SCHEDULE TO
LOAN AND SECURITY AGREEMENT
BORROWER: QAD, INC.
ADDRESS: 6450 VIA REAL
XXXXXXXXXXX, XXXXXXXXXX 00000
DATE: JULY 3, 1996
This Schedule is an integral part of the Loan and Security Agreement between
GREYROCK BUSINESS CREDIT, A DIVISION OF NATIONSCREDIT COMMERCIAL CORPORATION
("GBC") and the above-borrower ("Borrower") of even date.
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1. CREDIT LIMIT
(Section 1.1): An amount not to exceed the lesser of: $20,000,000 at
any one time outstanding; or the sum of the following:
(a) RECEIVABLE LOANS. Loans (the "Receivable
Loans") up to the sum of the following percentages of
Borrower's Eligible Receivables (as defined below):
(i) 80% of the net amount of eligible U.S.
accounts; plus
(ii) The lesser of (A) 90% of the net
amount of eligible Hong Kong accounts which are subject
to a Guarantee in form and substance satisfactory to
GBC by the Export-Import Bank of the United States, or
(B) $2,000,000; plus
(iii) The lesser of 65% of the net amount of
eligible Netherlands accounts or $2,000,000; plus
(iv) The lesser of 65% of the net amount of
eligible United Kingdom accounts or $2,000,000; plus
(v) The lesser of 65% of the net amount of
eligible French accounts or $1,000,000; plus
(vi) The lesser of 65% of the net amount of
eligible German accounts or $2,000,000; plus
(vii) The lesser of 65% of the net amount of
eligible Australian accounts or $2,000,000.
(viii) The lesser of 65% of the net amount of
eligible Japanese accounts or $2,000,000.
(ix) The lesser of 65% of the net amount of
eligible Swedish accounts or $1,000,000.
References above to countries refer to Receivables
billed from and payable to offices in such countries,
even if bills are sent to, and payments are remitted
from, other countries. Currencies in which Receivables
are denominated shall be acceptable to GBC in its
reasonable business judgment. Borrower's subsidiaries
holding the Receivables referred to above in clauses
(iii)-(ix) shall provide cross-corporate guarantees and
first-priority security interests in such accounts and
other assets prior to the making of any Loans with
respect to the same.
(b) TERM LOAN. A Loan (the "Term Loan") in the
amount of $4,000,000, which shall be repayable in 60
equal monthly principal installments of $66,666 per
month, plus interest at the rate provided below, on the
terms set forth in the Secured Promissory Note of even
date;
(c) EQUIPMENT LOANS. Loans (the "Equipment
Loans") in a total amount not to exceed $4,000,000, for
the purchase by Borrower of new Equipment acceptable to
GBC, in an amount not to exceed 80% of the net purchase
price of the Equipment. The net purchase price of
Equipment means the purchase price thereof, as shown on
the applicable invoice, net of all charges for taxes,
freight, delivery, insurance, set-up, training,
manuals, fees, service charges and other similar items.
Equipment Loans shall be made in disbursements of not
less than $500,000 each. Each Equipment Loan shall be
repaid by the Borrower to GBC in 36 equal monthly
payments of principal, commencing on the first day of
the first month after the date the Equipment Loan was
made and continuing until the earlier of the date the
Equipment Loan has been paid in full or the date this
Agreement terminates by its terms or is terminated, as
provided in Sections 6.1-6.2 above, at which date the
entire unpaid principal balance of the Equipment Loans,
plus all accrued and unpaid interest thereon, shall be
due and payable.
