Exhibit 10.14
THIRD AMENDMENT TO
REVOLVING CREDIT AGREEMENT AND LIMITED WAIVER
Third Amendment and Limited Waiver dated as of March 30, 1999 to
Revolving Credit Agreement (the "Third Amendment"), by and among AZTEC
TECHNOLOGY PARTNERS, INC., a Delaware corporation (the "Borrower"),
PROFESSIONAL COMPUTER SOLUTIONS, INC. ("PCSI"), 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 BankBoston, N.A. (now
known as Fleet National Bank) 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 Third Amendment;
WHEREAS, to reflect the allocation of debt among the Borrower and
its Subsidiaries, one of such Subsidiaries, which is currently a Guarantor
under the Guaranty, has agreed to assume joint and several liability with
respect to $15,000,000 in outstanding principal amount of the Acquisition
Loans;
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 Leverage Ratio for the period of October 1, 1999 through December
31, 1999 (the "Fourth Quarter") exceeded 3.50:1.00 during such Fourth Quarter
and, as such, the Borrower has failed to comply with ss. 11.1 of the Credit
Agreement during the Fourth Quarter. In addition, the Borrower has informed
the Agent and the Banks that the ratio of EBITDA for the Reference Period
ended on December 31, 1999 to Consolidated Total Interest Expense for such
Reference Period was less than 2.75 to 1.00 and, as such, the Borrower has
failed to comply with ss. 11.3 of the Credit Agreement at the end of the
Fourth Quarter. The Borrower has requested that the Banks waive, to the
limited extent necessary to permit such noncompliance for the Fourth Quarter,
the provisions of xx.xx. 11.1 and 11.3 of the Credit Agreement. Subject to
the satisfaction of the conditions precedent set forth in Section 12 hereof,
from and after the Effective Date (as defined in ss. 12 hereof) the Banks
hereby waive the provisions of xx.xx. 11.1 and 11.3 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 Fourth
Quarter.
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SS. 2. CONSENT AND WAIVER. The Agent and the Bank hereby consent to
the following, notwithstanding that the same would otherwise violate various
terms and provisions of the Credit Agreement, and hereby waive any Default
and Events of Default (and only such Defaults and Events of Default) that
would otherwise be caused by such violations:
(a) an assignment for the benefit of creditors with
respect to the stock or assets of Entra Computer Corp. and the winding up
and termination of business of Entra Computer Corp.;
(b) the sale of the stock or assets of Compel LLC, Fortran Corp.
and Xxxxx Communications Corporation to Morganthaler Partners pursuant to an
existing letter of intent for a price of at least the "Purchase Price" set
forth on SCHEDULE A and resulting in Net Cash Sale Proceeds after payment of
all fees and expenses of the Agent and the Banks then outstanding, including
without limitation any unpaid Amendment Fee and any earned and unpaid
Overadvance Fees, of not less than the "Release Amount" set forth on SCHEDULE
A, provided that on or before June 30, 2000, the Borrower uses all of the Net
Cash Sale Proceeds, first to pay all fees and expenses of the Agent and the
Banks then outstanding, including without limitation, unpaid Amendment Fee
and any earned and unpaid Overadvance Fees, and second, to repay Acquisition
Loans (or, to the extent Acquisition Loans have been paid in full, to repay
Revolving Credit Loans and permanently reduce the Total Commitment) and
provided further that none of the documents with respect to such sale shall
contain any provision that would adversely affect in a material manner the
interests of the Banks under the Credit Agreement or the Security Documents
and, notwithstanding the foregoing, to the extent the Banks are required to
disgorge any Net Cash Sale Proceeds paid to them as a result of any
rescission right that a purchaser may have under applicable law with respect
to such sale, then the Obligations that had been deemed satisfied by the
application of such Net Cash Sale Proceeds shall be deemed reinstated and any
security interest in any Collateral that had been released in connection
therewith shall be deemed restored as if such payment had never occurred; and
(c) the sale of the stock or assets of any Subsidiary of the
Borrower (including any Subsidiary currently proposed to be sold to
Morganthaler as described in clause (b) above that is not sold pursuant to
the terms set forth in clause (b) above), to one or more unrelated third
parties in one or more arm's length transactions, for a price resulting in
Net Cash Sale Proceeds after payment of all fees and expenses of the Agent
and the Banks then outstanding, including without limitation any unpaid
Amendment Fee and any earned and unpaid Overadvance Fees, at least equal to
the Minimum Net Cash Sale Proceeds for such Subsidiary, provided that the
