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EXHIBIT 10.11
FIRST AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT (this
"Amendment") is made as of October 1, 1996, by and between BTG, Inc., a
Virginia corporation (together with its successors, assigns and transferees,
the "Company"), and Nomura Holding America Inc., a Delaware corporation
(together with its successors, assigns and transferees, the "Purchaser").
Capitalized terms used herein without definition shall have the respective
meanings ascribed to them in that certain Note and Warrant Purchase Agreement,
dated as of February 16, 1996, by and between the Company and the Purchaser
(the "Purchase Agreement").
R E C I T A L S
A. Pursuant to the Purchase Agreement, the Purchaser on February
16, 1996, purchased (i) the Company's 12.875% Senior Subordinated Notes Due
2001 in the aggregate original principal amount of $15,000,000, and (ii) the
Company's Warrants to purchase an aggregate of 317,478 shares (subject to
adjustment as therein provided) of the Company's Common Stock, no par value,
all for the consideration and upon the terms and conditions therein provided.
B. The Company and its Subsidiaries are parties to a Business
Loan and Security Agreement dated as of November 28, 1995 with NationsBank,
N.A., individually and as Agent (the "Agent"; such Agreement, as modified by
the First Modification thereto dated as of February 16, 1996 and the Second
Modification thereto dated as of March 28, 1996, being hereinafter called the
"Credit Agreement"), pursuant to which, among other things, the Agent and
certain other lenders (collectively, the "NationsBank Lenders") have agreed to
furnish loans to the Company and its Subsidiaries in a maximum aggregate
principal amount of $60,000,000.
C. The Company and its Subsidiaries propose to enter into a Third
Modification to Business Loan and Security Agreement, dated as of the date
hereof, with the NationsBank Lenders (the "Third Modification"), in
substantially the form set forth as Exhibit A hereto.
D. The Purchaser has agreed to permit the Company and its
Subsidiaries to incur Indebtedness under the Credit Agreement, as so modified,
in an aggregate outstanding principal amount not to exceed (i) during the
period from the date hereof to and including March 31, 1997, $85,000,000, and
(ii) at any time thereafter, $65,000,000 (in each case except as otherwise
provided in Section 10.1(d) of the Purchase Agreement, as herein modified).
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NOW THEREFORE, in consideration of the terms and conditions contained
herein and of other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Amendments to the Purchase Agreement. Effective on the
Effective Date (as hereinafter defined), the Purchase Agreement is hereby
amended as follows:
A. The definition of the term "Credit Agreement" appearing in
Section 1 of the Purchase Agreement is hereby amended to read, in
full, as follows:
"'Credit Agreement' means the Business Loan and
Security Agreement dated as of November 28, 1995 among the
Company, Advanced Computer Technology, Inc., Delta Research
Corporation, BDS, Inc., BTG Products, Inc., Concept
Automation, Inc. of America and Concept Automation Services,
Inc. (the "Borrowers") and NationsBank, N.A., individually and
as Agent ("NationsBank"), as modified by the First
Modification to Business Loan and Security Agreement, dated as
of February 16, 1996, among the Borrowers and NationsBank, the
Second Modification to Business Loan and Security Agreement,
dated as of March 28, 1996, among the Borrowers, NationsBank,
Fleet Capital Corporation, Sanwa Business Credit Corporation
and Signet Bank (NationsBank and such other lenders being
hereinafter called the "NationsBank Lenders"), and the Third
Modification to Business Loan and Security Agreement dated as
of October 1, 1996, among the Borrowers and the NationsBank
Lenders, and as such agreement may from time to time be
further amended, modified or supplemented in accordance with
its terms."
