EXHIBIT 10.22
FOURTH AMENDMENT
THIS FOURTH AMENDMENT ("Amendment") is entered into as of the 17th
day of November, 2000 by and among Deutsche Financial Services Corporation, as
Agent and a Lender ("Agent"), the other Lenders signatories hereto ("Lenders")
and GTSI Corp. (f/k/a Government Technology Services, Inc. ("Borrower").
RECITALS
Agent, Lenders (and/or their successors by assignment, as
applicable) and Borrower are parties to that certain Second Amended and Restated
Business Credit and Security Agreement dated as of July 28, 1997 (as amended
from time to time, the "Credit Agreement"). Lenders and Agent now desire to
amend certain provisions of the Credit Agreement subject to the terms hereof.
NOW, THEREFORE, in consideration of the forgoing premises and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Amendments to Credit Agreement. Upon the Amendment Effective Date
(as defined in Section 2 below), the Credit Agreement shall be amended as
follows:
A. Name Change. All references in the Agreement to "Government
Technology Services, Inc." shall be deemed to be references to "GTSI Corp."
B. Name Change. All references in the Agreements to "Crestar Bank"
shall be deemed to be references to "SunTrust Bank, the successor by merger to
Crestar Bank."
C. Credit Facility Fee. Section 3.4(d) of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:
"(d) Credit Facility Fee. Borrower agrees to pay Agent for the
account of all Lenders an annual credit facility fee of Seventy-five Thousand
Dollars ($75,000) (the "Credit Facility Fee). The Credit Facility Fee shall be
payable quarterly, in arrears, in equal installments of Eighteen Thousand Seven
Hundred Fifty Dollars ($18,750). Once received by DFS, no Credit Facility Fee
shall be refundable by DFS for any reason."
D. Unused Line Fee. Section 3.4(e) of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:
"(e) Unused Line Fee. To the extent that the Borrower's
average daily borrowing during any "Seasonal Period" is less than fifty percent
(50%) of the total of all of the Lenders' "Seasonal Period Commitments" for such
Seasonal Period, Borrower agrees to pay Agent for the account of all Lenders an
unused line fee of fifteen one hundredths of one percent (0.15%) per annum on
the amount by which fifty percent (50%) of the total of the Seasonal Period
Commitments for such Seasonal Period exceeds Borrower's average daily borrowing
during such "Seasonal Period". The terms "Seasonal Period" and "Seasonal Period
Commitment" shall be as set forth on Exhibit A of the Credit Agreement."
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E. Collateral/Inspection Fees. Section 3.4(f) of the Credit
Agreement is hereby deleted in its entirety and replaced with the following:
"(f) Collateral/Inspection Fees. Borrower will pay a fee to
DFS, for its own account (even if other Lenders accompany the Agent on such
review), in the amount of Three Thousand Seven Hundred Fifty Dollars ($3,750)
per review for Collateral reviews and any other reviews performed under the Loan
Documents as frequently as Agent shall reasonably determine, but at least
quarterly. Borrower agrees that such fees are not interest but are rather
reimbursements for out-of-pocket and allocated overhead expenses incurred in
conducting such audits, reviews, examinations and inspections."
F. Termination. Section 4.1 of the Credit Agreement is hereby
deleted in its entirety and replaced with the following:
"4.1 Termination. This Agreement may be terminated at any time by Agent or
Borrower upon ninety (90) days written notice received by the other party or ,if
Borrower is in Default hereunder, Agent may terminate in the exercise of its
rights and remedies with no prior notice of termination to Borrower. Any
termination of this Agreement by Borrower or Agent will have the effect of
accelerating the maturity of all Obligations not then otherwise due.
4.1.1 Effect of Termination. Borrower will not be relieved from any
Obligations to Agent arising out of DFS' advances or commitments made before the
effective termination date of this Agreement. Agent will retain all of its
rights, interests and remedies hereunder until Borrower has paid all of
Borrower's Obligations to DFS. All waivers set forth within this Agreement will
survive any termination of this Agreement."
G. Financial Covenants. Section 9.3.1 of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:
"9.3.1 Amounts. Borrower agrees that it will:
(a) as of the last day of each calendar quarter set forth below, maintain
a Tangible Net Worth plus Subordinated Debt in the combined amount of not less
than the amount shown below for the period corresponding thereto:
Period Amount
Calendar quarter ending 9/30/00 $40,000,000
Calendar quarter ending 12/31/00 $40,000,000
Calendar quarter ending 3/31/01 $40,000,000
Calendar quarter ending 6/30/01 $40,000,000;
(b) as of the last day of each calendar quarter set forth below, maintain
a ratio of Debt minus Subordinated Debt to Tangible Net Worth plus Subordinated
Debt of not more than the amount shown below for the period corresponding
thereto:
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Period Ratio
Calendar quarter ending 09/30/00 7.0 to 1.0
Calendar quarter ending 12/31/00 4.0 to 1.0
Calendar quarter ending 3/31/01 4.0 to 1.0
Calendar quarter ending 6/30/01 4.0 to 1.0;
(c) as of the last day of each calendar quarter set forth below, maintain
a ratio of Current Assets to current liabilities of not less than the amount
shown below for the period corresponding thereto:
Period Ratio
Calendar quarter ending 9/30/00 1.1 to 1.0
Calendar quarter ending 12/31/00 1.2 to 1.0
Calendar quarter ending 3/31/01 1.2 to 1.0
Calendar quarter ending 6/30/01 1.2 to 1.0;
(d) for the fiscal year of Borrower ending December 31, 2000, and each
fiscal year-end thereafter, Borrower shall achieve net income, before giving
effect to provisions for income taxes, of at least Two Million Dollars
($2,000,000.00).
