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EXHIBIT 10.1
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AMENDED AND RESTATED
BUSINESS LOAN
AND
SECURITY AGREEMENT
by and among
BTG, INC.
BTG TECHNOLOGY SYSTEMS, INC.
DELTA RESEARCH CORPORATION
CONCEPT AUTOMATION, INC. OF AMERICA
and
NATIONS, INC.,
as Borrowers,
THE LENDERS PARTIES HERETO FROM TIME TO TIME
and
NATIONSBANK, N.A.
as Agent
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$110,000,000
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DATED AS OF OCTOBER 31, 1997
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THIS AMENDED AND RESTATED BUSINESS LOAN AND SECURITY AGREEMENT is made
as of the 31st day of October, 1997, by and among (i) NATIONSBANK, N.A., a
national banking association ("NationsBank"), having offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; (ii) Fleet Capital Corporation, a
Rhode Island corporation ("Fleet"), having offices at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; (iii) CRESTAR BANK, a Virginia
banking corporation ("Crestar"), having offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; (iv) each other person or entity hereafter
becoming a "Lender" pursuant to this Agreement; (v) NATIONSBANK, N.A., a
national banking association (acting in its capacity as Agent for the Lenders),
having offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
(vi) BTG, INC., a Virginia corporation ("BTG"); BTG TECHNOLOGY SYSTEMS, INC., a
Virginia corporation formerly known as BDS, Inc. ("BTGTECH"); DELTA RESEARCH
CORPORATION, a Virginia corporation ("DELTA"); CONCEPT AUTOMATION, INC. OF
AMERICA, a Virginia corporation ("CAI"); and NATIONS, INC., a New Jersey
corporation ("NI"); all having principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇; and (vii) each other person or entity
hereafter executing a "Joinder Agreement" pursuant to this Agreement.
R E C I T A L S:
WHEREAS, pursuant to the terms and conditions of a certain Business
Loan and Security Agreement dated November 28, 1995 (the "Original Loan
Agreement"), NationsBank, N.A. extended a loan (the "Original Loan") to BTG and
certain subsidiaries of BTG (the "Original Borrowers") in the maximum principal
amount of Sixty Million and No/100 Dollars ($60,000,000.00), evidenced by a
certain Revolving Promissory Note dated November 28, 1995 (the "Original
Note"), made by the Original Borrowers and payable to the order of NationsBank,
N.A., in the maximum principal amount of Sixty Million and No/100 Dollars
($60,000,000.00), and secured by, among other things, certain collateral more
fully described in the Original Loan Agreement; and
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WHEREAS, the Original Loan Agreement, Original Note and certain of the
other Loan Documents (as defined in the Original Loan Agreement) have
previously been amended, modified, substituted and/or replaced from time to
time; and
WHEREAS, pursuant to the terms and provisions of this Amended and
Restated Business Loan and Security Agreement, the Original Loan (as heretofore
increased) is being increased to One Hundred Ten Million and No/100 Dollars
($110,000,000.00) and the terms and provisions of the Original Loan Agreement
(as heretofore modified) are being amended and restated in their entirety.
W I T N E S S E T H T H A T:
In consideration of the mutual covenants and agreements herein
contained, Ten Dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree, represent and warrant as follows:
CERTAIN DEFINITIONS
For the purposes of this Amended and Restated Business Loan and
Security Agreement, the terms set forth below shall have the following
definitions:
"ADDITIONAL LIBOR PERCENTAGE" shall have the meaning assigned to such
term in Exhibit 7 attached to this Agreement.
"AFFECTED LENDER" shall have the meaning assigned to such term in
Section 14 of Article X of this Agreement.
"AGENT" shall mean NationsBank, N.A., a national banking association,
acting in its capacity as agent for the Lenders, or any successor Agent
appointed pursuant to Section 10 of Article X of this Agreement.
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"AGREEMENT" or "LOAN AGREEMENT" shall mean this Amended and Restated
Business Loan and Security Agreement.
"APPLICABLE INTEREST RATE" shall mean either (i) LIBOR or (ii) the
Prime Rate as set forth in the Notes.
"APPLICABLE LAWS" shall mean any federal, state or local law,
ordinance, rule or regulation to which any Borrower or the property of any
Borrower is subject.
"ASSIGNMENT" shall have the meaning assigned to such term in Section
14 of Article X of this Agreement.
"ASSIGNMENT OF CONVERTIBLE NOTE" shall mean that certain Amended and
Restated Assignment of Convertible Promissory Note as Collateral of even date
herewith, made by BTG to the Agent for the benefit of the Lenders ratably,
together with any and all extensions, renewals, modifications and substitutions
thereof or therefor.
"AVERAGE FUNDED DEBT" shall have the meaning assigned to such term in
Section 15(c) of Article VI of this Agreement.
"BLUE RIDGE" shall mean Blue Ridge Investments, LLC, a Delaware
limited liability company, together with its successors and assigns.
"BORROWER" and "BORROWERS" shall mean, respectively, each and all of
the following entities: BTG, Inc., a Virginia corporation; BTG Technology
Systems, Inc., a Virginia corporation; Delta Research Corporation, a Virginia
corporation; Concept Automation, Inc. of America, a Virginia corporation;
Nations, Inc., a New Jersey corporation; and each other person or entity
hereafter executing a Joinder Agreement pursuant to Section 9 of Article I of
this Agreement.
"BORROWING BASE CERTIFICATE" shall mean a certificate in the form of
Exhibit 5 hereto.
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"BORROWING BASE DEFICIENCY" shall have the meaning assigned to such
term in Section 3(b) of Article I of this Agreement.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday,
public holiday under the laws of the Commonwealth of Virginia or other day on
which banking institutions are authorized or obligated to close in the city in
which the Agent's office is located.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601 et
seq.).
"CERTIFICATE" shall have the meaning assigned to such term in Section
8 of Article XII of this Agreement.
"CLOSING" shall mean the settlement of the transactions contemplated
hereby.
"CNI" shall mean Community Networks, Inc., a Virginia corporation.
"COLLATERAL" shall have the meaning assigned to such term in Article
III of this Agreement.
"COLLATERAL ACCOUNT" shall mean the bank account(s) of the Borrowers
in which all checks, drafts, cash and other remittances received by any
Borrower, shall be deposited pursuant to Article VIII hereof and from which the
Agent alone has the power of access and withdrawal.
"COMMITMENT AMOUNT" shall mean One Hundred Ten Million Dollars
($110,000,000).
"COMMITMENT FEE" shall have the meaning assigned to such term in
Section 7 of Article I of this Agreement.
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"COMMITMENT LETTER" shall mean that certain letter dated October 19,
1995 from NationsBank, N.A. to BTG, as amended by letters from NationsBank,
N.A. to BTG dated November 13, 1995 and November 21, 1995.
"CONSOLIDATED EBITDA" shall mean, as of the date of the particular
determination, earnings, before interest, taxes, depreciation and amortization
for the four (4) consecutive fiscal quarters of the Borrowers most recently
ended, calculated on a consolidated basis in accordance with GAAP.
"CONSOLIDATED FIXED CHARGES" shall mean, as of the date of the
particular determination, interest expense, plus current maturities of long
term debt, plus current maturities of capitalized leases, plus cash payments
for taxes for the four (4) consecutive fiscal quarters of the Borrowers most
recently ended, calculated on a consolidated basis in accordance with GAAP.
"CONTRIBUTION AGREEMENT" shall mean the Amended and Restated
Contribution Agreement by and among the various Borrowers dated as of the date
hereof and delivered by the Borrowers prior to their execution and delivery of
this Agreement (and by future Subsidiaries through execution of a Joinder
Agreement).
"CONTROL AFFILIATE" shall mean, as to any person or entity, any other
person or entity which directly or indirectly controls, is controlled by, or is
under common control with such person or entity. For purposes of this
definition, "control" of a person or entity shall mean the power, direct or
indirect, (i) to vote or direct the voting of a majority of the Voting Stock of
such person or entity, or (ii) to direct or cause the direction of the
management and policies of such person or entity, whether by ownership of
Voting Stock, by contract or otherwise.
"CONVERTIBLE NOTE" shall mean that certain Convertible Promissory Note
dated May 2, 1996 (the "Convertible Note"), made by Wheelgroup and payable to
the order of
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BTG, in the original principal amount of Three Hundred Thousand and No/100
Dollars ($300,000.00).
"CURRENT RATIO" shall have the meaning assigned to such term in
Section 15(b) of Article VI of this Agreement.
"DFS" shall mean Deutsche Financial Services Corporation, a Nevada
corporation, together with its successors and assigns.
"DFS FINANCING AGREEMENT" shall mean that certain Agreement for
Wholesale Financing dated October 31, 1996, by and between DFS and BTG,
pursuant to which DFS agreed to provide the Wholesale Financing to BTG,
together with that certain Addendum to Agreement for Wholesale Financing dated
October 31, 1996 and that certain Amendment to Agreement for Wholesale
Financing dated October 31, 1996 and that certain Addendum to Agreement for
Wholesale Financing dated June 30, 1997.
"DFS SUBORDINATION AGREEMENT" shall mean that certain Subordination
Agreement dated August 29, 1997, by and between DFS and the Agent, pursuant to
which the Agent subordinated its security interest in and to any and all
inventory now owned or hereafter acquired by BTG, to the security interest in
favor of DFS, for so long as the DFS Financing Agreement remains in full force
and effect.
"ELIGIBLE ASSIGNEE" shall have the meaning assigned to such term in
Section 11(a) of Article XII of this Agreement.
"ELIGIBLE BORROWING BASE RECEIVABLES" shall mean all Receivables
which (i) represent amounts due and owing for products actually delivered and
accepted or work or services actually performed or rendered by or on behalf of
any Borrower pursuant to any contract or agreement now or hereafter entered
into by the particular Borrower and any unrelated and unaffiliated third party;
(ii) have been properly billed; (iii) arise in the
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ordinary course of the particular Borrower's business; (iv) are due, owing and
not subject to any defense, set-off or counterclaim; and (v) are not Ineligible
Receivables.
"ELIGIBLE UNBILLED COSTS" shall mean costs actually incurred and
arising out of work actually performed by one or more of the Borrowers under
Government Contracts which (i) are properly billable to the Government in
accordance with the applicable Government Contract within thirty (30) days of
the certification date of the related Borrowing Base Certificate; (ii) may, in
accordance with generally accepted principles, be included as current assets of
the Borrowers, even though such amounts have not been billed to the Government;
and (iii) are not Ineligible Unbilled Costs.
"EVENT OF DEFAULT" shall have the meaning assigned to such term in
Section 1 of Article IX of this Agreement.
"EXCESS CASH" shall mean, as of the date of the particular
determination, the aggregate amount of cash, marketable securities and/or other
cash equivalents owned, held or retained by Resources which exceeds One Million
Dollars ($1,000,000).
"EXCESS CASH PERIOD" shall mean any five (5) consecutive Business Days
during which Resources owns, holds or retains Excess Cash.
"FEDERAL FUNDS RATE" for any day shall mean the rate per annum
(rounded upward to the nearest 1/100 of 1%) determined by the Agent (which
determination shall be conclusive) to be the rate per annum announced by the
Federal Reserve Bank of New York_ (or any successor) on such day as being the
weighted average of the rates on overnight federal funds transactions arranged
by federal funds brokers on the previous trading day, as computed and
announced by such Federal Reserve Bank (or any successor) in substantially the
same manner as such Federal Reserve Bank computes and announces the weighted
average it refers to as the "Federal Funds Effective Rate" as of the date of
this Agreement; provided that if such Federal Reserve Bank (or its successors)
does not
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announce such rate on any day, the "Federal Funds Effective Rate" for such day
shall be the Federal Funds Rate for the last day on which such rate was
announced.
"GAAP" shall mean generally accepted accounting principles.
"GOVERNMENT" shall mean the United States government, any State or
local government or any department or agency thereof.
"GOVERNMENT CONTRACTS" shall mean written contracts between any
Borrower and the United States government, any State or local government or any
department or agency thereof.
"HAZARDOUS SUBSTANCE" shall mean, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated byphenyls, petroleum and petroleum products,
methane, hazardous materials, hazardous wastes, hazardous or toxic substances,
or related materials as defined in CERCLA, HMTA, RCRA, or any other applicable
environmental law, rule, order or regulation.
"HAZARDOUS WASTES" shall mean, without limitation, all waste materials
subject to regulation under CERCLA, RCRA or applicable Federal or state law,
and any other applicable Federal and state laws now in force or hereafter
enacted relating to hazardous waste disposal.
"HMTA" shall mean the Hazardous Materials Transportation Act, as
amended (49 U.S.C. Sections 1801 et seq.).
"INELIGIBLE RECEIVABLES" shall mean any Receivable which is (1)
evidenced by a promissory note or similar instrument; (2) owed or payable by an
account debtor (other than the Government) who is more than ninety (90) days
past due in the payment of fifty percent (50%) or more of the aggregate balance
due from such account debtor to the Borrowers; (3) owing from any person that
is the subject of any (a) suit, lien, levy or
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judgment which is reasonably likely to affect the collectibility of said
account(s), or (b) bankruptcy, insolvency or similar process or proceeding; (4)
owing from a foreign account debtor; (5) as of the date of any determination,
payable by the Government or NATO (as applicable), but not yet funded by the
Government or NATO (as applicable); (6) a bonded account receivable; or (7)
otherwise deemed ineligible by the Agent.
"INELIGIBLE UNBILLED COSTS" shall mean all Unbilled Costs which are
(i) not billable within thirty (30) days of the certification date of the
related Borrowing Base Certificate; (ii) cost or profit retentions; (iii)
variances from approved government reimbursement rates; or (iv) otherwise
deemed ineligible by the Agent.
"INTEREST PERIOD" means as to any Loan proceeds for which the
Borrowers have elected LIBOR based interest in accordance with this Agreement,
the period commencing on and including the date such LIBOR election is
effective (or the effective date of the Borrowers' election to convert any
portion of the Loan to a LIBOR interest basis in accordance with the provisions
of this Agreement) and ending on and including the day which is between 15 and
180 days thereafter, as available, and as selected by the Borrowers in
accordance with the provisions of this Agreement; provided, however, that: (i)
the first day of any Interest Period shall be a Business Day; (ii) if any
Interest Period would end on a day that would not be a Business day, such
Interest Period shall be extended to the next succeeding Business Day; and
(iii) no Interest Period shall extend beyond the maturity date of the Loan.
"JOINDER AGREEMENT" shall have the meaning assigned to such term in
Section 9 of Article I of this Agreement.
"LENDER" and "LENDERS" shall mean, respectively, any and all of the
banking or financial institutions which have (i) extended credit to any
Borrower pursuant to this Agreement, and (ii) agreed in writing to be bound by
the terms and provisions of this Agreement.
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"LETTER OF CREDIT" and "LETTERS OF CREDIT" shall mean, respectively,
each and all of the standby letter or letters of credit issued pursuant to this
Agreement.
"LETTER OF CREDIT ADMINISTRATIVE FEE" shall have the meaning assigned
to such term in Section 3 of Article II of this Agreement.
"LETTER OF CREDIT APPLICATION" shall have the meaning assigned to such
term in Section 1 of Article II of this Agreement.
"LETTER OF CREDIT FEE" shall have the meaning assigned to such term in
Section 3 of Article II of this Agreement.
"LIBOR" shall mean for any Interest Period with respect to any Loan
proceeds for which a LIBOR election has been made, the per annum interest rate
(rounded upward, if necessary, to the nearest next 1/100 of 1%) quoted to the
Agent, on an immediately available funds basis, at or about 11:00 a.m. (London
time) on the date that is two (2) Business Days prior to the first day of such
Interest Period, for the offering by leading banks in the London Interbank
Eurodollar market of Dollar deposits for a period comparable in time to the
duration of such Interest Period and in amounts comparable to the amounts for
which LIBOR is to be determined. If the Agent shall be unable or otherwise
fails to so obtain the LIBOR quotes, LIBOR shall be the average of those rates
quoted on the REUTERS "LIBO" page for a period comparable to the applicable
Interest Period (rounded upward, if necessary, to the nearest next 1/100 of
1%).
"LOAN" shall mean the loan made by the Lenders to the Borrowers in the
maximum principal amount of One Hundred Ten Million Dollars ($110,000,000), or
so much thereof as shall be advanced or readvanced from time to time, and which
shall be evidenced by, bear interest and be payable in accordance with the
terms and provisions set forth in the Notes.
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"LOAN DOCUMENT" and "LOAN DOCUMENTS" shall mean, respectively, each
and all of this Agreement, the Notes, the Commitment Letter, the Stock Security
Agreement, the Assignment of Convertible Promissory Note, the Negative Pledge
and each other document, instrument or agreement now or hereafter executed and
delivered by any Borrower in connection with the Loan.
"MATERIAL CONTRACT" shall mean any and all (i) Government Contracts,
other than purchase order contracts having a face amount (including all
addenda, modifications and supplements) of less than Two Hundred Fifty Thousand
Dollars ($250,000) and which are made or received by a Borrower in the ordinary
course of its business; and (ii) other contracts and agreements of any Borrower
having a face amount (including all addenda, modifications and supplements) of
Two Hundred Fifty Thousand Dollars ($250,000) or more.
"MAXIMUM BORROWING BASE" shall have the meaning assigned to such term
in Section 3 of Article I of this Agreement.