Borrower first pays all fees and expenses of the Agent and the Banks then
outstanding, including without limitation any unpaid Amendment Fee and any
earned and unpaid Overadvance Fees and then from the remaining Net Cash Sale
Proceeds of each such sale repays Acquisition Loans (or, to the extent
Acquisition Loans have been paid in full, repays Revolving Credit Loans and
permanently reduce the Total Commitment) in an amount equal to the sum of the
Minimum Net Cash Sale Proceeds for such Subsidiary and 80% of the Net Cash
Sale Proceeds of such sale in excess of the Minimum Net Cash Sale Proceeds
for such Subsidiary, on the date of receipt of such proceeds, and provided
further that none of the documents with respect to such sale shall contain
(i) any provision that would adversely affect in a material manner the
interests of the Banks under the Credit Agreement or the Security Documents
and, notwithstanding the foregoing, to the extent the Banks are required to
disgorge any Net Cash Sale Proceeds paid to them as a result of any
rescission right that a purchaser may have under applicable law with respect
to such sale, then the Obligations that had been deemed satisfied by the
application of such Net Cash Sale Proceeds shall be deemed reinstated and any
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security interest in any Collateral that had been released in connection
therewith shall be deemed restored as if such payment had never occurred.
SS. 3. TOTAL ACQUISITION COMMITMEnt. Pursuant to the Second
Amendment, the Total Acquisition Commitment was permanently reduced to the
outstanding balance of the Current Acquisition Loans (those outstanding on
November 8, 1999). The Total Acquisition Commitment and the Total Facility
Commitment shall be permanently reduced by the amount of any principal
payments or prepayments received with respect to the Acquisition Loans after
November 8, 1999, whether received heretofore or hereafter.
SS. 4. ASSUMPTION OF DEBT BY PCSI. PCSI hereby agrees to assume,
and hereby assumes, joint and several liability with Aztec as a Co-Borrower
with respect to all obligations under the Credit Agreement with respect to a
portion of the Acquisition Loans having an outstanding principal amount of
$15,000,000 on the Effective Date of the Third Amendment. Aztec and PCSI
shall exchange the existing Acquisition Note held by each Bank for (i) an
Acquisition Note signed by Aztec and PCSI as Co-Borrowers in a principal
amount equal to such Bank's respective Commitment Percentage of $15,000,000
and (ii) an Acquisition Note signed by Aztec as Borrower each in a principal
amount equal to such Bank's Acquisition Commitment minus the principal amount
of the Acquisition Note delivered to such Bank pursuant to clause (i) above.
The term "Borrower" shall be deemed to refer to both Aztec and PCSI as it
relates to such portion of the Acquisition Loans assumed by PCSI as
Co-Borrower to the extent appropriate in the context. Any Net Offering
Proceeds with respect to PCSI that are required to be used to repay
Acquisition Loans hereunder, subject to the limitations set forth in Section
4.8.2 of the Credit Agreement (as amended hereby), shall first be applied to
repay Acquisition Loans that have been assumed by PCSI as Co-Borrower until
repaid in full, then to repay other Acquisition Loans. Repayment of the
Acquisition Loans that have been assumed by PCSI as Co-Borrower shall not be
deemed to release PCSI from its obligations under the Guaranty. By signing
below, PCSI shall be deemed to have made all of the representations and
warranties of the Borrower set forth in Section 8 of the Credit Agreement as
of the Effective Date (except that with respect to Section 8.4 and 8.22, PCSI
shall be deemed to make only such portion of such representations and
warranties as relate to PCSI as a Subsidiary of the Borrower). Both Borrowers
and all of the Guarantors (by signing the attached Ratification of Guaranty)
hereby agree that the Guaranty and all of the Security Documents to which
each is a party shall be deemed to secure the Acquisition Notes assumed by
PCSI as Co-Borrower on a PARI PASSU basis with the other Notes. Both
Borrowers agree to make any filings and take any other actions necessary to
ensure that the Acquisition Notes assumed by PCSI as Co-Borrower, as well as
the Acquisition Notes and Revolving Credit Notes of Aztec, are secured on a
PARI PASSU basis by a first perfected security interest in favor of the
Agent, for its benefit and that of the Banks, in all assets of both Borrowers
and all Guarantors, subject only to Permitted Liens.
ss. 5. AMENDMENT TOSS. 1 OF THE CREDIT AGREEMENt. Section 1.1
of the Credit Agreement is hereby amended as follows:
(a) the definitions of "Borrowing Base" and
"Settlement" are hereby revised as follows:
BORROWING BASE. is revised by deleting the brackets
around "ten (10)" in such definition.
