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EXHIBIT 10.30
WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT ("Waiver and
Amendment"), dated as of December 17, 1996, is entered into by and between
QUARTERDECK CORPORATION (the "Borrower") and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION (the "Bank").
RECITALS
A. The Bank and the Borrower are parties to a Credit Agreement dated as
of February 14, 1996, as amended by that First Amendment to Credit Agreement
dated as of March 28, 1996, that Waiver and Second Amendment to Credit Agreement
dated as of August 13, 1996, and that Third Amendment to Credit Agreement dated
as of September 30, 1996 (as amended, the "Credit Agreement"), pursuant to which
the Bank has extended certain credit facilities to the Borrower and its
Acceptable Subsidiaries.
B. The Borrower has reported to the Bank the existence of certain
Events of Default under the Credit Agreement. The Borrower has requested that
the Bank waive certain Events of Default and agree to certain amendments to the
Credit Agreement.
C. The Bank is willing to waive certain Events of Default under the
Credit Agreement, and to amend the Credit Agreement, subject to the terms and
conditions of this Waiver and Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
used herein shall have the meanings, if any, assigned to them in the Credit
Agreement.
2. Defaults and Waiver.
(a) For purposes of this Waiver and Amendment, the "Existing
Defaults" shall mean:
(i) the Event of Default existing on this date under
Section 8.01(c) of the Credit Agreement as a consequence of a
breach of the negative covenant set forth at Section 7.12 of
the Credit Agreement solely for the quarter ended September
30, 1996 and thereafter through the Effective Date;
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(ii) the Event of Default existing on this date under
Section 8.01(c) of the Credit Agreement as a consequence of a
breach of the negative covenant set forth at Section 7.13 of
the Credit Agreement solely for the quarter ended September
30, 1996 and thereafter through the Effective Date;
(iii) the Event of Default existing on this date
under Section 8.01(c) of the Credit Agreement as a consequence
of a breach of the negative covenant set forth at Section 7.14
of the Credit Agreement solely for the quarter ended September
30, 1996 and thereafter through the Effective Date; and
(iv) the Event of Default existing on this date under
Section 8.01(c) of the Credit Agreement as a consequence of a
breach of the negative covenant set forth at Section 7.15 of
the Credit Agreement solely for the quarter ended September
30, 1996 and thereafter through the Effective Date.
(b) Subject to and upon the terms and conditions hereof, the
Bank hereby waives the Existing Defaults.
(c) Nothing contained herein shall be deemed a waiver of (or
otherwise affect the Bank's ability to enforce) any other default or
Event of Default, including without limitation (i) any default or Event
of Default as may now or hereafter exist and arise from or otherwise be
related to the Existing Defaults (including without limitation any
cross-default arising under the Credit Agreement by virtue of any
matters resulting from the Existing Defaults), and (ii) any default or
Event of Default arising at any time after the Effective Date and which
arises under the same provisions of the Credit Agreement as those
implicated by any of the Existing Defaults.
3. Amendments to Credit Agreement.
(a) Section 1.01 of the Credit Agreement shall be amended at
the defined term "Borrowing Base" by amending and restating such
defined term in its entirety as follows:
"'Borrowing Base': (i) as of any date of
determination thereof before March 31, 1997, an amount equal
to 65% of the value of all Eligible Accounts (net of all bad
debt reserves, reserves for returns, discounts and marketing
funds, or similar reserves applicable thereto) (such net
amount, the "Net Eligible Accounts") outstanding at such date,
and (ii) as of any
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date of determination thereof on or after March 31, 1997,
75% of the Net Eligible Accounts."
(b) Section 1.01 of the Credit Agreement shall be amended by
deleting the defined term "Permitted Acquisition Charges" in its entirety.
(c) Section 2.02 of the Credit Agreement shall be amended by
adding the following as new subsection (c) after subsection (b) thereof:
"(c) Notwithstanding anything herein to the contrary,
no election may be made to have all or portions of Dollar
Advances bear interest at the Offshore Rate or to convert any
Reference Rate Advance into an Offshore Rate Advance unless,
as of the end of the fiscal quarter immediately preceding the
date of the requested borrowing or conversion, (i) the ratio
on a consolidated basis of (A) the Borrower's total
liabilities (which shall include all outstanding Advances (or
the Equivalent Amount thereof) and the L/C Outstanding Amount,
and exclude the outstanding principal amount of the
Subordinated Notes) was less than l.25 times Tangible Net
Worth (for purposes of this subsection 2.02(c) only, Tangible
Net Worth shall include the outstanding principal amount of
the Subordinated Notes) and (ii) on a consolidated basis, the
Borrower's (A) unencumbered cash, but including cash subject
to encumbrances in favor of the Bank pursuant to the Credit
Documents, plus (B) unencumbered short-term marketable
securities, less (C) all outstanding Advances (or the
Equivalent Amount thereof) and the L/C Outstanding Amount,
exceeded $10,000,000. "
(d) Section 3.01 shall be amended and restated in its entirety
to read as follows:
"3.01 Requests for Credit. Each request for an extension of
credit shall be made in writing on a form acceptable to the Bank or in
any other manner acceptable to the Bank. Each request for an extension
of or renewal of credit (including issuances, amendments or renewals of
letters of credit) shall include a certification by the chief financial
officer of the Borrower that (i) the representations and warranties of
the Borrower contained in this Agreement are and shall be true on and
as of the date of each extension of credit (except to the extent such
representations and warranties expressly refer to an earlier date, in
which case they shall be true and
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correct as of such earlier date), (ii) immediately prior to
and immediately after giving effect to such extension of
credit, no Default or Event of Default exists or shall exist
and there shall have occurred no Material Adverse Effect, and
(iii) after giving effect to such extension of credit, (x) the
aggregate of (A) all Dollar Advances, (B) the Equivalent
Amount of all Local Currency Advances and (C) the L/C
Outstanding Amount shall not exceed the Credit Limit or the
Borrowing Base, and (y) the L/C Outstanding Amount shall not
exceed $2,000,000 or the Borrowing Base."
