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FOURTH MODIFICATION TO AMENDED AND RESTATED
BUSINESS LOAN AND SECURITY AGREEMENT
THIS FOURTH MODIFICATION TO AMENDED AND RESTATED BUSINESS LOAN AND
SECURITY AGREEMENT (this "Modification") is made as of the 26th day of January,
1999, by and among (i) NATIONSBANK, N.A., a national banking association
("NationsBank"), having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇; (ii) FLEET CAPITAL CORPORATION, a Rhode Island corporation
("Fleet"), having an office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; (iii) each other person or entity hereafter becoming a
"Lender" pursuant to the hereinafter defined Loan Agreement; (iv) NATIONSBANK,
N.A., a national banking association (acting in its capacity as Agent for the
Lenders), having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇; (v) BTG, INC., a Virginia corporation ("BTG"); BTG TECHNOLOGY SYSTEMS,
INC., a Virginia corporation; DELTA RESEARCH CORPORATION, a Virginia
corporation; CONCEPT AUTOMATION, INC. OF AMERICA, a Virginia corporation; and
NATIONS, INC., a New Jersey corporation (collectively, the "Original
Borrowers"), all having principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇; (vi) STAC, INC., a Virginia corporation ("STAC";
collectively with the Original Borrowers, the "Borrowers"), having its principal
place of business at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
and (vii) each other person or entity hereafter executing a "Joinder Agreement"
pursuant to the Loan Agreement. Capitalized terms used but not defined herein
shall have the meanings attributed to such terms in the Loan Agreement.
W I T N E S S E T H T H A T:
WHEREAS, pursuant to the terms and conditions of that certain Amended and
Restated Business Loan and Security Agreement dated October 31, 1997 (as
heretofore amended and as the same may be hereafter amended or modified, the
"Loan Agreement"), by and among the Agent, Original Borrowers, Lenders and
Crestar Bank (acting in its capacity as a Lender), the Original Borrowers
obtained a loan (the "Loan") from the Lenders in the original aggregate maximum
principal amount of One Hundred Ten Million Dollars ($110,000,000), which
aggregate maximum principal amount had been heretofore reduced to Fifty Million
Dollars ($50,000,000), but continues to be evidenced by two (2) separate
Replacement Revolving Promissory Notes (as defined in EXHIBIT A hereto), in the
aggregate original maximum principal amount of Ninety-five Million Dollars
($95,000,000), and which Loan is secured by, among other things, certain
collateral (the "Collateral") more fully described in Section 1 of Article III
of the Loan Agreement; and
WHEREAS, the Borrowers have requested (a) that the Agent and Lenders
consent to a merger (the "Merger") pursuant to which BTG Acquisition Corp., a
Virginia corporation and wholly-owned subsidiary of BTG ("BTGAC"), will be
merged with and into STAC, immediately after which STAC shall be the surviving
entity and a wholly owned subsidiary of BTG; and (b) that the Lenders extend to
the Borrowers a new term loan ("Facility "B""), in addition to and not in
replacement of the existing revolving facility heretofore evidencing the Loan
("Facility "A""), in the original aggregate principal amount
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of Three Million Four Hundred Thousand Dollars ($3,400,000), the proceeds of
which shall be used to finance the costs and expenses incurred in connection
with the Merger, and which Facility "B" shall be secured by the Collateral; and
WHEREAS, the Agent and Lenders have agreed to grant such consent and make
available Facility "B" to the Borrowers, subject to the terms, covenants,
conditions and limitations set forth in this Modification, as hereinafter
provided.
NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. The foregoing recitals are hereby incorporated herein by this
reference and made a part hereof, with the same force and effect as if fully set
forth herein.
2. The Agent, acting for and on behalf of the Lenders, hereby
consents to the Merger and agrees to make Facility "B" available to the
Borrowers, subject to the terms, conditions, covenants and limitations set forth
in this Modification.
3. Simultaneously with the execution of this Modification, the
proceeds of Facility "B" shall be fully advanced to the Borrowers, and used
solely for the purpose of financing the merger consideration and other amounts
payable by BTG pursuant to that certain Agreement and Plan of Merger of even
date herewith, by and among BTGAC, BTG, STAC and the shareholders of STAC party
thereto (the "Merger Agreement"), as well as the transactional costs and
expenses incurred in connection with the Merger. From and after the initial
disbursement of the proceeds of Facility "B", neither the Agent nor any Lender
shall have any further obligation whatsoever to advance or readvance the
proceeds of Facility "B".