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SETTLEMENT. is revised by deleting the phrase
"to be each to such Bank's Commitment Percentage" and replacing it with the
phrase "to be equal to such Bank's Commitment Percentage."
(b) the definitions of "Acquisition Loan
Maturity Date," "Agent," "Agent's Special Counsel," "BKB," "Revolving
Credit Loan Maturity Date" and "Uniform Customs" are hereby amended by
deleting such definitions in their entirety and restating them as follows:
ACQUISITION LOAN MATURITY DATE. April 30, 2001.
AGENT. Fleet National Bank (f/k/a BankBoston, N.A.)
acting as agent for the Banks.
AGENT'S SPECIAL COUNSEL. Xxxxxx & Dodge LLP or
such other counsel as may be approved by the Agent.
BKB. Fleet National Bank (f/k/a BankBoston, N.A.),
a national banking association in its individual capacity.
REVOLVING CREDIT LOAN MATURITY DATE. April 30, 2001.
UNIFORM CUSTOMS. With respect to any documentary
Letter of Credit, the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500 or any
successor version thereto adopted by the Agent in the ordinary course of its
business as a letter of credit issuer and in effect at the time of issuance
of such documentary Letter of Credit. With respect to any standby Letter of
Credit, the International Standby Practices ISP 98 (1998), International
Chamber of Commerce Publication No. 590 or any successor version thereto
adopted by the Agent in the ordinary course of its business as a letter of
credit issuer and in effect at the time of issuance of such standby Letter of
Credit.
(c) Section 1.1 of the Credit Agreement is hereby
amended by inserting the following definitions in the appropriate
alphabetical order:
AMENDMENT FEE. See Section 6.1
AZTEC. Aztec Technology Partners, Inc., a Delaware
corporation.
BORROWED COMMITMENT. The sum on the date of
determination of (i) the aggregate outstanding principal amount of the
Loans, (ii) the Maximum Drawing Amount, and (iii) all Unpaid Reimbursement
Obligations.
DEBT SERVICE. With respect to any period, the sum
of the following: (i) Consolidated Total Interest Expense (excluding
Overadvance Fees and Amendment Fee) for such period and (ii) all payments of
principal (other than payments of principal on the Loans) in respect of
Indebtedness of the Borrower and its Subsidiaries (including
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the principal component of any payments in respect of
Capital Lease Obligations) paid or payable during such period.
DEBT SERVICE COVERAGE RATIO. The ratio at any
time of (i) EBITDA (without regard to Overadvance Fees or Amendment Fee) for
the fiscal quarter ending on, or most recently ended prior to, such time to
(ii) Debt Service for such quarter.
MINIMUM NET CASH SALE PROCEEDS. With respect to
any Subsidiary, the amount set forth under the heading "Minimum Net Cash
Sale Proceeds" on SCHEDULE A attached hereto, which the parties have agreed
is the minimum amount of Net Cash Sale Proceeds that must be realized from
the sale of the stock or assets of such Subsidiary and available, after
payment of the Agent's and the Banks' fees and expenses, to repay principal
on the Loans in order for the consent of the Agent and the Banks to such sale
set forth in ss. 2(c) of the Third Amendment to be effective.
NET OFFERING PROCEEDS. The gross proceeds of any
Asset Sale consisting of the public offering of equity securities of any
Subsidiary, net of underwriting discount, printing and mailing expenses,
filing fees and reasonable accountant's and attorney's fees directly related
to such offering and all other reasonable out-of-pocket fees, commissions and
other expenses incurred in connection with such offering, including the
amount (estimated in good faith by such Person and approved by the Agent) of
income, franchise, sales and other applicable taxes required to be paid by
such Person in connection with such offering.
