Exhibit 10.2 (b)
Averstar, Inc.
Apollo Holding, Inc.
Intermetrics, Inc.
Pacer Infotec, Inc.
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March 18, 1999
To each of the holders of the Securities
issued pursuant to (and as defined in) the
Securities Purchase Agreements referred
to below
Ladies and Gentlemen:
1. General. Reference is hereby made to those certain Amended and
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Restated Securities Purchase Agreements dated February 27, 1998 among Averstar,
Inc., Apollo Holding, Inc., Intermetrics, Inc., Pacer Infotec, Inc. and the
institutional investors named therein (as amended, modified and supplemented
from time to time, the "Securities Purchase Agreements"). Prior to the date
hereof, each of Apollo Holding, Inc., Intermetrics, Inc. and Pacer Infotec, Inc.
was merged with and into Averstar, Inc. Capitalized terms used herein without
definition have the meanings ascribed to them in the Securities Purchase
Agreements.
2. Contemporaneous Transactions.
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(a) The Holding Company has informed you of the acquisition by the
Holding Company of all of the issued and outstanding capital stock of
Computer Based Systems, Inc. ("CBSI") pursuant to the terms of that certain
Agreement and Plan of Merger dated as of January 31, 1999 (the "CBSI
Acquisition Agreement") by and among the Holding Company, Averstar
Acquisition, Inc., a Virginia corporation ("AAI"), CBSI and the
stockholders party thereto, pursuant to which AAI will be merged with and
into CBSI (the "CBSI Merger"), with CBSI being the surviving corporation
and thereby becoming a Wholly-Owned Subsidiary of the Holding Company. The
Holding Company has provided you with true, correct and complete copies of
the CBSI Acquisition Agreement and all related agreements, documents and
instruments (the "CBSI Acquisition Documents").
(b) The Holding Company has informed you of the execution and delivery
of that certain Business Loan and Security Agreement dated as of March 18,
1999 (the "First Union Loan Agreement") by and among First Union Commercial
Corporation, individually and as agent, State Street Bank & Trust Company,
N.A., Crestar Bank, Massachusetts Mutual Life Insurance Company, the
Holding Company, CBSI, Computing Applications Software Technologies, Inc.
("CAST"), Intermetrics Securities, Inc. ("ISI") and Intermetrics
International, Inc. ("III"), pursuant to which the Holding Company has
established a $75,000,000 credit facility (the "Senior Loan Facility")
consisting of (i) a $30,000,000 five year senior secured revolving credit
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facility, including a $5,000,000 letter of credit sub-facility thereunder,
(ii) a $2,000,000 senior secured swing line facility, (iii) a $15,000,000
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five year senior secured term loan facility and (iv) a $30,000,000 six year
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senior secured term loan facility. The Holding Company has provided you
with true, correct and complete copies of the First Union Loan Agreements
and all related agreements, documents and instruments (the "First Union
Loan Documents").
(c) On this day, (i) the CBSI Merger has become effective, (ii) the
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Closing (as defined in the First Union Loan Agreement) has occurred, (iii)
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the proceeds of the loans made under the First Union Loan Agreement have
been used to, among other things, prepay in full the outstanding principal
amount of, and all accrued interest on, the Senior Term Notes, Senior
Revolving Credit Notes and Senior Bridge Notes and (iv) the Total Revolving
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Commitment has been terminated.
3. Extension of Maturity. The Holding Company hereby requests and, by
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their signatures hereto, each of the holders of the Subordinated Notes hereby
agree to, an extension of the scheduled maturity date of the Subordinated Notes
from August 31, 2002 to June 17, 2005. In order to further evidence the
foregoing, the Holding Company and each of such holders agree that each of the
Subordinated Notes shall have affixed to it an allonge in the form of Exhibit 3
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attached hereto.
