1
EXHIBIT 10.18
AMENDMENT NUMBER ONE TO FORBEARANCE AGREEMENT
THIS AMENDMENT NUMBER ONE TO FORBEARANCE AGREEMENT (this
"Amendment") is dated as of February 14, 2000, by and between MAI SYSTEMS
CORPORATION., a Delaware corporation ("MAI"), on the one hand, and CPI
SECURITIES LP, a California limited liability company, THE VALUE REALIZATION
FUND, L.P., a Delaware limited partnership, THE CANYON VALUE REALIZATION FUND
(CAYMAN), LTD., a Cayman Islands corporation, and GRS PARTNERS II (collectively,
the "Lenders"), on the other hand. All capitalized terms not otherwise defined
herein have the meanings assigned in the Forbearance Agreement (as defined
below).
RECITALS
WHEREAS, MAI and Lenders are party to that certain Forbearance
Agreement dated as of October 28, 1999 (the "Forbearance Agreement") which
provides, among other things, that Lenders would not enforce for a certain
period of time certain rights and remedies available to Lenders under the Note
Purchase Agreement and the Notes;
WHEREAS, such forbearance period expired on December 31, 1999;
and
WHEREAS, MAI has requested that Lenders enter into this
Amendment in order to provide MAI with additional time to make the Interest
Payments which, in the absence of this Amendment, would be currently due and
payable;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Amendment, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
AMENDMENT
1. Forbearance Period. Section 2.1 of the Forbearance Agreement
is hereby amended to provide that the Forbearance Period shall continue until
the earlier to occur of (a) the date of the termination of the Forbearance
Period by Lenders or otherwise pursuant to Section 2.2 of the Forbearance
Agreement and (b) May 1, 2000.
2. Covenants. In consideration of Lenders' execution of this
Amendment, MAI agrees to pay, on or before the Forbearance Effective Date,
Lenders' actual attorney's fees not yet paid by MAI related in any way to the
Specified Event of Default and all of Lenders' actual attorney's fees incurred
in the preparation, negotiation and execution of this Amendment (together, the
"Fees").
As additional consideration for the Lenders' agreement to enter
into this Amendment, MAI agrees to pay $12,500 to Lenders on a weekly basis,
beginning as of January 16, 2000, as partial repayment of the Obligations (the
first such payment (the "First Payment") to be made on the date hereof with each
subsequent payment to be made on the first Monday of every week following the
week in which this Amendment is executed, in each case by wire transfer of
immediately available funds to the account designated by Lenders in writing to
MAI.)
2
The First Payment shall include a payment of $12,500 for each of the weeks of
January 16, 2000, January 23, 2000, January 30, 2000, February 6, 2000 and
February 13, 2000, and shall be in the amount of $62,500 plus the current and
past due Fees in the amount of $10,610.84, for a total of $73,110.84. MAI may
make only such payments until May 1, 2000, and thereafter shall make such
additional payments as are then past due or thereafter become due on the
Obligations until such Obligations have been repaid in full in accordance with
their terms. All such payments shall be applied as specified in the Note
Purchase Agreement and the Notes. If MAI fails to comply with the foregoing
covenants, such failure shall constitute an Event of Default under the Note
Purchase Agreement, separate from the Specified Event of Default.
3. Representations and Warranties. MAI hereby represents and
warrants to Lenders that, as of the date of this Amendment:
3.1 All of MAI's representations and warranties contained
in this Amendment, the Forbearance Agreement and the Note Purchase
Agreement are true and correct on and as of the date hereof, as if then
made (other than representations and warranties which expressly related
to an earlier date);
3.2 Except for the Specified Event of Default, no Default
or Event of Default (as such terms are defined in the Note Purchase
Agreement) has occurred or is continuing.
3.3 The execution and delivery of this Amendment by MAI
and the performance of the transactions contemplated hereby (a) are
within MAI's corporate power, (b) have been duly authorized by all
necessary or proper corporate and shareholder action, (c) when duly
executed and delivered by MAI, shall constitute the legal, valid and
binding obligation of MAI enforceable against MAI in accordance with its
terms, and (d) have been consented to by Coast Business Credit, a
division of Southern Pacific Bank.
3.4 If any of the foregoing representations is untrue or
incorrect in any material respect, such untruthfulness or inaccuracy
shall constitute an Event of Default under the Note Purchase Agreement.
4. Effective Date. This Amendment shall become effective as of
the date first written above upon Lender's receipt of (i) a counterpart hereof
executed by MAI and (ii) indefeasible payment of the Fees, but shall occur no
later than February 17, 2000.
