Exhibit 10.2
LOAN AGREEMENT
BY
AND
BETWEEN
FIRST TENNESSEE BANK NATIONAL ASSOCIATION,
"BANK"
AND
SCB COMPUTER TECHNOLOGY, INC.
"BORROWER"
Dated: June 15, 2003
TABLE OF CONTENTS
1. DEFINITIONS AND REFERENCE TERMS .....................................1
2. LOAN ................................................................5
3. REPRESENTATIONS AND WARRANTIES ......................................5
4. AFFIRMATIVE COVENANTS ...............................................6
5. NEGATIVE COVENANTS ..................................................9
6. DEFAULT ............................................................10
7. REMEDIES UPON DEFAULT ..............................................11
8. NOTICE .............................................................11
9. COSTS, EXPENSES AND ATTORNEYS' FEES ................................12
10. MISCELLANEOUS ......................................................12
11. NO ORAL AGREEMENT ..................................................14
i
LOAN AGREEMENT
(SCB)
This Loan Agreement (this "Agreement") dated as of June 15, 2003, by
and between FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking
association ("Bank"), and SCB COMPUTER TECHNOLOGY, INC., a Tennessee corporation
("Borrower").
RECITALS:
A. Borrower has obtained the Commitment (as herein defined)
for the Loan (as herein defined) from the Bank to finance the purchase of the
Equipment (as herein defined) in accordance with the Commitment and the terms of
this Agreement.
B. One of the conditions of the Commitment is the execution of
this Agreement by Borrower in which the terms and conditions of the Loan are set
forth.
NOW THEREFORE, in consideration of the Loan described below and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, Bank and Borrower agree as follows:
1. DEFINITIONS AND REFERENCE TERMS. In addition to any other terms
defined herein, the following terms shall have the meaning set forth with
respect thereto:
A. ACCOUNTING TERMS. All accounting terms not specifically
defined or specified herein shall have the meanings generally attributed to such
terms under generally accepted accounting principles ("GAAP"), as in effect from
time to time, consistently applied, with respect to the financial statements
referenced in Section 3.H. hereof.
B. ACCOUNTS: Accounts means all amounts owed to Borrower on
account of sales, leases or rentals of goods or services rendered in the
ordinary course of trade or business to or on behalf of any Person (as herein
defined) which is now or hereafter obligated or indebted to Borrower.
C. BORROWER: SCB Computer Technology, Inc., a Tennessee
corporation.
D. BORROWER'S ADDRESS:
0000 Xxxxxxx Xxxx-Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
E. CHANGE OF CONTROL: Change of Control means (a) any "person"
or "group" (within the meaning of Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the "Exchange Act")), other than Xxx X. Xxxxxx or T. Xxxxx
Xxxx, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 10% or more of the Borrower's equity securities
having the right to vote for the election of members of the Board of Directors,
or (b) a majority of the members
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of the Board of Directors do not constitute directors as of the date of this
Agreement, or (c) Borrower ceases to directly own or control 100% of the
outstanding capital stock of each of the Subsidiaries.
F. COLLATERAL: Collateral means any and all collateral now or
hereafter pledged as collateral security for the Loan.
G. CONTRACTS: Contracts means collectively the IBM Contracts,
the Unisys Contracts and the Honeywell Contracts.
H. COMMITMENT: Commitment means that certain commitment letter
dated April 30, 2003, in which Bank agreed to make the Loan to Borrower with
which Borrower shall purchase the Equipment.
I. CURRENT LIABILITIES: Current Liabilities means the
aggregate amount of all current liabilities as determined in accordance with
GAAP, but in any event shall include all liabilities except those having a
maturity date which is more than one year from the date as of which such
computation is being made.
J. CUSTOMER SOLUTIONS AGREEMENT: Customer Solutions Agreement
means that certain agreement (as amended, modified or supplemented, including by
the Statement of Work, from time to time in accordance therewith, together with
all exhibits, schedules, annexes and other attachments thereto), dated as of
September 24, 1999 between Borrower and IBM, pursuant to which Borrower agreed
to provide certain services, and which services require Borrower to purchase the
Equipment in order to perform the same.
K. EBITDA: EBITDA means all earnings prior to interest
expense, taxes, depreciation and amortization.
