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EXHIBIT 10.1
FOURTH MODIFICATION TO BUSINESS LOAN AND SECURITY AGREEMENT
THIS FOURTH MODIFICATION TO BUSINESS LOAN AND SECURITY AGREEMENT
(this "Modification") is made as of the 12th day of February, 1997, by and
among (i) NATIONSBANK, N.A., a national banking association ("NationsBank"),
having offices at 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, XxXxxx, Xxxxxxxx 00000;
(ii) FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Fleet"), having
offices at 000 Xxxxxxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000;
(iii) SIGNET BANK, a Virginia banking corporation ("Signet"), having offices at
0000 Xxxxxxxx Xxxx, Xxxxx Xxxxxx, Xxxxxxxx 00000; and (iv) BTG, INC., a
Virginia corporation ("BTG"); ADVANCED COMPUTER TECHNOLOGY, INC., a Delaware
corporation ("ACTECH"); BDS, INC., a Virginia corporation ("BDS"); DELTA
RESEARCH CORPORATION, a Virginia corporation ("DELTA"); BTG PRODUCTS, INC., a
Virginia corporation ("BTGPRO"); CONCEPT AUTOMATION, INC. OF AMERICA, a
Virginia corporation ("CAI"); and CONCEPT AUTOMATION SERVICES, INC., a Virginia
corporation ("CAS"); all having principal offices at 0000 Xxx Xxxxxxx Xxxx,
Xxxxxx, Xxxxxxxx 00000. For purposes hereof, (a) NationsBank (acting in its
capacity as agent for the Lenders) is referred to herein as the "Agent"; (b)
NationsBank (acting on its own behalf as a Lender), Fleet and Signet and each
other person or entity hereafter becoming a "Lender" pursuant to the Loan
Agreement (hereinafter defined) are hereinafter referred to individually as a
"Lender" and collectively as the "Lenders"; and (c) BTG, ACTECH, BDS, DELTA,
BTGPRO, CAI, CAS and each other person or entity hereafter executing a "Joinder
Agreement" pursuant to the Loan Agreement are hereinafter referred to
individually as a "Borrower" and collectively as the "Borrowers". Capitalized
terms used, but not defined, in this Modification 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 a certain Business Loan and
Security Agreement dated November 28, 1995 (the "Original Loan Agreement", and
as amended by the hereinafter defined First Modification, Second Modification
and Third Modification, the "Loan Agreement"), by and among the Borrowers,
NationsBank and the Agent, the Borrowers obtained a loan (the "Loan") from
NationsBank in the maximum principal amount of Sixty Million and No/100 Dollars
($60,000,000.00), secured by, among other things, certain collateral more fully
described in Article III, Section 1 of the Loan Agreement; and
WHEREAS, the Loan was originally evidenced by a certain Revolving
Promissory Note dated November 28, 1995 (the "Original Note"), made by the
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Borrowers and payable to the order of the Agent, in the maximum principal
amount of Sixty Million and No/100 Dollars ($60,000,000.00); and
WHEREAS, pursuant to the terms and conditions of a certain First
Modification to Business Loan and Security Agreement dated February 16, 1996
(the "First Modification"), the Original Loan Agreement was amended to evidence
NationsBank's consent to, among other things, BTG's issuance and sale of
certain subordinate notes and warrants to Nomura Holding of America, Inc., a
Delaware corporation; and
WHEREAS, pursuant to the terms and conditions of a certain Second
Modification to Business Loan and Security Agreement dated March 28, 1996 (the
"Second Modification"), Fleet, Sanwa Business Credit Corporation, a Delaware
corporation ("Sanwa") and Signet became Lender parties to the Original Loan
Agreement, as theretofore modified, and agreed to be bound by the terms and
conditions thereof and advance loan proceeds in accordance therewith
(NationsBank, acting in its capacity as a Lender, Fleet, Sanwa and Signet are
each individually referred to as an "Original Lender" and collectively as the
"Original Lenders"); and
WHEREAS, concurrent with the execution of the Second
Modification, the Original Note was substituted and replaced by four (4)
separate Revolving Promissory Notes dated March 28, 1996 (as amended by the
hereinafter defined First Allonge and Second Allonge, each herein referred to
as a "Replacement Note" and all collectively referred to as, the "Replacement
Notes"), each made by the Borrowers and payable to the order of an Original
Lender, in the aggregate maximum principal amount of Sixty Million Dollars
($60,000,000); and
WHEREAS, pursuant to the terms and conditions of a certain Third