(e) Section 6.02(d) of the Credit Agreement shall be amended
and restated in its entirety as follows:
"(d) within 25 days after the end of each calendar month
(or, if there exists an Event of Default, more frequently as
may be required by the Bank), (i) a Borrowing Base
Certificate, (ii) a detailed aging of all accounts receivable
outstanding as of such last day in form and substance
reasonably requested by the Bank, and (iii) a statement of
cash and short-term marketable securities on hand as of such
last day in form and substance reasonably requested by the
Bank; and"
(f) Section 7.12 of the Credit Agreement shall be amended and
restated in its entirety as follows:
"7.12 Minimum Cash Balance. The Borrower shall not
permit, on a consolidated basis, at any time when the
Borrower's consolidated quick ratio as of the last day of the
fiscal quarter immediately preceding the time of determination
was less than 1.00: 1.00, its balance of unencumbered cash,
but including cash subject to encumbrances in favor of the
Bank pursuant to the Credit Documents, and unencumbered
short-term marketable securities (less all outstanding
Advances (or the Equivalent Amount thereof) and the L/C
Outstanding Amount) to be less than $3,000,000. For purposes
of this Section 7.12, the Borrower's consolidated quick ratio
shall mean the ratio of (i) the sum of unencumbered cash,
unencumbered short-term cash investments, unencumbered
marketable securities not classified as long-term investments
and unencumbered accounts receivable (net of any bad debt
reserve), but in each case including such item to the extent
subject to encumbrances in favor of the Bank pursuant to the
Credit Documents, to (ii) current liabilities (which shall
include all outstanding
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Advances (or the Equivalent Amount thereof) and the L/C
Outstanding Amount), in each case on a consolidated basis.
(g) Section 7.13 of the Credit Agreement shall be amended and
restated in its entirety as follows:
"7.13 Total Liabilities to Tangible Net Worth. The
Borrower shall not permit as of the last day of any fiscal
quarter on a consolidated basis the Borrower's total
liabilities (which shall include all outstanding Advances (or
the Equivalent Amount thereof) and the L/C Outstanding Amount,
and exclude the outstanding principal amount of the
Subordinated Notes) to exceed 2.00 times Tangible Net Worth.
For purposes of this covenant only, Tangible Net Worth shall
include the outstanding principal amount of the Subordinated
Notes."
(h) Section 7.14 of the Credit Agreement shall be amended and
restated in its entirety as follows:
"7.14 Tangible Net Worth. The Borrower shall not
permit as of the last day of any fiscal quarter on a
consolidated basis its Tangible Net Worth to be less (i) its
Tangible Net Worth as of September 30, 1996 plus (ii) the net
proceeds from any equity securities issued after September 30,
1996, plus (iii) any increase in stockholders' equity
resulting from the conversion of debt securities to equity
securities after September 30, 1996."
(i) Section 7.15 of the Credit Agreement shall be amended and
restated in its entirety as follows:
"7.15 Profitability. The Borrower shall not permit as
of the last day of any fiscal quarter for the fiscal quarter
then ending on a consolidated basis (i) a negative net
operating income, which shall be defined as income before any
deduction for interest expense, taxes, or extraordinary items,
and without giving effect to any interest or other
non-operating income or (ii) a negative net income, which
shall be defined as net income after tax (excluding
extraordinary items)."
(f) Exhibit A to the Credit Agreement shall be
amended and restated in its entirety in the form of Exhibit A attached hereto.
(g) Exhibit B to the Credit Agreement shall be amended
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and restated in its entirety in the form of Exhibit B attached hereto.
4. Representations and Warranties. The Borrower hereby represents and
warrants to the Bank as follows:
(a) Other than the Existing Defaults, no Default or Event of
Default has occurred and is continuing.
