EXHIBIT 10.13
AMENDMENT NUMBER EIGHT TO
LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER EIGHT TO LOAN AND SECURITY AGREEMENT, dated as of
January 13, 2003 (this "Amendment"), amends that certain Loan and Security
Agreement, dated as of April 23, 1998, as amended by that certain Amendment
Number Seven To Loan And Security Agreement, dated as of September 13, 2001,
that certain Amendment Number Six To Loan And Security Agreement, dated as of
September 12, 2000, that certain Amendment Number Five To Loan And Security
Agreement, dated as of April 13, 2000, that certain Amendment Number Four To
Loan And Security Agreement, dated as of July 28, 1999, that certain Amendment
Number Three To Loan And Security Agreement, dated as of June 16, 1999, that
certain Amendment Number Two To Loan And Security Agreement, dated as of March
2, 1999, and that certain Amendment Number One To Loan And Security Agreement,
dated as of September 30, 1998 (collectively, the "Loan Agreement"), by and
among MAI SYSTEMS CORPORATION, a Delaware corporation, and HOTEL INFORMATION
SYSTEMS, INC., a Delaware corporation (collectively, "Borrowers"), on the one
hand, and COAST BUSINESS CREDIT, a division of Southern Pacific Bank, a
California corporation ("Coast"), on the other hand. All initially capitalized
terms used in this Amendment shall have the meanings ascribed thereto in the
Loan Agreement unless specifically defined herein.
RECITALS
WHEREAS, Borrowers and Coast wish to amend the Loan Agreement pursuant
to the terms and provisions set forth in this Amendment; and
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
AMENDMENTS
Section 1. AMENDMENT TO SECTION 1 OF THE LOAN AGREEMENT.
(a) Section 1 of the Loan Agreement is hereby amended by deleting
the definition of Debt Service Coverage Ratio in its entirety and replacing it
with the following:
""Debt Service Coverage Ratio" means the ratio, in any fiscal quarter,
whose numerator is EBITDA minus cash capital expenditures minus cash
tax expenses minus capitalized software development costs, and whose
denominator is current maturity of long term debt plus current portion
of capital leases plus all principal payments on Debt plus all interest
payments on Debt."
(b) Section 1 of the Loan Agreement is hereby amended by deleting
the definition of Early Termination Fee in its entirety.
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(c) Section 1 of the Loan Agreement is hereby amended by adding
the following definition to such section:
""CSA" means CSA Private Limited, a Singapore corporation."
""Debt" means, as of the date of determination, the sum, but without
duplication, of any and all of Borrowers': (i) indebtedness heretofore
or hereafter created, issued, incurred or assumed by such Borrowers
(directly or indirectly) for or in respect of money borrowed; (ii) all
obligations arising out of capital leases; and (iii) all obligations
for the deferred purchase price of property or services."
""Quick Ratio" means the ratio of (i) the sum of cash plus Receivables,
to (ii) current liabilities."
""Subordinating Lender" means, collectively, The Value Realization
Fund, L.P., a California limited partnership, Canyon Value Realization
Fund (Cayman), Ltd., GRS Partners II, and CPI Securities L.P., a
California limited partnership."
""Subordination Agreement" means that certain Intercreditor and
Subordination Agreement, dated as of April 28, 1998, by and between
Subordinating Lender and Coast, including any and all amendments
thereto."
Section 2. AMENDMENT TO SECTION 8.5 OF THE LOAN AGREEMENT. Section 8.5
of the Loan Agreement is hereby amended by deleting the word "or" at the end of
subsection (l), replacing the period at the end of subsection (m) with a
semicolon, and adding the following:
"(n) notwithstanding anything to the contrary contained herein, and
subject to the terms and provisions of the Subordination Agreement,
make any payment to Subordinating Lender of unpaid interest in excess
of Fifty-two Thousand Dollars ($52,000), or any payment of principal
that is owed to Subordinating Lender regardless of amount, in any given
month; or
(o) notwithstanding anything to the contrary contained herein,
make any payment to CSA of unpaid interest in excess of Seventeen
Thousand Five Hundred Dollars ($17,500), or any payment of principal
that is owed to CSA regardless of amount, in any given month."
Section 3. AMENDMENT TO SECTION 9.2 OF THE LOAN AGREEMENT. Section 9.2
of the Loan Agreement is hereby amended by deleting the second and third
sentence in such section in their entirety.
Section 4. AMENDMENT TO SECTION 2 OF THE SCHEDULE TO THE LOAN AND
SECURITY AGREEMENT. Section 2 of the Schedule to the Loan Agreement is hereby
amended by deleting such Section in its entirety and replacing it with the
following:
"On January 13, 2003 (the "Conversion Date"), and so long as no Default
or Event of Default has occurred and is continuing, the outstanding and
unpaid
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principal balance of One Million Eight Hundred Twenty-eight Thousand
One Hundred Seventy-nine Dollars and .62/00 ($1,828,179.62) shall be
converted to a term loan (the "Term Loan"), which Term Loan shall be
amortized at thirty-six (36) months, with installments of principal and
interest, equaling Fifty-eight Thousand Dollars ($58,000) per month and
a final installment of the entire outstanding and unpaid principal
balance being due and payable on February 28, 2005. Principal and
interest accruing on the Term Loan shall be payable monthly commencing
on the last Business Day of February 2003 and continuing monthly
thereafter until the Term Loan is paid in full. The amount of the Term
Loan set forth above shall be increased by a per diem amount, to cover
interest, and other expenses, incurred for each day after the
Conversion Date, until all the conditions required by that certain
Amendment Number Eight To Loan And Security Agreement, dated as of
January 13, 2003, are satisfied."