Modification to Business Loan and Security Agreement dated October 1, 1996 (the
"Third Modification"), the Original Loan Agreement, as theretofore modified,
was further modified to (i) evidence the Original Lenders' consent to, among
other things, BTG entering into a financing arrangement with Deutsche Financial
Services Corporation, a Nevada corporation ("DFS"), for the sole purpose of
funding BTG's acquisition of inventory, and CAI entering into a financing
arrangement with DFS in connection with CAI's performance under two (2)
particular Government Contracts; and (ii) reflect an increase in the maximum
principal amount of the Loan from Sixty Million and No/100 Dollars
($60,000,000.00) to Eighty-five Million and No/100 Dollars ($85,000,000.00);
and
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WHEREAS, concurrent with the execution of the Third Modification,
each of the Replacement Notes was amended, respectively, pursuant to four (4)
certain Allonges and First Modifications to Promissory Note dated October 1,
1996 (collectively, the "First Allonges"), to evidence the increase in the
maximum principal amount of the Loan from Sixty Million and No/100 Dollars
($60,000,000.00) to Eighty-five Million and No/100 Dollars ($85,000,000.00);
and
WHEREAS, the Borrowers and Lenders have agreed, subject to the
terms and conditions set forth herein, to (i) increase Borrowers' Tangible Net
Worth requirements; (ii) delete the Funded Debt to Tangible Net Worth Ratio
covenant; (iii) modify the limitation on the amount of investments and/or
capital expenditures which the Borrowers are permitted to make or expend during
the fiscal year ending March 31, 1997; (iv) modify the Additional Libor
Percentage (as defined in the Replacement Notes, as heretofore modified); (v)
provide for the making of payments, loans or advances by the Borrowers to a
newly formed subsidiary of BTG known as Community Networks, Inc., a Virginia
corporation ("CNI"), for the purpose of funding development costs incurred or
to be incurred by CNI; and (vi) confirm that all of the Borrowers' right, title
and interest in and to the capital stock of CNI, whether now owned or hereafter
acquired (the "CNI Stock") has been pledged to the Agent (for the benefit of
the Lenders); and
WHEREAS, the Borrowers and Lenders have agreed, subject to the
terms and conditions set forth herein, that one hundred eighty (180) day
Interest Periods for Loan advances bearing interest on a LIBOR basis shall no
longer be available; and
WHEREAS, the Borrowers and Lenders desire to acknowledge and
confirm that NationsBank has acquired all of Sanwa's right, title and interest
in and to the Loan.
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 definition of "Interest Period" set forth in the "Certain
Definitions" section of the Loan Agreement is hereby deleted in its entirety
and the following substituted in lieu thereof:
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""INTEREST PERIOD" means as to any Loan proceeds for which
the Borrowers have elected LIBOR based interest in
accordance with this Agreement, the period commencing on
and including the date such LIBOR election is effective (or
the effective date of the Borrowers' election to convert
any portion of the Loan to a LIBOR interest basis in
accordance with the provisions of this Agreement) and
ending on and including the day which is between one (1)
and ninety (90) days, as available, and as selected by the
Borrowers in accordance with the provisions of this
Agreement; provided, however, that: (i) the first day of
any Interest Period shall be a Business Day; (ii) if any
Interest Period would end on a day that would not be a
Business day, such Interest Period shall be extended to the
next succeeding Business Day; and (iii) no Interest Period
shall extend beyond (a) the maturity date of the Loan; or
(b) the tenth (10th) day following the expiration of any
Quarterly Period (hereinafter defined), unless such
Interest Period commenced during the first ten (10) days of
the first calendar month of such Quarterly Period (i.e.,
the 1st through the 10th day of February, May, August or
November, as applicable)."
1. The "Certain Definitions" section of the Loan Agreement is hereby
amended by adding the following definitions of "Additional Libor Percentage",
"CNI" and "Funded Debt" therein:
"ADDITIONAL LIBOR PERCENTAGE" shall have the meaning
assigned to such term in Exhibit 7 attached to this
Agreement.
"CNI" shall mean Community Networks, Inc., a
Virginia corporation.