"MONETARY DEFAULT" shall mean the failure of any Borrower to pay when
due the principal, interest, fees, charges, expenses or other amounts (except
Borrowing Base Deficiencies) payable pursuant to the terms of any Note, this
Agreement or any other Loan Document.
"NATIONSBANK" shall mean NationsBank, N.A., a national banking
association, acting individually, together with its successors and assigns.
"NATO" shall mean the North Atlantic Treaty Organization.
"NEGATIVE PLEDGE" shall mean that certain Amended and Restated
Covenant Not to Convey and Negative Pledge of even date herewith, made by
Resources to the Agent for the benefit of the Lenders, ratably, together with
any and all extensions, renewals, modifications and substitutions thereof or
therefor.
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"NON-DEFAULT AND FINANCIAL COVENANTS COMPLIANCE CERTIFICATE" shall
mean the form certificate attached as Exhibit 6 hereto.
"NON-MONETARY DEFAULT" shall mean all Events of Default other than
Monetary Defaults.
"NOTE" and "NOTES" shall mean, respectively, each and all of the
promissory notes executed, issued and delivered pursuant to this Agreement,
together with all extensions, renewals, modifications and substitutions thereof
and therefor.
"OBLIGATION" AND "OBLIGATIONS" shall mean, respectively, each and all
of any and all obligations and liabilities of any Borrower to any Lender or the
Agent in connection with the Loan, whether now existing or hereafter created or
arising, direct or indirect, matured or unmatured, and whether absolute or
contingent, joint, several or joint and several, and no matter how the same may
be evidenced or shall arise.
"ORIGINAL LOAN AGREEMENT" shall have the meaning assigned to such term
in the Recitals of this Agreement.
"PERCENTAGE" shall mean, with respect to each Lender, the percentage
set forth beside such Lender's name on Schedule 1 attached to this Agreement.
"PERMITTED LIENS" shall mean: (a) liens for taxes which (i) are being
contested in good faith and by appropriate proceedings; and (ii) the Borrower
at all times has the financial ability to pay, including penalties and
interest; (b) deposits or pledges to secure obligations under workers'
compensation, social security or similar laws, incurred in the ordinary course
of business; (c) liens in favor of any equipment lessor for amounts due in
connection with equipment lease obligations; provided that the aggregate amount
of such liens do not exceed Six Hundred Thousand Dollars ($600,000); (d)
purchase money security interests on any of the personal property of any
Borrower created in the ordinary course of such Borrower's business, provided
that such security interests are not perfected
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by the filing of a UCC-1, financing statement or any other instrument or
document and the secured indebtedness is paid in accordance with its trade
payment terms; (e) judgment liens which are not prohibited by Section 4 of
Article VII of this Agreement; (f) liens in favor of the Agent; and (g) liens
in favor of DFS, encumbering only inventory and related assets of BTG more
fully described in the DFS Financing Agreement and granted in accordance with
the terms and provisions of the DFS Financing Agreement. It is expressly
acknowledged that landlord's liens (except those landlord liens expressly
permitted by the Agent in writing) shall not be included within the definition
of Permitted Liens.
"PRIME RATE" shall mean the fluctuating rate established by
NationsBank as its prime rate of interest from time to time, in its discretion,
whether or not such rate shall otherwise be published. The Prime Rate is
established by NationsBank as an index or base rate and may or may not at any
time be the best or lowest rate charged by NationsBank on any loan.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 6901 et. seq.).
"RECEIVABLES" shall mean all of each Borrower's present and future
accounts, contracts, contract rights, chattel paper, general intangibles,
notes, drafts, acceptances, chattel mortgages, conditional sale contracts,
bailment leases, security agreements and other forms of obligations now or
hereafter arising out of or acquired in the course of or in connection with any
business any Borrower conducts, together with all liens, guaranties,
securities, rights, remedies and privileges pertaining to any of the foregoing,
whether now existing or hereafter created or arising, and all rights with
respect to returned and repossessed items of inventory.
"REDUCTION DATE" shall mean the date on which the Borrowers, in
accordance with Section 8 of Article I of this Agreement, shall have (i)
terminated the Lenders' obligations to make additional advances under the Loan,
or (ii) irrevocably reduced the Commitment Amount.
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"REQUEST FOR ADVANCE AND CERTIFICATION" shall mean the form Request
for Advance and Certification attached as Exhibit 4 hereto.
"REQUIRED LENDERS" shall mean all of the Lenders who, at any given
time, are not in default under or in breach of any of the terms and conditions
of this Agreement applicable to the Lenders and who hold Notes representing, in
the aggregate, at least eighty percent (80%) of the Commitment Amount.
"RESOURCES" shall mean BTG Technology Resources, Inc., a Florida
corporation, together with its successors and/or assigns.
"STOCK SECURITY AGREEMENT" shall mean that certain Amended and
Restated Stock Security Agreement of even date herewith, made by BTG to the
Agent for the benefit of the Lenders ratably, together with any and all
extensions, renewals, modifications and substitutions thereof or therefor.
"SUBORDINATE DEBT" shall mean the indebtedness originally owing to
Nomura Holding America Inc. by BTG, in the maximum principal amount of Fifteen
Million and No/100 Dollars ($15,000,000.00), and thereafter assigned by Nomura
Holding America Inc. to Blue Ridge pursuant to that certain Letter Agreement
dated August 29, 1997, by and among Nomura Holding America Inc., Blue Ridge and
BTG.
"SUBORDINATE DEBT AGREEMENT" shall mean that certain Note and Warrant
Purchase Agreement dated as of February 16, 1996, originally by and between BTG
and Nomura Holding America Inc., as amended by that certain First Amendment to
Note and Warrant Purchase Agreement dated as of October 1, 1996, Second
Amendment to Note and Warrant Purchase Agreement dated as of October 31, 1996,
and Third Amendment to Note and Warrant Purchase Agreement dated as of August
25, 1997, which Note and Warrant Purchase Agreement (as amended) was
subsequently assigned by Nomura Holding America Inc. to Blue Ridge pursuant to
that certain Letter Agreement dated August 29, 1997, by and among Nomura
Holding America Inc., Blue Ridge and BTG, and further
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amended simultaneously with such assignment pursuant to that certain Fourth
Amendment to Note and Warrant Purchase Agreement dated as of August 29, 1997.
"SUBORDINATION AGREEMENT" shall mean that certain Amended and Restated
Subordination Agreement dated as of October 31, 1996, originally by and among
the Agent, NationsBank (acting in its capacity as a Lender), Fleet, Signet
Bank, a Virginia banking corporation, Sanwa Business Credit Corporation, a
Delaware corporation, certain of the Borrowers, DFS and Nomura Holding America
Inc., which Subordination Agreement was subsequently assigned by Nomura Holding
America Inc. to Blue Ridge pursuant to that certain Letter Agreement dated
August 29, 1997, by and among Nomura Holding America Inc., Blue Ridge and BTG,
and further amended simultaneously with such assignment pursuant to that
certain First Amendment to Amended and Restated Subordination Agreement dated
as of August 29, 1997.
"SUBSIDIARY" AND "SUBSIDIARIES" shall mean, respectively, each and all
of the subsidiary corporations or affiliates in which BTG now or hereafter
owns, directly or indirectly, an ownership interest of greater than fifty
percent (50%).
"TANGIBLE NET WORTH" shall have the meaning assigned to such term in
Section 15(a) of Article VI of this Agreement.
"TERMINATION FEE" shall have the meaning assigned to such term in
Section 8 of Article I of this Agreement.
"VOTING STOCK" shall mean, with respect to any person or entity, the
capital stock of such person or entity of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote for the
election of members of the Board of Directors ( or persons performing similar
functions) of such person or entity.
"WHEELGROUP" shall mean Wheelgroup Corporation, a Texas corporation,
together with its successors and assigns.
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"WHOLESALE FINANCING" shall mean that certain financing provided by
DFS to BTG from time to time for BTG's acquisition of inventory, pursuant to
the DFS Financing Agreement.
ARTICLE I
COMMITMENT
1. MAXIMUM LOAN AMOUNT. The Loan shall be evidenced by, bear
interest and be payable in accordance with the terms and provisions set forth
in one or more promissory notes payable to the Agent or as the Agent shall
otherwise direct. Concurrent with the Borrowers' execution of this Agreement,
the Borrowers shall execute and deliver to the Agent, for the benefit of the
Lenders, three (3) replacement revolving promissory notes payable to the order
of: (a) NationsBank, in the maximum principal amount of Fifty-three Million One
Hundred Twenty-five Thousand and No/100 Dollars ($53,125,000.00); (b) Fleet, in
the maximum principal amount of Forty-one Million Eight Hundred Seventy-five
Thousand and No/100 Dollars ($41,875,000.00); and (c) Crestar, in the maximum
principal amount of Fifteen Million and No/100 Dollars ($15,000,000.00).
2. USE OF PROCEEDS. The Loan shall be used only for working
capital and general corporate purposes. The Borrowers agree that they will not
use or permit the Loan proceeds to be used for any other purpose without the
Agent's prior written consent.
3. BORROWING BASE.
(a) Maximum Advances. Notwithstanding any term or
provision of this Agreement or any other Loan Document to the contrary, it is
understood and agreed that in no event whatsoever shall the Lenders be
obligated to advance any amount or have Obligations outstanding pursuant hereto
which shall exceed the lesser of:
1. The Commitment Amount, or
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2. the aggregate of (the "Maximum Borrowing Base"):
(i) ninety percent (90%) of the
Borrowers' Eligible Borrowing
Base Receivables representing
amounts due and owing from
the Government, which are
outstanding less than one
hundred twenty-one (121) days
from the date of original
invoice; plus
(ii) ninety percent (90%) of the
Borrowers' Eligible Borrowing
Base Receivables representing
amounts due and owing from
NATO, which are outstanding
less than one hundred
fifty-one (151) days from the
date of original invoice;
plus
(iii) eight-five percent (85%) of
the Borrowers' Eligible
Borrowing Base Receivables
representing amounts due and
owing from domestic account
debtors (other than the
Government or NATO), which
are outstanding less than
ninety-one (91) days from the
date of original invoice;
plus
(iv) the lesser of (x) fifty
percent (50%) of the
Borrower's Eligible Unbilled
Costs; or (y) Five Million
Dollars ($5,000,000); minus
(v) Ten Million Dollars
($10,000,000).
All receivables included in the computation of the Maximum Borrowing Base must
be acceptable to the Agent in all respects. Each request for an advance shall
be deemed a representation by the Borrowers that any Eligible Borrowing Base
Receivable or Eligible Unbilled Cost on which such request is based satisfies
the foregoing requirements.
(b) Borrowing Base Deficiency. If at any time the
aggregate principal amount of the Loan outstanding exceeds the Maximum
Borrowing Base (a "Borrowing Base Deficiency"), the Borrowers shall immediately
make a principal payment of not less than the amount of the Borrowing Base
Deficiency. Notwithstanding the foregoing, in the event a Borrowing Base
Deficiency shall occur as a result of (i) the Agent's determination that a
particular receivable or a specific unbilled cost previously included in
computing the
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Maximum Borrowing Base is no longer eligible for inclusion or (ii) the Agent
imposing any additional eligibility requirement which has not been previously
imposed and is not ordinarily used by the Agent as a basis for classifying
receivables or unbilled costs as ineligible, the Borrowers shall make a
principal payment of not less than the amount of the resulting Borrowing Base
Deficiency within three (3) Business Days of the date on which the Borrower is
advised by the Agent of the ineligibility of the particular receivable or
unbilled cost or the additional eligibility requirement.
(c) Separate Borrowing Bases. Without limiting the
Agent's right to exclude from borrowing base eligibility any receivable and/or
unbilled costs it deems ineligible, the Borrowers, Lenders and Agent further
agree that, if the Agent shall determine in its reasonable discretion that a
material adverse change in the financial condition of any Borrower has
occurred, the Agent shall have the right (exercisable at such time or times as
the Agent deems appropriate) to require that separate borrowing base
calculations be made for such Borrower, as well as the right to limit the use
of Loan proceeds by such Borrower to an amount equal to such Borrower's
separate and independently calculated Maximum Borrowing Base.
4. ADVANCES.
(a) Agreement to Advance and Readvance; Procedure. So
long as no Event of Default shall have occurred and is continuing, and no act,
event or condition shall have occurred which with notice or the lapse of time,
or both, shall constitute an Event of Default, and subject to the terms and
provisions of this Agreement, the Lenders shall advance and readvance the Loan
proceeds to the Borrowers from time to time at the request of the Borrowers.
Requests for advances of Loan proceeds shall be in the form of Exhibit 4 hereto
and may be made via facsimile or by telephone not later than 11:00 a.m. on any
given Business Day if (i) the Borrower provides the Agent, in advance, with a
written list of the names of the specific officers authorized to request
disbursements by telephone or facsimile; and (ii) each such request is
subsequently confirmed in writing by
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letter (in the form of Exhibit 4 attached hereto). Any and all advances of
Loan proceeds shall be deposited into the Borrowers' operating account
maintained with the Agent. Notwithstanding anything contained herein to the
contrary, the Lenders shall have no obligation to make any advance of Loan
proceeds after August 31, 1999.
(b) Interest Rate Election. Amounts advanced in
connection with the Loan shall bear interest either on a Prime Rate basis or
LIBOR basis, as more fully set forth in the Notes. The Borrowers' right to
request LIBOR based interest, as well as the terms, conditions and requirements
relating thereto, are set forth on Exhibit 7 of this Agreement, and the parties
expressly acknowledge and consent to the terms and provisions of Exhibit 7.
5. INTENTIONALLY OMITTED.
6. FIELD AUDITS. The Agent has the right to conduct field audits
on a regular basis with respect to the Collateral and the Borrowers' accounts
receivable, inventory, business and operations. From and after the occurrence
of an Event of Default, the Borrowers shall be obligated to pay all costs and
expenses of any field audits which may be necessary in the Agent's sole and
absolute discretion.
7. COMMITMENT FEE. In addition to principal, interest and other
sums payable under the Notes, so long as any Obligation remains outstanding or
this Agreement remains in effect, the Borrowers agree to pay to the Agent for
the benefit of the Lenders ratably, in accordance with each Lender's
Percentage, a quarter-annual commitment fee (the "Commitment Fee") at the
annual rate of three-eighths of one percent (3/8%), on the difference between
(i) the Commitment Amount and (ii) the daily outstanding principal balance of
the Notes. The Commitment Fee shall be due for any quarter during which the
average daily outstanding principal balance of the Notes during such quarter is
less than fifty percent (50%) of the Commitment Amount, and shall be payable in
arrears on the first day of the immediately following quarter.
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8. TERMINATION OF ADVANCES; REDUCTION OF THE COMMITMENT AMOUNT.
The Borrowers may terminate the Lenders' obligations to make additional
advances under the Loan or irrevocably reduce the Commitment Amount in whole or
in part, provided that (i) the Borrowers shall have provided written notice
thereof to the Agent at least ten (10) days prior to the Reduction Date; and
(ii) the Borrowers shall have paid to the Lenders, on or before the Reduction
Date (and in addition to any prepayment or other required fees set forth in the
Notes or any other Loan Document), a termination fee (the "Termination Fee")
in the amount of: (a) Seven Hundred Fifty Thousand Dollars ($750,000), if the
Reduction Date shall occur on or before the date which is twelve (12) months
from the date hereof; or (b) Five Hundred Thousand Dollars ($500,000), if the
Reduction Date shall occur after the day which is twelve (12) months from the
date hereof, but on or before the date which is twenty-four (24) months from
the date hereof. Notwithstanding the foregoing, the Termination Fee shall not
be payable in connection with a permanent reduction of the Commitment Amount,
if such permanent reduction is made in connection with (y) a contemporaneous
bond offering, provided that such bond offering (1) is consummated prior to
March 31, 1998, and (2) does not exceed One Hundred Million Dollars
($100,000,000), in the aggregate, (z) a contemporaneous public stock offering
or public or private sale of BTG, any Subsidiary or any of their respective
collective assets (with no new replacement indebtedness or debt refinancing of
any kind, directly or indirectly).
9. JOINDER OF NEW SUBSIDIARIES AND AFFILIATES. Any present or
future subsidiary or other affiliate of any Borrower or Resources in which any
Borrower or Resources now or hereafter owns, directly or indirectly, an
ownership interest of greater than fifty-percent (50%) shall, if and to the
extent requested by the Agent (pursuant to the direction of the Required
Lenders), execute a Joinder Agreement in the form attached hereto as Exhibit 8
(a "Joinder Agreement"), pursuant to which such subsidiary or affiliate shall
(i) join in and become a party to this Agreement and the other Loan Documents;
(ii) agree to comply with and be bound by the terms and conditions of this
Agreement and all
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of the other Loan Documents; and (iii) become a "Borrower" and thereafter be
jointly and severally liable for the performance of all the past, present and
future obligations and liabilities of the Borrowers hereunder and under the
other Loan Documents. Except as otherwise provided in Section 1(m) of Article
IX of this Agreement, Resources shall not be required to become a "Borrower"
pursuant to this Section 9.
