AMENDMENT TO
FORBEARANCE AGREEMENT AND LIMITED WAIVER
Amendment and Limited Waiver dated as of June 21, 2001 (this
"Amendment") to Forbearance Agreement dated as of May 17, 2001 (the "Forbearance
Agreement") by and among AZTEC TECHNOLOGY PARTNERS, INC., a Delaware corporation
("Aztec"), ("BLUEFLAME INC. (DE) (f/k/a PROFESSIONAL COMPUTER SOLUTIONS, INC.)
("BlueFlame" and together with Aztec, collectively called the "Borrower"), as
Co-Borrower with respect to $15,000,000 in outstanding principal amount of
Acquisition Loans under the Credit Agreement (as defined below), FLEET NATIONAL
BANK (f/k/a BANKBOSTON, N.A.) and the other lending institutions listed on
SCHEDULE 1 to the Credit Agreement (the "Banks") relating to the Revolving
Credit Agreement dated as of July 27, 1998 by and among the Borrower, the Banks
and the Agent (as amended and in effect from time to time, the "Credit
Agreement"). Terms not otherwise defined herein which are defined in the
Forbearance Agreement, or if not defined therein, in the Credit Agreement, shall
have the same respective meanings herein as therein
WHEREAS, a default has occurred under Section 2(m) of the Forbearance
Agreement in that the Borrower and Guarantors were required to provide bi-weekly
cash flow reports to the Agent and the Banks, showing actual performance
compared to projections for the relevant period and to include accounts
receivable reports showing aging of accounts receivable by Subsidiary, one
business day in advance of each bi-weekly conference call (the "Bi-Weekly
Financials" ), and the Borrower and the Guarantors did not deliver such cash
flow reports to the Agent and the Banks one business day in advance of the May
31, 2001 conference call; and
WHEREAS, the Agent notified the Borrower of such default on June 1,
2001 and the Borrower has requested that the Banks waive such default; 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
Forbearance Agreement and grant such waiver as specifically set forth in this
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 Banks hereby waive the Borrower's failure to
comply with Section 2(m) of the Forbearance Agreement with respect to the
Borrower's failure to provide the Bi-Weekly Financials in accordance with
Section 2(m) of the Forbearance Agreement for the May 31, 2001 conference call,
and any Default or Event of Default (and only such Defaults and Events of
Default) arising under the Credit Agreement that would otherwise be caused as a
result of such failure, and not with respect to any failure to comply with such
Section 2(m) that may occur on any date subsequent to May 31, 2001.
SECTION 2. LIMITATION ON BORROWINGS; AMENDMENT TO SECTION 1 (b) OF
FORBEARNCE AGREEMENT. Section 1 of the Forbearance Agreement is hereby amended
by deleting subsection (b) thereof in its entirety and substituting the
following in its place:
1
(b) During the Forbearance Period notwithstanding the Existing Event of
Default, the Borrower shall be permitted to borrow Revolving Credit Loans to the
extent of availability and otherwise under the terms of the Credit Agreement as
if the Commitment had not been terminated, PROVIDED, HOWEVER, that (i) such
Borrowing does not cause the aggregate outstanding principal amount of Revolving
Credit Loans to exceed $9,000,000 at any time during the Forbearance Period and
(ii) the Borrower is in compliance with all of the terms and conditions of this
Agreement (other than the representations and warranties in Section 8.4.4 of the
Credit Agreement) and that no Event of Default other than the Existing Event of
Default shall have occurred and be continuing. Nothing in this Agreement shall,
however, be construed as a waiver of or acquiescence in the Existing Event of
Default, which shall continue in existence subject only to the agreement of the
Banks and the Agent set forth herein not to enforce certain remedies for a
limited period of time. Except as expressly provided herein, the execution and
delivery of this Agreement shall not: (i) constitute an extension, modification,
or waiver of any aspect of the Credit Agreement; (ii) extend the terms of the
Credit Agreement or the due date of any of the Obligations; (iii) give rise to
any obligation on the part of the Agent or the Banks to extend modify or waive
any term or condition of the Credit Agreement; or (iv) give rise to any defenses
or counterclaims to the Agent's or the Banks' right to demand payment of the
Obligations or to otherwise enforce their rights and remedies under the Credit
Agreement. Following termination of the Forbearance Period, the Agent and the
Banks shall be entitled to enforce the Credit Agreement according to the
original terms of the Credit Agreement, as the Credit Agreement has been
heretofore amended from time to time.
SECTION 3. AMENDMENT TO SECTION 11 OF FORBEARANCE AGREEMENT. Section 11
of the Forbearance Agreement is hereby amended by deleting it in its entirety
and replacing it with the following:
SECTION 11. AMENDMENTS. Neither this Amendment nor any provision hereof
may be modified, supplemented, waived or amended, except pursuant to a written
agreement, consent or waiver executed and delivered by the Agent and the
Majority Banks or such greater number of Banks as would be required pursuant to
Section 27 of the Credit Agreement with respect to an equivalent modification,
supplement, waiver or amendment to the Credit Agreement. Notwithstanding the
foregoing, any amendment to this Forbearance Agreement that would permit the
aggregate outstanding principal amount of Revolving Credit Loans to exceed
$9,000,000 at any time during the Forbearance Period shall require the prior
written consent to the Agent and all of the Banks.