B. Subsection (b) of Section 10.1 of the Purchase Agreement is
hereby amended to read, in full, as follows:
"(b) Indebtedness incurred pursuant to the Credit
Agreement and any Permitted Refinancing thereof, provided
that, except as permitted by subsection (d) of this Section
10.1, the aggregate outstanding principal amount of such
Indebtedness shall not exceed (i) at any time during the
period from and including October 1, 1996 to and including
March 31, 1997, $85,000,000, or (ii) at any time after March
31, 1997, $65,000,000;"
C. Subsection (d) of Section 10.1 of the Purchase Agreement is
hereby amended by deleting the term "$60,000,000" appearing therein
and inserting, in lieu thereof, the following:
"(i) at any time during the period from and including October
1, 1996 to and including March 31, 1997, $85,000,000, or (ii)
at any time after March 31, 1997, $65,000,000"
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D. Subsection (d) of Section 10.1 of the Purchase Agreement is
hereby further amended by adding the following proviso at the end
thereof:
"provided that in no event shall any additional Indebtedness
be incurred under the Credit Agreement after March 31, 1997,
if the effect of such incurrence is to increase the aggregate
oustanding principal amount of the Indebtedness incurred
pursuant to the Credit Agreement to an amount which is greater
than $65,000,000 but not greater than $85,000,000, unless at
the time of such incurrence, under the foregoing provisions of
this subsection (d), an increase in the maximum aggregate
commitment amount of the Indebtedness incurred pursuant to the
Credit Agreement from $65,000,000 to $85,000,000 would have
been permitted;"
2. Effectiveness; Conditions. This Amendment and the provisions
hereof shall become and be effective on the date (the "Effective Date") on
which all of the following conditions shall be satisfied, or waived in writing
by the Purchaser:
A. Execution of Amendment. The Company and the Purchaser shall
each have executed and delivered a counterpart of this Amendment.
B. Corporate Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incident thereto shall be satisfactory in
form and substance to the Purchaser, and the Purchaser shall have
received all such counterpart originals or certified or other copies
of such documents as it may reasonably request.
C. Credit Agreement Modification. The Borrowers and the
NationsBank Lenders shall have duly executed and delivered the Third
Modification.
D. Consent of NationsBank Lenders. The NationsBank Lenders
shall have executed and delivered a written consent to this Amendment
satisfactory in form and substance to the Purchaser.
3. Representations and Warranties of the Company. The Company
represents and warrants to the Purchaser that:
A. Representations in the Purchase Agreement; No Defaults.
Each of the representations and warranties made by the Company in the
Purchase Agreement is true and correct on and as of the date hereof to
the same extent as if made on and as of the date hereof except to the
extent that such representations and warranties specifically relate to
an earlier date, in which case they are true and correct as of such
earlier date, and such representations and warranties are hereby
incorporated by reference as if set forth herein in full. No event has
occurred and is continuing or will result from the transactions
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contemplated hereby which constitutes (or with notice or the passage
of time would constitute) an Event of Default under the Purchase
Agreement as it existed before this Amendment or as it exists after
the effectiveness of this Amendment, except such as are being waived
pursuant to this Amendment.
B. Corporate Authority. The execution, delivery and
performance by the Company of this Amendment (i) is within its
corporate powers, (ii) has been duly authorized by all necessary
corporate action on the part of its Board of Directors and
stockholders, and (iii) does not require the consent, authorization or
approval of, or any registration, filing or declaration with, any
Governmental Body or non-governmental Person, except the consent of
the NationsBank Lenders.
C. Binding Effect. This Amendment is the legal, valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or other laws relative to or affecting the enforcement of
creditors' rights generally in effect from time to time and by general
principles of equity.
4. Effect of Amendment. Except as specifically provided herein,
this Amendment does not in any way affect or impair the terms, conditions and
other provisions of the Purchase Agreement or any of the Notes, or the
obligations of the Company thereunder, and all terms, conditions and other
provisions of the Purchase Agreement and the Notes shall remain in full force
and effect except to the extent specifically amended, modified or waived
pursuant to the provisions of this Amendment.
5. Payment of Fees. The Company agrees to pay all fees, costs and
expenses incurred by the Purchaser in connection with the negotiation,
preparation, execution and delivery of this Amendment and all other documents
executed pursuant to or in connection herewith, including, without limitation,
the fees and disbursements of Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, special counsel to
the Purchaser, in connection herewith.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which taken
together shall be deemed to constitute one and the same instrument.
7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
8. Headings. Section headings are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purposes.
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9. Amendments and Modifications. Any term, covenant, agreement or
condition of this Amendment may, with the consent of the parties hereto, be
amended, or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), by one or more
substantially concurrent written instruments signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first written above.
