Exhibit 10.18
FOURTH AMENDMENT TO
REVOLVING CREDIT AGREEMENT AND LIMITED WAIVER
Fourth Amendment and Limited Waiver dated as of September 15, 2000 to
Revolving Credit Agreement (this "Fourth Amendment"), by and among AZTEC
TECHNOLOGY PARTNERS, INC., a Delaware corporation (the "Borrower"), BLUEFLAME
INC. (DE) (F/K/A PROFESSIONAL COMPUTER SOLUTIONS, INC.) ("BlueFlame"), as
Co-Borrower with respect to $15,000,000 in outstanding principal amount of
Acquisition Loans, FLEET NATIONAL BANK (F/K/A BANKBOSTON, N.A.) and the other
lending institutions listed on SCHEDULE 1 to the Credit Agreement (as
hereinafter defined) (the "Banks"), amending certain provisions of the Revolving
Credit Agreement dated as of July 27, 1998 (as amended and in effect from time
to time, the "Credit Agreement") by and among the Borrower, the Banks and Fleet
National Bank (f/k/a BankBoston, N.A.) as agent for the Banks (the "Agent").
Terms not otherwise defined herein which are defined in the Credit Agreement
shall have the same respective meanings herein as therein.
WHEREAS, the Borrower has requested that the Banks amend certain
provisions contained in the Credit Agreement and waive certain covenants
contained therein; and
WHEREAS, the Banks have agreed with the Borrower, subject to the terms
and conditions contained herein, to modify certain terms and conditions of the
Credit Agreement and grant such waivers as specifically set forth in this Fourth
Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. WAIVER. The Borrower has informed the Agent and the Banks
that the Debt Service Coverage Ratio for the period of April 1, 2000 through
June 30, 2000 (the "Second Quarter") did not meet the required level of
1.00:1.00 during such Second Quarter and, as such, the Borrower has failed to
comply with ss. 11.2 of the Credit Agreement during the Second Quarter. Also,
the Banks' waiver of Borrower's failure to comply with ss. 11.2 of the Credit
Agreement for the period of January 1, 2000 through March 31, 2000 (the "First
Quarter") pursuant to Limited Waiver No. 2, dated as of June 17, 2000, expires
on August 14, 2000. The Borrower has requested that the Banks waive, to the
limited extent necessary to permit such noncompliance for the First Quarter and
the Second Quarter and for each fiscal quarter of the Borrower thereafter
through April 30, 2001, the provisions of ss. 11.2. Subject to the satisfaction
of the conditions precedent set forth in Section 6 hereof, effective as of
August 14, 2000, the Banks hereby waive the provisions of ss. 11.2 of the Credit
Agreement solely to the extent necessary to permit the above-referenced
noncompliance, and only with respect to the determination of compliance for the
First Quarter and the Second Quarter and for each fiscal quarter of the Borrower
thereafter through April 30, 2001.
SECTION 2. CONSENT AND WAIVER. The Agent and the Bank hereby consent to
the winding up and termination of business of Professional Network Services,
Inc., notwithstanding that the same would otherwise violate various terms and
provisions of the Credit Agreement, and hereby
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waive any Default and Events of Default (and only such Defaults and Events of
Default) that would otherwise be caused by such violations.
SECTION 3. AMENDMENT TO SECTION 1 OF THE CREDIT AGREEMENT. Section 1.1
of the Credit Agreement is hereby amended as follows:
(a) the definitions of "Interest Payment Date" and "PCSI" are
hereby amended by deleting such definitions in their entirety and restating them
as follows:
INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the last day
of the calendar month with respect to interest accrued during such calendar
month, including, without limitation, the calendar month which includes the
Drawdown Date of such Base Rate Loan; and (b) as to any LIBOR Rate Loan in
respect of which the Interest Period is (i) 1 month or less, the last day of
such Interest Period and (ii) more than 1 month, the date that is 1 month from
the first day of such Interest Period and each 1 month interval thereafter
during such Interest Period and, in addition, the last day of such Interest
Period.
PCSI. BlueFlame Inc. (DE), a New York corporation (f/k/a
Professional Computer Solutions, Inc.) or BlueFlame Inc., a Delaware
corporation, successor by merger to BlueFlame Inc. (DE), as the case may be.
(b) Section 1.1 of the Credit Agreement is hereby amended by
inserting the following definitions in the appropriate alphabetical order:
FOURTH AMENDMENT. The Fourth Amendment to Revolving Credit
Agreement and Limited Waiver dated as of September 15, 2000, by and among the
Borrower, PCSI, the Agent and the Banks.