OVERADVANCE AMOUNT. The amount by which the
Borrowed Commitment exceeds 80% of Eligible Accounts Receivable for which
invoices have been issued and are payable, each as determined on June 30,
2000 or on the last day of each fiscal quarter thereafter, as applicable.
Neither accrued and unpaid interest nor earned and unpaid Overadvance Fees or
Amendment Fee shall be included in principal for purposes of calculating the
Overadvance Amount.
OVERADVANCE FEES. See ss. 2.2.2.
PCSI. See ss. 9.20.
SECOND AMENDMENT. The Second Amendment to
Revolving Credit Agreement and Limited Waiver dated as of September 30,
1999, by and among the Borrower, the Agent and the Banks.
THIRD AMENDMENT. The Third Amendment to
Revolving Credit Agreement and Limited Waiver dated as of March 30, 2000,
by and among the Borrower, PCSI, the Agent and the Banks.
TOTAL FACILITY COMMITMENT. The sum of the
Total Commitment and the Total Acquisition Commitment.
WARRANT. See ss. 9.22.
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ss. 6. AMENDMENT TO SS. 2 OF THE CREDIT AGREEMENt. Section 2 of
the Credit Agreement is hereby amended as follows:
(a) Section 2.2 of the Credit Agreement is hereby
amended by deleting the heading "COMMITMENT FEE" and replacing it with the
heading "COMMITMENT FEE AND OVERADVANCE FEE," by inserting a subheading
"2.2.1. COMMITMENT FEE." after such heading and by adding the following at
the end of such ss. 2.2:
2.2.2. OVERADVANCE FEE. On June 30, 2000, an
overadvance fee shall be deemed earned in an amount determined by
multiplying the Overadvance Amount, if any, as of such date by .03. An
additional overadvance fee shall be deemed earned on the last day of each
fiscal quarter thereafter in an amount determined by multiplying the
Overadvance Amount, if any, as of such last day of the applicable fiscal
quarter by .015. Such overadvance fees shall be called "OVERADVANCE FEES"
herein. The Borrower shall pay all earned Overadvance Fees in full on the
later of the Revolving Credit Loan Maturity Date or the Acquisition Loan
Maturity Date; provided, however, that in the event of an Asset Sale
(including without limitation a capitalization event) with respect to the
Borrower or any Subsidiary, all earned but unpaid Overadvance Fees shall be
paid from the Net Cash Sale Proceeds (to the extent such exceed the amount of
such unpaid fees) or, in the event of a capitalization event (including any
initial public offering of capital stock of PCSI), the Net Offering Proceeds
(to the extent such exceed the amount of such unpaid fees) of such Asset Sale.
SS. 7. AMENDMENT TO SS. 4 OF THE CREDIT AGREEMENT.
(a) Section 4.3 of the Credit Agreement is hereby amended
by deleting the first sentence thereof in its entirety and restating it as
follows:
The Borrower shall have the right at any time and from time to time
upon one (1) Business Day's prior written notice to the Agent to reduce or
terminate entirely the Total Acquisition Commitment, whereupon the
Acquisition Commitments of the Banks shall be reduced pro rata in accordance
with their respective Commitment Percentages of the amount specified in such
notice or, as the case may be, terminated.
(b) Section 4.8.2 of the Credit Agreement is hereby amended
by deleting the first two sentences thereof and restating them 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 ss. 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, such prepayment shall be in an
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amount equal to the greater of (x) $15,000,000 and (y) 25% of the Net
Offering Proceeds and (ii) in the case of Net Cash Sale Proceeds from the
sale of the stock or assets of a Subsidiary as permitted by ss. 2(c) of the
Third Amendment, such 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.
SS. 8. AMENDMENT TO SS. 6 OF THE CREDIT AGREEMENT.