L. EQUIPMENT: Equipment means certain computer hardware and
software licenses, as described in the Unisys Agreement, which Borrower is
obligated to purchase from Unisys to provide the services described in the
Customer Solutions Agreement, including, without limitation, such hardware as is
described in the Security Agreement.
M. FIXED CHARGE COVERAGE RATIO: Fixed Charge Coverage Ratio
means the ratio of (a) EBITDA to (b) Fixed Charges.
N. FIXED CHARGES: Fixed Charges means the sum of (a) all
principal indebtedness scheduled to be paid or prepaid during the applicable
period, plus (b) interest expense for such period, plus (c) income taxes paid or
payable during such period, plus (d) cash dividends or distributions paid (other
than dividends or distributions paid by Borrower to a subsidiary or a Subsidiary
to Borrower or any other Subsidiary) during such period, plus (e) capital
expenditures made during such period.
O. FUNDED DEBT: Funded Debt means the total indebtedness
outstanding under all recourse notes payable of Borrower, excluding debt issued
by Borrower to selling shareholders in
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connection with acquisitions completed by Borrower, plus funded or unfunded
letters of credit issued pursuant to Borrower's application therefor, plus
capital leases of Borrower.
P. GENERAL INTANGIBLES: General Intangibles shall have the
meaning set forth in the UCC.
Q. GUARANTORS: All existing Subsidiaries of Borrower,
including, without limitation, Partners Resources Inc., an Arizona corporation,
SCB Computer Technology of Alabama, Inc., an Alabama corporation, and Remtech
Services, Inc., a Virginia corporation, as well as any other Persons from time
to time executing guaranty agreements in regards to the Loan.
R. HAZARDOUS MATERIALS: Hazardous Materials include all
materials defined as hazardous materials or substances under any local, state or
federal environmental laws, rules or regulations, and petroleum, petroleum
products, oil and asbestos.
S. HONEYWELL: Honeywell means Honeywell Corporation.
T. HONEYWELL CONTRACTS: Honeywell Contracts means all
agreements now or hereafter entered into by and between the Borrower and
Honeywell relating to services provided by the Borrower to Honeywell using,
relating to, or arising under the equipment.
U. IBM: IBM means International Business Machines Corporation.
V. IBM CONTRACTS: IBM Contracts means all agreements now or
hereafter entered into by and between Borrower and IBM relating to services
provided by Borrower to IBM using, relating to or arising under the Equipment,
including to, but not limited to, the Customer Solutions Agreement and the
Statement of Work.
W. LOAN: The Loan, as described in Section 2 hereof, and any
subsequent loan which states that it is subject to this Agreement.
X. LOAN DOCUMENTS: Loan Documents means this Agreement and any
and all promissory notes executed by Borrower in favor of Bank and all other
documents, instruments, guarantees, certificates and agreements executed and/or
delivered by Borrower, any Guarantor or third party in connection with the Loan.
Y. NET INCOME: Net Income means for any period, the net income
(or loss) of Borrower after provision for or benefit from income and franchise
taxes determined in accordance with GAAP, but excluding: (i) the income (or
loss) of any Person (other than a subsidiary of Borrower) in which Borrower has
an ownership interest unless received by Borrower in a cash distribution; and
(ii) the income (or loss) of any Person accrued prior to the date it is merged
into or consolidated with Borrower.
Z. NET WORTH. Net Worth means the amount by which total assets
exceed total liabilities in accordance with GAAP.
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AA. NOTE: The promissory note evidencing the Loan, modified,
as amended and/or restated from time to time.
BB. PERSON: Person means any individual, partnership,
corporation, trust, unincorporated organization, limited liability company,
association, joint venture or other legally recognized entity having the
capacity to contract in its own name.
CC. SECURITY AGREEMENT: Security Agreement means that certain
Security Agreement executed by Borrower of even date herewith.
DD. SERVICE FEES: Service Fees means the sums payable by IBM
to Borrower under the IBM Agreement including, without limitation, the Customer
Solutions Agreement and the Statement of Work, for services performed by
Borrower thereunder.
EE. STATEMENT OF WORK: Statement of Work means that certain
agreement (as amended, modified or supplemented from time to time, together with
all exhibits, schedules, annexes and other attachments thereto) between Borrower
and IBM entitled "statement of work" composing part of the Customer Solutions
Agreements.
