EXHIBIT 10.1
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the "Third Amendment") is made
and dated as of the 5th day of November, 1999, by and among QAD INC., a
Delaware corporation (the "Borrower"), BANK ONE, NA ("Bank One"), formerly
known as THE FIRST NATIONAL BANK OF CHICAGO, in its capacity as the sole
current Lender, and BANK ONE, as agent for the Lenders (in such capacity, the
"Agent").
RECITALS
A. Pursuant to that certain Credit Agreement dated as of April 19, 1999 by
and among the Borrower, the Lender and the Agent (as amended from time to time,
the "Credit Agreement"), the Lender agreed to extend credit to the Borrower on
the terms and subject to the conditions set forth therein. All capitalized terms
not otherwise defined herein shall have the meanings given to such terms in the
Credit Agreement.
B. The Borrower, the Agent and the Lender have agreed to amend the Credit
Agreement in certain respects as set forth more particularly herein.
NOW, THEREFORE, in consideration of the foregoing Recitals and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. FINANCING OF CERTAIN REAL PROPERTY. To reflect the agreement of the
Agent and the Lender to permit the Borrower to obtain financing secured by
certain existing Property owned by the Borrower, effective as of the Effective
Date (as defined in Paragraph 3 below):
(a) Section 6.11 of the Credit Agreement is hereby amended to delete
the existing subsection (iv) and to add new subsections (iv) and (v) to read in
their entirety as follows:
"(iv) Indebtedness in an amount not to exceed $7,500,000 secured
by Liens on the Ortega Property and the Mark Hill/Twin Pines Property as
provided in Section 6.15(viii) below.
(v) Other Indebtedness in an amount not to exceed $3,000,000 in
the aggregate outstanding at any date."
(b) Section 6.15 of the Credit Agreement is hereby amended to add a new
subsection (viii) thereto to read in its entirety as follows:
"(viii) Liens on the Ortega Property and the Mark Hill/Twin Pines
Property securing Indebtedness in a principal amount not to exceed $7,500,000;
provided that such Liens shall not extend to any property other than the Ortega
Property and the Mark Hill/Twin Pines Property, respectively."
(c) Section 2.1(ii) is hereby amended to read in its entirety as
follows:
"(ii) the aggregate Dollar Amount of Loans and Facility LCs
outstanding hereunder shall not exceed the lesser of:
(1) the Aggregate Commitment (as reduced concurrently
therewith) minus the sum of: (i) the aggregate Dollar Amount of Loans and
Facility LCs outstanding hereunder, plus (ii) the aggregate Dollar Amount of
Related Facility Loans outstanding under the Related Facility Credit Agreements,
and
(2) the Collateral Value of the Borrowing Base minus the sum
of: (i) the aggregate Dollar Amount of Loans and Facility LCs outstanding under
the Credit Agreement, plus (ii) the aggregate Dollar Amount of Parent Collateral
Supported Related Facility Loans outstanding under the Related Facility Credit
Agreements; and"
(d) Section 6.13 of the Credit Agreement is hereby amended to amend
subsection (ii) and renumber it as subsection (iii) and to add a new subsection
(ii), such amended and renumbered subsection (iii) and new subsection (ii) to
read in their entirety as follows:
"(ii) Transfers of the Ortega Property and/or the Mark Hill/Twin
Pines Property to single purpose Subsidiaries in connection with the financings
permitted under Sections 6.11(iv) and 6.15(viii)."
(iii) Other leases, sales and dispositions of its Property that,
together with all other Property of the Borrower and its Subsidiaries previously
leased, sold or disposed of (other than inventory in the ordinary course of
business) as permitted by this Section during the twelve-month period ending
with the month in which any such lease, sale or other disposition occurs, with a
fair market value not to exceed $5,000,000."
(e) Article I of the Credit Agreement is hereby amended to insert the
following new definitions, in correct alphabetical order, to read in their
entirety as follows:
"'Ortega Property' means that certain Property commonly referred
to as 2111 Ortega Hill road, Summerland, Santa Barbara County, California."
