<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _________)*
Government Technology Services, Inc.
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(Name of Issuer)
Common Stock, par value $0.005 per share
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(Title of Class of Securities)
383750106
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(CUSIP Number)
Edward H. Bersoff
Chairman of the Board, President and Chief Executive Officer
BTG, Inc.
3877 Fairfax Ridge Road
Fairfax, Virginia 22030-7448
(703) 383-8000
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
May 12, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_].
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
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CUSIP No. ------------------- Page 2 of 10 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
BTG, Inc.
IRS #54-1194161
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Virginia
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7 SOLE VOTING POWER
3,000,000
NUMBER OF ---------------------------------------------------------------
SHARES ---------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
EACH ---------------------------------------------------------------
REPORTING ---------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 3,000,000
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,000,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
30.8%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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Page 3 of 10 pages
ITEM 1. SECURITY AND ISSUER
This statement on Schedule 13D (this "Statement") relates to shares
of common stock (the "Common Stock"), par value $0.005 per share, of Government
Technology Services, Inc., a Delaware corporation (the "Issuer"), and is being
filed by BTG, Inc., a Virginia corporation ("BTG"). The principal executive
offices of the Issuer are located at 4100 Lafayette Center Drive, Chantilly,
Virginia 20151.
ITEM 2. IDENTITY AND BACKGROUND
This Statement is filed by and on behalf of BTG, a Virginia
corporation. BTG is engaged in the information technology business and has its
principal office at 3877 Fairfax Ridge Road, Fairfax, Virginia 22030-7448.
The name, citizenship, business address, position and present
principal occupation of each of the executive officers and directors of BTG (the
"Executive Officers and Directors") are set forth in Schedule I of this
Statement.
During the last five years, neither BTG, nor, to the best knowledge
of BTG, any of the persons named in Schedule I to this Statement, has or have
been (i) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, United States
federal or state securities laws or finding any violations with respect to such
laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to an Asset Purchase Agreement dated as of February 12, 1998
(the "Asset Purchase Agreement"), among BTG, certain subsidiaries of BTG and the
Issuer, BTG sold to the Issuer substantially all of the assets of the BTG
division engaged in the business of reselling computer hardware, software and
integrated systems to the federal government (the "Division"). The purchase
price for the Division paid by the Issuer consisted of $7,825,265 in cash and
15,375 shares of 8% Cumulative Redeemable Convertible Preferred Stock, Series C,
par value $0.25 per share, of the Issuer (the "Convertible Preferred Stock"). At
closing, 13,837 shares of the Convertible Preferred Stock were issued and
delivered to BTG, and 1,538 shares of the Convertible Preferred Stock were
issued and delivered to Crestar Bank, as escrow agent (the "Escrow Agent") to
hold in escrow for a period of one (1) year as security for BTG's
indemnification obligations under the Asset Purchase Agreement. The terms and
conditions of the escrow are governed by an Escrow Agreement dated as of
February 12, 1998 (the "Escrow Agreement") among BTG, certain subsidiaries of
BTG, the Issuer and the Escrow Agent.
The rights, preferences and privileges of the Convertible Preferred
Stock are set forth in a Certificate of Designation, Preferences and Rights of
the Convertible Preferred Stock that was filed with the Delaware Secretary of
State on February 12, 1998 (the "Certificate of Designation"). The Certificate
of Designation provides that on the Conversion Date (as defined below), each
outstanding share of Convertible Preferred Stock automatically converts into a
number of shares of the Issuer's Common Stock based on a formula set forth in
the Certificate of Designation. The "Conversion Date" is the date on which the
Issuer files with the Delaware Secretary of State an amendment to its
certificate of incorporation increasing the number of authorized shares of
Common Stock from 10,000,000 to 20,000,000 (the "Charter Amendment").
At the Annual Meeting of Stockholders of the Issuer held on May 12,
1998, the stockholders of the Issuer approved the Charter Amendment and the
conversion of the Convertible Preferred Stock held by BTG into Common Stock in
accordance with the Certificate of Designation. On May 12, 1998, the Charter
Amendment was filed with the Delaware Secretary of State and the 15,375 shares
of Convertible Preferred Stock issued pursuant to the Asset Purchase Agreement
automatically converted into 3,000,000 shares of Common Stock. Pursuant to the
Asset Purchase Agreement, 2,699,902 shares were deliverable to BTG, and 300,098
shares were deliverable to the Escrow Agent to hold in escrow pursuant to the
terms and conditions of the Escrow Agreement (such shares of Common Stock held
in escrow, the "Escrow Shares").
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Page 4 of 10 pages
The foregoing description of the Asset Purchase Agreement and
Certificate of Designation is qualified in its entirety by reference to such
agreement and certificate, copies of which are attached to BTG's Quarterly
Report on Form 10-Q, filed with the Commission on February 23, 1998, which
information is incorporated herein by reference. The foregoing description of
the Escrow Agreement is qualified in its entirety by reference to such
agreement, a copy of which is attached to this Statement as Exhibit 1 hereto.
ITEM 4. PURPOSE OF THE TRANSACTION
The shares of the Convertible Preferred Stock were issued to BTG as
part of the consideration for the Division transferred to the Issuer pursuant to
the Asset Purchase Agreement. At the time of closing under the Asset Purchase
Agreement, the Issuer did not have a sufficient number of authorized shares of
Common Stock to permit the Issuer to issue 3,000,000 shares of Common Stock to
BTG in exchange for the Division. As a result, the Issuer issued the Convertible
Preferred Stock which automatically converted into Common Stock once the number
of authorized shares of Common Stock was increased to permit the issuance of the
3,000,000 shares to BTG.
Except as otherwise set forth in this Item 4, neither BTG nor, to the
best knowledge of BTG, any of the Executive Officers and Directors have any
present plans or proposals with respect to the Issuer which relate to or would
result in any of the actions specified in subparagraphs (a) through (j) in Item
4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) BTG beneficially owns 3,000,000 shares of Common Stock as of May
12, 1998, which shares represent approximately 30.8% of the outstanding shares
of Common Stock as of May 12, 1998. The Escrow Shares are being held in escrow
pursuant to the Escrow Agreement and are subject to the terms and conditions
thereof.
(b) BTG has sole voting and investment power with respect to
3,000,000 shares of Common Stock.
(c) There have been no transactions in the Common Stock by BTG or, to
the best knowledge of BTG, by any of the Executive Officers and Directors,
during the past sixty (60) days.
(d) Pursuant to the Escrow Agreement, any stock dividends paid on or
other stock distributions in respect of the Escrow Shares with record dates
coinciding with the dates such Escrow Shares are held in escrow will be paid to
the Escrow Agent to hold in escrow will be deemed to be part of and will treated
as, the Escrow Shares. Any cash dividends paid on or other cash distributions in
respect of the Escrow Shares with record dates coinciding with the dates such
Escrow Shares are held in escrow will be paid on behalf of BTG to NationsBank,
N.A. ("NationsBank"), in accordance with instructions supplied by NationsBank.
Any such cash dividends or distributions paid to NationsBank would be applied to
outstanding obligations of BTG under an Amended and Restated Business Loan and
Security Agreement dated as of October 13, 1997, as subsequently amended (the
"Loan and Security Agreement"), among BTG, certain subsidiaries of BTG, the
Lenders named therein and NationsBank, as agent for the Lenders. A copy of the
Loan and Security Agreement is attached to BTG's registration statement on Form
S-4 (File No. 333-40917), and is incorporated herein by reference.
Except as otherwise set forth in this Item 5(d), no person other
than BTG has the right to receive or the power to direct the receipt of
dividends from, or the proceeds of the sale of, the Common Stock to which this
Schedule 13D relates.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
At the closing under the Asset Purchase Agreement, BTG and the Issuer
entered into a Standstill Agreement dated as of February 12, 1998 (the
"Standstill Agreement") with respect to the shares of Convertible
<PAGE> 5
Page 5 of 10 pages
Preferred Stock issued to BTG and the shares of Common Stock issuable upon
conversion thereof. BTG agreed that while the Standstill Agreement remains in
effect, it will not, nor will it permit any of its affiliates to, without the
Issuer's prior consent, acquire, by purchase or otherwise, any beneficial
ownership of Voting Securities (except by way of stock dividends or other
distributions or offerings made available by the Issuer to holders of Voting
Securities generally), if after such acquisition BTG and its affiliates would
beneficially own in the aggregate more than 30.8% of the total combined voting
power of the Voting Securities outstanding immediately following any such
acquisition. "Voting Securities" means the Issuer's outstanding securities
entitled to vote generally for the election of directors, including the Common
Stock, or securities convertible into, or entitling the holder thereof to
acquire such voting securities.