FF. SUBSIDIARY: Any entity existing on the date hereof in
which Borrower owns at least a majority share or has control, all of which are
listed in Exhibit "A" hereto, and being one and the same herein as a Guarantor.
GG. TANGIBLE STOCKHOLDERS' EQUITY: Tangible Stockholders'
Equity means stockholders" equity less goodwill, plus subordinated debt.
HH. TERMINATION FEE: Termination Fee means the sum payable by
IBM to Borrower upon the termination of the Customer Solutions Agreement and the
Statement of Work.
II. UNISYS: Unisys means Xxxxxx Xxxxxxxxxxx.
JJ. UNISYS AGREEMENT: Unisys Agreement means that certain
Master Agreement for Products and Services, including the Additional Terms and
Conditions, by and between Borrower and Xxxxxx Xxxxxxxxxxx dated March 31, 2003.
KK. UNISYS CONTRACTS: Unisys Contracts means all agreements
now or hereafter entered into by and between Borrower and Unisys relating to the
Equipment, including, without limitation, that certain Master Agreement for
Products and Services dated May, 2003.
LL. UCC: UCC means the Uniform Commercial Code as adopted by
the state of Tennessee.
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2. LOAN; SECURITY. As set forth in the Commitment, Bank has agreed to
make a term loan to Borrower in the principal face amount of Six Million Five
Hundred Thousand and No/100 Dollars ($6,500,000.00). The obligation to repay the
Loan is evidenced by the Note having a maturity date, repayment terms and
interest rate as set forth in the Note. The Loan shall be used by Borrower to
acquire the Equipment and to reimburse Borrower for advances and additional
deposits paid to Unisys.
The Loan shall be secured by the Collateral described in the
Security Agreement including, without limitation, the Equipment, the Termination
Fee and the Service Payments, whether such Termination Fee and Service Payments
constitute Accounts or General Intangibles.
3. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Bank as follows:
A. GOOD STANDING. Borrower is a corporation, duly organized,
validly existing and in good standing under the laws of the state of its
formation and has the power and authority to own its property and to carry on
its business as currently conducted.
B. AUTHORITY AND COMPLIANCE. Borrower has full power and
authority to execute and deliver the Loan Documents and to incur and perform the
obligations provided for therein, all of which have been duly authorized by all
proper and necessary action of the appropriate governing body of Borrower. No
consent or approval of any public authority or other third party is required as
a condition to the validity of any Loan Document, and Borrower is in material
compliance with all laws and regulatory requirements to which it is subject.
C. BINDING AGREEMENT. This Agreement and the other Loan
Documents executed by Borrower constitute valid and legally binding obligations
of Borrower, enforceable in accordance with their terms.
D. LITIGATION. There is no material proceeding involving
Borrower pending or, to the knowledge of Borrower, threatened before any court
or governmental authority, agency or arbitration authority, except as disclosed
to Bank in writing and acknowledged by Bank prior to the date of this Agreement.
E. NO CONFLICTING AGREEMENTS. There is no charter, bylaw,
stock provision, partnership agreement or other document pertaining to the
organization, power or authority of Borrower and no provision of any existing
material agreement, mortgage, indenture or contract binding on Borrower or
affecting its property, which would conflict with or in any way prevent the
execution, delivery or carrying out of the terms of this Agreement and the other
Loan Documents.
F. OWNERSHIP OF ASSETS. Borrower has good title to its assets,
and its assets are free and clear of liens, except for those liens disclosed to
and approved by Bank, and certain limited liens involving non-recourse lease
related loans, and except for those granted to Bank and as disclosed to Bank in
writing prior to the date of this Agreement or liens filed of record.
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G. TAXES. All taxes and assessments due and payable by
Borrower have been paid or are being contested in good faith by appropriate
proceedings and Borrower has filed all tax returns which it is required to file.
H. FINANCIAL STATEMENTS. The financial statements of Borrower
and Guarantors heretofore delivered to Bank have been prepared in accordance
with GAAP applied on a consistent basis throughout the period involved and
fairly present Borrower's and Guarantors' financial condition as of the date or
dates thereof, and there has been no material adverse change in Borrower's or
Guarantor's financial condition or operations since said delivery. All factual
information furnished by Borrower to Bank in connection with this Agreement and
the other Loan Documents is and will be accurate and complete in all material
respects on the date as of which such information is delivered to Bank and is
not and will not be incomplete by the omission of any material fact necessary to
make such information not misleading.