SECTION 4. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective only upon the satisfaction of the following conditions:
(a) this Amendment shall have been executed by each
Borrower, all of the Banks and the Agent and the Ratification of Guaranty in the
form attached hereto shall have been executed by each Guarantor; and
(b) the Borrower shall have paid all reasonable expenses,
including legal fees and disbursements incurred by the Agent and the Banks in
connection with this Amendment and the transactions contemplated hereby and any
other expenses, legal fees and disbursements required to be paid pursuant to
Section 17.1 of the Credit Agreement and not heretofore paid by the Borrower for
which an invoice has been submitted.
2
SECTION 5. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants that (a) the execution and delivery by the Borrower and
each Guarantor of this Amendment and the performance by the Borrower and each
Guarantor of all of its agreements and obligations under the Credit Agreement
and the Forbearance 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.
SECTION 6. RATIFICATION, ETC. Except as expressly amended hereby, the
Forbearance Agreement and 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 Forbearance Agreement and this Amendment shall be
read and construed as a single agreement. All references in the Forbearance
Agreement or any related agreement or instrument to the Forbearance Agreement
shall hereafter refer to the Forbearance Agreement as amended hereby. All
references in the Credit Agreement or any related agreement or instrument to the
Credit Agreement shall hereafter refer to the Credit Agreement as affected by
the Forbearance Agreement and this Amendment.
SECTION 7. 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 in Section 1 hereof.
SECTION 8. 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
of all Banks from any and all liabilities and claims under the Credit Agreement,
the Forbearance Agreement, this 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 Amendment.
SECTION 9. COUNTERPARTS. This 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 10. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).
SECTION 11. ENTIRE AGREEMENT. This Amendment, together with the
Forbearance Agreement contains the entire understanding among the parties hereto
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained.
SECTION 12. AMENDMENTS. Neither this Amendment nor any provision hereof
may be modified, supplemented, waived or amended, except pursuant to Section 11
of the Forbearance Agreement.
3
IN WITNESS WHEREOF, the parties hereto have executed this 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/ T. Kenwood Mullare
-----------------------------------------
Title: Secretary
FLEET NATIONAL BANK (AS AGENT AND AS A BANK)
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
CITIZENS BANK OF MASSACHUSETTS
By: /s/ Xxxxx X. Xxx
-----------------------------------------
Name: Xxxxx X. Xxx
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ Xxxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Senior Vice President
0
XXXXXXXX XXXX XXXX XX XXXXXXXX
By: /s/ Xxxxx X. Xxxx
-----------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Commercial Banking Officer
PEOPLE'S BANK
By: /s/ Xxxx X. XxXxxxx
-----------------------------------------
Name: Xxxx X. XxXxxxx
Title: Vice President
5
RATIFICATION OF GUARANTY
Each of the undersigned guarantors hereby acknowledges and consents to
the foregoing Amendment as of June ___, 2001, and agrees that the Guaranty dates
as of (a) July 27, 1998; (b) September 17, 1998; (c) October 2, 1998, (d) June
26, 2000 or (e) November 1, 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/ T. Kenwood Mullare
-----------------------------------------
Title: Secretary
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
TWO TWO TWO CORPORATION (f/k/a PCM, INC.)
By: /s/ T. Kenwood Mullare
-----------------------------------------
Title: Secretary
XXXXXXXX, XXXXXX & CO., INC.
By: /s/ T. Kenwood Mullare
-----------------------------------------
Title: Secretary
6
BLUEFLAME INC. (DE) (f/k/a PROFESSIONAL
COMPUTER SOLUTIONS, INC.)
By: /s/ T. Kenwood Mullare
-----------------------------------------
Title: Secretary
PROFESSIONAL NETWORK SERVICES, INC.
By: /s/ T. Kenwood Mullare
-----------------------------------------
Title: Secretary
SOFTECH COMMUNICATIONS, INC.
By: /s/ Xxx Xxxxx
-----------------------------------------
Title: President
SOLUTIONS E.T.C. INC.
By: /s/ Xxx Xxxxx
-----------------------------------------
Title: President
7
DIGITAL NETWORK ASSOCIATES LLC
By: /s/ T. Kenwood Mullare
-----------------------------------------
Title: Secretary
OFFICE EQUIPMENT SERVICE, INC.
By: /s/ T. Kenwood Mullare
-----------------------------------------
Name:
Title: Secretary
BLUEFLAME, INC.
By: /s/ T. Kenwood Mullare
-----------------------------------------
Name:
Title: Secretary
8
