EXHIBIT 10.32
AMENDMENT TO FORBEARANCE AGREEMENT
This AMENDMENT ("Amendment") TO FORBEARANCE AGREEMENT is made as of October
8, 1998 by and between PULSAR DATA SYSTEMS, INCORPORATED ("Pulsar") and IBM
CREDIT CORPORATION ("IBM Credit").
RECITALS:
WHEREAS, Pulsar and IBM Credit have entered into that certain Forbearance
Agreement dated as of August 31, 1998 (as amended, supplemented or otherwise
modified from time to time, the "Agreement") and that certain Inventory And
Working Capital Financing Agreement dated as of October 30, 1997 ("IWCF");
and;
WHEREAS, Pulsar has requested that IBM Credit make certain changes its
Credit Line and Borrowing Base as more fully set forth on Attachment A as of
this date to the IWCF; and
WHEREAS, IBM Credit is willing to consent to the requested changes subject
to the conditions set forth below.
AGREEMENT
NOW THEREFORE, in consideration of the premises set forth herein, and for
other good and valuable consideration, the value and sufficiency of which is
hereby acknowledged, the parties hereto agree that the Agreement is amended as
follows:
SECTION 1. DEFINITIONS. All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Agreement.
SECTION 2. AMENDMENTS.
A. The Attachment A to the IWCF is hereby amended as follows:
For the period October 8, 1998 through and including January 6, 1999 the
Credit Line shall be $18,000,000.00 and thereafter the Credit Line shall be
$15,000,000.00.
B. Section 10(b) of the Agreement is hereby amended by adding to the
conclusion thereof the following:
"provided, however that Pulsar demonstrate compliance to the foregoing Financial
Covenant on a monthly basis for each calendar month from September 1998 through
December 1998 for Pulsar's fiscal year ending December 31, 1998 and for each and
every reporting period thereafter."
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SECTION 3. ADDITIONAL REQUIREMENTS.
A. The Agreement is hereby amended by inserting therein the following new
section:
"IBM Credit has earned stock representing a four percent (4%) ownership interest
in Pulsar (the "IBM Credit Interest") on a fully diluted basis. At the option
Xxxxxxx X. Xxxxx Xx. in lieu of a distribution of such Pulsar stock to IBM
Credit, Pulsar shall pay to IBM Credit the lesser of (i) four percent (4%) of
the sale price upon the sale of all or substantially all of Pulsar's asset; or
(ii) $650,000.00 or (iii) a pro-rata share of $650,000.00 upon sale of less than
all or substantially all of Pulsar's assets. For the purpose of example only
should Pulsar sell twenty-five percent (25%) of its assets, pursuant to
provision (iii) above, Pulsar would pay IBM Credit $162,500.00, it being an
amount equal to twenty-five percent of $650,000.00."
B. IBM Credit's consent to the amendment set forth in Section 2 A of this
Amendment shall immediately cease upon the occurrence of an Event of Default and
all obligations of Pulsar to IBM Credit under the IWCF, the Agreement and
otherwise shall, without notice or demand, become immediately due and payable.
SECTION 4. CONDITIONS PRECEDENT. The effectiveness of this Amendment is
subject to the receipt by IBM Credit, on or before the close of business on
October 15, 1998, of the following conditions precedent:
A. Copies of all Xxxxxxx Xxxxx Stock Account Statements for those stock
accounts assigned to IBM Credit through and including statements for the month
of August 1998; and
B. Copies of all payment workout agreement letters with unsecured creditors;
and
C. A list of all suppliers currently providing open account terms to Pulsar;
and
D. This Amendment, executed and delivered by Pulsar.
SECTION 5. REPRESENTATIONS AND WARRANTIES. Pulsar makes to IBM Credit the
following representations and warranties all of which are material and are made
to induce IBM Credit to enter into this Amendment.
SECTION 5.1 ACCURACY AND COMPLETENESS OF WARRANTIES AND REPRESENTATIONS. All
representations made by Pulsar in the Agreement were true and accurate and
complete in every respect as of the date made, and, as amended by this
Amendment, all representations made by Pulsar in the Agreement are true,
accurate and complete in every material respect as of the date hereof, and do
not fail to disclose any material fact necessary to make such warranties and
representations not misleading.
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SECTION 5.2 VIOLATION OF OTHER AGREEMENTS. The execution and delivery of
this Amendment and the performance and observance of the covenants to be
performed and observed hereunder do not violate or cause Pulsar not to be in
compliance with the terms of any agreement to which Pulsar is a party.
SECTION 5.3 LITIGATION. Except as has been disclosed by Pulsar to IBM Credit
in writing, there is no litigation, proceeding, investigation or labor dispute
pending or threatened against Pulsar, which if adversely determined, would
materially adversely affect Pulsar's ability to perform Pulsar's obligations
under the Agreement and the other documents, instruments and agreements executed
in connection therewith or pursuant hereto.
SECTION 5.4 ENFORCEABILITY OF AMENDMENT. This Amendment has been duly
authorized, executed and delivered by Pulsar and is enforceable against Pulsar
in accordance with its terms.
SECTION 6. RAMIFICATION OF AGREEMENT. Except as specifically amended
hereby, all of the provisions of the Agreement shall remain unamended and in
full force and effect. Pulsar hereby ratifies, confirms and agrees that the
Agreement, as amended hereby, represents a valid and enforceable obligation of
Pulsar's and is not subject to any claims, offsets or defense.
SECTION 7. GOVERNING LAW. This Amendment shall be governed by and
interpreted in accordance with the laws of the State of New York.
SECTION 7. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement.
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IN WITNESS WHEREOF, this Amendment has been duly executed by the authorized
officers of the undersigned as of the day and year first above written.
IBM CREDIT CORPORATION PULSAR DATA SYSTEMS, INCORPORATED
By: /S/ XXXX X. XXXXXXXX By: /S/ XXXXXXX X. XXXXX, XX.
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Print Name: Xxxx X. Xxxxxxxx Print Name: Xxxxxxx X. Xxxxx, Xx.
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Title: Remarketer Loan Manager Title: President/CEO
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Date: 10/15/98 Date: 10/14/98
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