4. Amendments to Securities Purchase Agreements.
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(a) The definition of the term "Superior Indebtedness" appearing in
section 10.1 of the Securities Purchase Agreements is hereby amended to
read in its entirety as follows:
"(d) "Superior Indebtedness" shall mean the principal amount of
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the Indebtedness evidenced by the Senior Bank Documents (or of any
Indebtedness incurred in compliance with section 14.5 to refinance the
Senior Bank Documents), together with any interest (including any
interest accruing after the commencement of any action or proceeding
under the federal bankruptcy laws, as now or hereafter constituted, or
any
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other applicable domestic or foreign federal or state bankruptcy,
insolvency or other similar law, and any other interest that would
have accrued but for the commencement of such proceeding, whether or
not any such interest is allowed as an enforceable claim in such
proceeding), premium and any other amount (including any fee or
expense) due thereon or payable with respect thereto, including any
such amounts payable by any guarantor of the Indebtedness under the
Senior Bank Documents (or of any Indebtedness incurred in compliance
with section 14.5 to refinance such Indebtedness), provided that (a)
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Superior Indebtedness must arise under the Senior Bank Agreement (or
under any agreement executed in connection with any extension,
refinancing, refunding or renewal thereof effected in compliance with
the Securities Purchase Agreements) and (b) the aggregate outstanding
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principal amount of Superior Indebtedness, including, without
limitation, all amounts due (contingently or otherwise) in respect of
reimbursement obligations under letters of credit or similar
instruments (and all related reimbursement agreements) does not exceed
$87,000,000 minus the sum (without duplication of amounts) of (i) the
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aggregate amount of all scheduled principal payments made thereon from
time to time (other than any principal payment made under the
revolving credit facility established under the Senior Bank Agreement
(or under any agreement executed in connection with any extension,
refinancing, refunding or renewal thereof) which may be reborrowed
under such facility) and (ii) the aggregate amount of any reductions
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in the principal amount of the commitments under such revolving credit
facility."
(b) Section 10.2(b) of the Securities Purchase Agreements is hereby
amended to read in its entirety as follows:
"(b) For so long as any Superior Indebtedness shall be
outstanding under the Senior Bank Documents or any commitment to
lend thereunder remains in effect, neither this section 10 nor
any of the terms of the Subordinated Indebtedness relating to the
timing or amount of any payment (or prepayment) of the principal
of or premium, if any, or interest on the Subordinated
Indebtedness, or any other amount (including any fee or expense)
due thereon, shall be amended without the prior written consent
of the Required Lenders (as such term is defined in the Senior
Bank Agreement)."
(c) Section 10.4(a)(ii)(D) of the Securities Purchase Agreements is
hereby amended to delete the phrase "120 days" appearing therein and insert
the phrase "180 days" in place thereof.
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(d) Section 10.13(c)(ii) of the Securities Purchase Agreements is
hereby amended to delete the phrase "60 days" appearing therein and insert
the phrase "90 days" in place thereof.
(e) Section 15.1 of the Securities Purchase Agreements is hereby
amended to insert the following definitions in appropriate alphabetical
order:
"Senior Bank Agreement" shall mean that certain Business Loan and
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Security Agreement dated as of March __, 1999 by and among First Union
Commercial Corporation, individually and as agent, State Street Bank &
Trust Company, N.A., Crestar Bank, Massachusetts Mutual Life Insurance
Company, the Holding Company, Computer Based Systems, Inc., Computing
Applications Software Technologies, Inc, Intermetrics Securities, Inc.
and Intermetrics International, Inc., as the same may be amended from
time to time.
"Senior Bank Documents" shall mean the Senior Bank Agreement and
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all related agreements, documents and instruments.
5. Security Documents; Further Assurances. After giving effect to the
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CBSI Merger and the closing under the First Union Loan Agreement, the only
Subsidiaries of the Holding Company shall be CBSI, CAST, ISI and III. Not later
than April 30, 1999 the Holding Company will execute and deliver, or will cause
to be executed and delivered, such Security Documents and will take all such
other actions as any holder of any of the Subordinated Notes may reasonably
request for the purpose of implementing or effectuating the provisions of the
Operative Documents, including, without limitation, the execution and delivery
of Note Guarantees and Security Agreements (in substantially the forms attached
to the Securities Purchase Agreements) by CBSI and the filing of related
financing statements.
6. Ratification; No Defaults, etc.
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(a) The Holding Company represents and warrants that the
representations and warranties contained in the Securities Purchase
Agreements and the other Operative Documents are in all material respects
correct on and as of the date hereof as if made on such date (except to the
extent affected by the consummation of transactions permitted by the
Securities Purchase Agreements) and that, after giving effect to the
provisions of this letter agreement, no Default or Event of Default exists.
