EXHIBIT 10.21
ACKNOWLEDGEMENT, WAIVER AND AMENDMENT
TO
AMENDED AND RESTATED
WORKING CAPITAL FINANCING AND
TERM LOAN AGREEMENT
This Acknowledgement, Waiver and Amendment ("Amendment") to the Amended
and Restated Working Capital Financing and Term Loan Agreement is made as of
November 10, 1997 by and between Radius Inc., a California corporation
("Customer") and IBM CREDIT CORPORATION, a Delaware corporation ("IBM
Credit").
RECITALS:
A. Customer and IBM Credit have entered into that certain Amended and
Restated Working Capital and Financing and Term Loan Agreement, dated as of
August 30, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Agreement").
B. Customer is in default of one or more of its financial covenants
contained in the Agreement as more specifically set forth in Section 2 hereof;
C. Customer has requested that IBM Credit increase the Line of Credit by
Two Million Dollars ($2,000,000.00);
D. Whereas, IBM Credit is willing to increase the Line of Credit and
waive the defaults, in each case, on the terms and subject to the conditions
set forth in this Amendment;
AGREEMENT
NOW THEREFORE, in consideration of the premises set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Agreement.
Section 2. Acknowledgement. Customer acknowledges that the financial
covenants set forth in Attachment A to the Amended and Restated Working
Capital Financing and Term Loan Agreement are applicable to the financial
results of Customer for the fiscal year ending September 30, 1997, and
Customer was required to maintain such financial covenants at all times.
Customer further acknowledges its actual attainment was as follows:
Covenant Covenant
Covenant Requirement Actual
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(a) Minimum Working Capital Greater than $18,000,000 $7,900,000
(b) Current Assets to Current Liabilities Greater than 2.0:1.0 1.44:1.0
Section 3. Waivers to Agreement. IBM Credit hereby waives the defaults of
Customer with the terms of the Agreement to the extent such defaults are set
forth in Section 2 hereof.
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Section 4. Amendment. The Agreement is hereby amended as follows:
(A) Attachment A to the Agreement is hereby amended by deleting such
Attachment A in its entirety and substituting, in lieu thereof, the
Attachment A attached hereto.
(B) Attachment F to the Agreement is hereby amended by deleting
Attachment F thereto in its entirety, and substituting, in lieu thereof, the
Attachment F attached hereto.
(C) Section 1.1 of the Agreement is hereby amended by:
(1) deleting the definition of "Termination Date" in its entirety and
substituting, in lieu thereof, the following definition of "Termination
Date":
"Termination Date": shall mean the earlier of (i) March 31, 1998 and
(ii) the date the Line of Credit is reduced to zero dollars ($0.00)
pursuant to Section I of Attachment A of this Agreement.
(2) deleting the definitions of "Collateral Management Report" in its
entirety and substituting, in lieu thereof, the following definition
of "Collateral Management Report":
"Collateral Management Report": a report to be delivered by Customer to
IBM Credit from time to time, as provided herein, signed by an Approved
Officer, in the form of Attachment F hereto."
(D) Section 2.10 of the Agreement is hereby amended by:
(1) deleting from the definition of "Mandatory Pre-Payment Amount"
contained therein clause (1) thereof in its entirety and substituting,
in lieu thereof, the following clause (1):
"(1)(x) an amount equal to the proceeds of any sale, transfer or other
disposition set forth in clause (i) of the definition of Mandatory
Pre-Payment Date other than any sale, transfer or other disposition of
Customer's interest in Splash Technology Holdings, Inc. ("Splash") and
(y) in the case of any sale, transfer or other disposition of Customer's
interest in Splash on or after November 11, 1997, seventy-five percent
(75%) of proceeds of the sale, transfer or other disposition of the first
232,151 shares of common stock of Splash (such proceeds, the "Fee
Proceeds"), and fifty percent (50%) of the proceeds of the sale, transfer
or other disposition of the remaining shares of common stock of Splash."
(2) inserting in the seventh sentence of such Section 2.10 immediately
following the phrase "The Mandatory Pre-Payment Amounts", the new phrase
", other than the Fee Proceeds".