4. Concurrent herewith, the Borrowers shall execute and deliver (i)
to NationsBank, a Term Promissory Note No. 1 (the "NationsBank Facility "B"
Note"), in the original principal amount of One Million Nine Hundred One
Thousand Two Hundred Eighty and No/100 Dollars ($1,901,280.00), and (ii) to
Fleet, a Term Promissory Note No. 2 (the "Fleet Facility "B" Note), in the
original principal amount of One Million Four Hundred Ninety-eight Thousand
Seven Hundred Twenty and No/100 Dollars ($1,498,720.00); and (b) a First
Modification to Ancillary Loan Documents, pursuant to which the Borrowers shall
acknowledge and agree that all documents, instruments and agreements executed,
issued and/or delivered in connection with and securing the Loan, shall also
secure the repayment of the NationsBank Facility "B" Note, the Fleet Facility
"B" Note and all extensions, renewals, modifications and substitutions thereof
or therefor (collectively, the "Facility "B" Notes").
5. Notwithstanding anything set forth to the contrary in the Loan
Agreement, the maturity date of the promissory notes evidencing Facility "A"
shall be
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August 31, 2002, and the maturity date of the Facility "B" Notes shall be
January 26, 2001.
6. The definitions of "Agreement" or "Loan Agreement", "Borrower" and
"Borrowers", "Commitment Amount", "Loan", "Maturity Date", "Reduction Date"
"Subordinate Debt", "Subordinate Lenders", "Subordinate Note", and
"Subordination Agreement" set forth in the "Certain Definitions" section of the
Loan Agreement are hereby deleted in their entirety and the following
substituted in lieu thereof:
""AGREEMENT" or "LOAN AGREEMENT" shall mean this Amended
and Restated Business Loan and Security Agreement, together
with any and all amendments and modifications thereof or
therefor made in accordance with Section 10 of Article XII
hereof.
"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; STAC, Inc., a Virginia corporation; and each
other person or entity hereafter executing a Joinder
Agreement pursuant to Section 9 of Article I of this
Agreement.
"COMMITMENT AMOUNT" shall mean, collectively, the Facility
"A" Commitment Amount and the Facility "B" Commitment
Amount.
"LOAN" shall mean the loan made by the Lenders to the
Borrowers in the aggregate maximum principal amount of One
Hundred Thirteen Million Four Hundred Thousand and No/100
Dollars ($113,400,000.00), or so much thereof as shall be
advanced or readvanced from time to time, which are
represented by the Facilities, and which shall be evidenced
by, bear interest and be payable in accordance with the
terms and provisions set forth in the Notes.
"MATURITY DATE" shall mean the maturity dates set forth in
the Notes.
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"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 Facility "A",
or (ii) irrevocably reduced the Facility "A" Commitment
Amount.
"SUBORDINATE DEBT" shall mean the indebtedness owing to the
Subordinate Lenders in the original principal amount of One
Million Nine Hundred Ninety-nine Thousand Six Hundred
Seventy-five and No/100 Dollars ($1,999,675.00), pursuant
to the Subordinate Note.
"SUBORDINATE LENDERS" shall mean, collectively, ▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇.
"SUBORDINATE NOTE" shall mean that certain Subordinated
Promissory Note dated January 26, 1999, made by BTG and
payable to the order of the Subordinate Lenders in the
original principal amount of One Million Nine Hundred
Ninety-nine Thousand Six Hundred Seventy-five and No/100
Dollars ($1,999,675.00), together with any and all
extensions, renewals, modifications and substitutions
thereof or therefor approved in writing by the Agent.
"SUBORDINATION AGREEMENT" shall have the meaning attributed
to such term in Section 7 of Article VII of this
Agreement."
7. The following definitions of "Facility" or "Facilities", "Facility
"A"", "Facility "A" Commitment Amount", "Facility "B"", and "Facility "B"
Commitment Amount" are hereby added to the "Certain Definitions" section of the
Loan Agreement:
""FACILITY" or "FACILITIES" shall mean Facility "A" and/or
Facility "B", individually or collectively, as the context
may require.
"FACILITY "A"" shall mean the revolving credit facility
being extended pursuant to this Agreement on the basis of
Eligible Borrowing Base Receivables, Eligible Unbilled
Costs and Eligible Billed Foreign Accounts Receivable, in
the original maximum principal amount of One Hundred Ten
Million Dollars ($110,000,000).
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"FACILITY "A" COMMITMENT AMOUNT" shall mean Fifty Million
Dollars ($50,000,000), or if reduced pursuant to this
Agreement, such lesser amount.
"FACILITY "A" NOTES" shall mean those Notes executed,
issued and delivered from time to time which evidence
Facility "A".