BTG also agreed that while the Standstill Agreement remains in
effect, it will not, nor will it permit any of its affiliates to, without the
Issuer's prior consent: (a) deposit any Voting Securities in a voting trust or
subject them to any arrangement or agreement with respect to the voting thereof;
(b) solicit proxies with respect to Voting Securities under any circumstance or
become a participant in a solicitation in opposition to the recommendation of a
majority of the Board of Directors of the Issuer with respect to any matter;
provided that nothing in the Standstill Agreement prohibits BTG or any of its
affiliates from soliciting proxies or becoming a participant in a solicitation
in opposition to any proposal by the Issuer's Board of Directors which, if
adopted, would adversely affect (i) the rights of BTG under the Standstill
Agreement to designate a member of the Issuer's Board of Directors and to
jointly designate another member with the Issuer; (c) initiate, propose or
otherwise solicit stockholders for the approval of one or more proposals
relating to the Issuer, or induce or attempt to induce any other person to
initiate any stockholder proposal with respect to the Issuer; (d) join a
partnership or other group or otherwise act in concert with any other person for
the purpose of acquiring, holding, voting or disposing of Voting Securities; or
(e) make any proposal to the Issuer's Board of Directors or otherwise with
respect to the acquisition of any beneficial ownership of Voting Securities by
BTG or any of its affiliates or with respect to a merger or consolidation with,
or a sale of a substantial portion of the Issuer's assets to, BTG or any of its
affiliates.
In addition, BTG agreed that, while the Standstill Agreement remains
in effect, it will not, nor will it permit any of its affiliates to, without the
prior consent of the Issuer, transfer any Voting Securities, other than: (a) to
a wholly owned subsidiary of BTG or by any such person to BTG; (b) pursuant to
Rule 144 under the Securities Act of 1933, as amended; (c) pursuant to any
tender offer or exchange offer recommended to the stockholders by the Issuer's
Board of Directors; (d) pursuant to any public offering of Voting Securities
(with certain exceptions); or (e) as a result of any pledge to a financial
institution to secure a loan, or the foreclosure of any lien which may be placed
on any Voting Securities.
Under the Standstill Agreement, the Issuer has the option (the "Call
Option") to repurchase all, but not less than all, of the Voting Securities
beneficially owned by BTG and its affiliates if any of the following occurs: (a)
the Continuing Directors (as defined below) of BTG fail to constitute a majority
of the BTG board of directors; (b) no member of any slate of directors
recommended by the BTG board is elected to the BTG board by the stockholders of
BTG in any election; or (c) the BTG board approves, or BTG executes, an
agreement providing for a merger or consolidation of BTG, a sale of
substantially all of BTG's assets or any similar transaction (subject to certain
exceptions). "Continuing Directors" means all persons serving as members of the
BTG board of directors as of February 12, 1998, together with all other persons
whose election to such board will subsequently be effected by, or recommended
to, the stockholders of BTG by at least two-thirds of the Continuing Directors
then in office.
If the Issuer exercises the Call Option, the Issuer must do so within
thirty (30) days after the occurrence of any of the triggering events described
above and must pay an amount equal to the product of the number of shares of
Common Stock or units of other Voting Securities to be repurchased and the
Market Price (as defined below) of such securities on the settlement date. In
lieu of promptly settling the exercise of the Call Option, the Issuer has the
right to direct BTG to sell the Voting Securities covered thereby in open market
transactions and BTG must do so as soon thereafter as reasonably practicable.
The "Market Price" of any Voting Securities as of any date means the average of
the closing price per share of Common Stock on the NASDAQ National Market for
the ten (10) consecutive trading days prior to such date.
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Page 6 of 10 pages
The foregoing description of the Standstill Agreement is qualified in
its entirety by reference to such agreement, a copy of which is attached to
BTG's Quarterly Report on Form 10-Q, filed with the Commission on February 23,
1998, and is incorporated herein by reference.
Pursuant to an Amended and Restated Stock Security Agreement dated
October 31, 1997, as amended by a First Modification to Amended and Restated
Stock Security Agreement dated February 12, 1998 (collectively, the "Pledge
Agreement"), BTG granted to NationsBank, as agent for the Lenders under the Loan
and Security Agreement, a security interest in all of BTG's right, title and
interest in and to, among other collateral, its capital stock of the Issuer,
whether common and/or preferred, together with all conversion, voting or other
rights appurtenant thereto, including, but not limited to, the right to receive
dividends and/or other distributions payable to BTG by virtue of BTG's ownership
of the Issuer's capital stock, and all proceeds thereof, additions thereto and
substitutions thereof. BTG also agreed in the Pledge Agreement to, among other
things, retain legal and beneficial ownership of the Common Stock and not sell,
exchange, assign, loan, deliver, or mortgage or otherwise encumber or dispose of
the Common Stock without the prior written consent of NationsBank. The foregoing
description of the Pledge Agreement is qualified in its entirety by reference to
such agreement, a copy of which is attached to this Statement as Exhibit 2.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 Escrow Agreement dated as of February 12, 1998, among
BTG, certain subsidiaries of BTG, the Issuer and the
Escrow Agent.
Exhibit 2 Amended and Restated Stock Security Agreement dated
October 31, 1997, between BTG and NationsBank, as
amended by a First Modification to Amended and Restated
Stock Security Agreement dated February 12, 1998.
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Page 7 of 10 pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
Dated: May 22, 1998
BTG, Inc.
By: /s/ Edward H. Bersoff
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Edward H. Bersoff
President and Chief Executive Officer
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Page 8 of 10 pages
SCHEDULE I
Set forth below is the name, position, present principal occupation
and amount of beneficial interest in the Common Stock, if any, of the directors
and executive officers of BTG, Inc. Except as set forth below, the business
address of each of these persons is c/o BTG, Inc., 3877 Fairfax Ridge Road,
Fairfax, Virginia, 22030-7448. Each such person is a citizen of the United
States.
Directors and Executive Officers of BTG, Inc.
<TABLE>
<CAPTION>
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Number of Shares
Name and Position Present Principal Owned and Aggregate Percentage
at BTG, Inc. Occupation Purchase Price Interest
------------ ---------- -------------- --------
<S> <C> <C> <C>
Dr. Edward H. Bersoff Chairman of the Board, 0 N/A
President and Chief
Executive Officer
Donald M. Wallach President of Wallach 0 N/A
Director Associates, Inc.
6101 Executive Boulevard,
Suite 380
Rockville, MD 20852
(301) 231-9000
Dr. Ruth M. Davis President and CEO of the 0 N/A
Director Pymatuning Group, Inc.
4900 Seminary Road,
Suite 570
Alexandria, VA 22311
(703) 671-3500
Earle C. Williams 715 Potomac Knolls Drive 0 N/A
Director McLean, VA 22102
Dr. Alan G. Merten President of George Mason 0 N/A
Director University
Mason Hall, Suite D103
4400 University Drive
Fairfax, VA 22030
(703) 993-8700
Raymond T. Tate President of Raymond Tate 0 N/A
Director Associates, Inc.
17929 Pond Road
Ashton, MD 20861
(301) 774-7131
Ronald L. Turner Executive Vice President 0 N/A
Director of Ceridian Corporation
8800 Queen Avenue, South
Bloomington, MN 55431
(612) 921-6097
</TABLE>
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Page 9 of 10 pages
<TABLE>
<S> <C> <C> <C>
Marilynn D. Bersoff Senior Vice President, 0 N/A
Administration and
Secretary
Clifton Y. Bumgardner Senior Vice President, 0 N/A
Chief Technical Officer
John Littley, III Senior Vice President, 0 N/A
Randall C. Fuerst Senior Vice President, 0 N/A
General Manager Systems
Engineering Business Unit
Linda Hill Senior Vice President 0 N/A
Peter F. DiGiammarino Senior Vice President 0 N/A
Albert E. Mazei Senior Vice President 0 N/A
Todd A. Stottlemyer Senior Vice President 0 N/A
</TABLE>
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Page 10 of 10 pages
EXHIBIT INDEX
Exhibit 1 Escrow Agreement dated as of February 12, 1998, among
BTG, certain subsidiaries of BTG, the Issuer and the
Escrow Agent.
Exhibit 2 Amended and Restated Stock Security Agreement dated
October 31, 1997, between BTG and NationsBank, as
amended by a First Modification to Amended and Restated
Stock Security Agreement dated February 12, 1998.
<PAGE> 1
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement"), dated as of February 12, 1998,
among Government Technology Services, Inc., a Delaware corporation ("GTSI"),
BTG, Inc., a Virginia corporation, certain subsidiaries of BTG, Inc. listed on
the signature page hereto (BTG, Inc. and such subsidiaries are hereinafter
collectively referred to as "BTG") and Crestar Bank, as escrow agent (the
"Escrow Agent"). Terms used herein and not otherwise defined herein shall have
the meanings ascribed to such terms in the Purchase Agreement (as defined
below).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Asset Purchase Agreement dated as of
February 12, 1998 by and among GTSI and BTG (the "Purchase Agreement"), GTSI has
acquired from BTG substantially all of the assets of the Division;
WHEREAS, $800,000 (the "Escrow Cash") and certificates representing
1,538 shares of the Series C Cumulative Redeemable Convertible Preferred Stock,
par value $.25 per share, of GTSI (the "Preferred Escrow Shares") are to be
deposited in escrow pursuant to the Purchase Agreement to provide for payment by
BTG of certain claims by GTSI for indemnification against breaches by BTG under
in the Purchase Agreement; and
WHEREAS, if the GTSI Charter Amendment becomes effective, the Preferred
Escrow Shares will be converted automatically into 300,098 shares of GTSI's
common stock, par value $.005 per share ("Common Stock"), subject to adjustment
(the "Common Escrow Shares" and, together with the Preferred Escrow Shares, the
"Escrow Shares").