Section 6.1 of the Credit Agreement is hereby amended by adding the
following at the end of such ss. 6.1:
The Borrower agrees to pay to the Agent for the PRO RATA benefit (in
accordance with their respective Commitment Percentages of the Total Facility
Commitment) of the Banks an amendment fee (the "Amendment Fee") equal to the
sum of (i) one percent (1%) of the Total Facility Commitment and (ii) all
unreimbursed expenses of the Agent and the Banks required to be reimbursed by
the Borrower pursuant to the Revolving Credit Agreement. Such Amendment Fee
shall be payable in six equal monthly installments, with the first
installment due on the Effective Date, the second installment due on May 1,
2000 and the remaining installments due on the first day of each month
thereafter to and including September 1, 2000; provided, however, that in the
event of an Asset Sale (including without limitation a capitalization event)
with respect to the Borrower or any Subsidiary, the remaining unpaid
Amendment Fee shall be paid from the Net Cash Sale Proceeds (to the extent
such exceed the amount of such unpaid fees) or, in the event of a
capitalization event, Net Offering Proceeds (to the extent such exceed the
amount of such unpaid fees), of such Asset Sale.
SS. 9. AMENDMENT TO SS. 9 OF THE CREDIT AGREEMENT. Section 9 of
the Credit Agreement is hereby amended as follows:
(a) Section 9.4(g) of the Credit Agreement is hereby
amended be deleting the word "and" which appears at the end of ss. 9.4(g).
(b) Section 9.4(h) of the Credit Agreement is hereby
amended by deleting the period which appears at the end of the text ofss.
9.4(h) and substituting in place thereof a semicolon, followed by the
word "and".
(c) Section 9.4 of the Credit Agreement is further
amended by inserting immediately after the end of the text of ss. 9.4(h) the
following:
"(i) at 2:00 p.m. Boston time on Friday, March 24,
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
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use commercially reasonable efforts to continue to provide reports to the
Banks of its cash flow on a bi-weekly basis beginning at a mutually agreeable
time hereafter."
(d) Section 9.19 of the Credit Agreement is hereby
amended by inserting immediately after the end of the first sentence the
following:
"The Borrower shall continue to maintain the engagement
with such consultant, subject to periodic review by the Agent and the Banks,
until the earlier of (i) the date on which the Obligations shall have been
satisfied in full and (ii) the Revolving Credit Maturity Date."
(e) Section 9 of the Credit Agreement is hereby
amended by inserting new xx.xx. 9.20, 9.21, 9.22 and 9.23 immediately after
ss. 9.19, as follows:
9.20. PCSI IPO. The Borrower will use commercially
reasonable efforts to pursue an initial public offering of the stock of its
Subsidiary Professional Computer Solutions, Inc. ("PCSI"). 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. In the event such consent is granted and such
initial public offering occurs, the Agent, for the benefit of itself and the
Banks, shall continue to have a first priority perfected security interest
with respect to all of the capital stock of PCSI, other than shares sold in
such initial public offering. 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), in an amount equal to the greater of (a)
$15,000,000 and (b) 25% of such Net Offering Proceeds, to repay Obligations,
with such amount being applied first to repay Acquisition Notes with respect
to which PCSI and Aztec are jointly and severally liable until paid in full,
then Acquisition Notes of Aztec until paid in full, then Revolving Credit
Notes until paid in full.
9.21. ADDITIONAL FINANCING. The Borrower will use
commercially reasonable efforts to seek at least $20,000,000 in additional
financing or investment in the form of subordinated debt, preferred stock or
convertible securities. The prior written consent of the Agent and the Banks
shall be required for any such additional financing or investment, whether in
the form of subordinated debt or preferred stock or convertible securities
and the Agent and the Banks may condition such consent upon the use of all of
the first $20,000,000 in Net Cash Sale Proceeds of such additional financing
to repay Obligations. Restrictions on liens in ss. 10.2, restrictions on
indebtedness in ss. 10.1, provisions regarding Restricted Payments in ss.
10.4 and restrictions on amendments to Capitalization Documents in ss. 10.13
contained in this Revolving Credit Agreement shall apply unless specifically
waived in writing by the Agent and the Banks. The holders of any such
subordinated debt, preferred stock or convertible securities shall be
required to enter into a subordination agreement in form and substance
reasonably satisfactory to the Agent and the Banks.
