Exhibit 10.1
FOURTH AMENDMENT TO FORBEARANCE LETTER AGREEMENT
AND AMENDMENT AGREEMENT
This Fourth Amendment to Forbearance Letter Agreement and Amendment
Agreement (the "Fourth Amendment") is dated as of November 15, 1999 (the "Fourth
Amendment Closing Date") and is made and entered into by and among First Union
National Bank, as Collateral Agent, Administrative Agent and Issuing Lender (in
all such capacities, the "Agent"), Fleet Bank, N.A., as Lender, Citizens Bank of
Massachusetts, successor in interest to State Street Bank and Trust Company, as
Lender and Mellon Bank, N.A., as Lender (all of the foregoing, individually, a
"Lender," and collectively, the "Lender Group") and Condor Technology Solutions,
Inc., Computer Hardware Maintenance Company, Inc., Decision Support Technology,
Inc., Federal Computer Corporation, Global Core Strategies Acquisition, Inc.,
Interactive Software Systems Incorporated, Inventure Group, Inc., LINC Systems
Corporation, Xxxxxx Associates, Inc., Management Support Technology Corp., MIS
Technologies, Inc., Powercrew, Inc., Titan Technologies Group L.L.C., U.S.
Communications, Inc. and Condor System Solutions, Inc., as Borrowers
(collectively, the "Borrowers").
BACKGROUND
A. Pursuant to various loan agreements and documents, the Lender Group
has extended certain Revolving Loans (the "Revolving Credit Facility") and a
Term Loan Facility (the "Term Loan Facility" and, together with the Revolving
Credit Facility, the "Facilities") to the Borrowers. Such loan agreements and
documents (collectively, the "Existing Loan Documents") include, without
limitation, the following:
(1) that certain Credit Agreement dated as of April 16, 1999
by and among the Borrowers, the Lenders (including First Union National Bank, as
Lender) referred to therein and the Agent (as amended from time to time prior to
the Fourth Amendment Closing Date, the "Existing Credit Agreement," and as
amended hereby and from time to time hereafter, the "Credit Agreement");
(2) that certain Collateral Agreement dated as of April 16,
1999, by the Borrowers, as Grantors, in favor of the Agent (the "Collateral
Agreement");
(3) those certain Revolving Credit Notes each dated April 16,
1999, by the Borrowers in favor of each of the Lenders (collectively, the
"Revolving Credit Notes");
(4) that certain Term Note dated April 16, 1999, by the
Borrowers in favor of First Union National Bank (the "Term Note," and together
with the Revolving Credit Notes, the "Notes");
(5) various Uniform Commercial Code financing statements,
corporate authorization documents, and other loan and security documents
executed and delivered by any
one or more of either the Lenders or the Borrowers in connection with the
Facilities prior to the Fourth Amendment Closing Date; and
(6) that certain Forbearance Letter Agreement dated as of July
23, 1999, as amended by the First Amendment to Forbearance Letter Agreement
dated as of July 30, 1999, by and among the Borrowers and the Lenders party
thereto, and the Second Amendment to Forbearance Letter Agreement dated as of
August 13, 1999, as amended, by and among the Borrowers and the Lenders party
thereto, that certain Third Amendment to Forbearance Letter Agreement and
Amendment Agreement dated as of August 27, 1999 and this Fourth Amendment.
As used herein, the term "Loan Documents" shall mean this Fourth Amendment, the
other Forbearance Documents (hereinafter defined), the Existing Loan Documents,
and all other documents now or hereafter entered into by and among the Lenders,
the Borrowers and/or any of them and/or any guarantors, mortgagors or pledgors
to evidence and/or secure the Facilities and/or any of the other Obligations
(hereinafter defined). All capitalized terms contained herein which are not
otherwise defined shall have the definitions set forth in the Credit Agreement.
B. The Lender Group and the Borrowers are parties to that certain
Forbearance Letter Agreement dated July 23, 1999, by and among the Borrowers and
the Lender Group (as amended, the "Forbearance Letter Agreement"), pursuant to
which the Lender Group agreed to implement a limited forbearance period which
commenced on the date thereof and continued until the earlier to occur of the
following (as the case may be, the "First Forbearance Termination Date"): (i)
November 15, 1999; or (ii) at the Lender Group's option, the occurrence of a
Forbearance Event of Default.
C. In order to provide the Borrowers with additional time to take such
actions as may be necessary or appropriate to address the Borrowers' current
financial difficulties, the Borrowers have requested that the Lender Group: (i)
forbear from taking action with respect to the Existing Events (as defined in
the Forbearance Letter Agreement) for the period from the First Forbearance
Termination Date through February 15, 2000; and (ii) amend certain provisions of
the Forbearance Documents and the Existing Loan Documents. Subject to the terms
and conditions of this Fourth Amendment, the Lender Group has agreed to this
request.
D. All terms capitalized but not otherwise defined herein shall have
the meanings ascribed to them in the Forbearance Letter Agreement, as amended,
or in the Credit Agreement, as applicable.
