EXHIBIT 10.10(d)
AMENDMENT NO. 4 TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 4 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
(this "Amendment"), dated as of the 28 day of April, 1998, is made by and among
QUESTECH, INC., a Virginia corporation ("QuesTech"), QUESTECH SERVICE COMPANY, a
Virginia corporation formerly known as Engineering Resources, Inc. ("QTSC"),
QUESTECH PACKAGING, INC., a Virginia corporation ("QTPI"; QuesTech, QTSC and
QTPI are referred to individually as an "Original Borrower" and collectively as
the "Original Borrowers") and QT INFORMATION SCIENCES CORPORATION, a Virginia
corporation ("QTISC"; QuesTech, QTSC, QTPI and QTISC are referred to
individually as a "Borrower" and collectively as the "Borrowers"), and FIRST
UNION NATIONAL BANK, a national banking association, successor by merger to
Signet Bank, a Virginia banking corporation (the "Lender").
RECITALS
A. The Lender and the Original Borrowers entered into an Amended and Restated
Loan and Security Agreement dated as of June 3, 1996 (as amended through the
date hereof, the "Agreement") pursuant to which the Lender has agreed to extend
credit to the Original Borrowers, and the Original Borrowers have agreed to
obtain credit from the Lender, on the terms and conditions set forth in such
Agreement.
B. The Borrowers have requested that the Lender make certain modifications to
the Agreement, including, permitting QTISC to become a Borrower, extending the
Termination Date, increasing the Maximum Amount, permitting a higher advance
rate with respect to certain government receivables included in the borrowing
base, decreasing the unused fee charged with respect to the credit and
increasing the tangible net worth requirement for the Borrowers, and the Lender
has consented to such request subject to the execution of this Amendment and the
satisfaction of the conditions specified herein.
C. The Borrowers and the Lender now desire to execute this Amendment to set
forth their agreements with respect to the modifications to the Agreement.
Accordingly, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Lender and the Borrowers agree
as follows:
SECTION 1. Definitions. Capitalized terms used in this Amendment and not
defined herein are defined in the Agreement.
SECTION 2. Amendments to Agreement. The Agreement is hereby amended as
follows:
2.1 Amendments to Section 1. Section 1 of the Agreement is amended as
follows:
2.1 (a) Borrowing Base. The definition of the term Borrowing Base is
restated in its entirety with the following definition:
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"Borrowing Base" means, at the time in question, the sum of (a) 90% of
Eligible Billed Government Receivables, (b) 80% of Eligible Billed Commercial
Receivables, and (c) 85% of Eligible Billed Special Commercial Receivables, all
as depicted in the Borrowing Base Certificate the Lender has most recently
received pursuant to Section 2.1(e) or Section 5.8(g) provided, however, that
(i) the Borrowing Base shall be reduced by the Letter of Credit Exposure on the
date the Borrowing Base is being calculated, (ii) at all times the Borrowing
Base shall remain subject to verification by the Lender, and (iii) in no event
shall the Borrowing Base attributable to the Accounts Receivable described in
clause (b) of this definition of "Borrowing Base" exceed One Million and no/100
Dollars ($1,000,000.00).
2.1(b) Cash Collateral Account. The following sentence is added at
the end of the definition of Cash Collateral Account:
The initial Cash Collateral Account for QTISC is account number
2065202369252.
2.1(c) Commitment Fee. The definition of the term Commitment Fee is
restated in its entirety as follows:
"Commitment Fee" means the quarterly fee to be paid by the Borrowers
to the Lender pursuant to Section 2.5 hereof in consideration of the commitment
by the Lender to make Revolving Loans hereunder. The Commitment Fee due for each
calendar quarter (or portion thereof) shall equal the product of the Commitment
FeeRate in effect for such quarter (or portion thereof) multiplied by the
difference between $8,000,000.00 and the sum of the average daily principal
balance of the Revolving Loans during such quarter (or applicable portion
thereof) plus the average daily face amount of all Letters of Credit outstanding
during such quarter (or applicable portion thereof).