Prior to September 30, 2001, Agent and Borrower shall renegotiate the
above financial covenants for application to any subsequent periods of this
Agreement. If on or prior to September 30, 2001, the parties fail to execute a
written amendment to this Agreement providing for such revised financial
covenants for any subsequent periods of this Agreement, then the above financial
covenants in effect for the calendar quarter ending September 30, 2001, shall be
and remain in effect, until such amendment is executed and in full force and
effect.
For purposes of this paragraph: (i) "Tangible Net Worth" means the book
value of Borrower's assets less liabilities (including as liabilities all
recorded reserves for contingencies and other potential liabilities), excluding
from such assets all Intangibles; (ii) "Intangibles" means and includes general
intangibles (as that term is defined in the UCC); accounts receivable and
advances due from officers, directors, member, owner, employees, stockholders
and affiliates; leasehold improvements net of depreciation; licenses; good will;
prepaid expenses (except for those determined by Agent, in its sole discretion,
not to be Intangible); escrow deposits (except for those determined by Agent, in
its sole discretion, not to be Intangible); covenants not to compete; the excess
of cost over book value of acquired assets; franchise fees; organizational
costs; finance reserves held for recourse obligations; capitalized research and
development costs; and such other similar items as DFS may from time to time
determine in DFS' sole discretion; (iii) "Debt" means all of Borrower's
liabilities and indebtedness for borrowed money of any kind and nature
whatsoever, whether direct or indirect, absolute or contingent, and including
obligations under capitalized leases, guaranties or with respect to which
Borrower has pledged assets to
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secure performance, whether or not direct recourse liability has been assumed by
Borrower; (iv) "Subordinated Debt" means all of Borrower's Debt which is
subordinated to the payment of Borrower's liabilities to the Lenders by an
agreement in form and substance satisfactory to Agent; and (v) "Current Assets"
means Borrower's current assets. The foregoing terms will be determined in
accordance with GAAP consistently applied, and, if applicable, on a consolidated
basis ("Financial Covenants")."
2. Consent to Stock Repurchase. Lenders previously consented to Borrower's
purchase of its stock from third-party shareholders up to Five Million Two
Hundred Fifty Thousand Dollars ($5,250,000) in the Third Amendment dated
November 24, 2000 among Agent, Lenders and Borrower ("Third Amendment").
Borrower has requested that such amount be increased to Six Million One Hundred
Thousand Dollars ($6,100,000). Lenders hereby consent to Borrower's purchase of
its stock, provided that (i) the aggregate purchase price of all stock so
purchased (including stock previously purchased pursuant to the consent
contained in the Third Amendment), shall not exceed $6,100,000; and (ii)
Borrower shall not breach any financial covenant set forth in Section 9.3.1 of
the Credit Agreement as a result of Borrower's payment of the purchase price for
such stock.
3. Conditions Precedent. Notwithstanding the foregoing, this Amendment
shall not be effective unless and until satisfaction of the following terms and
conditions, each as acceptable to Agent, in its sole discretion (the date on
which all such terms and conditions are satisfied being the "Amendment Effective
Date):
(a) execution and delivery of this Amendment by all parties hereto; and
(b) such other and further documents and agreements as Agent may determine
in connection with any of the foregoing.
4. Miscellaneous. Except to the extent specifically amended herein, all
terms and conditions of the Credit Agreement and the other Loan Documents are
hereby ratified and reaffirmed and shall remain in full force and effect.
Capitalized terms used but not defined herein shall have the meanings given them
in the Credit Agreement. Borrower waives notice of Agent's and each Lender's
acceptance of this Amendment. Agent and each Lender reserves all of their
respective rights and remedies under the Credit Agreement and other Loan
Documents.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first written above.
GTSI Corp.
By:
Name:
Title:
DEUTSCHE FINANCIAL SERVICES CORPORATION,
as Agent and a Lender
By:
Name:
Title:
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XXXXXXXX XXXX, a Lender
By: _________________________________
Name:
Title:
Date:
FLEET CAPITAL CORPORATION, a Lender
By:
Name:
Title:
Date:
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