AGREEMENT
NOW THEREFORE, incorporating the Background herein, and for other good
and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the Lender Group
and the Borrowers agree as follows:
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ARTICLE I.- ACKNOWLEDGMENTS
I.1 ACKNOWLEDGMENT OF EXISTING EVENTS; EXISTING LOAN DOCUMENTS; WAIVER
OF DEFENSES. The Borrowers acknowledge that: (a) the Existing Events (as defined
in the Third Amendment and including, in addition, the failure of the Borrowers
to maintain: (i) Minimum Pro Forma EBITDA for their fiscal quarter ending
September 30, 1999 as required by Section 10.5 of the Credit Agreement and (ii)
Minimum Net Worth for their fiscal quarter ending September 30, 1999 as required
by Section 10.4 of the Credit Agreement) currently exist; (b) the Existing
Events are material in nature; and (c) the Existing Loan Documents and the
Forbearance Documents are valid and enforceable against the Borrowers in every
respect and all of the terms and conditions thereof are binding upon the
Borrowers. The Borrowers further acknowledge and agree that, as a result of the
Existing Events, the Lender Group is entitled immediately, and without further
notice or declaration to the Borrowers or any other Person, to accelerate the
Obligations and to exercise the Lender Group's rights and remedies under the
Loan Documents or otherwise. To the extent that any of the Loan Documents
require notification by the Lender Group to the Borrowers of the existence of a
default and an opportunity for the Borrowers to cure such a default, such notice
and period for cure have been properly given by the Lender Group or are hereby
waived by the Borrowers. To the extent that the Borrowers have any defenses,
setoffs, claims, or counterclaims to repayment of the Obligations or against the
Lender Group, such defenses, setoffs, claims, or counterclaims are hereby
waived.
I.2 ACKNOWLEDGMENT OF CURRENT OUTSTANDING OBLIGATIONS. As of November
15, 1999, the Borrowers are indebted to the Lender Group in an aggregate amount
equal to the principal sum (including the face amount of outstanding letters of
credit) of $50,491,504.80 apportioned as follows:
Revolving Credit Facility $20,434,431.95
Term Loan Facility 24,875,000.00
Letters of Credit 5,182,072.85
plus accrued but unpaid interest, plus the costs and expenses associated with
the Facilities incurred by any Lender and/or the Lender Group, including,
without limitation, reasonable attorneys' fees incurred by any Lender and/or the
Lender Group in the negotiation and preparation of the Loan Documents, this
Fourth Amendment and the documents related hereto (the foregoing amounts are
hereafter collectively referred to as the "Current Outstanding Obligations"),
all without offset, counterclaims or defenses of any kind. Nothing contained
herein shall alter, amend, modify or extinguish the obligation of the Borrowers
to repay the Obligations, and neither this Fourth Amendment nor any of the other
Forbearance Documents constitutes a novation of any of the Existing Loan
Documents.
I.3 ACKNOWLEDGMENT OF LIENS AND PRIORITY. Except for Permitted Liens,
pursuant to the Existing Loan Documents, to the best of Borrowers' knowledge,
the Lender Group holds first priority, perfected security interests in and liens
upon the Borrowers' assets, wherever located, including assets now owned or
hereafter acquired, and as more specifically described in the
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Existing Loan Documents. Such security interests and liens secure all of the
Obligations now or hereafter incurred, including, without limitation, the
Current Outstanding Obligations and all other amounts now or hereafter owed by
the Borrowers to the Lender Group under the Existing Loan Documents. For
purposes of this Fourth Amendment, the word "Obligations" shall mean any and all
obligations and liabilities of the Borrowers to the Lender Group, of every kind
and description, direct and indirect, absolute and contingent, sole, joint,
several, or joint and several, primary or secondary, due or to become due, now
existing or hereafter arising, regardless of how they arise or by what agreement
or instrument they may be evidenced or whether evidenced by any agreement or
instrument and includes obligations to perform acts and refrain from taking
actions as well as obligations to pay money, and also includes the Current
Outstanding Obligations.
I.4 REAFFIRMATION OF SECURITY INTERESTS; CROSS-COLLATERALIZATION. All
of the assets of the Borrowers pledged, assigned, conveyed, mortgaged,
hypothecated or transferred to the Lender Group pursuant to the Loan Documents
including, without limitation, all goods, accounts, chattel paper, contracts,
deposit accounts, documents, equipment, general intangibles, instruments,
intellectual property, inventory, investment property, all other property not
otherwise described above, all books and records pertaining to the foregoing
and, to the extent not otherwise included, all proceeds and products of any and
all of the foregoing and all collateral security and guarantees given by any
person with respect to any of the foregoing (collectively, the "Collateral")
constitute collateral security for all of the Obligations. The Borrowers hereby
grant to the Lender Group and reaffirm their prior conveyance to the Lender
Group of a continuing security interest in and lien on the Collateral as well as
a security interest in and lien on any and all funds and/or monies of the
Borrowers contained in accounts located at the Lender Group or at any of the
Lender Group's subsidiaries or affiliates.
ARTICLE II. - AMENDMENTS TO FORBEARANCE DOCUMENTS
AND LOAN DOCUMENTS
II.1 Paragraph 11 of the Forbearance Letter Agreement is hereby amended
and restated in its entirety as follows:
"11. Subject to the terms and conditions of this Forbearance
Letter Agreement, and without waiving the Existing Events, the
Lender Group agrees to forbear from enforcing its remedies
under the Loan Documents and applicable law as a result of the
Existing Events until the earlier to occur of the following
(as the case may be, the "Forbearance Termination Date"): (i)
February 15, 2000; or (ii) at the Lender Group's option, the
occurrence of a Forbearance Event of Default (as defined
herein)."
