Exhibit 10.12D
AMENDMENT NUMBER FOUR
TO LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER FOUR TO LOAN AND SECURITY AGREEMENT
(this "Amendment") is entered into as of August 14, 2001, among the lenders
identified on the signature pages hereof (the "Lenders"), FOOTHILL CAPITAL
CORPORATION, a California corporation, as the arranger and administrative agent
for the Lenders (the "Agent"), THE 3DO COMPANY, a California corporation
("Borrower"), THE 3DO COMPANY, a Delaware corporation ("Parent"), and 3DO
EUROPE, LTD., a company incorporated under the laws of England ("UK Sub"), with
reference to the following:
WHEREAS, the Obligors have previously entered into that
certain Loan and Security Agreement, dated as of April 6, 2000, as amended by
that certain Amendment Number One to Loan and Security Agreement, dated as of
June 9, 2000, by that certain Amendment Number Two to Loan and Security
Agreement, dated as of September 18, 2000, and by that certain Amendment Number
Three to Loan and Security Agreement, dated as of December 1, 2000 (as so
modified and as otherwise heretofore amended, modified or supplemented from time
to time, the "Agreement"), with the Lender Group, pursuant to which the Lender
Group has made certain loans and financial accommodations available to the
Obligors. Terms used herein without definitions shall have the meanings ascribed
to them in the Agreement;
WHEREAS, certain Events of Default have occurred and are
continuing;
WHEREAS, the Obligors have requested that Agent and the
Lenders waive such Events of Default and amend the Agreement in accordance with
the terms and conditions hereof; and
WHEREAS, Agent and the Lenders are willing to waive such
Events of Default and amend the Agreement in accordance with the terms and
conditions hereof.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. Amendments To The Agreement.
(a) Section 1.1 of the Agreement hereby is amended by
adding the following definition in the proper alphabetical order:
"Unrestricted Cash" means, as of any date of
determination, all cash that is not supporting a Letter of Credit.
(b) The following definitions contained in Section
1.1 of the Agreement hereby are amended and restated in their entirety to read
as follows:
"Borrower Seasonal Reserve" means, as of any date of
determination, an amount equal to 5% of the gross sales of Borrower for the 45
days immediately preceding the date of determination (the percentage amount of
the Borrower Seasonal Reserve may be adjusted, at the election of the Agent in
its sole discretion, for the 2001/2002 season based upon the actual amount of
Borrower's Dilution during the 2000/2001 season); provided, however, that the
Borrower Seasonal Reserve shall be reduced on a Dollar-for-Dollar basis for each
credit issued by Borrower on or after March 31 immediately following such period
until the Borrower Seasonal Reserve has been reduced to zero and, in any event,
the Borrower Seasonal Reserve shall be reduced to zero on June 1 of each year.
"Tangible Net Worth" means, as of any date of
determination, the amount equal to (a) Parent's total consolidated stockholder's
equity, minus (b) all Intangible Assets of Parent and its Subsidiaries.
"UK Sub Seasonal Reserve" means, as of any date of
determination, an amount equal to 5% of the gross sales of the UK Sub for the 45
days immediately preceding the date of determination (the percentage amount of
the UK Sub Seasonal Reserve may be adjusted, at the election of the Agent, for
the 2001/2002 season based upon the actual amount of the UK Sub's Dilution
during the 2000/2001 season); provided, however, that the UK Sub Seasonal
Reserve shall be reduced on a Dollar-for-Dollar basis for each credit issued by
UK Sub on or after March 31 immediately following such period until the UK Sub
Seasonal Reserve has been reduced to zero and, in any event, the UK Sub Seasonal
Reserve shall be reduced to zero on June 1 of each year.