"CONSOLIDATED EBITDA" shall mean earnings, before
interest, taxes, depreciation and amortization for
the four (4) consecutive fiscal quarters of the
Borrowers ended on any date of determination,
calculated on a consolidated basis in accordance
with generally accepted accounting principles.
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"FUNDED DEBT" shall mean borrowed funds, whether
senior or subordinated, secured or unsecured, or in
the form of loans or capitalized leases."
1. The Tangible Net Worth Covenant set forth in Section 15 of
Article VI of the Loan Agreement is hereby deleted in its entirety and the
following substituted in lieu thereof:
"Tangible Net Worth. The Borrowers will maintain on a
consolidated basis at all times during the following periods, Tangible Net
Worth of not less than the following amounts:
Required Consolidated
Periods Tangible Net Worth
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From 12/31/96 through 03/30/97 $40,000,000
From 03/31/97 through 03/30/98 $45,000,000
From 03/31/98 through the Maturity Date $53,000,000
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 that such
amounts are part of the Borrowers' consolidated net worth), investments in
non-marketable securities, notes receivable of affiliated companies (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."
1. The Funded Debt to Tangible Net Worth Ratio covenant set forth in
Section 15 of Article VI of the Loan Agreement is hereby deleted in its
entirety.
2. Section 10 of Article VII of the Loan Agreement is hereby deleted
in its entirety and the following substituted in lieu thereof:
"CAPITAL EXPENDITURES. On a consolidated basis, make any
investment or capital expenditure including, but not
limited to, expenditures for leasehold improvements or the
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acquisition of the assets of any other firm, person,
company, corporation or enterprise, in excess of Two
Million Two Hundred Thousand Dollars ($2,200,000) during
the Borrowers' fiscal year ending March 31, 1997, and One
Million Four Hundred Thousand Dollars ($1,400,000) during
any fiscal year thereafter; and"
1. Article VII of the Loan Agreement is hereby amended by adding the
following new negative covenant:
"PAYMENTS TO CNI. Suffer or permit any Borrower to make
any payments, loans or advances to or for the benefit of
CNI in excess of Four Million Four Hundred Thousand Dollars
($4,400,000), in the aggregate, throughout the term of the
Loan; it being understood and agreed that any such
payments, loans or advances constituting capital
expenditures shall also be subject to the limitations set
forth in Section 10 of Article VII and the other provisions
of this Agreement."
1. The form Request for Advance and Certification attached to the
Loan Agreement as Exhibit 4 is hereby deleted in its entirety and the form
Request for Advance and Certification attached hereto as "Exhibit 4"
substituted in lieu thereof.
2. Exhibit 7 attached to the Loan Agreement is hereby amended by
adding the following provision as a new section at the end thereof:
"ADDITIONAL LIBOR PERCENTAGE
From and after the effective date of the Second Allonges
(as defined in the Fourth Modification to Business Loan and
Security Agreement dated February ___, 1997, by and among
the Agent, Lenders and Borrowers) until the first
Calculation Date (hereinafter defined), the term Additional
Libor Percentage shall mean one and three-quarters percent
(1.75%). From and after the first Calculation Date, the
term Additional Libor Percentage shall mean the percentage
which corresponds to the Borrowers' Leverage Ratio, as set
forth below:
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-------------------------------------------------------------- Additional
Leverage Ratio Libor Percentage
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greater than or equal to 4.0, but less than 5.0 2.00%
greater than or equal to 3.0, but less than 4.0 1.75%
greater than or equal to 2.0, but less than 3.0 1.50%
less than 2.0 1.25%
For purposes hereof the Borrowers' Leverage Ratio shall mean the ratio of
Borrowers' Funded Debt to Consolidated EBITDA. 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 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 percent (2%). 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")."
1. The Lenders and Borrowers hereby acknowledge and confirm that
Sanwa has sold, assigned and transferred to NationsBank, all of Sanwa's right,
title and interest in and to the Loan.
2. Simultaneously with the execution of this Modification, Borrowers
shall execute and deliver to each Lender an Allonge and Second Modification to
Promissory Note (each being referred to herein as a "Second Allonge" and
collectively as the "Second Allonges"), pursuant to which each Replacement
Note, as heretofore modified, shall be further modified to provide that the
Additional Libor Percentage shall be defined and determined in accordance with
Exhibit 7 of the Loan Agreement (as amended hereby).