II.2 The following new definitions are hereby added to Section 1.1 of
the Existing Credit Agreement in appropriate alphabetical order:
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"Fourth Amendment Forbearance Extension Fee" means,
collectively, $400,000, all of which shall be earned by the
Lenders on the Fourth Amendment Closing Date, $150,000 of
which (the "First Payment") shall be payable to the Lenders
upon the Fourth Amendment Closing Date and $250,000 of which
(the "Second Payment") shall be payable upon the Forbearance
Termination Date; provided, however, the Lenders will waive
their right to receive the Second Payment if all Obligations
are satisfied in full prior to the Forbearance Termination
Date.
"Fourth Amendment" shall mean that certain Fourth Amendment to
Forbearance Letter Agreement and Amendment Agreement dated as
of the Fourth Amendment Closing Date by and among the
Borrowers and the Lender Group.
"Fourth Amendment Closing Date" means November 15, 1999.
II.3 The following definitions, as set forth in Section 1.1 of the
Existing Credit Agreement, are hereby amended and restated in their entirety to
read as follows:
"Commitment Fee Rate" has the meaning set forth in Section
5.3; provided, however, that notwithstanding anything in
Section 5.3 to the contrary, the Commitment Fee Rate shall be
based upon a Revolving Credit Commitment of $25,616,504.80.
"Forbearance Letter Agreement" shall mean that certain
Forbearance Letter Agreement dated as of July 23, 1999, by and
among the Borrowers and the Lender Group, as amended by the
First Amendment to Forbearance Letter Agreement dated as of
July 30, 1999, by and among the Borrowers and the Lenders
party thereto, and the Second Amendment to Forbearance Letter
Agreement dated as of August 13, 1999, as amended by the First
Amendment to Second Amendment to Forbearance Letter Agreement
dated as of August 20, 1999, by and among the Borrowers and
the Lenders party thereto, the Third Amendment to Forbearance
Letter Agreement and Amendment Agreement dated as of August
27, 1999, by and among the Borrowers and the Lenders party
thereto and the Fourth Amendment.
"Forbearance Period" shall mean the period of time from August
27, 1999, until the Forbearance Termination Date.
"Forbearance Termination Date" shall mean the earlier of (i)
February 15, 2000, or (ii) at the Lender Group's option, the
occurrence of a Forbearance Event of Default.
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"Revolving Credit Commitment" means (a) as to any Lender, the
obligation of such Lender to make Revolving Credit Loans to
the account of the Borrowers hereunder in an aggregate
principal amount at any time outstanding not to exceed the
amount set forth opposite such Lender's name on Schedule 1
hereto as such amount may be reduced or modified at any time
or from time to time pursuant to the terms hereof and (b) as
to all Lenders, the aggregate commitment of all Lenders to
make Revolving Credit Loans to the Borrowers pursuant to
Section 2.3 in an outstanding aggregate principal amount,
inclusive of the outstanding L/C Commitment, not to exceed at
any time $25,616,504.80.
II.4 The definition of "Loan Documents" as set forth in Section 1.1 of
the Existing Credit Agreement is hereby amended to include, in addition to all
other documents referenced therein, this Fourth Amendment and each of the other
Forbearance Documents.
II.5 Section 5.1(d) of the Existing Credit Agreement is hereby amended
by replacing the last sentence thereof with the following:
"Notwithstanding any provision in this Section 5.1(d) or in
this Agreement to the contrary, upon the occurrence and
continuation of any Forbearance Event of Default, all
outstanding Loans shall immediately and without the need for
notice to the Borrowers, bear interest at a rate per annum of
two percent (2%) in excess of the Base Rate, as modified
pursuant to the Third Amendment."
II.6 Section 10.9 of the Existing Credit Agreement is amended and
restated in its entirety to read as follows:
10.9 CUMULATIVE RECEIPTS AND EXPENSES. The Borrowers must have
cumulative actual receipts and expenses, on a cumulative four
week basis, measured every two weeks (but not on the two week
anniversary of the Fourth Amendment), equal to Borrowers'
projected receipts and expenses on the ninety (90) day cash
flow so that net cash inflows/outflows for trailing four weeks
have a variation of not more than $1,000,000 below
projections. For purposes of this Section, professional fees
and costs incurred by the Borrowers, professional fees and
costs incurred by the Lenders and paid by the Borrowers and
Excess Cash Flow paid by the Borrowers to the Lenders in
accordance with Section 10.12 hereof shall be added to the
variation allowed hereunder.
II.7 Article X of the Existing Credit Agreement is hereby supplemented
by adding the following sections:
Section 10.11 MINIMUM MONTHLY EBITDA
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As of the end of the months below specified the Borrowers
shall maintain EBITDA equal to or greater than the respective
amounts set forth below:
November 1999 ($733,000)
December 1999 ($742,000)
January 2000 $172,000
Solely for purposes of calculating EBITDA in accordance with
this covenant, professional fees and costs incurred by the
Borrowers and professional fees and costs incurred by the
Lenders and paid by the Borrowers shall be added back to
EBITDA.
Section 10.12 EXCESS CASH FLOW
The Borrowers shall pay to the Lenders, within 25 days after
the end of each month, 25% of any "Excess Cash Flow" for the
preceding month. Excess Cash Flow shall be calculated on a 4/5
week basis based upon the number of weeks comprising that
particular month.
