<PAGE> 1
NEWS RELEASE [GRAPHIC OMITTED]
EXHIBIT 3
Contact:
Nicole Burdette/Kevin Caviston
O'Keeffe & Company, Inc.
(610) 325-6550, ext. 10/(610) 325-6553, ext. 13
[email protected]
PICTURETEL RECEIVES COMMITMENT FOR A NEW $35 MILLION REVOLVING LINE OF CREDIT
ANDOVER, MASS., JULY 25, 2000 -PictureTel Corporation (NASDAQ: PCTL) said today
that it has taken the final step in its plan to refinance the Company. The plan
consists of a $35 million secured revolving credit facility in addition to the
$22 million in new equity previously announced.
The Company said it has received, and accepted, a letter of commitment
from Congress Financial Corporation for an asset based revolving line of credit
with a limit of $35 million, based upon certain lending formulas. This replaces
the expiring credit facility that the Company had in place. The previous
facility only provided working capital through a term loan of $8.5 million. This
new facility provides additional borrowing capacity of $26.5 million. PictureTel
expects to close on the new facility, subject to satisfaction of closing
conditions, in a few weeks.
The expiring facility also had letters of credit capacity that were
secured by the Company's cash at the rate of $1.05 for every $1.00 of LOCs. The
new facility also provides the Company letter of credit capabilities, secured by
the Company's receivables and inventory pledged under this new debt facility
and/or its cash.
Earlier this month, PictureTel announced that it had agreements with
investors to purchase $22 million of new Series B preference convertible shares.
These purchases have been completed, the company said today, and the funds are
now available. The Company will use a portion of the proceeds from the issuance
of this equity to pay off the term loan mentioned above.
"With this funding in place, we hope to regain customer confidence in
our financial stability as we are about to introduce our next generation line of
products," said Lew Jaffe, PictureTel's president and chief operating officer.
"These new products will take videoconferencing to the next level, integrated
collaboration. We will provide a simple way to connect people and content while
providing users an experience of unprecedented video sharpness and audio
clarity."
ABOUT PICTURETEL
PictureTel Corporation (Nasdaq: PCTL) is the world leader in
developing, manufacturing, and marketing a full range of visual- and
audio-collaboration and streaming-video solutions. The Company's systems meet
customers' collaboration needs from the desktop to the
- MORE -
<PAGE> 2
PICTURETEL RECEIVES COMMITMENT FOR A NEW
$35 MILLION REVOLVING LINE OF CREDIT PAGE 2
boardroom. PictureTel also markets network conferencing servers and a
comprehensive portfolio of enterprise-wide services. Additional PictureTel
information is available at www.picturetel.com. PictureTel collaboration
products and services eliminate the barrier of distance, enabling people to be
Anywhere Now(TM).
###
This release includes projections and other forward-looking statements about the
company's revenues, earnings, and other measures of economic performance. Actual
results could differ materially from forecasts due to many factors such as, for
example, competitive pressures, changes in technology, and the difficulty in
forecasting in overseas markets and indirect channels. Additional information
concerning risks that could cause actual results to differ is contained in the
company's annual report on Form 10-K and its Form 10-Q as filed with the SEC.
The company undertakes no obligation to update publicly any forward-looking
statements whether as a result of new information, future events or otherwise.
PictureTel is a registered trademark of PictureTel Corporation.
All other terms and product names may be trademarks or registered trademarks of
their respective owners.