2.1(d) Commitment Fee Rate. The definition of the term Commitment
Fee Rate is restated in its entirety as follows:
"Commitment Fee Rate" means the rate calculated by multiplying
one-quarter percent (1/4%) by a fraction, the numerator of which is the number
of days in the calendar quarter, or shorter period for which the Commitment Fee
Rate is being calculated, and the denominator of which is 360.
2.1(e) Maximum Amount. The definition of the term Maximum Amount is
restated in its entirety as follows:
"Maximum Amount" means, at any time, the lesser of (a) the difference
between Eight Million and no/100 Dollars ($8,000,000.00) and the Letter of
Credit Exposure at such time or (b) the then-applicable Borrowing Base.
2.1(f) Revolving Note. The definition of the term Revolving Note is
restated in its entirety as follows:
"Revolving Note" means the promissory note in form and substance
acceptable to the Lender in the original principal amount of $8,000,000.00 (as
it may be amended, modified, supplemented or replaced from time to time)
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evidencing the obligation of the Borrowers to pay the principal amount of the
Revolving Loans together with interest on the Revolving Loans.
2.1(g) Termination Date. The definition of Termination Date is
hereby restated in its entirety as follows:
"Termination Date" means May 31, 1999 and any extension or extensions
thereof granted by the Lender in its sole discretion.
2.2 Amendments to Section 2.
2.2 (a) Amendment to Section 2.1 (c). Section 2.1(c) is restated in
its entirety as follows:
(c) If the Principal Amount exceeds the Maximum Amount, the Borrowers shall
immediately prepay the Revolving Loans to the extent necessary to reduce such
excess. If after such prepayment the Letter of Credit Exposure exceeds the sum
of (a) 90% of Eligible Billed Government Receivables, (b) 80% of Eligible Billed
Commercial Receivables, and (c) 85% of Eligible Billed Special Commercial
Receivables, all as depicted in the Borrowing Base Certificate the Lender has
most recently received pursuant to Section 2.1(e) or Section 5.8(g), the
Borrowers shall immediately deliver to the Lender such additional collateral as
the Lender shall deem necessary to adequately secure the Borrowers' obligations
with respect to such Letter of Credit Exposure.
2.3 Amendments to Section 5. Section 5 of the Agreement is amended as
follows:
2.3(a) Amendment to Section 5.12(a). Section 5.12(a) is deleted in its
entirety and restated as follows:
(a) Minimum Tangible Net Worth. As of the ending date of the
financial period depicted in each consolidated balance sheet of QuesTech
required to be delivered to the Lender under the terms of this agreement (as
part of Form 10-Q or 10-K, as applicable), maintain a Tangible Net Worth of at
least (i) Three Million Dollars ($3,000,000.00) for each period ending prior to
June 30, 1998 and (ii) Three Million Seven Hundred Fifty Thousand and no/100
Dollars ($3,750,000.00) for each period ending on or after June 30, 1998.
SECTION 3. Representations and Warranties of the Borrowers. Each Borrower,
jointly and severally, represents and warrants to the Lender that:
(a) Each Borrower has the power and authority to enter into and
to perform this Amendment, to execute and deliver all documents relating to this
Amendment, and to incur the obligations provided for in this Amendment, all of
which have been duly authorized and approved in accordance with each Borrower's
corporate documents;
(b) This Amendment, together with all documents executed pursuant
hereto, shall constitute when executed the valid and legally binding obligations
of the Borrowers in accordance with their respective terms;
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(c) Except with respect to events or circumstances occurring
subsequent to the date thereof and known to the Lender, all representations and
warranties made in the Agreement are true and correct as of the date hereof,
with the same force and effect as if all representations and warranties were
fully set forth herein;
(d) Each Borrower's obligations under the Loan Documents remain
valid and enforceable obligations, and the execution and delivery of this
Amendment and the other documents executed in connection herewith shall not be
construed as a novation of the Agreement or any of the other Loan Documents; and
(e) As of the date hereof, no Borrower has any offsets or
defenses against the payment of any of the Obligations.
SECTION 4. Waiver of Claims. As a specific inducement to the Lender without
which the Borrowers acknowledge the Lender would not enter into this Amendment
and the other documents executed in connection herewith, each Borrower hereby
waives any and all claims that it may have against the Lender, as of the date
hereof, arising out of or relating to the Agreement or any other Loan Document
whether sounding in contract, tort or any other basis.