BTG, INC.
By: /s/ XXXXXX X. XXXXXXX
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and CEO
NOMURA HOLDING AMERICA INC.
By: /s/ XXXXXX XXXXXX
---------------------------------------
Name: Xxxxxx Xxxxxx
Title: Attorney-in-Fact
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SECOND AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT (this
"Amendment") is made as of October 31, 1996, by and between BTG, Inc., a
Virginia corporation (together with its successors, assigns and transferees,
the "Company"), and Nomura Holding America Inc., a Delaware corporation
(together with its successors, assigns and transferees, the "Purchaser").
Capitalized terms used herein without definition shall have the respective
meanings ascribed to them in that certain Note and Warrant Purchase Agreement,
dated as of February 16, 1996, by and between the Company and the Purchaser, as
amended by the First Amendment thereto dated as of October 1, 1996 (the
"Purchase Agreement").
R E C I T A L S
A. Pursuant to the Purchase Agreement, the Purchaser on February
16, 1996, purchased (i) the Company's 12.875% Senior Subordinated Notes Due
2001 in the aggregate original principal amount of $15,000,000, and (ii) the
Company's Warrants to purchase an aggregate of 317,478 shares (subject to
adjustment as therein provided) of the Company's Common Stock, no par value,
all for the consideration and upon the terms and conditions therein provided.
B. The Company has requested that the Purchaser consent to the
following additional financing arrangements: (i) a financing arrangement (the
"Wholesale Financing") between the Company and Deutsche Financial Services
Corporation ("DFS"), pursuant to which DFS will provide financing to the
Company, from time to time, for the sole purpose of funding the Company's
acquisition of inventory, and all of the Company's inventory will become
subject to a security interest in favor of DFS; and (ii) a financing
arrangement (the "CAI Financing") between Concept Automation, Inc. of America,
a Virginia corporation which is a wholly-owned subsidiary of the Company
("CAI") and DFS, in connection with CAI's performance under two specified
contracts with certain agencies of the United States Government, pursuant to
which all tangible and intangible property of CAI used by CAI solely in
connection with such two contracts will become subject to a security interest
in favor of DFS.
C. The Purchaser has agreed to consent to the Wholesale Financing
and the CAI Financing, and the incurrence by the Company and CAI, respectively,
of certain Indebtedness and Liens in connection therewith, subject to certain
terms and conditions, as hereinafter provided.
NOW THEREFORE, in consideration of the terms and conditions contained
herein and of other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
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1. Amendments to the Purchase Agreement. Effective on the
Effective Date, the Purchase Agreement is hereby amended as follows:
A. The following definition is hereby added to Section 1
of the Purchase Agreement immediately following the definition of the
term "Business Day" appearing therein:
"'CAI' means Concept Automation, Inc. of America, a
Virginia corporation and a Wholly-owned Subsidiary of the
Company."
B. The following definitions are hereby added to Section
1 of the Purchase Agreement immediately following the definition of
the term "Default" appearing therein:
"'DFS' means Deutsche Financial Services Corporation and its
successors and assigns.
'DFS Financing Documents' means (i) that certain Agreement For
Wholesale Financing dated as of October 31, 1996 between the Company
and DFS, as modified by that certain Addendum to Agreement For
Wholesale Financing dated as of October 31, 1996 between the Company
and DFS, and by that certain Amendment to Agreement For Wholesale
Financing dated as of October 31, 1996 between the Company and DFS,
and all notes, assignment agreements and other instruments and
documents now or hereafter executed and delivered by the Company or
its Subsidiaries pursuant to or in connection therewith, as each of
such agreements, instruments and documents may from time to time be
amended, modified or supplemented in accordance with its terms, and
(ii) all agreements, assignments, notes and other instruments and
documents now or hereafter executed by CAI pursuant to or in
connection with financing of accounts receivable and inventory of CAI
provided by DFS from time to time in connection with CAI's performance
of its obligations under (x) that certain contract identified as
Contract Number TIR-95-0079, dated July 3, 1995, by and between CAI
and the United States Department of the Treasury, IRS, and (y) that
certain contract identified as Contract Number N68939-96-D-0006, dated
April 18, 1996, by and between CAI and the Naval Information Systems
Management Center, as each of such agreements, assignments, notes and
other instruments and documents may from time to time be amended,
modified or supplemented in accordance with its terms.
