Exhibit 6
September 12, 1996
IBM Credit Corporation
0000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, XX 00000
attn: Xx. Xxxx Xxxxx
Re: supplement to loan agreement, registration rights agreement
and warrant
Gentlemen:
The purpose of this letter is to supplement the provisions of our
amended and restated loan agreement dated August 30, 1996 (the
"Loan Agreement") and our registration rights and warrant
agreements dated September 12, 1996 (the "Reg Rights" and
"Warrant" Agreement, respectively). Capitalized terms have the
meanings assigned to them in the Loan Agreement, unless otherwise
specified below.
1) At the end of Section 2.8 of the Loan Agreement add:
"Notwithstanding the foregoing but subject to the provisions of
Section 2.10, IBM Credit will not intentionally prepay a portion
of the Obligations in order to cause Customer to default on
another portion of the Obligations."
2) Pursuant to Section 5.1(K) of the Loan Agreement, at the
end of Section 2(a)(i) of the Reg Rights Agreement add: "Customer
agrees to pay IBM Credit a $3,000,000 fee on demand if the common
stock into which the Series A Preferred Stock is convertible or
which is issuable upon the exercise of the warrants (as defined
in the Warrant Agreement) is not subject to an effective
registration statement (or otherwise freely tradeable) by March
31, 1997."
3) At the end of Section 6(d) of the Reg Rights Agreement
add: "Notwithstanding the foregoing, IBM Credit can elect on
reasonable notice to jointly control the defense of any claim
against it with counsel of IBM credit's choice, provided that IBM
Credit will bear the expense of such separate representation."
4) At the end of Section 1(b) of the Warrant Agreement add:
"Moreover, in the event that there remains a balance due from the
Company to Holder under the Loan Agreement at the time of
exercise, then Holder can elect to credit such sum against the
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Warrant Price when the Election Notice is given. Notwithstanding
the foregoing, in the event that neither SCI Technology, Inc. nor
Mitsubishi Electronics America, Inc. extend any trade credit to
the Company prior to March 31, 1997 and Holder does not exercise
the Warrant prior to such date, then, the Warrant Price will be
reduced to $.80/share or the number of warrants will be increased
by the difference between 600,000 and the number of warrants
actually issued to trade creditors of the Company in order to
induce such creditors to extend credit to the Company, the
alternative being at the selection of the Company. If the
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Company elects to increase the number of warrants, then the
common stock issuable upon exercise of such warrants will have
the same registration rights as the common stock issuable upon
exercise of the original warrant."
5) Pursuant to Section 2.9(A) of the Loan Agreement, Customer
and IBM Credit agree that twenty-one million, nine hundred forty
thousand dollars even ($21,940,000.00) of the Outstanding
Advances pursuant to the Existing Financing Agreement shall
constitute the Term Loan on the Closing Date.
6) For purposes of Clarification, Customer and IBM Credit
hereby confirm and agree that solely for purposes of Section
10.16 of the Loan Agreement the definition of "Affiliate" is
amended by substituting "IBM Credit" for "Customer" wherever such
term appears in such definition.
7) Customer shall provide IBM Credit on or prior to December
31, 1996 with a list of all intellectual property owned by
Customer or with respect to which Customer is a licensee pursuant
to a license. Customer further agrees to use its best efforts to
obtain from each licensor under such licenses, licensor's
consent, in form and substance satisfactory to IBM Credit, to the
assignment by IBM Credit of such license to a third party after
the occurrence of an Event of Default pursuant to the Loan
Agreement and security documents.
8) Within fifteen days (or such other shorter time period as
IBM Credit may reasonably specify) after IBM Credit's request
from time to time, Customer shall update and extend the
projections set forth in Attachment D.
9) Upon IBM Credit's reasonable request, Customer will secure
the lien release of other lienholders identified in Schedule 1 to
Attachment B, if the obligations secured by such security
interests have been satisfied or if such security interests have
expired or are no longer necessary to Customer's business.
Specifically, Customer will secure the termination or release of
the lien referred to in item 5 (Apple Computer, Inc., secured
party) of the Amerisearch report dated September 10, 1996 within
thirty days after the Closing Date.
[the balance of this page is deliberately blank]
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[SIGNATURE]
If the foregoing is acceptable, please sign and return this
letter. It will be effective upon the closing of the Loan
Agreement. Consideration is acknowledged.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, Chairman and CEO
Agreed:
IBM Credit Corporation
/s/ Xxxxxx X. Xxxxx
_________________________________
by: Xxxxxx X. Xxxxx, Director, Remarketer Financing Portfolio
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