The term "Excess Cash Flow" with respect to any month shall
equal Net Income as reported by the Borrowers, on a
consolidated basis, with respect to such month
a. Plus the following with respect to such month:
(1) Depreciation and amortization expense;
(2) Any increase in the deferred tax liability
or decrease in the deferred tax benefit
account;
(3) Any unrealized loss on property, equipment
and improvements;
b. Less the following with respect to such month:
(1) Any decrease in the deferred tax liability
or increase in the deferred tax benefit
account;
(2) Principal reductions made on the Term Loan
during such year;
(3) And any realization of and/or any recovery
of any previously unrealized write down on
property, equipment and improvements, which
unrealized write down had been added back
into Net Income to calculate Excess Cash
Flow in a prior period.
II.8 Section 12.1(o) of the Existing Credit Agreement is hereby amended
and restated in its entirety to read as follows:
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"(o) DEFAULT IN PERFORMANCE UNDER FORBEARANCE
DOCUMENTS. Notwithstanding any provision in this
Agreement to the contrary, the Borrowers, or any
other obligor, or any one or more of them shall fail
to perform or observe any covenant, term, agreement
or condition of the Third Amendment, the Fourth
Amendment or any other Forbearance Document."
ARTICLE III.- ADDITIONAL COVENANTS OF BORROWERS
The Borrowers jointly and severally, covenant and agree that
from the date hereof and until the satisfaction of the Obligations, unless the
Lender Group shall otherwise consent in writing:
III.1 EXISTING COVENANTS. Unless otherwise provided herein, the
Borrowers shall comply with each of their respective covenants set forth in the
Loan Documents.
III.2 FOURTH AMENDMENT FORBEARANCE EXTENSION FEE. The Borrowers shall
pay to the Lenders $150,000 of the Fourth Amendment Forbearance Extension Fee
(the "First Payment"), on the Fourth Amendment Closing Date. The Borrowers shall
pay to the Lenders $250,000 of the Fourth Amendment Forbearance Extension Fee
(the "Second Payment") on the Forbearance Termination Date; provided, however,
that the Lenders shall will waive their right to receive the Second Payment if
all of the Borrowers' Obligations are satisfied in full prior to the Forbearance
Termination Date.
III.3 TAX REFUNDS. The Borrowers shall pay over to the Lenders to
permanently reduce the outstanding principal balance of the Obligations any
refund of income taxes assigned to the Lenders in accordance with the Third
Amendment and the documents .
III.4 RETENTION OF MANAGEMENT. The Borrowers shall cause Condor
Technology Solutions, Inc. ("Condor") to continue to employ those persons
serving as Condor's chairman, chief executive officer and chief operating
officer as of the Fourth Amendment Closing Date in such capacities; provided,
however, that should such persons cease to be employed by Condor or cease to be
acting in such capacities, Condor shall have 30 days to replace such persons
with candidates reasonably acceptable to the Lenders.
III.5 EXTRAORDINARY RECEIPTS. Upon the receipt by any Borrower of any
non-ordinary course receipt (including, without limitation, the receipt of any
litigation proceeds), such Borrower shall pay over to the Lenders in permanent
reduction of the outstanding principal Obligations 100% of the net cash proceeds
of such extraordinary receipt.
ARTICLE IV.- FORBEARANCE BY THE LENDER GROUP
Subject to the terms and conditions of this Fourth Amendment, and
without waiving the Existing Events and the right to exercise rights and
remedies, the Lender Group agrees to forbear from enforcing its remedies under
the Loan Documents or applicable law as a result of the
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Existing Events until the earlier to occur of either one of the following (as
the case may be, the "Forbearance Termination Date"): (i) February 15, 2000; or
(ii) the occurrence of an Event of Default (other than the Existing Events)
under the Credit Agreement.
ARTICLE V.- CONDITIONS PRECEDENT TO FOURTH AMENDMENT
The Fourth Amendment is binding upon due execution thereof by
all parties thereto and the delivery of all documents required to be delivered
at closing. Any future deliveries required under the Fourth Amendment, the
Credit Agreement or any other Loan Document which are not made when due shall
constitute an event of default under the applicable document.
V.1 DOCUMENTS AND OTHER ITEMS TO BE DELIVERED TO THE LENDER GROUP. The
Borrowers shall deliver or cause to be delivered to the Lender Group, in form
and substance satisfactory to the Lender Group and its counsel, on the Fourth
Amendment Closing Date, the following (together with all Forbearance Documents
executed in connection with the Third Amendment, the "Forbearance Documents"):
a. this Fourth Amendment duly executed by the Borrowers;
b. Second Allonges to Revolving Credit Notes
c. Reaffirmation of Collateral Agreement
d. opinion of Condor's In-house Counsel as to
non-contravention, required consents, approvals, and
the due authorization, and due execution and validity
of the Forbearance Documents;
e. Certifications of Secretary executed by the
Secretaries of the Borrowers, certifying the
incumbency and signature of the officers of such
Borrowers executing this Fourth Amendment and all
other documents to be delivered by them pursuant
hereto, together with evidence of the incumbency of
such Secretary;
f. payment of each Lender's and the Lender Group's legal
fees, costs and expenses;
g. all fees due to the Lenders as of the Fourth
Amendment Closing Date including, but not limited to,
$150,000 of the Fourth Amendment Forbearance
Extension Fee, shall have been irrevocably paid in
full to the Lenders on the date(s) such fees were
due;
h. a detailed schedule setting forth the amounts and
sources of the tax refunds applied for or to be
applied for by the Borrowers; and
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i. such other documents as may be reasonably required by
the Lender Group.