"FACILITY "B"" shall mean the term loan facility being
extended pursuant to this Agreement, in the original
aggregate principal amount of Three Million Four Hundred
Thousand Dollars ($3,400,000).
"FACILITY "B" COMMITMENT AMOUNT" shall mean Three Million
Four Hundred Thousand Dollars ($3,400,000).
"FACILITY "B" NOTES" shall mean those Notes executed,
issued and delivered from time to time which evidence
Facility "B"."
8. Subsections (a) and (b) of Section 3 of Article I of the Loan
Agreement are hereby deleted in their entirety and the following substituted in
lieu thereof:
"(a) Maximum Advances.
(1) Facility "A". 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 under Facility "A" or
issue any Letter(s) of Credit hereunder if such advance or the
issuance of such Letter(s) of Credit would cause the aggregate
amount of Obligations outstanding with respect to Facility "A" to
exceed the lesser of:
A. The Facility "A" Commitment Amount, or
B. 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
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twenty-one (121) days from the date of original
invoice; plus
(ii) eighty-five percent (85%) of the Borrowers'
Eligible Borrowing Base Receivables representing
amounts due and owing from domestic account debtors
(other than the Government), which are outstanding
less than ninety-one (91) days from the date of
original invoice; plus
(iii) the lesser of (y) fifty percent (50%) of the
Borrower's Eligible Unbilled Costs; or (z) Ten
Million Dollars ($10,000,000); plus
(iv) the lesser of (y) eighty percent (80%) of the
Borrower's Eligible Billed Foreign Accounts
Receivable; or (z) Three Million Dollars
($3,000,000.00).
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,
Eligible Unbilled Cost and Eligible Billed Foreign Accounts
Receivable on which such request is based satisfies the foregoing
requirements.
(2) Facility "B". 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 under Facility "B" or
have Obligations outstanding with respect to Facility "B" which
shall exceed the Facility "B" Commitment Amount."
(b) Borrowing Base Deficiency. If at any time the aggregate
outstanding principal amount of Facility "A" 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 Maximum Borrowing Base is no longer eligible for
inclusion, or (ii) the Agent imposing any additional
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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."
9. Section 4(a) of Article I of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"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
(i) advance and readvance the proceeds of Facility "A" to
the Borrowers from time to time at the request of the
Borrowers, and (ii) advance the proceeds of Facility "B",
in their entirety, to the Borrowers on January 26, 1999.
Requests for advances of Loan proceeds with respect to
Facility "A" 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 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 with respect to Facility "A" after August 31,
2002.
10. Section 4(c) of Article I of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
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"(c) Authorization to Advance. In the event any payment is
not made under Facility "B" when due, or in the event any
payment is not made under the Subordinated Debt when due
and the Subordinated Creditors shall have issued a default
notice as a result thereof, the Agent and Lenders shall
have the right (but not the obligation), without further
approval or authorization of or from the Borrowers to cause
an advance to be made under Facility "A" and apply the
proceeds thereof to (i) amounts due under Facility "B";
and/or (ii) the Subordinate Lenders for application against
the Subordinated Debt."
11. Section 5 of Article I of the Loan Agreement is hereby deleted in
its entirety and the following substituted in lieu thereof:
"5. ADDITIONAL MANDATORY PAYMENTS; REDUCTION OF COMMITMENT.
In addition to all other sums payable by the Borrowers
pursuant to any of the Notes, this Agreement or any other
Loan Document, the Borrowers shall also make mandatory
payments under the Facility "B" Notes, in the amount of
fifty percent (50%) of the cash proceeds (net of reasonable
and customary costs paid to unrelated and unaffiliated
third parties in connection with the particular
transaction) arising from the sale or disposition by any
Borrower of the capital stock of Cisco Corporation, a
California corporation or Government Technology Services,
Inc., a Delaware corporation."
12. All references to the "Commitment Amount" and the "Notes"
referenced in Section 7 of Article I of the Loan Agreement are hereby deleted in
their entirety and substituted with the "Facility "A" Commitment Amount" and the
"Facility "A" Notes", respectively.
13. Section 8 of Article I of the Loan Agreement is hereby deleted in
its entirety and the following substituted in lieu thereof:
"8. TERMINATION OF ADVANCES; REDUCTION OF THE COMMITMENT
AMOUNT. The Borrowers may terminate the Lenders'
obligations to make additional advances under Facility "A"
or irrevocably reduce the Facility "A" 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
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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 Five Hundred Thousand
Dollars ($500,000), but only if the Reduction Date shall
occur on or before October 31, 1999, after which date no
such Termination Fee shall be payable. Notwithstanding the
foregoing, the Termination Fee shall not be payable in
connection with a permanent reduction of the Facility "A"
Commitment Amount, if such permanent reduction is made in
connection with 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)."
