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EXHIBIT 10.7
SIXTH MODIFICATION TO AMENDED AND RESTATED
BUSINESS LOAN AND SECURITY AGREEMENT
THIS SIXTH MODIFICATION TO AMENDED AND RESTATED BUSINESS LOAN AND
SECURITY AGREEMENT (this "Modification") is made as of the 2nd day of April,
2001, by and among (i) BANK OF AMERICA, N.A., a national banking association (as
successor-in-interest to NationsBank, N.A.), acting in its capacity as a Lender
("Bank of America"), 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)
BANK OF AMERICA, N.A., a national banking association (as successor-in-interest
to NationsBank, N.A.), acting in its capacity as Agent for the Lenders, having
an office at 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, XxXxxx, Xxxxxxxx 00000; and (v)
BTG, INC., a Virginia corporation ("BTG"); BTG TECHNOLOGY SYSTEMS, INC., a
Virginia corporation ("BTGTECH"); DELTA RESEARCH CORPORATION, a Virginia
corporation ("Delta"); CONCEPT AUTOMATION, INC. OF AMERICA, a Virginia
corporation ("CAI"); NATIONS, INC., a New Jersey corporation ("Nations"); STAC,
INC., a Virginia corporation ("STAC"); RESEARCH PLANNING, INC., a Delaware
corporation ("RPI"), all having principal offices at 0000 Xxxxxxx Xxxxx Xxxx,
0X, Xxxxxxx, Xxxxxxxx 00000-0000; and each other person or entity hereafter
executing a "Joinder Agreement" pursuant to the Loan Agreement (collectively,
the "Borrowers" and without RPI, the "Existing Borrowers"). 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 or modified, and as the same may be hereafter amended or
modified, the "Loan Agreement"), by and among the Agent, the Existing Borrowers
and the Lenders (including Crestar Bank which is no longer a party thereto), the
Existing Borrowers obtained a loan (the "Loan") from the Lenders in the original
aggregate maximum principal amount of One Hundred Ten Million and No/100 Dollars
($110,000,000.00), which aggregate maximum principal amount had been heretofore
reduced to Fifty Million and No/100 Dollars ($50,000,000.00), but continues to
be evidenced by two (2) separate Replacement Revolving Promissory Notes (as
defined in Exhibit A hereto), in the aggregate maximum principal amount of
Ninety-five Million and No/100 Dollars ($95,000,000.00); and
WHEREAS, the 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, pursuant to that certain Fifth Modification to Amended
and Restated Business Loan and Security Agreement dated April 19, 2000, by and
among the Agent, the Existing Borrowers and Lenders, the Existing Borrowers
obtained a term loan (the "SSDS Acquisition Term Loan") in the original
aggregate principal amount of Eight Million and No/100 Dollars ($8,000,000.00),
which term loan was (a) made available to the Borrowers in addition to and not
in replacement of the existing revolving facility ("Facility "A""), (b)
evidenced by two (2) separate Term Promissory Notes (as defined in EXHIBIT A
hereto), in the original aggregate
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principal amount of Eight Million and No/100 Dollars ($8,000,000.00), and (c)
secured by, among other things, the Collateral; and
WHEREAS, the Term Promissory Notes which evidenced the SSDS
Acquisition Term Loan have been paid and satisfied in full; and
WHEREAS, pursuant to a certain letter agreement dated March 29,
2001 (the "Letter Agreement"), between the Existing Borrowers and the Agent
(acting for and on behalf of the Lenders), the Agent and Lenders (a) consented
to a stock acquisition (the "Acquisition") pursuant to which BTG will acquire
all of the issued and outstanding capital stock of RPI, as described in that
certain Stock Purchase Agreement dated as of March 30, 2001 (the "Stock
Purchase Agreement"), by and among BTG, RPI and the stockholders of RPI; and (b)
agreed to extend to the Borrowers a new term loan ("Facility "B""), in the
original aggregate principal amount of Two Million and No/100 Dollars
($2,000,000.00), the proceeds of which shall be used to finance the Acquisition
and certain costs and expenses incurred in connection therewith; and
WHEREAS, the Letter Agreement expressly provides that the Agent's
and Lenders' consent to the Acquisition and agreement to make Facility "B"
available to the Borrowers shall be subject to, among other things, the
execution and delivery of this Modification by the Borrowers, Lenders and Agent,
and 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. Promptly following the Borrowers' written request to the
Agent, the proceeds of Facility "B" shall be fully advanced to the Borrowers;
provided that (a) as of the date of the Borrowers' written request and as of the
date of disbursement, (i) no Event of Default shall have occurred and be
continuing, (ii) and no act, event or condition shall have occurred which with
notice or the lapse of time, or both, would constitute an Event of Default, and
(iii) all of the representations and warranties set forth in the Loan Agreement
are true and correct in all respects, and (b) the Borrowers' written request to
the Agent contains a certification as to the matters set forth in clause (a)
above. The proceeds of Facility "B" shall be used solely for the purpose of
financing the purchase price for the Acquisition and other amounts payable by
BTG pursuant to the Stock Purchase Agreement, as well as the transactional costs
and expenses incurred in connection with the Acquisition. 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".
