**Exhibit 10.41**

 

FIRST AMENDMENT TO CREDITAGREEMENT

 

THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”)is entered into as of June 1, 2005, by and between SYMMETRICOM, INC., aDelaware corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”).

 

# **RECITALS**

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WHEREAS, Borrower is currently indebted to Bankpursuant to the terms and conditions of that certain Credit Agreement betweenBorrower and Bank dated as of May 1, 2004, as amended from time to time (“CreditAgreement”).

 

WHEREAS, Bank and Borrower have agreed to certainchanges in the terms and conditions set forth in the Credit Agreement and haveagreed to amend the Credit Agreement to reflect said changes.

 

NOW, THEREFORE, for valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties heretoagree that the Credit Agreement shall be amended as follows:

 

Section 1.1(a) is hereby amended (a) by deleting “June 1, 2005” as the lastday on which Bank will make advances under the Line of Credit, and by substitutingfor said date “November 1, 2006,” and (b) by deleting “Five MillionDollars ($5,000,000.00)” as the maximum principal amount available under theLine of Credit, and by substituting for said amount “Ten Million Dollars($10,000,000.00),” with such changes to be effective upon the execution anddelivery to Bank of a promissory note dated as of June 1, 2005 (whichpromissory note shall replace and be deemed the Line of Credit Note defined inand made pursuant to the Credit Agreement) and all other contracts, instrumentsand documents required by Bank to evidence such change.

 

Thethird sentence of Section 1.1 (b) is hereby deleted in its entirety,and the following substituted therefore:

 

(b) NoLetter of Credit shall have an expiration date subsequent to May 1, 2007.

 

Section 4.3is hereby deleted in its entirety, and the following substituted therefore:

 

“SECTION 4.3FINANCIAL STATEMENTS.  Provide to Bankall of the following, in form and detail satisfactory to Bank:

 

notlater than 90 days after and as of the end of each fiscal year, a consolidatedannual audited and unqualified financial statement of Borrower, prepared by acertified public accountant acceptable to Bank, to include balance sheet,income statement, statement of cash flows, management report, auditor’s report,all supporting schedules, and footnotes;

 

notlater than 45 days after and as of the end of each quarter, a consolidated copyof the 10Q report of Borrower filed with the Securities Exchange Commission,prepared by a certified public accountant acceptable to Bank, to includebalance sheet, income statement and statement of cash flows; and

 

fromtime to time such other information as Bank may reasonably request.”

 

Section 4.9is hereby deleted in its entirety, and the following substituted therefore:

 

“SECTION 4.9FINANCIAL STATEMENTS.  Maintain Borrower’sfinancial condition as follows using generally accepted accounting principlesconsistently applied and used consistently with prior practices (except to theextent modified by definitions herein), with compliance determined commencingwith Borrower’s financial statements for the period ending June 30, 2005:

 

TangibleNet Worth not at any time less than $125,000,000.00, with “Tangible Net Worth”defined as the aggregate of total stockholders’ equity plus subordinated debtless any intangible assets.

 

QuickRatio not at any time less than 1.50 to 1.0, with “Quick Ratio” defined as theaggregate of unrestricted cash, unrestricted marketable securities andreceivables convertible into cash divided by total current liabilities.

 

Pre-taxprofit not less than $1.00 on a quarterly basis, determined as of each fiscalquarter end.”

 

Section 5.4is hereby deleted in its entirety, and the following substituted therefore:

 

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“SECTION 5.4    MERGER, CONSOLIDATION, TRANSFER OF ASSETS.

 

Mergeinto or consolidate with any other entity; make any substantial change in thenature of Borrower’s business as conducted as of the date hereof; acquire allor substantially all of the assets of any other entity other than entities in asimilar business, provided that no individual entity acquisition shall have atransaction value in excess of $10,000,000; nor sell, lease, transfer orotherwise dispose of all or a substantial or material portion of Borrower’sassets except in the ordinary course of its business.”

 

Exceptas specifically provided herein, all terms and conditions of the CreditAgreement remain in full force and effect, without waiver or modification.  All terms defined in the Credit Agreementshall have the same meaning when used in this Amendment.  This Amendment and the Credit Agreement shallbe read together, as one document.

 

Borrowerhereby remakes all representations and warranties contained in the CreditAgreement and reaffirms all covenants set forth therein.  Borrower further certifies that as of thedate of this Amendment there exists no Event of Default as defined in theCredit Agreement, nor any condition, act or event which with the giving ofnotice or the passage of time or both would constitute any such Event ofDefault.

 

INWITNESS WHEREOF, the parties hereto have caused this Amendment to be executedas of the day and year first written above.

 

 
| By:                                     | /s/ William Slater                      |   |
|-----------------------------------------|-----------------------------------------|--------|
|                                    | William Slater, Chief Financial Officer |
|                                    |                                    |
| WELLS FARGO BANK, NATIONAL  ASSOCIATION |
| By:                                     | /s/ Kevin Herr                          |   |
|                                    | Kevin Herr, Vice President              |

 

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