I. PLACE OF BUSINESS. Borrower's chief executive office is
located at 0000 Xxxxxxx Xxxx-Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
J. ENVIRONMENTAL. The conduct of Borrower's business
operations and the condition of Borrower's properties does not and will not
violate any federal laws, rules or ordinances for environmental protection,
regulations of the Environmental Protection Agency, any applicable local or
state law, rule, regulation or rule of common law or any judicial interpretation
thereof relating primarily to the environment or Hazardous Materials.
K. CONTINUATION OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the date hereof.
L. SUBSIDIARIES. Other than as shown on Exhibit "A," there are
no other Subsidiaries.
M. LOCATION OF EQUIPMENT. The Equipment is and at all times
will be located on property owned by Honeywell bearing a street address of
Honeywell Building 01504, 00000 X. 00xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000.
N. NO DEFAULT UNDER OTHER AGREEMENTS. There are no defaults
known to Borrower under any of the Contracts, or under any other loan agreement
to which the Borrower is a party, or under any license agreements to which the
Borrower is a party, or is subject. Borrower has provided Bank with a complete
copy of the Customer Solutions Agreement and all Statements of Work and
amendments thereto.
4. AFFIRMATIVE COVENANTS. Until full payment and performance of all
indebtedness and obligations of Borrower under the Loan Documents, Borrower
will, and shall cause Guarantors to, on a consolidated basis unless Bank
consents otherwise in writing (and without limiting any requirement of any other
Loan Document):
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A. FINANCIAL CONDITION. Maintain at all times Borrower's and
Guarantors' financial conditions, on a consolidated basis, as follows and as
determined in accordance with GAAP applied on a consistent basis throughout the
period involved, except to the extent modified by the following:
i. Minimum EBITDA for the twelve month period ending
each fiscal quarter of SCB after April 30, 2002 shall
not be less than 80% of Borrower's projected EBITDA
for each twelve month period as set forth in the
projections delivered to Bank which projections shall
be in the form acceptable to Bank; provided, if Bank
and Borrower cannot agree on such projections, for
the purposes of this requirement, minimum EBITDA for
each twelve month period shall not be less than
$10,000,000.
ii. The maximum amount of capital expenditures that
Borrower may make during each fiscal quarter after
April 30, 2002 shall not exceed 120% of Borrower's
projected amount of capital expenditures for each
such fiscal quarter as set forth in the projection
delivered to Bank, which projections shall be in form
and substance acceptable to Bank; provided, if Bank
and Borrower cannot agree on such projections, for
the purposes of this requirement, the amount of
Borrower's capital expenditures for each such fiscal
quarter shall not exceed $300,000.
iii. The Fixed Charge Coverage Ratio for any fiscal
quarter for Borrower shall not be less than 1.25 to 1
through April 30, 2004. After April 30, 2004, the
Fixed Charge Coverage Ratio for any fiscal quarter
shall not be less than 1.5 to 1 (it being understood
and agreed that Borrower and Bank intend to negotiate
for a revised Fixed Charge Coverage Ratio promptly
after receipt by Bank of projections of Borrower for
the fiscal year beginning on May 1, 2004, but that
until Borrower and Bank have entered into a written
amendment to this provision, the requirement set
forth in this clause (iii) will remain in full force
and effect).
B. FINANCIAL STATEMENTS AND OTHER INFORMATION. Maintain a
system of accounting satisfactory to Bank and in accordance with GAAP applied on
a consistent basis throughout the period involved, permit Bank's officers or
authorized representatives to visit and inspect Borrower's books of account and
other records at such reasonable times and as often as Bank may desire, and pay
the reasonable fees and disbursements of any accountants or other agents of Bank
selected by Bank for the foregoing purposes. Unless written notice of another
location is given to Bank, Borrower's books and records will be located at
Borrower's chief executive office set forth above. All financial statements
called for below shall be prepared in form and content acceptable to Bank and by
independent certified public accountants acceptable to Bank.