NOW, THEREFORE, for and in consideration of the mutual promises
contained herein, GTSI, BTG and the Escrow Agent hereby agree as follows:
1. Delivery of Escrow Cash and Escrow Shares. To provide for the timely
payment of claims of GTSI under the Purchase Agreement, GTSI has, with BTG's
agreement as contemplated by the Purchase Agreement, delivered the Escrow Cash
and the Preferred Escrow Shares to the Escrow Agent, each to be held in escrow
pending disposition as provided herein. BTG has also delivered to the Escrow
Agent five undated executed stock powers with respect to the Preferred Escrow
Shares, with medallion signatures guaranteed by a member in good standing with a
medallion signature guaranty program. If the GTSI Charter Amendment becomes
effective, GTSI shall instruct its transfer agent, First Union National Bank, or
any successor thereto (the "Transfer Agent") to deliver to the Escrow Agent
certificates representing the Common Escrow Shares and the Escrow Agent, upon
its receipt of the Common Escrow Shares, shall deliver the Preferred Escrow
Shares to GTSI. In such event, BTG shall also deliver to the Escrow Agent five
undated executed stock powers with respect to the Common Escrow Shares, with
medallion signatures guaranteed by a member in good standing with a medallion
signature guaranty program. BTG agrees to provide promptly such additional
number of undated executed stock powers with respect to the Escrow Shares as may
be required by the Escrow Agent from time to time. The Escrow Agent hereby
acknowledges receipt of the Escrow Cash and the Preferred Escrow Shares.
<PAGE> 2
2. Investment of Escrow Funds.
(a) The Escrow Agent shall invest and reinvest from time to time
the Escrow Cash together will all investments and reinvestments thereof and all
interest accumulated thereon and proceeds therefrom ("Escrow Funds") (i) in any
obligation of the United States with maturities not to exceed 90 days or (ii) in
any other investment agreed to in writing by GTSI and BTG. To the extent the
Escrow Agent invests any funds in the manner provided for in this Section, no
party hereto shall be liable for any loss which may be incurred by reason of
such investment.
(b) The Escrow Agent shall have the power to reduce, sell or
liquidate the foregoing investments whenever the Escrow Agent shall be required
to release all or any portion of the Escrow Funds pursuant to Section 3. The
Escrow Agent shall have no liability for any investment losses resulting from
the investment, reinvestment, sale or liquidation of any portion of the Escrow
Funds, except in the case of the bad faith, gross negligence or wilful
misconduct of the Escrow Agent.
3. Claims on Escrow Funds and Escrow Shares.
(a) At any time and from time to time, during the period from the
date of this Agreement through the first anniversary hereof (the "Release
Date"), GTSI may give to the Escrow Agent and BTG one or more notices (each a
"Claim Notice") containing the information set forth in Section 3(b) and stating
that, pursuant to this Agreement, GTSI is asserting against BTG a right of
indemnity with respect to a claim (a "Claim") and that GTSI has asserted such
Claim pursuant to and in accordance with Article 8 of the Purchase Agreement.
Upon receipt of the Claim Notice, the Escrow Agent shall hold in escrow Escrow
Funds and, to the extent the Escrow Funds are insufficient, Escrow Shares,
having a value (in the case of Escrow Funds) or an aggregate Market Value (as
defined below) (in the case of Escrow Shares) equal to the amount of such Claim
as set forth in such Claim Notice (each an "Escrow Holdback"). The "Market
Value" of the Escrow Shares shall equal (a) with respect to the Preferred Escrow
Shares, the product of (i) the number of such shares and (ii) $1,000.00 and (b)
with respect to the Common Escrow Shares, the product of (i) the number of such
shares and (ii) $5.125. The Escrow Holdback shall not be released until
receiving a notice of a Determination (as defined below) of such Claim.
(b) The Claim Notice given to the Escrow Agent pursuant to Section
3(a) shall set forth the nature and details of such Claim, the Section of the
Purchase Agreement pursuant to which the Claim is made, the amount thereof or
GTSI's good faith estimate thereof and whether or not such Claim arises from the
assertion of liability by a third party.
(c) For purposes of this Agreement, a "Determination" shall mean (i)
a written compromise or settlement signed by GTSI and BTG or (ii) a binding
judgment of a court of competent jurisdiction as provided in the Purchase
Agreement (the time for appeal having expired and no appeal having been
perfected) in favor of GTSI and against BTG; provided, however, that in the case
of a Claim not resulting from the assertion of liability by a third party, the
Claim Notice to
- 2 -
<PAGE> 3
the Escrow Agent setting forth the amount thereof as reasonably ascertained by
GTSI shall constitute a Determination of such Claim unless, within ten business
days of the receipt by BTG of such Claim Notice, as above provided, including
the amount of such Claim, BTG notifies the Escrow Agent that it disputes such
amount in whole or in part (an "Objection").
(d) Within ten business days following receipt of notice of a
Determination, the Escrow Agent shall disburse to GTSI from the Escrow Funds and
the Escrow Shares the amount set forth in such Determination in the manner set
forth in Section 4. In the event of an Objection, the Escrow Agent shall release
the amount which is not in dispute, if any, in the manner set forth in Section 4
and shall hold the amount in dispute until such Objection is resolved in
accordance with Section 5.
(e) On the Release Date, the Escrow Agent shall distribute to BTG an
amount equal to the excess, if any, of the Escrow Funds and the Escrow Shares
remaining in escrow at that time over the aggregate Escrow Holdback.
4. Payment of Escrow Claims. Upon receipt of notice of a
Determination, the Escrow Agent shall deliver to GTSI sufficient Escrow Funds to
make the payment of the amount set forth in such notice of Determination that is
due to GTSI. If the Escrow Funds are insufficient to make such payment in full,
the Escrow Agent shall deliver to the Transfer Agent (in the case of Common
Escrow Shares) or to GTSI directly (in the case of Preferred Escrow Shares)
certificates representing at least a sufficient number of Escrow Shares (with
such Escrow Shares valued at the Market Value) to make (together with such
Escrow Funds) the payment of indemnification in full, together with a request
(in the case of Common Escrow Shares) to transfer such Escrow Shares to GTSI,
with any fractional shares being rounded up to the nearest whole number. If any
such certificate exceeds the number of Escrow Shares necessary to make the
payment of indemnification, the Escrow Agent shall instruct GTSI (in the case of
Preferred Escrow Shares) or the Transfer Agent (in the case of Common Escrow
Shares) (i) to issue a certificate in the name of BTG for the balance of such
Escrow Shares and (ii) to return such certificate to the Escrow Agent to be held
pursuant to this Agreement. An illustration of the manner in which the
allocation of Escrow Funds and Escrow Shares is to be made is set forth in
Schedule A hereto.
5. Settlement of Disputes. Any dispute which may arise under this
Agreement with respect to the delivery and/or ownership of right of possession
of the Escrow Funds or the Escrow Shares or any part thereof, or the duties of
the Escrow Agent hereunder, shall be settled either by mutual agreement of GTSI
and BTG (evidenced by appropriate instructions in writing to the Escrow Agent,
signed by such parties) or by a final order, decree or judgment of a court of
competent jurisdiction as provided in the Purchase Agreement (the time for
appeal having expired and no appeal having been perfected), each party bearing
its own costs and expenses with respect to the dispute; provided, however, that
neither GTSI nor BTG shall have the right to dispute any Claim which has been
the subject of a Determination. The Escrow Agent shall be under no duty
whatsoever to institute or defend any such proceedings. Prior to the settlement
of any such dispute, the Escrow Agent is authorized and directed to retain in
its possession, without liability to anyone, that portion
- 3 -
<PAGE> 4
of the Escrow Funds and the Escrow Shares which is the subject of such dispute.
6. Dividends and Other Distributions on Escrow Shares. Any stock
dividends paid on or other stock distributions in respect of the Escrow Shares
with record dates coinciding with the dates such Escrow Shares are held in
escrow pursuant to the provisions hereof shall be paid to the Escrow Agent to be
held in escrow hereunder. Any stock dividends paid on or other stock
distribution in respect of the Escrow Shares shall be deemed to be part of, and
shall be treated hereunder as, the Escrow Shares. Any cash dividends paid on or
other cash distributions in respect of the Escrow Shares with record dates
coinciding with the dates such Escrow Shares are held in escrow pursuant to the
provisions hereof shall be paid on behalf of BTG to NationsBank, N.A., as agent,
in accordance with instructions supplied by NationsBank, N.A.
