EXHIBIT 10.3
FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (the "Fifth Amendment") is
made and dated as of the 26th day of May, 2000, by and among QAD INC., a
Delaware corporation (the "Borrower"), the Lenders, and BANK ONE, NA,
formerly known as The First National Bank of Chicago, 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 Lenders, and the Agent (as amended from time to
time, the "Credit Agreement"), the Lenders 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 has requested that the Agent and the Lenders reduce the
dollar commitment of the Lenders under the Credit Agreement and amend the Credit
Agreement in certain other respects and the Agent and the Lenders have agreed to
do so on the terms and subject to the conditions set forth 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. REDUCTION IN COMMITMENT. 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 $25,000,000 to $20,000,000, with the Aggregate Commitment thereby being
reduced to $20,000,000.
2. LIBERALIZATION OF RESTRICTIONS ON ACQUISITIONS. To reflect the
agreement of the Agent and the Lenders to liberalize the restrictions on
additional acquisitions by the Borrower and its Subsidiaries, Section 6.14 of
the Credit Agreement is hereby amended to read in its entirety as follows:
"6.14. INVESTMENTS AND ACQUISITIONS. The Borrower will not,
nor will it permit any Subsidiary to, make or suffer to exist any
Investments (including without limitation, loans and advances to, and
other Investments in, Subsidiaries), or commitments therefor, or to
create any Subsidiary or to become or remain a partner in any
partnership or joint venture, or to make any Acquisition of any Person,
except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Subsidiaries and
other Investments in existence on the date hereof and
described on SCHEDULE 6.14(ii).
(iii) The French Acquisition.
(iv) Other Acquisitions consummated from and after
May 1, 2000 to and including January 31, 2001 (the "Current
Acquisition Period"): (a) for a total consideration which,
when taken together with the total consideration for all other
Acquisitions by the Borrower and its Subsidiaries during the
Current Acquisition Period, would not exceed $5,500,000, and
(b) for a total cash consideration, which when taken together
with the total cash consideration for all other Acquisitions
by the Borrower and its Subsidiaries during the Current
Acquisition Period which cash consideration is payable on or
before January 31, 2001, would not exceed $3,000,000."
3. EFFECTIVE DATE. This Fifth 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 Fifth Amendment, duly executed by all
parties hereto; and
(b) 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 Fifth Amendment shall not in any way 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 Fifth
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 Fifth 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 Fifth Amendment and
has taken all necessary corporate action to authorize the execution, delivery
and performance of this Fifth Amendment. This Fifth 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 an
Event of Default or Potential Default under the Credit Agreement.
(c) Each of the representations and warranties set
forth in the Acknowledgment and Agreement attached hereto by each of the
Subsidiary Borrowers are accurate and complete in all respects.
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment
to be executed as of the day and year first above written.
QAD INC., a Delaware corporation
By
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Name
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Title
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BANK ONE, NA, formerly known as THE FIRST NATIONAL
BANK OF CHICAGO, as the sole Lender and as the
Agent
By
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James P. Moore, Senior Vice President
ACKNOWLEDGMENT AND AGREEMENT
OF SUBSIDIARY BORROWERS
Each of the undersigned Subsidiary Borrowers hereby acknowledges and
agrees and represents and warrants as follows:
1. Such Subsidiary Borrower has reviewed and acknowledges the
effectiveness of the Fifth Amendment and all previous amendments to the Credit
Agreement and related Loan Documents and confirms that the Fifth Amendment
constitutes, and each such previous amendment concurrently constituted, a
conforming amendment to the Related Facility Agreement to which such Subsidiary
Borrower is party and all documents, agreements and instruments made or given by
such Subsidiary Borrower in connection therewith. Without limiting the
generality of the foregoing, such Subsidiary Borrower acknowledges that the
modifications to pricing described in Paragraph 4 of the Fifth Amendment are
applicable to the pricing provisions of said Related Facility Agreement.
2. The execution and delivery by the Borrower and agreement by
the Borrower to the terms of the Fifth Amendment and the performance by the
Borrower of its obligations under the Fifth Amendment are conclusively binding
upon such Subsidiary Borrower and shall not in any way impair, invalidate or
otherwise affect any of the obligations of such Subsidiary Borrower or the
rights of the Agent and the Lenders under the Subsidiary Borrower Loan Documents
to which such Subsidiary Borrower is a party, including, without limitation,
under the Related Facility Agreement and the Subsidiary Borrower Security
Agreement.
3. Such Subsidiary Borrower has the corporate power and authority
and the legal right to execute, deliver and perform this Acknowledgment and
Agreement and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Acknowledgment and Agreement. This
Acknowledgment and Agreement has been duly executed and delivered on behalf of
such Subsidiary Borrower and constitutes the legal, valid and binding obligation
of such Subsidiary Borrower, enforceable against such Subsidiary Borrower in
accordance with its terms.
4. At and as of the date of execution hereof and at and as of
effective date hereof: (a) the representations and warranties of such Subsidiary
Borrower contained in the Related Facility Agreement and the Subsidiary Borrower
Security Agreement to which it is party are accurate and complete in all
respects, and (b) other than the Event of Default described in Paragraph 1 of
the Fifth Amendment, there has not occurred an Event of Default or Potential
Default under said Related Facility Agreement.
5. This Acknowledgment and Agreement 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.
Dated as of April 18, 2000.
QAD AUSTRALIA PTY LIMITED
By:
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Barry Anderson, Director
QAD EUROPE BV
By:
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Barry Anderson, Director
QAD EUROPE LIMITED
By:
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Barry Anderson, Director