Exhibit 10.23


AMENDMENT NUMBER ONE TO SECURITY AGREEMENT


AMENDMENT NUMBER ONE TO


SECURITY
AGREEMENT


THIS AMENDMENT NUMBER ONE
TO SECURITY AGREEMENT (this “Amendment”) is dated as of July 25, 2002 and is
entered into by and among 3Com Corporation (“Grantor”), on the one hand, and
Bank of America, N.A., as administrative agent for the various financial
institutions that are or may from time to time become parties to the Credit
Agreement referred to below (collectively, the “Lenders” and individually, a
“Lender”) (in such capacity, together with its successors and assignees in such
capacity, the “Agent”).  All capitalized
terms used herein but not otherwise defined shall have the meanings ascribed to
them in the Security Agreement (as hereinafter defined).


R E C I T A L S


WHEREAS, Grantor, the
Lenders and the Agent have entered into that certain Credit Agreement dated as
of November 28, 2001 (as amended and supplemented, the “Credit Agreement”), and
Agent and Grantor have entered into that certain Security Agreement, dated as
of November 28, 2001 (as amended and supplemented the “Security Agreement”);
and


WHEREAS, Grantor desires
to amend the Security Agreement and the Agent and the Required Lenders are
willing to do so, subject to the terms and conditions stated herein;


NOW, THEREFORE, in
consideration of the premises herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Agent (on behalf of itself and the required Lenders) and the Grantor hereby
agree as follows:


A G R E E M E N T


Section 1.              Amendment to the Security Agreement. 
The Agent, Lenders and Grantor agree that Section 4(c)(D) of the
Security Agreement is hereby amended in its entirety to read as follows:


“(D) on
consignment, provided that the Grantor has taken all actions necessary to
protect its interests in such Collateral against such consignees and their
creditors (including the filing of precautionary financing statements against
such consignees and has provided to Agent an assignment of such financing
statements);  provided, however,
that the Grantor may place on consignment (1) Inventory having a fair market
value of approximately $4,000,000 and delivered prior to July 1, 2002 to
America II Electronics at their warehouse at 2600 118th Avenue
North, St. Petersburg, Florida 33716, and (2) Collateral having a fair market
value of up to $250,000 per fiscal quarter, but in no event shall Grantor place
on consignment Inventory having a fair market value of more than $2,500,000
outstanding at any one time, with any consignees, in each case


 


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without the
necessity of taking the foregoing protective actions so long as such Collateral
has not been included in the Borrowing Base (or if it has been included, it has
been removed (with written notice to Agent) prior to delivery to the
consignee); or”


 


Section 2.              Conditions Precedent. 
The effectiveness of this Amendment is subject to the satisfaction of
the following conditions precedent:


A.            Amendment.  A fully executed copy of this Amendment
signed by the Grantor shall be delivered to Agent.


B.            Other Documents. Grantor
shall have executed and delivered to Agent such other documents and instruments
as Agent may reasonably require.


Section
3.              Miscellaneous.


A.            Survival of Representations and
Warranties.  All representations and
warranties made in the Security Agreement or any other document or documents
relating thereto, including, without limitation, any Loan Document furnished in
connection with this Amendment, shall survive the execution and delivery of
this Amendment and the other Loan Documents, and no investigation by Agent or
Lenders or any closing shall affect the representations and warranties or the
right of Agent or Lenders to rely thereon.


B.            Reference to Agreement.  The Security Agreement, each of the Loan
Documents, and any and all other agreements, documents or instruments now or
hereafter executed and delivered pursuant to the terms hereof, or pursuant to
the terms of the Security Agreement as amended hereby, are hereby amended so
that any reference therein to the Security Agreement shall mean a reference to
the Security Agreement as amended hereby.


C.            Agreement Remains in Effect.  The Security Agreement and the Loan
Documents, as amended hereby, remain in full force and effect and the Grantor
ratifies and confirms its agreements and covenants contained therein.  The Grantor hereby confirms that, after
giving effect to this Amendment and the Waiver Letter of even date herewith by
Agent and addressed to the Grantor, no Event of Default or Default exists as of
such date.


D.            Severability.  Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.


E.             APPLICABLE
LAW.  THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.


F.             Successors and Assigns.  This Amendment is binding upon and shall
inure to the benefit of Agent, the Lenders and Grantor and their respective
successors and assigns; provided, however, that Grantor may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of the Agent and Lenders.


 


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G.            Counterparts.  This Amendment may be executed in one or
more counterparts, each of which when so executed shall be deemed to be an
original, but all of which when taken together shall constitute one and the
same instrument.


H.            Headings.  The headings, captions and arrangements used
in this Amendment are for convenience only and shall not affect the
interpretation of this Amendment.


I.              NO
ORAL AGREEMENTS.  THIS AMENDMENT,
TOGETHER WITH THE OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENTS THE FINAL
AGREEMENT BETWEEN AGENT AND GRANTOR AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN AGENT AND GRANTOR.


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IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be duly executed by
their respective authorized officers as of the date set forth above.


 


	
   

  	
  3COM CORPORATION,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 


 


 


 


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