'DFS Indebtedness' means all Indebtedness now or hereafter
incurred by the Company or its Subsidiaries pursuant to the DFS
Financing Documents."
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C. The definition of the term "Subordination Agreement"
appearing in Section 1 of the Purchase Agreement is hereby amended to
read, in full, as follows:
"'Subordination Agreement' means the Amended and
Restated Subordination Agreement dated as of October 31, 1996,
among the Company, the Guarantors, NationsBank, N.A.,
individually and as Agent under the Credit Agreement, Deutsche
Financial Services Corporation and the Purchaser, as from time
to time amended, modified or supplemented in accordance with
its terms."
D. Subsection (m) of Section 7 of the Purchase Agreement
is hereby redesignated as subsection (n) thereof (and the reference to
"this subsection (m)" appearing in the proviso thereto is hereby
changed to "this subsection (n)"); the word "and" at the end of
subsection (l) of Section 7 is hereby deleted; and a new subsection
(m) is hereby added to Section 7 immediately following subsection (l)
thereof, as follows:
"(m) DFS Financing Document. Copies of any and all
DFS Financing Documents executed and delivered at any time by
the Company or any of its Subsidiaries, in each case promptly
after the date of execution thereof; and copies of all
notices, reports, certificates and other information furnished
to the holders of DFS Indebtedness or to any agent or
representative of such holders which may be requested by the
Purchaser, in each case promptly after the same are so
furnished or requested (as the case may be); and"
E. Subsection (b) of Section 10.1 of the Purchase
Agreement is hereby amended to read, in full, as follows:
"(b) Indebtedness incurred pursuant to the Senior
Loan Documents (including Indebtedness incurred pursuant to
the Credit Agreement and DFS Indebtedness) and any Permitted
Refinancing thereof, provided that, except as permitted by
subsection (d) of this Section 10.1, the aggregate outstanding
principal amount of such Indebtedness shall not exceed (i) at
any time during the period commencing on October 1, 1996 and
ending on March 31, 1997, $90,000,000, or (ii) at any other
time, $65,000,000;"
F. Subsection (d) of Section 10.1 of the Purchase
Agreement is hereby amended by deleting the first parenthetical phrase
occurring therein and inserting, in lieu thereof, the following:
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"(including, without limitation, Indebtedness incurred
pursuant to the Senior Loan Documents or any Permitted
Refinancing thereof, to the extent that the aggregate
outstanding principal amount of such Indebtedness after giving
effect to such additional amount would exceed (i) at any time
during the period from and including October 1, 1996 to and
including March 31, 1997, $90,000,000, or (ii) at any time
after March 31, 1997, $65,000,000)"
G. Subsection (j) of Section 10.2 of the Purchase
Agreement is hereby redesignated as subsection (k) thereof, and a new
subsection (j) is hereby added to Section 10.2 immediately following
subsection (i) thereof, as follows:
"(j) Liens incurred pursuant to the DFS Financing
Documents to secure DFS Indebtedness; and"
H. The third paragraph of Exhibit A to the Purchase
Agreement is hereby amended to read, in full, as follows:
"This Senior Subordinated Note and the Indebtedness
evidenced hereby are and shall at all times be and remain
subordinated and subject in right of payment and enforcement,
to the extent and in the manner set forth in that certain
Amended and Restated Subordination Agreement dated as of
October 31, 1996 among the Company, each of its Subsidiaries,
NationsBank, N.A., individually and as Agent under the Credit
Agreement, Fleet Capital Corporation, Sanwa Business Credit
Corporation, Signet Bank, Deutsche Financial Services
Corporation and Nomura Holding America Inc., to the prior
payment in full of all Senior Indebtedness."
2. Effectiveness; Conditions. This Amendment and the provisions
hereof shall become and be effective on the date (the "Effective Date") on
which all of the following conditions shall be satisfied, or waived in writing
by the Purchaser:
A. Execution of Amendment. The Company and the
Purchaser shall each have executed and delivered a counterpart of this
Amendment.