SECTION 4. AMENDMENT TO SECTION 4 OF THE CREDIT AGREEMENT. Section
4.8.2 of the Credit Agreement is hereby amended by deleting the first sentence
thereof (contained in the Third Amendment) and restating it as follows:
In the event the Borrower or any of its Subsidiaries receives any Net Cash
Sale Proceeds or Net Offering Proceeds from any Asset Sale permitted by Section
10.5.2 or otherwise consented to in writing by the Majority Banks (or, in the
event such a sale constitutes a sale of all or substantially all of the
Collateral, then consented to in writing by all of the Banks), the Borrower
shall, immediately upon receipt thereof, pay all outstanding fees and expenses
of the Agent and the Banks, including without limitation any Overadvance Fees
and Amendment Fee required to be paid from such proceeds and shall make a
prepayment of principal on the Acquisition Loans (or to the extent the
Acquisition Loans have been repaid in full, then a prepayment of principal on
the Revolving Credit Loans) in the amount of all remaining Net Cash Sale
Proceeds or Net Offering Proceeds; provided, however, that (i) in the case of
Net Offering Proceeds resulting from an initial public offering of the common
stock of PCSI or from the sale of the stock or assets of PCSI as permitted by
Section 2(c) of the Third Amendment, such prepayment shall be in an amount equal
to the outstanding Obligations and the Total Commitment, the Total Acquisition
Commitment and the Total Facility Commitment shall be permanently reduced to
zero on the date of such prepayment and (ii) in the case of Net Cash Sale
Proceeds from the sale of the stock or assets of a Subsidiary other than PCSI as
permitted by Section 2(c) of the Third Amendment, such
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prepayment shall be in an amount equal to the sum of (x) the Minimum Net Cash
Sale Proceeds for such Subsidiary and (y) 80% of the Net Cash Sale Proceeds in
excess of the Minimum Net Cash Sale Proceeds for such Subsidiary; with the Total
Acquisition Commitment (and/or the Total Commitment, as applicable) and the
Total Facility Commitment also being permanently reduced by the amount of such
prepayment.
SECTION 5. AMENDMENT TO SECTION 9 OF THE CREDIT AGREEMENT. Section 9 of
the Credit Agreement is hereby amended as follows:
(a) Section 9.4(i) of the Credit Agreement is hereby amended be
deleting such Section 9.4(i) in its entirety and replacing it with the
following:
"(i) at 2:00 p.m. Boston time on Thursday, September 14, 2000 and
at 2:00 p.m. Boston time on each two-week anniversary thereof, the Borrower will
make financial and other appropriate officers of the Borrower and its
Subsidiaries available to the Agent and the Banks for a dial-in conference call,
which will be arranged by the Borrower and of which arrangements the Borrower
shall notify the Agent and the Banks at least one Business Day prior to each
such call, to discuss the information in any of the foregoing reports or other
reports delivered to the Banks by the Borrower or its Subsidiaries and answer
any questions the Agent or the Banks may have regarding the Borrower and its
Subsidiaries. In addition, the Borrower will use commercially reasonable efforts
to continue to provide reports to the Banks of its cash flow on a bi-weekly
basis."
(b) Section 9 of the Credit Agreement is hereby amended by
deleting Sections 9.20, 9.21, 9.22 and 9.23 and replacing them with the
following:
9.20. PCSI IPO. The Borrower will obtain the prior written consent
of the Agent and each of the Banks for any initial public offering of the stock
of PCSI, which consent shall not unreasonably be withheld if the Obligations
would be repaid in full from the proceeds thereof. The Borrower shall pay, or
shall cause PCSI to pay, any unpaid Amendment Fee and any earned and unpaid
Overadvance Fees and other unpaid fees and expenses of the Agent and the Banks
from the Net Offering Proceeds of such offering (including the offering of
underwriters' overallotment shares, if any) and shall use a portion of the
remaining Net Offering Proceeds of such offering (including the offering of
underwriters' overallotment shares, if any), to repay all Obligations in full
and the Total Commitment, the Total Acquisition Commitment and the Total
Facility Commitment shall be permanently reduced to zero on the date of such
prepayment.