7. Voting of Escrow Shares. BTG shall be deemed to be the owner of
the Escrow Shares and shall have sole voting power on the Escrow Shares
registered in its name while the Escrow Shares are held in escrow pursuant to
the provisions hereof.
8. Escrow Agent.
(a) It is understood that the Escrow Agent, or its successor, will
charge fees for its services under this Agreement, the payment of which,
together with the Escrow Agent's expenses in connection herewith, all as set
forth on Schedule B hereto, shall be paid one-half by GTSI and one-half by BTG.
(b) The Escrow Agent may terminate its obligations under this
Agreement upon 30 days prior written notice to GTSI and BTG. In the event of
such notice, GTSI and BTG may appoint a successor Escrow Agent, and the Escrow
Agent shall promptly transfer to the successor Escrow Agent, as directed, all
Escrow Funds and Escrow Shares being held by it pursuant to this Agreement. If
GTSI and BTG are unable to select a successor Escrow Agent, either GTSI or BTG
may petition a court of competent jurisdiction for the appointment of a
successor, and pending such appointment, the Escrow Agent shall deliver all such
Escrow Funds and Escrow Shares to such court.
(c) The Escrow Agent shall not be liable for any action or omission
to act hereunder except for its own gross negligence or willful misconduct. In
no event shall the Escrow Agent have any responsibility to ascertain or take
action with respect to the Escrow Funds and the Escrow Shares held by it
hereunder, except as expressly provided herein. The Escrow Agent may act in
reliance upon any joint written communication of GTSI and BTG concerning the
delivery of the Escrow Funds and the Escrow Shares held by it hereunder. The
Escrow Agent may act in reliance upon any writing, instrument or signature which
it, in good faith, believes to be genuine, may assume the validity and accuracy
of any statement or assertion contained in such writing or instrument and may
assume that any person purporting to give any writing, notice, advice or
instructions in connection with the provisions hereof has been duly authorized
to do so. The Escrow Agent does not assume and shall have no responsibility for,
and makes no representation as to, monitoring the value of or determining the
legal enforceability or validity of the Escrow Shares held by it hereunder.
- 4 -
<PAGE> 5
(d) The Escrow Agent shall have no duties or responsibilities except
those that are specifically set forth herein and no duties or obligations shall
be implied in this Agreement against the Escrow Agent. If the Escrow Agent shall
request instructions from GTSI or BTG with respect to any act, action or failure
to act in connection with this Agreement, the Escrow Agent shall be entitled to
refrain from taking such action and continue to refrain from acting unless and
until it shall have received written instructions from such party without
incurring any liability therefor to GTSI, BTG or any other person.
(e) GTSI and BTG each agree to reimburse, indemnify and hold harmless
the Escrow Agent and its directors, officers, employees and agents from and
against any and all liability, loss, cost and expense, including reasonable fees
and expenses of counsel arising from or connected with the Escrow Agent's
execution and performance of this Agreement, including but not limited to the
claims of any third parties, except in the case of liability, loss, cost or
expense resulting from gross negligence or wilful misconduct on the part of the
Escrow Agent. To the extent the Escrow Agent is not reimbursed, indemnified or
held harmless as required in the preceding sentence, GTSI and BTG will
reimburse, indemnify and hold harmless the Escrow Agent and its directors,
officers, employees and agents for liability, loss, cost and expense arising
from any action or refraining from action in accordance with joint instructions
given to the Escrow Agent by GTSI and BTG.
(f) The Escrow Agent shall have no lien on the Escrow Funds or the
Escrow Shares held by it hereunder. Except for payment of fees and/or expenses
greater than 60 days old from the date of invoice(s) presented for payment, the
Escrow Agent waives any right of set off, lien or similar right with respect to
the Escrow Funds or the Escrow Shares which arises by operation of law or
otherwise.
(g) The Escrow Agent shall not be liable to pay any tax on any
interest earned on the Escrow Funds, it being the understanding of the parties
that such tax shall be the responsibility of BTG. The tax identification number
of BTG is set forth on Schedule C hereto.
9. Notices. Any notice or communication given pursuant to this
Agreement shall be in writing and delivered or mailed by registered or certified
mail, postage prepaid, return receipt requested, as follows:
If to GTSI, as follows:
Government Technology Services, Inc.
4100 Lafayette Center Drive
Chantilly, VA 20151-1200
Attn: General Counsel
Tel: (703) 502-2121
Fax: (703) 222-5217
- 5 -
<PAGE> 6
With a copy to:
Arent Fox Kintner Plotkin & Kahn, PLLC
1050 Connecticut Avenue, N.W.
Washington, D.C. 20036-5339
Attn: Gerald P. McCartin
Tel: (202) 857-6090
Fax: (202) 857-6395
If to the Escrow Agent, as follows:
Crestar Bank
Trust & Investment Management Group
919 East Main Street, 10th Floor
Richmond, Virginia 23219
Attn: William F. Michie, III
Tel: (804) 782-5581
Fax: (804) 782-7855
If to BTG, as follows:
BTG, Inc.
3877 Fairfax Ridge Road
Fairfax, Virginia 22030-7448
Attn: General Counsel
Tel: (703) 383-6404
Fax: (703) 383-4000
- 6 -
<PAGE> 7
With a copy to:
Hogan & Hartson
555 Thirteenth Street, N.W.
Washington, D.C. 20004
Attn: David B. H. Martin, Jr.
Tel: (202) 637-6858
Fax: (202) 637-5910
Except as otherwise specifically provided herein, mailed notices
shall be deemed given when duly mailed. Any party may change its address or the
designated addresses by notice to the other parties pursuant to this Section 9,
such notice to be effective upon receipt.
10. Miscellaneous.
(a) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same instrument.
(b) This Agreement shall be construed by and governed in accordance
with the laws of the Commonwealth of Virginia, without regard to such
jurisdiction's conflicts of laws principles.
(c) This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of the parties hereto.
(d) This Agreement may be modified or amended only by a written
instrument duly executed by all parties hereto or their respective successors or
assigns.
(e) Except as provided herein, the rights and obligations of the
parties under this Agreement shall not be assigned to any person or entity,
without the prior written consent of the other parties.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
- 7 -
<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
GOVERNMENT TECHNOLOGY
SERVICES, INC.
By: /s/ STEPHEN L. WAECHTER
-----------------------------------------
Name: Stephen L. Waechter
Title: Chief Financial Officer
BTG, INC.
By: /s/ EDWARD H. BERSOFF
-----------------------------------------
Name: Edward H. Bersoff
Title: President and Chief Executive
Officer
BTG TECHNOLOGY SYSTEMS, INC.
By: /s/ EDWARD H. BERSOFF
-----------------------------------------
Name: Edward H. Bersoff
Title: President and Chief Executive
Officer
CONCEPT AUTOMATION, INC. OF
AMERICA
By: /s/ EDWARD H. BERSOFF
-----------------------------------------
Name: Edward H. Bersoff
Title: President and Chief Executive
Officer
CRESTAR BANK, AS ESCROW AGENT
By: /s/ W. F. MICHIE, III
-----------------------------------------
Name: W. F. Michie, III
Title: Trust Officer
<PAGE> 9
SCHEDULE A
ALLOCATION ILLUSTRATION
Facts Assumed
- -------------
1. There are 1,538 Preferred Escrow Shares with a Market Value of
$1,538,000 (i.e., 1,538 multiplied by the per share liquidation
preference of $1,000).
2. The Escrow Funds equal $800,000. The total Market Value of the
Escrow Shares and the Escrow Funds is therefore $2,338,000.
3. GTSI delivers a Claim Notice to the Escrow Agent for which
the Claim amount is $1 million.
Allocation
- ----------
1. The Escrow Holdback would consist of (i) Escrow Funds equal to
$800,000 and (ii) Escrow Shares with a Market Value of $200,000,
or 200 Preferred Escrow Shares.
<PAGE> 10
SCHEDULE B
ESCROW AGENT FEES
$2,000 per annum payable in advance
plus out-of-pocket expenses payable in arrears
<PAGE> 11
SCHEDULE C
BTG TAX IDENTIFICATION NUMBER
54-119-4161
<PAGE> 12
February 12, 1998
Crestar Bank
Trust & Investment Management Group
919 East Main Street, 10th Floor
Richmond, Virginia 23219
Attention: William F. Michie, III
Re: Escrow Agreement of even date herewith (the "Escrow Agreement"), by and
among BTG, Inc. ("BTG"), Government Technology Services, Inc. ("GTSI") and
Crestar Bank ("Escrow Agent")
- --------------------------------------------------------------------------------
Dear Mr. Michie:
This letter is to advise you that BTG assigned to NationsBank, N.A., as Agent
("NationsBank"), as collateral security for a loan (the "Loan") made to BTG and
certain of its subsidiaries, a security interest in all of BTG's right, title
and interest in and to (i) the Escrow Agreement, and (ii) any and all funds and
stock now or hereafter held by Escrow Agent (collectively, "Escrow Proceeds");
it being understood that the security interest in Escrow Proceeds is subject to
the rights of GTSI in and to such Escrow Proceeds.