3. The definitions of "Borrower" and "Borrowers",
"Consolidated Fixed Charges", "Facility "B"", "Facility "B" Commitment Amount"
and "Loan" set forth in the "Certain Definitions" section of the Loan Agreement
are hereby deleted in their entirety and the following substituted in lieu
thereof:
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""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; Research
Planning, Inc., a Delaware corporation; and each other person or
entity hereafter executing a Joinder Agreement pursuant to Section
9 of Article I of this Agreement.
"CONSOLIDATED FIXED CHARGES" shall mean, as of the date of the
particular determination, interest expenses, plus current
maturities of long term debt, plus current maturities of
capitalized leases, plus cash payments for taxes for the fiscal
quarter of the Borrowers most recently ended, calculated on a
consolidated basis in accordance with GAAP. For purposes hereof,
current maturities under Facility "B" shall be determined using a
twenty-four (24) month amortization schedule, calculated from the
date on which the first installment of principal and interest
becomes due and payable under the Facility "B" Notes.
"FACILITY "B"" shall mean the term loan facility being extended
pursuant to this Agreement, in the original aggregate principal
amount of Two Million and No/100 Dollars ($2,000,000.00).
"FACILITY "B" COMMITMENT AMOUNT" shall mean Two Million and No/100
Dollars ($2,000,000.00)."
4. The following definitions of "RPI Seller Notes", "RPI Stock
Purchase Agreement" and "RPI Subordination Agreement" are hereby added to the
"Certain Definitions" section of the Loan Agreement:
""RPI SELLER NOTES" shall mean, individually or collectively at
the context may require, that certain (a) Subordinated Promissory
Note dated April 2, 2001, made by BTG and payable to the order of
Xxxxxxxx X. Xxxxxx, Xx., in the original principal amount of Six
Million Seven Hundred Fifty Thousand and No/100 Dollars
($6,750,000.00), (b) Subordinated Promissory Note dated April 2,
2001, made by BTG and payable to the order of Xxxxxxx X. Xxxx,
III, in the original principal amount of One Million Eight Hundred
Thousand and No/100 Dollars ($1,800,000.00), (c) Subordinated
Promissory Note dated April 2, 2001, made by BTG and payable to
the order of Xxxxx X. Xxxxxxxx, in the original principal amount
of Four Hundred Fifty Thousand and No/100 Dollars ($450,000.00),
and (d) any and all extensions, renewals, modifications,
replacements, and/or substitutions of or for any of the foregoing
approved in writing by the Agent.
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"RPI STOCK PURCHASE AGREEMENT" shall mean that certain Stock
Purchase Agreement dated as of March 30, 2001, among BTG, RPI,
Xxxxxxxx X. Xxxxxx, Xx., Xxxxxxx X. Xxxx, III, and Xxxxx X.
Xxxxxxxx, together with all amendments or modifications thereof
approved in writing by the Agent.
"RPI SUBORDINATION AGREEMENT" shall mean that certain
Subordination Agreement dated as of April 2, 2001, by and among
BTG, RPI, Xxxxxxxx X. Xxxxxx, Xx., Xxxxxxx X. Xxxx, III, Xxxxx X.
Xxxxxxxx and the Agent, together with all amendments or
modifications thereof."
5. The definition of "Net Cash Flow" set forth in the "Certain
Definitions" section of the Loan Agreement is hereby deleted in its entirety.
6. 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, to be applied in inverse order of maturity under the
Facility "B" Notes, in the amount of one hundred percent (100%) of
(a) any and all payments made under the Installment Note; and (b)
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
BTG of the Installment Note. Any mandatory payment required
pursuant to clauses (a) and/or (b) above shall be due and payable
in full simultaneously with the occurrence of the event giving
rise to such mandatory payment (i.e., a payment under the
Installment Note, or a sale or other disposition of the
Installment Note)."
7. 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. As of March 31, 2001, the Borrowers
shall have Tangible Net Worth of not less than Eight Million Five
Hundred Thousand and No/100 Dollars ($8,500,000.00). Thereafter,
the Borrowers, on a consolidated basis, will maintain at all times
Tangible Net Worth of not less than the sum of (i) Eight Million
Five Hundred Thousand and No/100 Dollars ($8,500,000.00), plus
(ii) sixty-seven percent (67%) of net income arising after March
31, 2001 (not to be reduced for subsequently incurred losses), as
determined on a consolidated basis in accordance with GAAP at the
end of each fiscal quarter. For purposes of this Agreement,
"Tangible Net Worth" shall mean all capital stock, paid in capital
and retained earnings, less all
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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."