14. Any and all references to "Notes" set forth in Section 2 of
Article II of the Loan Agreement are hereby deleted in their entirety and
substituted with "Facility "A" Notes".
15. Section 3(c) of Article VI of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"(c) at least once each calendar week within three (3)
Business 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. The
Borrowers shall elect, between the seventh (7th) and
seventeenth (17th) day of each calendar month, which of the
Borrowing Base Certificates submitted to the Agent and the
Lenders during each particular calendar month shall be used
in the calculation of the Maximum Borrowing Base for such
calendar month;"
16. Section 15(a) of Article VI of the Loan Agreement is hereby
deleted in its entirety and the following substituted in lieu thereof:
"(a) Tangible Net Worth. The Borrowers, on a consolidated
basis, will maintain at all times during the
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following periods, Tangible Net Worth of not less than the
following amounts:
Required Tangible
Periods Net Worth
------- ---------
From December 1, 1998 $23,750,000.00
through December 31,
1998
From January 1, 1999 $15,000,000.00, plus 67% of
through the Maturity net income (as determined on
Date 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 such amounts are part of the Borrowers' consolidated
net worth), investments in non-marketable securities, notes
receivable of affiliates (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, trademarks,
copyrights, franchises, licenses and other intangible
assets."
17. Section 15(c) of Article VI is hereby deleted in its entirety and
the following substituted in lieu thereof:
"(c) Funded Debt to Consolidated EBITDA Ratio. The
Borrowers, on a consolidated basis, will maintain at all
times during the following periods, a ratio of Funded Debt
to Consolidated EBITDA as follows:
For the Fiscal
Quarter Ended Not Greater than:
------------- -----------------
March 31, 1999 and the 5.00 to 1.00
three (3) fiscal quarter ends
thereafter
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March 31, 2000 and each 4.50 to 1.00
fiscal quarter end thereafter
For purposes hereof, (i) "Funded Debt" shall mean the
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; and (ii) ."Consolidated EBITDA"
shall mean as of the date of the particular determination,
earnings before interest, taxes, depreciation and
amortization calculated on a consolidated basis in
accordance with GAAP, excluding all non-operating results
(including, but not limited to, the results of Government
Technology Services, Inc. as included in the Borrowers'
consolidated income statement and the profit or loss from
the sale of Cisco Systems, Inc. stock or the GTSI Stock).
Consolidated EBITDA shall be calculated as of each fiscal
quarter end on a rolling four (4) quarter basis.
18. Section 7 of Article VII of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"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 Subordinate
Debt; provided that BTG and the Subordinate Lenders shall
have executed and delivered to the Agent a subordination
agreement (the
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"Subordination Agreement"), in form and substance
acceptable to the Agent in all respects, pursuant to which
the Subordinate Debt, including without limitation, any and
all rights of payment and/or collection thereof, and/or
enforcement of the Subordinated Note, shall be subordinated
in every respect to the payment and collection of the Loan.
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."
19. Section 10 of Article VII of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"10. CAPITAL EXPENDITURES. On a consolidated basis make any
cash investment or cash 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 any of the
Borrowers' fiscal year in excess of One Million Five
Hundred Thousand and No/100 Dollars ($1,500,000.00);"
20. The last sentence of Section 3 of Article IX of the Loan Agreement
is hereby deleted in its entirety and the following substituted in lieu thereof:
"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 (a) first
against the Borrower's debts owed to the Lenders in
connection with Facility "B", ratably in accordance with
each Lender's Percentage, until each Lender is paid in full
all sums owing to them in connection with Facility "B", (b)
second against the Borrower's debts owed to the Lenders in
connection with Facility "A", ratably in accordance with
each Lender's Percentage, until each Lender is paid in full
all sums owing to them in connection with Facility "A", and
(c) then to and then shall be applied to any other debts of
the Borrower owing to NationsBank or any of its
affiliates."
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21. Section 1(k) of Article IX of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"(k) If a default shall have occurred under the Subordinate
Note, the Subordination Agreement or any other document,
instrument or agreement entered into in connection with the
Subordinate Debt."
22. Simultaneously with the effectiveness of this Modification,
EXHIBIT 5 to the Loan Agreement shall be deleted in its entirety and EXHIBIT 5
attached to this Modification shall be substituted in lieu thereof.