V.2 PAYMENT OF LENDER GROUP'S LEGAL FEES. On or before the Fourth
Amendment Closing Date, the Borrowers shall pay to the Lender Group the amount
of the Lender Group's legal fees, expenses and costs including, without
limitation, any stamp or documentary tax or other similar taxes and any filing,
recording or lien search fees, incurred through the Fourth Amendment Closing
Date in connection with the Existing Events, the Loan Documents, this Fourth
Amendment, and all documents executed and negotiations undertaken in connection
with any of the foregoing. Each Borrower hereby agrees, and to the extent
provided in the Loan Documents, reaffirms its joint and several obligation under
the Loan Documents, to reimburse each of the Lenders for the following incurred
in connection with the Credit Facility: (a) legal fees and expenses, and (b)
fees and expenses of any appraisers or other professionals retained by counsel
to the Lenders. The Borrowers shall pay to the Lender Group the legal fees and
expenses incurred from and after the Fourth Amendment Closing Date and fees and
expenses of appraisers and other professionals retained by counsel to Lenders
after Fourth Amendment Closing Date. The foregoing fees and expenses will be
reimbursed upon submission by Agent. All Obligations provided for in this
Section shall survive any termination of this Fourth Amendment.
V.3 PAYMENT OF FEES AND COSTS. On or before the Fourth Amendment
Closing Date, or upon two (2) Business Days written notice by any Lender to the
extent that such Lender is unable to provide to the Borrowers on or before the
Fourth Amendment Closing Date a statement of fees and costs, the Borrowers shall
pay to each Lender and to the Lender Group the amount of each Lender's and the
Lender Group's fees and costs, including, without limitation, legal fees,
expenses and costs incurred by such Lender or the Lender Group in connection
with this Fourth Amendment and the other Loan Documents, if any. All Obligations
provided for in this Section 5.3 shall survive any termination of this Fourth
Amendment.
V.4 EXECUTION OF OTHER DOCUMENTS. At the Lender Group's request, within
two Business Days of submission thereof by the Lender Group, the Borrowers, or
any of them, shall execute and deliver to the Lender Group such other documents
and instruments, as the Lender Group, in its sole discretion, deems necessary or
convenient to carry out the terms of this Fourth Amendment and the other Loan
Documents.
V.5 CERTIFICATES OF GOOD STANDING. On or before November 29, 1999, the
Borrowers shall provide to the Lender Group good standing certificates for their
respective states of incorporation and evidence that they are duly authorized to
do business and are duly qualified as foreign corporations in all jurisdictions
wherein the nature of their businesses or properties make such qualification
necessary.
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ARTICLE VI. - REPRESENTATIONS AND WARRANTIES
To induce the Lender Group to enter into this Fourth Amendment
and as partial consideration for the terms and conditions contained herein, the
Borrowers make the following representations and warranties to the Lender Group,
each and all of which shall survive the execution and delivery of this Fourth
Amendment and all of the other documents executed in connection herewith:
VI.1 ORGANIZATION AND LOCATION.
a. The Borrowers are corporations duly incorporated,
organized, validly existing and in good standing under the laws of their
respective states of incorporation, and are duly authorized to do business and
are duly qualified as foreign corporations in all jurisdictions wherein the
nature of their businesses or properties make such qualification necessary, and
have the corporate power to own their respective properties and to carry on
their respective businesses as now conducted;
b. The Borrowers have the requisite corporate power and
authority to deliver and perform this Fourth Amendment and all of the documents
executed by them in connection herewith;
c. Every fictitious name, trade name, division or style under
which any Borrower or any other obligor (collectively with the Borrowers, the
"Obligors") conducts any business has been disclosed to the Lender Group in
writing together with the names of each and every jurisdiction in which the same
are utilized.
d. Every joint venture, partnership, enterprise or stock
ownership involvement of each Obligor has been disclosed to the Lender Group
herein on the Security Agreement Questionnaire delivered to the Lender Group in
connection with the Third Amendment;
e. Each affiliate and subsidiary of each of the Borrowers is
named on the Security Agreement Questionnaire delivered to the Lender Group in
connection with the Third Amendment; and
f. The information contained on each of the Security Agreement
Questionnaires is true, complete and accurate as of the Fourth Amendment Closing
Date.
VI.2 AUTHORIZATION; VALID AND BINDING AGREEMENT. All corporate action
required to be taken by the Borrowers and their respective officers, directors
and stockholders and all actions required to be taken by the principals of the
Borrowers for the authorization, execution, delivery and performance of this
Fourth Amendment and other documents contemplated hereby have been taken. Each
person executing this Fourth Amendment on behalf of any of the Borrowers is an
authorized officer of such Borrower. This Fourth Amendment is, and each of the
documents executed pursuant hereto will be, legal, valid, and binding
obligations of the party or parties
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thereto, enforceable against each such party in accordance with their respective
terms, subject only to bankruptcy, insolvency, reorganization, moratorium and
other laws or equitable principles affecting creditors' rights generally.
