September 3, 2009

 

 

RBC Bank (USA)

Attn: Mr. Charles Arndt

531 South Main Street, 2nd Floor

Greenville, SC 29601

Re: Computer Software Innovations, Inc.

Waiver Concerning Subordinated Notes

Dear Mr. Arndt:

This letter is being provided to you in connection with the Second Amended and
Restated Loan and Security Agreement dated September 14, 2007 (as amended, the
"Loan Agreement") and other documents described or contemplated therein or
related thereto (the "Loan Documents") between Computer Software Innovations,
Inc. (the "Borrower" or "CSI") and RBC Bank (USA) (formerly known as RBC Centura
Bank, the "Bank"). Specifically, this letter concerns a potential cross-default
under the Loan Documents arising out of a payment default on certain outstanding
subordinated debt owed by CSI to various parties as described below.

On February 11, 2005, CSI executed five (5) Promissory Notes, each in the amount
of $375,040, in favor of each of the following persons: Nancy K. Hedrick, Joe G.
Black, Thomas P. Clinton, William J. Buchanan and Beverly N. Hawkins. Also on
February 11, 2005, CSI executed a sixth Promissory Note in the amount of
$1,875,200 in favor of Baron Partners, LP ("Baron"). The original maturity date
of the six Promissory Notes (the "Subordinated Notes") was May 10, 2006. On
August 23, 2008, we and each of the holders of the Subordinated Notes entered
into a letter agreement which extended the maturity date of such notes until
March 31, 2009. Again, on May 13, 2009, we and each of the holders of the
Subordinated Notes entered into an agreement to extend the notes until August
30, 2009. Among other things, the two agreements with the note holders entailed
making principal payments on the notes, to which you provided waivers under the
Loan Documents.

We failed to pay the remaining principal balance of the notes of $1,750,400 on
the extended maturity date of August 30, 2009. Consequently, we were in default
under the terms of the Subordinated Notes (the "Payment Defaults") as of August
31, 2009. However, we have received no notice of default and none of the
Subordinated Notes has been accelerated.

On past occasions, the Bank has granted CSI a waiver with respect to any
potential cross-defaults under the Loan Documents that may have been triggered
solely by reason of the Payment Defaults on the Subordinated Notes. CSI
respectfully requests such a waiver of any defaults or breaches of any of the
terms of the Loan Documents which may be triggered solely by reason of the
Payment Defaults under the Subordinated Notes, including any subsequent
acceleration of payment of any of the Subordinated Notes by the holders thereof,
based on the Payment Defaults.

The Company is currently in negotiations with Baron and the other holders to
extend the maturity of, to refund, or to restructure the Subordinated Notes. CSI
agrees, pursuant to the requirements of the Loan Documents, that it will obtain
the consent of the Bank with respect to any amendments to the Subordinated
Notes.

If our request is acceptable to the Bank, please indicate your assent by
affixing your signature and the date below, and returning a copy of this letter
to me and our legal counsel, Smith Moore Leatherwood LLP, to the attention of
William L. Pitman. Thank you in advance for your consideration of our request.
Please call me if you have any questions concerning any of the foregoing.

Yours very truly,

/s/ David D. Dechant

David D. Dechant

Chief Financial Officer

 

ON BEHALF OF RBC BANK (USA), THE

REQUEST FOR WAIVER ABOVE IS

ACCEPTED.

Date: September 3, 2009

By: /s/ Charles Arndt____________

Charles Arndt, Market Executive

South Carolina Markets