10. APPOINTMENT OF BTG. Each Borrower acknowledges that (i) the
Lenders have agreed to extend credit to BTG and the Subsidiaries on an
integrated basis for the purposes herein set forth; (ii) it is receiving direct
and/or indirect benefits from each such extension of credit; and (iii) the
obligations of the "Borrower" or "Borrowers" under this Agreement are the joint
and several obligations of each Borrower. To facilitate the administration of
the Loan, each Borrower hereby irrevocably appoints BTG as its true and lawful
agent and attorney-in-fact with full power and authority to execute, deliver
and acknowledge, as appropriate, each Request for Advance and Certification,
Borrowing Base Certificate and all other Loan Documents or certificates from
time to time deemed necessary or appropriate by BTG or the Agent in connection
with the Loan. This power-of-attorney is coupled with an interest and cannot
be revoked, modified or amended without the prior written consent of the Agent.
Upon request of the Agent, each Borrower shall execute, acknowledge and deliver
to the Agent a form Power of Attorney confirming and restating the
power-of-attorney granted herein.
ARTICLE II
LETTERS OF CREDIT
1. ISSUANCE. The Borrowers and Lenders acknowledge that from
time to time a Borrower may request that NationsBank issue or amend Letter(s)
of Credit pursuant to this Agreement, and that if any such Letter(s) of Credit
are issued by NationsBank, each of the Lenders shall purchase from NationsBank
a risk participation with respect to such Letter(s) of Credit in an amount
equal to such Lender's Percentage of such Letter(s) of Credit. Any request by
a Borrower for issuance of a Letter of Credit shall be made by such
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23
Borrower submitting to the Agent an Application and Agreement for Letter of
Credit or Amendment to Letter of Credit (each being herein referred to as a
"Letter of Credit Application") on NationsBank's standard form from time to
time in effect (modified to conform to the requirements of this Agreement,
unless normal and customary letter of credit procedures are to the contrary),
at least three (3) Business Days prior to the date on which the issuance or
amendment of the Letter of Credit shall be required. The Letter of Credit
Application shall be executed by an authorized officer of the Borrower, and be
accompanied by such other supporting documentation and information, borrowing
and other corporate resolutions and opinions of counsel as the Agent may from
time to time reasonably request. Each Letter of Credit Application shall be
deemed to govern the terms of issuance of the subject Letter of Credit. No
Letter of Credit shall be issued which, by its terms, expires after August 31,
1999.
2. AMOUNTS ADVANCED PURSUANT TO LETTERS OF CREDIT. In the event
NationsBank issues any Letter(s) of Credit (i) the Maximum Borrowing Base shall
be reduced by the face amount of each Letter of Credit (so long as such Letter
of Credit remains outstanding), (ii) any amounts drawn under any Letter of
Credit shall be deemed advanced ratably under the Notes, shall bear interest
and be payable in accordance with the terms of the Notes and shall be secured
by the Collateral (in the same manner as all other sums advanced under the
Notes), and (iii) each Lender shall purchase from NationsBank such risk
participations in the Letter(s) of Credit as shall be necessary to cause each
Lender to share the funding obligations with respect thereto ratably in
accordance with its particular Percentage. It is expressly understood and
agreed that all obligations and liabilities of any Borrower to NationsBank in
connection with any such Letter(s) of Credit shall be deemed to be
"Obligations". Furthermore, in no event whatsoever shall NationsBank have any
obligation to issue any Letter of Credit which would cause the face amount of
all then outstanding Letters of Credit issued by NationsBank for the benefit of
the Borrowers pursuant to this Agreement to exceed, in the aggregate, Five
Million Dollars ($5,000,000).
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3. LETTER OF CREDIT FEES. The Borrowers shall pay (i) to the
Agent, a per annum fee in the amount of one and one-half percent (1.5%) of the
face amount of each Letter of Credit issued pursuant to this Agreement (the
"Letter of Credit Fee"), which shall be shared by the Lenders ratably in
accordance with their respective Percentages; and (ii) to NationsBank, an
administrative fee in the amount of Three Hundred Dollars ($300) for each
letter of credit issued or amended (the "Letter of Credit Administrative Fee").
The Letter of Credit Fee shall be due and payable quarterly, in advance, on the
date the Letter of Credit is issued or amended, and on the same day of each
third (3rd) month thereafter so long as such Letter of Credit remains
outstanding. The Letter of Credit Administrative Fee shall be due and payable
simultaneously with NationsBank's issuance or amendment of the particular
Letter of Credit.
ARTICLE III
SECURITY
1. SECURITY. As collateral security for the Loan and all other
Obligations, the Borrowers hereby grant and convey to the Agent, for the
benefit of the Lenders ratably, a security interest in all of the following
(collectively, the "Collateral"):
Receivables. All of each Borrower's present and future
accounts, contracts, contract rights, chattel paper, general
intangibles, notes (including, without limitation, all of
BTG's right, title and interest in and to the Convertible Note
pursuant to the terms and conditions of the Assignment of
Convertible Note), drafts, acceptances, chattel mortgages,
conditional sale contracts, bailment leases, security
agreements and other forms of obligations now or hereafter
arising out of or acquired in the course of or in connection
with any business any Borrower conducts, together with all
liens, guaranties, securities, rights, remedies and privileges
pertaining to any of the foregoing, whether now existing or
hereafter created or arising, and all rights with respect to
returned and repossessed items of inventory;
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Inventory. All of each Borrower's inventory and goods (as
defined in the Uniform Commercial Code in effect in the
Commonwealth of Virginia) now or hereafter owned by any
Borrower, whenever acquired and wherever located, and whether
held for sale or lease or furnished or to be furnished under
contracts of service, and all raw materials, work in process
and materials now or hereafter owned by any Borrower, wherever
located, and used or consumed in its business, including all
returned and repossessed items; and all other property now or
hereafter constituting inventory (as defined in the Uniform
Commercial Code in effect in the Commonwealth of Virginia);
Other Collateral. All of each Borrower's present and future
furniture, fixtures, equipment, machinery, supplies and other
personal property of every type or nature whatsoever,
including without limitation, all of each Borrower's present
and future instruments, documents, inventions, designs,
patents, patent applications, trademarks, trademark
applications, trade names, trade secrets, good will,
registrations, copyrights, licenses, franchises, customer
lists, tax refunds, tax refund claims, rights of claims
against carriers and shippers, leases, and rights to
indemnification;
Stock. All of BTG's right, title and interest in and to all
of the issued and outstanding capital stock of Resources, and
certain issued and outstanding capital stock of CNI and
Wheelgroup, in each case whether common and/or preferred, and
whether now or hereafter issued or outstanding and whether now
or hereafter acquired by BTG, together with all voting or
other rights appurtenant thereto, including, without
limitation, the right to receive all dividends and/or
distributions, and all proceeds thereof, pursuant to the terms
and conditions of the Stock Security Agreement;
Records. All of each Borrower's records, documents and files,
in whatever form, pertaining to the Collateral; and
Proceeds, Etc. Any and all cash and non-cash proceeds,
increases, substitutions, replacements and/or additions to any
or all of the foregoing.
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Notwithstanding the foregoing, the above described conveyance shall
not be deemed to include the assignment of any Government Contract which, by
its terms or applicable law, prohibits any Borrower from conveying its rights
thereunder; it being understood however that the Agent's security interest
shall include the entirety of each Borrower's right, title and interest in and
to all receivables and other proceeds directly or indirectly arising from or by
reason of such Government Contract, and all other rights and interests to which
any Borrower may lawfully be entitled to convey to the Agent.
It is expressly understood and agreed that the foregoing grant and
conveyance of a security interest in the Collateral is in confirmation of (and
not in replacement of) the grant and conveyance of a security interest in the
Collateral which was previously made to the Agent, for the benefit of the
Lenders ratably, in connection with the Original Loan (as heretofore modified);
that the lien created by such prior grant and conveyance of a security interest
in the Collateral remains in full force and effect; and that the grant and
conveyance of a security interest in the Collateral pursuant to Section 1 of
Article III of this Agreement shall be supplemental to such prior grant and
conveyance.
2. NEGATIVE PLEDGE OF RESOURCES. As a material inducement for
the Lenders to amend and restate the Loan, Resources has executed and delivered
the Negative Pledge to the Agent for the benefit of the Lenders ratably,
pursuant to which Resources has agreed not to sell, assign, transfer, pledge or
otherwise encumber any of its assets to or for the benefit of any person or
entity (except as expressly permitted therein) so long as any Obligation
remains outstanding or this Agreement remains in effect.
3. RELEASE OF SECURITY INTEREST. At such time as (i) the Notes
and all other sums due to the Lenders in connection with the Loan have been
paid and satisfied in full, (ii) all Letters of Credit have been canceled or
expired, and (iii) no Lender has any further obligation or responsibility
hereunder to make additional Loan advances or issue additional Letters of
Credit, the Agent shall, upon request of the Borrowers and at no cost or
expense to the Agent or any Lender, execute and deliver such documentation as
the Borrowers may
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reasonably request to release the Collateral from the Agent's lien, and the
termination of record of this Agreement.
ARTICLE IV
CONDITIONS TO THE LENDERS' OBLIGATIONS
The Lenders' obligation to perform hereunder shall be subject to the
following conditions:
1. COMPLIANCE WITH AGREEMENTS. Each of the Borrowers shall have
performed all agreements theretofore to be performed by it and shall not be in
breach of any covenant, representation or warranty made in this Agreement or in
any other Loan Document.
2. FINANCIAL CONDITION AND MANAGEMENT. There shall have been no
material adverse change in the financial condition of any Borrower between the
date of the most recent financial statement listed in Exhibit 3 hereto, and
the date of Closing.
3. OPINION OF COUNSEL. The Lenders shall have received an
opinion of counsel for each of the Borrowers in form and substance satisfactory
to the Agent.
4. NO DEFAULT. There shall exist no Event of Default, and no
act, event or condition shall have occurred which with notice or the lapse of
time, or both, would constitute an Event of Default.
5. DOCUMENTATION. The Agent shall have received such
certificates of good standing, corporate resolutions, opinions and
certifications, in such form and content and from such parties as the Agent
shall reasonably require. All documentation relating to the Loan and all
related transactions, including the Contribution Agreement, must be
satisfactory in all respects to the Lenders, the Agent and the Agent's counsel.
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6. LEGAL FEES AND CLOSING EXPENSES. The Borrower shall have paid
the reasonable fees and disbursements of the Agent's counsel, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, as well as all other reasonable expenses of
closing the transactions contemplated hereby, including, without limitation,
all recording costs.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement, each of the
Borrowers jointly and severally represents, warrants, covenants and agrees as
follows:
1. CORPORATE EXISTENCE AND QUALIFICATION. Each of the Borrowers
is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, with all requisite power and
authority and all necessary licenses and permits to own, operate and lease its
properties and carry on its business as now being conducted. Each of the
Borrowers is duly qualified and authorized to do business and is in good
standing in each jurisdiction in which the nature of its activities or the
character of its properties makes qualification necessary.
2. CORPORATE AUTHORITY; NONCONTRAVENTION. The execution,
delivery and performance of the obligations of each of the Borrowers set forth
in this Agreement, the Notes and the other Loan Documents (i) have been duly
authorized by all necessary corporate and/or stockholder action; (ii) do not
require the consent of any governmental body, agency or authority; (iii) will
not violate or result in (and with notice or the lapse of time will not violate
or result in) the breach of any provision of any Borrower's Articles of
Incorporation or By-laws, any indenture, instrument, or material agreement or
other undertaking to which any Borrower is a party or by which any Borrower is
bound, or any order or regulation of any governmental authority or arbitration
board or tribunal; and (iv) except as provided for in this Agreement or in the
other Loan Documents, result in the creation of a lien, charge or encumbrance
of any nature upon any of the properties or assets of any Borrower. When the
Loan Documents are executed and delivered, they will
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constitute legal, valid and binding obligations of each Borrower, enforceable
against each Borrower in accordance with their respective terms, except as such
enforceability may be subject to the effect of any applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or similar laws
affecting creditors' rights generally, and subject to the effect of general
principals of equity (whether considered in a proceeding in equity or at law).
3. FINANCIAL POSITION. The financial statements listed on
Exhibit 3 hereto, copies of which have been delivered to the Lenders, present
fairly the financial condition of the Borrowers as of the dates thereof and
the results of the Borrowers' operations for the periods indicated therein,
were prepared in accordance with GAAP, are true and accurate in all material
respects, and are not misleading in any material respect. All material
liabilities, fixed or contingent, are fully shown or provided for on the
referenced financial statements or the notes thereto as of the dates thereof.
There has been no material adverse change in the business, properties or
condition (financial or otherwise) of the Borrowers since the date of the most
recent financial statements listed on Exhibit 3.
4. PAYMENT OF TAXES. Each Borrower has filed all tax returns and
reports required to be filed by it with the United States Government and/or
with all state and local governments, and has paid in full or made adequate
provision on its books for the payment of all taxes, interest, penalties,
assessments or deficiencies shown to be due or claimed to be due on or in
respect of such tax returns and reports, except to the extent that the validity
or amount thereof is being contested in good faith by appropriate proceedings
and the non-payment thereof pending such contest will not result in the
execution of any tax lien or otherwise jeopardize the Agent's or Lenders'
interests in any part of the Collateral.
5. ACCURACY OF SUBMITTED INFORMATION; OMISSIONS. All
certificates and financial statements furnished to any Lender or the Agent
pursuant to this Agreement or otherwise in connection with the Loan, including
all schedules and exhibits to this Agreement and the other Loan Documents, (i)
are true and correct in all material respects;
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(ii) do not contain any untrue statement of a material fact; and (iii) do not
omit any material fact necessary to make the statements contained therein or
herein not misleading. No Borrower is aware of any fact which has not been
disclosed to the Agent in writing or in the Borrowers' filings with the
Securities and Exchange Commission which materially adversely affects, or so
far as any Borrower can now reasonably foresee, could reasonably be expected to
materially adversely affect, the properties, business, profits or condition
(financial or otherwise) of any Borrower or the ability of any Borrower to
perform its obligations under this Agreement or any other Loan Document.
6. CONTRACTS; SUSPENSION, DEBARMENT AND TERMINATION. No notice
of suspension, notice of debarment or notice of termination for default has
been received by any Borrower, no cure notice has been received by any
Borrower in connection with any Government Contract, and no Borrower is a party
to any pending or, to any Borrower's knowledge, threatened, suspension,
debarment, termination for default or other adverse government action or
proceeding in connection with any Government Contract.
7. NO EXISTING OR PENDING DEFAULTS OR LIABILITIES. No Borrower
is in default in any material respect in the performance of any obligation,
covenant or condition contained in any material agreement to which it is a
party. Additionally, no Borrower is aware of any condition, act, event or
occurrence, including, without limitation, any pending or threatened
litigation, legal or administrative proceeding or investigation, not disclosed
to the Agent in writing or in the Borrowers' filings with the Securities and
Exchange Commission that could reasonably be expected to prejudice the Agent's
or any Lender's rights under any Loan Document.
8. NO VIOLATIONS OF LAW. No Borrower is in violation of any
Applicable Law in any material respect; no Borrower has failed to obtain any
license, permit, franchise or other governmental authorization necessary to the
ownership of its properties or to the conduct of its business, and each
Borrower has conducted its business and operations in compliance in all
material respects with all Applicable Laws.
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9. LITIGATION AND PROCEEDINGS. Except as may be set forth on
Exhibit 9, no action, suit or proceeding against or affecting any Borrower is
presently pending, or to the knowledge of any Borrower threatened, in any
court, before any governmental agency or department, or before any arbitration
board or tribunal, which could reasonably be expected to result in a judgment
or liability in excess of Five Hundred Thousand Dollars ($500,000), which is
not fully covered by insurance, and no Borrower is aware of any existing basis
for any such action, suit or proceeding. No Borrower is in default with
respect to any order, writ, injunction or decree of any court, governmental
authority or arbitration board or tribunal.
10. SECURITY INTEREST IN THE COLLATERAL. Each Borrower is the
sole legal and beneficial owner of the Collateral represented to be owned by
it, free and clear of all liens and encumbrances of any nature, except for
Permitted Liens.
11. PRINCIPAL PLACE OF BUSINESS; LOCATION OF BOOKS AND RECORDS;
LOCATION OF INVENTORY. Each Borrower maintains its principal place of business
and the location of its books and records with respect to accounts and
contracts rights at the Borrowers' offices located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Set forth on Exhibit 2 hereto is a list of each
Borrower's business locations, and all places where any of the Collateral
(other than moveable business equipment located off-site from time to time in
connection with the Borrowers' normal business operations) is located. Each
Borrower agrees to notify the Bank in writing within ten (10) days after any
change in its principal place of business or any change in the location of the
office where it keeps its books and records with respect to accounts and
contract rights, or any change of or addition to the locations where the
Collateral is located.
12. FISCAL YEAR. The Borrowers' fiscal year ends on March 31.
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13. PENSION PLANS.
(a) The present value of all benefits vested under all
"employee pension benefit plans", as such term is defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974 ("ERISA"), from time to
time maintained by each Borrower (individually, a "Pension Plan" and
collectively, the "Pension Plans") did not, as of December 31, 1996, exceed the
value of the assets of the Pension Plans allocable to such vested benefits;
(b) No Pension Plan, trust created thereunder or other
person dealing with any Pension Plan has engaged in a transaction proscribed by
Section 406 of ERISA or a "prohibited transaction", as such term is defined in
Section 4975 of the Internal Revenue Code;
(c) No Pension Plan or trust created thereunder has been
terminated, and there have been no "reportable events" (as that term is defined
in Section 4043 of ERISA and the regulations thereunder) with respect to any
Pension Plan or trust created thereunder after June 30, 1974; and
(d) No Pension Plan or trust created thereunder has
incurred any "accumulated funding deficiency" (as such term is defined in
Section 302 of ERISA or Section 412 of the Internal Revenue Code) as of the end
of any plan year, whether or not waived, since the effective date of ERISA.
