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EXHIBIT 10.32
EXECUTION COPY
MAI SUPPLEMENT AND AMENDMENT
This Supplement and Amendment (the "Supplement") dated as of January 31,
2001, is by and among MAI Systems Corporation, a Delaware corporation ("MAI")
and CPI Securities LP, a California limited partnership, The Value Realization
Fund, L.P., a Delaware limited partnership, The Value Realization Fund, L.P., a
Cayman Islands corporation and GRS Partners II (collectively, "Canyon").
RECITALS
A. MAI, Canyon and other parties are contemporaneously herewith entering
into that certain Subordination Agreement effective as of December 1, 2000 (the
"Subordination Agreement") together with the Rider to Subordination Agreement
among Canyon and CSA Private Limited ("Rider").
X. XXX is as of this date obligated to Canyon for unpaid principal and
interest under that certain Note Purchase Agreement, dated as of March 3, 1997
(as amended (i) by the Forbearance Agreement dated October 28, 1999, (ii) by
Amendment No. One dated as of February 14, 2000, and (iii) by Amendment No. Two
dated April 13, 2000, (collectively, the "Canyon Loan Agreement"), among MAI and
Canyon. Capitalized terms not defined herein shall have the meanings assigned to
such terms in the Canyon Loan Agreement.
X. XXX is also obligated to Canyon for reimbursement for outstanding
legal fees incurred in connection with the representation of Canyon in current
and former MAI transactions and amendments to the Canyon Loan Agreement.
X. XXX and Canyon wish to enter into this Supplement to confirm the
unpaid principal and interest currently owed to Canyon by MAI and to confirm the
payment of legal fees in connection with this transaction and ensure timely
payment to counsel for Canyon in connection with the prior transactions.
NOW THEREFORE, the parties agree as follows:
AGREEMENT
1. PRINCIPAL BALANCE. MAI acknowledges that as of January 31, 2001, it
is obligated to Canyon in the amount of $5,710,000.00, representing
$5,250,000.00 of original principal and $460,000.00 of unpaid interest and prior
loan waiver fees fully earned and added to principal as of the date hereof. MAI
acknowledges that from and after February 1, 2001 and thereafter unpaid interest
(or interest paid late) shall accrue and shall be added to principal and shall
thereafter accrue further interest as of the first day of each month. Payments
received shall be first applied to interest and then to principal. Canyon agrees
that notwithstanding the accrual of additional compounded interest, all
additional interest so calculated and added to principal shall
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be due when the Obligations are due, but no later than March 3, 2003. Therefore,
initially interest shall accrue at the rate of $11,973.08 per week (assuming the
two payments due of February 5 and 13, 2001 are made) and weekly amortizing
payments of $12,500.00 shall be due on the Obligations, and clauses 2(c) and (d)
of Amendment Number Two to Forbearance Agreement and shall be restated to read
as follows:
"(c) after the existing term bridge loan in favor of Coast in an
approximate principal amount as of April 13, 2000 of $1,075,000 plus an
additional amount of $300,000 (the "Coast Bridge Loan") is repaid in full, MAI
agrees to and shall pay to the Lenders $25,000 per week on the first Monday of
every week until the Obligations have been brought current in accordance with
the original Note Purchase Agreement dated as of March 3, 1997, without regard
to the Forbearance Agreements.
(d) once the Obligations are brought current (i.e., to a principal
balance of $5,250,000), MAI shall make weekly payments of interest on the
Obligations at the rate called for in the Note Purchase Agreement (approximately
$11,105.77 per week), and all scheduled payments of principal, until such
Obligations have been repaid in full in accordance with their terms; provided,
however, that MAI agrees that the maturity of the Obligations shall restated to
March 3, 2003, and that Canyon is authorized to xxxx the Notes accordingly, and
provided further that MAI agrees to pay a "final payment fee" to Lenders of
$50,000 upon the due date of the Obligations (whether by acceleration or
prepayment or on maturity), and Lenders agree that such $50,000 amount shall not
bear interest unless not paid when due."
2. OUTSTANDING LEGAL FEES. MAI acknowledges that it is obligated to
Sidley & Austin the sum of $16,294.22 representing fees and costs billed through
November 30, 2000 and payments received through January 31, 2001. Sidley &
Austin has agreed to accept a discount of $7,625.00 if payment is received on or
before March 1, 2001, and MAI has agreed to pay the discounted amount by such
date.
3. PAYMENT OF FEES. MAI agrees to pay to counsel for Canyon all of its
fees reasonably incurred in connection with the Subordination Agreement and the
Rider and for the preparation of this Supplement within thirty (30) days of
presentation of an invoice for the foregoing.
4. NO PAYMENT ON SUBORDINATED DEBT IF DEFAULT. MAI covenants and agrees
that it shall make no payments on any obligations owed to GetronicsWang Co. LLC
or CSA Private Limited if, at such time, it is not then current in its payment
obligations owed to Canyon and there is no other Default or Event of Default now
existing under the Canyon Loan Agreement.
5. FAILURE TO PAY. Failure to pay any amounts set forth above shall be
an "Event of Default" under the Canyon Loan.
6. REPRESENTATIONS AND WARRANTIES. MAI hereby represents and warrants to
Canyon that, as of the date of this Supplement:
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(A) No Default or Event of Default is continuing other than the
failure to pay $50,000 in past due interest, which amount MAI covenants
to pay $25,000 on February 5, 2001 and $25,000 on February 13, 2001.
(B) The execution and delivery of this Supplement 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.
(C) 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 Canyon Loan Agreement.
7. LIMITATIONS. This Supplement, the Subordination Agreement and the
Rider 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 Canyon Loan
Agreement other than the provisions thereof which are specifically and
explicitly covered hereby, (ii) prejudice any right or rights which Canyon may
now have or may have in the future under or in connection with the Canyon Loan
Agreement, (iii) require Canyon to agree to a similar transaction on a future
occasion or (iv) create any rights herein to another person, entity or other
beneficiary or otherwise, except to the extent specifically provided herein.
8. NO OTHER CHANGES. Other than as set forth herein, all provisions of
the Canyon Loan Agreement shall remain in full force and effect.
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IN WITNESS HEREOF, the parties have executed this Supplement as of the
date first written above.
"CANYON"
CPI SECURITIES LP, THE VALUE REALIZATION FUND, L.P.,
a California limited partnership, a Delaware limited partnership
By: Canpartners Incorporated, By: Canpartners Investments III, L.P.,
a California corporation, a California limited partnership,
its general partner its general partner
By: Canyon Capital Advisors LLC,
a Delaware limited liability company,
By: its general partner
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Name:
Title:
By:
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Name:
Its Managing Director
THE CANYON VALUE REALIZATION FUND GRS PARTNERS II
(CAYMAN), LTD.
By: MeesPierson (Cayman) Limited,
its Administrator
By:
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Name:
By: Title:
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Name:
Title:
AGREED AND ACCEPTED: ACKNOWLEDGED:
MAI SYSTEMS CORPORATION, COAST BUSINESS CREDIT,
a Delaware corporation a division of Southern Pacific Bank
By: By:
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Name: Name:
Title: Title:
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