3. Simultaneously with the execution of this Modification, Borrowers
shall (i) pledge to the Agent (for the benefit of the Lenders), the CNI Stock;
(ii) deliver to the Agent original CNI Stock certificates, accompanied by blank
stock powers therefor, executed by the Borrowers; and (iii) execute and deliver
to the Agent a certain Third Modification to BTG Stock Security Agreement,
pursuant to which the Borrowers
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acknowledge and agree that the CNI Stock shall be subject to the terms and
conditions of the BTG Stock Security Agreement, as amended.
4. Each Borrower hereby acknowledges and agrees that (i) there are
no set-offs or defenses against the Replacement Notes, as heretofore modified
(collectively, 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 (iv) 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.
5. 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.
6. 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.
7. 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.
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
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
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Title: Secretary Title: President and CEO
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[Corporate Seal] ADVANCED COMPUTER
ATTEST: TECHNOLOGY, INC., a Delaware
corporation
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ C. Xxxxxx Xxxxx
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Name: Xxxxxxxx X. Xxxxxxx Name: C. Xxxxxx Xxxxx
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Title: Secretary Title: President
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[Corporate Seal] BDS, INC.,
ATTEST: a Virginia corporation
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
----------------------- -----------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
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Title: Secretary Title: CEO
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[Signatures Continue on Following Page]
[Corporate Seal] DELTA RESEARCH CORPORATION,
ATTEST: a Virginia corporation
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
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Title: Secretary Title: CEO
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[Corporate Seal] BTG PRODUCTS, INC.,
ATTEST: a Virginia corporation
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
----------------------- -----------------------
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
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Title: Secretary Title: CEO
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[Corporate Seal] CONCEPT AUTOMATION, INC. OF
ATTEST: AMERICA, a Virginia corporation
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
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Title: Secretary Title: CEO
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[Corporate Seal] CONCEPT AUTOMATION SERVICES,
ATTEST: INC., a Virginia corporation
/s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
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Title: Secretary Title: CEO
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AGENT:
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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
[Signatures Continue on Following Page]
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
SIGNET BANK, a Virginia banking
corporation
By: /s/ R. Xxxx Xxxxx
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Name: R. Xxxx Xxxxx
Title: Asst. Vice President
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EXHIBIT 4
REQUEST FOR ADVANCE AND CERTIFICATION
$85,000,000 REVOLVING CREDIT FACILITY
REQUEST FOR ADVANCE
12 The undersigned, BTG, Inc., a Virginia corporation ("BTG"), for
itself and as attorney-in-fact for each Borrower (hereinafter defined) under
that certain Business Loan and Security Agreement dated November 28, 1995 (as
heretofore modified, the "Loan Agreement"), by and among (i) NationsBank, N.A.,
a national banking association (acting in its capacity as a Lender), Fleet
Capital Corporation, a Rhode Island corporation and Signet Bank, a Virginia
banking corporation, (ii) NationsBank, N.A., acting in its capacity as agent,
and (iii) BTG, certain subsidiaries of BTG and any person or entity who has
become a party thereto by execution of a "Joinder Agreement" pursuant to the
Loan Agreement (collectively, the "Borrower"), hereby requests that a Loan
advance be made to the Borrower pursuant to Section 4(a) of the Loan Agreement
in the amount of ____________________________________ and No/100 Dollars
($__________________). This Loan advance will be effective on
__________ and will be at the _______ Prime Rate option or the ________ Libor
Rate option (check one). If the Libor Rate option is requested, it shall
be effective for a ____ (select 1 through 90) day period, commencing on
___________________ (a Business Day no less than three (3) days from the date
of submission of this Request and Certification) and expiring on ______________
(not later than (i) August 31, 1998; or (ii) the expiration of any Quarterly
Period (as defined in the Loan Agreement), unless such Interest Period
commenced within ten (10) days immediately preceding the commencement of such
Quarterly Period).
CERTIFICATION
The Borrower hereby represents, warrants and certifies that each
and all of the representations and warranties set forth in the Loan Documents
are being remade and redated as of the date hereof, and are true, correct and
complete in all respects as of the date hereof.
IN WITNESS WHEREOF, the undersigned has executed and delivered
this certificate, this ___ day of __________, 19____.
BTG, INC., a Virginia corporation,
attorney-in-fact for each of the Borrowers
By:
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Name:
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Title:
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