QUADRANT 4 SYSTEM CORPORATION (OTCMKTS:QFOR) Files An 8-K Entry into a Material Definitive Agreement

As previously reported in a Current Report on Form 8-K dated
December 6, 2016, Quadrant 4 System Corporation (the Company)
received a formal notice of default from BMO Harris Bank N.A.
(BMO) with respect to the Credit Agreement, dated as of July 1,
2016 (as amended, restated, supplemented or otherwise modified
from time to time, the Credit Agreement), between the Company, as
borrower, and BMO, as lender. The notice of default cited (i) the
pending charges described in Item 8.01 of that Current Report on
Form 8-K, (ii) the failure of the Company to timely deliver
evidence of having closed a deposit account with another lender,
and (iii) the failure of the Company to deliver evidence that the
policies of insurance of the Company and its subsidiaries contain
a lenders loss payable endorsement for BMOs benefit and an
endorsement showing BMO as additional insured, as required by the
Credit Agreement. Since that time, the Company has been engaged
in discussions with BMO regarding these matters.

Effective March 17, 2016, the Company entered into a Forbearance
Agreement (the Forbearance Agreement) by and among the Company,
its subsidiary guarantor Stratitude, Inc. (Guarantor, and
together with the Company, the Forbearance Parties), and BMO.

to the terms of the Forbearance Agreement, BMO has agreed to
forbear in the exercise and enforcement of its rights, powers and
remedies under: (i) the Credit Agreement; (ii) the First
Amendment to Credit Agreement, dated as of November 3, 2016 (as
amended, supplemented or otherwise modified from time to time,
the Credit Agreement Amendment) by and among Borrower, Guarantor
and BMO; (iii) the General Security Agreement, dated as of July
1, 2016 (as amended, supplemented or otherwise modified from time
to time, the Security Agreement) by and between the Company and
BMO; (iv) the Amendment No. 1 to General Security Agreement,
dated as of November 3, 2016 (as amended, supplemented or
otherwise modified from time to time, the Security Agreement
Amendment) by and among the Company, Guarantor and BMO; (v) the
General Security Agreement, dated as of November 3, 2016 (as
amended, supplemented or otherwise modified from time to time,
the Guarantor Security Agreement) by and between Guarantor and
BMO; (vi) the Revolving Note, dated as of July 1, 2016 (as
amended, supplemented or otherwise modified from time to time,
the Revolving Note) by the Company in favor of BMO in the
original principal amount of $7,000,000.00; (vii) the Term Note,
dated as of July 1, 2016 (as amended, supplemented or otherwise
modified from time to time, the Term Note) by the Company in
favor of BMO in the original principal amount of $13,000,000.00;
(viii) the CapEx Software Note, dated as of July 1, 2016 (as
amended, supplemented or otherwise modified from time to time,
the CapEx Note, and collectively with the Revolving Note and Term
Note, the Notes) by the Company in favor of BMO in the original
principal amount of $5,000,000.00; (ix) the Guaranty Agreement
(as amended, supplemented or otherwise modified from time to
time, the Guaranty) by Guarantor in favor of BMO; (x) the
Intercreditor and Subordination Agreement, dated as of November
3, 2016 (as amended, supplemented or otherwise modified from time
to time, the Intercreditor Agreement) by and between BMO and BIP
Lender, LLC; (xi) the Subordination Agreement, dated as of
November 3, 2016 (as amended, supplemented or otherwise modified
from time to time, the Intercreditor Agreement) by and among the
Company, BMO, Pankaj Kalra, Ashish Sanan and Khannan Sankaran;
and (xii) all other related documents (collectively, as amended,
modified, supplemented, renewed, extended and/or restated from
time to time, the Other Documents, and collectively with the
Credit Agreement, the Credit Agreement Amendment, the Security
Agreement, the Security Agreement Amendment, the Guarantor
Security Agreement, the Notes, the Guaranty, the Intercreditor
Agreement, and the Subordination Agreement, the Loan Documents).

The forbearance period (the Forbearance Period) under the
Forbearance Agreement will expire on the earliest to occur of:
(a) the date of the termination of the Forbearance Agreement by
BMO to Section 8 thereof, or (b) May 15, 2017.

Under the terms of the Forbearance Agreement, the Forbearance
Parties have agreed to, among other things, (i) pay to BMO a
non-refundable forbearance fee in the amount of $10,000, and (ii)
appoint three new members to the Companys Board of Directors, as
further described in Item 5.02.

The foregoing summary of the Forbearance Agreement is qualified
in its entirety by the text of the Forbearance Agreement, which
is filed as Exhibit 10.1 to this Current Report on Form 8-K and
hereby incorporated herein by reference.

Item 5.02.

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 16, 2017, the Companys Board of Directors (the Board)
appointed Robert H. Steele, Brad Buxton, and Michael Silverman to
fill its three current vacancies.

There are no understandings or arrangements between Messrs.
Steele, Buxton, or Silverman and any other person to which
Messrs. Steele, Buxton, or Silverman was selected as a director
of the Company; provided, however that as a condition of BMOs
agreement to enter into the Forbearance Agreement, BMO required
that the Company appoint three new directors who were acceptable
to the Board and to BMO. None of the new appointees to the Board
has any family relationship with any director or executive
officer of the Company. Mr. Steele currently serves as the
Companys Chief Executive Officer. It has not yet been determined
on which committees of the Board the new appointees will serve.
The appointment of the new directors was effective immediately.

Item 5.03. Amendments to Articles of Incorporation or Bylaws;
Change in Fiscal Year.

Effective March 16, 2017, the Board approved and amended the
Companys Bylaws to amend and restate Section 3.2 thereof in a
manner that more clearly complies with the Business Corporation
Act of the State of Illinois, as amended (the BCA) and that
provides for a Board ranging in size from three to seven
directors, as designated by the Board from time to time.
Previously, the Bylaws had provided for a variable-size board
without specifying a minimum size and a maximum size as required
by the BCA.

The foregoing summary of the amendment to the Bylaws is qualified
in its entirety by reference to the full text of such amendment,
which is filed as Exhibit 3.1 to this Current Report on Form 8-K
and hereby incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits