Exhibit 10.27

 

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AMENDMENT NO. TWO TO LOAN AGREEMENT

 

This Amendment No. Two (the “Amendment”) dated as of June 6, 2005, is between
Bank of America, N.A. (the “Bank”) and Thomas Group, Inc. (the “Borrower”).

 

RECITALS

 

A.  The Bank and the Borrower entered into a certain Loan Agreement dated as of
July 21, 2004 (together with any previous amendments, the “Agreement”).

 

B.  The Bank and the Borrower desire to amend the Agreement.

 

AGREEMENT

 

1.  Definitions.  Capitalized terms used but not defined in this Amendment shall
have the meaning given to them in the Agreement.

 

2.  Amendments.  The Agreement is hereby amended as follows:

 

(a)          Paragraph number 1.1 is hereby amended to read in its entirety as
follows:

 

1.1           “Borrowing Base” means the sum of:

 

(a)          80% of the balance due on Acceptable Commercial Receivables; and

 

(b)         90% of the balance due on Eligible Prime Government Receivables; and

 

(c)          80% of the balance due on Eligible Sub Contractor or other
Government Receivables.

 

After calculating the Borrowing Base as provided above, the Bank may deduct such
reserves as the Bank may establish from time to time in its reasonable credit
judgment, including, without limitation, reserves for rent at leased locations
subject to statutory or contractual landlord’s liens, inventory shrinkage,
dilution, customs charges, warehousemen’s or bailee’s charges, liabilities to
growers of agricultural products which are entitled to lien rights under the
federal Perishable Agricultural Commodities Act or any applicable state law, and
the amount of estimated maximum exposure, as determined by the Bank from time to
time, under any interest rate contracts which the Borrower enters into with the
Bank (including interest rate swaps, caps, floors, options thereon, combinations
thereof, or similar contracts).

 

(b)  Paragraph number 1.6, entitled “Overadvance Limit” is hereby deleted in its
entirety

 

(c)  Paragraph number 7.7, entitled “Subordination Agreements” is hereby deleted
in its entirety.

 

(d)  Paragraph number 9.2 is hereby amended to read in its entirety as follows:

 

9.2 Minimum EBITDA Amount.  To maintain on a consolidated basis a minimum EBITDA
amount of not less than $1,700,000.

 

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“EBITDA” means net income, less income or plus loss from discontinued operations
and extraordinary items, plus income taxes, plus interest expense, plus
depreciation, depletion, and amortization.

 

This minimum EBITDA amount will be calculated at the end of each reporting
period for which the Bank requires financial statements, using the results of
the twelve-month period ending with that reporting period.

 

(e)  Paragraph number 9.3 is hereby amended to read in its entirety as follows:

 

9.3  Funded Debt to EBITDA Ratio.  To maintain on a consolidated basis a ratio
of Funded Debt to EBITDA not exceeding 2.5:1.0.

 

“Funded Debt” means all outstanding liabilities for borrowed money and other
interst-bearing liabilities, including current and long term debt, less the
non-current portion of Subordinated Liabilities.

 

“EBITDA” means net income, less income or plus loss from discontinued operations
and extraordinary items, plus income taxes, plus interest expense, plus
depreciation, depletion, and amortization.

 

This ratio will be calculated at the end of each reporting period for which the
Bank requires financial statements, using the results of the twelve-month period
ending with that reporting period.

 

“Subordinated Liabilities” means liabilities subordinated to the Borrower’s
obligations to the Bank in a manner acceptable to the Bank in its sole
discretion.

 

3.  Representations and Warranties.  When the Borrower signs this Amendment, the
Borrower represents and warrants to the Bank that:  (a) there is no event which
is, or with notice or lapse of time or both would be, a default under the
Agreement except those events, if any, that have been disclosed in writing to
the Bank or waived in writing by the Bank, (b) the representations and
warranties in the Agreement are true as of the date of this Amendment as if made
on the date of this Amendment, (c) this Amendment does not conflict with any
law, agreement, or obligation by which the Borrower is bound.

 

4.  Conditions.  This Amendment will be effective when the Bank receives the
following items, in form and content acceptable to the Bank:

 

(a)  If the Borrower or any guarantor is anything other than a natural person,
evidence that the execution, delivery and performance by the Borrower and/or
such guarantor of this Amendment and any instrument or agreement required under
this Amendment have been duly authorized.

 

(b)  Payment by the Borrower of a loan documentation fee in the amount of Five
Thousand Dollars ($5,000.00).

 

5.  Effect of Amendment.  Except as provided in this Amendment, all of the terms
and conditions of the Agreement shall remain in full force and effect.

 

6.  Counterparts.  This Amendment may be executed in counterparts, each of which
when so executed shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument.

 

7.  FINAL AGREEMENT.  BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES
THAT:  (A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY
COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS
RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM SHEET
OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE
CONTRARY, (C) THERE ARE NO

 

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UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY NOT BE
CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

8.  Notice of Final Agreement.  THIS WRITTEN AGREEMENT AND THE LOAN DOCUMENTS
EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

This Amendment is executed as of the date stated at the beginning of this
Amendment.

 

Borrower:

 

Bank:

 

 

 

Thomas Group, Inc.

 

Bank of America, N.A.

 

 

 

 

 

 

By

 

By

James T. Taylor, CEO/President

 

Authorized Signer

 

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