(b) The Holding Company ratifies and confirms the Securities Purchase
Agreements (as amended hereby) and each of the other Operative Documents
(as amended hereby) to which it is a party (including as a successor to
Apollo, Intermetrics and Pacer) and agrees that each such agreement,
document and instrument is in full force
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and effect, that its obligations thereunder and under this letter agreement
are its legal, valid and binding obligations enforceable against it in
accordance with the terms thereof and hereof and that it has no defense,
whether legal or equitable, setoff or counterclaim to the payment and
performance of such obligations.
(c) The Holding Company agrees that (i) if any default shall be made
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in the performance or observation of any covenant, agreement or condition
contained herein or (ii) if any representation or warranty made by it
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herein shall prove to have been false or incorrect on the date as of which
made, the same shall constitute an Event of Default under the Securities
Purchase Agreements and the other Operative Documents and, in such event,
you and each other holder of any of the Securities shall have all rights
and remedies provided by law and/or provided or referred to in the
Securities Purchase Agreements and the other Operative Documents. The
Holding Company further agrees that this letter agreement is an Operative
Document and all references thereto in the Securities Purchase Agreements
and in any other of the Operative Documents shall include this letter
agreement.
7. Reimbursement of Expenses. Without limiting the generality of any
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other provision of the Operative Documents, the Holding Company shall pay all
fees, expenses and disbursements incurred by you at or prior to the execution
hereof in connection with the transactions contemplated hereby, including,
without limitation, the reasonable fees, expenses and disbursements of your
special counsel.
8. Successors and Assigns. This letter agreement shall be binding on and
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shall inure to the benefit of each of the parties hereto and their respective
successors and assigns.
9. Miscellaneous. The headings in this letter agreement are for purposes
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of reference only and shall not limit or otherwise affect the meaning hereof.
This letter agreement embodies the entire agreement and understanding among the
parties hereto and supersedes all prior agreements and understandings relating
to the subject matter hereof. In case any provision in this letter agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. This letter agreement may be executed in any number of
counterparts and by the parties hereto on separate counterparts but all such
counterparts shall together constitute but one and the same instrument.
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If you are in agreement with the foregoing, please sign in the space
indicated below.
Very truly yours,
AVERSTAR, INC.
By _____________________________________
(Title)
Acknowledged and agreed as of the date
first above written.
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By ____________________________________
(Title)
MASSMUTUAL CORPORATE INVESTORS
By ______________________________________
(Title)
The foregoing is executed on behalf of MassMutual
Corporate Investors, organized under a Declaration
of Trust, dated September 13, 1985, as amended from time
to time. The obligations of such Trust are not
personally binding upon, nor shall resort be had to the
property of, any of the Trustees, shareholders, officers,
employees or agents of such Trust, but the Trust's
property only shall be bound.
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MASSMUTUAL PARTICIPATION INVESTORS
By ______________________________________
(Title)
The foregoing is executed on behalf of MassMutual
Participation Investors, organized under a Declaration
of Trust, dated April 7, 1988, as amended from time
to time. The obligations of such Trust are not
personally binding upon, nor shall resort be had to the
property of, any of the Trustees, shareholders, officers,
employees or agents of such Trust, but the Trust's
property only shall be bound.
MASSMUTUAL CORPORATE VALUE
PARTNERS LIMITED
By Massachusetts Mutual Life Insurance
Company, as Investment Manager
By ____________________________________________
(Title)
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Exhibit 3
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ALLONGE
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As of ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ forming a part of each of those certain 13.00% Senior Subordinated
Notes dated February 27, 1998 (the "Notes"), made by Averstar, Inc., Apollo
Holding, Inc., Intermetrics, Inc., and Pacer Infotec, Inc. in the original
aggregate principal amount of $5,000,000. Prior to the date hereof, each of
Apollo Holding, Inc., Intermetrics, Inc. and Pacer Infotec, Inc. was merged with
and into Averstar, Inc.
Reference is hereby made to that certain Letter Agreement dated March 18,
1999 (the "Letter Agreement") among the issuers and holders of the Note to which
this Allonge is affixed by which, among other things, the scheduled maturity
date of such Note was extended to June 17, 2005 and certain changes were made to
the terms of subordination applicable such Note. Payments on the Notes and the
rights of the holders thereof (including the right to take any enforcement
action in respect thereof) are subordinate to the extent specified in the
Securities Purchase Agreements pursuant to which the Notes were issued to
Superior Indebtedness (as defined in such Securities Purchase Agreements) and to
the rights of the holders of such Superior Indebtedness.
AVERSTAR, INC.
By _______________________________________
(Title)
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