9.21. ADDITIONAL FINANCING. [Intentionally omitted.]
9.22. WARRANTS. As consideration for the Fourth Amendment and in
lieu of any Warrants that the Borrower may be or become obligated to issue to
the Banks pursuant to the Third Amendment, the Borrower hereby agrees to issue
to each of the Banks a warrant to purchase common stock of the Borrower in the
form attached hereto as EXHIBIT I (each a "WARRANT"), exercisable for the number
of Warrant Shares (as defined in the Warrant) equal to such Bank's PRO RATA
share (in accordance with such Bank's Commitment Percentage of the Total
Facility Commitment) of the number of Warrant Shares that would equal 3% of the
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outstanding shares of the Borrower's common stock on the date of the Fourth
Amendment (assuming issuance of all shares of common stock issuable upon
exercise of all outstanding options, warrants and other rights and upon
conversion of all outstanding convertible securities). As consideration for the
Fourth Amendment, the Borrower also agrees that on December 31, 2000, in the
event that the Total Facility Commitment is not permanently reduced to
$32,000,000, the Borrower shall automatically issue to each of the Banks a
warrant to purchase common stock of the Borrower in the form attached hereto as
EXHIBIT I (each a "WARRANT"), exercisable for the number of Warrant Shares (as
defined in the Warrant) equal to such Bank's PRO RATA share (in accordance with
such Bank's Commitment Percentage of the Total Facility Commitment) of the
number of Warrant Shares that, when combined with the cumulative number of
Warrant Shares for which all Warrants theretofore issued to the Banks would be
exercisable, would equal 4% of the outstanding shares of the Borrower's common
stock on such date (assuming issuance of all shares of common stock issuable
upon exercise of all outstanding options, warrants and other rights and upon
conversion of all outstanding convertible securities). For purposes of
determining whether the Total Facility Commitment has been permanently reduced
to $32,000,000, amounts in respect of Amendment Fee or Overadvance Fees paid
from proceeds of an Asset Sale (including without limitation a capitalization
event) in advance of the scheduled installment payment date or Revolving Credit
or Acquisition Loan Maturity Date, as applicable, shall be deemed to have been
applied to permanently reduce the Total Facility Commitment. The Banks shall
have the registration rights with respect to the Warrant Shares as set forth in
the Registration Rights Agreement among the Borrower and the Banks. The Borrower
shall use its commercially reasonable efforts to have the Securities and
Exchange Commission declare the registration statement with respect to the
Warrants effective as soon as possible after the date of the Fourth Amendment,
including filing all amendments necessary to reflect changes in the Borrower's
circumstances and the terms of issuance of the Warrants. Assuming it has used
its commercially reasonable efforts and continues to do so, the failure of such
registration statement to become effective shall not constitute a Default or
Event of Default under the Credit Agreement or this Fourth Amendment. The
Borrower will at all times maintain sufficient authorized but unissued shares of
Common Stock reserved for issuance upon exercise of the Warrants. On the date of
issuance of each of the Warrants, each such Warrant shall have been duly and
validly issued to the respective Bank. The Warrant Shares will be duly and
validly issued, fully paid and nonassessable upon issuance by the Borrower and
payment of the exercise price therefor (or conversion thereof) in accordance
with the provisions of the Warrants. Upon exercise of the Warrants, and the
delivery by the Borrower of stock certificates representing Warrant Shares, all
in accordance with the terms of the Warrants, lawful and valid title to each of
such Warrant Shares will be conveyed to and vested in the Banks, free and clear
of all restrictions and other liens and encumbrances, except the agreements,
restrictions and other liens and encumbrances (if any) imposed by the Third
Amendment, the Fourth Amendment, the Warrants and applicable law.
9.23. POSTCLOSING ITEMS. The Borrower shall deliver to the Agent,
within 30 days after the date of the Fourth Amendment satisfactory evidence that
all liens against the assets of the Borrower and its Subsidiaries other than
Permitted Liens have been released and removed of record and a revised schedule
of Permitted Liens satisfactory to the Agent to replace that contained in the
DISCLOSURE SCHEDULE. The Borrower shall deliver to the Agent, within seven days
after the date of the Fourth Amendment a revised DISCLOSURE SCHEDULE that is
accurate and complete as of such date and which DISCLOSURE SCHEDULE shall
contain no information that had
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such information been known to the Banks on the date of the Fourth Amendment
would have caused any Bank acting reasonably to have refused to agree to the
Fourth Amendment. The Borrower shall deliver to the Agent at the time of
execution and delivery of any Warrants, an opinion of counsel reasonably
satisfactory in form and substance to the Agent as to the corporate power and
authority and capitalization of the Borrower, due authorization, execution and
delivery, validity and enforceability of the Warrants and other customary
provisions. The Borrower hereby agrees to pay all reasonable expenses, including
legal fees and disbursements incurred by the Agent and the Banks in connection
with the Fourth Amendment and the transactions contemplated thereby and any
other expenses, legal fees and disbursements required to be paid pursuant to ss.