By executing and consenting to this letter below, BTG authorizes Escrow Agent to
deliver any and all Escrow Proceeds to NationsBank (together with executed
stock powers for the benefit of NationsBank, as applicable), that but for this
letter, would have been payable and/or delivered to BTG; whether such
distribution is being made at termination or expiration of the Escrow Agreement,
or at any other time.
By executing and consenting to this letter below, Escrow Agent (i) agrees that
no consent, acknowledgment, authorization, notice or agreement of BTG under,
pursuant to or executed in connection with the Escrow Agreement (including,
without limitation, any modification or termination of the Escrow Agreement by
BTG), shall be effective, valid or binding as the act of BTG without the written
consent of NationsBank; and (ii) acknowledges that, as an accommodation to
NationsBank, and without liability to NationsBank except for any loss, cost,
expense, damage or liability incurred by NationsBank as a result of Escrow
Agent's gross negligence or willful misconduct), Escrow Agent shall retain
physical possession of Escrow Proceeds not only for the purposes set forth in
the Escrow Agreement, but also to perfect NationsBank's security interest in
Escrow Proceeds, which security interest is subject to the rights of GTSI.
<PAGE> 1
FIRST MODIFICATION TO AMENDED AND RESTATED STOCK SECURITY AGREEMENT
THIS FIRST MODIFICATION TO AMENDED AND RESTATED STOCK SECURITY
AGREEMENT (this "Modification") is made as of the 12th day of February, 1998, by
and between (i) NATIONSBANK, N.A., a national banking association
("NationsBank"), having offices at 8300 Greensboro Drive, Suite 550, McLean,
Virginia 22102, acting in its capacity as Agent (the "Agent") pursuant to the
Loan Agreement (as defined in SCHEDULE 1 attached hereto); and (ii) BTG, INC., a
Virginia corporation, having its principal place of business at 3877 Fairfax
Ridge Road, 4B, Fairfax, Virginia 22030-7448 ("Pledgor"). For purposes hereof
(a) NationsBank (acting on its own behalf as a Lender), Fleet Capital
Corporation, a Rhode Island corporation ("Fleet"), Crestar Bank, a Virginia
banking corporation ("Crestar"), and each other person or entity hereafter
becoming a "Lender" pursuant to the Loan Agreement are hereinafter referred to
individually as a "Lender" and collectively as the "Lenders"; and (b) Pledgor,
BTG Technology Systems, Inc., a Virginia corporation ("Tech Systems"), Delta
Research Corporation, a Virginia corporation, Concept Automation, Inc. of
America, a Virginia corporation ("CAI"), Nations, Inc., a New Jersey
corporation, and each other person or entity hereafter executing a "Joinder
Agreement" pursuant to the Loan Agreement are hereinafter referred to
individually as the "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 the Loan Agreement,
the Borrowers obtained a loan (the "Loan") from the Lenders in the maximum
principal amount of One Hundred Ten Million and No/100 Dollars
($110,000,000.00), currently evidenced by three (3) separate Replacement
Revolving Promissory Notes (as defined in SCHEDULE 1 hereto) 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 shares of stock
more fully described in the Stock Security Agreement (as defined in SCHEDULE 1
hereto); and
WHEREAS, concurrent with the execution of this Modification, BTG,
Tech Systems, CAI and Resources are selling certain assets (the "Asset Sale") to
Government Technology Services, Inc. ("GTSI") in exchange for which, among other
things, BTG will acquire fifteen thousand three hundred seventy-five (15,375)
shares of Series C 8% Cumulative Redeemable Convertible Preferred Stock of GTSI
(the "Preferred Shares"); and
WHEREAS, Pledgor has requested that the Lenders waive certain
negative covenants set forth in the Loan Agreement and other Loan Documents
which, as currently
<PAGE> 2
written, prohibit the Borrowers and Resources from consummating the transactions
contemplated by the Asset Sale; and
WHEREAS, the Agent, acting for and on behalf of the Lenders, has
agreed to waive such negative covenants pursuant to that certain letter
agreement of even date herewith issued by the Agent and accepted by the
Borrower; provided that, among other things, Pledgor acknowledges and confirms
that (i) all of its right, title and interest in and to the Preferred Shares,
and any other common or preferred stock of GTSI, whether now or hereafter issued
or outstanding, and whether now or hereafter acquired by Pledgor, together with
all conversion, voting or other rights appurtenant thereto, including, but not
limited to, the right to receive all dividends and/or other distributions
payable to Pledgor by virtue of Pledgor's ownership of such capital stock, and
all proceeds thereof, additions thereto and substitutions thereof (collectively,
the "GTSI Stock"), secures repayment of the Loan; and (ii) the GTSI Stock is
subject to the terms and conditions of the Stock Security Agreement, 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. Pledgor hereby grants to the Agent (for the benefit of the
Lenders, ratably) a valid and binding security interest in the GTSI Stock in
accordance with the terms of the Loan Agreement and Stock Security Agreement,
and expressly acknowledges, agrees and confirms that the GTSI Stock shall be and
remain subject to all terms and provisions of such documents and all other Loan
Documents, as applicable. Pledgor shall deliver to the Agent the original GTSI
Stock certificate(s), together with a fully executed blank stock power in favor
of the Agent for the benefit of the Lenders, ratably, (i) concurrent with the
execution of this Modification, as to the shares of GTSI Stock acquired by
Pledgor on the date hereof, and (ii) immediately following the release from
escrow of any and all of the shares of GTSI held in escrow pursuant to the
Escrow Agreement defined in SCHEDULE 1 hereto which, at the time of such release
from escrow, are distributable to Pledgor.
3. Pledgor hereby represents and warrants as follows:
(a) That Pledgor owns the GTSI Stock free and clear of any and
all liens, security interests, claims, charges and other encumbrances whatsoever
(except for the security interest granted to the Agent hereby, the restrictions
imposed pursuant to the Standstill Agreement defined in SCHEDULE 1 hereto, the
terms and provisions of the Escrow Agreement and tax liens imposed by any taxing
authority for taxes which are not yet due and payable);
2
<PAGE> 3
(b) That the GTSI Stock has been duly authorized and validly
issued, and is fully paid and nonassessable;
(c) That the Agent's possession of the GTSI Stock establishes
a valid and perfected first lien priority interest therein, securing repayment
of the Obligations in accordance with the terms of the Stock Security Agreement;
and
(d) That Pledgor has the right to vote, pledge and grant a
security interest in the GTSI Stock pursuant to the terms of the Stock Security
Agreement.
4. Schedule A to the Stock Security Agreement is hereby amended by
adding the following paragraph at the end thereof:
"All of the right, title and interest of BTG in and to all of
its capital stock of Government Technology Services, Inc.,
whether common and/or preferred, and whether now or hereafter
issued or outstanding, and whether now or hereafter acquired
by BTG, together with all conversion, voting or other rights
appurtenant thereto, including, but not limited to, the right
to receive all dividends and/or other distributions payable to
BTG by virtue of BTG's ownership of such capital stock, and
all proceeds thereof, additions thereto and substitutions
thereof."
5. Agent hereby acknowledges and agrees, for itself and on behalf of
any foreclosure purchaser of the GTSI Stock, that following the occurrence of an
Event of Default and the exercise by Agent of any of its rights and/or remedies
with respect to the GTSI Stock, as set forth in the Stock Security Agreement,
the terms and provisions of the Standstill Agreement shall be binding upon the
Agent and any foreclosure purchaser of the GTSI Stock Pledgor hereby
acknowledges and agrees that, except as specifically amended hereby, all of the
terms and conditions of the Stock Security Agreement shall remain unmodified and
in full force and effect.
6. Pledgor shall pay all of the Agent's costs and expenses
associated with this Modification, including, without limitation, the Agent's
reasonable legal fees and expenses.
7. 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 heirs, executors, administrators,
personal representatives, successors and assigns.
8. 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.
3
<PAGE> 4
IN WITNESS WHEREOF, the undersigned have executed this Modification
on the day and year first above written.
PLEDGOR:
ATTEST/[CORPORATE SEAL] BTG, INC., a Virginia corporation
/s/ DEBORAH FOX By: /s/ EDWARD H. BERSOFF
- ---------------------------- --------------------------------
Name: Deborah Fox Name: Edward H. Bersoff
Title: Ass't Secretary Title: President and CEO
AGENT:
NATIONSBANK, N.A., a national
banking association, acting in its
capacity as agent
By: /s/ DOUGLAS T. BROWN
---------------------------------
Name: Douglas T. Brown
Title: Vice President
4
<PAGE> 5
Schedule 1
For purposes of this Modification, "Escrow Agreement" shall mean that certain
Escrow Agreement dated February 12, 1998, by and between Pledgor and GTSI.
For purposes of this Modification, "Loan Agreement" shall mean that certain
Amended and Restated Business Loan and Security Agreement, dated October 31,
1997, by and among the Agent, NationsBank (acting in its capacity as a Lender),
Fleet, Crestar and the Borrowers, as amended from time to time after the date of
this Modification.