5. This Amendment shall be limited solely to the matters
expressly set forth herein and shall not (i) constitute an amendment or waiver
of any term of the Forbearance Agreement other than the provisions thereof which
are specifically and explicitly amended hereby, (ii) constitute an amendment or
waiver of any term or condition of the Note Purchase Agreement, the Notes or the
Security Agreement, (iii) prejudice any right or rights which Lenders may now
have or may have in the future under or in connection with the Note Purchase
Agreement, the Notes or the Security Agreement, (iv) require Lenders to agree to
a similar transaction on a future occasion or (v) create any rights herein to
another person, entity or other beneficiary or otherwise, except to the extent
specifically provided herein.
2
3
6. Release.
6.1 MAI acknowledges that Lenders would not enter into
this Amendment without MAI's assurance that MAI has no claim against any
of Lenders, their parents companies, subsidiaries, affiliates, officers,
directors, shareholders, employees, attorneys, agents, professionals and
servants, or any of their respective predecessors, successors, heirs and
assigns (collectively, the "Lender Parties" and each, a "Lender Party").
MAI, for itself and on behalf of its officers and directors, and its
respective predecessors, successors and assigns (collectively, the
"Releasors") releases each Lender Party from any known or unknown claims
which MAI now has against any Lender Party of any nature, including any
claims that any Releasor, or any Releasor's successors, counsel and
advisors may in the future discover they would have had now if they had
known facts not now known to them, whether founded in contract, in tort
or pursuant to any other theory of liability, including but not limited
to any claims arising out of or related to the Loan Documents or the
transactions contemplated thereby. MAI, FOR ITSELF AND ON BEHALF OF EACH
RELEASOR, WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542,
WHICH STATE:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.
6.2 The provisions, waivers and releases set forth in
this section are binding upon each Releasor. The provisions, waivers and
releases of this section shall inure to the benefit of each Lender
Party.
6.3 The provisions of this section shall survive payment
in full of the Obligations, full performance of all of the terms of this
Amendment, the Note Purchase Agreement, the Notes, and the Security
Agreement and/or any action by Lenders to exercise any remedy available
under such documents, applicable law or otherwise.
6.4 MAI warrants and represents that it is the sole and
lawful owner of all right, title and interest in and to all of the
claims released hereby and MAI has not heretofore voluntarily, by
operation of law or otherwise, assigned or transferred or purported to
assign or transfer to any person any such claim or any portion thereof.
MAI shall indemnify and hold harmless each Lender Party from and against
any claim, demand, damage, debt, liability (including payment of
reasonable attorneys' fees and costs actually incurred whether or not
litigation is commenced) based on or arising out of any such assignment
or transfer.
7. Miscellaneous. The headings herein are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof. No
amendment, modification, termination or waiver of any provision of this
Amendment, or any consent to any departure by MAI therefrom, shall in any event
be effective unless the same shall be in writing and signed by
3
4
all of the Lenders. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.
8. Sole Benefit of Parties. This Amendment is solely for the
benefit of the parties hereto and their respective successors and assigns, and
no other person or entity shall have any right, benefit or interest under or
because of the existence of this Amendment.
9. Further Assurances. MAI and Lenders shall execute such
documents and perform such further acts as may be reasonably required or
desirable to carry out the provisions of this Amendment and the Security
Agreement.
10. Counterparts. This Amendment may be executed in any number
of separate counterparts, each of which shall collectively and separately
constitute one agreement.
11. GOVERNING LAW. THIS AGREEMENT, AND ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE HEREOF, SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA
APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA.
* * *
4
5
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
MAI SYSTEMS CORPORATION
By:
-----------------------------------------
Name:
Title:
GRS PARTNERS II
By: Grosvenor Capital Management, L.P.,
its Administrator
By: GCM, L.L.C.,
its general partner
By: Grosvenor Holdings, L.L.C.
By:
-----------------------------------------
Name:
Title:
THE VALUE REALIZATION FUND, L.P.
By: Canpartners Investments III, L.P.,
its general partner
By: Canyon Capital Advisors LLC,
its general partner
By:
-----------------------------------------
Name:
Title: Managing Director
5
6
THE CANYON VALUE REALIZATION FUND (CAYMAN), LTD.
By: MeesPierson (Cayman) Limited,
its Administrator
By:
-----------------------------------------
Name:
Title:
CPI Securities LP
By: Canpartners Incorporated,
its general partner
By:
-----------------------------------------
Name:
Title:
6