In addition, Borrower will:
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i. Furnish to Bank audited year end financial
statements of Borrower for each fiscal year of Borrower, within one hundred
twenty (120) days after the close of each such fiscal year, prepared by a public
accounting firm acceptable to Bank.
ii. Furnish to Bank Borrower's quarterly 10-Q for
each quarter of each fiscal year of Borrower, within fifty (50) days after the
close of each such period, such financial statements to be certified by the
president, vice president or chief financial officer of Borrower.
iii. Furnish to Bank a quarterly compliance
certificate for (and executed by an authorized representative of) Borrower in
the form of Exhibit "B" attached hereto, concurrently with and dated as of the
date of delivery of each of the financial statements as required in paragraphs i
and ii above, and at such other times as Bank may request, containing (a) a
certification that the financial statements of even date are true and correct
and that Borrower is not in default under the terms of this Agreement, and (b)
computations and conclusions, in such detail as Bank may request, with respect
to compliance with this Agreement, and the other Loan Documents, including
computations of all quantitative covenants.
iv. Furnish to Bank promptly any such additional
information, reports and statements respecting the business operations and
financial condition of Borrower and its Subsidiaries, respectively, from time to
time, as Bank may reasonably request.
All such statements and certificates required in paragraphs i
through iv above shall be consolidated with and between Borrower and the
Subsidiaries.
C. INSURANCE. Maintain insurance on the Equipment with an
insurance company, in such amounts and against such risks as is reasonably
acceptable to Bank and as is customarily maintained by similar businesses
operating in the same vicinity, specifically to include fire and extended
coverage insurance, and providing for at least thirty (30) days prior notice to
Bank of any cancellation thereof, and all to name Bank as loss payee as
applicable and as Bank's interest may appear. Satisfactory evidence of such
insurance will be supplied to Bank prior to funding under the Loan(s) and thirty
(30) days prior to each policy renewal.
D. EXISTENCE AND COMPLIANCE. Maintain its, as well as that of
its Subsidiaries, existence, good standing and qualification to do business,
where failure to do so would have a material adverse effect on Borrower or its
Subsidiaries, and comply with all laws, regulations and governmental
requirements including, without limitation, applicable environmental laws or to
any of its or their property, business operations and transactions.
E. ADVERSE CONDITIONS OR EVENTS. Promptly advise Bank in
writing of (i) any condition, event or act which comes to its attention that
would or might materially adversely affect Borrower's, Subsidiary's or any
Guarantor's financial condition or operations or Bank's rights under the Loan
Documents, (ii) any material litigation filed by or against Borrower, Subsidiary
or any Guarantor, (iii) any event that has occurred that would constitute an
event of default under any Loan Documents and (iv) any uninsured or partially
uninsured loss through fire, theft, liability or property damage in excess of an
aggregate of Five Hundred Thousand and No/100 Dollars ($500,000.00).
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F. TAXES AND OTHER OBLIGATIONS. Pay all of its taxes,
assessments and other obligations, including, but not limited to taxes, costs or
other expenses arising out of this transaction, as the same become due and
payable, except to the extent the same are being contested in good faith by
appropriate proceedings in a diligent manner.
G. MAINTENANCE. Maintain all of the Equipment in good
condition and repair and make all necessary replacements thereof, and preserve
and maintain all licenses, trademarks, privileges, permits, franchises,
certificates and the like necessary for the operation of the Equipment.
H. ENVIRONMENTAL. Immediately advise Bank in writing of (i)
any and all enforcement, cleanup, remedial, removal, or other governmental or
regulatory actions instituted, completed or threatened pursuant to any
applicable federal, state, or local laws, ordinances or regulations relating to
any Hazardous Materials affecting Borrower's or any Subsidiary's business
operations; and (ii) all claims made or threatened by any third party against
Borrower or any Subsidiary relating to damages, contribution, cost recovery,
compensation, loss or injury resulting from any Hazardous Materials. Borrower
shall immediately notify Bank of any remedial action taken by Borrower with
respect to Borrower's business operations. Borrower will not use or permit any
other party to use any Hazardous Materials at any of Borrower's places of
business or at any other property owned by Borrower except such materials as are
incidental to Borrower's normal course of business, maintenance and repairs and
which are handled in compliance with all applicable environmental laws. Borrower
agrees to permit Bank, its agents, contractors and employees to enter and
inspect any of Borrower's places of business or any other property of Borrower
at any reasonable times upon three (3) days prior notice for the purposes of
conducting an environmental investigation and audit (including taking physical
samples) to insure that Borrower is complying with this covenant and Borrower
shall reimburse Bank on demand for the costs of any such environmental
investigation and audit. Borrower shall provide Bank, its agents, contractors,
employees and representatives with access to and copies of any and all data and
documents relating to or dealing with any Hazardous Materials used, generated,
manufactured, stored or disposed of by Borrower's business operations within
five (5) days of the request therefore.