"Eligible Receivables" shall mean Receivables arising in the ordinary course
of Borrower's business from the sale of goods or
rendition of services, which GBC, in its reasonable
business judgment, shall deem eligible for borrowing,
based on such considerations as GBC may from time to
time deem appropriate. Without limiting the fact that
the determination of which Receivables are eligible for
borrowing is a matter of GBC's reasonable discretion,
the following (the "MINIMUM ELIGIBILITY REQUIREMENTS")
are
the minimum requirements for a Receivable to be an
Eligible Receivable: (i) the Receivable must not be
outstanding for more than 120 days from its invoice
date, (ii) the Receivable must not represent progress
xxxxxxxx, (iii) the Receivable must not be subject to
any contingencies (including Receivables arising from
sales on consignment, guaranteed sale or other terms
pursuant to which payment by the Account Debtor may be
conditional), (iv) the Receivable must not be owing
from an Account Debtor with whom the Borrower has any
dispute (whether or not relating to the particular
Receivable), (v) the Receivable must not be owing from
an Affiliate of Borrower, (vi) the Receivable must not
be owing from an Account Debtor which is subject to any
insolvency or bankruptcy proceeding, or whose financial
condition is not acceptable to GBC, or which, fails or
goes out of a material portion of its business, (vii)
the Receivable must not be owing from the United States
or any department, agency or instrumentality thereof
(unless there has been compliance, to GBC's
satisfaction, with the United States Assignment of
Claims Act), (viii) the Receivable must not be owing
from an Account Debtor to whom Borrower is or may be
liable for goods purchased from such Account Debtor or
otherwise. If more than 50% of the Receivables owing
from an Account Debtor are outstanding more than 120
days from their invoice date (without regard to
unapplied credits) or are otherwise not Eligible
Receivables, then all Receivables owing from that
Account Debtor will be deemed ineligible for borrowing.
GBC may, from time to time, in its discretion, revise
the Minimum Eligibility Requirements, upon written
notice to the Borrower. Notwithstanding clauses
(ii)-(iii) above, Receivables for maintenance with
respect to which future maintenance on the part of the
Borrower is required, but which would otherwise be
Eligible Receivables, will continue to be Eligible
Receivables notwithstanding such required future
performance on the part of Borrower.
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2. INTEREST.
INTEREST RATE (Section 1.2):
The interest rate in effect throughout each calendar
month during the term of this Agreement shall be the
highest "LIBOR Rate" in effect during such month, plus
4.875% per annum, provided that the interest rate in
effect in each month shall not be less than 8% per
annum, and provided that the interest charged for each
month for all Obligations shall be a minimum of
$20,000, regardless of the amount of the Obligations
outstanding. Interest shall be calculated on the basis
of a 360-day year for the actual number of days
elapsed. "LIBOR Rate" has the meaning set forth in
Section 8 above.
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3. FEES (Section 1.3/Section 6.2):
Loan Fee: $200,000, payable concurrently herewith.
Termination Fee: NONE
NSF Check Charge: $15.00 per item.
Wire Transfers: $15.00 per transfer.
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4. MATURITY DATE
(Section 6.1): JULY 31, 1997, subject to automatic renewal as
provided in Section 6.1 above, and early
termination as provided in Section 6.2 above.
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5. REPORTING.
(Section 5.2):
Borrower shall provide GBC with the following:
1. Annual financial statements, as soon as available,
and in any event within 120 days following the end
of Borrower's fiscal year, certified by
independent certified public accountants
acceptable to GBC.
2. Quarterly unaudited financial statements, as soon
as available, and in any event within 30 days
after the end of each fiscal quarter of Borrower.
3. Monthly Receivable agings, aged by invoice date,
within 15 days after the end of each month.
4. Monthly accounts payable agings, aged by invoice
date within 15 days after the end of each month.
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6. BORROWER INFORMATION:
PRIOR NAMES OF
BORROWER
(Section 3.2): QAD, INC.
PRIOR TRADE
NAMES OF BORROWER
(Section 3.2):
EXISTING TRADE
NAMES OF BORROWER
(Section 3.2):
OTHER LOCATIONS AND
ADDRESSES (Section 3.3): See Exhibit A hereto.
MATERIAL ADVERSE
LITIGATION (Section 3.10): See Exhibit B hereto.
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7. OTHER PROVISIONS:
1. APPRAISAL. Borrower shall provide appraisals
to GBC with respect to the real property commonly
known as 0000 Xxxxxx Xxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxx (54,600 sq. ft. building) and Twin Pine
Ranch, 6390 Via Real, Carpenteria, California
(approx 34.42 acres), prepared by an appraiser
specified by GBC in accordance with FIRREA
guidelines and requirements, which appraisals
shall be completed and delivered to GBC within 60
days after the date hereof and shall be
satisfactory to GBC.
Borrower: GBC:
QAD, INC. GREYROCK BUSINESS CREDIT,
a Division of NationsCredit Commercial
Corporation
By
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President or Vice President By
-----------------------------------
Title
--------------------------------
By
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Secretary or Ass't Secretary
[The full text of Exhibit 3a has been omitted. Exhibit 3a contains the
addresses and contact information for the Company's chief executive office and
each of its and its subsidiaries' other offices.]