(c) Subsections (a)(x) and (a)(y) of Section 2.1 of
the Agreement are hereby amended and restated in their entirety to read as
follows:
(x) the result of 85% of Eligible Borrower
Accounts, minus the amount, if any, of the Borrower
Dilution Reserve, minus, during the period from
November 15 to June 1, the amount, if any, of the
Borrower Seasonal Reserve, plus
(y) on and after the UK Sub Closing Date,
the least of
(i) the result of 75% of the amount
of Eligible UK Sub Accounts, minus
the amount, if any, of the UK Sub
Dilution Reserve, minus, during the
period from November 15 to June 1,
the amount, if any, of the UK Sub
Seasonal Reserve, and
(ii) an amount equal to 20% of the
Availability provided by subsection
(x) above, and
(iii) $10,000,000, minus
(d) Section 6.2 of the Agreement is hereby amended
and restated in its entirety to read as follows:
6.2 Collateral Reporting. Provide Agent (with copies
for each Lender) with the following documents at the following times in form
reasonably satisfactory to Agent:
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Daily (a) a sales journal, collection journal, and credit
register since the last such schedule and a
calculation of the Borrowing Base as of such date,
(b) notice of all returns, disputes, or claims,
(c) a report of daily cash balances in Obligors' bank
accounts summarized from statements generated by the
banks where such accounts are located,
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Monthly (not later than (d) a detailed calculation of the Borrowing Base,
the 10th day of each
month) (e) a detailed aging, by total, of the Accounts,
together with a reconciliation to the detailed
calculation of the Borrowing Base previously provided
to Agent,
(f) a summary and detailed listing, by vendor, of the
Obligors' accounts payable and any book overdraft,
(g) a report of all new copyrightable or patentable
materials generated by the Obligors during the prior
month identifying all such copyrightable materials
that are required to be registered pursuant to
Section 6.19, and patentable materials with respect
to which applications are required to by filed
pursuant to Section 6.20
(h) a detailed listing of all copyright applications
filed and all copyrights granted since the date of
the last report provided in compliance with this
subsection, and
(i) a calculation of Dilution for the prior month.
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Quarterly (j) a detailed list of Borrower's customers,
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Upon request by Agent (k) copies of invoices in connection with the
Accounts, credit memos, remittance advices, deposit
slips, shipping and delivery documents in connection
with the Accounts and, for Inventory and Equipment
acquired by an Obligor, purchase orders and invoices,
(l) such information to implement and continue
Agent's electronic collateral reporting system, and
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(m) such other reports as to the Collateral, or the
financial condition of an Obligor, as Agent may
reasonably request.
========================== =====================================================
(e) Section 7.19 of the Agreement is hereby amended
and restated in its entirety to read as follows:
(a) Tangible Net Worth. Fail to maintain
Tangible Net Worth of not less than the required amount set forth in the
following table for the applicable period set forth opposite thereto:
------------------------------------------------------------------------
Measurement Date Tangible Net Worth
------------------------------------------------------------------------
July 2001 $35,500,000
------------------------------------------------------------------------
August 2001 $30,000,000
------------------------------------------------------------------------
September 2001 $30,000,000
------------------------------------------------------------------------
October 2001 $27,000,000
------------------------------------------------------------------------
November 2001 $38,500,000
------------------------------------------------------------------------
December 2001 $50,000,000
------------------------------------------------------------------------
January 2002 $54,500,000
------------------------------------------------------------------------
February 2002 $58,500,000
------------------------------------------------------------------------
March 2002 $67,000,000
------------------------------------------------------------------------
(b) Minimum Liquidity. Fail to maintain
Availability plus Unrestricted Cash and Cash Equivalents that have been pledged
to Agent and subject to a control agreement (in form and substance satisfactory
to Agent) in favor of Agent of at least $1,500,000 at any time.