B. Corporate Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incident thereto shall be
satisfactory in form and substance to the Purchaser, and the Purchaser
shall have received all such counterpart originals or certified or
other copies of such documents as it may reasonably request.
C. DFS Financing Documents. The initial DFS financing
documents shall have been executed and delivered and shall be
satisfactory in form and substance to the Purchaser.
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D. NationsBank Consent. NationsBank, N.A., individually
and as Agent under the Credit Agreement, shall have duly executed and
delivered a written consent to this Amendment and the transactions
hereby contemplated satisfactory in form and substance to the
Purchaser.
E. Amended and Restated Subordination Agreement. The
Company, each of the Guarantors, NationsBank, N.A., individually and
as Agent under the Credit Agreement, and DFS shall have duly executed
and delivered an Amended and Restated Subordination Agreement dated as
of the date hereof substantially in the form set forth in Exhibit A to
this Amendment.
F. Exchange of Notes. The Company shall have duly
executed and issued to the Purchaser a new Note, substantially in the
form of Exhibit A to the Purchase Agreement (as hereby amended), in
the principal amount of $15,000,000.00, in exchange for the
outstanding Note currently held by the Purchaser, which shall be
cancelled and retired.
3. Representations and Warranties of the Company. The Company
represents and warrants to the Purchaser that:
A. Representations in the Purchase Agreement; No
Defaults. Each of the representations and warranties made by the
Company in the Purchase Agreement is true and correct on and as of the
date hereof to the same extent as if made on and as of the date hereof
except to the extent that such representations and warranties
specifically relate to an earlier date, in which case they are true
and correct as of such earlier date, and such representations and
warranties are hereby incorporated by reference as if set forth herein
in full. No event has occurred and is continuing or will result from
the transactions contemplated hereby which constitutes (or with notice
or the passage of time would constitute) an Event of Default under the
Purchase Agreement as it exists before this Amendment or as it exists
after the effectiveness of this Amendment, except such as are being
waived pursuant to this Amendment.
B. Corporate Authority. The execution, delivery and
performance by the Company of this Amendment (i) is within its
corporate powers, (ii) has been duly authorized by all necessary
corporate action on the part of its Board of Directors and
stockholders, and (iii) does not require the consent, authorization or
approval of, or any registration, filing or declaration with, any
Governmental Body or non-governmental Person, other than NationsBank,
N.A., individually and as Agent under the Credit Agreement.
C. Binding Effect. This Amendment is the legal, valid
and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except as such enforceability may be
limited by applicable
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bankruptcy, insolvency, reorganization, moratorium, or other laws
relative to or affecting the enforcement of creditors' rights
generally in effect from time to time and by general principles of
equity.
4. Effect of Amendment. Except as specifically provided herein,
this Amendment does not in any way affect or impair the terms, conditions and
other provisions of the Purchase Agreement or any of the Notes, or the
obligations of the Company thereunder, and all terms, conditions and other
provisions of the Purchase Agreement and the Notes shall remain in full force
and effect except to the extent specifically amended, modified or waived
pursuant to the provisions of this Amendment.
5. Payment of Fees. The Company agrees to pay all fees, costs
and expenses incurred by the Purchaser in connection with the negotiation,
preparation, execution and delivery of this Amendment and all other documents
executed pursuant to or in connection herewith, including, without limitation,
the fees and disbursements of Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, special counsel to
the Purchaser, in connection herewith.
6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which taken
together shall be deemed to constitute one and the same instrument.
7. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
8. Headings. Section headings are included herein for convenience
of reference only and shall not constitute a part of this Amendment for any
other purposes.
9. Amendments and Modifications. Any term, covenant, agreement or
condition of this Amendment may, with the consent of the parties hereto, be
amended, or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), by one or more
substantially concurrent written instruments signed by the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first written above.
BTG, INC.
By: /s/ XXXXXX X. XXXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President and CEO
NOMURA HOLDING AMERICA INC.
By: /s/ XXXXXX XXXXXX
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Attorney-in-Fact
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