14. O.S.H.A. AND ENVIRONMENTAL COMPLIANCE.
(a) To the best of its knowledge, each Borrower has duly
complied in all material respects with, and its facilities, business assets,
property, leaseholds and equipment are in compliance in all materials respects
with, the provisions of the Federal Occupational Safety and Health Act
("O.S.H.A."), the Environmental Protection Act, RCRA and all other
environmental laws with which non-compliance could result in a
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material adverse effect on the business, condition (financial or otherwise) or
results of operations of any Borrower; and there have been no outstanding
citations, notices or orders of non-compliance issued to any Borrower relating
to its business, assets, property, leaseholds or equipment under any such laws,
rules or regulations;
(b) each Borrower has been issued all required federal,
state and local licenses, certificates and permits necessary or appropriate in
the operation of its facilities, businesses, assets, property, leaseholds and
equipment, unless the failure to obtain any such license, certificate or permit
would not have a material adverse effect on the business condition (financial
or otherwise) or results of operations of any Borrower;
(c) (i) to the best of each Borrower's knowledge, there
are no visible signs of releases, spills, discharges, leaks or disposal
(collectively referred to herein as "Releases") of Hazardous Substances at,
upon, under or within any Real Property or any premises leased by any Borrower;
(ii) to the best of each Borrower's knowledge, there are no underground storage
tanks or polychlorinated biphenyls on any Real Property or any premises leased
by any Borrower; (iii) neither any Real Property nor any premises leased by any
Borrower has ever been used by any Borrower (and to the best of each Borrower's
knowledge, any other person) as a treatment, storage or disposal facility of
Hazardous Waste; and (iv) to the best of each Borrower's knowledge, no
Hazardous Substances are present on any Real Property or any premises leased by
any Borrower, excepting such quantities as are handled in accordance with all
applicable manufacturer's instructions and governmental regulations and in
proper storage containers, and as are necessary for the operation of the
commercial business of any Borrower; and
(d) each Borrower, for itself and its successors and
assigns, hereby covenants and agrees to indemnify, defend and hold harmless the
Agent and the Lenders from and against any and all liabilities, losses, claims,
damages, suits, penalties, costs and expenses of any kind or nature, including,
without limitation, reasonable attorneys' fees, arising from or in connection
with (i) the presence or alleged presence of any Hazardous
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Substance or Hazardous Waste on, under or about any property of the Borrower
(including, without limitation, any property or premises now or hereafter owned
or leased by any Borrower), or which is caused by or results from, directly or
indirectly, any act or omission to act by any Borrower; and (ii) any Borrower's
violation of any environmental statute, ordinance, order, rule or regulation of
any governmental entity or agency thereof (including, without limitation, any
liability arising under CERCLA, RCRA, HMTA or any Applicable Laws).
15. INTELLECTUAL PROPERTY. All patents, patent applications,
trademarks, trademark applications, copyrights, copyright applications,
tradenames, trade secrets and licenses necessary for the conduct of the
business of each Borrower are owned or utilized by such Borrower and are valid
and have been duly registered or filed with all appropriate governmental
authorities; to the best of each Borrower's knowledge, there is no objection to
or pending challenge to any Borrower's right to use any such patent,
trademark, copyright, tradename, trade secret or license; no Borrower is aware
of any grounds for any challenge or objection thereto; except as expressly set
forth on the financial statements listed on Exhibit 3 hereof, no Borrower pays
any royalty to anyone in connection with the use of any such patent, trademark,
copyright, tradename, trade secret or license; it being understood and agreed
that this representation and warranty shall not be deemed violated by any
Borrower's payment of a royalty for the use of intellectual property owned by
Resources; provided that the aggregate amount of any and all consideration
payable or paid by a Borrower in connection with such Borrower's use of such
intellectual property does not exceed commercially reasonable amounts which
would be payable in a comparable, arm's-length transaction with an unaffiliated
and unrelated entity or person. Each Borrower hereby acknowledges, agrees and
confirms that all of each Borrower's right, title and interest in and to any
and all documents, instruments and agreements (including, without limitation
licensing agreements) executed and/or delivered in connection with each
Borrower's use of the intellectual property of Resources is subject to the
security interest in and to such documents, instruments and agreements granted
to the Agent (for
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the benefit of the Lenders) by each Borrower pursuant to this Agreement. Each
Borrower has the right to bring action for the infringement of any such patent,
trademark, copyright, tradename, trade secret or license owned or used by each
such Borrower.
16. INTENTIONALLY OMITTED.
17. LEASES; NO REAL PROPERTY. Except as otherwise disclosed to
the Agent, all leases and other agreements under which any Borrower is the
lessee are in full force and effect and constitute legal, valid and binding
obligations of, and are legally enforceable against, the respective parties
thereto and grant the leasehold estate which such documents purport to grant,
free and clear of all liens and encumbrances (except for any statutory
landlord's liens permitted pursuant to this Agreement). Except as otherwise
disclosed to the Agent, there are currently no threatened cancellations or
outstanding disputes with respect to any such lease, and all necessary
government approvals, if any, required to be obtained by any Borrower under
Applicable Laws have been obtained for the present and continued use of the
property or premises leased by each Borrower. No Borrower owns any interest
in real property (other than the leasehold interests listed on Exhibit 2
hereto).
18. LABOR RELATIONS. Except as set forth on Exhibit 9, there are
no strikes, work stoppages, grievance proceedings, union organization efforts
or other labor controversies pending, or to any Borrower's knowledge,
threatened or reasonably anticipated between any Borrower and (i) any current
or former employee of any Borrower or (ii) any union or other collective
bargaining unit representing any such employee. Each Borrower has complied and
is in compliance in all material respects with all Applicable Laws relating to
employment or the workplace, including, without limitation, provisions relating
to wages, hours, collective bargaining, safety and health, work authorization,
equal employment opportunity, immigration, withholding, unemployment
compensation, employee privacy and right to know. No Borrower is a party to
any collective bargaining agreement. Except as disclosed in any of the
Borrowers' filings with the Securities and Exchange Commission or as otherwise
disclosed to the Agent in writing, there are no
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employment agreements between any Borrower and any of their respective
employees not terminable at will relating to the businesses or assets of any
Borrower. The consummation of the transactions contemplated hereby will not
cause any Borrower to incur or suffer any liability relating to, or obligation
to pay, severance, termination or other payments to any person or entity.
19. ASSIGNMENT OF GOVERNMENT CONTRACTS. No existing Government
Contract of any Borrower (and no present or future interest of any Borrower, in
whole or in part, in, to or under any such Government Contract, including,
without limitation, the right to receive payment thereunder) is currently
assigned, pledged, hypothecated or otherwise transferred to any person or
entity (other than to the Agent for the benefit of the Lenders).
20. CONTRIBUTION AGREEMENT. The Contribution Agreement is in full
force and effect, has not been modified, altered or amended in any respect
whatsoever (other than amendments entered into from time to time, pursuant to
which a person or entity is joined as a party thereto immediately prior to and
in connection with the execution of a Joinder Agreement), and no Borrower is in
default thereunder.
21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made herein shall survive the making of the
Loan, and shall be deemed remade and redated as of the date of each request for
an advance or readvance of Loan proceeds.
ARTICLE VI
AFFIRMATIVE COVENANTS OF THE BORROWERS
So long as any Obligations remain outstanding or this Agreement
remains in effect, each Borrower jointly and severally covenants and agrees
with the Lender that:
1. PAYMENT OF LOAN OBLIGATIONS. Each Borrower will duly and
punctually pay all sums to be paid to the Lenders in accordance with the terms
and
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conditions of the Loan Documents, and will comply with, perform and observe all
of the terms thereof.
2. PAYMENT OF TAXES. Each Borrower will promptly pay and
discharge all federal, state and other governmental taxes, assessments, fees
and charges imposed upon it, or upon any of its properties or assets, prior to
the date when any interest or penalty would accrue for non-payment of such
taxes, except to the extent that the validity or amount thereof is being
contested in good faith by appropriate proceedings and the non-payment thereof
pending such contest will not result in the execution of any tax lien or
otherwise jeopardize the Agent or Lenders' interest in any part of the
Collateral.
3. DELIVERY OF FINANCIAL AND OTHER STATEMENTS. The Borrowers
shall deliver financial and other statements to the Agent and each Lender as
follows:
(a) on or before the ninetieth (90th) day following the
close of each of its fiscal years, the Borrowers will submit to the Agent and
each Lender (i) annual audited financial statements prepared on a consolidated
basis, which shall include at a minimum, a balance sheet and statement of
income and expenses (with reconciliation of surplus), and a statement of
changes in cash flow and related footnotes thereto, which financial statements
shall be accompanied by an unqualified accountant's opinion and show the
financial position and results of financial operations of the Borrowers for the
fiscal year most recently ended; (ii) a Non-Default and Compliance Certificate
in the form of Exhibit 6 hereto, confirming compliance with the Maximum
Borrowing Base requirements and all representations, warranties and covenants
set forth in this Agreement, which shall be certified by the President or Chief
Financial Officer of BTG; and (iii) an annual management letter, if provided by
the Borrowers' auditors;
(b) on or before the thirtieth (30th) day following the
close of each calendar month, the Borrowers will submit to the Agent and each
Lender (i) consolidated and consolidating financial statements, reporting the
Borrowers' current financial position and the results of their operations for
the month then ended, in form and substance
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reasonably satisfactory to the Agent in all respects, certified by the
President or Chief Financial Officer of BTG; (ii) a Non-Default and Compliance
Certificate in the form of Exhibit 6 hereto, confirming compliance with the
Maximum Borrowing Base requirements and all representations, warranties and
covenants set forth in this Agreement which shall be certified by the President
or Chief Financial Officer of BTG; and (iii) an accounts payable aging report
as of the last Business Day of the calendar month then ended, in form and
substance reasonably satisfactory to the Agent;
(c) at least once each calendar week within two (2) days
of the date as of which the report was prepared, the Borrowers will submit to
the Agent and each Lender a Borrowing Base Certificate in the form of Exhibit 5
hereto, which certificate shall be certified by an authorized officer of the
Borrowers and accompanied by a detailed current accounts receivable agings
report;
(d) on or before the thirtieth (30th) day following the
close of each quarter of the Borrower's fiscal year, the Borrowers will submit
to the Agent and each Lender a contract status/backlog report prepared as of
the last day of the calendar quarter most recently ended, in form and substance
reasonably satisfactory to the Agent;
(e) on or before the forty-fifth (45th) day following the
close of each fiscal quarter of the Borrowers' fiscal year and on or before the
ninetieth (90th) day following the Borrowers' fiscal year end, as applicable,
the Borrowers will submit to the Agent and each Lender the Borrowers' quarterly
Form 10Q, and annual Form 10K filings with the Securities and Exchange
Commission;
(f) within five (5) days of issuance, distribution or
filing, as applicable, the Borrowers will submit to the Agent and each Lender
copies of all filings with the Securities and Exchange Commission, all press
releases and all other public filings, disclosure statements and/or
registration statements; and
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(g) on or before the thirtieth (30) day preceding the
close of each of the Borrowers' fiscal years, the Borrowers will submit to the
Agent and each Lender annual budgets and projections which shall include, at a
minimum, a balance sheet and income statement, in form and substance reasonably
satisfactory to the Agent.
4. MAINTENANCE OF RECORDS; REVIEW BY THE BANK. Each Borrower
will maintain at all times proper books of record and account in accordance
with GAAP, consistently applied, and will permit the Agent's officers or any of
the Agent's authorized representatives or accountants to visit and inspect each
Borrower's offices and properties, examine its books of account and other
records, and discuss its affairs, finances and accounts with the officers,
employees, accountants and auditors of any of the Borrowers, all at such
reasonable times and as often as the Agent may desire.
5. MAINTENANCE OF INSURANCE COVERAGE. Each Borrower will
maintain in effect fire and extended coverage insurance, public liability
insurance, and workmen's compensation insurance with responsible insurance
companies, in such amounts and against such risks as are customary for similar
businesses, required by governmental authorities, if any, having jurisdiction
over all or part of its operations, or otherwise reasonably required by the
Agent, and will furnish to the Agent certificates evidencing such continuing
insurance. The Agent shall be named as loss payee on all hazard and casualty
insurance policies by means of a standard noncontributory mortgagee clause and
as an additional insured on all liability insurance policies. All insurance
policies shall also provide for (i) not less than thirty (30) days written
notice to the Agent prior to expiration, cancellation or other material change;
and (ii) waiver of subrogation.
6. MAINTENANCE OF PROPERTY/COLLATERAL. Each Borrower will at all
times maintain the Collateral and its tangible property, both real and
personal, in good order and repair, and will permit the Agent's officers or any
of the Agent's authorized representatives to visit and inspect the Collateral
and each Borrower's tangible property as and when the
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Agent deems necessary or appropriate; provided, however, that the Agent's
review of any and all "classified contracts" shall be subject to compliance
with Applicable Laws.
7. MAINTENANCE OF CORPORATE EXISTENCE. Each Borrower will
maintain its corporate existence and will provide the Agent with evidence of
the same from time to time upon the Agent's request.
8. MAINTENANCE OF CERTAIN ACCOUNTS WITH AGENT. The Borrowers
shall maintain their respective primary operating accounts, including all
depository accounts (time and demand), collection accounts and disbursement
accounts, with the Agent; provided, that the foregoing shall not require the
Borrowers to maintain with the Agent any specifically designated escrow
account(s) maintained as of the date hereof by any Borrower pursuant to any
NATO Government Contract.
9. MAINTENANCE OF MANAGEMENT. The Borrowers will notify the
Agent in writing of the change of any chief executive officer or chief
financial officer of BTG, within five (5) days of the date of any such change.
10. DISCLOSURE OF DEFAULTS, ETC. Promptly upon the occurrence
thereof, each Borrower will provide the Agent and each Lender with written
notice of any Event of Default, or any act, event or occurrence that, upon the
giving of any required notice or the lapse of time, or both, would constitute
an Event of Default. In addition, each Borrower will promptly advise the Agent
and each Lender in writing of any condition, act, event or occurrence which
comes to such Borrower's attention that would prejudice any Lender's rights in
connection with any Material Contract, the Collateral, this Agreement, any Note
or any other Loan Document, including, without limitation, the details of any
pending or threatened suspension, debarment or other governmental action or
proceeding, any material pending or threatened litigation, and any other
material legal or administrative proceeding or investigation pending or
threatened against any Borrower, including the entry of any judgment or lien
(other than a Permitted Lien) in excess of Five Hundred Thousand Dollars
($500,000).
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11. SECURITY PERFECTION; PAYMENT OF COSTS. Upon the request of
the Agent, the Borrowers will execute and deliver and pay the costs of
recording and filing (i) all documents or materials necessary for compliance
with the Assignment of Claims Act of 1940, as amended, 31 U.S.C. Section 3727
and 41 U.S.C. Section 15, and (ii) all financing statements, continuation
statements, termination statements, assignments and other documents, in any
such case as the Agent may from time to time deem necessary or appropriate for
the perfection of any liens granted to the Agent pursuant hereto or pursuant to
any other Loan Document. The Borrowers will pay any and all costs of closing
hereunder, including, without limitation, any and all taxes (other than the
Lenders' income taxes), which may be payable as a result of the execution of
this Agreement or any agreement supplemental hereto, or as a result of the
execution and/or delivery of any Note or other Loan Document.
12. DEFENSE OF TITLE TO COLLATERAL. The Borrowers will at all
times defend the Lenders', Agent's and Borrowers' rights in the Collateral
against all persons and all claims and demands whatsoever, and will, upon
request of the Agent (i) furnish such further assurances of title as may be
reasonably required by the Agent, and (ii) do any other acts reasonably
necessary to effect, perfect, preserve, maintain or continue the security
interests of the Agent and Lenders in the Collateral.
13. COMPLIANCE WITH LAW. Each Borrower will conduct its
businesses and operations in compliance in all material respects with (i) all
Applicable Laws and requirements of all federal, state and local regulatory
authorities having jurisdiction, (ii) the provisions of its charter documents
and by-laws, (iii) all agreements and instruments by which it or any of its
properties may be bound, and (iv) all applicable decrees, orders and judgments.
14. FURTHER ASSURANCES; ADDITIONAL REQUESTED INFORMATION. Each
Borrower will provide to the Agent such further assurances and additional
documents regarding the Collateral as the Agent may from time to time
reasonably request, and each
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Borrower will promptly provide the Agent with such additional information,
reports and statements respecting its business operations and financial
condition, and respecting its affiliated business and investments, as the Agent
may from time to time reasonably request.
15. FINANCIAL COVENANTS OF THE BORROWERS. So long as any
Obligation remains outstanding or this Agreement remains in effect, the
Borrowers will comply with each of the financial covenants set forth below.
All financial or accounting terms referenced below and not otherwise defined in
this Agreement shall have the meanings attributable to such terms in accordance
with GAAP.
