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EXHIBIT 10.2
FIRST MODIFICATION TO AMENDED AND RESTATED BUSINESS LOAN AND
SECURITY AGREEMENT
THIS FIRST MODIFICATION TO AMENDED AND RESTATED BUSINESS LOAN AND
SECURITY AGREEMENT (this "Modification") is made as of the 24th day of February,
1998, by and among (i) NATIONSBANK, N.A., a national banking association
("NationsBank"), having an office at 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, XxXxxx,
Xxxxxxxx 00000; (ii) FLEET CAPITAL CORPORATION, a Rhode Island corporation
("Fleet"), having an office at 000 Xxxxxxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000; (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 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, XxXxxx, Xxxxxxxx
00000; (v) BTG, INC., a Virginia corporation ("BTG"); BTG TECHNOLOGY SYSTEMS,
INC., a Virginia corporation formerly known as BDS, Inc. ("Tech Systems"); DELTA
RESEARCH CORPORATION, a Virginia corporation ("Delta"); CONCEPT AUTOMATION, INC.
OF AMERICA, a Virginia corporation ("CAI"); and NATIONS, INC., a New Jersey
corporation ("Nations"); all having principal offices at 0000 Xxxxxxx Xxxxx
Xxxx, 0X, Xxxxxxx, Xxxxxxxx 00000-0000; and (vi) 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 meaning 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 the
same may be hereafter amended or modified, the "Loan Agreement"), by and among
the Agent, Borrowers, Lenders and Crestar Bank (acting in its capacity as a
Lender), the Borrowers obtained a loan (the "Loan") from the Lenders in the
aggregate maximum principal amount of One Hundred Ten Million and No/100 Dollars
($110,000,000.00), evidenced by three (3) separate Replacement Revolving
Promissory Notes (as defined in EXHIBIT A), in the aggregate maximum principal
amount of One Hundred Ten Million and No/100 Dollars ($110,000,000.00), and
secured by, among other things, certain collateral more fully described in
Article III, Section 1 of the Loan Agreement; and
WHEREAS, the Borrowers have requested that the Agent and Lenders'
consent to the extension of a new term loan (the "Term Loan") to the Borrowers
by Blue Ridge Investments, L.L.C., a Delaware limited liability company ("Blue
Ridge") and Fleet (acting in such capacity, the "Term Loan Lenders"), in the
maximum principal amount of Fifteen Million Dollars ($15,000,000), the granting
of a second lien security interest in the Borrowers' assets to secure the same,
and a modification to the Loan Agreement to provide to the Term Loan Lenders the
right to cause advances to be made under the Loan to pay amounts not paid when
due under the Term Loan; and
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WHEREAS, the Lenders have agreed to grant such consent and the
Borrowers have agreed to proceed with the Term Loan, subject to the terms and
conditions set forth herein, provided that the Loan Agreement is modified (i) to
reduce the Commitment Amount (and in connection therewith, reallocate the
reduced Commitment Amount between NationsBank and Fleet), and amend the manner
in which the Borrowing Base is calculated; (ii) to delete, add and modify
certain definitions; (iii) to modify certain financial covenants; (iv) to
provide cross default provisions between the Loan and Term Loan; (v) to modify
the Additional Libor Percentage provisions; (vi) to make certain conforming
changes to various Exhibits and Schedules; and (vii) to provide for the payment
of a modification commitment fee.
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 and Lenders hereby acknowledge and consent to the
Borrowers entering into the Term Loan and granting second lien security
interests to secure payment thereof, all in accordance with the terms of the
loan agreement and other loan documents executed in connection with the Term
Loan. The Agent and Lenders also consent to a sale of the WheelGroup Stock and
GTSI Stock, as contemplated by and in accordance with the provisions of Section
17 of Article VI of the Term Loan Agreement.
3. The definition of "Commitment Amount" set forth in the "Certain
Definitions" section of the Loan Agreement is hereby deleted in its entirety and
the following substituted in lieu thereof:
"COMMITMENT AMOUNT" shall mean (i) during the period from
the date of this Modification through March 31, 1998,
Ninety-five Million Dollars ($95,000,000.00), (ii) during
the period from April 1, 1998 through June 30, 1998,
Eighty-five Million Dollars ($85,000,000.00), (iii) during
the period from July 1, 1998 through September 30, 1998,
Seventy-five Million Dollars ($75,000,000.00), and (iv) from
and after October 1, 1998 through the Maturity Date, Sixty
Million Dollars ($60,000,000.00)."