VI.3 LOCATION OF ASSETS OF BORROWERS. The locations of all of the
Borrowers' inventory, equipment, warehouses, sales offices, main offices, and
product distribution centers are listed on the Security Agreement Questionnaire
delivered to the Lenders in connection with the Third Amendment.
VI.4 REAL PROPERTY. None of the Borrowers owns any real property.
VI.5 COMPLIANCE WITH LAWS. Each of the Borrowers is in compliance in
all material respects with all laws, regulations and requirements applicable to
its business, and has not received, and has no knowledge of, any order or notice
of any governmental investigation or of any violations or claims of violation of
any law, regulation or any governmental requirement.
VI.6 NO CONFLICT; GOVERNMENT APPROVALS. The execution, delivery and
performance by the Borrowers of this Fourth Amendment and the other documents
executed in connection herewith will not:
a. conflict with, violate or result in the breach of any
provisions of any applicable law, rule, regulation or order; or
b. conflict with or result in the breach of any provision of
their respective Articles of Incorporation, operating agreements,
charters, and/or by-laws. No authorization, consent or approval of, or
other action by, and no notice of or filing with, any governmental
authority or regulatory body is required to be obtained or made by any
of the Borrowers for the due execution, delivery and performance of
this Fourth Amendment.
VI.7 THIRD PARTY CONSENTS. The execution, delivery and performance by
the Borrowers of this Fourth Amendment and the documents related hereto will
not:
a. require any consent or approval of any person or entity
which has not been obtained prior to, and which is not in full force
and effect as of, the date of this Fourth Amendment;
b. result in the breach of, default under, or cause the
acceleration of any obligation owed under any loan, credit agreement,
note, security agreement, lease indenture, mortgage, loan document or
other agreement by which any of them are bound or affected; or
c. result in, or require the creation or imposition of, any
lien or encumbrance on any of their respective properties other than
those liens or security interests in favor of the Lender Group or the
liens or security interests disclosed to the Lender Group in the Loan
Documents.
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VI.8 FINANCIAL STATEMENTS; REPORTING.
a. Except as otherwise disclosed in writing (including by the
delivery of financial statements) to the Lender Group prior to the Fourth
Amendment Closing Date, all balance sheets, reports, Borrowing Base
certificates, budgets, reconciliations, accounts receivable reports, and other
financial information supplied to the Lender Group with respect to the Borrowers
have been, if applicable, in conformity with GAAP, and present fairly the
financial condition and results of operations for the period covered thereby of
the Borrowers. All balance sheets, reports, Borrowing Base certificates,
budgets, reconciliations, accounts receivable reports, and other financial
information to be supplied to the Lender Group with respect to the Borrowers
will be prepared in form acceptable to the Lender Group and, if applicable, in
conformity with GAAP, and will present fairly the financial condition and
results of operations for the period covered thereby of the Borrowers.
b. None of the Borrowers has actual knowledge of any facts,
other than those already disclosed in writing to the Lender Group that
materially adversely affect or, in so far as can be foreseen, will materially
adversely affect any Borrower's ability to perform such Borrower's obligations
under this Fourth Amendment and other Loan Documents. After the Fourth Amendment
Closing Date, the Borrowers will notify the Lender Group of any facts which
became known to the Borrowers on or after the Fourth Amendment Closing Date
which may materially adversely affect any Borrower's ability to perform such
Borrower's obligations under this Fourth Amendment and other Loan Documents.
VI.9 LITIGATION AND CONTINGENT LIABILITIES. Except as previously
disclosed to the Lenders in writing, no action, suit, litigation, administrative
or governmental proceeding is pending, or to the knowledge of any officer of any
of the Borrowers, is threatened against any of the Borrowers or any of their
respective properties in which the amount involved exceeds $100,000.00 in the
aggregate.
VI.10 EXCLUSIVE AND FIRST PRIORITY PERFECTED LIEN. Subject to the
Intercreditor Agreement granting certain Lien priorities in favor of Deutsche,
the best of the Borrowers' knowledge and except for Permitted Liens, the Lender
Group has, as of the date of this Fourth Amendment, and shall continue to have,
until all of the Obligations are paid in full, first priority, valid perfected
liens upon and security interests in all of the Collateral to secure the payment
and performance of all of the Obligations.
VI.11 NO UNTRUE OR MISLEADING STATEMENTS. Neither this Fourth Amendment
nor any other document executed in connection herewith contains any untrue
statement of a material fact or omits any material fact necessary in order to
make the statement made, in light of the circumstances under which it was made,
accurate.
VI.12 NO EVENTS OF DEFAULT. Other than the Existing Events, no default
or Event of Default has occurred as of the date hereof under any of the Loan
Documents.
-13-
VI.13 OTHER REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
reaffirm all of their representations and warranties to the Lender Group
contained in the Loan Documents, and warrant that such representations and
warranties, not otherwise rendered untrue by the Existing Events as disclosed by
the Borrowers herein, are true and correct as of the date of this Fourth
Amendment.
ARTICLE VII.- MISCELLANEOUS
VII.1 CONTINUING EFFECT. Except as amended hereby, all of the Loan
Documents including, but not limited to, the Forbearance Letter Agreement as the
same has been amended from time to time, shall remain in full force and effect
and bind and inure to the benefit of the parties thereto and are hereby ratified
and confirmed.
