SECOND AMENDMENT AND MODIFICATION TO CREDIT AGREEMENT
THIS SECOND AMENDMENT AND MODIFICATION TO CREDIT AGREEMENT (the
"Amendment") is made as of the 8th day of April, 1997, by and among
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION ("Company"), SCT SOFTWARE &
RESOURCES MANAGEMENT CORPORATION ("Borrowing Subsidiary") (collectively,
"Borrowers" and individually a "Borrower") and MELLON BANK, N.A.
("Bank").
BACKGROUND
A. By a Credit Agreement dated June 20, 1994, as amended by
Amendment and Modification to Credit Agreement dated of even date
(collectively, the "Credit Agreement"), by and among Bank and Borrowers,
Bank agreed, inter alia, to extend to Borrowers a revolving credit
facility in the principal amount of up to Twenty Million Dollars
($20,000,000.00) (the "Revolving Credit"), as further evidenced by that
certain Promissory Note dated June 20, 1994 payable to Bank in the
original principal amount of Twenty Million Dollars ($20,000,000.00)
(the "Note").
B. Borrowers have requested that Bank (i) permanently increase the
maximum amount of the Revolving Credit to $30,000,000.00; and (ii)
provide for a temporary increase in the Revolving Credit of
$5,000,000.00 to a total of $35,000,000.00; all of which Bank is willing
to do on the terms set forth herein.
NOW, THEREFORE, intending to be legally bound hereby, the parties
hereto agree as follows:
1. CAPITALIZED TERMS. Capitalized terms not otherwise defined
herein will have the meanings set forth therefor in the Credit
Agreement.
2. PERMANENT INCREASE.
(a) The definition of "Revolving Commitment" contained in
Section 1.01 of the Credit Agreement is hereby amended to be
"$30,000,000.00 plus the Temporary Increase until the Temporary Increase
expires as provided in Section 2.01(a)(1) of the Credit Agreement."
(b) The reference to "Twenty Million Dollars
($20,000,000.00)" contained in Section 2.01(a) of the Credit Agreement
is hereby deleted and replaced with "Thirty Million Dollars
($30,000,000.00)".
3. THE NOTE. The form of Note attached to the Credit Agreement as
Exhibit "A" is hereby deleted and replaced with the form of Amended and
Restated Note attached hereto as Exhibit "A" (the "Amended and Restated
Note").
4. TEMPORARY INCREASE. The following is hereby added to and made
a part of the Credit Agreement as Section 2.01(a)(1) thereof:
"2.01(a)(1) Temporary Increase in the Revolving Commitment.
Notwithstanding the limitation on the aggregate
outstanding amount of the Revolving Loans contained in
Section 2.01(a) above, subject to the other terms and
conditions of this Agreement, the maximum amount of the
Revolving Loans shall be increased by the principal amount
of Five Million Dollars ($5,000,000.00) (the "Temporary
Increase"). The Temporary Increase shall be available to
Borrowers under the Revolving Commitment for a period (the
"Redemption Period") commencing on April 9, 1997 and
terminating upon the first to occur of (i) October 9, 1997;
or (ii) the date of an advance under the Term Loan
contemplated in that certain Commitment Letter dated March
20, 1997 from Bank to Borrowers. Borrowers shall use
proceeds of the Temporary Increase solely to fund redemption
payments by Borrowers on the Subordinated Indenture. Upon
expiration of the Redemption Period, the Temporary Increase
shall expire and the maximum amount available to Borrowers
under the Revolving Loans shall automatically, without
further action by or notice to or consent of Borrowers,
reduce to Thirty Million Dollars ($30,000,000.00).
All sums advanced under the Temporary Increase shall be
evidenced by Borrowers' joint and several promissory note in
the principal amount of Five Million Dollars ($5,000,000.00)
(the "Increase Note"), which shall be in the form attached
hereto as Exhibit "A-I", with the blanks appropriately
filled in. The entire outstanding principal amount of the
Increase Note, and all accrued but unpaid interest thereon,
shall be due and payable in full upon the expiration of the
Redemption Period. Accrued interest on the Increase Note
shall be payable at all times, at the rates and in the same
manner as accrued interest on the Note, provided that
Borrower may not select an As-offered Interest Period or an
Interest Period for any Eurodollar Loan for sums advanced
under the Temporary Increase if such As-offered Interest
Period or Interest Period extends beyond the expiration of
the Redemption Period. Until the expiration of the
Redemption Period and except as provided in this Section
2.01(a)(1), advances shall be available under the Temporary
Increase in the same manner and subject to the same
limitations as advances under the original Revolving
Commitment.