4. The definition of "NATO" set forth in the "Certain Definitions"
section of the Loan Agreement is hereby deleted in its entirety.
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5. The following definitions of "Calculation Date" , "Quarterly
Period", "Term Loan" and "Term Loan Agreement" are hereby added to the "Certain
Definitions" section of the Loan Agreement:
""CALCULATION DATE" shall have the meaning attributed to
such term in Section 6 of Exhibit 7 to the Loan Agreement.
"QUARTERLY PERIOD" shall have the meaning attributed to such
term in Section 6 of Exhibit 7 to the Loan Agreement.
"TERM LOAN" shall mean that certain Term Loan in the
original principal amount of Fifteen Million and No/100
Dollars ($15,000,000), made by Blue Ridge and Fleet to the
Borrowers.
"TERM LOAN AGREEMENT" shall mean the Business Loan and
Security Agreement executed in connection with the Term
Loan.
6. Section 3(a) of Article I of the Loan Agreement is hereby
deleted in its entirety and the following substituted in lieu thereof:
"(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
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) eight-five percent (85%) of the Borrowers'
Eligible Borrowing Base
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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 (x) fifty percent (50%) of the
Borrower's Eligible Unbilled Costs; or (y) 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."
7. The following new paragraph 4(c) is hereby added to Section 4 of
Article I of the Loan Agreement:
(c) In the event any payment is not made in connection with
the Loan when due, or in the event any payment is not made
under the Term Loan when due, the Agent and Lender shall
have the right, without further approval or authorization of
or from the Borrowers (i) to cause an advance to be made
under this Agreement and apply the proceeds thereof to
amounts due under the Loan; and (ii) upon the request of the
agent under the Term Loan Agreement, to cause an advance to
be made under this Agreement and disburse the proceeds
thereof to the agent under the Term Loan Agreement for
application against the Term Loan.
8. Section 15 of Article VI of the Loan Agreement is hereby modified
so that from and after the date of this Modification, the financial covenants
referenced therein shall be required to be complied with on March 31, 1998 and
thereafter (in accordance with the terms of the specific provisions thereof;
i.e., no financial covenants shall be tested prior to March 31, 1998).
9. Subsection 1(k) of Article IX of the Loan Agreement is hereby
deleted in its entirety and the following inserted in lieu thereof:
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"(k) If a default shall have occurred under the Term Loan
Agreement or any other agreement, document or instrument
entered into in connection with the Term Loan, and such
default remains uncured beyond the expiration of any
applicable notice and/or grace period."
10. Simultaneously with the effectiveness of the reductions in the
Commitment Amount referenced in Section 3 above, the Maximum Loan Amount set
forth in the computation section of Exhibit 5 to the Loan Agreement shall be
automatically reduced to the applicable Commitment Amount as of the date of the
particular computation.
11. Section 6 of Exhibit 7 to the Loan Agreement is hereby deleted in
its entirety and the following substituted in lieu thereof:
"The term Additional Libor Percentage shall mean two and
one-quarter percent (2.25%). From and after the first
Calculation Date (hereinafter defined), the term Additional
Libor Percentage shall mean the percentage which corresponds
to the Borrowers' "Leverage Ratio", as set forth below:
Additional
Leverage Ratio Libor Percentage
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greater than or equal to 6.0 to 1.0 2.25%
greater than or equal to 5.0 to 1.0,
but less than 6.0 to 1.0 2.00%
greater than or equal to 4.0 to 1.0,
but less than 5.0 to 1.0 1.75%
less than 4.0 to 1.0 1.50%
For purposes hereof the Borrowers' "Leverage Ratio" shall
mean the ratio of Borrowers' Average Funded Debt to
Consolidated EBITDA, as calculated in accordance with
Section 15(c) of Article VI of the Loan Agreement.
Determinations of the applicable Additional Libor Percentage
shall be made quarterly, on or before the first (1st) day of
each February, May, August and November throughout the term
of
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the Loan (the 1st day of each such month being herein
referred to as a "Calculation Date"), based on the quarterly
financial statements submitted by the Borrowers for the
immediately preceding calendar quarter; it being understood
and agreed that if any such quarterly financial statements
are not submitted as required hereunder, the applicable
Additional Libor Percentage for the ensuing Quarterly Period
shall be two and one-quarter percent (2.25%). The applicable
Additional Libor Percentage so determined shall be effective
for any Interest Period which commences on or after the
applicable Calculation Date, and such rate shall continue to
be the applicable Additional Libor Percentage until the next
Calculation Date (each such period of effectiveness being
herein referred to as a "Quarterly Period")."