VII.2 NOTICES. Any notice given pursuant to this Fourth Amendment or
pursuant to any document comprising or relating to this Fourth Amendment shall
be given in accordance with the Credit Agreement.
VII.3 INDEMNIFICATION.
If, after receipt of any payment of all or any part of the
Obligations, the Lender Group is compelled to surrender such payment to any
person or entity for any reason (including, without limitation, a determination
that such payment is void or voidable as a preference or fraudulent conveyance,
an impermissible setoff, or a diversion of trust funds), then this Fourth
Amendment and the other Loan Documents shall continue in full force and effect,
and the Borrowers shall be jointly and severally liable for, and shall
indemnify, defend and hold harmless the Lender Group with respect to the full
amount so surrendered. The provisions of this section shall survive the
termination of this Fourth Amendment and the other Loan Documents and shall be
and remain effective notwithstanding the payment of the Obligations, the
cancellation of the Notes, the release of any lien, security interest or other
encumbrance securing the Obligations or any other action which the Lender Group
may have taken in reliance upon its receipt of such payment. Any cancellation of
the Notes, release of any such encumbrance or other such action shall be deemed
to have been conditioned upon any payment of the Obligations having become final
and irrevocable.
VII.4 COSTS, EXPENSES AND ATTORNEYS' FEES. The Borrowers agree to pay
all reasonable out-of-pocket costs and expenses incurred by the Lender Group,
including, without limitation, all reasonable fees and out-of-pocket expenses of
counsel for the Lender Group, any stamp or documentary tax or other similar
taxes and any filing, recording or lien search fees. All Obligations provided
for in this Section shall survive any termination of this Fourth Amendment.
VII.5 RELEASE. THE BORROWERS, ON BEHALF OF THEMSELVES, AND ALL PERSONS
AND ENTITIES CLAIMING BY, THROUGH, OR UNDER ANY ONE OR MORE OF THEM, HEREBY
JOINTLY AND SEVERALLY RELEASE, WAIVE AND FOREVER DISCHARGE EACH LENDER, AND EACH
LENDER'S OFFICERS, DIRECTORS, ATTORNEYS, AGENTS, AFFILIATES, AND SUCCESSORS AND
-14-
ASSIGNS, OF, FROM, AND WITH RESPECT TO ANY AND ALL MANNER OF ACTION AND ACTIONS,
CAUSE AND CAUSES OF ACTIONS, SUITS, DISPUTES, CLAIMS, COUNTERCLAIMS AND/OR
LIABILITIES, CROSS CLAIMS, DEFENSES, AND ANY CLAIMS FOR AVOIDANCE OR OTHER
REMEDIES AVAILABLE TO A DEBTOR, ITS ESTATE OR ANY TRUSTEE OR REPRESENTATIVES
THEREOF, WHETHER NOW KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, PAST OR
PRESENT, ASSERTED OR UNASSERTED, CONTINGENT OR LIQUIDATED, WHETHER OR NOT WELL
FOUNDED IN FACT OR LAW, WHETHER IN CONTRACT, IN TORT OR OTHERWISE, AT LAW OR IN
EQUITY, BASED UPON, RELATING TO OR ARISING OUT OF ANY AND ALL TRANSACTIONS,
RELATIONSHIPS OR DEALINGS WITH OR LOANS MADE TO THE BORROWERS PURSUANT TO THE
LOAN DOCUMENTS WHICH THE BORROWERS HAD OR NOW HAVE, CLAIM TO HAVE HAD, NOW CLAIM
TO HAVE OR HEREAFTER CAN, SHALL OR MAY CLAIM TO HAVE AGAINST ANY LENDER, FOR OR
BY REASON OF ANY CAUSE, MATTER, OR THING WHATSOEVER ARISING FROM THE BEGINNING
OF THE WORLD THROUGH THE DATE HEREOF.
VII.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties of the Borrowers contained in this Fourth Amendment and in all
other documents and instruments executed in connection herewith or otherwise
relating to this Fourth Amendment shall survive the execution of this Fourth
Amendment and are material and have been or will be relied upon by the Lender
Group, notwithstanding any investigation made by any person, entity or
organization on the Lender Group's behalf. No implied representations or
warranties are created or arise as a result of this Fourth Amendment or the
documents comprising or relating to this Fourth Amendment.
VII.7 HEADINGS. The headings and underscoring of articles, sections and
clauses have been included herein for convenience only and shall not be
considered in interpreting this Fourth Amendment.
VII.8 GOVERNING LAW. This Fourth Amendment and all documents and
instruments executed in connection herewith or otherwise relating to this Fourth
Amendment shall be construed in accordance with and governed by the internal
laws of the State of New York without reference to conflict of laws principles.
VII.9 INTEGRATION. This Fourth Amendment and all documents and
instruments executed in connection herewith or otherwise relating to this Fourth
Amendment, including, without limitation, the Loan Documents, constitute the
sole agreement of the parties with respect to the subject matter hereof and
thereof and supersede all oral negotiations and prior writings with respect to
the subject matter hereof and thereof.
VII.10 AMENDMENT AND WAIVER. No amendment of this Fourth Amendment, and
no waiver, discharge or termination of any one or more of the provisions
thereof, shall be effective unless set forth in writing and signed by all of the
parties hereto.
