Exhibit 10.27


 





 


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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