(a) Tangible Net Worth. The Borrowers will maintain on a
consolidated basis at all times during the following
periods, tangible net worth of not less than the
following amounts.
Periods Required Tangible
------- Net Worth
------------------
From 12/31/97 through 03/30/98 $42,500,000
From 03/31/98 through 06/29/98 $43,700,000
From 06/30/98 through the $43,700,000,
Maturity Date plus 67% of net
income (as
determined on a
consolidated basis in
accordance with
GAAP at the end of
each fiscal quarter).
For purposes of this Agreement, "Tangible Net Worth"
shall mean all capital stock, paid in capital and
retained earnings, less all treasury stock, amounts
due from officers, directors, stockholders and
members of their immediate families, amounts due from
affiliates (to the extent that such amounts are part
of the Borrowers' consolidated net worth),
investments in non-marketable securities, notes
receivable of affiliated companies (to the extent
that such amounts are part of the Borrowers'
consolidated net worth), leasehold improvements,
goodwill, non-competition agreements, capitalized
organization and development costs, capitalized
expenses, loan costs, patents,
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trademarks, copyrights, franchises, licenses and
other intangible assets.
(b) Current Ratio. From and after December 31, 1997, the
Borrowers will at all times maintain on a
consolidated basis a current ratio of not less than
1.5 to 1.0. For purposes of this Agreement, the
current ratio shall be calculated by dividing current
assets by current liabilities.
(c) Average Funded Debt to EBITDA Ratio. From and after
December 31, 1997, the Borrowers will at all times
maintain on a consolidated basis, a ratio of Average
Funded Debt to EBITDA of not more than 5.0 to 1.0.
For purposes hereof, "Average Funded Debt" shall
mean, for the prior twelve (12) month period, the
average daily outstanding principal balance of
borrowed funds pursuant to this Agreement (including,
without limitation, the face amount of outstanding
Letters of Credit), plus all other interest bearing
obligations of the Borrowers as of the date of
determination.
(d) Maintenance of Fixed Charge Coverage. The Borrowers
shall not permit the ratio of (i) Consolidated EBITDA
of the Borrowers, to (ii) Consolidated Fixed Charges,
measured as of each date set forth below for the
period of four consecutive full fiscal quarters of
the Borrowers ended on such date, to be less than the
ratio set forth below:
Fiscal Quarter Ended Ratio
-------------------- -----
December 31, 1997 and the last day
of any subsequent fiscal quarter of
the Borrowers 1.4 to 1.0
16. LANDLORD WAIVERS; SUBORDINATION. Borrowers shall provide to
the Agent written landlord waivers from each lessor/landlord of any premises at
which any Borrower's inventory is hereafter located. These required landlord
waivers shall subordinate any statutory, contractual or other lien the
landlord/lessor may have in any of the Collateral to the lien, operation and
effect of the lien being granted to the Agent pursuant to this Agreement, and
shall be in form and substance acceptable to the Agent.
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Borrowers shall provide the required waiver(s) to the Agent prior to any
Borrower storing, keeping or locating inventory on the landlord's/lessor's
premises with respect to any location at which any Borrower hereafter stores,
keeps or locates any inventory.
ARTICLE VII
NEGATIVE COVENANTS OF THE BORROWERS
So long as any of the Obligations remain outstanding or this Agreement
remains in effect, each Borrower jointly and severally covenants and agrees
that, without the prior written consent of the Agent, the Borrowers will not:
1. CHANGE OF CONTROL; MERGER; DISPOSITION OF ASSETS.
(a) Permit any person or entity (other than ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ or any Control Affiliate of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇) to become the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Securities and Exchange
Act of 1934, as amended), directly or indirectly, of more than thirty-five
percent (35%) of the outstanding shares of Voting Stock of BTG, if ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ and his Control Affiliates, taken together, beneficially own (as
defined in Rules 13d-3 and 13d-5 under the Securities and Exchange Act of 1934,
as amended), directly or indirectly, in the aggregate, a lesser percentage of
the Voting Stock of BTG than any such person or entity, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
and his Control Affiliates do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of the
Board of Directors of BTG;
(b) Permit, during any period of two (2) consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors of BTG (together with any new directors whose election by such Board
of Directors or whose nomination for election by the stockholders of BTG was
approved by a vote of a majority of the directors of BTG then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) to no longer constitute a
majority of the Board of Directors of BTG then in office,
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(c) Permit majority or effective control of any
Subsidiary (other than CNI) to be sold, assigned or otherwise transferred,
legally or equitably; or permit any Borrower to merge or consolidate with any
company or enterprise, or acquire or purchase any company or enterprise, or
sell, assign, loan, deliver, lease, transfer or otherwise dispose of a
substantial part of its property or assets, other than in the ordinary course
of its business. For purposes of this subsection, any transaction involving
the disposition of assets or properties having a value in excess of Five
Hundred Thousand Dollars ($500,000), as measured by the consideration for the
transaction in question, shall be deemed to be substantial;
2. MARGIN STOCKS. Use any part of the proceeds of any advance
made hereunder to purchase or carry, or to reduce or retire any loan incurred
to purchase or carry, any margin stocks (within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System) or to extend credit to
others for the purpose of purchasing or carrying any such margin stocks;
3. CHANGE OF OPERATIONS. Change the general character of the
Borrowers' business as conducted on the date hereof, or engage in any type of
business not reasonably related to such business, as presently and normally
conducted;
4. JUDGMENTS; ATTACHMENTS. Suffer or permit any judgment or
attachment against any Borrower or any Borrower's property which is not covered
by insurance and is in an amount in excess of Five Hundred Thousand Dollars
($500,000), to remain unpaid, undischarged, unbonded, unstayed or undismissed
for a period of twenty (20) days;
5. FURTHER ASSIGNMENTS; PERFORMANCE AND MODIFICATION OF
CONTRACTS; ETC. Except as may be expressly permitted by the Loan Documents,
(i) make any further assignment, pledge or disposition (other than in the
ordinary course of business) of the Collateral or any part thereof; (ii) permit
any set-off or reduction, delay the timing of any payment under, or otherwise
modify any Material Contract, if such set-off, reduction, delay
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or modification would give rise to a Borrowing Base Deficiency or otherwise
adversely affect the Borrowers in any material respect; or (iii) do or permit
to be done anything to impair the security or value of any Collateral or the
payments due to any Borrower thereunder;
6. INTENTIONALLY OMITTED.
7. INDEBTEDNESS; GRANTING OF SECURITY INTERESTS. Suffer or
permit any Borrower to incur any new indebtedness for borrowed money (except
for intercompany indebtedness by and among the Subsidiaries and/or BTG, with no
third party financing or participation, and trade debt incurred in the ordinary
course of business), or guarantee or otherwise become obligated for any
indebtedness of others (except for indebtedness of another Borrower as
expressly permitted above in this Section 7), or mortgage, assign, pledge,
hypothecate or otherwise encumber or permit any lien, security interest or
other encumbrance, including purchase money liens, whether under conditional or
installment sales arrangements or otherwise, to affect the Collateral or any
other assets or properties of any Borrower (except for Permitted Liens).
Notwithstanding anything contained in this Section 7 of Article VII to the
contrary, it is understood and agreed that the negative covenant set forth in
this Section 7 (prohibiting new indebtedness for borrowed money) shall not be
violated by the Wholesale Financing; provided that (i) the aggregate
outstanding amount of the Wholesale Financing may not exceed, at any time,
Fifty Million Dollars ($50,000,000); and (ii) no Borrower may incur any
interest expense pursuant to the DFS Financing Agreement or any other document,
instrument or agreement entered into in connection with the Wholesale
Financing, without the Agent's prior written consent.
Furthermore, each of the Borrowers agrees that it will not enter into
any agreement or understanding with any person or entity pursuant to which any
of the Borrowers agrees to be bound by a covenant not to encumber all or any
part of the property or assets of any Borrower;
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8. DIVIDENDS AND SIMILAR EVENTS. Declare or pay any dividends on
any of BTG's capital stock of any class, alter or amend any Borrower's capital
structure, purchase, redeem or otherwise retire any shares of any Borrower's
capital stock, voluntarily prepay, acquire or anticipate any sinking fund
requirement of any indebtedness, make any distributions in cash or assets, or
make any loans, salary advances or other payments to any person or entity
(other than in the ordinary course of business). Notwithstanding the
foregoing, it is understood and agreed that (a) payments made by any Borrower
to Resources pursuant to Section 15 of Article V of this Agreement shall not
violate the negative covenant set forth in this Section 8 of Article VII of
this Agreement; and (b) payments, loans or advances made by any Borrower to or
for the benefit of CNI shall not violate the negative covenant set forth in
this Section 8 of Article VII of this Agreement; provided that (i) the
aggregate amount of any and all such payments, loans and/or advances to or for
the benefit of CNI does not, at any time, exceed Seven Million Dollars
($7,000,000), in the aggregate, and (ii) any such payments, loans or advances
to or for the benefit of CNI constituting capital expenditures shall also be in
compliance with the limitations set forth in Section 10 of Article VII and the
other provisions of this Agreement;
9. LEASE OBLIGATIONS. Enter into any new leases of real or
personal property, except in the ordinary course of business;
10. CAPITAL EXPENDITURES. On a consolidated basis, make any
investment or capital expenditure, including, but not limited to, expenditures
for leasehold improvements or the acquisition of the assets of any other firm,
person, company, corporation or enterprise, during the Borrowers' fiscal year
ending March 31, 1998, or during any fiscal year thereafter, in excess of One
Million Eight Hundred Thousand Dollars ($1,800,000);
11. CONTINUED PROFITABILITY. Incur, on a consolidated basis, a
net loss for any fiscal quarter ending on or after December 31, 1997; and/or
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12. RESOURCES' INDEBTEDNESS; DISPOSITION OF RESOURCES' ASSETS.
Permit Resources to (a) incur any new indebtedness for borrowed money (except
for intercompany indebtedness by and among Resources and BTG or any Subsidiary,
with no third party financing or participation, and trade debt incurred in the
ordinary course of business); (b) guarantee or otherwise become obligated for
any indebtedness of others (except for indebtedness of a Borrower); or (c)
sell, assign, transfer, pledge or otherwise encumber any of its assets to or
for the benefit of any person or entity (except as expressly permitted pursuant
to the Negative Pledge).
ARTICLE VIII
COLLATERAL ACCOUNT
The Borrowers will deposit or cause to be deposited into the
Collateral Account, all checks, drafts, cash and other remittances received by
any Borrower, and shall deposit such items for credit to the Collateral Account
within one (1) Business Day of the receipt thereof and in precisely the form
received. Pending such deposit, the Borrowers will not commingle any such
items of payment with any of their other funds or property, but will hold them
separate and apart.
Each Borrower hereby covenants and agrees that the Collateral Account
shall secure the Obligations and hereby grants, assigns and transfers to the
Agent, on behalf of the Lenders, a continuing security interest in all of each
Borrower's right, title and interest in and to the Collateral Account. In
accordance with Applicable Law, the Agent may apply funds in the Collateral
Account to any of the Obligations, including, without limitation, any
principal, interest or other payment not made when due, whether arising under
this Loan Agreement and/or any other Loan Document, or any other Obligation of
any Borrower, without notice to any Borrower, without regard to the origin of
the deposits to the account or beneficial ownership of the funds therein or
whether such Obligations are owed jointly with another or severally; the order
and method of such application to be in the sole discretion of the Agent. The
Agent's right to deduct sums due under the Loan
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Documents from any Borrower's account(s) shall not relieve the Borrowers from
their obligation to make all payments required by the Loan Documents as and
when required by the Loan Documents, and the Agent shall not have any
obligation to make any such deductions or liability whatsoever for any failure
to do so.
ARTICLE IX
DEFAULT AND REMEDIES
1. EVENTS OF DEFAULT. Any one of the following events shall be
considered an "Event of Default".
(a) if any Borrower shall fail to pay any principal,
interest or other sum owing on the Obligations when the same shall become due
and payable, whether by reason of acceleration or otherwise;
(b) if the Borrowers shall incur a Borrowing Base
Deficiency and fail, immediately upon such occurrence, without notice or demand
therefor, to make a payment to the Agent in an amount equal to or greater than
the Borrowing Base Deficiency; provided, however, that upon the occurrence of
the circumstances described in Paragraph 3(b) of Article I of this Agreement,
the Borrowers shall not be required to make an immediate payment, but rather
shall be required to make the payment within the time frame specified in
Paragraph 3(b) of Article I;
(c) if any Borrower shall fail to pay and satisfy in
full, within twenty (20) days of the rendering thereof, any judgment against
any Borrower in the amount of Five Hundred Thousand Dollars ($500,000.00) or
more which is not, to the satisfaction of the Agent, fully bonded, stayed,
covered by insurance or covered by appropriate reserves;
(d) if (i) a notice of debarment, notice of suspension
or notice of termination for default shall have been issued under any Material
Contract (ii) any Borrower is barred or suspended from contracting with any
part of the Government; (iii) the actual termination of any Material Contract
due to alleged fraud, willful misconduct, neglect, default or any other
wrongdoing; or (iv) a cure notice issued under any Material Contract shall
remain uncured beyond (x) the expiration of the time period available to the
Borrower pursuant to such Material Contract and/or such cure notice, to cure
the noticed default, or (y) the date on which the other contracting party is
entitled to exercise its rights and remedies under the Material Contract as a
consequence of such default;
(e) if any warranty or representation set forth herein or
in any other Loan Document made by or on behalf of any Borrower shall be
misleading or untrue in
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any material respect, when made or remade; it being understood and agreed,
however, that a representation or warranty set forth in a Borrowing Base
Certificate as to the eligibility of a particular Receivable which is
misleading or untrue as a result of (i) an Account Debtor being the subject of
any (A) suit, lien, levy or judgment which is reasonably likely to affect the
collectibility of said account or (B) bankruptcy, insolvency or similar process
or proceeding, or (ii) such Receivable having not yet been funded by the
Government or NATO (as the case may be), shall not constitute an Event of
Default hereunder, provided that the Borrower has made or given such
representation or warranty to the best of the Borrower's knowledge at the time
the applicable Borrowing Base Certificate is submitted to the Agent and
Lenders;
(f) if there shall be non-compliance with or a breach of
any of the Affirmative Covenants or Negative Covenants contained in this
Agreement, or any other covenants or agreements of any Borrower set forth
herein, in the Notes or any other Loan Document;
(g) if the Agent is not satisfied in its reasonable
discretion, with the results of any field audit conducted by the Agent or its
agents;
(h) if (i) without the prior written consent of the
Agent, any Borrower shall be liquidated or dissolved or shall discontinue its
business; (ii) if a trustee or receiver is appointed for any Borrower or for
all or a substantial part of its assets; (iii) if any Borrower makes a general
assignment for the benefit of creditors; (iv) if any Borrower files or is the
subject of any insolvency proceeding or petition in bankruptcy, which in the
case of an involuntary bankruptcy, remains undismissed for sixty (60) days; (v)
if any Borrower shall become insolvent or shall at any time fail generally to
pay its debts as such debts become due; or (vi) if any governmental agency or
bankruptcy court or other court of competent jurisdiction shall assume custody
or control of the whole or substantial portion of the assets of any Borrower;
(i) if any Borrower's property or assets, including,
without limitation, any deposit accounts, are levied upon, attached or subject
to any other enforcement proceeding;
(j) if a default shall have occurred under the terms and
provisions of any bonding contract or other agreement entered into by any
Borrower in connection with the performance by any Borrower of its obligations
under any contract;
(k) if a default shall have occurred under the DFS
Financing Agreement or any other agreement, document or instrument entered into
in connection with the Wholesale Financing, or if any person or entity (other
than the Agent) shall be in breach or violation of any of the terms and
conditions of the DFS Subordination Agreement;
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(l) if Resources shall breach or fail to observe any
term, covenant or agreement set forth in the Negative Pledge; and/or
(m) if at any time Resources owns, holds or retains
Excess Cash for a period of time exceeding the Excess Cash Period, and within
ten (10) Business Days after the expiration of the Excess Cash Period,
Resources has failed to (i) pay dividends to its shareholder(s) in an amount
equal to or greater than the Excess Cash, or (ii) become a "Borrower" under
this Agreement pursuant to the terms and provisions of this Agreement; it being
understood and agreed that Resources' failure to timely pay dividends or become
a "Borrower" pursuant to clauses (i) and (ii) above of this subsection (m)
shall not constitute an Event of Default unless such failure continues
unremedied for a period of three (3) days or more following the date that the
Agent has given written notice of such failure to the Borrower.
2. REMEDIES. Upon the occurrence of any Event of Default, the
Agent, acting on behalf of the Lenders, may exercise any or all of the
following remedies.