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9.22. WARRANTS. As consideration for the Third Amendment,
the Borrower agrees that on each date set forth on the attached SCHEDULE B,
in the event that the Total Facility Commitment is not permanently reduced to
the amount set forth with respect to such date on such SCHEDULE B, 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 the percentage 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)
set forth on such SCHEDULE B for the respective date, regardless of whether
the Borrower had failed or succeeded in reducing the Total Facility
Commitment to the level set forth on such SCHEDULE B with respect to any
prior date. For purposes of determining whether the Total Facility Commitment
has been permanently reduced to the amount set forth with respect to each
date set forth on SCHEDULE B, 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 Borrower shall enter into a Registration
Rights Agreement with the Banks in form and substance satisfactory to the
Agent and the Banks within fourteen (14) days after the Effective Date. The
Borrower shall be obligated to file on the terms set forth in such
Registration Rights Agreement, within thirty (30) days after the Effective
Date of the Third Amendment, a registration statement with the Securities and
Exchange Commission with respect to the resale of the Warrant Shares by the
Banks and shall use its commercially reasonable efforts to have the
Securities and Exchange Commission prepared to declare such registration
statement effective by June 30, 2000, including filing all amendments
necessary to reflect changes in the Borrower's Circumstances. The Borrower
needs not request acceleration of effectiveness until Warrants have been
issued, at which time the Borrower will use its commercially reasonable
efforts to have the registration statement declared effective. 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
Third 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 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 Warrants
and applicable law.
9.23. POSTCLOSING ITEMS. The Borrower shall deliver to
the Agent, within 90 days after the Effective Date of the Third Amendment:
(a) 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, (b) fully executed Pledged Account Agreements in form and
substance satisfactory to the Agent with respect to each depository account
of the Borrower and each of its Subsidiaries, as required by the Second
Amendment and (c) all items required to
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be delivered under the Credit Agreement that were not delivered prior to the
Effective Date of the Third Amendment in form and substance satisfactory to
the Agent (provided that the Agent shall deliver to the Borrower a definitive
list of all such items within 30 days after the Effective Date of the Third
Amendment). The Borrower shall deliver to the Agent, within seven days after
the Effective Date of the Third Amendment a revised DISCLOSURE SCHEDULE that
is accurate and complete as of such Effective Date and which DISCLOSURE
SCHEDULE shall contain no information that had such information been known to
the Banks on such Effective Date would have caused any Bank acting reasonably
to have refused to agree to the Third Amendment. The Borrower shall deliver
to the Agent at the time of execution and delivery of the Registration Rights
Agreement, an opinion of counsel reasonably 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 Registration Rights Agreement and other customary
provisions. 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 Third 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 Third Amendment within 30 days after the
date of the respective invoice.
SS. 10. AMENDMENT TO SS. 11 OF THE CREDIT AGREEment. Section 11
of the Credit Agreement is hereby amended by deleting ss. 11 in its entirety
and restating it as follows:
11.1. CAPITAL EXPENDITURES. The Borrower will not
make, or permit any Subsidiary of the Borrower to make, Capital
Expenditures in any fiscal year that exceed, in the aggregate,
$4,000,000. This covenant shall be tested on the last day of each fiscal
year.
11.2. DEBT SERVICE COVERAGE RATIO. The Borrower will not
permit the Debt Service Coverage Ratio to be less than 1.00 to 1.00, tested
on the last day of each fiscal quarter with respect to the fiscal quarter
then ended.
SS. 11. AMENDMENT TO SS. 27 OF THE CREDIT AGREEment. Section 27
of the Credit Agreement is hereby amended by deleting the second sentence
thereof in its entirety and restating it as follows:
Notwithstanding the foregoing, the rate of interest on the
Notes (other than interest accruing pursuant to ss. 6.11.2 following the
effective date of any waiver by the Majority Banks of the Event of Default
relating thereto), the amount of the Commitments or Acquisition Commitments
of the Banks, the release of all or substantially all of the Collateral, and
the amount of commitment fee, Amendment Fee, Overadvance Fees or Letter of
Credit Fees hereunder may not be changed without the written consent of the
Borrower and the written consent of each Bank affected thereby; the Revolving
Credit Loan Maturity Date and the Acquisition Loan Maturity Date may not be
postponed without the written consent of each Bank affected thereby; the
Minimum Net Cash Sale Proceeds with respect to any Subsidiary, this ss. 27
10
and the definition of Majority Banks may not be amended, without the written
consent of all of the Banks; and the amount of the Agent's Fee or any Letter
of Credit Fees payable for the Agent's account and ss. 16 may not be amended
without the written consent of the Agent.