(E) Section 2.11 of the Agreement is hereby amended by deleting such
Section in its entirety and substituting, in lieu thereof, the following
Section 2.11:
"2.11. Sale of Splash Stock. (a) Customer shall use its best efforts to
sell 232,151 shares of common stock of Splash on or prior to December 31,
1997 at a price consented to by IBM Credit from time to time. A portion of
the proceeds of the sale of the first 232,151 shares of common stock of
splash sold by Customer on or after November 11, 1997 equal to the Fee
Proceeds shall be paid to IBM Credit as a "Cancellation Fee". Upon receipt by
IBM Credit of the Cancellation Fee, IBM Credit's options with respect to a
number of shares of common stock of Splash having a value on the day of the
sale by Customer of the
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common stock of Splash from which such Cancellation Fee is the proceeds
equal to such Cancellation Fee shall be automatically cancelled.
(b) Following the sale of the shares of common stock of Splash set forth
in paragraph 2.11(a) above, Customer may, from time to time, until
notified by IBM Credit otherwise in its sole discretion, sell additional
shares of common stock of Splash; PROVIDED that fifty percent (50%) of
the proceeds of any such sale are applied in accordance with Section
2.10; PROVIDED, FURTHER, after giving effect to any such sale the unsold
common stock of Splash owned by Radius (Cayman Islands) Inc. and pledged
to IBM Credit, excluding any shares subject to the option granted by
Customer to IBM Credit, multiplied by the closing bid price of a share
of common stock of Splash traded on the NASDAQ National Market as of the
last trading day of the preceding calendar week shall equal or exceed
two times the Outstanding Advances (after giving effect to the
application of the proceeds of such sale)."
Section 5. Additional Requirements. The Agreement is hereby amended by
inserting therein the following new terms:
(1) Customer agrees to pay IBM Credit a documentation fee equal to Five
Thousand Dollars ($5,000.00) on or prior to November 21, 1997.
(2) Customer shall enter into agreements, in form and substance satisfactory
to IBM Credit, with the broker selling the common stock of Splash (a)
instructing such broker that all proceeds of the sale of the common stock of
Splash shall be immediately transferred, via wire transfer, to account number
0351777270 at Silicon Valley Bank, ABA Xx. 000000000, Xxxxx Xxxxx,
Xxxxxxxxxx, (b) wherein the broker acknowledges the security interest of IBM
Credit in the Splash common stock and the proceeds thereof, (c) wherein the
broker agrees to return the certificates representing any unsold shares of
Splash common stock to IBM Credit upon its request, and (d) containing such
other terms and conditions as IBM Credit may reasonably request. Radius shall
also enter into agreements with such other third parties as IBM Credit may
reasonably request in order to protect its perfected, first priority security
interest in the Splash common stock.
(3) In consideration of the waivers by IBM Credit of the defaults of Customer
under the Agreement for the fiscal quarter ending September 30, 1997,
Customer shall pay to IBM Credit a waiver fee equal to Twenty-Five Thousand
Dollars ($25,000.00) on or prior to November 21, 1997. Such waiver fees
payable to IBM Credit hereunder shall be non-refundable and shall be in
addition to any other fees IBM Credit may charge to Customer.
Section 6. Rights and Remedies. Except to the extent specifically waived
herein IBM Credit reserves any and all rights and remedies that IBM Credit
now has or may have in the future with respect to Customer, including any and
all rights or remedies which it may have in the future as a result of
Customer's failure to comply with its financial covenants to IBM Credit.
Except to the extent specifically waived herein neither this Amendment, any
of IBM Credit's actions or IBM Credit's failure to act shall be deemed to be
a waiver of any such rights or remedies.
Section 7. Governing Law. This Amendment shall be governed by and interpreted
in accordance with the laws which govern the Agreement.
Section 8. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement.
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IN WITNESS WHEREOF, this Amendment has been executed by duly authorized
representatives of the undersigned as of the day and year first above written.
RADIUS INC. IBM CREDIT CORPORATION
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxx
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Title: CFO Title: ACCOUNT EXECUTIVE
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