SECTION 5. Conditions of Effectiveness. This Amendment shall become effective
when, and only when, the Borrowers have executed and completed this Amendment
and a Revolving Note in form and substance acceptable to the Lender, have
delivered such original, executed documents to the Lender, and have reimbursed
the Lender for the Lender's costs and expenses incurred in connection with this
Amendment.
SECTION 6. Miscellaneous.
6.1 Reference To Agreement, Revolving Note and Borrower or Borrowers.
Upon the effectiveness of this Amendment, each reference in the Agreement to
"this Agreement" and each reference in the other Loan Documents to the
Agreement, shall mean and be a reference to the Agreement as amended hereby,
each reference in the Agreement and the other Loan Documents to the "Revolving
Note" shall mean and be a reference to the Revolving Note executed by the
Borrowers and delivered to the Lender pursuant to Section 5 hereof, and each
reference to "Borrower" or "Borrowers" shall mean and be a reference to such
terms as defined in the preface of this Amendment.
6.2 Effect on Loan Documents and Accrued and Unpaid Interest, Fees and
Other Charges. Except as specifically amended above, the Agreement and all other
Loan Documents shall remain in full force and effect and are hereby ratified and
confirmed. Without limiting the generality of the foregoing, all Collateral
given to secure the Obligations of the Borrowers under the Agreement and the
other Loan Documents prior to the date hereof does and shall continue to secure
all Obligations of the Borrowers under the Agreement, as amended hereby and the
other Loan Documents, and, except as provided in the Agreement and the other
Loan Documents, no such Collateral shall be released until all conditions to
such release as contained in the Loan Documents are satisfied. Any interest,
fees and other charges due under the Agreement which have accrued and remain
unpaid as of the effective date of this Amendment
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shall be paid on the next succeeding date that any such charge which has accrued
on or after the effective date of this Amendment is due under the Agreement, as
amended hereby, unless any such charge is discontinued by this Amendment, in
which event the Borrowers shall pay the accrued and unpaid portion thereof upon
execution of this Amendment.
6.3 No Waiver. The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of the
Lender under any of the Loan Documents, nor constitute a waiver of any provision
of any of the Loan Documents.
6.4 Costs, Expenses and Taxes. The Borrowers, jointly and severally,
agree to pay on demand all costs and expenses of the Lender in connection with
the preparation, reproduction, execution and delivery of this Amendment and the
other instruments and documents to be delivered hereunder, including the
reasonable fees and out-of-pocket expenses of counsel for the Lender with
respect thereto.
6.5 Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the Commonwealth of Virginia, without giving
effect to conflict of law provisions.
6.6 Assumption of Obligations. As evidenced by its signature below,
QTISC hereby assumes all Obligations of the Original Borrowers under the
Agreement, as modified hereby.
IN WITNESS WHEREOF, the Borrowers and the Lender have caused this Amendment
to be signed by their duly authorized representatives under seal all as of the
day and year first above written.
QUESTECH, INC. a Virginia corporation
ATTEST: By: X. X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx, Chairman
X. X. Xxxxxx
----------------------
Secretary
[corporate seal]
QUESTECH SERVICE COMPANY, a Virginia
corporation
ATTEST: By: X. X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx, Chairman
X. X. Xxxxxx
----------------------
Secretary
[corporate seal]
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QUESTECH PACKAGING, INC., a Virginia
corporation
ATTEST: By: X. X. Xxxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxxx, Chairman
X. X. Xxxxxx
---------------------
Secretary
[corporate seal]
QT INFORMATION SCIENCES
CORPORATIONS a Virginia corporation
ATTEST: By: X. X. Xxxxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxxxx, Chairman
X. X. Xxxxxx
---------------------
Secretary
[corporate seal]
FIRST UNION NATIONAL BANK, a national banking
association, successor by merger to Signet Bank, a
Virginia banking corporation
By: Xxxxxxx Xxxxxxxxxx
-----------------------------------
Xxxxxxx Xxxxxxxxxx, Vice President
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