I. ACQUISITIONS. In the event Borrower acquires any other
Subsidiary, such Subsidiary shall sign an unlimited guaranty of the indebtedness
and obligations of Borrower to Bank, such guaranty to be in form and substance
prepared by and acceptable to Bank.
J. OTHER DOCUMENTS. Use its best efforts to provide to Bank
such other documents as Bank may reasonably require including, without
limitation, release documents releasing any and all liens possessed by any
Person other than Bank, Xxxxx Fargo Foothill, Inc., formerly known as Foothill
Capital Corporation or State Bank & Trust, encumbering any of the Collateral,
and an intercreditor agreement with or a consent and waiver from any other
Person claiming any lien on any of Borrower's property agreeing not to interfere
with Bank's enforcement of its liens against, any of the Collateral.
5. NEGATIVE COVENANTS. Until full payment and performance of all
obligations of Borrower under the Loan Documents, Borrower will not, without the
prior written consent of Bank (and without limiting any requirement of any other
Loan Documents):
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A. TRANSFER OF ASSETS OR CONTROL. Sell, lease, assign or
otherwise dispose of or transfer any of the Collateral, or cause, permit, or
suffer, directly or indirectly, any Change of Control.
B. LIENS. Except as set forth in Section 4(J) above, grant,
suffer or permit any contractual or noncontractual lien on or security interest
in the Collateral, except in favor of Bank and except for limited liens
involving non-recourse lease related loans, or fail to promptly pay when due all
lawful claims, whether for labor, materials or otherwise related to the
Equipment.
C. CHARACTER OF BUSINESS. Change the general character of
business as conducted at the date hereof, or engage in any type of business not
reasonably related to its business as presently conducted.
D. NEGATIVE PLEDGE LIMITATION. Enter into any agreement with
any person other than Bank pursuant hereto which prohibits or limits the ability
of Borrower, Subsidiary or any Guarantor to create, incur, assume or suffer to
exist any lien upon the Collateral, including without limitation, the Equipment.
E. LOCATION OF EQUIPMENT. Move the Equipment from Honeywell's
premises as identified to Bank without Bank's prior written consent.
F. CUSTOMER SOLUTIONS AGREEMENT; STATEMENT OF WORK. Amend,
modify or supplement the Customer Solutions Agreement or the Statement of Work
without Bank's prior written consent.
6. DEFAULT. Subject to any applicable notice and right to cure
provision contained herein or in any of the other Loan Documents, Borrower shall
be in default under this Agreement and under each of the other Loan Documents if
any of the following should occur:
A. It shall default in the payment of any amounts due and
owing under the Loan within fifteen (15) days of the date when due or;
B. It should fail to timely and properly observe, keep or
perform any term, covenant, agreement or condition herein or in any other Loan
Document or in any other loan agreement, promissory note, security agreement,
deed of trust, deed to secure debt, mortgage, assignment or other contract
securing or evidencing payment of any indebtedness of Borrower to Bank; or
C. There should occur any material adverse change in
Borrower's financial condition or business affairs from that shown on Borrower's
most recent financial statements provided to Bank, including, without
limitation, any legal proceedings commenced against Borrower or any of its
officers which Bank determines in its reasonable discretion could have a
material adverse effect on Borrower's financial condition or business affairs;
or
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D. Any material default should occur under any loan
documentation between Borrower and any other Person, including, without
limitation, Xxxxx Fargo Foothill, Inc., f/k/a Foothill Capital Corporation, The
State Bank and Trust Company, and IBM, which default continues to exist after
the expiration of any applicable cure period and which default in the reasonable
opinion of the Bank could have a material adverse effect on Borrower's ability
to perform its obligation under the Loan Documents.