-15-
VII.11 SUCCESSORS AND ASSIGNS. This Fourth Amendment and the other Loan
Documents: (i) shall be binding upon the Lender Group, the Borrowers, and upon
their respective heirs, nominees, successors and assigns, and (ii) shall inure
to the benefit of the Lender Group and the Borrowers; provided, however, that
neither the Borrowers nor any of them may assign any rights hereunder or any
interest herein without obtaining the prior written consent of the Lender Group,
and any such assignment or attempted assignment shall be void and of no effect
with respect to the Lender Group.
VII.12 SEVERABILITY OF PROVISIONS. Any provision of this Fourth
Amendment that is held to be inoperative, unenforceable, void or invalid in any
jurisdiction shall, as to that jurisdiction, be ineffective, unenforceable, void
or invalid without affecting the remaining provisions in that jurisdiction or
the operation, enforceability or validity of that provision in any other
jurisdiction, and to this end the provisions of this Fourth Amendment are
declared to be severable.
VII.13 CONFLICTING PROVISIONS. To the extent that any of the terms in
this Fourth Amendment contradict any of the terms contained in any of the other
Loan Documents including, but not limited to, the Credit Agreement, the terms of
this Fourth Amendment shall control.
VII.14 JOINT AND SEVERAL LIABILITY. The obligations and liabilities of
the Borrowers hereunder and under the other Loan Documents are joint and
several.
VII.15 COUNTERPARTS; EFFECTIVENESS. This Fourth Amendment may be
executed in any number of counterparts and by the different parties on separate
counterparts, and each such counterpart shall be deemed to be an original, but
all such counterparts shall together constitute one and the same Fourth
Amendment. This Fourth Amendment shall be deemed to have been executed and
delivered when the Lender Group has received counterparts hereof executed by all
parties listed on the signature pages hereto.
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this Fourth Amendment to be executed as of the date
first above written.
CONDOR TECHNOLOGY SOLUTIONS, INC., COMPUTER
HARDWARE MAINTENANCE COMPANY, INC., DECISION
SUPPORT TECHNOLOGY, INC., FEDERAL COMPUTER
CORPORATION, GLOBAL CORE STRATEGIES
ACQUISITION, INC., INTERACTIVE SOFTWARE
SYSTEMS INCORPORATED, INVENTURE GROUP, INC.,
LINC SYSTEMS CORPORATION, XXXXXX ASSOCIATES,
INC., MANAGEMENT SUPPORT TECHNOLOGY CORP.,
MIS TECHNOLOGIES, INC., POWERCREW, INC.,
TITAN TECHNOLOGIES GROUP L.L.C., U.S.
COMMUNICATIONS, INC., as Borrowers
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxxx
Vice President and Chief Financial
Officer
CONDOR SYSTEM SOLUTIONS, INC., as Borrower
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxxx
President
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FIRST UNION NATIONAL BANK, as Collateral
Agent, Administrative Agent and Issuing
Lender
By: /s/ XXXX. X. XXXX
--------------------------------------
Xxxx X. Xxxx
Vice President
CITIZENS BANK OF MASSACHUSETTS, SUCCESSOR IN
INTEREST TO STATE STREET BANK AND TRUST
COMPANY, as Lender
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxx
Vice President
FLEET BANK, N.A., as Lender
By: /s/ XXXXXX X. XXXXXX
--------------------------------------
Xxxxxx X. Xxxxxx
Vice President
MELLON BANK, N.A., as Lender
By: /s/ GREEN E. DIM
--------------------------------------
Green E. Dim
First Vice President
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SCHEDULE 1
(LENDERS AND COMMITMENTS)
------------------------------------ ------------------- ------------------------ ------------------- ----------------------
REVOLVING CREDIT REVOLVING CREDIT TERM LOAN TERM LOAN COMMITMENT
LENDER COMMITMENT COMMITMENT PERCENTAGE COMMITMENT PERCENTAGE
------------------------------------ ------------------- ------------------------ ------------------- ----------------------
First Union National Bank and
First Union Commercial
Corporation $10,246,601.92 40% $24,875,000.00 100%
One South Penn Square
Xxxxxxx Xxxxxxxx, 0xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxx
Telephone No: (000) 000-0000
Telecopy No: (000) 000-0000
----------------------------------------------------------------------------------------------------------------------------
Fleet Bank, N.A.
111 Westminster
Mail Stop: RI MOM 20A $5,123,300.96 20% - -
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Telephone No: (000) 000-0000
Telecopy No: (000) 000-0000
----------------------------------------------------------------------------------------------------------------------------
Citizens Bank of Massachusetts
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000 $5,123,300.96 20% - -
Atttention: Xxxxxxx X. Xxxxxx
Telephone No: (000) 000-0000
Telecopy No: (000) 000-0000
----------------------------------------------------------------------------------------------------------------------------
Mellon Bank, X.X.
Xxxxxx Bank Center
0000 Xxxxxx Xxxxxx, 0xx Xx. $5,123,300.96 20% - -
Xxxxxxxxxxxx, XX 00000
Attention: Green E. Dim
Telephone No: (000) 000-0000
Telecopy No: (000) 000-0000
----------------------------------------------------------------------------------------------------------------------------
TOTALS $25,616,504.80 100% $24,875,000.00 100%
----------------------------------------------------------------------------------------------------------------------------
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