Section 5. AMENDMENT TO SECTION 3.1 OF THE SCHEDULE TO THE LOAN AND
SECURITY AGREEMENT TITLED INTEREST RATE. Section 3.1 of the Schedule to the Loan
Agreement titled Interest Rate is hereby amended by deleting such Section in its
entirety and replacing it with the following:
"A rate equal to 9.25% per annum, calculated on the basis of a 360-day
year for the actual number of days elapsed."
Section 6. AMENDMENT TO SECTION 3.1 OF THE SCHEDULE TO THE LOAN AND
SECURITY AGREEMENT TITLED MINIMUM MONTHLY INTEREST. Section 3.1 of the Schedule
to the Loan Agreement titled Minimum Monthly Interest is hereby amended by
deleting such Section in its entirety.
Section 7. AMENDMENT TO SECTION 8.1 OF THE SCHEDULE TO THE LOAN AND
SECURITY AGREEMENT. Section 8.1 of the Schedule to the Loan Agreement is hereby
amended by deleting such Section in its entirety and replacing it with the
following:
"1. Borrowers shall maintain a Debt Service Coverage Ratio,
measured quarterly at the end of each fiscal quarter, as
follows: (i) 0.90 to 1.00 for the fiscal quarter ending March
31, 2003; (ii) 1.10 to 1.00 for fiscal quarter ending June 30,
2003; and (iii) 1.25 to 1.00 for fiscal quarter ending
September 30, 2003, and for each and every fiscal quarter
thereafter.
2. Borrowers shall maintain a Quick Ratio as follows: (i) 0.30 to
1.00 for the fiscal quarters ending March 31, 2003 and June
30, 2003; (ii) 0.31 to 1.00 for the fiscal quarter ending
September 30, 2003; and (iii) 0.34 to 1.00, commencing with
the fiscal quarter ending December 31, 2003, and for each and
every fiscal quarter thereafter."
Section 8. AMENDMENT TO SECTION 9.1 OF THE SCHEDULE TO THE LOAN AND
SECURITY AGREEMENT. Section 9.1 of the Schedule to the Loan Agreement is hereby
amended by deleting such Section in its entirety and replacing it with the
following:
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"February 28, 2005, subject to automatic renewal as provided for in
Section 9.1 of the Agreement, and early termination as provided in
Section 9.2 of the Agreement."
Section 9. AMENDMENT TO SECTION 9.2 OF THE SCHEDULE TO THE LOAN AND
SECURITY AGREEMENT. Section 9.2 of the Schedule to the Loan Agreement is hereby
amended by deleting such Section in its entirety.
ARTICLE II
GENERAL PROVISIONS
Section 1. CONDITIONS. This Amendment shall be effective and the
effectiveness of this Amendment is expressly conditioned upon the receipt by
Coast of: (a) a copy of this Amendment duly executed by Borrowers; (b) a copy of
that certain Amendment Number One to Intercreditor And Subordination Agreement,
of even date herewith, duly executed by Borrowers and the Subordinated Lender,
as such term is defined therein; and (c) payment for all expenses, fully earned
and payable on the date hereof, incurred by Coast in connection with making the
amendments contained herein, as well as any and all unpaid expenses owed to
Coast by Borrowers pursuant to the terms and provisions of the Loan Agreement,
within a reasonable time from that date hereof.
Section 2. ENTIRE AGREEMENT. The Loan Agreement, as amended hereby,
embodies the entire agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings relating to the subject
matter hereof. Borrowers represent, warrant and agree that in entering into the
Loan Agreement, and consenting to this Amendment, they has not relied on any
representation, promise, understanding or agreement, oral or written, of, by or
with, Coast or any of its agents, employees, or counsel, except the
representations, promises, understandings and agreements specifically contained
in or referred to in the Loan Agreement, as amended hereby.
Section 3. CONFLICTING TERMS. In the event of a conflict between the
terms and provisions of this Amendment and the terms and provisions of the Loan
Agreement, the terms of this Amendment shall govern. In all other respects, the
Loan Agreement, as amended and supplemented hereby, shall remain in full force
and effect.
Section 4. MISCELLANEOUS. This Amendment shall be governed by and
construed in accordance with the laws of the State of California. This Amendment
may be executed in any number of counterparts, all of which taken together shall
constitute one agreement, and any party hereto may execute this Amendment by
signing such counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers thereunto duly authorized as of the
date first above written.
BORROWER:
MAI SYSTEMS CORPORATION,
a Delaware corporation
By: _____________________________________
Name: ___________________________________
Title: __________________________________
HOTEL INFORMATION SYSTEMS, INC.,
a Delaware corporation
By: _____________________________________
Name: ___________________________________
Title: __________________________________
COAST
COAST BUSINESS CREDIT,
a division of Southern Pacific Bank,
a California corporation
By: _____________________________________
Name: ___________________________________
Title: __________________________________
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