COMERICA BANK-CALIFORNIA
FROM: C-CUBE MICROSYSTEMS, INC.
The undersigned authorized officer of C-Cube Microsystems, Inc.
("Borrower") hereby certifies that in accordance with the terms and
conditions of the Loan Agreement between Borrower and Bank (the
"Agreement"), (i) Borrower is in complete compliance for the period
ending ______________ with all required covenants except as noted
below and (ii) all representations and warranties of Borrower stated
in the Agreement are true and correct in all material respects as of
the date hereof. Attached herewith are the required documents
supporting the above certification. The Officer further certifies that
these are prepared in accordance with Generally Accepted Accounting
Principles (GAAP) and are consistently applied from one period to the
next except as explained in an accompanying letter or footnotes. The
Officer expressly acknowledges that no borrowings may be requested by
Borrower at any time or date of determination that Borrower is not in
compliance with any of the terms of the Agreement, and that such
compliance is determined not just at the date this certificate is
delivered.
Please indicate compliance status by circling Yes/No under "Complies"
column.
Reporting Covenant Required Complies
Quarterly financial statements Quarterly within 45 days Yes No
Annual (CPA Audited) FYE within 90 days Yes No
Financial Covenant Required Actual Complies
Maintain on a Quarterly Basis:
Minimum Quick Ratio 1.75:1.0 ____:1.0 Yes No
Maximum Debt/Tangible Net Worth 0.75:1.0 ____:1.0 Yes No
Minimum Tangible Net Worth $180,000,000* $______ Yes No
Profitability: Quarterly $1.00** $______ Yes No
* plus 75% of quarterly profits, plus 100% of proceeds of new equity
or Subordinated Debt.
** Borrower may incur a loss in one quarter in any fiscal year of no
more than $3,000,000.
Comments Regarding Exceptions: See Attached.
Sincerely, ------------------------------
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