E. The Service Fees should be insufficient at any time to
fully service the regularly scheduled payments of principal and interest due
under the Note, and/or should the Service Fees fail, regardless of the reason
for such failure, to be received by Bank for application to the payments due
under the Note.
F. The Termination Fee should be insufficient at any time to
fully pay the outstanding balance then due under the Loan, and/or should the
Termination Fee fail, regardless of the reason for such failure, to be received
by Bank when due and payable by IBM for application to the outstanding balance
due under the Loan.
G. As for any default which is capable of cure, before any
such default becomes an event of default under this Agreement entitling Bank to
exercise any remedies as a result, Bank shall give Borrower written notice of
default, specifying the nature thereof, and Borrower shall have thirty (30) days
from the date appearing on such written notice to cure any such default to the
complete satisfaction of Bank. If Borrower has not cured such default within
such thirty (30) day period to the complete satisfaction of Bank, or if such
default is curable but not within thirty (30) days and Borrower fails to
institute a curative action promptly upon such notice and diligently and
continuously prosecute the same to conclusion as determined in Bank's sole
discretion, then Bank may exercise any or all remedies available hereunder or
under any other instrument now or hereafter in any manner evidencing, securing
or relating to the indebtedness evidenced hereby.
7. REMEDIES UPON DEFAULT. If any of the foregoing defaults shall occur,
Bank shall have all rights, powers and remedies available under each of the Loan
Documents as well as all rights and remedies available at law or in equity,
including, without limitation, the rights and remedies provided in the Note and
the Security Agreement.
8. NOTICES. All notices, requests or demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to the other party at the following
address:
Borrower:
SCB Computer Technology, Inc.
0000 Xxxxxxx Xxxx-Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attn: ___________________
Fax. No. ________________
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with a copy to:
Xxxxx, Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxx X. Xxxxx
Fax No. 901/000-0000
Bank:
First Tennessee Bank National Association
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: ________________
Fax No. 901/000-0000
with a copy to:
Martin, Tate, Xxxxxx & Xxxxxxx, PC
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: J. Xxxxxx Xxxxx, Esq.
Fax No. 901/000-0000
or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be deemed given or made
as follows:
A. If sent by mail, upon the earlier of the date of receipt or
five (5) days after deposit in the U.S. Mail, first class postage prepaid;
B. If sent by any other means, upon delivery.
9. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Bank
immediately upon demand the full amount of all costs and expenses, including
reasonable attorneys' fees (to include outside counsel fees and all allocated
costs of Bank's in-house counsel if permitted by applicable law), incurred by
Bank in connection with (a) negotiation and preparation of this Agreement and
each of the Loan Documents, and (b) all other costs and attorneys' fees incurred
by Bank for which Borrower is obligated to reimburse Bank in accordance with the
terms of the Loan Documents.
10. MISCELLANEOUS. Borrower and Bank further covenant and agree as
follows, without limiting any requirement of any other Loan Document:
A. CUMULATIVE RIGHTS AND NO WAIVER. Each and every right
granted to Bank under any Loan Document, or allowed it by law or equity shall be
cumulative of each other and may be exercised in addition to any and all other
rights of Bank, and no delay in exercising any right shall operate as a waiver
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thereof, nor shall any single or partial exercise by Bank of any right preclude
any other or future exercise thereof or the exercise of any other right.
Borrower expressly waives any presentment, demand, protest or other notice of
any kind, including but not limited to notice of intent to accelerate and notice
of acceleration. No notice to or demand on Borrower in any case shall, of
itself, entitle Borrower to any other or future notice or demand in similar or
other circumstances.
B. APPLICABLE LAW. This Agreement and the rights and
obligations of the parties hereunder shall be governed by and interpreted in
accordance with the laws of the state of Tennessee and applicable United States
federal law.
C. AMENDMENT. No modification, consent, amendment or waiver of
any provision of this Agreement, nor consent to any departure by Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
an officer of Bank, and then shall be effective only in the specified instance
and for the purpose for which given. This Agreement is binding upon Borrower,
its successors and assigns, and inures to the benefit of Bank, its successors
and assigns; however, no assignment or other transfer of Borrower's rights or
obligations hereunder shall be made or be effective without Bank's prior written
consent, nor shall it relieve Borrower of any obligations hereunder. There is no
third party beneficiary of this Agreement.