17.1 of the Revolving Credit Agreement for which an invoice is submitted after
the date of the Fourth Amendment within 30 days after the date of the respective
invoice.
SECTION 6. AMENDMENT TO SECTION 10.1 OF THE CREDIT AGREEMENT. Section
10.1 of the Credit Agreement is hereby amended by deleting ss. 10.1(c) in its
entirety and replacing it with the following:
"(c) Indebtedness incurred in connection with the acquisition after the
date hereof of any real or personal property by the Borrower or such Subsidiary
or under any Capitalized Lease, PROVIDED that (i) if at the time such
Indebtedness is incurred, no Default or Event of Default shall have occurred and
be continuing, or would occur after giving effect to such transaction on a pro
forma basis; and (ii) immediately after giving effect to such incurrence, the
aggregate principal amount of all Indebtedness of the Borrower and its
Subsidiaries outstanding pursuant to this ss. 10.1(c) shall not exceed
$250,000;"
SECTION 7. CONDITIONS TO EFFECTIVENESS. This Fourth Amendment shall
become effective only upon the satisfaction of the following conditions:
(a) this Fourth Amendment shall have been executed by the
Borrower, PCSI, all of the Banks and the Agent and the Ratification of Guaranty
in the form attached hereto shall have been executed by each Guarantor;
(b) the Borrower shall have delivered to the Agent and the Banks
an opinion of counsel satisfactory in form and substance to the Agent as to the
corporate power and authority of the Borrower, due authorization, execution and
delivery, validity and enforceability of the Fourth Amendment and other
customary provisions;
(c) the Borrower shall have delivered to the Banks the Warrants
required to be delivered on the date of this Fourth Amendment pursuant to the
terms of this Fourth Amendment;
(d) the Borrower and holders of at least 80% of the outstanding
principal amount of the Loans shall have executed and delivered a First
Amendment to Registration Rights Agreement in the form of EXHIBIT J attached
hereto; and
(e) the Borrower shall have paid all reasonable expenses,
including legal fees and disbursements incurred by the Agent and the Banks in
connection with this Fourth Amendment and the transactions contemplated hereby
and any other expenses, legal
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fees and disbursements required to be paid pursuant to ss. 17.1 of the Credit
Agreement and not heretofore paid by the Borrower for which an invoice has been
submitted.
SECTION 8. REPRESENTATIONS AND WARRANTIES. The Borrower hereby repeats,
on and as of the date hereof, each of the representations and warranties made by
it in ss. 8 of the Credit Agreement, and such representations and warranties
remain true as of the date hereof (except in such respects (none of which shall
be materially adverse) as may be set forth on the DISCLOSURE SCHEDULE required
to be delivered pursuant to ss. 9.23 of the Credit Agreement, as amended hereby,
and to the extent of changes resulting from transactions contemplated or
permitted by the Credit Agreement and the other Loan Documents and changes
occurring in the ordinary course of business that singly or in the aggregate are
not materially adverse, and to the extent that such representations and
warranties relate expressly to an earlier date), PROVIDED, that all references
therein to the Credit Agreement shall refer to such Credit Agreement as amended
hereby. In addition, the Borrower hereby represents and warrants that (a) the
execution and delivery by the Borrower and each Guarantor of this Fourth
Amendment and the performance by the Borrower and each Guarantor of all of its
agreements and obligations under the Credit Agreement as amended hereby and the
other Loan Documents are within the corporate authority of the Borrower and each
Guarantor and have been duly authorized by all necessary corporate action on the
part of the Borrower and each Guarantor party thereto, (b) the Borrower has, on
or prior to the date hereof, duly and properly authorized, subject to the
satisfaction of certain conditions precedent set forth in Section 9.22 of the
Credit Agreement (as amended hereby), the issuance of the Warrants in or
substantially in the form of EXHIBIT I attached hereto, evidencing right to
subscribe for and purchase from the Borrower the number of Warrant Shares to
which each of the Banks is entitled pursuant to the terms of this Fourth
Amendment, (c) the Borrower has duly and properly authorized the issuance of
Warrant Shares issuable upon due exercise or conversion of the Warrants and (d)
the Borrower has filed in a timely manner each report required to be filed by it
with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d)
of the Securities Exchange Act of 1934 since December 31, 1998.