All Revolving Loans shall be made under the Note until
the aggregate amount of outstanding advances thereunder
equals Thirty Million Dollars ($30,000,000.00); thereafter,
advances shall be made under the Increase Note in accordance
with the foregoing. All principal payments actually
received by Bank from Borrowers on Revolving Loans shall be
applied as follows: (i) first, to repayment of all principal
advanced and outstanding under the Increase Note, then (ii)
to payment of principal advanced and outstanding under the
Note.
Except to the extent necessary to avoid confusion or
inconsistency with the terms of this Section 2.01(a)(1), all
references in this Agreement and the other Loan Documents to
the "Note" shall mean the Note and the Increase Note,
collectively."
5. USAGE FEE. Borrowers and Bank hereby clarify and confirm that
until the Temporary Increase expires as provided in Section 2.01(a)(1)
of the Credit Agreement, the commitment fee required under Section
2.01(d) of the Credit Agreement shall be calculated on 5/16 of 1% per
annum of the unused portion of the $35,000,000.00 then available under
the Revolving Commitment, payable quarterly as provided in Section
2.01(d). After the Temporary Increase expires, the commitment fee shall
be calculated on 5/16 of 1% per annum of the unused portion of the
$30,000,000.00 then available under the Revolving Commitment, subject to
an increase to 3/8 of 1% per annum upon the occurrence of an Event of
Default.
6. DEFINED TERMS. Borrowers and Bank hereby agree that, except as
necessary to avoid confusion or inconsistency with the terms of this
Amendment or the other Loan Documents, all references in the Loan
Documents to: (a) the "Note" shall include the Amended and Restated Note
and the Increase Note executed pursuant to this Amendment, as each may
hereafter be amended, and (b) "Loan Documents" includes, inter alia,
this Amendment, the Amended and Restated Note and the Increase Note.
7. ADDITIONAL DOCUMENTS. Borrowers shall execute and deliver to
Bank, at Borrowers' sole cost and expense, (i) the Amended and Restated
Promissory Note in the form of Exhibit "A" attached hereto; (ii) the
Increase Note in the form of Exhibit "A-I" attached hereto; and (iii)
any and all other documents, agreements, corporate resolution, searches,
certificates and opinions as Bank shall request in connection with the
execution and delivery of this Amendment or any documents in connection
herewith, or to further evidence effect, enforce or protect any of the
terms hereof or the rights or remedies granted or intended to be granted
to Bank herein or therein, each of which shall be in form and content
applicable to Bank. At Borrowers' request, Bank has agreed to accept
delivery of an opinion of Borrowers' and Guarantors' counsel on or
before April 17, 1997. Borrowers agree that (i) such opinion shall be
in form and content acceptable to Bank; and (ii) failure to deliver such
opinion by the foregoing date shall, without further notice to or
consent of Borrowers or Guarantors, constitute an Event of Default under
the Credit Agreement and each of the other Loan Documents.
8. SECURITY. Each Borrower acknowledges, confirms and agrees that
the Revolving Commitment, as permanently and temporarily increased
hereby, the Amended and Restated Note, the Increase Note and all other
Debt owing by Borrowers, or either of them, to Bank are and shall
continue to be secured by all rights and remedies securing the Revolving
Commitment, including, without limitation, all the Guaranties and all
rights and remedies granted to Bank in the Credit Agreement and/or the
other Loan Documents, which Guaranties, rights and remedies are hereby
reaffirmed and continued as security for the foregoing; and all of the
Loan Documents are hereby amended to reflect the same.
9. FURTHER ASSURANCES. Each Borrower covenants and agrees to
execute and deliver to Bank or to cause to be executed and delivered at
the sole cost and expense of Borrowers, from time to time, any and all
other documents, agreements, statements, certificates and information as
Bank shall reasonably request to evidence or effect the terms hereof,
the Credit Agreement, as amended, or any of the other Loan Documents.