(a) Withhold disbursement of all or any part of the Loan
proceeds;
(b) Suspend the Lenders' obligation to make further
disbursements of the Loan proceeds until such Event of Default shall have been
cured, and terminate such obligation if an Event of Default continues after the
expiration of any applicable grace period as may be provided herein;
(c) Declare all principal, interest at the then
applicable rate and other sums owing on the Obligations to be immediately due
and payable without demand, protest, notice of protest, notice of default,
presentment for payment or further notice of any kind; provided, however, that
payments of amounts hereunder shall not be accelerated by reason of (i) a
Monetary Default, unless such default remains uncured for two (2) days (with no
notice of default being required); and (ii) a Non-Monetary Default, unless such
default remains uncured for thirty (30) days following notice thereof from the
Agent to the Borrower. It is expressly understood and agreed that no notice or
grace period shall be required to be provided to any Borrower (and the Agent
may accelerate payment and exercise its other rights and remedies without
delay) in the event of (i) the occurrence of a Borrowing Base Deficiency, in
which event the amount of the deficiency is immediately due and payable in full
(except as otherwise provided in Section 3(b) of Article I of this Agreement);
or (ii) any failure of the Borrowers to satisfy any of the financial covenants
set forth in Section 15 of Article VI of this Agreement. Furthermore, notice
of a Non-Monetary Default shall not be required prior to acceleration or prior
to the Agent exercising any other right or remedy under this Agreement or any
other Loan Document, if the Agent in good faith believes that any such delay
would impair the value of the Lenders' security in any material respect or the
Lenders' lien priority;
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(d) Without notice, offset and apply against all or any
part of the Obligations then owing by any Borrower to any Lender, any and all
money, credits, stock, bonds or other securities or property of any Borrower of
any kind or nature whatsoever on deposit with, held by or in the possession of
any Lender in any capacity whatsoever, including without limitation, any
deposits with any Lender or any of its affiliates, to the credit of or for the
account of any of the Borrowers. To the extent permitted by Applicable Law,
upon the occurrence and continuance of an Event of Default, the Agent and
Lenders are authorized at any time to charge the Obligations against any
Borrower's account(s), without regard to the origin of deposits to the account
or beneficial ownership of the funds; it being understood that the foregoing
authorization shall not limit any other rights the Agent or any Lender may have
to debit any account(s) of any Borrower pursuant to this Agreement or any other
Loan Document. Any and all amounts obtained by the Agent or any Lender
pursuant to this subsection (d) shall be shared by all of the Lenders ratably,
in accordance with each Lender's Percentage; it being expressly acknowledged
and agreed that each Lender, as well as the Agent, shall be entitled to
exercise the rights of set-off provided in this subsection (d) and/or in
Section 3 of this Article IX;
(e) Upon the occurrence of an Event of Default (subject
to the expiration of any applicable grace period as may be provided herein),
exercise all rights, powers and remedies of a secured party under the Uniform
Commercial Code in effect in the Commonwealth of Virginia, any other
jurisdiction in which the Collateral is located and/or under any other
applicable law(s), including, without limitation, the right to (i) require each
Borrower to assemble the Collateral (to the extent that it is movable) and make
it available to the Agent at a place to be designated by the Agent, and (ii)
enter upon any Borrower's premises, peaceably by the Agent's own means or with
legal process, and take possession of, render unusable or dispose of the
Collateral on such premises; each Borrower hereby agreeing not to resist or
interfere with any such action. The Agent agrees to give the Borrowers written
notice of the time and place of any public sale of the Collateral or any part
thereof, and the time after which any private sale or any other intended
disposition of the Collateral is to be made, and such notice will be mailed,
postage prepaid, to the principal place of business of the Borrowers, at least
ten (10) days before the time of any such sale or disposition. Each Borrower
hereby authorizes and appoints the Agent and its successors and assigns to (x)
sell the Collateral, and (y) declare that each Borrower assents to the passage
of a decree by a court of proper jurisdiction for the sale of the Collateral.
Any such sale pursuant to (x) or (y) above is to be made in accordance with the
applicable provisions of the laws and rules of procedure of the Commonwealth of
Virginia or other applicable law; and/or;
(f) Upon the occurrence of an Event of Default (subject
to the expiration of any applicable grace period as may be provided herein),
proceed to enforce such other and additional rights and remedies as the Agent
and/or Lenders may have hereunder, and/or under any of the other Loan
Documents, or as may be provided by applicable law. It is expressly understood
and agreed that the Lenders and/or Agent may exercise their respective rights
under this Agreement or under any other Loan Document
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without exercising the rights or affecting the security afforded by any other
Loan Document, and it is further understood and agreed that the Agent may
proceed against all or any portion of the Collateral in such order and at such
times as the Agent, in its sole discretion, sees fit; and each of the Borrowers
hereby expressly waives, to the extent permitted by law, all benefit of
valuation, appraisement, marshaling of assets and all exemptions under the laws
of the Commonwealth of Virginia and/or any other state, district or territory
of the United States.
Furthermore, if any Borrower shall default in the performance when due
of any of the provisions of this Agreement, the Agent, without notice to or
demand upon any Borrower (and without any grace or cure period) and without
waiving or releasing any of the Obligations or any default hereunder, under the
Notes or under any other Loan Document, may (but shall be under no obligation
to) perform the same for each Borrower's account and any monies expended in so
doing shall be chargeable to the Borrowers with interest which shall accrue
(until the monies expended are repaid to the Agent) at the rate provided for in
the Notes plus two percent (2%) per annum, and added to the indebtedness
secured by the Collateral.
All sums paid or advanced by the Agent in connection with the
foregoing or otherwise in connection with the Loan, and all court costs and
expenses of collection, including without limitation, attorneys' fees and
expenses (and fees and expenses resulting from the taking, holding or
disposition of the Collateral) incurred in connection therewith shall be paid
by the Borrowers upon demand and shall become a part of the Obligations secured
by the Collateral. The Borrowers agree to bear the expense of each lien
search, property and judgment report or other form of Collateral ownership
investigation as the Agent, in its discretion, shall deem necessary or
desirable to assure or further assure to the Lenders their interests in the
Collateral.
3. AGENT'S RIGHT OF SETOFF/SECURITY INTEREST. Each Borrower
hereby covenants and agrees that its account(s) shall secure all debts which it
may owe to the Agent, Lenders or any of their affiliates, now or in the future,
and to secure all such debts, each Borrower hereby grants to the Agent, for
itself, as agent for its affiliates and as agent for the Lenders, a continuing
security interest in, and hereby assigns and transfers to, and pledges with,
the Agent, for itself, as agent for its affiliates and as agent for the
Lenders, all of each Borrower's right, title and interest in its account(s) and
any funds or other items in said account(s) from time to time. The Agent may
use funds in any Borrower's account(s) to repay any debt which any Borrower may
owe the Agent, any of its affiliates or any Lender which is due, without notice
to any Borrower. The Agent shall not be liable for dishonoring items where its
exercise of such right of setoff or enforcement of such security
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interest results in insufficient funds in an account. The funds held in joint
accounts may be pledged by any Borrower or used to repay the debts on which any
Borrower is liable to the Agent, or its affiliates or any lender, whether
jointly with another or severally. Notwithstanding anything to the contrary in
state law, the Agent is authorized at any time to charge any such debt against
any Borrower's account, without regard to the origin of deposits to the account
or beneficial ownership of the funds. Funds held in individual accounts may be
used to repay any Borrower's debts to the Agent, any affiliate of the Agent or
the Lenders, whether such debts are owed jointly with another or severally.
Any Borrower's debts may include (1) those incurred under any agreement
regarding the extension of credit, (2) those owed by any Borrower arising out
of another joint account of which any Borrower is joint owner, even if they are
not directly incurred by any Borrower, (3) those on which any Borrower is
secondarily liable, or (4) any amounts for which the Agent or any Lender
becomes liable to any governmental agency or department or any company as a
result of recurring payments credited to any Borrower's account after the
termination of entitlement of the intended recipient of such amounts. If the
Agent cashes a third party check for any Borrower over the counter, and the
check is returned to the Agent unpaid for any reason, each Borrower authorizes
the Agent to charge the check against any Borrower's account without notice,
provided the Agent returns the unpaid check to such Borrower. Notwithstanding
anything contained in this Section 3 to the contrary, any and all funds
obtained by the Agent pursuant to this Section shall first be applied against
the Borrower's debts owed to the Lenders in connection with the Loan, ratably
in accordance with each Lender's Percentage, until each Lender is paid in full
all sums owing to them in connection with the Loan, and then shall be applied
to any other debts of the Borrower owing to NationsBank or any of its
affiliates.
ARTICLE X
THE AGENT
1. APPOINTMENT. Each Lender hereby irrevocably appoints
NationsBank, N.A. to act as Agent for such Lender pursuant to the provisions of
this Agreement and the
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other Loan Documents, and irrevocably authorizes the Agent to take such action,
exercise such powers and perform such duties as are expressly delegated to or
required of the Agent by the terms hereof or thereof, or are reasonably
incidental thereto, including without limitation, executing documents in the
name of the Agent for and on behalf of the Lenders. NationsBank, N.A. agrees
to act as Agent on behalf of the Lenders on the terms and conditions set forth
in this Agreement and the other Loan Documents, subject to its right to resign
as provided in Section 10 of this Article X. Each Lender agrees that the
rights and remedies granted to the Agent under this Agreement and the other
Loan Documents shall be exercised exclusively by the Agent, and that no Lender
shall have the right individually to exercise any such right or remedy, except
to the extent expressly provided herein or therein.
2. GENERAL NATURE OF AGENT'S DUTIES. Notwithstanding anything to
the contrary elsewhere in this Agreement or in any other Loan Document:
(a) The Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and the other Loan
Documents, and no implied duties or responsibilities on the part of the Agent
shall be read into this Agreement or any other Loan Document or shall otherwise
exist.
(b) The duties and responsibilities of the Agent under
this Agreement and the other Loan Documents shall be mechanical and
administrative in nature, and the Agent shall not have a fiduciary relationship
in respect of any Lender.
(c) The Agent is and shall be solely the agent of the
Lenders. The Agent does not assume, and shall not at any time be deemed to
have, any relationship of agency or trust with or for, or any other duty or
responsibility to, the Borrowers or any other person (except only for its
relationship as agent for, and its express duties and responsibilities as agent
for, and its express duties and responsibilities to, the Lenders as provided in
this Agreement and the other Loan Documents).
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(d) The Agent shall be under no obligation to take any
action hereunder or under any other Loan Document if the Agent believes in good
faith that taking such action may conflict with any Applicable Laws or any
provision of this Agreement or any other Loan Document, or may require the
Agent to qualify to do business in any jurisdiction where it is not then so
qualified.
3. EXERCISE OF POWERS.
(a) The Agent shall have the authority to take any action
of the type specified in this Agreement or any other Loan Document as being
within the Agent's rights, powers or discretion as it determines, in its sole
discretion, except as provided in subsection (b) below, and except as provided
in any other Loan Document which expressly requires the direction or consent of
(i) the Required Lenders; or (ii) all of the Lenders, in either of which
circumstances the Agent shall not take such action absent such direction or
consent. Any action or inaction pursuant to such direction, discretion or
consent shall be binding on all of the Lenders.
(b) Except as otherwise provided in subsection (c)
hereof, the Agent shall not, without the consent or approval of the Required
Lenders, (1) amend, modify, supplement or waive any term or provision of this
Agreement or any other Loan Document, or (2) consent, or withhold consent, to
any departure from or variation of the terms and conditions of the negative
covenants set forth in Article VII of this Agreement. Without limiting the
foregoing, it is understood and agreed that, except as otherwise provided in
subsection (c) hereof, the Agent shall not, without the consent or approval of
all of the Lenders (i) extend the final maturity of the Loan or any Note,
reduce the interest rate payable on or extend the time of payment of any
installment of principal, interest or fees payable in connection with the Loan,
change the Percentage of the Commitment Amount of any Lender, or increase the
Commitment Amount (if the effect of such increase shall require any
non-consenting Lender to fund the Loan in excess of its Percentage of the
original Commitment Amount), (ii) release any Collateral, except in accordance
with the
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provisions of any applicable Loan Document, (iii) amend the definition of the
Required Lenders, (iv) consent to the assignment or transfer by a Borrower of
any of its rights or obligations hereunder, except in connection with a merger
permitted by this Agreement, (v) amend, modify or waive any provisions of this
Article X, (vi) except as may be consented to by a Lender affected thereby or
as otherwise permitted by Section 13(d) of this Article X, change the
definition of Percentage or the manner of application by the Agent of payments
made under the Loan Documents, (vii) change the method of computation used in
connection with the calculation of interest, commissions or fees or (viii)
increase the percentages, or expand the definitions, of the Borrowers' Eligible
Borrowing Base Receivables or Eligible Unbilled Costs used in connection with
the calculation of the Maximum Borrowing Base; it being understood that the
provisions of this subsection (viii) shall not modify, impair or adversely
affect the Agent's rights set forth in Section 3(c) of Article I of this
Agreement. Each Lender agrees that its decision to approve or reject any
request for an amendment or waiver with respect to this Agreement shall be made
as soon as reasonably practicable after the Lender has received all relevant
information with respect to such request.
(c) Notwithstanding anything contained herein or in any
other Loan Document to the contrary, each Lender hereby agrees that the Agent
may take any or all of the following described actions on behalf of all of the
Lenders, without the consent of any of the Lenders: (i) release such Collateral
as the Agent may determine, in its sole discretion, provided that the aggregate
fair market value of all such Collateral released pursuant to this subsection
(c)(i) does not exceed, in the aggregate, One Million and No/100 Dollars
($1,000,000.00) during any fiscal year of the Borrower; (ii) consent to any
merger (in which, if BTG is one of the parties to such merger, BTG shall be the
surviving entity thereof), acquisition of stock or assets, or investments by
any Borrower, provided that (A) such merger, acquisition or investment is
complimentary to such Borrower's core business activities, (B) the
consideration for the subject transaction does not exceed One Million and
No/100 Dollars ($1,000,000.00) and (C) no Event of Default has occurred and is
continuing; (iii) consent to the Borrower's granting of purchase money security
interests
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which do not constitute Permitted Liens, provided that the aggregate amount of
liens to which the Agent consents pursuant to this subsection does not exceed,
in the aggregate, One Million and No/100 Dollars ($1,000,000.00) during any
fiscal year of the Borrower; and (iv) consent to advances in excess of the
Maximum Borrowing Base, provided that such overadvance does not (x) occur more
than once per month, (y) extend for more than ten (10) Business Days and (z)
exceed One Million and No/100 Dollars ($1,000,000.00).
4. GENERAL EXCULPATORY PROVISIONS. Notwithstanding anything to
the contrary elsewhere in this Agreement or any other Loan Documents:
(a) The Agent shall not be liable for any action taken or
omitted to be taken by it under or in connection with this Agreement or any
other Loan Document, unless caused by its own gross negligence or willful
misconduct.
(b) The Agent shall not be responsible for (i) the
execution, delivery, effectiveness, enforceability, genuineness, validity or
adequacy of this Agreement or any other Loan Document, (ii) any recital,
representation, warranty, document, certificate, report or statement in this
Agreement or any other Loan Document, (iii) any failure of the Borrowers or any
Lender to perform any of their respective obligations under this Agreement or
any other Loan Document, (iv) the existence, validity, enforceability,
perfection, recordation, priority, adequacy or value, now or hereafter, of any
lien or encumbrance or other direct or indirect security afforded or purported
to be afforded by any of the Loan Documents or otherwise from time to time, or
(v) caring for, protecting, insuring, or paying any taxes, charges or
assessments with respect to any Collateral.
(c) The Agent shall not be under any obligation to
ascertain, inquire or give any notice relating to (i) the performance or
observance of any of the terms or conditions of this Agreement or any other
Loan Document on the part of the Borrowers, (ii) the business, operations,
condition (financial or otherwise) or prospects of the Borrowers, or (iii)
except to the extent set forth in Article IX hereof, the existence of any Event
of Default.
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(d) The Agent shall not be under any obligation, either
initially or on a continuing basis, to provide any Lender with any notices,
reports or information of any nature, whether in its possession presently or
hereafter, except for such notices, reports and other information expressly
required by this Agreement or any other Loan Document to be furnished by the
Agent to such Lender.
5. ADMINISTRATION BY THE AGENT.
(a) The Agent may rely upon any notice or other
communication of any nature (written or oral, including telephone
conversations, whether or not such notice or other communication is made in a
manner permitted or required by this Agreement or any other Loan Document)
purportedly made by or on behalf of the proper party or parties, and the Agent
shall not have any duty to verify the identity or authority of any person
giving such notice or other communication.
(b) The Agent may consult with legal counsel (including
in-house counsel for the Agent or in-house or other counsel for the Borrowers),
independent public accountants and any other experts selected by it from time
to time, and the Agent shall not be liable for any action taken or omitted to
be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts.
(c) The Agent may conclusively rely upon the truth of the
statements and the correctness of the opinions expressed in any certificates or
opinions furnished to the Agent in accordance with the requirements of this
Agreement or any other Loan Document. Whenever the Agent shall deem it
necessary or desirable that a matter be proved or established with respect to
the Borrowers or any Lender, such matter may be established by a certificate of
the Borrowers or such Lender, as the case may be, and the Agent may
conclusively rely upon such certificate (unless other evidence with respect to
such matter is specifically prescribed in this Agreement or another Loan
Document).
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(d) The Agent may fail or refuse to take any action
unless it shall be indemnified to its satisfaction from time to time against
any and all amounts, liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature which may be imposed on, incurred by or asserted against the Agent by
reason of taking or continuing to take any such action.
(e) The Agent may perform any of its duties under this
Agreement or any other Loan Document by or through agents or attorneys-in-fact.