SECTION 9. EXHIBITS. The Credit Agreement is hereby amended to delete
EXHIBIT I to the Credit Agreement (attached to the Third Amendment) and to
substitute EXHIBIT I attached hereto in its place, as if the same were EXHIBIT I
to such Credit Agreement.
SECTION 10. RATIFICATION, ETC. Except as expressly amended hereby, the
Credit Agreement and all documents, instruments and agreements related thereto,
including, but not limited to the Security Documents, are hereby ratified and
confirmed in all respects and shall continue in full force and effect. The
Credit Agreement and this Fourth Amendment shall be read and construed as a
single agreement. All references in the Credit Agreement or any related
agreement or instrument to the Credit Agreement shall hereafter refer to the
Credit Agreement as amended hereby.
SECTION 11. NO WAIVER. Nothing contained herein shall constitute a
waiver of, impair or otherwise affect any Obligations, any other obligation of
the Borrower or any rights of the Agent or the Banks consequent thereon, except
such waivers as are specifically set forth herein.
SECTION 12. RELEASE OF CLAIMS. The Borrower and, by executing the
attached Ratification of Guaranty, each of the Borrower's Subsidiaries hereby
releases the Agent and the Banks and all
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agents, officers, directors, shareholders, or anyone acting at the direction or
control of the Agent or each or all Banks from any and all liabilities and
claims under the Credit Agreement, this Fourth Amendment, the Registration
Rights Agreement or any Security Documents or otherwise in connection with the
transactions contemplated thereby, except those arising after the time of
execution and delivery of this Fourth Amendment.
SECTION 13. COUNTERPARTS. This Fourth Amendment may be executed in one
or more counterparts, each of which shall be deemed an original but which
together shall constitute one and the same instrument.
SECTION 14. GOVERNING LAW. THIS FOURTH AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).
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IN WITNESS WHEREOF, the parties hereto have executed this Fourth
Amendment as a document under seal as of the date first above written.
AZTEC TECHNOLOGY PARTNERS, INC.
By: /s/ Xxx Xxxxx
----------------------------------------
Title: President
BLUEFLAME INC. (DE)
(F/K/A PROFESSIONAL COMPUTER
SOLUTIONS, INC.)
(HAVING JOINT AND SEVERAL LIABILITY FOR A
PORTION OF THE ACQUISITION LOANS HAVING AN
OUTSTANDING PRINCIPAL AMOUNT OF
$15,000,000)
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Title: Treasurer
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Xxxxx X. Xxx
----------------------------------------
Name: Xxxxx X. Xxx
Title: Vice President
FLEET NATIONAL BANK (AS AGENT AND AS A BANK)
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Senior Vice President and
Group Head
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XXXXXXXX XXXX XXXX XX XXXXXXXX
By: /s/ Xxxxx X. Xxxx
----------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxx X. XxXxxxx
----------------------------------------
Name: Xxxx X. XxXxxxx
Title: First Vice President
PEOPLE'S BANK
By: /s/ Dante Pazzine
----------------------------------------
Name: Dante Pazzine
Title: Vice President
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RATIFICATION OF GUARANTY
Each of the undersigned guarantors hereby acknowledges and consents to
the foregoing Fourth Amendment as of September 15, 2000, and agrees that the
Guaranty dated as of (a) July 27, 1998; (b) September 17, 1998; (c) October 2,
1998, or June 26, 2000 from each of the undersigned Guarantors remain in full
force and effect, and each of the Guarantors confirms and ratifies all of its
obligations thereunder.
AZTEC INTERNATIONAL LLC
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Title: Treasurer
AZTEC TECHNOLOGY PARTNERS OF NEW
ENGLAND LLC (F/K/A BAY STATE
COMPUTER GROUP LLC)
By: /s/ Xxx Xxxxx
----------------------------------------
Title: President
ENTRA COMPUTER CORP.
By: /s/ Xxx Xxxxx
----------------------------------------
Title: President
PCM, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Title: Treasurer
BLUEFLAME INC. (DE) (F/K/A
PROFESSIONAL COMPUTER SOLUTIONS, INC.)
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Title: Treasurer
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PROFESSIONAL NETWORK SERVICES, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Title: Treasurer
XXXXXXXX, XXXXXX & CO., INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Title: Treasurer
SOFTECH COMMUNICATIONS, INC.
By: /s/ Xxx Xxxxx
----------------------------------------
Title: President
SOLUTIONS E.T.C. INC.
By: /s/ Xxx Xxxxx
----------------------------------------
Title: President
DIGITAL NETWORK ASSOCIATES LLC
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Title: Treasurer
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