10. FURTHER AGREEMENTS AND REPRESENTATIONS. Each Borrower does
hereby:
(a) ratify, confirm and acknowledge that the Credit
Agreement, as amended, and the other Loan Documents continue to be and
are valid, binding and in full force and effect;
(b) covenant and agree to perform all obligations of
Borrowers contained herein, under the Amended and Restated Note, the
Increase Note, and under the Credit Agreement, as amended, and the other
Loan Documents;
(c) acknowledge and agree that such Borrower has no defense,
set-off, counterclaim or challenge against the payment of any sums owing
under Loan Documents, the enforcement of any of the terms of the Credit
Agreement, as amended, or the other Loan Documents;
(d) acknowledge and agree that except as previously
disclosed to and consented to by Bank in writing, all representations
and warranties of Borrowers contained in the Credit Agreement and/or the
other Loan Documents are true, accurate and correct on and as of the
date hereof as if made on and as of the date hereof;
(e) represent and warrant that no Event of Default or
Potential Event of Default exists and all information described in the
foregoing Background is true, accurate and complete;
(f) acknowledge and agree that nothing contained herein and
no actions taken pursuant to the terms hereof is intended to constitute
a novation of the Credit Agreement or any of the other Loan Documents,
and does not constitute a release, termination or waiver of any of the
guarantees, rights or remedies granted to the Bank therein, which
guarantees, rights and remedies are hereby ratified, confirmed, extended
and continued as security for the obligations of Borrowers to Bank under
the Credit Agreement and the other Loan Documents, including, without
limitation, this Amendment; and
(g) acknowledge and agree that a Borrower's failure to
comply with or perform any of its covenants, agreements or obligations
contained in this Amendment shall constitute an Event of Default under
the Credit Agreement and each of the Loan Documents.
11. BANK FEE, COSTS AND EXPENSES. Upon execution of this
Amendment, Borrowers shall pay to Bank a fee in the amount of Fifty
Thousand Dollars ($50,000.00), which fee is payable to Bank in
consideration for Bank's agreement to permanently and temporarily
increase the Revolving Commitment as provided herein, is fully earned on
the date hereof and is non-refundable for any reason. Borrowers shall
also pay to Bank all costs and expenses incurred by Bank in connection
with the review, preparation and negotiation of this Amendment and all
documents in connection therewith, including, without limitation, all of
Bank's attorneys' fees and costs.
12. INCONSISTENCIES. To the extent of any inconsistency between
the terms, conditions and provisions of this Amendment and the terms,
conditions and provisions of the Credit Agreement or the other Loan
Documents, the terms, conditions and provisions of this Amendment shall
prevail. All terms, conditions and provisions of the Credit Agreement
and the other Loan Documents not inconsistent herewith shall remain in
full force and effect and are hereby ratified and confirmed by
Borrowers.
13. CONSTRUCTION. All references to the Credit Agreement therein
or in any other Loan Documents shall be deemed to be a reference to the
Credit Agreement as amended hereby.
14. NO WAIVER. Nothing contained herein and no actions taken
pursuant to the terms hereof are intended to nor shall they constitute a
waiver by the Bank of any rights or remedies available to Bank at law or
in equity or as provided in the Credit Agreement or the other Loan
Documents. Nothing contained herein constitutes an agreement or
obligation by Bank to grant any further increases in the Revolving
Commitment.
15. BINDING EFFECT. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
16. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the Commonwealth of
Pennsylvania.
17. HEADINGS. The headings of the sections of this Amendment are
inserted for convenience only and shall not be deemed to constitute a
part of this Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first above written.
SYSTEMS & COMPUTER TECHNOLOGY CORPORATION
By:./s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx, Senior Vice President
[CORPORATE SEAL]
SCT SOFTWARE & RESOURCE MANAGEMENT
CORPORATION
By: /s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx, Senior Vice President
[CORPORATE SEAL]
MELLON BANK, N.A.
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, First Vice President
ACKNOWLEDGMENT AND CONSENT
The undersigned Guarantors hereby acknowledge and consent to the
foregoing Amendment and agree that (i) all sums advanced under the
Amended and Restated Note and/or the Increase Note, each as referenced
in the Amendment, constitute "Guarantied Obligations under the terms of
their respective Subsidiary Guaranty Agreements dated June 20, 1994,
(the "Guarantees"); and (ii) the foregoing Amendment shall not
constitute a release or waiver of any of the obligations of the
undersigned to the Bank under any of the Guarantees, all of which are
hereby ratified and confirmed.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound
hereby, have executed this Acknowledgment and Consent, effective as of
the date of the foregoing Agreement.
SCT UTILITY SYSTEMS, INC.
By: /s/ Xxxx Xxxxxxx
Name/Title: Sr. VP
SCT GOVERNMENT SYSTEMS, INC.
(formerly known as "SCT Public Sector, Inc.")
By: /s/ Xxxx Xxxxxxx
Name/Title: Sr. VP
SCT FINANCIAL CORPORATION
By: /s/ Xxxx Xxxxxxx
Name/Title: Sr. VP
SCT INTERNATIONAL LIMITED
By: /s/ Xxxx Xxxxxxx
Name/Title: Sr. VP
SCT PROPERTY, INC.
By: /s/ Xxxx Xxxxxxx
Name/Title: Sr. VP