The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
(f) The Agent shall not be deemed to have any knowledge
or notice of the occurrence of any Event of Default unless the Agent has
received from a Lender or the Borrowers a written notice referring to this
Agreement, describing the Event of Default, and stating that such notice is a
"notice of default". If the Agent receives such a notice, the Agent shall give
prompt notice thereof to each Lender. The Agent shall not, however, declare an
Event of Default, provide formal written notice of default to the Borrower or
exercise any rights or remedies against the Borrowers without the prior consent
of the Required Lenders. Each Required Lender agrees that its decision to
consent to or reject any request by the Agent for permission to declare an
Event of Default, provide formal notice thereof to the Borrowers and/or
exercise any rights or remedies arising by virtue of such default, shall be
made as soon as reasonably practicable after the Required Lender has received
all relevant information with respect to such request, but in all events within
two (2) Business Days of the receipt of such information.
(g) The Agent shall provide three (3) Business Days prior
notice to each Lender of any field audit scheduled to be performed by the Agent
in accordance with Section 6 of Article I of this Agreement. Each Lender shall
be entitled to accompany the Agent to any field audit at least once per year;
provided, however, that the Agent may, in its sole discretion, limit the number
of Lenders attending any such field audit. If an Event
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of Default has occurred and is continuing, all of the Lenders shall be entitled
to attend each field audit conducted during such Event of Default.
6. LENDERS NOT RELYING ON AGENT OR OTHER LENDERS. Each Lender
acknowledges as follows:
(a) Neither the Agent nor any other Lender has made any
representations or warranties to it, and no act taken hereafter by the Agent or
any other Lender shall be deemed to constitute any representation or warranty
by the Agent or such other Lender to it.
(b) It has, independently and without reliance upon the
Agent or any other Lender, and based upon such documents and information as it
has deemed appropriate, made its own credit and legal analysis and decision to
enter into this Agreement and the other Loan Documents.
(c) It will, independently and without reliance upon the
Agent or any other Lender, and based upon such documents and information as it
shall deem appropriate at the time, make its own decisions to take or not take
action under or in connection with this Agreement and the other Loan Documents.
7. INDEMNIFICATION. Each Lender agrees to reimburse and
indemnify the Agent and the Agent's directors, officers, employees and agents
(to the extent not reimbursed by the Borrowers, and without limitation of the
obligation of the Borrowers to do so), ratably in accordance with each Lender's
Percentage, from and against any and all amounts, losses, liabilities, claims,
damages, expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements of any kind or nature (including the reasonable fees and
disbursements of counsel for the Agent or such other person in connection with
any investigative, administrative or judicial proceeding commenced or
threatened, whether or not the Agent or such other person shall be designated a
party thereto) that may at any time be imposed on, incurred by or asserted
against the Agent or such other person as a
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result of this Agreement, any other Loan Document, any transaction from time to
time contemplated hereby or thereby, or any transaction financed in whole or in
part or directly or indirectly with the proceeds of the Loan; provided that no
Lender shall be obligated to indemnify the Agent or such other person for any
portion of such amounts, losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements
resulting solely from the gross negligence or willful misconduct of the person
seeking indemnity, as finally determined by a court of competent jurisdiction.
8. AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
commitments and the Obligations owing to it, NationsBank shall have the same
rights and powers under this Agreement and each other Loan Document as any
other Lender, and may exercise the same as though it were not also the Agent.
The terms "Lender," "holders of Notes" and like terms set forth in this
Agreement or any other Loan Document shall include NationsBank in its
individual capacity. Subject to any limitations that may be set forth in
Section 3 of Article IX of this Agreement, NationsBank and its affiliates may,
without liability to account, make loans to, accept deposits from, acquire debt
or equity interests in, act as trustee under indentures of and engage in any
other business with the Borrowers and any stockholder, subsidiary or affiliate
of the Borrowers, as though NationsBank was not the Agent hereunder.
9. HOLDERS OF NOTES. The Agent may deem and treat any Lender
which is the payee of a Note as the owner and holder of such Note for all
purposes hereof unless and until a written transfer thereof shall have been
filed with the Agent. Any authority, direction or consent of any person who at
the time of giving such authority, direction or consent was a Lender shall be
conclusive and binding on each present and subsequent holder, transferee or
assignee of any Note or Notes payable to such Lender or issued in exchange
therefor.
10. SUCCESSOR AGENT. The Agent may resign at any time by giving
thirty (30) days' prior written notice thereof to the Lenders and Borrowers,
subject to
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appointment of a successor agent (and such appointee's acceptance of
appointment), as below provided in this Section 10. Additionally, if at any
time the Agent (in its individual capacity) does not maintain the lesser of (i)
a Fifteen Million Dollar ($15,000,000) interest in the Commitment Amount; or
(ii) a Percentage of the Commitment Amount that is equal to or greater than the
Percentage of the Commitment Amount of each other Lender, the Agent agrees to
resign upon the unanimous request of all of the Lenders (other than the Agent,
acting as a Lender). Furthermore, the Agent may be removed for cause if
removal is requested by all of the Lenders (other than the Agent, acting as a
Lender, if the Agent is then a Lender) in writing, and ten (10) days' prior
written notice of removal is provided to the Agent and Borrowers. Upon any
such resignation or removal, the Lenders (other than the retiring Agent, acting
as a Lender, if the retiring Agent is then a Lender), acting unanimously, shall
have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed and shall have accepted such appointment within thirty (30)
days after such notice of resignation or removal, then the retiring Agent
shall, on behalf of the Lenders, immediately appoint, as successor Agent (a)
another Lender; or (b) a commercial bank or trust company organized under the
laws of the United States of America or any State thereof and having a combined
capital and surplus of at least $500,000,000. In such event, the Agent's
resignation or removal shall not be effective until the successor Agent shall
have accepted its appointment. Upon the acceptance by a successor Agent of its
appointment as Agent hereunder, such successor Agent shall thereupon succeed to
and become vested with all of the properties, rights, powers, privileges and
duties of the former Agent, without further act, deed or conveyance. Upon the
effective date of resignation or removal of a retiring Agent, such Agent shall
be discharged from its duties under this Agreement and the other Loan
Documents, but the provisions of this Agreement shall continue to be binding on
and inure to its benefit as to any actions taken or omitted by it while it was
Agent under this Agreement. If for any reason, at any time, there is no Agent
hereunder, then during such period any notice or other communication required
or permitted to be given by the Agent shall be sufficiently given if given by
the Lenders, all notices or other communications required or permitted to
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be given to the Agent shall be given to each Lender, and all payments to be
made to the Agent shall be made directly to the Borrowers or the Lender for
whose account such payment is being made.
11. ADDITIONAL AGENTS. If the Agent shall from time to time deem
it necessary or advisable, for its own protection in the performance of its
duties hereunder or in the interests of the Lenders, the Agent and the
Borrowers shall execute and deliver a supplemental agreement and all other
instruments and agreements necessary or advisable, in the opinion of the Agent,
to constitute another commercial bank or trust company, or one or more other
persons approved by the Agent, to act as co-Agent or agent with respect to any
part of the Collateral, with such powers of the Agent as may be provided in
such supplemental agreement, and to vest in such bank, trust company or person
as such co-Agent or separate agent, as the case may be, any properties, rights,
powers, privileges and duties of the Agent under this Agreement or any other
Loan Document.
12. CALCULATIONS. The Agent shall not be liable for any
calculation, apportionment or distribution of payments made by it in good
faith. If such calculation, apportionment or distribution is subsequently
determined to have been made in error, the sole recourse of any Lender to whom
payment was due but not made shall be to recover from the Lenders any payment
in excess of the amount to which they are determined to be entitled, with
interest thereon at the Federal Funds Rate, or, if the amount due was not paid
by the Borrowers, to recover such amount from the Borrowers, with interest
thereon at the rate provided in the Notes.
13. FUNDING BY AGENT; PAYMENTS.
(a) The Agent shall be entitled to make all advances in
connection with the Loan and shall receive all payments and other receipts
relating to the Loan; it being understood, however, that the Agent has reserved
the right not to advance any amounts to the Borrowers which the Agent has not
received from the Lenders. Once per week, or within such shorter time frame as
may be requested by the Agent, the Agent and
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each Lender shall pay to each other such amounts (the "Equalization Payments")
as may be necessary to cause each Lender to own its applicable Percentage of
the Loan and otherwise implement the terms and provisions of this Agreement; it
being understood that each Lender shall be entitled to receive interest on
amounts advanced by it only from the date of such Lender's advance of funds.
The obligation of the Agent and each Lender to make the Equalization Payments
shall not be affected by a bankruptcy filing by any Borrower, the occurrence of
any Event of Default or any other act, occurrence or event whatsoever, whether
the same occurs, before, on or after the date on which an Equalization Payment
is required to be made. All Equalization Payments shall be made by 2:00 p.m.
Eastern Standard Time on the date such payment is required to be paid.
(b) Unless the Agent shall have been notified in writing
by any Lender no later than the close of business on the Business Day before
the Business Day on which an advance requested by the Borrowers is to be made,
that such Lender will not make its ratable share of such advance, the Agent may
assume that such Lender will make its ratable share of the advance, and in
reliance upon such assumption the Agent may (but in no circumstances shall be
required to) make available to the Borrower a corresponding amount. If and to
the extent that any Lender fails to make such payment to the Agent when
required, such Lender shall pay such amount on demand (or, if such Lender fails
to pay such amount on demand, the Borrowers shall arrange for the repayment of
such amount to the Agent), together with interest for the Agent's own account
for each day from and including the date of the Agent's payment, to and
including the date of repayment to the Agent (before and after judgment).
Interest (a) if paid by such Lender (i) for each day from and including the
date of the Agent's payment to and including the second Business Day
thereafter, shall accrue at the Federal Funds Rate for such day, and (ii) for
each day thereafter, shall accrue at the rate or rates per annum applicable to
the Notes; and (b) if paid by the Borrowers, shall accrue at the rate or rates
per annum applicable to the Notes. All payments to the Agent under this
Section shall be made to the Agent at its office set forth in the preamble of
this Agreement (or as otherwise directed by
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the Agent), in dollars, in immediately available funds, without set-off,
withholding, counterclaim or other deduction of any nature.
(c) All borrowings under this Agreement shall be incurred
from the Lenders pro rata on the basis of their respective Percentages (except
to the extent advanced by the Agent on behalf of any Lender as provided in
subsection (a) or (b) above). It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make
advances hereunder and that each Lender shall be obligated to make advances
required to be made by it hereunder regardless of the failure of any other
Lender to make its advances hereunder.
(d) Each payment and prepayment received by the Agent for
the account of the Lenders shall be distributed to each Lender entitled to
share in such payment, ratably in accordance with each Lender's Percentage,
concurrent with each Equalization Payment required to be made in accordance
with subsection (a) hereof. Notwithstanding the provisions of Section 2(d) of
Article IX, any Lender who has failed to fund its Percentage of any advance
under the Loan shall not be entitled to share in any such payment(s) until such
time as the funding deficiency caused thereby, together with interest thereon
(as provided in subsection (b) above), has been paid to the Agent in accordance
with the terms and conditions of this Agreement. Payments from the Agent to
the Lenders shall be made by wire transfer in accordance with written
instructions provided to the Agent by the Lenders from time to time. Unless
the Agent shall have received notice from the Borrowers prior to the date on
which any payment is due to the Lenders hereunder that the Borrowers will not
make such payment in full, the Agent may assume that the Borrowers have made
such payment in full on such date and the Agent, in reliance upon such
assumption, may cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent the
Borrowers shall not have made such payment in full to the Agent, each Lender
shall repay to the Agent upon its demand therefor such amount distributed to
such Lender, together with interest thereon at
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the overnight Federal Funds Rate for each day from the date such amount is
distributed to such Lender until the date such Lender repays such amount to the
Agent.
(e) if any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) in excess of such Lender's Percentage of payments, such Lender shall
forthwith purchase from the other Lender(s) such participations in the Loans
made by them as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from the other Lender(s) shall be rescinded and each
other Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery, together with an amount equal to such Lender's ratable
share (according to the proportion of (1) the amount of such Lender's required
repayment, to (2) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount recovered. Each Borrower agrees that any Lender
purchasing a participation from another Lender pursuant to this Section 13(e),
to the fullest extent permitted by law, may exercise all of its rights of
payment with respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation.
14. REPLACEMENT OF CERTAIN LENDERS. If a Lender (an "Affected
Lender") shall have (i) failed to fund its Percentage of any advance requested
by the Borrower which such Lender is obligated to fund under the terms of this
Agreement and such failure remains uncured for any applicable notice and cure
period, (ii) requested compensation from the Borrower under Section 8 of
Article XII of this Agreement to recover increased costs incurred by such
Lender which are not being incurred generally by the other Lenders, or (iii)
merged or consolidated with any other financial institution, and is not the
surviving entity of such merger or consolidation, or agreed to merge or
consolidate with any other financial institution, and will not be the surviving
entity of such merger or consolidation, then in any such case and in addition
to any other rights and remedies that the Agent, any
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other Lender or the Borrower may have against such Affected Lender by virtue of
such event, the Agent may, by written demand on such Affected Lender (with a
copy to the Borrower) require that the Affected Lender assign to one or more
Lenders willing to accept such assignment or assignments, or to one or more
Eligible Assignees, in each case designated by the Agent, all of such Affected
Lender's rights and obligations under this Agreement, in accordance with
Section 11 of Article XII of this Agreement. Any such assignment shall be
pursuant to assignment documentation acceptable to the Agent in all respects
(the "Assignment"), and shall be executed and delivered by the Affected Lender
within five (5) Business Days after written demand in accordance with this
provision. If the Affected Lender fails or refuses to execute and deliver the
same within five (5) Business Days after the date of such demand, provided the
Affected Lender does not deliver to the Agent written notice of the existence
of a bona fide dispute as to amounts due and owing hereunder between the
Affected Lender, the Agent and/or the Borrower, which notice sets forth with
particularity the nature of such dispute, the Agent is hereby irrevocably
authorized to execute such Assignment (which shall be without recourse,
representation or warranty of any kind whatsoever) as attorney-in-fact for any
Affected Lender. The Affected Lender shall be entitled to receive, in cash and
concurrently with execution and delivery of the Assignment (whether executed by
the Affected Lender or by the Agent as its attorney-in-fact pursuant to the
provisions hereof), all amounts owed to the Affected Lender hereunder or under
any other Loan Document, including amounts funded by the Affected Lender
ratably in accordance with the Affected Lender's Percentage of the aggregate
outstanding principal amount of the Loan which remain due and owing to such
Lender, together with accrued interest thereon through the date of such
assignment. Upon the replacement of any Affected Lender pursuant to this
Section 14, such Affected Lender shall cease to have any participation in,
entitlement to, or other right to share in the Loan or the security interests
granted in favor of the Agent in any Collateral, and such Affected Lender shall
have no further liability to the Agent or any other Lender under any of the
Loan Documents (except as provided in Section 11(a) of Article XII of this
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Agreement as to events or transactions which occurred prior to the replacement
of such Affected Lender).
15. BENEFIT OF ARTICLE. The provisions of this Article X are
solely for the benefit of the Lenders and the Agent. The Borrowers shall not
have any rights under any of the provisions of this Article X; it being
understood that the provisions of this Article X are not in limitation of any
right, power, duty, obligation or liability which the Agent would have to or
against the Borrowers or the Borrowers would have to or against the Agent other
than in its capacity as Agent hereunder.
ARTICLE XI
CERTAIN ADDITIONAL RIGHTS AND OBLIGATIONS
REGARDING THE COLLATERAL
1. POWER OF ATTORNEY. Each of the Borrowers hereby irrevocably
appoints the Agent as its agent and attorney-in-fact, with power of
substitution, having full power and authority, in its own name, in the name of
any Lender(s), in the name of any Borrower(s) or otherwise (but at the cost and
expense of the Borrowers and without notice to any Borrower) to (i) notify
account debtors obligated on any of the Receivables to make payments thereon
directly to the Agent, and to take control of the cash and non-cash proceeds of
any such Receivables, which right the Agent may exercise at any time whether or
not any of the Borrowers are then in default hereunder or were theretofore
making collections thereon; (ii) charge against any banking account of any
Borrower any item of payment credited to the Collateral Account which is
dishonored by the drawee or maker thereof; (iii) upon the occurrence of an
Event of Default (subject to the expiration of any applicable grace period as
may be provided herein), compromise, extend or renew any of the Collateral
constituting Receivables or deal with any of the Collateral as the Agent may
deem advisable; (iv) upon the occurrence of an Event of Default (subject to the
expiration of any applicable grace period as may be provided herein), release
its interest in, make exchanges or substitutions for and/or surrender, all or
any part of any Borrower's interest
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in all or any part of Collateral; (v) upon the occurrence of an Event of
Default (subject to the expiration of any applicable grace period as may be
provided herein), remove from any Borrower's place(s) of business all books,
records, ledger sheets, correspondence, invoices and documents relating to or
evidencing any of the Collateral (so long as the Agent shall supply copies of
all documents removed within a reasonable time after removal), or without cost
or expense to the Agent, make such use of any Borrower's place(s) of business
as may be reasonably necessary to administer, control and/or collect the
Collateral; (vi) upon the occurrence of an Event of Default (subject to the
expiration of any applicable grace period as may be provided herein), repair,
alter or supply goods, if any, necessary to fulfill in whole or in part the
purchase order of any account debtor; (vii) upon the occurrence of an Event of
Default (subject to the expiration of any applicable grace period as may be
provided herein), demand, collect receipt for and give renewals, extensions,
discharges and releases of all or any part of the Collateral; (viii) upon the
occurrence of an Event of Default (subject to the expiration of any applicable
grace period as may be provided herein), institute and prosecute legal and
equitable proceedings to enforce collection of, or realize upon, all or any
part of the Collateral; (ix) upon the occurrence of an Event of Default
(subject to the expiration of any applicable grace period as may be provided
herein), settle, renew, extend, compromise, compound, exchange or adjust claims
with respect to all or any part of the Collateral or any legal proceedings
brought with respect thereto; (x) endorse the name of any Borrower upon any
items of payment relating to the Collateral or upon any proof of claim in
bankruptcy against any account debtor; (xi) receive and open all mail addressed
to any Borrower and, upon the occurrence of an Event of Default (subject to the
expiration of any grace period as may be provided herein), notify the Post
Office authorities to change the address for the delivery of mail to any
Borrower to such address as the Agent may designate; and (xii) file financing
statements and continuation statements covering the Collateral and execute the
same on behalf of any Borrower. It is expressly understood and agreed,
however, that the Agent shall not be required or obligated in any manner to
make any inquiries as to the nature or sufficiency of any payment received by
it or to present or file any claims or take any other action to collect or
enforce a payment of any amounts
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which may have been assigned to it or to which it or the Lenders may be
entitled at any time or times.