For purposes of this Modification, "Replacement Revolving Promissory Notes"
shall have the meaning attributed to the term "Notes" in the Loan Agreement.
For purposes of this Modification, "Standstill Agreement" shall mean that
certain Standstill Agreement dated February 12, 1998, by and between Pledgor and
GTSI.
For purposes of this Modification, "Stock Security Agreement" shall mean that
certain Amended and Restated Stock Security Agreement dated October 31, 1997, by
and between the Agent and BTG, as amended by this Modification.
5
<PAGE> 6
AMENDED AND RESTATED STOCK SECURITY AGREEMENT
THIS AMENDED AND RESTATED STOCK SECURITY AGREEMENT (this "Amended
and Restated Security Agreement"), is made as of the 31st day of October, 1997,
by and between (i) NATIONSBANK, N.A., a national banking association having
offices at 8300 Greensboro Drive, McLean, Virginia 22102, acting in its capacity
as Agent ("Agent") pursuant to the hereinafter defined Loan Agreement, and (ii)
BTG, Inc., a Virginia corporation having its principal place of business at 3877
Fairfax Ridge Road, 4B, Fairfax, Virginia 22030 ("Pledgor").
RECITALS
WHEREAS, pursuant to the terms and conditions of a certain Business
Loan and Security Agreement dated November 28, 1995 (the "Original Loan
Agreement"), NationsBank, N.A. made a loan (the "Original Loan") to Pledgor and
certain subsidiaries of Pledgor (the "Original Borrowers") in the maximum
principal amount of Sixty Million and No/100 Dollars ($60,000,000.00), evidenced
by a certain Revolving Promissory Note dated November 28, 1995 (the "Original
Note") made by the Original Borrowers and payable to the order of NationsBank,
N.A., in the maximum principal amount of Sixty Million and No/100 Dollars
($60,000,000.00), and secured by, among other things, certain collateral more
fully described in the Original Loan Agreement, including without limitation,
certain capital stock owned by Pledgor and pledged to the Agent as collateral
security for the Original Loan pursuant to that certain Stock Security Agreement
dated November 28, 1995 by and between the Agent and Pledgor (the "Original
Stock Security Agreement"); and
WHEREAS, the Original Loan Agreement, Original Note, Original Stock
Security Agreement and certain of the other Loan Documents (as defined in the
Original Loan Agreement) have previously been amended, modified, substituted
and/or replaced from time to time; and
WHEREAS, concurrent with the execution of this Amended and Restated
Security Agreement, the maximum principal amount of the Original Loan (as
heretofore increased) is being increased to One Hundred Ten Million and No/100
Dollars ($110,000,000.00) and the terms and provisions of the Original Loan
Agreement (as heretofore modified) are being amended and restated in their
entirety; and
WHEREAS, the Agent and Pledgor desire to confirm their agreements
and understandings with respect to capital stock previously pledged to the Agent
as collateral security, and amend and restate in their entirety, the terms and
provisions of the Original Stock Security Agreement (as heretofore modified).
NOW THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties
<PAGE> 7
hereto amend and restate the Original Stock Security Agreement (as
heretofore modified) as follows:
1. DEFINITIONS. For purposes hereof, (a) NationsBank (acting on its
own behalf as a Lender), Fleet Capital Corporation, a Rhode Island corporation,
Crestar Bank, a Virginia banking corporation, and each other person or entity
hereafter becoming a "Lender" pursuant to the Loan Agreement are hereinafter
referred to individually as a "Lender" and collectively as the "Lenders"; (b)
Pledgor, BTG Technology Systems, Inc., a Virginia corporation, Delta Research
Corporation, a Virginia corporation, Concept Automation, Inc. of America, a
Virginia corporation ("CAI"), Nations, Inc., a New Jersey corporation, 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"; and (c) the "Loan Agreement" shall mean that
certain Amended and Restated Business Loan and Security Agreement of even date
herewith, by and among the Agent, Lenders and Borrowers. All other capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
such terms in the Loan Agreement.
2. GRANT OF SECURITY. Pledgor hereby grants and conveys to the
Agent, for the benefit of the Lenders ratably, a security interest in the
property described in Schedule A hereto (the "Collateral"), as security for the
repayment of (i) all sums outstanding in connection with a certain One Hundred
Ten Million and No/100 Dollar ($110,000,000.00) loan (the "Loan"), made to
Pledgor and others pursuant to the Loan Agreement, including all interest, fees
and other charges payable in connection therewith, which Loan is evidenced by
the Notes; and (ii) any other indebtedness or liability of Pledgor and any other
Borrower to any Lender or the Agent, whether direct or indirect, joint, several
or joint and several, absolute or contingent, due or to become due or now
existing or hereafter created or arising, including without limitation all
future advances or loans which may be made at the option of the Agent, whether
pursuant to the Loan Agreement or otherwise (all of the foregoing being herein
collectively referred to as the "Obligations"). It is expressly understood and
agreed that the foregoing grant and conveyance of a security interest in the
Collateral is in confirmation of (and not in replacement of) the grant and
conveyance of a security interest in the Collateral which was previously made to
the Agent, for the benefit of the Lenders ratably, in connection with the
Original Loan Agreement (as heretofore modified) and Original Note (as
heretofore modified), which note and loan agreement are being amended, restated
and/or replaced, as applicable, as of the date hereof; that the lien created by
such prior grant and conveyance of a security interest in the Collateral remains
in full force and effect; and that the grant and conveyance of a security
interest in the Collateral pursuant to this Amended and Restated Security
Agreement shall be supplemental to such prior grant and conveyance.
2
<PAGE> 8
3. LIEN PRIORITY. As a result of the previous grant by Pledgor to
the Agent of a security interest in the Collateral pursuant to the Original
Stock Security Agreement (as heretofore modified) and the regrant by Pledgor to
the Agent of a security interest in the Collateral set forth in Section 2 of
this Amended and Restated Security Agreement, the Agent, on behalf of the
Lenders, ratably, shall continue to have a first lien security interest in the
Collateral, free and clear of any and all liens, security interests, claims,
charges and other encumbrances whatsoever (except tax liens imposed by any
taxing authority for taxes which are not yet due and payable).
4. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and
warrants as follows:
(a) That Pledgor owns two hundred fourteen thousand forty-two
(214,042) shares of capital stock of Wheelgroup Corporation, a Texas corporation
("Wheelgroup"), together with the right to convert all or any portion of the
outstanding principal balance of that certain Convertible Promissory Note dated
May 2, 1996 (the "Convertible Note") made by Wheelgroup and payable to the order
of Pledgor in the original principal amount of Three Hundred Thousand and No/100
Dollars ($300,000.00), plus all interest accrued thereon, into fully paid and
non-assessable shares of common stock of Wheelgroup (the "Conversion Shares") at
any time prior to the payment in full of the indebtedness evidenced by the
Convertible Note; that Pledgor is the owner and holder of the Convertible Note,
free and clear of any and all liens, claims and encumbrances (except for the
amended and restated collateral assignment of the Convertible Note made by
Pledgor to the Agent on even date herewith); and that Pledgor has the
unconditional right to convert all or any portion of the outstanding principal
balance of the Convertible Note, plus interest accrued thereon, into the
Conversion Shares at any time prior to the payment in full of the indebtedness
evidenced by the Convertible Note;
(b) That Pledgor owns nine hundred fifty thousand (950,000)
shares of the capital stock of Community Networks, Inc., a Virginia corporation
("CNI");
(c) That Pledgor owns one hundred (100) shares of the capital
stock of BTG Technology Resources, Inc., a Virginia corporation ("Resources"),
and such shares represent all of the issued and outstanding capital stock of
Resources. No other person or entity owns any stock in Resources or has any
right or option to acquire any interest in the stock of Resources;
(d) That the Collateral is legally and equitably owned by
Pledgor except for the security interest granted to the Agent, and is owned by
Pledgor free and clear of any and all liens, security interests, claims, charges
and other encumbrances whatsoever (except tax liens imposed by any taxing
authority for taxes which are not yet due and payable);
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(e) That all of the Collateral has been duly authorized and
validly issued and is fully paid and nonassessable;
(f) That this Amended and Restated Security Agreement
constitutes a valid and perfected security interest in the Collateral, securing
repayment of the Obligations for the benefit of the Agent and Lenders, that all
of the Collateral has been delivered to the Agent, and that the Agent's
possession of the Collateral establishes a valid and perfected first lien
priority interest in the Collateral, securing repayment of the Obligations in
accordance with the terms hereof; and
(g) That Pledgor has the right to vote, pledge and grant a
security interest in the Collateral as provided by this Amended and Restated
Security Agreement.