8. 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
Two Million and No/100 Dollars ($2,000,000.00); "
9. By executing this Modification, RPI 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 RPI
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. RPI 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. RPI hereby represents and warrants to the Agent and each Lender that
in accordance with the terms of a certain Second Amendment to Amended and
Restated Contribution Agreement of even date herewith (the "Second Amendment to
Contribution Agreement"), RPI has become a party to the Contribution Agreement
and that the Contribution Agreement (as heretofore amended or modified) remains
unmodified and in full force and effect. RPI 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, RPI (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 RPI'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
RPI's balance sheet, as of the date on which Indebtedness is to be determined,
(ii) all obligations of any other person or entity which
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RPI has guaranteed, (iii) reimbursement obligations in connection with letters
of credit issued for RPI's benefit, and (iv) the Obligations (after giving
effect to RPI's rights under the Contribution Agreement).
10. Each Borrower hereby represents and warrants to the Agent and the
Lenders that (a) all of the assets of RPI (the "RPI Assets") are free and clear
of any and all liens, claims and encumbrances (other than Permitted Liens); (b)
all of the RPI Assets constituting accounts, accounts receivable and books and
records (as such terms may be defined in the Virginia Uniform Commercial Code)
are, as of the date hereof, located at BTG's address set forth in the Preamble
to this Modification, and all other RPI Assets are, as of the date hereof,
located at one or more of the locations set forth on SCHEDULE 1 attached to this
Modification; and (c) immediately following the Acquisition, the Agent (for the
ratable benefit of the Lenders) shall have a valid and perfected first priority
security interest in and to all of the RPI Assets (without further
documentation) pursuant to the Loan Agreement and the UCC Financing Statements
to be executed by RPI on the date hereof and filed in the appropriate
jurisdiction necessary to perfect a security interest in and to the RPI Assets.
11. The Borrowers acknowledge and agree that (a) neither the Stock
Purchase Agreement nor any of the RPI Seller Notes shall be altered, modified or
amended in any respect without the Agent's prior written consent; (b) a default
under the RPI Subordination Agreement or the failure of any party thereto (other
than the Agent) to observe or perform any of its respective covenants or
obligations set forth therein shall constitute an Event of Default under the
Loan Agreement.
12. 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 modification fee in the
amount of Forty Thousand and No/100 Dollars ($40,000.00), which fee shall be
paid in cash on or before the date of this Modification. The Borrowers shall
also 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.
13. 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;
(v) the execution, delivery and performance by each Borrower of this
Modification and its obligations hereunder (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; and (vi) it
continues to be in good standing under the laws of its state of incorporation
and remains duly qualified to do business in all other jurisdictions in which
foreign qualification is necessary or appropriate.
14. 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.
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15. 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:
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[Corporate Seal] BTG, INC., a Virginia corporation
ATTEST:
By: /s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------- --------------------------------
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
--------------------------------- --------------------------------
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
--------------------------------- --------------------------------
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
--------------------------------- --------------------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: CEO
[Corporate Seal] NATIONS, INC.,
ATTEST: a New Jersey corporation
By: /s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------- --------------------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: President and CEO
[Signatures Continued on the Following Page]
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[Corporate Seal] STAC, INC., a Virginia corporation
ATTEST:
By: /s/ Xxxxxxx Xxx By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------- --------------------------------
Name: Xxxxxxx Xxx Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: CEO
[Corporate Seal] RESEARCH PLANNING, INC., a
ATTEST: Delaware corporation
By: /s/ Xxxxxxx Xxx By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------- --------------------------------
Name: Xxxxxxx Xxx Name: Xxxxxx X. Xxxxxxx
Title: Secretary Title: CEO
AGENT:
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BANK OF AMERICA, N.A., a national banking association (as
successor-in-interest to NationsBank, N.A.), acting in its capacity
as Agent
By: /s/ Xxxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
LENDER(S):
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BANK OF AMERICA, N.A., a national banking association (as
successor-in-interest to NationsBank, N.A.), acting in its capacity
as Lender
By: /s/ Xxxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
FLEET CAPITAL CORPORATION, a
Rhode Island corporation
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
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EXHIBIT A
For purposes of this Modification, the following terms shall have the following
meanings:
"Contribution Agreement" means that certain Amended and Restated Contribution
Agreement dated as of October 31, 1997, by and among certain of the Existing
Borrowers, as amended by a First Amendment dated as of January 26, 1999, and a
Second Amendment dated as of April 2 , 2001.
"Replacement Revolving Promissory Notes" shall mean each and all of the
promissory notes executed, issued and delivered pursuant to the Loan Agreement
in connection with Facility "A", together with all extensions, renewals,
modifications and substitutions thereof and therefor.
"Term Promissory Notes" shall mean each and all of the promissory notes
executed, issued and delivered pursuant to the Loan Agreement in connection with
the SSDS Acquisition Term Loan.
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SCHEDULE 1
[RPI Asset Locations]
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