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8-K - FORM 8-K - GTSI CORP | c21626e8vk.htm |
Exhibit 10.1
FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT
THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND CONSENT (this
Amendment), dated as of August 12, 2011, is entered into by and among GTSI Corp., a
Delaware corporation (Reseller), Castle Pines Capital LLC, a Delaware limited liability
company (as an individual administrative agent, or as a lender, as the context may require,
CPC) and Wells Fargo Capital Finance, LLC, a Delaware limited liability company, formerly
known as Wells Fargo Foothill, LLC (in its capacity as the collateral agent for the benefit of
Lenders, the Collateral Agent, in its capacity as an individual administrative agent,
WFF and, together with CPC, Administrative Agents), CPC as lender and the other
lenders listed on Exhibit 3 of the Credit Agreement and the signature pages hereto (and
their respective successors and permitted assigns), as Lenders, agree as follows.
RECITALS
A. Reseller, Administrative Agents and the several financial institutions from time to time
party to thereto as lenders (Lenders) have previously entered into that certain Second
Amended and Restated Credit Agreement dated as of May 31, 2011 (as amended, modified, supplemented,
extended or restated from time to time, the Credit Agreement), pursuant to which
Administrative Agents and Lenders have made certain loans and financial accommodations available to
Reseller. Terms used herein without definition shall have the meanings ascribed to them in the
Credit Agreement.
B. Reseller has requested that Administrative Agents and the Lenders amend the Credit
Agreement which Administrative Agents and the Lenders are willing to do pursuant to the terms and
conditions set forth herein.
C. Reseller is entering into this Amendment with the understanding and agreement that, except
as specifically provided herein, none of Administrative Agents or any Lenders rights or remedies
as set forth in the Credit Agreement are being waived or modified by the terms of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Amendments to Credit Agreement.
(a) Section 3.1.5 of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:
(i) Borrowing Base. The BORROWING BASE on any date shall equal the sum of:
(a) 85% of the total outstanding principal balance of all Eligible Accounts
that are not Eligible Government Accounts, as certified in the Borrowing Base
Certificate most recently furnished to Administrative Agents as required in
Section 14.15.1.1; plus
(b) 90% of the total outstanding principal balance of all Eligible Government
Accounts, as certified in the Borrowing Base Certificate most recently furnished to
Administrative Agents as required in Section 14.15.1.1; plus
(c) 100% of the cost of the Floorplanned Inventory as certified in the
Borrowing Base Certificate most recently furnished to Administrative Agents as
required in Section 14.15.1.1; minus
(d) the sum of (i) the Bank Product Reserve, (ii) the Liquidity Reserve and
(iii) the aggregate amount of reserves against the Borrowing Base, if any,
established by Administrative Agents pursuant to Section 3.1.7.
(b) Section 16.1 of the Credit Agreement is hereby amended by deleting the existing definition
of Total Debt Service Coverage Ratio and replacing it with the following new definition:
TOTAL DEBT SERVICE COVERAGE RATIO as of any date, for the twelve-month period
ending on such date, the ratio, determined on a consolidated basis, of:
(a) Consolidated EBITDA for such period; minus Cash Taxes paid during such period;
to
(b) the sum of:
(1) the Interest Expense of Reseller for such period; plus
(2) all scheduled principal payments with respect to Debt; plus
(3) all scheduled principal payments on Capital Lease Obligations for such
period; plus
(4) all fees described in Sections 5.1 through 5.5 of this Agreement accrued during such
period.
(c) Exhibit 2.1, Definitions, of the Credit Agreement is amended by adding the following two
definitions, Liquidity Reserve and Restricted Securities Account in the appropriate
alphabetical sequence:
LIQUIDITY RESERVE means $15,000,000 minus the balance of cash then existing
in the Restricted Securities Account, provided, however, that the resulting sum may not equal a
number less than zero.
RESTRICTED SECURITIES ACCOUNT means that certain account(s) identified in that
certain Securities Account Control Agreement effective as of March 4, 2011, among Borrower, Wells
Fargo Securities, LLC and Wells Fargo Capital Finance LLC.
2. Consent. Subject to Section 3 hereof, the Administrative Agents and the
Lenders hereby consent to Resellers acquisition of the all the equity of Information Systems
Consulting Group, Inc. (InSysCo) a Virginia corporation (the Acquisition),
provided that:
(a) immediately before and after giving effect thereto, no Default shall have occurred and be
continuing;
(b) such Acquisition shall be consensual;
(c) after giving effect to such Acquisition, Reseller shall have availability for Revolving
Loan Advances;
(d) the aggregate consideration payable in respect of the Acquisition shall not exceed
$15,000,000 together with such reasonable out-of-pocket costs, expenses and reasonable fees as
shall be acceptable to the Administrative Agents;
(e) such Acquisition and all transactions related thereto shall be consummated in accordance
with all applicable laws, ordinances, rules, regulations and requirements of all Governmental
Authorities;
(f) Reseller shall furnish to the Administrative Agents at least two Business Days prior to
such proposed Acquisition evidence reasonably satisfactory to the Administrative Agents that, after
giving effect to such acquisition and, if applicable, the making of a Loan, the Reseller is in pro
forma compliance with each of the financial covenants set forth in Section 16;
(g) Reseller shall furnish to the Administrative Agents year-end audited financial statements
of InSysCo for the fiscal year ending December 31, 2010;
(h) all other assets and properties acquired in connection with such Acquisition shall be free
and clear of any Liens, other than Liens expressly permitted under Section 15.6;
(i) not later than five Business Days (or such shorter period as may be reasonably
practicable, if approved by the Administrative Agents) prior to the consummation of such
Acquisition, the Reseller shall have delivered to the Administrative Agents draft copies of all
proposed acquisition agreements for such Acquisition together with all schedules thereto (followed
by fully executed acquisition agreements within five (5) Business Days after the closing of such
acquisition);
(j) not later than two Business Days from the effective date of such Acquisition, Reseller
shall deliver to the Administrative Agents (i) a duly authorized and duly executed Annex I to
Subsidiary Security Agreement, a Security Agreement Supplement by InSysCo, in the form of Exhibit
A, attached hereto and (ii) a duly authorized and duly executed Annex I to Guaranty by InSysCo, in
the form of Exhibit B, attached hereto; and
(k) not later than two Business Days prior to the consummation of such Acquisition, the
Reseller shall have delivered to the Administrative Agents a proposed sources and uses of funds
with respect to such Acquisition, which such sources and uses of funds shall be acceptable to the
Administrative Agents.