"'Mark Hill/Twin Pines Property' means that certain Property
commonly referred to as 6390 Via Real, Carpinteria, Santa Barbara County,
California."
2. REDUCTION IN COMMITMENT. In consideration of the agreement of the Agent
and the Lender to permit the incurrence of the secured Indebtedness referred to
in Paragraph 1 above, the Borrower, the Agent and the Lender hereby agree that
effective as of the Effective Date, the Commitment of Bank One, as the sole
current Lender under the Credit Agreement, shall be reduced from $30,000,000 to
$25,000,000, with the Aggregate Commitment thereby being reduced to $25,000,000.
3. EFFECTIVE DATE. This Third Amendment shall be effective, retroactive to
the date first above written, upon the date upon which the Agent has received:
(a) A copy of this Third Amendment, duly executed by all parties
hereto, including the current Subsidiary Borrowers;
(b) For payment to the Lender, immediately available funds in the
amount, if any, by which the aggregate Dollar Amount of Loans and Facility LCs
outstanding under the Credit Agreement after giving effect to the reduction in
Commitment set forth in Paragraph 2 above exceeds the lesser of:
(1) the Aggregate Commitment (as reduced concurrently
therewith) minus the sum of: (i) the aggregate Dollar Amount of Loans and
Facility LCs outstanding hereunder, plus (ii) the aggregate Dollar Amount of
Related Facility Loans outstanding under the Related Facility Credit Agreements,
and
(2) the Collateral Value of the Borrowing Base minus the sum
of: (i) the aggregate Dollar Amount of Loans and Facility LCs outstanding under
the Credit Agreement, plus (ii) the aggregate Dollar Amount of Parent Collateral
Supported Related Facility Loans outstanding under the Related Facility Credit
Agreements; and
(c) Such corporate resolutions, incumbency certificates and other
authorizing documentation as the Agent may require.
4. REAFFIRMATIONS. The Borrower hereby affirms and agrees that (a) the
execution and delivery by the Borrower of and the performance of its obligations
under this Third Amendment shall not in any way amend, impair, invalidate or
otherwise affect any of the obligations of the Borrower or the rights of the
Agent and the Lenders under the Borrower Security Agreement or any other
document, agreement or instrument made or given by the Borrower or any
Subsidiary Borrower in connection therewith, (b) the term "Secured Obligations"
as used in the Borrower Security Agreement and any Subsidiary Borrower Security
Agreement includes, without limitation, the Obligations of the Company under the
Credit Agreement as amended to date, including, without limitation, pursuant to
this Third Amendment, and (c) each of the Borrower Security Agreement and any
Subsidiary Borrower Security Agreement remains in full force and effect and
continues to constitute a first priority security interest in and lien upon the
Collateral.
5. NO OTHER AMENDMENT. Except as expressly amended herein, the Credit
Agreement and other Loan Documents shall remain in full force and effect as
currently written.
6. COUNTERPARTS. This Third Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
7. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Agent and each Lender as follows:
(a) The Borrower has the corporate power and authority and the legal
right to execute, deliver and perform this Third Amendment and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Third Amendment. This Third Amendment has been duly executed and
delivered on behalf of the Borrower and constitutes the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms.
(b) At and as of the date of execution hereof and at and as of
effective date hereof: (1) the representations and warranties of the Borrower
contained in the Credit Agreement and the other Loan Documents are accurate and
complete in all respects, and (2) there has not occurred a Default or an
Unmatured Default under the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be executed as of the day and year first above written.
QAD INC., a Delaware corporation
By___________________________________________
Name_________________________________________
Title________________________________________
BANK ONE, NA, formerly known as THE FIRST NATIONAL
BANK OF CHICAGO, as the sole current Lender and as
the Agent
By __________________________________________
Name ________________________________________
Title _______________________________________
ACKNOWLEDGED AND AGREED TO
as of the day and year first above written:
QAD AUSTRALIA PTY LIMITED
By: __________________________
Name: ________________________
Title: _______________________
QAD EUROPE BV
By: __________________________
Name: ________________________
Title: _______________________
QAD EUROPE LTD.
By: __________________________
Name: ________________________
Title: _______________________