2. LOCKBOX. Each Borrower hereby authorizes the Agent to receive
and collect any amount or amounts due or to become due on account of any
Receivables and to apply the same to the repayment of the Obligations, and each
Borrower agrees that, as of the date hereof, it has established and shall
continually maintain on terms and conditions reasonably satisfactory to the
Agent in all respects one or more special lockbox or blocked accounts for the
collection of Receivables. Any checks or other remittances received by any
Borrower in payment of the Receivables shall be held in trust by each Borrower
for the Agent and Lenders. Each Borrower shall include on all of its invoices,
a direction to its customer to make all payments directly to the Agent at the
address provided by the Agent.
3. FUNDS TRANSFER SERVICES.
(a) Each Borrower acknowledges that the Agent has made
available to it a description of security procedures regarding funds transfers
executed by the Agent or an affiliate bank at the request of any Borrower (the
"Security Procedures"). Each Borrower and the Agent agree that the Security
Procedures are commercially reasonable. Each Borrower further acknowledges
that the full scope of the Security Procedures which the Agent or such
affiliate bank offers and strongly recommends for funds transfers is available
only if any such Borrower communicates directly with the Agent or such
affiliate bank as applicable in accordance with said procedures. If any
Borrower attempts to communicate by any other method or otherwise not in
accordance with the Security Procedures, the Agent or such affiliate bank, as
applicable, shall not be required to execute such instructions, but if the
Agent or such affiliate bank, as applicable, does so, such Borrower will be
deemed to have refused the Security Procedures that the Agent or such affiliate
bank as applicable offers and strongly recommends, and such Borrower will be
bound by any funds transfer, whether or not authorized, which is issued in the
Borrower's name and accepted by the Agent or such affiliate bank, as
applicable, in good faith. The
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Agent or affiliate bank, as applicable, may modify the Security Procedures at
such time or times and in such manner as the Agent or such affiliate bank, as
applicable, in its sole discretion, deems appropriate to meet prevailing
standards of good banking practice. By continuing to use the Agent's or such
affiliate bank's, as applicable, wire transfer services after receipt of any
modification of the Security Procedures, each Borrower agrees that the Security
Procedures, as modified, are likewise commercially reasonable. Each Borrower
further agrees to establish and maintain procedures to safeguard the Security
Procedures and any information related thereto.
(b) The Agent or such affiliate bank, as applicable, will
generally use the Fedwire funds transfer system operated by the Society for
Worldwide International Financial Telecommunication (SWIFT) for international
funds transfers. International funds transfers may also be initiated through
the Clearing House InterBank Payment System (CHIPs) or international cable.
However, the Agent or such affiliate bank, as applicable, may use any means and
routes that the Agent or such affiliate bank, as applicable, in its sole
discretion, may consider suitable for the transmission of funds. Each payment
order, or cancellation thereof, carried out through a funds transfer system or
a clearinghouse will be governed by all applicable funds transfer system rules
and clearing house rules and clearing arrangements, whether or not the Agent or
such affiliate bank, as applicable, is a member of the system, clearinghouse or
arrangement and each Borrower acknowledges that the Agent's or such affiliate
bank's, as applicable, right to reverse, adjust, stop payment or delay posting
of an executed payment order is subject to the laws, regulations, rules,
circulars and arrangements described herein.
ARTICLE XII
MISCELLANEOUS
1. REMEDIES CUMULATIVE. Each right, power and remedy of the
Agent or Lenders provided for in this Agreement or in the other Loan Documents
or now or hereafter existing at law or in equity, by statute or otherwise,
shall be cumulative and
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concurrent and shall be in addition to every other right, power or remedy
provided for in this Agreement or in any other Loan Document, or now or
hereafter existing at law or in equity, by statute or otherwise, and the
exercise or beginning of the exercise by the Agent of any one or more of such
rights, powers or remedies shall not preclude the simultaneous or later
exercise by the Agent of any or all such other rights, powers or remedies.
2. WAIVER. Time is of the essence of this Agreement. No failure
or delay by the Agent to insist upon the strict performance of any term,
condition, covenant or agreement of this Agreement or of any other Loan
Document, or to exercise any right, power or remedy consequent upon a breach
thereof, shall constitute a waiver of such term, condition, covenant or
agreement or of any such breach, or preclude the Agent from exercising any such
right, power or remedy at any later time or times. By accepting payment after
the due date of any of the Obligations, neither the Lenders nor Agent shall be
deemed to have waived either the right to require prompt payment when due of
all other Obligations, or the right to declare a default for failure to effect
payment of any such other Obligations.
3. NOTICES. Notices to either party shall be in writing and shall
be delivered personally or by mail addressed to the parties at the addresses
set forth below or otherwise designated in writing:
If to any Borrower: c/o BTG, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇,
Chief Financial Officer
If to the Lenders: NationsBank, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Vice President
AND
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Fleet Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Senior Vice President
AND
Crestar Bank
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President
AND
Any other Lender at the address
designated by such Lender in writing.
If to the Agent: NationsBank, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Vice President
with a copy to: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
4. ENTIRE AGREEMENT; CONFLICTS WITH COMMITMENT LETTER; AMENDMENT
AND RESTATEMENT. This Agreement and the other Loan Documents constitute the
entire agreement of the parties with respect to the Loan. This Agreement and
the other Loan Documents shall continue in full force and effect for so long as
any Borrower shall be indebted hereunder or under any Note, and thereafter
until the Agent shall have actually received written notice of the termination
hereof from the Borrowers, all Letters of Credit shall have been canceled or
expired and all Obligations incurred or contracted before receipt of such
notice shall have been fully paid. In the event of any inconsistency between
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the terms and conditions of this Agreement and the terms and conditions of the
Commitment Letter, the terms and conditions of this Agreement shall control.
This Agreement is a complete amendment and restatement of the Original Loan
Agreement (as heretofore modified), the terms and conditions of which have been
superseded and replaced in their entirety by the terms and provisions of this
Agreement.
5. RELATIONSHIP OF THE PARTIES. This Agreement provides for the
extension of financial accommodations by each Lender, in its capacity as
lender, to the Borrowers, in their capacities as borrowers, and for the payment
of interest and repayment of the Obligations by the Borrowers. The provisions
herein are intended solely for the benefit of the Agent and Lenders to protect
the Lenders' interests in assuring repayment of the Obligations, and nothing
contained in this Agreement shall be construed as permitting or obligating the
Lenders or Agent to act as a financial or business advisor or consultant to any
Borrower, as permitting or obligating the Lenders or Agent to control any
Borrower or to conduct any Borrower's operations, as creating any fiduciary
obligation on the part of any Lender or the Agent to any Borrower, or as
creating any joint venture, agency or other similar relationship between the
parties other than as explicitly and specifically stated in this Agreement.
Each Borrower acknowledges that it has had the opportunity to obtain the advice
of experienced counsel of its own choosing in connection with the negotiation
and execution of this Agreement and to obtain the advice of such counsel with
respect to all matters contained herein, including, without limitation, the
provision in this Agreement for waiver of trial by jury. Each Borrower further
acknowledges that it is experienced with respect to financial and credit
matters and has made its own independent decision to request the Obligations
and execute and deliver this Agreement.
6. WAIVER OF JURY TRIAL. Each party hereby (a) covenants and
agrees not to elect a trial by jury of any issue triable by a jury, and (b)
waives any right to trial by jury fully to the extent that any such right shall
now or hereafter exist. This waiver of right to trial by jury is separately
given by each party, knowingly and voluntarily, and this waiver is intended to
encompass individually each instance and each issue as to which the right to a
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jury trial would otherwise accrue. Each party is hereby authorized and
requested to submit this Agreement to any court having jurisdiction over the
subject matter and the parties hereto, so as to serve as conclusive evidence of
the parties' herein contained waiver of the right to jury trial. Further, each
party hereby certifies that no representative or agent of the other parties
(including their legal counsel) has represented, expressly or otherwise, to
such party that the other parties will not seek to enforce this provision
waiving the right to a trial by jury.
7. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS; VENUE. Any
judicial proceeding brought against any Borrower with respect to this Agreement
or any other Loan Document may be brought in any court of competent
jurisdiction in the Commonwealth of Virginia, and by execution and delivery of
this Agreement, each Borrower accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid court, and irrevocably agrees to be bound by any judgment
rendered by such court in connection with this Agreement. Each Borrower
irrevocably designates and appoints ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, whose address is c/o
BTG, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as its agent
to receive on its behalf service of all process in any such proceeding in any
court in the Commonwealth of Virginia, such service being hereby acknowledged
by the Borrower to be effective and binding on it in every respect. A copy of
any such process so served shall be mailed by registered or certified mail to
the Borrower at the address to which notices are to be addressed in accordance
with this Agreement, except that any failure to mail such copy shall not affect
the validity of service of process. Each Borrower shall at all times maintain
an agent for service of process pursuant to this provision. If any Borrower
fails to appoint such an agent, or if such agent refuses to accept service,
such Borrower hereby agrees that service upon it by mail shall constitute
sufficient notice. Nothing herein shall affect the right to serve process in
any other manner permitted by law or shall limit the right of the Agent or the
Lenders to bring proceedings against any Borrower in the courts of any other
jurisdiction.
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8. CHANGES IN CAPITAL REQUIREMENTS. If, after the date hereof,
any Lender shall determine that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof, or compliance by such Lender with
any request or directive regarding capital adequacy of any authority, central
bank or comparable agency, which adoption, change or compliance has or would
have the effect of reducing the rate of return on such Lender's capital as a
consequence of such Lender's obligations hereunder, by an amount which is below
that which such Lender could have achieved but for such adoption, change or
compliance and which such Lender reasonably deems to be material, (i) the Agent
shall promptly, after its receipt of notice of such Lender's written
determination of such occurrence (a "Certificate"), give notice thereof to the
other Lenders and the Borrower; and (ii) the Borrower shall pay to the Agent,
for the account of such Lender, as an additional fee, on demand from time to
time, such amounts as such Lender certifies to be the amounts reasonably
calculated by such Lender to compensate such Lender for such reduction. Each
Certificate shall be conclusive in the absence of manifest error and shall set
forth the nature of the occurrence giving rise to the need for such
compensation, the additional amount or amounts to be paid to such Lender
(including the basis for such Lender's determination of such amount), and the
method by which such amounts were determined. In determining such amounts,
such Lender may use any reasonable averaging and/or attribution method.
Notwithstanding anything contained herein to the contrary, if the adoption,
change or compliance of any applicable law, rule or regulation regarding
capital adequacy shall affect, as the Agent may determine in its sole
discretion, all of the Lenders ratably in accordance with each Lender's
Percentage of the Commitment Amount, then, after notice by the Agent to the
Borrower, the interest rate on the Notes shall be increased to a rate which
shall retain the Lenders' original rate of return on the Lenders' capital.
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9. CAPTIONS. The paragraph headings of this Agreement are for
convenience of reference only, and in no way define, limit or describe the
scope of this Agreement or the intent of any provision hereof.
10. MODIFICATION AND WAIVER. Neither this Agreement nor any term,
condition, covenant or agreement hereof may be changed, waived, discharged or
terminated orally, but that may be accomplished only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought.
11. TRANSFERABILITY.
(a) No Borrower shall assign any of its rights, interests
or Obligations under this Agreement. Subject to Sections 9 and 14 of Article X
hereof, the interests of the Lenders hereunder shall be freely assignable to
any other Lender. Any Lender may, with the prior written consent of the Agent,
which consent will not be unreasonably withheld, assign its entire interest
hereunder to any domestic bank or commercial affiliate of such domestic bank
(each, an "Eligible Assignee") whose total assets exceed One Billion Dollars
($1,000,000,000); provided that (i) such assigning Lender provides to the Agent
written notice of its intention to assign its entire interest hereunder,
together with the identity of the Eligible Assignee, at least thirty (30) days
prior to the effective date of such assignment; (ii) the assigning Lender
expressly agrees that it shall remain liable to the other parties hereto for
any and all acts, events or transactions which occur prior to such assignment;
(iii) the instrument of assignment, any agreements related thereto and all
other documentation evidencing or effectuating such assignment (collectively,
the "Assignment Documents") is acceptable to the Agent in all respects; and
(iv) a true, correct and complete copy of the fully executed Assignment
Documents has been provided to the Agent on or prior to the effective date of
such assignment.
(b) Any Lender may, at any time, in the ordinary course
of its commercial banking business, sell, to one or more Eligible Assignees
participations in some
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but not all of its rights and obligations under this Agreement and the other
Loan Documents; provided that (i) each such Eligible Assignee has total assets
of at least One Billion Dollars ($1,000,000,000); (ii) each such participation
interest must not be less than Five Million Dollars ($5,000,000) and be in One
Million Dollar ($1,000,000) increments; (iii) the aggregate amount of the
funding obligations retained by the selling Lender shall in no event be less
than One Million and No/100 Dollars ($1,000,000.00); (iv) the selling Lender's
obligations under this Agreement and the other Loan Documents shall remain
unchanged; (v) the selling Lender expressly agrees that it shall remain solely
responsible to the other parties hereto for the performance of such
obligations; (vi) the selling Lender shall remain the holder of any Note for
all purposes under the Loan Documents; (vii) all amounts payable by the
Borrowers under this Agreement, the Notes or any other Loan Document shall be
determined as if such selling Lender had not sold such participation interests;
(viii) the parties hereto shall be permitted to deal only (and directly) with
the selling Lender in connection with such Lender's rights and obligations
under this Agreement and each of the other Loan Documents; and (ix) written
notice thereof is provided by the selling Lender to the Agent at least ten (10)
days prior to each such sale of a participation interest hereunder.
12. GOVERNING LAW; BINDING EFFECT. This Agreement shall be
governed by the laws of the Commonwealth of Virginia and shall be binding upon
each Borrower and inure to the benefit of the parties hereto and their
respective personal representatives, successors and assigns.
13. GENDER; NUMBER. As used herein, the singular number shall
include the plural, the plural the singular and the use of the masculine,
feminine or neuter gender shall include all genders, as the context may
require.
14. JOINT AND SEVERAL LIABILITY. Each of the Borrowers shall be
jointly and severally liable hereunder.
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15. MATERIALITY. For purposes of this Agreement and the other
Loan Documents, except as may be otherwise provided herein or as the context
may otherwise require, references herein to the term "material" shall be
construed in the context of the Borrowers, collectively, taken as a whole.
[remainder of page intentionally left blank]
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This Agreement is signed, sealed and delivered as of this 31st day of
October, 1997.
BORROWERS:
---------
[Corporate Seal] BTG, INC.,
ATTEST: a Virginia corporation
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
--------------------------------------- -------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Title: Secretary Title: President and CEO
[Corporate Seal] BTG TECHNOLOGY SYSTEMS, INC., a
ATTEST: Virginia corporation formerly known
as BDS, Inc.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
--------------------------------------- -------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Title: Secretary Title: President and CEO
[Corporate Seal] DELTA RESEARCH CORPORATION,
ATTEST: a Virginia corporation
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
--------------------------------------- -------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Title: Secretary Title: President and CEO
[Corporate Seal] CONCEPT AUTOMATION, INC. OF
ATTEST: AMERICA, a Virginia corporation
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
--------------------------------------- -------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Title: Secretary Title: President and CEO
[Signatures continued on the following page]
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[Corporate Seal] NATIONS, INC.,
ATTEST: a New Jersey corporation
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
--------------------------------------- -------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Title: Secretary Title: President and CEO
AGENT:
NATIONSBANK, N.A., a
national banking association
By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Title: Vice President
LENDER(S):
NATIONSBANK, N.A., a
national banking association
By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Title: Vice President
FLEET CAPITAL CORPORATION, a
Rhode Island corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
CRESTAR BANK,
a Virginia banking corporation
By: /s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇
Title: Vice President
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The exhibits in this Amended and Restated Business Loan and Security
Agreement are not included with this Registration Statement on Form S-4. The
Company will provide these exhibits upon the request of the Securities and
Exchange Commission.