5. COVENANTS. So long as any of the Obligations remain unpaid,
Pledgor covenants and agrees that it will:
(a) Pay and perform, and cause the other Borrowers to pay and
perform, all of the Obligations according to their terms;
(b) Defend all right and title to the Collateral against any
and all claims and demands whatsoever;
(c) Upon the request of the Agent do the following: furnish
further assurance of title, execute any written agreement and do all other acts
necessary to effectuate the intent, purposes and provisions of this Amended and
Restated Security Agreement, execute any instrument or statement required by law
or otherwise in order to perfect, continue or terminate the security interest of
the Agent in the Collateral and pay all filing or other costs incurred in
connection therewith;
(d) Unless otherwise required by the Agent, retain legal and
beneficial ownership of the Collateral and, except as otherwise expressly
permitted under the Loan Agreement, not sell, exchange, assign, loan, deliver,
mortgage or otherwise encumber or dispose of the Collateral or any portion
thereof without the prior written consent of the Agent;
(e) Keep the Collateral free and clear of all liens, charges,
encumbrances, taxes and assessments (except for tax liens imposed by any taxing
authority for taxes which are not yet due and payable), and pay when due all
taxes, payments and/or assessments in any way relating to the Collateral or any
part thereof;
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(f) Keep and maintain satisfactory, complete and current
records of the Collateral. Upon request of the Agent, Pledgor will provide the
Agent with written reports of the status of the Collateral, or any part thereof,
as of the period specified, in form and substance reasonably satisfactory to the
Agent. The Pledgor shall not change the location of its books and records
relating to any of the Collateral without giving the Agent at least thirty (30)
days' prior written notice; and
(g) Comply in all material respects with all federal, state
and local laws and regulations applicable to its business, whether now in effect
or hereinafter enacted, and upon request of the Agent, furnish to the Agent
evidence of such compliance therewith.
6. EVENTS OF DEFAULT. For purposes of this Amended and Restated
Security Agreement, each of the following shall constitute an "Event of Default"
hereunder:
(a) An Event of Default under the Loan Agreement;
(b) If any representation or warranty made or given by Pledgor
in connection with this Amended and Restated Security Agreement, or made or
given by Pledgor or any other Borrower in connection with the Loan Agreement,
the Note or any other Loan Document shall prove to have been incorrect or
misleading or breached in any material respect on or as of the date when made;
(c) If all or any part of the Collateral is subject to levy of
execution or other judicial process; or
(d) If the value of the Collateral is materially reduced, or
Pledgor or any of the other Borrowers suffers or permits any act which imperils
the prospect of full performance or satisfaction of the Obligations.
7. REMEDIES UPON DEFAULT. Upon the occurrence of any Event of
Default (subject to the expiration of any applicable grace period as may be
provided in the Loan Agreement) and at the option of the Agent:
(a) The Obligations shall immediately become due and payable
in full without notice or demand, and the Agent shall have all of the rights,
remedies and privileges with respect to repossession, retention and sale of the
Collateral and disposition of the proceeds thereof as are accorded to the Agent
by the applicable sections of the Uniform Commercial Code in effect in the
Commonwealth of Virginia (as the same may be amended from time to time, the
"UCC").
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(b) Without limiting the scope of the foregoing clause (a), it
is expressly understood and agreed that:
(i) The Agent shall have the right to sell, resell,
assign, and deliver all or any of the Collateral at any exchange or broker's
board or at public or private sale. The Agent agrees that unless the Collateral
is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market, the Agent will give Pledgor at least
ten (10) days' prior written notice by registered or certified mail (at the
address of Pledgor set forth above) of the time and place of any public sale of
the Collateral or the time after which any private sale or any other intended
disposition of the Collateral is to be made. Any such notice shall be deemed to
meet any requirement hereunder or under any applicable law (including the UCC)
that reasonable notification be given of the time and place of such sale or
other disposition. Such notice may be given without any demand for performance
or other demand, all such demands being hereby expressly waived by Pledgor. All
sales of the Collateral shall be at such price or prices as the Agent shall deem
best and either for cash, on credit or for future delivery (without assuming any
responsibility for credit risk);
(ii) At any such sale or sales the Agent may purchase
any or all of the Collateral upon such terms as the Agent may deem best. The
Collateral so purchased shall be held by the purchaser absolutely free from any
and all claims or rights of Pledgor of every kind and nature whatsoever,
including, without limitation, any equity of redemption or similar rights, all
such equity of redemption and similar rights being hereby expressly waived and
released by Pledgor. The proceeds of the sale of any Collateral, together with
any other additional collateral security at the time received and held
hereunder, shall be received and applied: first, to the payment of all costs
and expenses of sale, including reasonable attorneys' fees; second, to the
payment of the Obligations, in such order of priority as the Agent shall
determine; and third, any remaining proceeds shall be paid to Pledgor, unless
otherwise provided by law or directed by a court of competent jurisdiction;
(iii) Pledgor recognizes that the Agent may be unable
to effect a public sale of all or any part of the Collateral by reason of
certain prohibitions contained in the Securities Act of 1933, as amended (the
"Securities Act"), or other applicable laws, rules or regulations, but may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will, among other things, be obliged to agree to acquire the
Collateral or any part thereof for their own account, for investment and not
with a view to the distribution or resale thereof. Pledgor agrees that private
sales so made may be at prices and on terms less favorable than if the
Collateral were sold at public sales, and that the Agent has no obligation to
delay the sale of any Collateral for the period of time necessary to permit the
Collateral to be registered for public sale under the Securities Act or any
other applicable law, rule or regulation. Pledgor agrees that private sales made
under the foregoing circumstances shall be deemed to have been made in a
commercially reasonable manner; and
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(iv) Pledgor shall remain liable for any deficiency
resulting from any sale of the Collateral, or any part thereof, and shall pay
any such deficiency forthwith on demand.
(c) Without limiting any of the rights granted to the Agent
elsewhere in this Amended and Restated Security Agreement, the Agent shall be
entitled to (i) exercise the voting power appurtenant to the Collateral, (ii)
receive and retain as collateral security for the Obligations any and all
dividends or other distributions at any time or from time to time declared or
made upon any of the Collateral (all cash dividends or other distributions
payable in respect of the Collateral which are received by Pledgor after the
occurrence of an Event of Default shall be paid directly to the Agent and, if
received by Pledgor, shall be received in trust for the benefit of the Agent,
shall be segregated from other funds of Pledgor and shall be immediately paid
over to the Agent as Collateral in the same form as received, with any necessary
endorsements), and (iii) exercise any and all rights of payment, conversion,
exchange, subscription or other rights, privileges or options appurtenant to the
Collateral, as if the Agent were the absolute owner thereof, including without
limitation the right to exchange, at its discretion, any and all of the
Collateral upon the merger, consolidation, reorganization, recapitalization or
other readjustment of Pledgor. Upon the exercise of any such right, privilege or
option pertaining to the Collateral, and in connection therewith, the Agent may
deliver and deposit any or all of the Collateral with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Agent may determine, all without liability, except to account
for property actually received, but the Agent shall have no duty to exercise any
of the aforesaid rights, privileges or options and shall not be responsible for
any failure to do so or delay in so doing.
(d) Subject to provisions of the UCC and other applicable law,
the Agent may cause all or any of the Collateral to be transferred into its name
or into the name of its nominee or nominees; provided, however, that until such
time as there occurs an Event of Default hereunder, Pledgor shall be entitled to
exercise as it shall think fit, but in a manner not inconsistent with the terms
of this Amended and Restated Security Agreement, the Loan Agreement, any other
Loan Document or the Obligations, the voting power appurtenant to the
Collateral, and to receive cash dividends paid by Pledgor (subject to any
applicable prohibitions in the Loan Documents).
8. OTHER RIGHTS OF THE AGENT.
(a) If upon any dissolution, winding up, liquidation or
reorganization of Pledgor, whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or any other
marshaling of the assets and liabilities of Pledgor, any sum shall be paid or
any property shall be distributed upon or with respect to any of the Collateral,
such sum shall be paid or property distributed over to the Agent, to
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be held by the Agent or applied against the Obligations, as the Agent determines
in its sole discretion. In case any stock dividend shall be declared
on any of the Collateral, or any share of stock or fraction thereof shall be
issued pursuant to any stock split involving any of the Collateral, or any
distribution of capital shall be made on any of the Collateral, or any property
shall be distributed upon or with respect to the Collateral pursuant to
recapitalization or reclassification of the capital of Pledgor, or otherwise,
the shares or other property so distributed shall constitute Collateral and be
delivered to the Agent to be held as collateral security for the Obligations.
(b) Upon the occurrence of an Event of Default (subject to the
expiration of any applicable grace period as may be provided in the Loan
Agreement), the Agent shall have the right, for and in the name, place and stead
of Pledgor, to execute endorsements, assignments and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
9. SECURITY INTEREST ABSOLUTE. All rights of the Agent and security
interests hereunder, and all obligations of Pledgor hereunder, shall be absolute
and unconditional irrespective of, and unaffected by:
(a) Any lack of validity or enforceability of the Loan
Agreement or any other Loan Document;
(b) Any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Loan Agreement and/or any
other Loan Document;
(c) Any exchange, surrender, release or non-perfection of any
Collateral for all or any of the Obligations; or
(d) Any other circumstance which might otherwise constitute a
defense available to, or a discharge of, Pledgor in respect of the Obligations
or this Amended and Restated Security Agreement.