2. Waiver.
(a) The Obligors hereby acknowledge that the
following Events of Default (the "Designated Events of Default") have occurred
and are continuing:
(i) In violation of Section 3.3(d) of the
Agreement, UK Sub has failed to:
(a) deliver to Agent a certificate of status
(or the equivalent) with respect to UK Sub, dated
within 10 days of the UK Sub Closing Date (but no
later than 90 days following the Closing Date), such
certificate to be issued by the appropriate officer
of the jurisdiction of organization of UK Sub,
(b) deliver to Agent certificates of status
with respect to UK Sub, each dated within 15 days of
the UK Sub Closing Date (but no later than 90 days
following the Closing Date), such certificates to be
issued by the appropriate officer of the
jurisdictions in which its failure to be duly
qualified or licensed would constitute a Material
Adverse Change,
(c) deliver to Agent satisfactory evidence
that UK Sub has instructed in writing all of its
Account Debtors to remit all Collections payable in
Dollars into the applicable Foreign Concentration
Account,
(d) execute and deliver each of the UK Sub
Security Documents and, where appropriate, file or
record such agreements with the applicable
Governmental Authority,
(e) deliver to Agent (i) duly executed
originals of the UK Sub Security Documents, in form
and substance satisfactory to Agent in its sole and
absolute discretion, and (ii) satisfactory evidence
that the security interests granted in favor of Agent
pursuant to the UK Sub Security Documents have been
duly perfected and are senior in priority to all
other liens, claims, security interests, or
encumbrances, except for Permitted Liens, and
(f) enter into lockbox agreements or blocked
account agreements with each of UK Sub's depositary
banks;
(ii) In violation of Section 5.11 of the
Agreement, there has been a Material Adverse Change with
respect to the Obligors since the date of the latest financial
statements submitted to the Lender Group on or before the
Closing Date; and
(iii) In violation of Section 7.19 of the
Agreement, the Obligors failed to maintain Tangible Net Worth
of not less than $40,000,000 from February 2001 through June
2001.
(b) Subject to the receipt by Agent of this Amendment duly
executed by the Obligors and the satisfaction of the conditions precedent set
forth in Section 3, and anything in the Agreement or the other Loan Documents to
the contrary notwithstanding, Agent and the Lenders hereby waive the Designated
Events of Default (the "Waiver"); provided, however, that if the Designated
Events of Default contained in Section 2(a)(i) are not cured within thirty (30)
days of the date hereof, the Waiver shall no longer be effective with respect to
such Section.
3. Conditions Precedent to Amendment. The satisfaction of each of the
following, unless waived or deferred by Agent in its sole discretion, shall
constitute conditions precedent to the effectiveness of this Amendment and each
and every provision hereof:
(a) Agent shall have received this Amendment, duly executed by
the parties hereto, and the same shall be in full force and effect;
(b) Agent shall have received a certificate from the Secretary
of each Obligor attesting to the incumbency and signatures of authorized
officers of such Obligor and to the resolutions of such Obligor's Board of
Directors authorizing its execution and delivery of this Amendment, the
performance of its obligations under this Amendment and the Agreement as amended
by this Amendment, and authorizing specific officers of such Obligor to execute
and deliver the same;
(c) The representations and warranties in this Amendment, the
Agreement as amended by this Amendment, and the other Loan Documents shall be
true and correct in all respects on and as of the date hereof as though made on
such date (except to the extent that such representations and warranties relate
solely to an earlier date);
(d) After giving effect to this Amendment, no Default or Event
of Default shall have occurred and be continuing on the date hereof, or shall
result from the consummation of the transactions contemplated herein;
(e) No injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the consummation of the
transactions contemplated herein shall have been issued and remain in force by
any governmental authority against the Agent or any of the Lenders or Obligors;
(f) Agent shall have received, for the ratable benefit of the
Lenders, an amendment fee as further described in the Letter Agreement (as
defined below);
(g) Agent shall have received the letter agreement, dated on
or about the date hereof, duly executed by the parties hereto (the "Letter
Agreement"), and the same shall be in full force and effect; and
(h) All other documents and legal matters in connection with
the transactions contemplated by this Amendment shall have been delivered or
executed or recorded and shall be in form and substance satisfactory to Agent
and its counsel.