SS. 12. CONDITIONS TO EFFECTIVENESS. This Third Amendment
shall become effective (the "Effective Date") only upon the satisfaction
of the following conditions on or prior to March 30, 2000:
(a) this Third Amendment shall have been executed by
the Borrower, PCSI, the Banks and the Agent and the Ratification of
Guaranty in the form attached hereto shall have been executed by each
Guarantor;
(b) the Agent shall have received from the
Borrower the initial installment of 1/6 of the Amendment Fee, which fee
shall be for the PRO RATA accounts of the Banks (in accordance with their
respective Commitment Percentages of the Total Facility Commitment);
(c) 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
Third Amendment and other customary provisions; and
(d) the Borrower shall have paid all reasonable
expenses, including legal fees and disbursements incurred by the Agent and
the Banks in connection with this Third Amendment and the transactions
contemplated hereby and any other expenses, legal 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.
SS. 13. 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 Third 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
11
subscribe for and purchase from the Borrower the number of Warrant Shares to
which each of the Banks may become entitled pursuant to the terms of the
Third 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.
SS. 14. EXHIBITS. The Credit Agreement is hereby amended to
include EXHIBIT I attached hereto, as if the same were EXHIBIT I to such
Credit Agreement.
SS. 15. 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 Third 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.
SS. 16. 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.
SS. 17. 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 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 Third 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 Third Amendment.
SS. 18. COUNTERPARTS. This Third 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.
SS. 19. GOVERNING LAW. THIS THIRD 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 Third
Amendment as a document under seal as of the date first above written.
AZTEC TECHNOLOGY PARTNERS, INC.
By: /s/ Xxx Xxxxx
-----------------------------
Name: Xxx Xxxxx
Title: President
PROFESSIONAL COMPUTER SOLUTIONS, INC.
(WITH RESPECT TO THE ASSUMPTION OF
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
-----------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Treasurer
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
FLEET NATIONAL BANK
By: /s/ Xxxxx X. Xxxx
-----------------------------
Name: Xxxxx X. Xxxx
Title: Authorized Officer
THE FUJI BANK, LIMITED
By: /s/ Xxxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxxx Xxxxxx
Title: Senior Vice President
and Group Head
NATIONAL CITY BANK OF KENTUCKY
13
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: 1st Vice President
PEOPLE'S BANK
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
14
RATIFICATION OF GUARANTY
Each of the undersigned guarantors hereby acknowledges and consents
to the foregoing Third Amendment as of March 30, 2000, and agrees that the
Guaranty dated as of (a) July 27, 1998; (b) September 17, 1998; or (c)
October 2, 1998 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: Aztec Technology Partners, Inc.,
as Sole Member
By: /s/ Xxx Xxxxx
-----------------------------
Title: President
AZTEC TECHNOLOGY PARTNERS OF NEW
ENGLAND LLC (F/K/A BAY STATE COMPUTER
GROUP LLC)
By: Aztec Technology Partners, Inc.,
as Sole Member
By: /s/ Xxx Xxxxx
-----------------------------
Title: President
COMPEL LLC
By: Aztec Technology Partners, Inc.,
as Sole Member
By: Xxx Xxxxx
-----------------------------
Title: President
ENTRA COMPUTER CORP.
By: Xxx Xxxxx
-----------------------------
Title: President
FORTRAN CORP.
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------
Title: Treasurer
15
XXXXX COMMUNICATIONS CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------
Title: Treasurer
OFFICE EQUIPMENT SERVICE, INC.
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------
Title: Treasurer
PCM, INC.
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------
Title: Treasurer
PROFESSIONAL COMPUTER SOLUTIONS,
INC.
By: /s/ Xxxx X. Xxxxxxxxx
-----------------------------
Title: Treasurer
PROFESSIONAL NETWORK SERVICES,
INC.
By: Xxxxxx X. Xxxxxxx
-----------------------------
Title: Vice President
XXXXXXXX, XXXXXX & CO., INC.
By: /s/ Xxx Xxxxx
-----------------------------
Title: President
SOFTECH COMMUNICATIONS, INC.
By: /s/ Xxx Xxxxx
-----------------------------
Title: President
16
SOLUTIONS E.T.C. INC.
By: Xxxx X. Xxxxxxxxx
-----------------------------
Title: Treasurer