(b) The execution, delivery and performance by the Borrower of
this Waiver and Amendment have been duly authorized by all necessary
corporate and other action and do not and will not require any
registration with, consent or approval of, notice to or action by, any
Person (including any governmental authority) in order to be effective
and enforceable. The Credit Agreement as amended by this Waiver and
Amendment constitutes the legal, valid and binding obligations of the
Borrower, enforceable against it in accordance with its respective
terms, without defense, counterclaim or offset.
(c) Subject to the Existing Defaults, all representations and
warranties of the Borrower contained in the Credit Agreement are true
and correct.
(d) The Borrower is entering into this Waiver and Amendment on
the basis of its own investigation and for its own reasons, without
reliance upon the Bank or any other Person.
5. Effective Date. This Waiver and Amendment will become effective as
of the date first above written (the "Effective Date"), provided that each of
the following conditions precedent are satisfied:
(a) The Bank has received from the Borrower a duly executed
original (or, if elected by the Bank, an executed facsimile copy) of
this Waiver and Amendment and from Datastorm Technologies, Inc.
("Datastorm") a duly executed original (or, if elected by the Bank, an
executed facsimile copy) of a Pledgor Acknowledgement and Consent in
the form attached hereto (the "Consent").
(b) The Bank has received from the Borrower a copy of a
resolution passed by the board of directors of such corporation,
certified by the Secretary or an Assistant Secretary of such
corporation as being in full force and effect on the date hereof,
authorizing the execution, delivery and performance of this Waiver and
Amendment.
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(c) All representations and warranties contained herein are
true and correct as of the Effective Date.
(d) The Bank has received from the Borrower the amount of
$10,000, representing payment in full of a non-refundable amendment fee
which amount the Borrower hereby covenants to pay to the Bank on
demand.
6. Consent of Guarantor. The Borrower, as guarantor with respect to the
obligations of the Acceptable Subsidiaries to the Bank under the Credit
Agreement, as amended by this Waiver and Amendment, hereby reaffirms and agrees
that each Guaranty to which the Borrower is party, and all other documents and
agreements executed and delivered by the Borrower to the Bank in connection
therewith, are in full force and effect, without defense, offset or
counterclaim.
7. Reservation of Rights. The Borrower acknowledges and agrees that
neither the Bank's forbearance in exercising its rights and remedies in
connection with the Existing Defaults, nor the execution and delivery by the
Bank of this Waiver and Amendment, shall be deemed to create a course of dealing
or otherwise obligate the Bank to forbear or execute similar waivers under the
same or similar circumstances in the future.
8. Miscellaneous.
(a) Except as herein expressly amended, all terms, covenants
and provisions of the Credit Agreement are and shall remain in full
force and effect and all references therein and in the other Credit
Documents to such Credit Agreement shall henceforth refer to the Credit
Agreement as amended by this Waiver and Amendment. This Waiver and
Amendment shall be deemed incorporated into, and a part of, the Credit
Agreement.
(b) This Waiver and Amendment shall be binding upon and inure
to the benefit of the parties hereto and thereto and their respective
successors and assigns. No third party beneficiaries are intended in
connection with this Waiver and Amendment.
(c) This Waiver and Amendment shall be governed by and
construed in accordance with the law of the State of California.
(d) This Waiver and Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
Each of the
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parties hereto and Datastorm, by its execution and delivery of the
Consent, understands and agrees that this document (and any other
document required herein) may be delivered by any party thereto either
in the form of an executed original or an executed original sent by
facsimile transmission to be followed promptly by mailing of a hard
copy original, and that receipt by the Bank of a facsimile transmitted
document purportedly bearing the signature of the Borrower or Datastorm
shall bind the Borrower or Datastorm, as the case may be, with the same
force and effect as the delivery of a hard copy original. Any failure
by the Bank to receive the hard copy executed original of such document
shall not diminish the binding effect of receipt of the facsimile
transmitted executed original of such document which hard copy page was
not received by the Bank.
(e) This Waiver and Amendment, together with the Credit
Agreement, contains the entire and exclusive agreement of the parties
hereto with reference to the matters discussed herein and therein. This
Waiver and Amendment supersedes all prior drafts and communications
with respect thereto. This Waiver and Amendment may not be amended
except in accordance with the provisions of Section 9.05 of the Credit
Agreement.
(f) If any term or provision of this Waiver and Amendment
shall be deemed prohibited by or invalid under any applicable law, such
provision shall be invalidated without affecting the remaining
provisions of this Waiver and Amendment or the Credit Agreement,
respectively.
(g) The Borrower covenants to pay to or reimburse the Bank,
upon demand, for all reasonable costs and expenses (including
reasonable allocated costs of in-house counsel) incurred in connection
with the development, preparation, negotiation, execution and delivery
of this Waiver and Amendment and the administration of the Existing
Defaults, including without limitation appraisal, audit, search and
filing fees incurred in connection therewith.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Waiver and Amendment as of the date first above written.
QUARTERDECK CORPORATION
By: _______________________________
Title: ____________________________
By: _______________________________
Title: ____________________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: _______________________________
Title: Vice President
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