23. By executing this Modification, STAC hereby (i) agrees to become a
"Borrower" under the Loan Agreement; (ii) joins in, becomes a party to, and
agrees to comply with and be bound by the terms and conditions of the Loan
Agreement and each and every other Loan Document, to the same extent as if STAC
were an original signatory thereto; (iii) grants and conveys to the Agent, for
the ratable benefit of the Lenders, a valid and enforceable security interest in
and to all of its assets constituting Collateral, free and clear of all liens,
claims and encumbrances (other than Permitted Liens and any other liens
expressly approved in writing by the Agent); and (iv) makes all of the
representations and warranties set forth in the Loan Agreement and each other
Loan Document. STAC shall hereafter be jointly and severally liable for the
performance of any and all past, present and future obligations of any Borrower
in connection with any of the Notes, the Loan Agreement and/or the other Loan
Documents. STAC hereby represents and warrants to the Agent and each Lender that
in accordance with the terms of a certain First Amendment to Amended and
Restated Contribution Agreement of even date herewith (the "First Amendment to
Contribution Agreement"), STAC has become a party to the Contribution Agreement
and that the Contribution Agreement (as amended by the First Amendment to
Contribution Agreement) remains unmodified and in full force and effect. STAC
further hereby represents and warrants to the Agent and each Lender that both
prior to and after giving effect to the transactions contemplated by the terms
and provisions of this Modification, STAC (a) owned and owns property
(including, without limitation, contribution rights against the other
Borrower(s), evidence of which, if required by the Agent as a condition
precedent to the transactions contemplated hereby, must be in form and substance
reasonably satisfactory to the Agent) whose fair salable value is greater than
the amount required to pay all of STAC's Indebtedness (including contingent
debts), (b) was and is able to pay all of its Indebtedness as such Indebtedness
matures, and (c) had and has capital sufficient to carry on its business and
transactions and all business and transactions in which it is about to engage.
For purpose hereof, "Indebtedness" means, without duplication (i) all items
which in accordance with GAAP would be included in determining total liabilities
as shown on the liability side of STAC's balance sheet, as of the date on which
Indebtedness is to be determined, (ii) all obligations of any other person or
entity which STAC has guaranteed, (iii) reimbursement obligations in connection
with letters of credit issued for STAC's benefit, and (iv) the Obligations.
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24. The Borrowers acknowledge and agree that the Merger Agreement
shall not be altered, modified or amended in any respect without the Agent's
prior written consent.
25. In consideration of the transactions contemplated by this
Modification, the Borrowers shall pay to the Agent, for the benefit of the
Lenders (pro rata based on each Lender's Percentage), a commitment fee in the
amount of Twenty-five Thousand and No/100 Dollars ($25,000.00), which fee shall
be paid in cash on or before the date of this Modification.
26. Each Borrower hereby acknowledges, agrees, represents and warrants
that, as of the date hereof (i) there are no set-offs or defenses against the
Notes, the Loan Agreement or any other Loan Document; (ii) except as
specifically amended hereby, all of the terms and conditions of the Notes, the
Loan Agreement and the other Loan Documents shall remain unmodified and in full
force and effect; (iii) the Notes, the Loan Agreement (as modified hereby) and
the other Loan Documents are hereby expressly approved, ratified and confirmed;
and (v) the execution, delivery and performance by each Borrower of this
Modification (a) is within its corporate powers, (b) has been duly authorized by
all necessary corporate action, and (c) does not require the consent or approval
of any other person or entity.
27. The Borrowers shall pay all of the Agent's costs and expenses
associated with this Modification and the transactions referenced herein or
contemplated hereby, including, without limitation, the Agent's reasonable legal
fees and expenses.
28. This Modification shall be governed by the laws of the
Commonwealth of Virginia and shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
29. This Modification may be executed in any number of counterparts,
each of which shall be deemed an original and all of which together shall be
deemed one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have signed, sealed and delivered
this Modification on the day and year first above written.
BORROWERS:
[Corporate Seal] BTG, INC.,
ATTEST: a Virginia corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------- -------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: President and CEO
[Corporate Seal] BTG TECHNOLOGY SYSTEMS, INC.,
ATTEST: a Virginia corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------- -------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: President
[Corporate Seal] DELTA RESEARCH CORPORATION,
ATTEST: a Virginia corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------- -------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: CEO
[Corporate Seal] CONCEPT AUTOMATION, INC. OF
ATTEST: AMERICA, a Virginia corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------- -------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: CEO
[Corporate Seal] NATIONS, INC.,
ATTEST: a New Jersey corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------- -------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: President and CEO
[signatures continue on the following page]
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[Corporate Seal] STAC, INC., a Virginia corporation
ATTEST:
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------- -------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary Title: CEO
AGENT:
NATIONSBANK, N.A., a
national banking association, acting in its
capacity as Agent
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
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