D. DOCUMENTS. All documents, certificates and other items
required under this Agreement to be executed and/or delivered to Bank shall be
in form and content satisfactory to Bank and its counsel.
E. PARTIAL INVALIDITY. The unenforceability or invalidity of
any provision of this Agreement shall not affect the enforceability or validity
of any other provision herein and the invalidity or unenforceability of any
provision of any Loan Document to any person or circumstance shall not affect
the enforceability or validity of such provision as it may apply to other
persons or circumstances.
F. INDEMNIFICATION. Notwithstanding anything to the contrary
contained in Section 10(G), except for gross negligence or willful misconduct,
Borrower shall indemnify, defend and hold Bank and its successors and assigns
harmless from and against any and all claims, demands, suits, losses, damages,
assessments, fines, penalties, costs or other expenses (including reasonable
attorneys' fees and court costs) arising from or in any way related to any of
the transactions contemplated hereby, including but not limited to actual or
threatened damage to the environment, agency costs of investigation, personal
injury or death, or property damage, due to a release or alleged release of
Hazardous Materials, arising from Borrower's business operations, any other
property owned by Borrower or in the surface or ground water arising from
Borrower's business operations, or gaseous emissions arising from Borrower's
business operations or any other condition existing or arising from Borrower's
business operations resulting from the use or existence of Hazardous Materials,
whether such claim proves to be true or false. Borrower further agrees that its
indemnity obligations shall include, but are not limited to, liability for
damages resulting from the personal injury or death of an employee of Borrower,
regardless of whether Borrower has paid the employee under the workmen's
compensation laws of any state or other similar federal or state legislation for
the protection of employees. The term "property damage" as used in this
paragraph includes, but is not limited to, damage to any real or personal
property of Borrower, Bank, and of any
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third parties. Borrower's obligations under this paragraph shall survive the
repayment of the Loan and any deed in lieu of foreclosure or foreclosure of any
Deed to Secure Debt, Deed of Trust, Security Agreement or Mortgage securing the
Loan.
G. SURVIVABILITY. All covenants, agreements, representations
and warranties made herein or in the other Loan Documents shall survive the
making of the Loan and shall continue in full force and effect so long as the
Loan is outstanding or the obligation of Bank to make any advances under the
Loan shall not have expired.
11. NO ORAL AGREEMENT. This written loan agreement and the other loan
documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal by their duly authorized representatives as of the date
first above written.
BORROWER: BANK:
SCB COMPUTER TECHNOLOGY, INC. FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxx Xxxxxx
----------------------------------- ----------------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxx Xxxxxx
-------------------------------- --------------------------------
Title: Executive Vice President Title: Senior Vice President
------------------------------- -------------------------------
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EXHIBIT "A"
SUBSIDIARIES
1. Partners Resources Inc., an Arizona corporation
2. SCB Computer Technology of Alabama, Inc., an Alabama corporation
3. Remtech Services, Inc., a Virginia corporation
EXHIBIT "B"
COMPLIANCE CERTIFICATE
(SCB)
This Compliance Certificate is furnished pursuant to the Loan Agreement
dated as of June ____, 2003 (as the same may be amended, modified, supplemented
or replaced from time to time, the "Loan Agreement"), by and between SCB
COMPUTER TECHNOLOGY, INC. ("Borrower"), and FIRST TENNESSEE BANK NATIONAL
ASSOCIATION, a national banking association ("Bank"). Unless otherwise defined
herein, capitalized terms defined in the Loan Agreement are used herein as
defined therein.
1. Minimum EBITDA
(a) Loan Agreement: $___________
(b) Actual: $___________
2. Maximum Capital Expenditures
(a) Loan Agreement ____________
(b) Actual: ____________
3. Fixed Charge Coverage Ratio
(a) Loan Agreement: ____________
(b) Actual: ____________
The undersigned authorized officer on behalf of Borrower hereby certifies that
the foregoing covenant calculations are true and correct as of the end of the
prior reporting period.
SCB COMPUTER TECHNOLOGY, INC.
By:___________________________________
Name: ________________________________
Title:________________________________
Date: ________________________________