3. Conditions Precedent to Effectiveness of this Amendment. This Amendment shall not
become effective until all of the following conditions precedent shall have been satisfied in the
sole discretion of Administrative Agents or waived by Administrative Agents:
(a) Amendment. Administrative Agents shall have received this Amendment fully
executed.
(b) Representations and Warranties. The representations and warranties set forth
herein and in the Credit Agreement (other than any such representations or warranties that, by
their terms, are specifically made as of a date other than the date hereof) must be true and
correct in all material respects (except that such materiality qualifier shall not be applicable to
any portion of any representation and warranty that is already qualified or modified by materiality
in the text thereof).
(c) Other Required Documentation. Administrative Agents shall have received all other
documents and legal matters in connection with the transactions contemplated by this Amendment and
such documents shall have been delivered or executed or recorded and shall be in form and substance
satisfactory to Administrative Agents.
4. Representations and Warranties. Reseller represents and warrants as follows:
(a) Authority. Reseller has the requisite corporate power and authority to execute
and deliver this Amendment, and to perform its obligations hereunder and under the Loan Documents
(as amended or modified hereby) to which it is a party. The execution, delivery and performance by
Reseller of this Amendment have been duly approved by all necessary corporate action, have received
all necessary governmental approval, if any, and do not contravene any law or any contractual
restriction binding on any Reseller. No other corporate proceedings are necessary to consummate
such transactions.
(b) Enforceability. This Amendment has been duly executed and delivered by Reseller.
This Amendment and each Loan Document (as amended or modified hereby) is the legal, valid and
binding obligation of Reseller, enforceable against Reseller in accordance with its terms, and is
in full force and effect.
(c) Representations and Warranties. The representations and warranties contained in
each Loan Document (other than any such representations or warranties that, by their terms, are
specifically made as of a date other than the date hereof) are true and correct in all material
respects (except that such materiality qualifier shall not be applicable to any portion of any
representation and warranty that is already qualified or modified by materiality in the text
thereof) on and as of the date hereof as though made on and as of the date hereof.
(d) No Default. No event has occurred and is continuing that constitutes a Default or
Event of Default.
5. Choice of Law. The validity of this Amendment, the construction, interpretation,
and enforcement hereof, and the rights of the parties hereto with respect to all matters arising
hereunder or related hereto shall be determined under, governed by, and construed in accordance
with the laws of the State of New York.
6. Counterparts. This Amendment may be executed in any number of counterparts and by
different parties and separate counterparts, each of which when so executed and delivered, shall be
deemed an original, and all of which, when taken together, shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page to this Amendment by
telefacsimile or other electronic transmission shall be effective as delivery of a manually
executed counterpart of this Amendment.
7. Reference to and Effect on the Loan Documents.
(a) Upon and after the effectiveness of this Amendment, each reference in the Credit Agreement
to this Agreement, hereunder, hereof or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the Credit Agreement, thereof or
words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit
Agreement as modified and amended hereby.
(b) Except as specifically set forth in this Amendment, the Credit Agreement and all other
Loan Documents, are and shall continue to be in full force and effect and are hereby in all
respects ratified and confirmed and shall constitute the legal, valid, binding and enforceable
obligations of Reseller to Administrative Agent and Lenders without defense, offset, claim or
contribution.
(c) The execution, delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of Administrative Agents or any
Lender under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
8. Ratification. Reseller hereby restates, ratifies and reaffirms each and every term
and condition set forth in the Credit Agreement, as amended hereby, and the Loan Documents
effective as of the date hereof.
9. Estoppel. To induce Administrative Agents and Lenders to enter into this Amendment
and to induce Administrative Agents and Lenders to continue to make advances to Reseller under the
Credit Agreement, Reseller hereby acknowledges and agrees that, after giving effect to this
Amendment, as of the date hereof, there exists no Default or Event of Default.
10. Integration. This Amendment, together with the other Loan Documents, incorporates
all negotiations of the parties hereto with respect to the subject matter hereof and is the final
expression and agreement of the parties hereto with respect to the subject matter hereof.
11. Severability. In case any provision in this Amendment shall be invalid, illegal
or unenforceable, such provision shall be severable from the remainder of this Amendment and the
validity, legality and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
12. Submission of Amendment. The submission of this Amendment to the parties or their
agents or attorneys for review or signature does not constitute a commitment by Administrative
Agents or any Lender to waive any of their respective rights and remedies under the Loan Documents,
and this Amendment shall have no binding force or effect until all of the conditions to the
effectiveness of this Amendment have been satisfied as set forth herein.
[Remainder of Page Left Intentionally Blank]
IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above
written.
GTSI CORP. as Reseller |
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CASTLE PINES CAPITAL LLC as Administrative Agent and as a Lender |
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WELLS FARGO CAPITAL FINANCE, LLC, as Administrative Agent and as Collateral Agent |
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SUNTRUST BANK, as a Lender |
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