4. Representations and Warranties. Each Obligor hereby represents and
warrants to the Lender Group that (a) the execution, delivery, and performance
of this Amendment and of the Agreement, as amended by this Amendment, are within
such Obligor's corporate powers, have been duly authorized by all necessary
corporate action, and are not in contravention of any law, rule, or regulation,
or any order, judgment, decree, writ, injunction, or award of any arbitrator,
court, or governmental authority, or of the terms of its charter or bylaws, or
of any contract or undertaking to which it is a party or by which any of its
properties may be bound or affected, and (b) this Amendment and the Agreement,
as amended by this Amendment, constitute such Obligor's legal, valid, and
binding obligation, enforceable against such Obligor in accordance with its
terms, and (c) this Amendment has been duly executed and delivered by such
Obligor.
5. Choice of Law. The validity of this Amendment, its construction,
interpretation and enforcement, and the rights of the parties hereunder, shall
be determined under, governed by, and construed in accordance with the laws of
the State of California.
6. Counterparts; Telefacsimile Execution. This Amendment may be
executed in any number of counterparts and by different parties and separate
counterparts, each of which when so executed and delivered, shall be deemed an
original, and all of which, when taken together, shall constitute one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Amendment by telefacsimile shall be effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also shall deliver a manually executed
counterpart of this Amendment but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.
7. Effect on Loan Documents.
(a) The Agreement, as amended hereby, and the other Loan
Documents shall be and remain in full force and effect in accordance with its
respective terms and hereby is ratified and confirmed in all respects. The
execution, delivery, and performance of this Amendment shall not, except as
expressly set forth herein, operate as a waiver of or, except as expressly set
forth herein, as an amendment of, any right, power, or remedy of Agent or any
Lender under the Agreement, as in effect prior to the date hereof. The waivers,
consents, and modifications herein are limited to the specifics hereof, shall
not apply with respect to any facts or occurrences other than those on which the
same are based, shall not excuse future non-compliance with the Agreement, and
shall not operate as a consent to any further or other matter, under the Loan
Documents.
(b) Upon and after the effectiveness of this Amendment, each
reference in the Agreement to "this Agreement", "hereunder", "herein", "hereof"
or words of like import referring to the Agreement, and each reference in the
other Loan Documents to "the Agreement", "thereunder", "therein", "thereof" or
words of like import referring to the Agreement, shall mean and be a reference
to the Agreement as modified and amended hereby.
(c) To the extent that any terms and conditions in any of the
Loan Documents shall contradict or be in conflict with any terms or conditions
of the Agreement, after giving effect to this Amendment, such terms and
conditions are hereby deemed modified or amended accordingly to reflect the
terms and conditions of the Agreement as modified or amended hereby.
8. Further Assurances. The Obligors shall execute and deliver all
agreements, documents, and instruments, in form and substance satisfactory to
Agent, and take all actions as Agent may reasonably request from time to time,
to perfect and maintain the perfection and priority of Agent's or any Lender's
security interests in the Collateral and to fully consummate the transactions
contemplated under this Amendment and the Agreement, as amended by this
Amendment.
9. Entire Agreement. This Amendment, together with all other
instruments, agreements, and certificates executed by the parties in connection
herewith or with reference thereto, embody the entire understanding and
agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings,
and inducements, whether express or implied, oral or written.
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IN WITNESS WHEREOF, the parties have entered into this
Amendment as of the date first above written.
THE 3DO COMPANY,
a California corporation
By Xxxxx Xxxx Xxxx
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Title: Executive Vice President
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THE 3DO COMPANY,
a Delaware corporation
By Xxxxx Xxxx Xxxx
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Title: Secretary
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3DO EUROPE, LTD.,
a corporation organized under the laws of England
By Xxxxxxx X. Xxxxxx
---------------------------------
Title: President, 3DO Europe
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FOOTHILL CAPITAL CORPORATION,
a California corporation
By Xxxxx Xxxxxxxxx
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Title: Vice President
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