10. GENERAL PROVISIONS.
(a) The Agent may exercise its rights with respect to the
Collateral held hereunder without first or simultaneously resorting to any other
collateral or sources of repayment or reimbursement, and without being obligated
to consider or take notice of any right of contribution, reimbursement,
subrogation or marshalling of assets which Pledgor may have or claim to have
against any person or persons or with respect to any other collateral. The Agent
may release any and all other collateral it may now or hereafter
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have to secure repayment of the Obligations, all without affecting or impairing
its rights with respect to the Collateral. No delay or omission on the part of
the Agent in exercising any right hereunder shall operate as a waiver of such
right or any other right under this Amended and Restated Security Agreement. A
waiver on any one occasion shall not be construed as a bar to or waiver of any
right and/or remedy on any future occasion.
(b) If Pledgor shall default in the performance of any
provision of this Amended and Restated Security Agreement on Pledgor's part to
be performed, the Agent may perform the same for Pledgor's account and any
monies expended in so doing shall be chargeable with interest and added to the
indebtedness secured hereby.
(c) If in connection with the exercise by the Agent of any
power, right, provision or remedy granted pursuant to this Amended and Restated
Security Agreement, or in order to effectuate the purposes and intent of this
Amended and Restated Security Agreement, any consent, approval, registration,
filing, qualification or authorization of any governmental authority is
required, Pledgor will execute and deliver all applications, certificates,
instruments and other documents and papers that the Agent may be required to
obtain for such governmental consent, approval, registration, filing,
qualification or authorization.
(d) The rights and powers granted to the Agent hereunder are
being granted in order to preserve and protect the Agent's security interest in
and to the Collateral granted hereby and shall not be interpreted to, and shall
not, impose any duties on the Agent in connection therewith.
(e) The Agent shall have no duty as to the collection or
protection of the Collateral held hereunder or of any income thereon, or as to
the preservation of any rights pertaining thereto, beyond the safe custody of
the Collateral. The Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral if it complies with Pledgor's
requests in such regard made to the Agent in writing, but failure to comply with
any such request shall not in and of itself be deemed a failure to exercise
reasonable care in such custody and preservation of the Collateral.
(f) Upon the occurrence of an Event of Default (subject to the
expiration of any applicable grace period as may be provided in the Loan
Agreement), the Agent's reasonable attorneys' fees and the legal and other
expenses of pursuing, searching for, receiving, taking, keeping, storing,
advertising and selling the Collateral shall be chargeable to Pledgor.
(g) The Agent may assign its interests in this Amended and
Restated Security Agreement and, if assigned, the assignee shall be entitled (to
the same extent as the Agent) to performance of all of Pledgor's obligations and
agreements hereunder, and the
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assignee shall also be entitled (to the same extent as the Agent) to all of the
rights and remedies of the Agent hereunder. Pledgor will not assert a claim or
defense against the assignee which Pledgor may have against the Agent.
(h) Each party hereby (a) covenants and agrees not to elect a
trial by jury of any issue triable by a jury, and (b) waives any right to trial
by jury fully to the extent that any such right shall now or hereafter exist.
This waiver of right to trial by jury is separately given by each party,
knowingly and voluntarily, and this waiver is intended to encompass individually
each instance and each issue as to which the right to a jury trial would
otherwise accrue. Each party is hereby authorized and requested to submit this
Amended and Restated Security Agreement to any court having jurisdiction over
the subject matter and the parties hereto, so as to serve as conclusive evidence
of each of the parties' herein contained waiver of the right to jury trial.
Further, each party hereby certifies that no representative or agent of the
other parties (including their legal counsel) has represented, expressly or
otherwise, to such party that the other parties will not seek to enforce this
provision waiving the right to a trial by jury.
(i) Any judicial proceeding brought against Pledgor with
respect to this Amended and Restated Security Agreement or any other Loan
Document may be brought in any court of competent jurisdiction in the
Commonwealth of Virginia, and by execution and delivery of this Amended and
Restated Security Agreement, Pledgor accepts for itself and in connection with
its properties, generally and unconditionally, the non-exclusive jurisdiction of
the aforesaid court, and irrevocably agrees to be bound by any judgment rendered
by such court in connection with this Agreement. Pledgor irrevocably designates
and appoints Marilyn D. Bersoff, whose address is c/o BTG, Inc. 3877 Fairfax
Ridge Road, 4B, Fairfax, Virginia 22030, as its agent to receive on its behalf
service of all process in any such proceeding in any court in the Commonwealth
of Virginia, such service being hereby acknowledged by Pledgor to be effective
and binding on it in every respect. A copy of any such process so served shall
be mailed by registered or certified mail to Pledgor at the address to which
notices are to be addressed in accordance with this Amended and Restated
Security Agreement, except that any failure to mail such copy shall not affect
the validity of service of process. Pledgor shall at all times maintain an agent
for service of process pursuant to this provision. If Pledgor fails to appoint
such an agent, or if such agent refuses to accept service, Pledgor hereby agrees
that service upon it by mail shall constitute sufficient notice. Nothing herein
shall affect the right to serve process in any other manner permitted by law or
shall limit the right of the Agent to bring proceedings against Pledgor in the
courts of any other jurisdiction.
(j) The terms, warranties and agreements contained in this
Amended and Restated Security Agreement shall bind and inure to the benefit of
the parties hereto, and their respective successors and assigns.
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(k) This Amended and Restated Security Agreement may not be
changed orally, but may be changed only by an agreement in writing signed by the
parties against whom enforcement of any waiver, change, modification or
discharge is sought.
(l) Captions are inserted only as a matter of convenience and
for reference and in no way define, limit or describe the scope of this Amended
and Restated Security Agreement or the intent of any provision hereof. The
gender and number used in this Amended and Restated Security Agreement are used
as reference terms only and shall apply with the same effect whether the parties
are of the masculine or feminine gender, corporate or other form, and the
singular shall likewise include the plural. If there shall be more than one
Pledgor, their liability shall be joint and several.
(m) Any provision in this Amended and Restated Security
Agreement declared invalid under any law shall not invalidate any other
provision of this Amended and Restated Security Agreement. This Security
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia.
(n) Notices to either party shall be in writing and shall be
delivered personally or by mail addressed to the party at the address and in the
manner set forth in the Loan Agreement or as otherwise designated in writing.
(o) This Amended and Restated Security Agreement is a complete
amendment and restatement of the Original Stock Security Agreement (as
heretofore modified), the terms and conditions of which have been superseded and
replaced in their entirety by the terms and provisions of this Amended and
Restated Security Agreement.
IN WITNESS WHEREOF, the parties have respectively signed and sealed
these presents on the day and year first above written.
PLEDGOR:
--------
[CORPORATE SEAL]
ATTEST: BTG, INC., a Virginia corporation
By: /s/ MARILYNN D. BERSOFF By: /s/ EDWARD H. BERSOFF
----------------------- ---------------------
Name: Marilynn D. Bersoff Name: Edward H. Bersoff
Title: Secretary Title: President and CEO
[Signatures continued on the following page]
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AGENT:
NATIONSBANK, N.A., a national
banking association
By: /s/ DOUGLAS T. BROWN
--------------------
Name: Douglas T. Brown
Title: Vice President
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SCHEDULE A TO AMENDED AND RESTATED SECURITY AGREEMENT
All of the right, title and interest of BTG, Inc., a Virginia
corporation ("BTG") in and to all of its capital stock of Wheelgroup
Corporation, a Texas corporation, whether common and/or preferred, and whether
now or hereafter issued or outstanding, and whether now or hereafter acquired by
BTG (including, but not limited to, any and all Conversion Shares now held or
hereafter acquired by BTG pursuant to the Convertible Note), together with all
voting or other rights appurtenant thereto, including, but not limited to, the
right to receive all dividends and/or other distributions payable to BTG by
virtue of BTG's ownership of such capital stock, and all proceeds thereof,
additions thereto and substitutions thereof.
All of the right, title and interest of BTG in and to all of its
capital stock of Community Networks, Inc., a Virginia corporation, whether
common and/or preferred, and whether now or hereafter issued or outstanding, and
whether now or hereafter acquired by BTG, together with all voting or other
rights appurtenant thereto, including, but not limited to, the right to receive
all dividends and/or other distributions payable to BTG by virtue of BTG's
ownership of such capital stock, and all proceeds thereof, additions thereto and
substitutions thereof.
All of the right, title and interest of BTG in and to all of the
capital stock of BTG Technology Resources, Inc., a Florida corporation whether
common and/or preferred, and whether now or hereafter issued or outstanding, and
whether now or hereafter acquired by BTG, together with all voting or other
rights appurtenant thereto, including, but not limited to, the right to receive
all dividends and/or other distributions payable to BTG by virtue of BTG's
ownership of such capital stock, and all proceeds thereof, additions thereto and
substitutions thereof.
13