12. The Lenders and Borrowers hereby acknowledge and confirm that the
Replacement Revolving Promissory Note made by the Borrowers and payable to the
order of Crestar Bank (the "Crestar Note"), in the maximum principal amount of
Fifteen Million Dollars ($15,000,000.00), is being paid and satisfied in full
contemporaneously with the execution and delivery of this Modification, and that
effective as of the date such promissory note is paid and satisfied in full, the
sole remaining Lenders will be NationsBank and Fleet; it being understood that
the percentage interests in the Loan and Loan Commitments of NationsBank and
Fleet shall be as set forth in Schedule 1 to this Modification. The Borrowers,
Agent and Lenders acknowledge and agree that the payment of the Crestar Note
shall be accomplished by Fleet and NationsBank advancing additional amounts
under the Loan and paying such amounts to Crestar. Fleet and NationsBank shall
fund this additional amount in accordance with their relative percentages set
forth in Schedule 1 attached hereto, and promptly following payment of the
Crestar Note, the Agent shall obtain the original Crestar Note, xxxx the same
paid and satisfied in full, and return the same to BTG.
13. MODIFICATION COMMITMENT FEE. The Borrowers shall pay to the
Agent, for the benefit of the Lenders (on a 50-50 basis), a modification
commitment Fee in the maximum amount of One Million Two Hundred Fifty Thousand
and No/100 Dollars ($1,250,000), which shall be payable as follows: (a) Seven
Hundred Fifty Thousand and No/100 Dollars ($750,000) of the modification
commitment fee shall be paid in cash on or before the date of this Modification;
the Agent hereby acknowledging that Two Hundred Fifty Thousand and No/100
Dollars ($250,000) of such amount has been previously received by the Agent; and
(b) Fifty Thousand and No/100 Dollars ($50,000) shall be payable on the first
day of April, 1998 and on the first day of each calendar month thereafter during
which all or any portion of the Term Loan remains outstanding; it being
understood that these monthly payments shall cease on the date the Term Loan is
paid and
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satisfied in full, and in no event shall the monthly payments required
by this clause (b) exceed, in the aggregate, Five Hundred Thousand and No/100
Dollars ($500,000).
14. Each Borrower hereby acknowledges, agrees, represents and
warrants that (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
and by the modification documents expressly referenced herein, 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 and the other Loan Documents (as modified hereby and by the other
documents expressly referenced herein) 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.
15. Concurrent with the execution of this Modification, 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.
16. 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.
17. The Borrowers shall be jointly and severally liable for the
payment and performance of all of their obligations hereunder.
18. 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.
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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:
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[Corporate Seal] BTG, INC.,
ATTEST: a Virginia corporation
By: /s/ XXXXXXXX X. XXXXXXX By: /S/ XXXXXX X. XXXXXXX
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Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: President and CEO
[Corporate Seal] BTG TECHNOLOGY SYSTEMS, INC.,
ATTEST: a Virginia corporation
By: /s/ XXXXXXXX X. XXXXXXX By: /S/ XXXXXX X. XXXXXXX
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Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: President
[Corporate Seal] DELTA RESEARCH CORPORATION,
ATTEST: a Virginia corporation
By: /s/ XXXXXXXX X. XXXXXXX By: /S/ XXXXXX X. XXXXXXX
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Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: CEO
[Corporate Seal] CONCEPT AUTOMATION, INC. OF
ATTEST: AMERICA, a Virginia corporation
By: /s/ XXXXXXXX X. XXXXXXX By: /S/ XXXXXX X. XXXXXXX
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Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: CEO
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Corporate Seal] NATIONS, INC.,
ATTEST: a New Jersey corporation
By: /s/ XXXXXXXX X. XXXXXXX By: /S/ XXXXXX X. XXXXXXX
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Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: President and CEO
AGENT:
NATIONSBANK, N.A., a
national banking association, acting in its
capacity as Agent
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: Vice President
LENDER(S):
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NATIONSBANK, N.A., a
national banking association
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
Title: Vice President
FLEET CAPITAL CORPORATION, a
Rhode Island corporation
By: /s/ XXXXXX XXXXXXX
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Name: Xxxxxx Xxxxxxx
Title: Senior Vice President
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